INTEGRATION OF SUSTAINABILITY ASPECTS IN PRODUCT PORTFOLIO
ABSTRACT
Several environmental issues are incrementing sys- supported the development of semi-structure in- INTEGRATION OF SUSTAINABILITY tematically, and many of them are linked to man- terviews with companies and field experts. The ufacturing activities. To mitigate these issues, it interviews outcome provided a better under- ASPECTS IN PRODUCT PORTFOLIO is necessary to develop sustainability solutions in standing of the industry perspective. Afterwards, a the early stages of the innovation process, where workshop helped to understand what aspects are there is room for creativity and innovation. The more significant for the portfolio evaluation cri- integration of sustainability at the strategic level teria. Finally, a strategic sustainability assessment of the company, where the essential decisions, the tool SLCA 2.0 was used to assess a technology strategic plan, and the portfolio are developed, product portfolio of a specific industry case. might ensure the implementation of sustainability aspects in products and services. Many companies The results from the studies created a foundation develop product portfolios to organize and offer to: a) determine the state of art of the sustaina- services, products, technologies and operations bility product portfolio field and its relevance for Denny Carolina Villamil Velasquez following the company strategy and targets. The integration and implementation of sustainability in portfolio components are assessed and selected the early stages of the product innovation process, using evaluation criteria. The most common cri- b) define the concept of sustainability product teria include: cost, quality, risk, revenue, time and portfolio, c) have a better understanding of the market position. Usually sustainability is not in- setting and the application of the portfolio eval- cluded in the portfolio evaluation criteria. uation criteria and how to include sustainability in the evaluation, d) identify key factors to integrate The aim of this research is to obtain a better un- and implement sustainability in the product port- derstanding of how sustainability can be integrated folio, e) apply and test a tool for assessing a tech- in the product portfolio development of manufac- nology portfolio from a sustainability perspective turing companies. The main research targets are and f) create a prototype of a model to develop to: 1) define sustainability product portfolio based the product portfolio with a strategic sustainability on a comprehension of the academic and indus- perspective. try perspectives, 2) identify how companies cur- rently implement sustainability in their portfolio, This research provides a knowledge foundation 3) determine which evaluation criteria and tools of how sustainability can be integrated in product are used for portfolio development and 4) how the portfolio. In future research a model will be devel- product portfolio is developed, implemented and oped to support companies of how to include a managed. strategic sustainability perspective into their prod- Carolina Villamil Velasquez Denny uct portfolio to enhance development of more A systematic literature review was performed to sustainable solutions. understand the state of the art about sustainabili- ty product portfolio. The literature review results
Blekinge Institute of Technology Licentiate Dissertation Series No. 2020:02 2020:02 ISSN: 1650-2140 ISBN: 978-91-7295-398-7 Department of Strategic Sustainable Development 2020:02 Integration of Sustainability Aspects in Product Portfolio
Denny Carolina Villamil Velasquez
Blekinge Institute of Technology Licentiate Dissertation Series No 2020:02
Integration of Sustainability Aspects in Product Portfolio
Denny Carolina Villamil Velasquez
Licentiate Dissertation in Strategic Sustainable Development
Department of Strategic Sustainable Development Blekinge Institute of Technology SWEDEN 2020 Denny Carolina Villamil Velasquez Department of Strategic Sustainable Development Publisher: Blekinge Institute of Technology SE-371 79 Karlskrona, Sweden Printed by Exakta Group, Sweden, 2020 ISBN: 978-91-7295-398-7 ISSN: 1650-2140 urn:nbn:se:bth-19037
“Todo aquel que atente contra la madre tierra atenta contra sus hijos, quien agrede a la madre tierra nos agrede a todos, a los que vivimos hoy y a los que luego vendrán.” Pensamiento de los indígenas U´wa (Boyacá, Colombia).
“Anyone that destroys mother nature destroys their own children, who destroys mother nature destroys everybody, those that are living today and those that will come in the future” U´wa indigenous belief (Boyacá, Colombia).
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ii Acknowledgements
I am grateful to mother nature, and all the wonderful people that have been part of this journey. Those who have inspired, motivated, shared, challenged, respected, collaborated, listened and loved me. I express my gratitude:
To Sophie Hallstedt. my main supervisor, who has been a wonderful human being and guided me with patience, wisdom and respect. To my second supervisors Göran Broman, for providing great and constant support, and Johana Nylander, for sharing her industry expertise. To the SPD team for the valuable feedback and project development. To the staff of the department of Strategic Sustainable Development at BTH, for their collaboration and friendship. To the MSPI 2012 people, specially to Tony Thompson, who inspired me to continue in this expedition.
To the people from the company partners, for being part of the projects to implement sustainability in the product innovation process. To the Swedish Knowledge Foundation (KKS) and Vinnova for the project founding.
To my family, who has supported and loved me during my journey. To my beloved mother, who has been my mentor, my inspiration, and my guardian. To my father for his contagious positive attitude. To Rochi, for being my unconditional support. To Javi, for showing me the environmental and social side. To Sarita, Natis and Emilia, who are the children of my hearth.
To my teachers and students in Colombian and Swedish universities, who have inspired me to be better at learning and teaching. To my Colombian friends, who have supported my education and knowledge sharing. To my friends in Sweden, for keeping me smiling in the sunny and dark days. To the dance and choir people, for transmitting a valuable positive energy through music. To the board game community, for inspiring me to include games into the research and teaching activities.
To the indigenous communities, farmers and social leaders who have fought for the environment protection and the well-being of our society. Especially, to more than 800 Colombian leaders who have been killed since 2016 defending our territory and the human rights.
Karlskrona, December 2019
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iv Abstract
Several environmental issues are incrementing systematically, and many of them are linked to manufacturing activities. To mitigate these issues, it is necessary to develop sustainability solutions in the early stages of the innovation process, where there is room for creativity and innovation. The integration of sustainability at the strategic level of the company, where the essential decisions, the strategic plan, and the portfolio are developed, might ensure the implementation of sustainability aspects in products and services. Many companies develop product portfolios to organize and offer services, products, technologies and operations following the company strategy and targets. The portfolio components are assessed and selected using evaluation criteria. The most common criteria include: cost, quality, risk, revenue, time and market position. Usually sustainability is not included in the portfolio evaluation criteria.
The aim of this research is to obtain a better understanding of how sustainability can be integrated in the product portfolio development of manufacturing companies. The main research targets are to: 1) define sustainability product portfolio based on a comprehension of the academic and industry perspectives, 2) identify how companies currently implement sustainability in their portfolio, 3) determine which evaluation criteria and tools are used for portfolio development and 4) how the product portfolio is developed, implemented and managed.
A systematic literature review was performed to understand the state of the art about sustainability product portfolio. The literature review results supported the development of semi-structure interviews with companies and field experts. The interviews outcome provided a better understanding of the industry perspective. Afterwards, a workshop helped to understand what aspects are more significant for the portfolio evaluation criteria. Finally, a strategic sustainability assessment tool SLCA 2.0 was used to assess a technology product portfolio of a specific industry case.
The results from the studies created a foundation to: a) determine the state of art of the sustainability product portfolio field and its relevance for integration and implementation of sustainability in the early stages of the product innovation process, b) define the concept of sustainability product portfolio, c) have a better understanding of the setting and the application of the portfolio evaluation criteria and how to include sustainability in the evaluation, d) identify key factors to integrate and implement sustainability in the product portfolio, e) apply and test a tool for assessing a technology portfolio from a sustainability perspective and f) create a prototype of a
v model to develop the product portfolio with a strategic sustainability perspective.
This research provides a knowledge foundation of how sustainability can be integrated in product portfolio. In future research a model will be developed to support companies of how to include a strategic sustainability perspective into their product portfolio to enhance development of more sustainable solutions.
Keywords: Product portfolio, sustainability product portfolio, sustainable product development, portfolio evaluation criteria, early design phase, strategic sustainability, strategic plan.
vi Thesis
Disposition
An introductory part is presented in this thesis, which is supported by the papers listed here below. These papers have been adjusted to the thesis format, without any change of their content.
Paper A
Villamil, Carolina & Hallstedt, Sophie. (2018). Sustainability product portfolio – a review. European Journal of Sustainable Development, 7(4), 146- 158. https://doi:10.14207/ejsd.2018.v7n4p146
Paper B
Villamil, Carolina & Hallstedt, Sophie. (2019). Sustainability product portfolio from an industrial perspective. (Submitted to a Journal).
Paper C
Villamil, C., Nylander, J., Hallstedt, S., Schulte, J., & Watz, M. (2018). Additive manufacturing from a strategic sustainability perspective. 15th International design conference, May 2018. Dubrovnik, Croatia. https://doi.org/10.21278/idc.2018.0353
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viii Table of contents
1 INTRODUCTION 1
1.1 Aim and research questions 3
1.2 Scope 4
1.3 Outline 5
2 CONCEPT BACKGROUND 7
2.1 Product portfolio 7
2.2 Portfolio and product development 9
2.3 Product innovation 10
2.4 Sustainability and sustainable development 12
2.5 Sustainable product development 14
2.6 Sustainable product development approaches 15
3 RESEARCH METHODOLOGY 21
3.1 Qualitative design research 21 3.1.1 Goals 22 3.1.2 Conceptual framework stage 23 3.1.3 Research questions stage 23 3.1.4 Methods stage 23 3.1.5 Validity 25
3.2 Design research methodology 25
4 SUMMARY OF APPENDED PAPERS 29
4.1 Paper A 29
4.2 Paper B 32
ix 4.3 Paper C 34
5 MAIN RESULTS AND DISCUSSION 37
5.1 RQ1: How can the concept of a Sustainability Product Portfolio be defined? 37 5.1.1 Product portfolio development 37 5.1.2 Stakeholder’s involvement in the product portfolio 40 5.1.3 Early stages of the product innovation process 41 5.1.4 Sustainability and product portfolio 42 5.1.5 Proposal of a sustainability product portfolio definition 43
5.2 RQ2: What frameworks, guidelines, tools, criteria or other forms of support can be used to assess and guide companies to develop sustainability product portfolios in the early stages of the product innovation process? 45 5.2.1 Product portfolio evaluation criteria 46 5.2.2 Tools used for product portfolio development process 48 5.2.3 Using the SLCA2.0 tool for a technology portfolio assessment 50
5.3 RQ3: What are some of the perceived benefits with a sustainability product portfolio from a company perspective? 53 5.3.1 Key factors and guidance model to implement sustainability in the product portfolio process 53 5.3.2 Possible application in a sustainability technology portfolio 56
6 CONCLUSIONS 59
REFERENCES 63
PAPER A 75
PAPER B 95
PAPER C 125
x 1 Introduction
1 Introduction
Society has overpassed some of the nine planetary boundaries proposed by Rockström et al. (2009), such as, biosphere integrity, biogeochemical flows (nitrogen/phosphorous), climate change and land-system change. As “80 percent of the world’s population lives in countries that are running ecological deficits” (Foot print network, 2019) there is an urgency to propose radical changes in the society activities, before reaching the non-returning point.
There are several aspects that need to be mentioned to understand the meaning of the environmental issues that society is facing. In the case of the carbon dioxide (CO2) emissions worldwide, these emissions have increased from 22 Gt/year in 1990 to 37.1 Gt/year (McCarthy, 2018). Ripple et al. (2019) stated that several scientists agreed that “the planet Earth is facing a climate emergency”. According to the Earth Overshoot Day (2019), 1,75 earths, on average, are necessary to supply the resources demanded by humanity. For example, if all societies would live as the current society in the United States, we would require five planets, or, in the case of Germany, we would require three planets. Overconsumption is reaching the tipping points (Giljum et al. 2009). Moreover, an accelerated production process with a high demand of renewable resources has put a pressure on nature to the point that renewable resources are not regenerated in the same pace as they are used. This will eventually lead to resource deficiency, e.g., freshwater can become a shortage of resources if there is not enough time for its renewing process (Flörke, 2018).
Another significant environmental and social issue is the mega-mining projects. According to Villamil (2011), these projects have radically modified the biological and social dynamics of its territory, changing systematically the biodiversity and the equilibrium of the ecosystems, affecting the air, land, hydric resources, and the life quality of communities. Many of these transformed territories cannot restore their initial features, loosing forever their specific ecosystem characteristics. Sonter et al. (2018) identified a high increment in the deforestation of the Amazon forest located in Brazil “causing 11,670 km2 of deforestation between 2005 and 2015” due to mining activities. The mega-mining projects cause biodiversity loss, and even if there are reforestation plans, many of the endemic species will be lost. One of the biggest gold mines is Kalgoorlie Super Pit located in Australia, that has a high environmental impact; “the canyon-size hole - which is visible from space! – measures roughly 3.8 kilometers long, 1.5 kilometers wide and approximately 600 meters deep” (Mining global, 2015). These mining activities bring along a considerable amount of environmental issues, e.g.,
1 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio the contamination by mercury (ABC, 2005). These extracted minerals are some of the raw materials used for the manufacturing of everyday products.
The mentioned environmental issues are some of the few challenges that the planet is facing. These issues are linked directly with manufacturing processes and the complete product life cycle, from the raw material extraction to the end of life of the product. Moreover, the production and the demand of products have increased significantly in the recent decades, which have some positive effects for industry and society (Ritzén, 2000). At the same time, the increment of negative environmental and social impacts constitutes a challenge to society. There is a need to involve sustainability in the product innovation process with a holistic and strategic viewpoint (Hallstedt, 2008), and in those terms a sustainable product development should ensure the integration of sustainability in all the stages of the product life cycle, with a long-term perspective and with a system thinking approach, covering the three sustainability dimensions, the environmental, social and economic dimensions (Hallstedt & Isaksson, 2017). Therefore, manufacturing companies have an important responsibility of implementing sustainability into their development of products and services.
Product innovation is key for the development of sustainable solutions and will move society towards sustainability (Thompson, 2012; Shedroff, 2009). Several authors have developed design approaches and methods to develop sustainable innovations, such as eco-design (Brezet & van Hemel, 1997; Kobayashi, 2006; Donnelly et al., 2006), cradle to cradle (Braungart & McDonough, 2002), biomimicry (Benyus, 2002), design for the environment (DfE) (Graedel & Allenby, 2010), circular economy (CE) (Ellen MacArthur Foundation, 2013), sharing economy (Hamari et al., 2016), among other approaches.
According to Cluzel (2016), companies have identified the need to include sustainability in their product innovation process. Usually this implementation occurs in the later phases of the process, when there is little room for improvements (Villamil & Hallstedt, 2018). The product planning stage is part of the early phases of the product innovation process, where companies set their product portfolio with different kinds of solutions (Ulrich & Eppinger, 2012), such as products, services, technologies and operations. The product portfolio process supports companies to be more competitive (Brones & Carvalho, 2015). Therefore, when a company defines the elements that will be part of their portfolio at the early stages of the innovation process, it is beneficial for the implementation of sustainability (Vliex, 2013).
2 1 Introduction
Cluzel et al. (2016) mentioned that companies are interested in including sustainability as part of their product portfolio, and according to Vliex (2013) it is therefore important to include sustainability in the company strategy. In the company’s strategic plan, most of the main and crucial decisions are taken related to the company and the offered products (Kohl, 2016). This means that the top management decides, at the strategic level of the organization, the future of the company’s offers (Vliex, 2013) and what elements should be included in the portfolio.
From the study described in Paper C in this thesis, companies agreed that the concept of sustainability is not well defined (Villamil et al., 2018). From a company perspective there is a gap between sustainability theory and implementation. Some companies are struggling to include sustainability into their product portfolio using the available methodologies and tools (Vliex, 2013). However, relatively few studies have focused on implementing sustainability considerations into product portfolio development, and some authors have criticized the definitions for being unclear or fuzzy (Bey et al., 2013) which motivates a special focus in this field.
The purpose of this study is, firstly, to understand the state of art and the company perspective on the concept of a sustainability product portfolio for a future guidance of companies to implement sustainability in the early stages of the innovation process. Secondly, the purpose is to develop a design method and a model that represent the design method with the objective to guide companies to implement sustainability in their product portfolio. This research is based on the outcomes from a systematic literature review, a descriptive study and a prescriptive study.
1.1 Aim and research questions
As mentioned previously, there is a need to include sustainability in the early stages of the product innovation process at the strategic level of the organization, where the company goals, the strategy, the vision, the future plan and targets are set. The early inclusion of sustainability in the portfolio development might ensure its integration into a larger variety of products and services. The aim of this research is to build a knowledge base for a better understanding of the sustainability product portfolio concept, that can lead to support and guide manufacturing companies for how to implement sustainability in their product portfolio.
The following research questions (RQ) were developed to guide the research:
3 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
RQ1: How can the concept of a Sustainability Product Portfolio be defined?
RQ2: What frameworks, guidelines, tools, criteria or other forms of support can be used to assess and guide companies to develop sustainability product portfolios in the early stages of the product innovation process?
RQ3: What are some of the perceived benefits with a sustainability product portfolio from a company perspective?
Table 1 presents the research questions and their relationship with the appended papers used for the development of the study. In future work, some of the RQs will be further explored.
Link between the research questions and the appended papers.
1.2 Scope
The scope of this research is on the product portfolio and its link with sustainability. Although the product portfolio is related to portfolio and project management, the management area is covered partially. The main focus is within the area of sustainable product development and sustainability integration in the early stages of the product innovation process.
4 1 Introduction
This study mainly targets manufacturing companies, who develop tangible products and services. The integration and implementation of sustainability in the company portfolio is a topic that only few researchers have focused on. In this research, the three sustainability dimensions are considered, the economic, social and environmental dimensions, using a strategic sustainability perspective, which is guided mainly by the Framework for Strategic Sustainable Development (FSSD) (Broman & Robèrt, 2017).
1.3 Outline
The following chapter 2 describes the main concepts used to understand the research field. In chapter 3 the research methodology used to guide the study is presented. Chapter 4 includes summaries, main outputs and contributions of the papers used to develop this study. Chapter 5 describes the main research outcome and the contribution to the field. Finally, chapter 6 summarizes the essential aspects of the study and presents the future research work.
5 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
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6 2 Concept background
2 Concept background
This section presents a summary of the main concepts related to the research about the sustainability product portfolio, such as: product portfolio, sustainability and sustainable product development.
2.1 Product portfolio
Many manufacturing companies are offering a cluster of different products and services to their customers, which is known as the company product portfolio (Villamil & Hallstedt, 2018). With the portfolio process companies can organize, classify and assess the right offerings. A portfolio can be linked to a project, a program or the portfolio management (Cooper et al., 2001). From a management perspective, a portfolio is defined as: “a collection of projects, programs and other work that is grouped together to facilitate the effective management of that work to meet strategic business objectives” (PMI, 2013), where a “project may be described as a temporary undertaking to produce a unique product, service or result, a portfolio brings together all the projects created by an organization” (Heising, 2012).
The company portfolio can have sub-portfolios, which are compilations of projects and programs in a lower level of the main portfolio, see Figure 1. The projects, programs and sub-portfolios can be related by common elements or not related at all (PMI, 2013). The product portfolio of a company is directly connected with the company strategic plan, where companies make crucial strategies and plans to control, prioritize, and evaluate their operations (Vliex, 2013). Companies have three organization levels: the strategic, tactical and the operational level. The portfolio development belongs to the strategic level, where high-level positions establish the overall company decisions and set the most important goals related to products and services (Kohl, 2016). Therefore, the high-level positions such as the CEOs, and top managers, are in charge of taking these decisions (Vliex, 2013). When a company evaluates and selects the portfolio components, they frequently use the “Iron triangle”, which assesses the scope, time and cost (Silvius & Schipper, 2015).
7 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
Figure 1. The Portfolio content.
For portfolio management, the PMI (2013) suggested the following phases: a) strategic planning process, b) aligning process group, c) monitoring and controlling process group and d) component process, see Figure 2. For the “aligning process group” phase, there are several steps to select the portfolio components, such as 1) Identification: the portfolio management team choses the projects or programs that will be part of the portfolio according to the strategic business goals, 2) Categorization: the team organizes the portfolio alternatives in different categories according to the company characteristics, 3) Evaluation: the team assesses the possible portfolio components, 4) Selection: the team selects and lists the portfolio components to manage them, 5) Prioritization: the team determines which aspects have a higher priority for each portfolio component, 6) Portfolio balancing: the team follows up the strategic plan and allocates the different aspects for an effective management and 7) Authorization: the team establishes the final portfolio, and, thereafter, the company can start its development.
8 2 Concept background
Figure 2. Portfolio Management Processes (PMI, 2013).
2.2 Portfolio and product development
The International Organization of Standardization ISO 9001:2000 defined a product as: “an output that results from a process. Products can be tangible or intangible, a thing or an idea, hardware or software, information or knowledge, a process or procedure, a service or function, or a concept or creation”. This ISO definition is related to the concept used for this thesis, where a product is the physical object, software or process developed by a manufacturing company, which is supported by services.
In the area of product development, a portfolio is linked to product planning, where a portfolio is a group of projects, and a project is planned to develop products (Ulrich & Eppinger, 2012). In product planning, there is a portfolio process to develop products, following five steps: i) identify opportunities; ii) evaluate and prioritize projects; iii) allocate resources and plan timing; iv) complete pre-project planning, and v) evaluate several variables (Ulrich & Eppinger, 2012). Companies have used the product portfolio to deal with the complexity of their offers (Kohl, 2016). They use portfolio evaluation criteria to select the most suitable projects. The products and services are normally assessed by the following evaluation criteria: cost, revenue, customer needs, market trends, and many other factors (Cluzel, 2016). Balancing the portfolio is a key step in the portfolio development process, and since it is necessary to select the right offerings, which can be competitive, it must be aligned with the company strategy, profitable in a short and long-term, besides other aspects (Vliex, 2013). Therefore, companies use several portfolio maps and
9 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio matrices to have a better perspective of the complete portfolio (Kohl, 2016; Cluzel, 2016).
2.3 Product innovation
Innovation is related to the creation of new products, services and operations (Thompson, 2010). Many companies use innovation to develop new products to improve the characteristics of current products. According to Cooper and Kleinschmidt (1987) there are three dimensions for new products performance: 1) Financial performance, which is related with the profit, 2) Opportunity window, which is linked to new market opportunities and 3) Market impact, which determines the influence and sales in local and global markets. Danneels (2002) mentioned the need for technology and customer competences to develop innovative products, i.e., to have enough knowledge and capabilities to determine the market needs related to new technologies and customer demands. Zhou and Wu (2010) proposed a strategic flexibility to adapt and be ahead in the technology capabilities necessary for product innovation. The innovation of products can be radical, where there are drastic changes, or incremental innovation, where the changes are made step by step (Valle & Vázquez-Bustelo, 2009).
The product innovation process proposed by Roozenburg and Eekels (1995) is used in this thesis to describe the phases of the process, see Figure 3. The first stage of the innovation process is related to “formulating goals and strategies”, which is connected to the portfolio foundation and it is linked to the company strategic plan (Kohl, 2016). The product planning phase is where the portfolio is developed (Ulrich & Eppinger, 2012). Furthermore, at the early stages of the innovation process there are more opportunities to develop sustainable solutions (Hallstedt, 2008; Wever et al., 2008).
10 2 Concept background
Figure 3. Product Innovation Process (Roozenburg & Eekels 1995).
11 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
2.4 Sustainability and sustainable development
Sustainability has many definitions based on different perspectives depending on the context. Sustainability comes from the Latin word “sustinere”, related to the word sustain which means to hold, endure or support (Jeronen, 2013; Online Etymology Dictionary, 2019). In the triple bottom line approach, it is considered the three dimensions of sustainability: environmental, social and economic sustainability (Elkington, 2002). Miller and Spoolman (2012) proposed that: “Sustainability is the capacity of the earth's natural systems and human cultural systems to survive, flourish, and adapt to changing environmental conditions into a very long-term future. It is about people caring enough to pass on a better world to all generations to come”. Missimer et al. (2017) suggested an approach taking into account the social sustainability and the holistic perspective: “Sustainability is about the elimination of basic mechanisms of systematic degradation of essential aspects of both the ecological and the social system”. Humanity is living in very complex systems, which are interconnected and depend on other systems and their dynamics (Capra, 1996). For that reason, all the human activities will have positive or negative impacts to the systems (Rockström et al., 2009). Sustainability is linked to the systems, their complexity and dynamics (Capra, 1996), which is known as systems thinking. This fact is associated to what Lozano (2008) has proposed, namely, that sustainability is related to a long-term perspective.
Sustainability is related to the economy, society and ecological cycles, and these cycles are interdepended and nested, i.e., the economy depends on the society and the society relies on the environment, although the environment does not rely on the society to function (Broman & Robèrt, 2017). Lozano (2008) highlighted that society plays a key role in maintaining the system equilibrium and prosperity.
The World Commission on Environment and Development (1987) defined sustainable development as “Humanity has the ability to make development sustainable - to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs”. In 2000, the United nations (the UN), created the 8 Millennium Development Goals (MDGs), with the main purpose to end poverty in several fields by 2015. After the assessment of the MDGs and with a broader perspective, the UN in 2015 defined 17 Sustainable development goals SDGs, which are related to well-being, poverty, education, health, environmental protection, corporate responsibility, resource efficiency, besides other goals (UNDP, 2019). The SDGs are suggested to be part of the agendas of companies, according to Ban Ki-moon, United Nations Secretary-General: “Business is a vital partner in
12 2 Concept background
achieving the Sustainable Development Goals. Companies can contribute through their core activities, and we ask companies everywhere to assess their impact” (SDG Compass, 2016).
Figure 4. Funnel metaphor, based on Broman and Robèrt (2017) (Mukaze & Villamil, 2012).
In the funnel metaphor, there is a systematic increment of resources demand and production, which causes a proliferation of environmental impacts. Parallelly, there is a systematic decrease of resources, biodiversity, land productivity, among other issues related to the environmental degradation (Broman & Robèrt, 2017), see Figure 4. This is directly related with a systematic decrease of room for the development of new solutions. In order to reach sustainability, it is necessary to balance the aspects that increase and decrease in the funnel, and systematically change the directions of the arrows, therefore avoiding the tipping points and the collapse of our society. Related to this metaphor, Broman & Robèrt (2017) developed a framework for strategic sustainable development (FSSD) which is based on a system perspective, sustainability principles and backcasting, which supports the development of a future vision, see Figure 5. The overarching sustainable principles are developed to identify the root-causes of our unsustainable society (Broman & Robèrt, 2017). These principles are: “In a sustainable society, Nature is not subject to systematically increasing
(1) …concentrations of substances from the Earth's crust, (2) …concentrations of substances produced by society, (3) …degradations by physical means,
13 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
and, in that society people are not subject to structural obstacles to (4) health, (5) influence, (6) competence, (7) impartiality, and, (8) meaning-making” (Missimer et al., 2017)
Figure 5. Backasting from sustainability principles, inspired from Broman & Robèrt (2017).
2.5 Sustainable product development
Product development is related to all the processes, resources, management and other activities required to conceive, manufacture and launch a product (Ulrich and Eppinger, 2012). Sustainability is a key aspect in the product innovation process (Shedroff, 2009). Companies are looking for new business models that improve the sustainability performance, provide value to customers and revenue to the company, where the shared economy is taking a larger role (Hamari et al., 2016). Hallstedt and Isaksson (2017) suggested a definition for sustainable product development, meaning that this happens “when a strategic sustainability perspective is integrated and implemented into the early phases of the product innovation process, including life-cycle thinking”.
The Product Service System, PSS, motivates ownership reduction and the turning of material goods into experiences. PSS is founded in the idea of
14 2 Concept background
solving a need by offering the combination of products and services (Roy, 2002), e.g., the bike sharing system, where users can use a bike for a specific period of time and next, they return it to be used for other users. Maxwell and van der Vorst (2003) mentioned that academy and industries are focusing on Sustainable PSS to move organizations towards sustainability by considering the complete product life cycle, assessing the system interactions, creating long-lasting solutions and equilibrating the three dimensions of sustainability: the economic, social and environmental dimensions.
Hallstedt (2008) proposed to use the FSSD, the backasting perspective and the socio-ecological principles as a main pillar to include sustainability in product development, and as a result a Method for Sustainable Product Development (MSPD) was developed (Byggeth et al., 2007). The main purpose of the MSPD was to define a methodology to identify sustainability issues and to guide companies to develop sustainable solutions. To give guidance in the early stages of product development, Hallstedt (2017) developed the so-called Sustainability Design Space, that aims to answer the following questions: “What are the prioritized sustainability aspects for the company products & production; and to What degree a concept performs in relation to a sustainable solution?”. As part of the design space, Hallstedt (2017) developed the sustainability criteria and sustainability compliance index (SCI), to guide decisions in the early stages of the innovation process using backasting and key aspects of the FSSD. The SCI has been used as an important part in other support tools, for example a material criticality assessment tool (Hallstedt & Isaksson, 2017) to be used in the early stage of the product innovation process.
2.6 Sustainable product development approaches
There are several approaches related to product development and sustainability, such as eco-design, circular economy, cradle to cradle, biomimicry, eco-efficiency, among others. These approaches have been created to develop more sustainable solutions (Shedroff, 2009). According to Charter and Tischner (2001), ‘‘Sustainable solutions are products, services, hybrids or system changes that minimize negative and maximize positive sustainability impacts… beyond the life-cycle of existing products or solutions, while fulfilling acceptable societal demands/needs”. Some of these approaches are described in the following section to understand the field of sustainable solutions development.
15 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
Eco-design is a concept to describe the development of more environmentally friendly products. According to Pigosso et al. (2015), “Ecodesign aims to improve environmental performance of products throughout their life cycle, from raw material extraction and manufacturing to use and end-of-life”. Eco-design is the implementation of environmental aspects into the design and development of products, where there is a relationship between the role of design and the nature fundamentals: "eco- design can be interpreted as Design with a more intelligent interrelationship to Nature" (Karlsson & Luttropp, 2006). In eco-design, the development of manufacturing systems is focused on assessing the complete product life cycle, reducing consumption, and decreasing the negative environmental impacts of products.
Boks (2006) highlighted the importance of involving the value chain into the eco-design process, to define the role of the stakeholders involved for a further collaboration and management, and to be more efficient and reduce environmental impacts. Furthermore, Boks identified some obstacles for eco-design implementation, such as the complexity of tools, lack of collaboration, lack of design thinking, lack of management, among others. According to van Hemel and Cramer (2002), there are barriers and stimuli to implement eco-design; some stimuli are related to external aspects, such as government, suppliers, competitors and the initial stimuli are related to the “environment benefit, cost reduction, image improvement, new market opportunities”, besides others. Some of the barriers are related to “no clear environmental benefit, not perceived as responsibility, not yet required by legislation, not yet required by customers”, among others (van Hemel and Cramer, 2002).
Some eco-design tools, frameworks and methodologies have been developed to support companies in the development of sustainable solutions, such as the eco-design wheel (Brezet & van Hemel, 1997), the eco-design checklist (Brezet & van Hemel, 1997; Wimmer, 1999), the ten golden rules (Luttropp & Lagerstedt, 2006), besides others. Knight & Jenkins (2009) identified some barriers with the use of the eco-design tools such as the limitation of application of eco-design, lack of specificity, need of specific knowledge, and the fact that some tools are more appropriated than others. According to Lofthouse (2006), “many existing tools fail because they do not focus on design”, and he proposed a framework to develop an eco-design tool with specific requirements by following these aspects: education, visual, information, dynamic aspects, guidance, inspiration and non-scientific language.
Cradle to cradle (C2C) is an approach that considers the complete product life cycle and determines how it can be closed with zero emissions and zero
16 2 Concept background
waste (McDonough & Braungart, 2002). In nature, the unused materials are useful for the same of different cycles, there is no waste. In the cradle to cradle approach, the waste produced in the different stages of the product life cycle should be turned into useful material, similar to the natural processes. Instead of calling it waste, it is suggested to be called “nutrient”. The three principles for C2C are: “waste equals food, use current solar income and respect diversity” (McDonough & Braungart, 2002). The concept of cradle to cradle focuses on eco-effectiveness for a long-term growth and sustainable and effective material flows (Braungart et al., 2007). This approach is based on the following strategies: dematerialization, increased resource productivity, reduced toxicity, increased recyclability (downcycling) and extended product lifespan (Braungart et al., 2007). Bakker et al. (2010) identified some issues in the application of the C2C approach in industry systems, such as the lack of viability of business models, the fact that excess of biological material in nature can increase the eutrophication, besides other issues. Then they proposed to complement C2C with LCA.
Biomimicry is a design approach that uses nature as inspiration (Benyus, 2002). Since many centuries ago, humans have observed nature and have tried to emulate it (Kennedy et al., 2015), e.g., the bird’s flight, which was the inspiration for designing airplanes. Nature has evolved and adapted in the most efficient and effective way, where the processes use the sun as power with zero waste. According to Benyus (2013), “Biomimicry is learning from and then emulating natural forms, processes, and ecosystems to create more sustainable designs”. Many researchers and companies have taken nature as guidance, e.g., the king fisher bird was used as inspiration to decrease the noise and to improve the design of a bullet train (Ask nature, 2016). Kennedy et al. (2015) mentioned that “biological designs are, for instance, resilient, adaptable, multifunctional, regenerative, and generally zero-waste”. Biomimicry is based on the life principles, which control most of the planet species, and these principles are set in the following categories: “evolve to survive, adapt to changing conditions, be locally attuned and responsive, integrate development with growth, be resource efficient (material and energy), and use life-friendly chemistry” (Biomimicry 3.8, 2019). Nowadays, manufacturing activities use fossil fuel, high energy consumption, and produce a considerable amount of waste and emission. In contrast, nature runs with solar energy, uses water as a solvent, encourages diversity, and focuses on resource efficiency (Rossin, 2010; Hastrich, 2006).
The Circular economy (CE) approach is based on circularity, i.e., it determines different possibilities to close the loops and develop other cycles to make the system more efficient. This approach was introduced by the Ellen MacArthur Foundation (2013) to motivate the awareness of implementation of sustainability in organizations. The CE has been used in
17 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio different sectors, such as education, legislation, and manufacturing. Korhonen et al. (2018) defined CE as: “economy constructed from societal production-consumption systems that maximizes the service produced from the linear nature-society-nature material and energy throughout flow”. Circularity is inspired by the closed loops presented in natural systems, where everything is used inside the system (Ellen MacArthur Foundation, 2013). The wasted materials have a notorious value and might be used in the same or different cycles. CE methodologies focus on circular manufacturing systems and decision-making tools that can guide to move towards CE. Related to this fact, Rashid et al. (2013) developed closed-loop manufacturing systems, to consider the energy, material and its value-added with a holistic view through products design, mainly looking at their supply chain and business model. Asif et al. (2016) and Lieder et al. (2017) developed models to evaluate the economic and environmental performance of the system with a business model perspective. According to Rashid et al. (2013), remanufacturing and closing the loop activities require a high amount of work in planning, logistics and it involves the stakeholders. Furthermore, it is essential to examine the connection between business models and CE. Bocken et al. (2014) defined business models by three main elements: “value creation to seize the market, value proposition to offer the product or service and value capture by earning the revenue”, proposing sustainable business model archetypes such as 1) Maximizing material productivity and energy efficiency, 2) Creating value from waste, 3) Substituting with renewables and natural processes, 4) Delivering functionality, rather than ownership, 5) Adopting a stewardship role, 6) Encouraging sufficiency, 7) Re-purposing the business for society/environment, and 8) Developing scale-up solutions. To develop more efficient and sustainable solutions it is necessary to combine several of these archetypes.
Some authors have identified barriers and challenges in the development of approaches to include sustainability in product development. Korhonen et al. (2018), e.g., identified challenges of the CE, which might be applicable to other approaches. These challenges are:
1) The limit of thermodynamics refers to the fact that any activity performed to close the loop (e.g., remanufacturing, recycling) produces impacts and needs energy and materials.
2) The limit of system boundaries is related to solutions that focus on local scale and short-term perspective.
3) The limit related to physical economic growth is linked to high product demand and consumption, causing negative facts such as the rebound and boomerang effect. The rebound effect is when a product tagged as
18 2 Concept background
sustainable might increment its use, due to the user perception of being more sustainable than others, e.g., car sharing. The boomerang effect is when the negative impacts from others may affect directly or indirectly, e.g., the forest protection in some specific areas will cause the overuse of non- protected areas, damaging the biodiversity balance and ecosystem dynamics of both areas.
4) The limit related with path dependency, where new CE solutions will have difficulties trying to position in the market.
5) The limit of governance and management refers to the logistics and the active participation of the stakeholders in the CE network.
6) The limit of social and cultural definitions, where the concept of waste is different for each culture and it is difficult to define the exact moment when it turns into value.
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20 3 Research methodology
3 Research methodology
This section is about the methodology used for this research. First, there is a description of the qualitative design research proposed by Maxwell (2005), and it is followed by the Design Research Methodology (DRM) by Blessing and Chakrabarti (2009).
3.1 Qualitative design research
The methodology for qualitative research proposed by Maxwell (2005) is suitable for the study about the sustainability product portfolio due to its interactive process, flexibility and the systematic methods that can be replicated in the research. Maxwell (2005) mentioned the importance of a well-structured methodology: “a good design, one in which the components work harmoniously together, promotes efficient and successful functioning”.
This methodology has five stages: goals, research questions, conceptual framework, methods, and validity, see Figure 6. Where the stages are connected to each other, the arrows in both directions represent their interaction. Consequently, a specific stage content and outcome that can be useful for another stage in any direction. For this study, the conceptual framework was the pillar for the different methods used in the research. The application of these methods guided the research questions and the goals. The research goals were adjusted according to the findings and a better definition of the conceptual framework. The methods were used to validate the findings, structure the conceptual framework, and answer the research questions. The iterative and flexible methodology was useful to improve the focus of the research and to have a better structure and foundation for the understanding of the field and the reliability of the research outcome. In the following paragraphs, each stage of the methodology proposed by Maxwell will be further explained.
21 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
Figure 6. Interactive model for qualitative Research (Maxwell, 2005).
3.1.1 Goals
The first approach of the literature review provided the elements for a better understanding of the field about the sustainability product portfolio. This outcome was useful to identify the main challenges, gaps and possible contribution of the research, between other variables that are the structural bases for the research planning and to determine the research goals. According to Maxwell (2005), the goals should be used to support and structure the research, and to guarantee that it is valuable, and additionally, to justify why the study is performed. For this research it was crucial to start defining the goals to identify a clear purpose of the study. This stage is referred to the purpose of the research which can be, e.g., personal, academic, or industrial. For this study there are two main purposes:
Academic purpose: to enrich the field of study and motivate other researchers to be part of it by building a theoretical support about the concept of a sustainability product portfolio, developing models or support tools to implement sustainability in the product portfolio that can be applied, tested and modified in academia and industry. Based on the research results, this study will provide a scientific contribution related to the concept of the sustainability product portfolio.
Industrial purpose: to contribute to an increased capacity to integrate and implement sustainability in the product innovation process and thereby speed up the development of more sustainable products. The environmental challenges that society is facing today require immediate and effective
22 3 Research methodology
changes. For that reason, this research applies the results directly in real industrial cases for their future application in sustainable development. The main contribution to manufacturing companies is to support and guide the process to include sustainability into their product portfolio, using specific case companies. This guidance process will later be improved and shared with other companies, contributing to the industrial application of sustainability into the product manufacturing sector.
3.1.2 Conceptual framework stage
In this conceptual framework stage, the useful concepts and theories that will support the research are identified. According to Maxwell (2005), it is essential to link the conceptual framework with the research questions, and for that reason it is necessary to determine a set of concepts to guide the research and have a solid ground to support the understanding of the analysis. In paper A and C, two literature reviews were performed to identify the main concepts related to the sustainability product portfolio and a specific technology portfolio of an industrial case, respectively. The results of these reviews have been the pillar for the research structure and analysis. The main concepts used for the foundation of this study are presented in chapter 2. This stage is further explained in papers A and B.
3.1.3 Research questions stage
In this stage it is possible to identify the questions around a specific problem and what the research wants to achieve. These questions are key elements for the research, as they will give the direction and the scope for the research. In some occasions, the research results will be according to the predicted outcomes. Sometimes, however, it is possible to have results in an opposite direction, meaning that they are then not aligned with the expected results. In that case, it is a winning situation as well, because it will provide new useful elements to the research that were not contemplated before (Thomas, 2004). The licentiate research is guided by the research questions, which are mentioned previously in the introduction section.
3.1.4 Methods stage
In the methods stage, all the elements used in the research to analyze, understand and visualize the data are presented. For this research, different methods have been developed, such as:
• Systematic literature review aided to determine the state of art of the research field. The systematic approach of the literature
23 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
review helped to have a defined research purpose, by identifying the type of information required for the research and documenting all the steps of the process. This is useful for the validation of the process or for further method replication (Gill & Johnson, 2002). For this case, mostly books, journals and conference papers were used to obtain the data. First, the scope, the research query and the data criteria selection were defined. Afterwards, specific topics were determined for the classification and organization of the data. Then followed a deep analysis of the data performed based on the RQs and research goals. Gaps and similarities were identified in the data analysis. The final phase of the review was to comprehend the findings, to structure the research and develop the conceptual framework. Two systematic literature reviews were performed, one related to the sustainability product portfolio and the other focused on the sustainability assessment of AM technologies used in aerospace industry. For a deeper description of the application of this method see papers A and C.
• Semi-structured interviews helped to understand the field from an industrial perspective. Based on the systematic literature review, specific questions were developed to comprehend the perspective related to the product portfolio and sustainability in manufacturing companies. The interviews were performed with experts in the field with experience in organizations and academia and with people from multinational manufacturing companies with presence in Sweden. The semi-structure interviews are more flexible, motivate, and encourage fluent conversation and empathy between the interview participants (Fontana & Frey, 1994), i.e., the interviews were guided with open questions that allowed freedom participation of the interviewer and interviewees, providing deeper or additional information related to the research topic. For more information about this method see papers B and C.
• Workshops performed with industrial partners were useful to collect valuable information (paper B) and to test a sustainability assessment tool (paper C). People from multinational manufacturing companies with presence in Sweden participated in the workshops. For the first workshop related to the portfolio evaluation criteria, the participants from different companies followed up the guidance using specific questions, to analyze three
24 3 Research methodology
different economic sectors. The purpose of the workshop was to a) identify and prioritize the criteria for each specific sector, and b) understand the role of sustainability in the product portfolio criteria. The second workshop was focused on the strategic sustainability assessment of a specific technology in an industrial case. Where, workshop participants compared and assessed three different scenarios of AM applied in aerospace industry, by using the SLCA 2.0 templates, guided questions, brainstorming and discussions. For a better comprehension of this method see papers B and C.
• Review of company reports from companies such as Clariant, Solvay and Henkel supported the understanding of some topics that have not been covered by authors in the literature review (papers A and C), such as evaluation criteria, visualization tools and portfolio assessment and development tools.
3.1.5 Validity
After the study is conducted, there are several results that need to be tested. This validation needs a set of test variables based on the nature and purpose of the research. For a consistent validation, conclusions based on the test variables or measurement need to be drawn, in order to determine if the results are reliable, by presenting enough proof of the process.
With the systematic literature review presented in paper A, it was possible to identify key factors to implement sustainability in the product portfolio from the academic perspective. These factors were validated with the interviews, where it was possible to identify key factors from the industry perspective. which are presented in paper B. Further information about this stage is presented in section 5.3.
3.2 Design research methodology
Blessing and Chakrabarti (2009) proposed the Design Research Methodology DRM, which is the main structure of this study. The methodology has four stages that are related to their contribution and support to each other. The DRM stages are: a) research clarification, b) descriptive study I, c) prescriptive study and d) descriptive study II. The DRM model is presented in Figure 7.
25 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
Figure 7. Design research methodology, DRM Framework (Blessing, Chakrabarti, & Blessing, 2009).
In the research clarification stage, it is required to obtain enough data to shape the research goals and scope, define the research structure and provide a foundation for the descriptive study I stage. For that reason, two systematic literature reviews were conducted. These reviews were performed to collect data developed by experts in the field, usually the information comes from academic journals, books and reports. This stage helped to have a better picture of the state of art of the research about the sustainability product portfolio from a scientific and an industrial perspective. It supported the understanding of the topic, the clarification of concepts or theories, the identification of research opinions and methodologies, besides presenting other advantages (Gill & Johnson, 2002). This stage is further explained in papers A and C.
In the descripted study I stage, through observations and interviews it is possible to collect data that provides a deeper understanding of the research. The systematic literature review was the foundation for the descriptive study I, which was based on semi-structured interviews (Fontana & Frey, 1994) and a workshop related to portfolio evaluation criteria. The data analysis was made following the methodology proposed by Miles & Huberman (1984) which has these steps: data collection, data reduction, data display and conclusions, drawing and verifying. And the coding was performed by following partially the method proposed by Strauss and Corbin (1990). This process is further explained in paper B.
26 3 Research methodology
In the prescriptive study stage, it is possible to build guidelines, methods, frameworks or elements to support the findings. The prescriptive study was supported by the outcome from the research clarification and the descriptive study I. A model will be developed in the prescriptive stage, to guide manufacturing companies to implement sustainability in their product portfolio. This stage is described in more detail in paper B. As part of the prescriptive study, a specific industrial case was used to assess a technology sub-portfolio by using a strategic sustainability assessment tool, which is further explained in paper C. The prescriptive study will be completed in the future work of this research.
In the descriptive study II stage, it is possible to analyze and evaluate the results of the prescriptive study, making the changes or adaptations that are required. In this stage it is essential to include the missing knowledge that has not been found in previous stages. This stage will be part of the future research work.
Figure 8 presents a map of how the stages of the DRM methodology are related with the papers that support this research.
Figure 8. Appended papers related to the Research methodology. Based on Blessing & Chakrabarti (2009).
27 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
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28 4 Summary of appended papers
4 Summary of appended papers
For this dissertation, three appended papers supported the research. This section presents a summary of the content of the papers, the relation to the thesis, and the author´s contribution.
4.1 Paper A
Sustainability product portfolio – a review.
Published as
Villamil, Carolina & Hallstedt, Sophie. (2018). Sustainability product portfolio – a review. European Journal of Sustainable Development, 7(4), 146- 158. https://doi:10.14207/ejsd.2018.v7n4p146
Summary
A company portfolio is a set of programs and projects and it is related with the business goals and the strategy of the organization, i.e., companies that introduce sustainability into their portfolio will more likely develop a larger amount of sustainable products, services, processes or technologies. The portfolio components are, usually, evaluated from a management perspective, where sustainability has a minor role in the evaluation criteria. This paper presents a systematic literature review about the sustainability product portfolio, drawing conclusions based on the state of art of the field.
The aim of the paper A is to identify the main aspects related to the sustainability product portfolio concept, determine challenges and opportunities, identify the tools, methods and frameworks that are used for product portfolio development, and determine key factors to implement sustainability from an academic perspective. Few researchers have done focused research in this area and, therefore, it was necessary to review some company reports of those industries that had developed a deeper understanding of the topic.
The results indicated that a general portfolio setting follows selection criteria and the company´s strategies, which usually are based on management elements, e.g., time, cost, risk, quality, among others, leaving behind sustainability aspects. Moreover, most of the tools used for evaluation criteria omit the holistic view. With the study it was identified that there is
29 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
a gap between portfolio management and sustainability implementation, and for that reason some companies have developed their own tools to include sustainability in their portfolio.
With this study it was possible to identify several gaps and challenges with sustainability implementation in the product portfolio such as e.g., vague communication regarding portfolio content and sustainability goals, lack of a common view of sustainability, lack of a system perspective in the portfolio evaluation, use of sustainability aspect only in late stages, confusion due to many tools available, and partial sustainability assessments of the portfolio components. In contrast, to fulfill those identified gaps, this research contributed to determine key factors to implement sustainability in the product portfolio. These can be divided into I) how and II) when to implement sustainability in the product portfolio, and III) what measures to support an implementation. In summary: I) How: integrate sustainability in all the development stages and portfolio elements; use a stage-gate model and multicriteria selection models to systematize the process; include a complete assessment of the product life cycle. II) When: in early stage of the process, i.e., in product planning; III) What: do stakeholder analysis and supply chain management; establish an alignment with the company goals and strategy; include sustainability in risk management, product value and product requirements; have a holistic view and include the complete system, and strive to develop innovations and new approaches
The implementation of sustainability into the product portfolio should be focused on the environmental, social and economic sustainability dimensions, introducing these dimensions in the early stage of the innovation process and integrating them with other elements of the portfolio evaluation criteria. A summary of gaps and key factors from paper A is presented in Figure 9.
The identified key factors were analyzed with a specific industry case presented in paper C, which describes a sustainability assessment of Additive Manufacturing (AM) technologies portfolio. It was possible to determine which key factors are currently used in a specific sustainability technology portfolio.
30 4 Summary of appended papers
Figure 9. Summary of the paper A.
Contribution to thesis
This paper provided the fundamentals to understand the field from the academic perspective. It was possible to determine the gaps in the field related to the sustainability product portfolio and to map up a conceptual framework, which is the foundation to develop the descriptive study and which will be explained further in paper B. The study found four main areas for the development of the descriptive study questions: 1) concept definition: determine the main elements to set the portfolio and define the sustainability product portfolio concept, 2) sustainability: identify the role of sustainability in the product portfolio process, 3) tools and communication: identify the most used tools for the product portfolio sustainability assessment and the communication of the portfolio content, 4) portfolio development: determine how to manage and develop a sustainability product portfolio.
Present author´s contribution
The author of this thesis was the main leader of the paper, doing most of the literature search and analysis of the collected literature. With support and guidance from the co-author, the thesis author led the paper planning, the main writing and edition.
31 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
4.2 Paper B
Sustainability product portfolio from an industrial perspective
Published as:
Villamil, Carolina & Hallstedt, Sophie. (2019). Sustainability product portfolio from an industrial perspective. (Submitted to a Journal).
Summary
Many companies decide which services, products and technologies to include in their product portfolio, using evaluation criteria, which often consider cost, quality, risk, revenue, time and market position. Incorporating sustainability in the portfolio evaluation criteria might ensure the development of sustainable solutions from the early stages of the product innovation process, where there is more room for innovation. The aim of this paper is to understand how sustainability can be integrated in the company portfolio development from an industry perspective. A systematic literature review was performed in paper A to support the development of semi- structured interviews. Experts in the field and representatives from seven manufacturing companies with operations in Sweden were interviewed. Additionally, a workshop was performed to get detailed information about the portfolio evaluation criteria. This paper provides a conceptual background to understand the main concepts related to the sustainability product portfolio from an industry perspective. The main findings from this paper were:
1. Product portfolio development: the main characteristics of a product portfolio are determined, and opportunities and challenges that companies are facing in the portfolio development are identified.
2. Sustainability and product portfolio: an overview of how sustainability is implemented and assessed in companies´ current product portfolio is presented.
32 4 Summary of appended papers
3. Proposal of a sustainability product portfolio definition: a clear definition of the concept of a sustainability product portfolio is suggested. The proposed definition is: “A company platform of solutions, i.e., a cluster of products, services, technologies, and/or customized options, based on the company strategic plan and assessed by a strategic sustainability perspective”.
4. Product portfolio evaluation criteria: identified criteria are discussed to select the right components of the portfolio based on, e.g., the company’s strategic plan, customer requirements and market trends. In addition, the paper determined which tools are currently used to assess the product portfolio.
5. Stakeholders involvement in product portfolio: identify the different roles and active participation of the stakeholders involved in the portfolio process.
6. Key factors and guidance model to implement sustainability in the product portfolio process: key factors to include sustainability in portfolio and how to find the business case for sustainability are topics that are discussed
Interviewed companies in this study identified the need to include sustainability as part of their product portfolio. They noticed the link between the development of sustainable solutions, the strategic plan, and a sustainability implementation in the product portfolio process. For that reason, strategic sustainability may clarify the business case for sustainability into the portfolio, with the support of the FSSD. A gap of social sustainability in the portfolio was also identified, needing further research in this area.
Moreover, this study helped to recognize the importance of several aspects to implement sustainability into the product portfolio, such as stakeholders’ involvement, clear sustainability evaluation criteria, long-term perspectives and system thinking. With the study outcome, it was possible to develop a conceptualized prototype to guide manufacturing companies to include sustainability in their product portfolio, and this will be further developed in future prescriptive studies.
Contribution to thesis
This paper presented the industry perspective related to the sustainability product portfolio. One of the purposes of this study was to define the concept of the sustainability product portfolio from academic and industry perspective. In addition, the study provided useful data to support the prescriptive study. The analysis is related to the role of sustainability in the
33 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
product portfolio, stakeholder´s involvement, portfolio evaluation criteria, besides other aspects useful to propose an initial model to implement sustainability in the company product portfolio, which will be further developed in the prescriptive study.
Present author´s contribution
The author of this thesis was the leader of paper B, who did the literature review, developed the interview questions, performed the semi-structured interviews with experts in the field and employees of manufacturing companies, analyzed the data and reflected on the findings. The author wrote and edited most of the paper content, with support and guidance from the co-author.
4.3 Paper C
Additive manufacturing from a strategic sustainability perspective
Published as:
Villamil, C., Nylander, J., Hallstedt, S., Schulte, J., & Watz, M. (2018). Additive manufacturing from a strategic sustainability perspective. Proceedings of the 15th International design conference, May 2018. Dubrovnik, Croatia. https://doi.org/10.21278/idc.2018.0353
Summary
Additive manufacturing (AM) is a widely used technology in different industry fields. Regarding sustainability, there are though few research studies that have conducted sustainability assessment of AM and presented the impacts that it might cause in the complete life cycle. This paper therefore had the purpose to present results from an application of a Sustainability Life Cycle Assessment (SLCA) on an AM portfolio including specific AM technologies at a case company. The aim of this study was to clarify the sustainability advantages and challenges of AM technologies used in industry. A systematic literature review, experts’ interviews and a workshop with an industry partner in the aerospace field were conducted.
34 4 Summary of appended papers
Sustainability Life Cycle Assessment (SLCA) developed in previous research (Hallstedt et al., 2013) is a qualitative method to identify challenges and strengths in the complete life cycle of a product, evaluating both the environmental and the social dimensions. The SLCA has a life cycle thinking perspective and uses the Sustainability Principles (SPs) to identify hot-spots of sustainability impacts on an overall level and it provides immediate information, which is relevant in the early stages of the product innovation processes. Previous applications of the SLCA have shown that it allows designers and decision makers to identify potential sustainability issues, business opportunities or knowledge gaps that may require further research.
With this study it was possible to verify the applicability of the updated version SLCA2.0 as a tool to strategically assess a technology portfolio in the early development phase from a sustainability perspective. The main conclusions from applying the SLCA2.0 were the following: i) it requires less expertise and detailed data; ii) a multi-functional team can contribute with their competences and experiences; iii) it is possible to get valuable data for future industry improvements; iv) it is a quick guide for the early stages of the product innovation process; v) it assesses the ecological, social and economic dimensions of sustainability; and, vi) it includes the complete product life cycle applying a backasting perspective. Some limitations of the SLCA2.0 were also concluded: i) the assessment is dependent on the facilitator's skills and knowledge in the area of sustainability, ii) the results rely on the team’s expertise with the risk of neglecting some important aspects due to their lack of experience and knowledge of the technologies assessed, and iii) the outcome is qualitative, lacking quantitative results. Due to these limitations, it is necessary to verify the effectiveness of the tool SLCA2.0 by its application in other industry sectors, adapting and improving the structure and possibly complementing it with other tools or methods.
The study helped to conclude that there are clear sustainability challenges with AM, even though the technology has a great potential to be part of a more sustainable production process. The research results showed some areas of certain interest regarding improvement potentials of the AM technologies, i.e., value chain management, concept design, optimized material usage, and social sustainability, see Figure 10.
35 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
Figure 10. Summary of the paper C.
Contribution to thesis
With this paper it was possible to test the SLCA 2.0 tool to perform a strategic sustainability assessment of a technology portfolio in a specific industry case. From the research outcome it was possible to obtain a better understanding of the effectiveness and limitations of the tool for the assessment of a technology portfolio. Furthermore, it helped to identify some potentials and improvements of the tool. The study showed the potential of providing strategic sustainability guidance to manage, assess and propose strategies to improve a portfolio. The research results will be used in future prescriptive studies that aim to propose a model for implementing sustainability in the product portfolio.
Present author´s contribution
The author of the thesis performed the systematic literature review and supported the workshop development with the industry partner. The thesis author took the lead of the paper by summarizing the other authors´ contributions, organizing and editing the material from the beginning to the end of the paper process.
36 5 Main results and discussion
5 Main results and discussion
The appended papers provided useful results by using different methods to understand in depth the sustainability product portfolio field. For this section, the research questions are used to guide the main findings and the discussion.
5.1 RQ1: How can the concept of a Sustainability Product Portfolio be defined?
Based on a systematic literature review, semi-structured interviews, and workshops, this research presents an understanding of the field regarding the sustainability product portfolio from the academic and industrial perspectives. To define the concept it is necessary to understand the portfolio development process and its link with sustainability. The RQ1 is answered with the support of the following aspects: product portfolio development, stakeholder’s involvement in product portfolio, early stages of the product innovation process, sustainability and product portfolio. Finally, a proposal of a definition of the sustainability product portfolio is presented.
5.1.1 Product portfolio development
To understand the product portfolio field, it is first necessary to comprehend the portfolio components and next identify opportunities and challenges with the use of a product portfolio. Usually companies arrange their portfolio with products and services, whereas others have customized combinations of products and services to respond to customer demands called “solutions”, which can be tailored for certain customers or market requests. Most of the companies update their portfolio yearly, to be ahead of market changes. There are similarities and differences between the literature review and the descriptive study results, e.g., both studies indicated that there are many tools to develop a product portfolio. In contrast, the literature review results showed that the portfolio components are products and services, and the interview study results considered the portfolio components as solutions, see Figure 11.
37 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
Figure 11. Portfolio components determined from the literature review and the company’s interviews.
Opportunities with having a product portfolio
The interviewees identified both opportunities and challenges with a product portfolio process from an industry perspective. The opportunities open the door to justify the implementation of sustainability in the development of the company portfolio process, e.g., with a product portfolio process it is possible to optimize the company products to be more profitable and sustainable. Moreover, with the portfolio process, it is feasible to improve company solutions, according to a strategic company plan, customer requirements, technology changes, new legislations and standards. Some companies use the product portfolio to communicate with internal and external stakeholders. Table 2 presents a parallel of the most mentioned opportunities and challenges mentioned by industry interviewees.
Challenges with the portfolio development
In the literature review, specific challenges to implement sustainability into project management were identified, such as the lack of holistic perspective, practical use, and lack of connection of local and global perspectives (Økland, 2015). Some authors mentioned that it is crucial to have a holistic view and a system thinking approach in the integration of project management and sustainability (Silvius & Schipper, 2014) and the importance of analyzing the complete product life cycle. Hallstedt and Isaksson (2017) proposed a systematic approach that considers the life-cycle
38 5 Main results and discussion
thinking in the sustainability implementation. Several companies identified the need to apply sustainability into project management but to put it into practice is challenging (Martens & Carvalho, 2016). Certain challenges to introduce sustainability are due to profits, resources, training, cost, resources, quality, deadlines and risks (Brones et al., 2014). Flexibility (Mansoornejad et al., 2010) and resilience (Martens & Carvalho, 2017) are key terms in the development of a sustainability product portfolio.
Product portfolio opportunities and challenges identified by the interviewees.
Opportunities of the product Challenges of the product portfolio process portfolio process It helps to evaluate, optimize and organize It is difficult to manage too many the company offers: products/solutions. products and business units. It is a useful way to communicate internally. There are many tools available, which are disconnected, and complex. It is possible to increment the knowledge of There are some communication the product, market, legislation and challenges with involved stakeholders. technology. It is possible to offer a wide portfolio with It is difficult to keep the balance between many and different products. cost, quality, risk, among other criteria. It supports the customization of solutions, It requires more knowledge about the fulfill the product requirements. product and sustainability It supports the assessment of the market, in The process requires too much work and order to be more competitive. logistics. It helps to promote the dialog and involve There are many external trends to different functions and stakeholders. manage, e.g., market changes. It drives innovation and the development of It is challenging to be competitive, e.g., sustainable solutions. low-cost competitors. It helps to include sustainability into the It is difficult to fulfill product and product innovation process. environmental standards and legislation. It is useful to increment awareness about There is a high uncertainty about future sustainability, market and technology. events e.g., technology innovations. It supports a transparent process, which can It is difficult to implement and takes time be verified by a third party to change radically. It is difficult to assess environmental and social aspects.
Some of the product portfolio challenges mentioned by the interviewees were the following: many tools available to develop the portfolio, internal and external stakeholders’ discussions about the portfolio content, keeping the balance between cost, quality, performance, legislation and market position. Therefore, the high number of different products and business units that companies must manage in their portfolio is extremely challenging, and for that reason it is difficult to assess all the company
39 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
products. Thereby, a relevant challenge is to keep the balance between the portfolio evaluation criteria such as cost, quality and performance. Other challenges related to sustainability are knowledge, implementation, and assessment. Table 2 presents the challenges identified by industry interviewees.
Some portfolio development factors can be perceived as opportunities and challenges simultaneously, e.g., i) having a complete system knowledge is an advantage, but it requires a big amount of work and logistics, ii) external trends are challenging, but they push the creation of more sustainable offerings, iii) internal stakeholder´s communication can be challenging, but it allows awareness and collaboration with other company functions. For the sustainability implementation in the product portfolio, it is crucial to tackle the mentioned challenges and turn them into opportunities.
5.1.2 Stakeholder’s involvement in the product portfolio
According to the interviews, internal and external stakeholders can have an important role in the product portfolio development. Stakeholders can promote, support, slow down or limit the portfolio process, and for that reason it is important to understand the involvement of stakeholders in the product portfolio development. According to Kohl (2016), companies use the portfolio process for an active participation and collaboration with internal and external stakeholders for the implementation of sustainability in the product portfolio. Brones & Carvalho (2015) mentioned the need to have a constant collaboration with stakeholders, similar to the industry interview results. Due to portfolio complexity and wide products variety, some companies limit the participation of customers and suppliers. In contrast, other companies highlight the need to involve all the stakeholders in the portfolio process.
Silvius & Schipper (2014) identified that it is essential to train a team, improving their competences, and knowledge about sustainability and product portfolio, similar to the interview study results. Some interviewees mentioned the importance to have “Cross-functional teams” in the product portfolio process, which are formed by people from different departments, and with different roles, disciplines, knowledge, skills, expertise and expectations. According to Vliex (2013), the commitment of management positions is crucial to implement sustainability in the product portfolio.
40 5 Main results and discussion
In some cases, the participation of stakeholders can be challenging, due to problems related to common understanding, different interests, resources and time constraints. Stakeholder participation is essential for the sustainability implementation in the product portfolio, and for that reason it is necessary to solve these challenges.
5.1.3 Early stages of the product innovation process
In the literature review, some authors mentioned that sustainability aspects can be implemented in the early stages or in the fuzzy front end of the product innovation process (Wever et al., 2008), instead of inserting them in the middle or the end of the process, when few changes can be made. Portfolio setting is part of the strategic level (Hope & Moehler, 2014), and strategy means long-term decisions (Pimentel et al., 2016). Many projects are shaped in the ideation stage, where sustainability facts should be included (Ölundh & Ritzen, 2004), see Figure 12. In the interviews, some companies mentioned that at early stages of the product innovation process there is more room for sustainability implementation, innovation, and product portfolio adaptation, as mentioned by Wever et al. (2008). A barrier to this implementation is that usually the required data to include sustainability is not available in the early stages of the process (Marcelino-Sádaba et al., 2015).
Desirable implementation Current situation in many at the early stages manufacturing companies
Figure 12. Implementation of sustainability in the early stage of the product innovation process.
41 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
5.1.4 Sustainability and product portfolio
Sanchez (2015) mentioned the importance to include in the company product portfolio the three dimensions of sustainability: environmental, social and economic dimension. For that reason, it is important to comprehend the relationship between sustainability and the product portfolio. Sustainability is a topic that many companies are dealing with in their daily operations. When companies are setting their portfolios, they have identified some challenges to include sustainability in the process, such as the lack of knowledge about sustainability, the variety of tools necessary for the sustainability assessment, lack of social sustainability indicators, among other aspects (Villamil & Hallstedt, 2018). Industry interviewees agreed that sustainability is a key concept in the product portfolio development.
Interviewees mentioned some sustainability approaches such as eco-design, circularity and eco-efficiency for supporting the implementation of sustainability in the product portfolio. According to Cluzel et al. (2016), there is a close link between these approaches and the implementation of sustainability in the product portfolio. Some companies follow a product life-cycle perspective in the portfolio methodology, assessing the system from raw material extraction until the end of life. For some companies that manage and offer many products, it is difficult to implement sustainability in all of their products.
Based on literature, some companies have used eco-labels to identify the products that are part of the sustainability product portfolio. The company Clarian (2015) created the eco-label called “EcoTain label” and Henkel (2014) created the label: “Henkel Sustainability#Master®”. In the interviews, only one company has used eco-label requirements to assess their products. In opposite, other company avoids eco-labels, due to the big quantity of eco- labels at the market, which could misinform consumers.
Social sustainability
In the literature it was found that social perspective and corporate responsibility are key factors in portfolio management (Ketola, 2010). There is a lack of active participation of the involved stakeholders, and there is a need of project managers that know about sustainability issues (Mesquita et al., 2016). Therefore, special training might be needed regarding these aspects (Ali et al., 2016). Silvius & Schipper (2014) mentioned the importance to enforce sustainability capabilities of the portfolio development team. Authors mentioned the importance to use stakeholder analysis (Sánchez,
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2015) and value-chain management (Carvalho & Rabechini, 2017). For the effective sustainability performance, it is indispensable to engage stakeholders to participate actively (Kohl, 2016), which is also validated by the industry interview results. There is a need to manage the supply chain with a sustainability perspective in order to develop the sustainability portfolio (Trapp & Sarkis, 2016; Brones & Carvalho, 2015).
In the industry interviews, companies linked social sustainability with well- being, health and safety issues, focusing on stakeholder’s involvement and safe working environment. All the interviewees agreed that sustainability implementation is difficult, especially social sustainability, due to the lack of specific measurements, concept vagueness and assessment complexity. Interviewees and workshop participants agreed that they follow up on the social sustainability only related to their internal stakeholders, leaving behind most of the external stakeholders.
According to the industry interviewees and some authors, the social sustainability perspective is, however, partially implemented or assessed (Martens & Carvalho, 2016), which indicates the need for further research in this area for an effective implementation of sustainability in the product portfolio.
5.1.5 Proposal of a sustainability product portfolio definition
In the literature there is a gap in the definition of the sustainability product portfolio concept. Generally, a portfolio is defined by portfolio management and project management (Cooper et al., 2001). In product planning, the product portfolio is managed, where projects are evaluated and planned (Ulrich & Eppinger, 2012). Based on the literature review, a summary of concepts to be used to define a sustainability product portfolio is presented in Figure 13.
With the literature review and the descriptive study, it was possible to determine key aspects used to define the product portfolio from an academic and industry perspective. Table 3 presents these aspects to get a comprehensive understanding of the concept. It is highlighted that both literature review study and interview study concluded that the company strategy has an important role in the portfolio development (Cluzel et al., 2016; Vliex, 2013; Kohl, 2016).
43 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
Figure 13. Literature review results showing concepts to define a sustainability product portfolio.
Main aspects used to explain and define the product portfolio concept based on the industry interview study.
Key aspects used for portfolio definition
Companies offer a wide portfolio composed by products and services. The product portfolio is aligned with the company strategy plan. The portfolio is approved by the company high-level positions. Companies use evaluation criteria to determine the final portfolio. There is a high involvement of R&D in the portfolio process. The market and technology trends affect directly the product portfolio. Often the portfolio is updated, due to constant changes (e.g., new legislation). Companies offer combinations of products and services, called solutions. There is a constant dialog between stakeholders in the portfolio process. The product portfolio needs to be balanced (e.g., cost, time, risk, etc.). A cross-functional team is necessary to develop the portfolio.
One of the purposes of this research is to define the sustainability product portfolio concept based on findings from previous research, company reports and different views and experiences from company interviewees, who are related to portfolio and product development. The proposed definition is:
44 5 Main results and discussion
A sustainability product portfolio is: a company platform of solutions, i.e., a cluster of products, services, technologies, and/or customized options, based on the company strategic plan and assessed by a strategic sustainability perspective
Based on previous research a product portfolio is decided at the strategic level of a company (Kohl, 2016), where the mission, vision, strategy, core values and targets of the company are determined (León‐Soriano et al., 2010). To implement a strategic sustainability perspective a system view is needed. This means that the portfolio solutions need to be assessed from the three dimensions of sustainability, i.e., the environmental, social and economic dimensions (Elkington, 2002; Figge et al., 2002), including a full life-cycle view, as suggested in Ulrich & Eppinger (2012), and involving internal and external stakeholders (Silvius & Schipper, 2014). In addition, sustainability evaluation criteria (Cluzel et al., 2016) need to be identified to balance aspects such as market success, cost, revenue, quality, resources, and risk from a short- and long-term perspective (Villamil & Hallstedt, 2018). Related to sustainability, most of the interviewees mentioned the implementation of systems thinking, where companies consider the complete product life cycle. Figure 14 represents this definition graphically.
Figure 14. Sustainability product portfolio definition.
5.2 RQ2: What frameworks, guidelines, tools, criteria or other forms of support can be used to assess and guide companies to develop sustainability product portfolios in the early stages of the product innovation process?
45 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
The systematic literature review, the interviews and the workshops provided answers to RQ2 and relevant aspect can be grouped into the following three topics: product portfolio evaluation criteria, tools used for product portfolio development process, and a strategic sustainability assessment tool for portfolio assessment. These topics are further described in this section.
5.2.1 Product portfolio evaluation criteria
In the literature, companies measured the portfolio performance according to products’ sales and profit (Clarian & CSCP, 2015) (Henkel, 2014) (Solvay. 2010). According to industry interviewees, the most used criteria for evaluating a product portfolio are, e.g., revenue, customer needs, market success, among others, see Table 4. However, variations in technology, legislations, customer requirements, or market demands can affect the portfolio development requiring constant updates, logistics, assessment and adjustments. Knowing about external trends pushes companies to improve their portfolio and to be more innovative and competitive.
Portfolio evaluation criteria identified by industry interviewees.
Product Portfolio Evaluation criteria Revenue: the solutions provide a high profit for the company. Customer needs: the solution fulfills the customer demands. Market success: the solution is highly recognized for a long time in the market. Cost: the solution has a low cost in the complete product life cycle. Performance: the solution is recognized to have a high performance. Company strategy alignment: the solutions are related to targets and strategy. Efficiency: the solution is efficient in terms of energy, resources and waste. Sustainability: the solution includes sustainability aspects: environmental and social. Legislation: the solution fulfills the standards and legislations. Competitive: the solution is in a high position compared with competitors Technology and innovation: the solution is ahead in technology advances. Quality: the solution has a recognized quality (e.g., long-lasting solution). Value: the solution provides a value to the customer. Resources: there is enough knowledge, people, technology, etc. to produce it.
Workshop participants and interviewees agreed that the portfolio process leads the company to be more profitable and successful at the market. Some companies have adapted their company strategy to get higher revenue.
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Market success refers to the acceptance and popularity of the product in the market and its adaptation to external trends. New solutions require additional resources, research and competences, making it challenging to deal with cost reduction or technology adaptation. Some companies have developed evaluation criteria based on sustainability, technology adaptation, customer requirements, and market push, e.g., energy efficiency. It was concluded from the research presented in paper B that it is important to have a balance between important portfolio evaluation criteria such as cost, quality, customer requirements, and sustainability.
According to the workshop results in paper B related to portfolio evaluation criteria, it was shown that the criteria setting depends on the company sector, context, market and customer requirements. However, for workshop participants, it must be clear which portfolio evaluation criteria are decided, and it is crucial to include sustainability in the criteria.
Workshop participants mentioned that each company sets the evaluation criteria according to their needs, market, legislation and stakeholders. To prioritize the criteria is a challenge, due to their dependencies, e.g., quality is linked to market success, revenue and customer demands. Workshop participants and interviewees noticed the relevance of sustainability in the portfolio evaluation criteria as a separated criterion or integrated with other criteria. A more detailed explanation is presented in paper B.
Figure 15. Sustainability evaluation in the Henkel innovation process Henkel Sustainability#Master® (Henkel, 2014).
In the literature review, some authors used graphic elements to illustrate the selection criteria and classification such as maps, matrices, e.g., the sustainability evaluation in the Henkel innovation process Henkel Sustainability#Master® (Henkel, 2014), where they use portfolio evaluation criteria that include sustainability aspects for the selection of the portfolio components in each gate of the Stage-Gate process, see Figure 15.
47 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
5.2.2 Tools used for product portfolio development process
Many companies used different types of tools and methods to decide and access their product portfolio content by combining or adapting these tools (Vandaele & Decouttere, 2013). This study provided an understanding of which tools are currently used for management, assessment, and implementation of sustainability in their product portfolio, as well as to identify advantages and gaps related to these tools from an industry perspective.
In the literature review, some authors used several steps in the selection criteria. Usually, the first steps evaluate future projects and the final stage defines a balanced portfolio with a set of projects, which fulfills the selection process requirements. Certain models used a combination of tools, e.g., the opportunity-strength matrix combined with the eco-design matrix (Wever et al., 2008). In paper A, the most used tools for management in product development were identified as being the Balance Score Card (BSC) and the Stage-Gate model. Life Cycle Assessment (LCA) is the most used tool to analyze the complete life cycle of a product, from raw material extraction to the end of life, identifying the environmental impacts in each stage of the cycle (ISO, 2006). For the evaluation process, cost is the most used variable, followed by risk, time and resources.
Industry interviewees agreed that a single tool is not enough to fulfill all the company requests to assess the portfolio. For that reason, companies combine different tools to assess the product portfolio. This is also stated by Vliex (2013), who mentioned that tools can be complex and demand special knowledge and expertise. Therefore, a simpler adaptation of existent tools is suggested, instead of creating new tools, which demand time, training, infrastructure, among other aspects. Some companies have adapted tools according to their needs, context, customer demands, market changes, etc. In contrast, other companies have created their own methodology with different tools and methods according to their needs, to assess the portfolio and the sustainability performance of products, services and solutions in their portfolio.
Some companies used a ranking system based on the evaluation criteria to assess the portfolio. This ranking is useful to assess and visualize the different portfolio components. In the literature, companies such as Solvay (2010) applied a traffic light system using colors from green to red, to classify the portfolio components, see Figure 16. In the interviews, some companies use a similar ranking system, based on the assessment of sustainability, innovation and market aspects, where green means beneficial sustainability
48 5 Main results and discussion
performance and red is the opposite. Another company used a numeric system from 0 to 3, where 3 has the highest sustainability performance.
Figure 16. Portfolio selection tools developed by Solvay. Upper tool: Heat Map Matrix. Lower tool: Market alignment decision tree (Solvay, 2010).
The industry interviewees identified that excel sheets and matrices were useful support to manage and compare products lines, business units, services and operations. Checklists are mostly used in each gate of a stage- gate model. Due to product complexity, high number of products, and resource limitation, companies have assessed only specific product components, specific stages or single impacts, e.g., assessment of the manufacturing stage or greenhouse emissions, leaving behind negative
49 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
impacts generated in other stages. The tools mentioned by the industry interviewees related to sustainability were LCA, REACH legislation, eco- efficiency tools, sustainability checklist, among other tools. Further research is needed to clarify how the evaluation criteria are used for assessment, management and implementation of sustainability in product portfolio.
5.2.3 Using the SLCA2.0 tool for a technology portfolio assessment
Commonly companies use tools to assess sustainability of their products and operation; a used tool is the Life Cycle Assessment (LCA). Knight & Jenkins (2009) mentioned that “LCA is too complex, and not user friendly”, finding that it requires a lot of resources, such as data, time and knowledge. LCA is useful for linear production processes, and less effective for closing the loops and cradle to cradle approaches (Braungart et al., 2007). In contrast, Ny et al. (2006) developed the Strategic Life Cycle Assessment (SLCA) tool, which is a qualitative tool that allows performing a quick analysis with a strategic sustainability perspective. The SLCA is based on the FSSD, where the sustainability principles help to assess all the stages of the product life cycle by using specific questions. The use of this tool requires less data, knowledge and time, making it a good source for a fast product assessment.
Previous applications of a strategic sustainability life-cycle assessment, the SLCA, have shown that it allows designers and decision makers to identify potential sustainability issues, business opportunities or knowledge gaps that may require further investigations (Ny et al., 2006; Borén & Ny, 2016). The SLCA uses templates to analyze all the stages of the product life cycle, from the raw material extraction to the disposal phase. Additionally, it allows f0r the assessing of the environmental, social and economic dimensions of sustainability. The templates are supported by guided questions, which are related to the sustainability principles, SPs. For the strategic sustainability assessment of AM technologies, the SLCA tool was modified to the SLCA2.0 version, with the purpose of 1) being more specific with the industrial case, 2) including the social principles, and 3) developing specific questions for a deeper assessment. Examples of the SLCA2.0 templates and the detailed questions are presented in Tables 5 and 6.
In paper C, it was possible to test and verify the applicability of SLCA2.0 to assess a technology portfolio in the early development phase from a strategic sustainability perspective. Paper C presents the sustainability challenges, opportunities and improvements related to selected Additive Manufacturing (AM) technologies.
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SLCA2.0 template with some examples of guided questions.
Ecological Economic Social dimension dimension dimension Guided Guided Life cycle phases questions questions Raw material extraction What Are there any materials Are there any conflict Are there enough Manufacturing or activities used that are minerals/metals and/or developed dependent on: metal hazardous chemicals used collaborations in Post – process alloys, chemicals, usage in any of the life cycle the value chain? does the current of fertil land and/or clean phases? Usage maintenance process have? water usage? Upgrading, end of life
Excerpt of the detailed questions template with some example questions.
Yes, Response notes and references to data no, Detailed questions - sustainability principles (SPs) 1-8 don’t AM technology know alternative 1 SP1 - Are there any risk metals/alloys used, that have a high
SP2 - that are non- - the SIN or the REACH candidate lists? If
SP3 - Does raw material extraction or production cause damage to nature by physical means (e.g. deforestation or open pit mining)? If yes, specify how. SP4 – 8
addressed?
The results from the SLCA2.0 workshop showed misalignments to the ecological sustainability principles. Energy intensity, value chain uncertainty, use of critical metals and hazardous chemicals can be identified as common sustainability hotspots for the AM technologies at the case company. The identified advantages involve a potential for new business opportunities. The questions related to the social dimension highlights the lack of apprehension regarding social aspects of product development among AM practitioners. The workshop participants were aware of the opportunities, gaps and the relevance of the environmental and social dimensions related to this technology. For the economic dimension, disadvantages are generally mentioned in terms of costs, while advantages are framed as business opportunities and competitiveness.
There are clear sustainability challenges with AM, which have been grouped according to different areas, i.e., value chain management, concept design,
51 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
optimized material usage, and social sustainability. For more details, see Paper C.
SLCA2.0 potentials and limitations
Paper C showed that the SLCA2.0 was a useful tool to assess a technology product portfolio. Some potentials of the SLCA2.0 tool are the following: it does not demand expertise and detailed data, a multi-functional team can contribute with their competences and experiences, it is possible to get valuable data for future industry improvements, it is a quick guide for the early stages of the product innovation process, and it assesses the ecological, social and economic dimensions of sustainability using socio-ecological sustainability principles that are claimed to be scientific, necessary, sufficient, concrete and non-overlapping (Ny et al. 2006). It also assesses the complete product life cycle by applying a backasting perspective. Industry practitioners mentioned that the tool raised awareness and encouraged them to work with their external stakeholders.
Figure 17. Potentials and limitations of the SLCA 2.0 tool in a specific industry case.
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However, some limitations of the SLCA2.0 were also concluded: the assessment is dependent on the facilitator's skills and knowledge in the area of sustainability, the results rely on the team’s expertise with the risk of neglecting some important aspects due to their lack of experience and knowledge of the technologies assessed, and the outcome is qualitative and does not provide a visualization of the result. The potentials and limitations of the SLCA 2.0 are presented in Figure 17.
5.3 RQ3: What are some of the perceived benefits with a sustainability product portfolio from a company perspective?
With the literature reviews, the industry interviews and the workshops, it was possible to partially answer RQ3. In the future prescriptive study, RQ3 will be further explored. The following topics are chosen to answer RQ3: key factors and a guidance model to implement sustainability in the product portfolio process and a possible application in a sustainability technology portfolio.
5.3.1 Key factors and a guidance model to implement sustainability in the product portfolio process
The research analysis clarified that it is necessary to include sustainability into the product portfolio process to offer sustainable solutions in a strategic way. For that reason, it is important to determine how companies can include sustainability and have a better understanding of the best approach for its implementation. Interviewees suggested key factors to increase the capabilities to implement sustainability in the product portfolio process. Table 7 shows the comparison between these factors identified in the systematic literature review and the industry interviews, where there are similarities and differences. It is highlighted that most of the factors identified in the literature review were validated with the interview results. Furthermore, some of the factors identified in the descriptive study are new contributions from the industry perspective, which are underlined at the bottom part of Table 7.
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Key factors to implement sustainability in the product portfolio process.
Key factors identified in the Key factors identified by industry literature review interviewees
Integration of sustainability in all the Improve the portfolio process and integrate stages and elements (Mansoornejad el al., the tools (e.g., less data base work) 2010) Holistic view – system thinking (Brones et Include life cycle thinking in the complete al., 2017) product portfolio process. Stakeholder analysis and Supply chain Encourage a clear communication and management (identify all the connections) include key stakeholders in the process (Sánchez, 2015) Alignment with the company goals and Link sustainability with the company core strategy (Cluzel et al., 2016) values and strategy. Include Risk management, Product value Incorporate sustainability requirements in and Product Requirements in the process the portfolio process. (Kohl, 2016) Product Innovation and use new Motivate the creation of sustainable approaches (Hallstedt & Isaksson, 2017) solutions (e.g., increase eco-efficiency) Complete assessment of the product life It is necessary to assess all the stages of the cycle (Ulrich & Eppinger, 2012) product life cycle Early stage procedures – Product planning Implement sustainability at the early stages, (Ulrich & Eppinger, 2012) where there is more room for innovation Stage - Gate Model and multicriteria Check lists are used to assess the selection models (Ölundh & Ritzén, 2004) alternatives in each gate of the process Sustainability might be included at the Make sustainability as a mandatory aspect strategic level discussions (Vliex, 2013) to manage in the high-level positions. Include social sustainability aspects in the assessment and the innovation Factors found only in the study of the Define clear sustainability evaluation industry perspective criteria for selecting portfolio components
Future research will propose tools to meet these factors for sustainability implementation in the product portfolio. Based on the factors “define clear sustainability evaluation criteria”, “include a life cycle thinking”, and “include social sustainability aspects”, a FSSD based approach called the Sustainability Design Space (Hallstedt, 2017) will be explored. This approach includes long-term sustainability criteria for a product’s life-cycle phases and it also includes a connected qualitative measurement scale for each of the criteria, a so called “Sustainability Compliance Index scale (SCI)”. These criteria are defined using backasting from overarching sustainability principles, which are based on the FSSD (Broman & Robèrt, 2017). Further research will explore if the SCI may be relevant to use in a guidance model for the sustainability product portfolio. The need to balance the different
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components and evaluation criteria, e.g., profit, customer needs, cost, company strategies, of the portfolio with the sustainability criteria can be one approach to implement sustainability in the portfolio development process.
A strategic sustainability perspective will support the consideration of a sustainability vision, having a long-term system perspective, developing improvement strategies and planning for long-lasting solutions (Hallstedt, 2017). With the support of a strategic sustainability perspective and following the company strategic plan (Vliex, 2013), it is possible to determine the evaluation criteria to set the right components of the product portfolio for a specific company. The aim for a future proposed guidance model for the sustainability product portfolio should therefore allow for assessing different criteria simultaneously, which are aligned with the company characteristics, such as the industry sector, context, and customer requirements. Figure 18 presents an early conceptualization of such a model that may clarify the business case for sustainability.
Figure 18. An early conceptualized prototype of a guidance model for the sustainability product portfolio.
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5.3.2 Possible application in a sustainability technology portfolio
In a product portfolio, a company may offer products, services, technologies and operations. In Paper C, a sustainability assessment of AM technologies is presented (Villamil et al., 2018). In paper A, it was possible to identify key factors to implement sustainability in the product portfolio from the academic perspective. These key factors were analyzed with the specific case study of assessing a technology portfolio for AM, presented in paper C, see Table 8. For each of the identified and generic key factor, a specific key factor is translated for AM technology.
Key factors for a sustainability technology portfolio based on the literature review.
Key factors based on the literature Sustainability technology portfolio review focused on AM
Integration of sustainability in all the stages Focus in one stage: Improve buy to fly ratio and elements - Reduce the amount of waste Holistic view – system thinking: Complete Increment the product life by improving the assessment of the product life cycle product quality and repairing airplane parts Stakeholder analysis and Supply chain Collaboration with stakeholders and management improvement of materials, processes, etc. Early stage procedures – Product planning Choose the best sustainable alternatives from early stages Alignment with the company goals and Improve knowledge, safety, strategy competitiveness, awareness, etc. Include Risk management, Product value Product requirements: Improve the and Product Requirements component characteristics, processes, reduce emissions and waste. Stage - Gate Model and multicriteria Introduce effective models to speed out the selection models process Innovation - new design approaches The Freedom of design (hive or organic shape) reduce weight and processes
The purpose of this analysis is to understand how companies can shape their sustainability technology portfolio. Key factors such as the holistic view are related to the increment of product life and the improvement of quality products, characteristics highlighted by the workshop participants. In contrast, the factor related to the implementation of sustainability in all the stages, the workshop results showed that there is still a focus for solving environmental issues in single stages of the process, such as the reduction of waste in the production phase. From a holistic perspective, sustainability
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needs to be accessed in all the stages of the product innovation process to ensure that an effective solution moves fully towards sustainability.
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58 6 Conclusions
6 Conclusions
The industry has an important role in moving society towards sustainability. The main purpose of this research was to determine how to integrate sustainability in the product portfolio of manufacturing companies. Several methods, such as a systematic literature review, semi-structured interviews, workshops and company reports reviews were used to determine the academic and industry perspective related to the sustainability product portfolio.
This research has focused on the company product portfolio due to the relevance for the company to link the portfolio with the company strategic plan and the selected solutions that they will offer, i.e., products, services, operations and technologies. At the strategic level of the company, the elements that will be part of the product portfolio are decided. Therefore, focusing on the development of sustainability product portfolios might ensure the implementation of sustainability in most of the company offerings.
With this research, the state of art of the sustainability product portfolio field was explored from the academic and industry perspective, to understand the main elements of the portfolio, to analyze the product portfolio development process, to determine the role of the stakeholders, to detect the opportunities and the challenges, and to identify key factors to integrate and implement sustainability in the product portfolio. This outcome was useful to define the concept of the sustainability product portfolio, which is defined as: “a company platform of solutions, i.e., a cluster of products, services, technologies, and/or customized options, based on the company strategic plan and assessed by a strategic sustainability perspective”.
The descriptive study provided a better understanding of the industry perspective about the sustainability product portfolio, where companies are interested to include sustainability in their product portfolio. The workshop related to portfolio evaluation criteria provided a better perspective of the criteria used to select the elements that will be part of the portfolio. Moreover, it was useful to determine the dependencies between the selection criteria, where sustainability can be included with all the criteria to ensure the implementation of sustainability in the complete system or separated to guarantee the visibility of sustainability in the assessment.
A tool for a strategic sustainability assessment of a technology portfolio, the SLCA 2.0, was applied. This tool is based on the FSSD, where the system perspective, backcasting and the sustainability principles are used for the
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assessment. With the workshop it was possible to identify the potentials and limitations of the SLCA 2.0 tool for the implementation of sustainability in a technology portfolio.
This research made it possible to identify key factors for an integration and implementation of sustainability in the product portfolio. These factors have been validated by the literature review and the descriptive study. It was concluded that strategic sustainability is a key aspect in the product portfolio development.
The outcome of this research helped to develop a prototype of a model that can guide manufacturing companies to integrate and implement sustainability in their product portfolio, with the support of the Framework for Strategic Sustainable Development (FSSD). The model will focus on selecting the portfolio components by balancing the portfolio evaluation criteria with a strategic sustainability perspective.
6.1 Future work
In the future, this research will focus on the prescriptive and descriptive study II. In the prescriptive study, a model to implement sustainability in the product portfolio will be developed, and it will later be applied and tested in specific cases of manufacturing companies. Also, focus studies regarding social sustainability integration in product portfolio will be planned. In the descriptive study II, it will be possible to determine the effectiveness and limitations of the model from an industry perspective, and this feedback will be useful to improve the prototype of the model.
Figure 19 illustrates the different parts of the future prescriptive study; first a model is developed with the guidance of the Framework for Strategic Sustainable Development (FSSD), using the feedback provided for the study, which is represented with the symbols in the center. These symbols are related to the academic and industrial perspective to define the concept of sustainability product portfolio, the identified selection criteria and the role of sustainability, the understanding of product portfolio development with its link with the company strategic plan and the identified key factors for the sustainability implementation. Parallel to this, and for a better comprehension of the sustainability implementation and assessment, different approaches will be explored. Later, an implementation plan of the model will be developed to be further used with specific industry cases.
60 6 Conclusions
Figure 19. The different parts of the planned prescriptive study (adapted from Blessing and Chakrabarti et al., 2009).
61 Denny Carolina Villamil Velásquez Integration of Sustainability Aspects in Product Portfolio
(This page is intentionally left blank).
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74 INTEGRATION OF SUSTAINABILITY ASPECTS IN PRODUCT PORTFOLIO
ABSTRACT
Several environmental issues are incrementing sys- supported the development of semi-structure in- INTEGRATION OF SUSTAINABILITY tematically, and many of them are linked to man- terviews with companies and field experts. The ufacturing activities. To mitigate these issues, it interviews outcome provided a better under- ASPECTS IN PRODUCT PORTFOLIO is necessary to develop sustainability solutions in standing of the industry perspective. Afterwards, a the early stages of the innovation process, where workshop helped to understand what aspects are there is room for creativity and innovation. The more significant for the portfolio evaluation cri- integration of sustainability at the strategic level teria. Finally, a strategic sustainability assessment of the company, where the essential decisions, the tool SLCA 2.0 was used to assess a technology strategic plan, and the portfolio are developed, product portfolio of a specific industry case. might ensure the implementation of sustainability aspects in products and services. Many companies The results from the studies created a foundation develop product portfolios to organize and offer to: a) determine the state of art of the sustaina- services, products, technologies and operations bility product portfolio field and its relevance for Denny Carolina Villamil Velasquez following the company strategy and targets. The integration and implementation of sustainability in portfolio components are assessed and selected the early stages of the product innovation process, using evaluation criteria. The most common cri- b) define the concept of sustainability product teria include: cost, quality, risk, revenue, time and portfolio, c) have a better understanding of the market position. Usually sustainability is not in- setting and the application of the portfolio eval- cluded in the portfolio evaluation criteria. uation criteria and how to include sustainability in the evaluation, d) identify key factors to integrate The aim of this research is to obtain a better un- and implement sustainability in the product port- derstanding of how sustainability can be integrated folio, e) apply and test a tool for assessing a tech- in the product portfolio development of manufac- nology portfolio from a sustainability perspective turing companies. The main research targets are and f) create a prototype of a model to develop to: 1) define sustainability product portfolio based the product portfolio with a strategic sustainability on a comprehension of the academic and indus- perspective. try perspectives, 2) identify how companies cur- rently implement sustainability in their portfolio, This research provides a knowledge foundation 3) determine which evaluation criteria and tools of how sustainability can be integrated in product are used for portfolio development and 4) how the portfolio. In future research a model will be devel- product portfolio is developed, implemented and oped to support companies of how to include a managed. strategic sustainability perspective into their prod- Carolina Villamil Velasquez Denny uct portfolio to enhance development of more A systematic literature review was performed to sustainable solutions. understand the state of the art about sustainabili- ty product portfolio. The literature review results
Blekinge Institute of Technology Licentiate Dissertation Series No. 2020:02 2020:02 ISSN: 1650-2140 ISBN: 978-91-7295-398-7 Department of Strategic Sustainable Development 2020:02