A growing number of manufacturers are beginning to sell the use of their products, rather than the physical products themselves, a process the Tellus Institute calls “servicizing.” There is much talk of the potential environmental gains from this trend, but it has yet to be subjected to critical study. Do environmental gains always result from servicizing? Not necessarily, according to a Tellus Institute report that looks at the services provided by seven companies. It uncovers when there are environmental benefits from servicizing, what policy initiatives can encourage them, and whether this trend can lead to extended producer responsibility.
Coro, Inc., a Herman Miller subsidiary, provides moving and reorganization services to its corporate customers, offering to take-back or trade-in furniture. Castrol Industrial offers its customers the option of using the chemicals they need without purchasing them. The company manages the procurement, inventory, storage etc. of chemicals and receives compensation based on cost savings rather than volume sold. Xerox sells “documents” rather than copy machines. It integrates document storage and reproduction technology with customer business systems providing them with automated, just-in-time, custom document production. Radian International (Dow Chemical), IBM, DuPont and Electrolux are the other companies profiled.
Download the 90-page report, “Servicizing: The Quiet Transition to Extended Producer Responsibility.”
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