Supporting SMEs adoption of sustainable Product Service Systems

371 Pages·2017·12.02 MB·English

Loughborough University
Institutional Repository
Supporting SMEs adoption
of sustainable Product
Service Systems: a holistic
design-led framework for
creating competitive
advantage
ThisitemwassubmittedtoLoughboroughUniversity’sInstitutionalRepository
by the/an author.
Additional Information:
• A Doctoral Thesis. Submitted in partial fulfilment of the requirements
for the award of Doctor of Philosophy of Loughborough University.
Metadata Record: https://dspace.lboro.ac.uk/2134/16399
Publisher: (cid:13)c Yaone Rapitsenyane
Rights: This work is made available according to the conditions of the Cre-
ative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
(CC BY-NC-ND 4.0) licence. Full details of this licence are available at:
https://creativecommons.org/licenses/by-nc-nd/4.0/
Please cite the published version.
Loughborough Design School

Supporting SMEs’ adoption of sustainable Product Service Systems: A
holistic design-led framework for creating competitive advantage

By
Yaone Rapitsenyane

Doctoral Thesis
Submitted in partial fulfilment of the requirements
for the award of Doctor of Philosophy
of Loughborough University

© September 2014
Abstract

This thesis explores effective and contextually appropriate means through which manufacturing
SMEs can create competitive advantage through design and sustainable Product Service Systems
(PSS). The exploration focuses on how design capabilities can be developed and used in non-
design led contexts to drive an effective adoption of sustainable product service systems,
creating competitive heterogeneity.

A comprehensive review of literature gave understanding of perspectives to competitiveness
issues, how organisations have been supported towards PSS, sustainability and design adoption
and related challenges. From this review surfaced the need to be cautious of contextual
considerations leading to a Delphi study. The purpose of the Delphi study was to identify
factors relevant for SMEs in Botswana to embrace sustainable PSS as a competitive business
strategy. Priorities from the Delphi study informed a study aimed at exploring competitiveness
experiences of SMEs and their perceptions of sustainability and product service systems.
Following the position of experts on industries highly prioritised in Botswana’s economic
diversification agenda, this was done with a specific industry; the leather industry.

Possible opportunities of how design can address challenges identified and how PSS and
sustainability can open new business opportunities for SMEs were also drawn from the findings.
A systems success framework was developed using the main findings. The framework was
tested through workshops with 3 SMEs who were also participants in the previous study.
Through interactions with designers, the workshops exposed SMEs to design and PSS. Findings
from the workshops indicate that through design capabilities SMEs can recognise opportunities
and translate them in a service context to differentiated offerings suitable for their various
markets. A designerly approach also offered a simplified but holistic process for SMEs to engage
in systems thinking.

Keywords: Design capabilities, sustainability, product service systems, SMEs, competitiveness, design
and PSS adoption
iv
Acknowledgements

This three year project has been the success it is because of contributions and support
from different people in so many ways, making this journey worthwhile. At the top of
my salutations are Tracy and Rhoda, you have been the helm of my research journey
with your incredibly invaluable guidance. Many thanks to you for having confidence in
me. This has been a great encouragement for me to keep going. I would also like to
extend my thanks to Karl for his contributions to my work, including the independent
assessor for my yearly reviews whose feedback provided yet another point of view.

Thanks to my office colleagues, you have been an informal yet informative ‘poll of
opinions’. Special thanks to Ricardo for your open discussions about our work with
similar interests. To you my fellow countrymen and colleagues who have been with me
at Loughborough for the past three years, Victor and Matthews, thanks for providing a
home-like feeling whenever loneliness crept in. My heart-felt thanks to my family for
your undying love and keeping me posted on home front issues. Kgotla you have
given me a peace of mind for managing my belongings in my absence. Thanks

It would be a mistake not to mention my sponsors (University of Botswana) and Local
Enterprise Authority (LEA). Special thanks to you LEA clients, SMEs who participated in
this research, without you this research would not have been possible. Thanks also to
all the experts who participated in this research through the Delphi study.

Finally, he who comes last comes first. From the bottom of my heart, Lyndah you have
been my motivation, inspiration and support for the past 2 years when everything was
overwhelming. Thanks for believing in me and for your daily care and love.

~ke digetse sebaka sa tshiano~
v
List ofPublications

Rapitsenyane, Y and Bhamra, T (2013). The place of sustainability through Product
Service Systems in manufacturing SMEs in Botswana: A Delphi study, In Proceedings of
the 16th Conference of the European Roundtable on Sustainable Consumption and Production
(ERSCP) & 7th Conference of the Environmental Management for Sustainable Universities
(EMSU), June 4 -7, Istanbul

Rapitsenyane, Y and Bhamra, T (2013). Factors to be considered for supporting SMEs
competitiveness through the transition to sustainable Product Service Systems, In
Proceedings of the Gaborone International Design Conference (GIDEC), September 24-26,
Gaborone

Rapitsenyane, Y, Bhamra, T and Trimingham, R (2014). Competitiveness experiences of
Botswana SMEs in the leather industry and their perceptions of sustainability and
Product Service Systems, In Proceedings of the 20th International Conference of Engineering,
Technology and Innovation & IEEE Technology Management Council, June 23-25, Bergamo

Rapitsenyane, Y, Bhamra, T and Trimingham, R (2014). Design led PSS adoption as a
competitive approach in non-design led SMEs in Botswana, In Proceedings of the 4th
Design, Development & Research Conference, September 8-10, Cape Town

vi
Table of contents

Abstract .................................................................................................................... iv
Acknowledgements .............................................................................................. v
List of Publications ............................................................................................... vi
Table of contents ................................................................................................. vii
List of Tables .......................................................................................................................... xvi
List of Figures ........................................................................................................................ xvii
Definition of terms ............................................................................................ xix
1 Introduction ........................................................................................................ 1
1.1. Resource limits and sustainable innovation in manufacturing ................................. 1
1.2. The potential of decoupling to creating competitive heterogeneity ..................... 2
1.2.1. Decoupling through design and product service systems ............................... 4
1.3. Engaging SMEs with design capabilities and Product Service Systems: Gap in
knowledge ....................................................................................................................................... 4
1.4. Aims and objectives.......................................................................................................... 7
1.4.1. Aim .............................................................................................................................. 7
1.4.2. Objectives .................................................................................................................. 7
1.4.3. Research questions .................................................................................................. 8
1.5. Scope ................................................................................................................................... 8
1.6. Thesis outline ..................................................................................................................... 9
2 The context of Botswana ............................................................................... 13
2.1. SMEs structure and composition ............................................................................... 13
2.2. Why SMEs? What is their significance in Botswana’s economy? ........................ 13
2.3. Problems of SMEs in Botswana................................................................................... 16
2.4. Competitiveness issues for SMEs in Botswana ....................................................... 17
2.5. Sustainability .................................................................................................................... 18
2.6. Design and design for sustainability in Botswana ................................................... 19
vii
2.7. Socio-cultural values...................................................................................................... 19
2.8. Conclusions ..................................................................................................................... 21
3 Literature review ............................................................................................. 22
3.1 Introduction .................................................................................................................... 22
3.2 Business innovation in the context of sustainability............................................... 25
3.2.1 Integrating sustainability in business .................................................................. 25
3.2.2 Accounting for sustainability ............................................................................... 26
3.2.3 Life cycle approach ................................................................................................ 27
3.2.4 Innovation................................................................................................................ 28
3.2.4.1 Design innovation ........................................................................................................... 30
3.2.4.2 Sustainable design innovation ...................................................................................... 31
3.2.4.3 Design for sustainability in SMEs ................................................................................ 33
3.3 Product Service Systems .............................................................................................. 36
3.3.1 Defining product service systems ...................................................................... 36
3.3.2 Distinctions between PSS and product oriented models ............................. 38
3.3.3 Differences between products and PSS offerings ........................................... 39
3.3.4 Methodological support for PSS design ............................................................ 42
3.3.4.1 IPD activity analysis for PSS methodological support ............................................ 43
3.3.4.2 PSS support for solution-oriented partnerships ..................................................... 43
3.3.4.3 Methodology for PSS ..................................................................................................... 44
3.3.4.4 Design and ICT methodology for PSS ....................................................................... 44
3.3.5 Benefits for implementing PSS ............................................................................ 45
3.3.6 Barriers for implementing PSS ............................................................................ 46
3.3.7 Competitiveness of Product Service Systems ................................................. 47
3.3.8 Differentiation through services ........................................................................ 49
3.4 Organisational development view of competitiveness .......................................... 50
3.4.1 Neoclassical microeconomics view ................................................................... 50
3.4.2 Resource-based view ............................................................................................ 52
3.4.2.1 Dynamic capabilities ....................................................................................................... 53
3.5 Creating competitive edge through design capabilities ......................................... 56
3.5.1 Characteristics of design capabilities ................................................................. 56
viii
3.5.1.1 Design capabilities and leadership actions ................................................................ 57
3.5.1.2 Design management approach to design capabilities ............................................. 58
3.5.1.3 Design capabilities in a service context .................................................................... 59
3.5.1.4 Design capabilities in organisational transformation .............................................. 61
3.6 Knowledge creation in SME innovation process .................................................... 64
3.7 Transformation challenges – Manufacturers into PSS providers ........................ 65
3.8 Conclusions ..................................................................................................................... 66
4 Methodology ..................................................................................................... 69
4.1 Introduction .................................................................................................................... 69
4.2 Research purpose .......................................................................................................... 69
4.3 Research process ........................................................................................................... 70
4.4 Research paradigm ........................................................................................................ 73
4.5 Research type ................................................................................................................. 74
4.6 Research strategy........................................................................................................... 75
4.7 Data collection and analysis methods ....................................................................... 77
4.7.1 Phase One - Literature review ........................................................................... 78
4.7.2 Phase Two - Delphi study ................................................................................... 78
4.7.2.1 The approach .................................................................................................................. 79
4.7.2.2 Sampling ............................................................................................................................ 80
4.7.2.3 The process ..................................................................................................................... 82
4.7.2.4 Data analysis techniques ............................................................................................... 83
4.7.3 Phase Three - Single case with embedded units ............................................. 89
4.7.3.1 Sampling ............................................................................................................................ 90
4.7.3.2 Data collection methods .............................................................................................. 91
4.7.3.3 Data analysis .................................................................................................................... 94
4.7.4 Phase Four – Exploratory interactive workshops .......................................... 97
4.7.4.1 Sampling ............................................................................................................................ 99
4.7.4.2 Data collection .............................................................................................................. 100
4.7.4.3 Background to Workshops ........................................................................................ 102
4.7.4.4 Data analysis .................................................................................................................. 103
4.7.4.5 Attributing chunks of data .......................................................................................... 105
ix
4.8 Research quality ........................................................................................................... 105
4.8.1 Validity ................................................................................................................... 105
4.8.2 Generalizability ..................................................................................................... 106
4.8.3 Reliability ............................................................................................................... 107
4.8.4 Response rate issues ........................................................................................... 108
4.8.5 Ethics ...................................................................................................................... 108
5 Scoping study .................................................................................................. 110
5.1 The manufacturing landscape and the market in Botswana ............................... 110
5.1.1 Competitiveness .................................................................................................. 111
5.2 The Delphi Study ......................................................................................................... 112
5.3 Findings ........................................................................................................................... 112
5.3.1 Round One: .......................................................................................................... 113
5.3.2 Round Two ........................................................................................................... 116
5.3.2.1 Understand Context ................................................................................................... 120
5.3.2.2 Systems Thinking .......................................................................................................... 121
5.3.2.3 Sustainability Practices ................................................................................................ 123
5.3.2.4 Design Thinking ............................................................................................................ 124
5.4 Conclusions ................................................................................................................... 125
6 Experiences and perceptions of SMEs in the leather industry .............. 127
6.1 Introduction – Economic diversification and the leather industry ................... 127
6.1.1 Local sources of raw materials ......................................................................... 128
6.1.2 Businesses in the leather industry ................................................................... 128
6.1.2.1 Tannery ........................................................................................................................... 129
6.1.2.2 Upholstery and garments ........................................................................................... 131
6.1.3 Design .................................................................................................................... 132
6.1.4 Sustainability practices ........................................................................................ 132
6.2 Bounding the case ........................................................................................................ 133
6.3 Findings ........................................................................................................................... 135
6.3.1 Competitiveness .................................................................................................. 135
6.3.1.1 Complacency ................................................................................................................. 136
6.3.1.2 Cheap imports .............................................................................................................. 137
x
6.3.1.3 Brand awareness ........................................................................................................... 138
6.3.2 Interpreting design in SMEs ............................................................................... 138
6.3.2.1 Innovation/differentiation ........................................................................................... 140
6.3.2.2 Product development approaches ........................................................................... 141
6.3.3 Relationships and the role of main stakeholders ......................................... 142
6.3.3.1 SME-SME relationships ................................................................................................ 142
6.3.3.2 SMEs-Customers relationships ................................................................................. 144
6.3.3.3 SMEs-Suppliers relationships ..................................................................................... 144
6.3.3.4 SMEs-Government relationships .............................................................................. 145
6.3.3.5 SMEs-Other organisations relationships ................................................................. 146
6.3.4 SME business environment ................................................................................ 146
6.3.4.1 Resources constraints ................................................................................................. 147
6.3.5 Opportunities for sustainability ........................................................................ 149
6.3.5.1 The role of sustainability practices ........................................................................... 150
6.3.5.2 Engagement with sustainability viewed in economic terms ............................... 151
6.3.6 Is PSS a viable option? ......................................................................................... 152
6.3.6.1 PSS opportunities for SMEs and customers ........................................................... 152
6.3.6.2 Possible types of PSS and PSS market for SMEs ................................................... 153
6.4 Implications of SMEs experiences on their competitiveness ............................. 155
6.5 Implications of SMEs’ perceptions on their competitiveness ............................. 157
6.6 Interpreting implications in the whole systems design approach ..................... 159
6.7 Conclusions ................................................................................................................... 162
7 Main findings of exploratory workshops ................................................... 164
7.1 Introduction .................................................................................................................. 164
7.2 The need for a capability based approach .............................................................. 166
7.2.1 Support services .................................................................................................. 166
7.2.2 LEA’s programme categories ............................................................................ 167
7.2.3 Income generation versus Entrepreneurship development ....................... 168
7.3 The influence of a collaborative approach ............................................................. 169
7.3.1 Workshop procedure ........................................................................................ 169
7.4 Main Findings ................................................................................................................. 172
xi