TOWARDS ECO-EFFICIENT SOLUTIONS

This paper summarises the findings from the SOLiD research project. The research has explored how knowledge
about the concept of integrated solutions can support the development of offers with less environmental impact. The
research has been undertaken from October 2001 until March 2003.

Introduction
The point of departure for this research project is the need for companies to drastically cut down
the environmental impact of their products and services in order to contribute towards a more
sustainable future. This effectively means reducing the amount of materials and energy used and
toxic emissions generated per unit of product or service. For the last decade, companies have
focussed on improving parts of their products and services from an environmental perspective.
Now there is a call for a more holistic approach. Within the environmental research community
there is an interest in looking beyond the products sold by companies. The space for
(environmental) improvement increases by focussing on providing results to customers, instead
of selling just products. Looking at a whole ‘need fulfilling system’ has much more potential for
improvement than looking at a product component level for example. The provision of a mix of
products and services to satisfy the customer needs, i.e. offering integrated solutions, has been
the area of interest of this research. The environmental research community has little to no
experience in the development of these ‘environmentally friendly results’. Therefore, within this
research project we have learnt from companies that are offering integrated solutions, so as to
transfer this knowledge into the future development of ‘eco-efficient solutions’.

An integrated solutions framework has been developed and opportunities for improving the
environmental performance, i.e. the eco-efficiency, of integrated solutions have been identified.
Next the integrated solutions framework is presented and its features are described. After that,
the concept of eco-efficiency is introduced, and then the opportunities for environmental
improvement are presented. During this research project, the following solutions have studied:
mobile enterprise technology solutions, lifecycle solutions, medical solutions, infrastructure
solutions, turnkey power plant solutions, total energy solutions, total document solutions, total
chemical management solutions, and integrated security solutions.

The integrated solutions framework

The framework on the next page (Figure 1) presents the different features of integrated solutions
that have been identified. The model is based around three main elements: the integrated solution
itself, the organisation that provides the solution, and the client that buys the solution. Alongside
these elements, the nine features of integrated solutions are positioned. These are discussed next.

Adding value
Battling commoditisation of their products and avoiding cost competition are among the main
drivers for a company for offering integrated solutions. The integrated solution that is offered
must be perceived by the client to have a certain added value compared to existing possibilities.

Business need
An integrated solution focuses on more than just products. It focuses on a specific business need
of a client. A solution provider takes over an entire set of client’s activities. The provider can, by
analysing their clients’ processes, reduce inefficiencies in terms of material and energy use, thus
leading to cost reductions.

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 Bu
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Figure 1: The integrated solutions framework

Integration
Solution providers integrate a wide range of products, services, systems, knowledge, and support
into a tailor-made solution for their clients. ICT can play an important part in this, since it has the
ability to integrate previously separate elements, thus enhancing the efficiency of the solution.

Lifecycle
Integrated solutions are not about a short-term fix but rather about long-term improvements.
Solution providers remain involved in the solution throughout its lifecycle. Therefore lifecycle
thinking becomes important.

Risk/ Performance
When offering integrated solutions, usually some sort of performance guarantee is involved. The
solution provider takes care of a certain business problem, ensures a performance level, and the
client pays a premium for this. The solution provider is responsible when performance levels are
not met. The provider has got an incentive to enhance the efficiency of the solution, i.e. to assure
a certain result while using as little resources as possible.

Customer intimacy
With integrated solutions the client plays a crucial role. It is about getting closer to the customer
and getting the customer involved. The solution provider then tailors its offering to the
customer’s needs. Therefore it is important to understand the client’s operational requirements
and forge close relationships with clients.

Partnerships
It is important to work with (other) market winners in order to provide excellent and robust
solutions. Besides that, it is found useful to work with industry associations and regulatory bodies
in order to help formulate and to anticipate standards affecting the solution.

Capabilities
A lot of skills, knowledge and capabilities are involved in offering solutions. The most important
ones are: system integration capabilities, business consulting capabilities, operating services
capabilities, technical competence, life cycle management, market knowledge, and soft skills.

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Organisational structure
The organisational structure needs to change if a company wants to change towards providing
solutions and the company also has to redefine its role in the value chain. The way the company
performance is measured needs to change, since offering solutions goes beyond selling products.

Eco-efficiency
This research project has focused on the possible reduced environmental impact of integrated
solutions compared to existing options. The aim to reduce the environmental impact of a
product, service or system is called ‘eco-efficiency’. The essence of eco-efficiency is contained in
eight simple guidelines:

Reduce the material intensity of goods and services
Mining and processing materials requires energy and creates pollution and waste, which can be expensive.
Using materials more efficiently and sustainably makes sense both for the environment and for business.

Reduce the energy intensity of goods and services
Energy is consumed during most stages of the life cycle of any product or service. Producing and consuming
this energy creates pollution and waste. Making life cycles more energy efficient creates environmental benefit.
As energy is costly even today, reducing the energy intensity will also create economic benefit.

Reduce toxic dispersion
Some substances that are emitted to the environment can cause negative environmental and health impacts.
Reducing health and safety risks of business operations to humans and the environment is part of a
business’ corporate responsibility.

Enhance material recycleability
Material and energy utilisation can be improved by reuse in the same or another system. Recycling avoids the
energy and waste costs of mining or creating virgin materials.

Maximise sustainable use of renewable resources
Fossil fuels and some of the key materials on which our modern world is built are finite. Using renewable
resources often tends to create less environmental impact over the life cycle and might create economic benefits.

Extend product durability
Resource productivity can be increased by extending the useful life of products. This results in less frequent
replacements, which in turn can mean less waste and the use of fewer materials and energy resources.
Product-life optimisation can be used to gain competitive advantage.

Increase the service intensity of products
Eco-efficiency can also be improved by increasing service intensity while reducing or holding constant service
impacts, like shared use, upgrading and multifunctional products. This might generate economic benefits.

Create added value
The goal of eco-efficiency is to create value for society and for the company, by doing more with less over the
entire life cycle. When added value is created, while reducing or holding constant environmental impacts, the
environmental impact per unit of service is decreased.
As has become clear from the explanation above, eco-efficiency is not just about the reducing the
environmental impact in the manufacturing phase, but about reducing the environmental impact
across an entire (product) life cycle (See Figure 2).

It is useful to mention the so-called ‘rebound effect’ in this context. The ‘rebound effect’ is the
environmentally negative second order effects which can sometimes arise from more eco-
efficient solutions. The more the price of something goes down (e.g., because energy or material
requirements are reduced), the more likely it is that demand will increase in response to the falling
price. The question then is whether the environmental impacts from the increased demand
outweigh those from the reduction in environmental impacts per unit of output. It is therefore
important to gain a clearer understanding of the circumstances in which eco-efficient solutions
are more or less likely to create rebound effects.

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 Resources Base Manufacturing Utilisation Waste
materials

Loop 1:
Loop 2: Re-use of goods
Recycling of materials Repairs of goods
Reconditioning of goods
Upgrading of goods

Figure 2: The (product) life cycle with two closed material loops

The refined eco-efficient solutions model

On the next page, the refined eco-efficient solutions model is shown (Figure 3). The model
consists of the framework discussed above and the specific elements of integrated solutions that
might be able to influence the eco-efficiency of a solution. These elements can be regarded as
points of particular attention from an eco-efficiency point of view. It must not be thought of as a
prescriptive set of rules but rather a set of guidelines which can support the further development
of more eco-efficient services or solutions.

The following nine elements of integrated solutions, that might be able to influence the eco-
efficiency, have been identified:
1. Focus on creating value
Indirectly reducing the environmental impact per unit of service, thereby improving its eco-efficiency
2. Focus on the whole process or business need
Rather than focussing on separate products or services, tailor the integrated solution, thus discarding the
inefficiencies and redundancy
3. Acknowledge interdependencies and vested interests
Existing interdependencies between a solution provider and other parties can limit the freedom with which
the solution provider can offer eco-efficient solutions
4. Battling rebound effect
Actively looking at rebound effect and look at ways to reconfigure/ redesign the solution so as to limit this
effect.
5. Conscious use of ICT
Increased eco-efficiency through shipping less physical matter around and the ability to integrate previously
separate elements; acknowledge rebound effect and energy use.
6. Performance guarantees
Guaranteed performance gives an incentive to fulfil a certain need using fewer resources – but be aware of
over-performance.
7. Create lifecycle awareness
Gather information of solution throughout its lifecycle and redesign the solution so as to limit the resources
used for the solution throughout its lifecycle.
8. Ability to shape client’s expectations
An opportunity for offering more eco-efficient solutions to clients, which appeals to a company’s initiative to
make the environment part of their solutions.
9. Redefine ways of measuring company performance
Instead of product sales, different ways of measuring corporate performance have to be devised when
providing solutions. This needs to be in line with corporate strategy.

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Conscious use of Information and
Communication Technology –
Focus on whole process; tailor solution,
acknowledge rebound effect and energy discard inefficiencies and redundancy
use
Acknowledge interdependencies and
vested interests

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Create lifecycle awareness - gather Solution unit of service
information of solution throughout
Battling rebound effect
lifecycle Risk / Performance

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Figure 3. The refined eco-efficient solutions model

If a company wants to offer an eco-efficient solution, it needs to pay explicit attention to the
environment, rather than relying on the business forces present when providing integrated
solutions. Moreover, it also came to light that, more often than not, there is no link between the
environmental orientation of a solution and the corporate environmental orientation. These two
elements – explicit attention to environment and link between environmental attitude at solution
and corporate level – are represented by a globe in the inner triangle of the refined model,
representing planet Earth or the ‘environment’. The position of the globe also illustrates that
there needs to be a congruent environmental attitude between the other three triangles – Client,
Organisation, and Solution.

Application of the eco-efficient solutions model

The eco-efficient solutions model describes the distinct features of an integrated solution and the
elements that can influence the eco-efficiency of a solution. The model, and more specifically the
framework, enables academics and practitioners in the eco-efficient services research field to
identify the features that need to be taken into account when product-oriented companies
successfully want to shift towards providing solutions. For example, the model stimulates these
practitioners to consider ‘Customer intimacy’; how can this be achieved or how can customer
intimacy contribute to the commercial success of a particular solution? It thus provides a
business design framework for developing environmentally or sustainability focused approaches.

The model also shows elements related to the eco-efficiency of a solution. These provide useful
points for thought for academics and practitioners in the eco-efficient services research field to
enhance the eco-efficiency of eco-efficient services and integrated solutions. These elements can
be incorporated as development considerations into existing service concepts or provide
inspiration for the development of new eco-efficient service of solutions concepts. For example,
one of the elements is ‘Redefine ways of measuring company performance’. This is an important
element to take into account when developing and offering eco-efficient services or solutions,
since this offer and corporate metrics need to be geared to each other if it is to contribute to
enhanced eco-efficiency. It is thus important to acknowledge the wider implications of
developing eco-efficient services or solutions. The elements of the model also provide useful
directions for future research into issues related to the eco-efficiency of services and solutions.
When looking at the same element for example, future research can be carried out to find
substitutes for measuring company performance.

Finally, the eco-efficient solutions model can be transformed into a communication tool for
researchers and business practitioners, to communicate the features of integrated solutions and
the elements that might influence the eco-efficiency of a solution.

The SOLiD project

The acronym SOLiD stands for Service Oriented Life cycle Design. The project is funded by the
UK Engineering and Physical Sciences Research Council (grant nr.: GR/M54834).The project
started in October 1999 and has a duration of 3 years. The principal investigator is Dr. Tracy
Bhamra, and the two PhD researchers working, one of which is Frank van der Zwan MSc.

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