Integrated Facades as a Product-Service System: Business process innovation to accelerate integral product implementation

Abstract

The Circular Economy (CE) attempts to realign business incentives, across all fields of human industry, to support the preservation of raw materials within closed economic loops. Within this conceptual frame, Product-Service Systems (PSS) combine the use of tangible products such as building technologies, with intangible maintenance and monitoring services, to enhance the delivery of valuable performances while limiting the use of materials and other resources. This paper explores the potential for the application of CE and PSS organization principles in the delivery of Facades-as-a-Service. It explores how the benefits brought about by this way of thinking: Lower initial capital requirements, material ownership retention by suppliers, and long-term interdisciplinary collaboration, could lead to a more efficient façade construction industry, while accelerating the rate of building energy renovations. Within the current process for designing, manufacturing, and operating facades there is a gap between supply-side discoveries and demand-side needs, which hinders the implementation of resource-efficient facades. Facade leasing as a form of product-service system keeps suppliers committed, throughout the building’s service-life, to safeguard optimum performance in operation, while actively stimulating clients to adopt innovative technical solutions. The paper elaborates on both supply-side facade innovations and the demand-side conditions necessary to implement such business models, while exploring the costs and benefits of product-service systems as new business-to-client models to connect supply and demand. It builds upon the research project “Facade leasing” (MSc thesis by Azcarate-Aguerre, J.F., 2014) and combines knowledge about facade design and engineering (supply-side approach) with the knowledge about client needs, performance criteria, and willingness to pay (demand-side approach). The research methodology includes literature review and expert interviews, integrating both theory and practice. This paper argues that a Product-Service System approach to facade design, construction, operation and renovation could accelerate the rate and depth of building energy renovations. It could also provide incentives to supply- and demand-side stakeholders, to implement Circular Economy principles through new models of ownership, contracting, and service delivery. It aims at establishing the general conceptual frame of a Product-Service System for leasable facades, setting the basic parameters to be taken into account when designing a PSS-based business model, and formulating its value proposition.

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