A sustainability-oriented multi-dimensional value assessment model for product-service development

In the product-service system (PSS), products are carriers of functions and media of services. Currently, value creation in PSS is directly related to the capabilities of the product-service solutions provided to serve customer demands and supplier business interest over time. There is a need for an evaluation approach that can identify in what manner and to what extent products and services should best be bundled in the development of a company's value proposition. Furthermore, with an increasing focus on the sustainability profile of business operations, it is necessary to incorporate environmental impact measures with technical performance and cost measures to present a more comprehensive value assessment of product-service development. In this paper, a sustainability-oriented value assessment model is proposed as an attempt for product-service development decision support based on life cycle thinking. In this proposed approach, the fitness for extended utilisation indicators, the net present value (NPV) approach and life cycle assessment (LCA), are applied as the measures of life cycle performance, life cycle cost, and life cycle environmental impact, which are used for value assessment. A case study on a solar heating system will be presented to show how the assessment model can be used to support the evaluation and selection of different product-service development alternatives.