Implementation of Circular Economy principles in PSS operations

Abstract

Product-Service Systems (PSS) where customers pay for the functionality of an asset are considered among the most suitable business models for a Circular Economy (CE). The PSS literature assumes that these offerings have potential environmental benefits, because they can break the traditional link between profit and production volume and incentivize resource productivity by the providers. While the theoretical business case for sustainable PSS is clear, it is rather unclear whether manufacturers actually adopt resource efficiency measures in these types of business models. This paper reviews studies from the servitization literature to determine how CE dimensions are implemented in the operations of such PSS offerings. The analysis provides insights into PSS activities and offers new implications for analyzing and improving the circularity of PSS offerings.