Issues to Consider in Developing a Sustainable Product or Service

New and shifting legal, market and financial dynamics have increased the pressure on firms in manufacturing industries to implement processes for developing and marketing sustainable products.  The environmental and social impacts of products and services depend on how they interact with the surrounding socio-economic and technical systems, sectors and actors along their life cycles.  A number of actors need to be involved in the drive toward greater sustainability in the development, commercialization and use of products and services.  Businesses, particularly larger and more established firms, can play a significant role in making changes in product design and functionality and then using their positions in the marketplace to communicate with customers and supply chain members about the importance of optimizing sustainability throughout the product life cycle.  Consumers can also contribute by changing their preferences and decision making patterns to demand more responsibility with respect to environmental and social impacts in the products and services they purchase; however, changes in consumer attitudes require more investment in education and raising awareness.  If consumers do show legitimate interest in sustainability, retailers need to exert pressure on their suppliers to develop and market sustainable product and service offerings and provide easily assessable information about those offerings to consumers.  Media outlets must also be involved in disseminating information and providing opportunities for sustainable advocates and trendsetters to get their message out to consumers.  Researchers in the corporate and academic communities must be able to provide the requisite technical innovations necessary for enhancing energy efficiency, reducing waste and pollution and eco-design.

Since product developers and designers are the generally the first ones to conceptualize how, and of what materials, a new product will be manufactured, they have a strong influence on the environmental impact of the product during its life cycle.  In fact, the National Research Council has estimated that approximately 70% of the costs associated with a product’s development, manufacture and use (i.e., its life cycle) are determined in the initial design stage.  Among other things, product developers and designers play a leading role with respect to specification of raw materials, energy inputs, purchasing specifications, hazardous materials generated, recycling and worker health and safety.  However, environmental performance is just one of the business goals for product developers and they must balance environmental impact against other priorities such as regulatory compliance, product performance, consumer acceptability, and price.

Companies have used a variety of analytical tools and managerial processes and strategies as part of their business approaches to developing sustainable products and services.  Among the more popular analytical tools have been lifecycle assessment (“LSA”), lifecycle costing, risk assessment, environmental impact assessment, ecological footprint and MIPS for systematic evaluation of environmental impacts along the entire supply chain or product lifecycle.  Managerial processes and approaches have included eco-design, eco-innovation, product service systems (i.e., selling a bundle of products and services based on functionality rather than purely physical products), lifecycle management, product stewardship, supply chain management, corporate social responsibility and product-oriented environmental management systems that are used to collect and analyze lifecycle information.  Lifecycle management and product stewardship are particularly important for integrating lifecycle thinking into the corporate culture and structure and product design and encouraging communication with customers, product marketing, information and support.

Maxwell and van der Vorst wrote about their efforts to develop a method that would provide a framework for implementing sustainable product and/or service development (“SPSD”) throughout the entire lifecycle of a product and/or service.  They noted that the product and/or service lifecycle starts at conception, where there is only a concept and design of a potential product or service, and then continues with raw materials, production processes, distribution, consumption and “end of life” as well as potential “recovery” and “reuse” options (e.g., production processes, consumption and/or “end of life” back to raw materials).  They defined and described SPSD as follows:

“SPSD is defined here as the process of making products and/or services in a more sustainable way throughout their entire lifecycle, from conception to end of life. The products and/or services are developed to be more sustainable in a Triple Bottom Line (TBL) context, i.e. balancing economic, environmental and social aspects. This is interpreted as achieving an optimum balance between environmental protection, social equity and economic prosperity, while still meeting traditional product requirements, e.g. quality, market, technical and cost issues, etc. The goal of SPSD is to produce products and/or to provide services, which are sustainable and achieve their required functionality, meet customer requirements and are cost effective. In other words, SPSD is about producing superior products and/or services that fulfil traditional criteria as well as sustainability requirements.”

Maxwell and van der Vorst pointed out that SPSD represented an evolutionary step in approaches to sustainable product development in that it went beyond the traditional emphasis on reducing the environmental impacts of products to incorporate services as well as products and all of the TBL elements.  Another important aspect of SPSD was the incorporation of the “Product Service Systems”, or “PSS”, concept, which is described in more detail below and involved “shifting the focus of the design away from producing products to providing a function and determining whether the function can be provided by a service, a product or some combination of a PSS”.  PSS provide companies with opportunities to reduce the volume of products that they manufacture, which also has environmental benefits, and increase profits through the introduction of services offerings.  For example, when Xerox transitioned from manufacturing photocopiers to being the “Document Company”, it began offering “functions” through a PSS approach (i.e., offering a product which incorporated service elements such as product leasing, upgrade and maintenance to provide the required functionality more effectively).

Maxwell and van der Vorst explained that “SPSD is about assessing the lifecycle of a function to be provided (from conception to end of life) and determining the optimum sustainable (environmental, social and economic) way of providing that function (through a product, service or PSS) in line with traditional product and/or service criteria”.  The first step of the SPSD process occurs at the “concept stage” when a determination is made about the best way to meet the functional requirements.  At this point, the relevant question is whether functionality can be provided through a product, a service or some combination of a PSS and then optimizing the sustainability impacts of these options with traditional criteria.  Once a decision has been made about whether a product, service or PSS is to be developed, the relevant life cycle stages (e.g., raw materials, production process, distribution, consumption and “end of life”) and the associated supply chain should be identified.  Maxwell and van der Vorst pointed out that a key element of SPSD was its focus on the supply chain for the product and/or service rather than solely at an individual company level, and an assessment must be made of the entire supply chain to determine which companies are the optimum targets for SPSD implementation and how supply chain management (“SPM”) can be effectively utilized.  Particular emphasis should be placed on those supply chain companies that have control over the main life cycle phases with key sustainability issues.  The next step is an assessment of the environmental and then social impacts for each product or PSS life cycle stage to identify opportunities for elimination or minimization of these impacts which can be optimized with the remaining traditional product and service criteria.

Based on their research relating to sustainable product development, Maxwell and van der Vorst identified the following key framework features for ensuring effective SPSD implementation in industry:

  • Use of a strategy level approach, which should be integrated into existing corporate business, sustainability/environmental systems and product development systems.
  • Use of a simple, flexible, non-resource intensive approach designed to mesh with the business reality.
  • Integration and optimization of TBL criteria with traditional product and service specifications over the entire product life cycle.
  • Determination of the requirement for a product based on the functionality and consideration of the options for PSS.
  • Use of Supply Chain Dynamics (“SCD”) to determine the most effective target supply chain company(ies) for SPSD implementation and for effective SCM up and down the supply chain.

Maxwell and van der Vorst developed a checklist to guide consideration of “triple bottom line” issues during the development of a sustainable product and/or service (“SPSD”).  The questions on the checklist were organized by reference to the specific SPSD criteria (i.e., functionality, environmental impact, social impact and economic aspects) and the stage in the product life cycle (i.e., raw materials, conception, production, distribution, consumption and end of life) where an issue was typically most relevant.

SPSD criteria: Optimize functionality

Conception stage

  • What is the functionality?
  • How can this be achieved?
  • Do you need a product?
  • Could this be achieved by a service?
  • Options for PSS?

SPSD criteria: Optimize environmental impact

Raw materials stage

  • Reduce the volume of materials used (dematerialization)
  • Nature of raw materials
  • Eliminate or reduce non-renewables usage
  • Substitution of none/less hazardous raw materials
  • Facilitate recovery, reuse, recycling
  • Extraction and processing of raw materials
  • Transport from supplier

Production stage

  • Optimize production technology
  • Eliminate/reduce emissions to air
  • Eliminate/reduce effluents
  • Eliminate/reduce waste
  • Eliminate/reduce energy usage

Distribution stage

  • Is transport necessary?
  • Volume and nature of transport
  • Type of fuel usage
  • Eliminate/reduce emissions to air
  • Eliminate/reduce waste

Consumption stage

  • Eliminate/reduce waste from product
  • Eliminate/reduce waste from packaging
  • Eliminate/reduce energy consumption

End of life stage

  • Extend product life
  • Design for repair
  • Modular design for maximizing upgradability
  • Facilitate recovery of components for reuse
  • Facilitate recovery of components for recycling and treatment/disposal

SPSD criteria: Optimize social impacts

Raw materials stage

  • Are the raw materials extracted and/or processed in the developing world?
  • Ownership rights
  • Are the trading arrangements equitable?

Production and distribution stages

  • Employee conditions of work at company
  • Employee conditions of work in subcontract companies
  • Impact on local community
  • Investment in local community

Consumption stage

  • Adverse health/safety impacts for the local community
  • Adverse health/safety impacts for the global community

End of life stage

  • Adverse health/safety impacts for the local community
  • Adverse health/safety impacts for the global community

SPSD criteria: Optimize economic aspects

All stages

  • Is the product and/or service cost effective?
  • Does the product and/or service cost the same/less than competing versions?
  • Are environmental externality costs (e.g. end of life recovery, reuse/treatment/disposal) taken into account?

Key sources for this article included D. Maxwell and R. van der Vorst, “Developing Sustainable Products and Services”, Journal of Cleaner Production, 11 (2003), 883; and Designing Products and Services with Sustainable Attributes: An Internal Assessment Tool for Product Developers (Grand Rapids, MI: The Design Work Group West Michigan Sustainable Business Forum, 1999).

Alan Gutterman is the Founding Director of the Sustainable Entrepreneurship Project, which engages in and promotes research, education and training activities relating to entrepreneurial ventures launched with the aspiration to create sustainable enterprises that achieve significant growth in scale and value creation through the development of innovative products or services which form the basis for a successful international business.  Visit the Project’s Library of Resources for Sustainable Entrepreneurs to download handbooks, guides, articles and other materials relating to sustainable entrepreneurship and keep up with the Project’s activities by following Alan on LinkedInTwitter and Facebook.

 

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