How does servitisation affect supply chain circularity? – A systematic literature review

Abstract

Purpose The purpose of this paper is to test the link between servitisation and circular economy by synthesising the effect of product-service systems (PSS) on supply chain circularity (SCC). Design/methodology/approach Following a systematic literature review methodology, the study identified 67 studies and synthesised them using content analysis. Findings A conceptual model is developed illustrating how PSS business models impact SCC through increased product longevity, closure of resource loops and resource efficiency. It also identifies six contextual factors affecting the implementation of SCC including: economic attractiveness of SCC; firm sustainability strategy; policy and societal environment; product category; supply chain relationships; and technology. Research limitations/implications The conceptual model proposes that SCC increases with servitisation. It also proposes that the main circularity effect stems from increased product longevity, followed by closed resource loops and finally resource efficiency. The model is deduced from the literature by using secondary data. Practical implications The review provides practitioners with a framework to increase SCC through PSS business models. It also gives insight into the various contextual factors that may affect how a manufacturer’s servitisation strategy contributes to SCC. Originality/value This review contributes to the understanding of the relationship between servitisation and SCC by synthesising the different effects that exist. Moreover, it creates new knowledge by identifying a range of contextual factors affecting the relationship between PSS and SCC.

The Need for New Product Development Capabilities from Digitalization, Sustainability, and Servitization Trends

“…Another observation was that few of the companies in this study connect sustainability and PSS with circularity and circular economy. This is in contrast to findings from the literature study, which communicate connections between PSS, circularity, and sustainability [62,63,78], also in combination with digitalization. Our result indicates that there is a lack of understanding of the potentials of these three areas in combination, or at least of how this can be realized in these manufacturing companies.…”

Towards a Conceptual Development of Industry 4.0, Servitisation, and Circular Economy: A Systematic Literature Review

“…Servitisation is defined as the transformation procedure from the product-centric towards a service-oriented BM [55]; servitisation defines the productivity of this process [8]. It integrates services and goods that offer diverse functionalities to stakeholders and consumers and offer environmental advantages [58].…”

Megatrends in Circular Economy: Avenues for Relevant Advancements in Organizations

“…Examples of users of the [32] protocol are the studies by [31], [34], [35], [36] among others. As users of the protocol of [33], [37] and [38], they made use of both protocols mentioned earlier [30]. After analysing the SLR content, this study shows that the sample of studies analysed by these articles was 6213 studies.…”

“…Narrow Inclusion and Exclusion Criteria: the review focused on peer-reviewed articles written in English, without considering results published in other languages [41]. No access [20] or neglect [57] of grey literature and archives of market professionals which would cover corporate research [20] and researcher's bias [57] or books and reports by professionals that could contain important discoveries [36].…”

“…Total databases used Theories that have been applied in the GSCM and CE studies. 12 theories identified, the most often used complexity theory, transaction cost economics, agency theory and information theories[40] f) How closing a supply chain can reduce the bullwhip effect, which could lead to positive impacts on the environmental performance of supply chains[34] g) How Product Service Systems business models affect Supply Chain Circularity through greater product durability[41] h) How circular business models can be designed using hybrid categories derived from the circular economy and industry 4.0[42] i) Drivers, barriers and enablers for the management of photovoltaic panels. Classification of indicators with the objective of evaluating, improving, monitoring and communicating the performance of the CE [1] j) CE trends and a reflection on the interface of the innovation scopes of the business model oriented towards the circular economy and the business model oriented towards sustainability[15] …”