Characterization of the impact of digitalization on the adoption of sustainable business models in manufacturing

Available online at www.sciencedirect.com Available online at www.sciencedirect.com

ScienceDirect ScienceDirect Available online atonline www.sciencedirect.com Available at www.sciencedirect.com Procedia CIRP 00 (2019) 000–000

ScienceDirect ScienceDirect

Procedia CIRP 00 (2019) 000–000

www.elsevier.com/locate/procedia www.elsevier.com/locate/procedia

Procedia CIRP 00 (2017) 000–000 Procedia CIRP 81 (2019) 765–770

52nd CIRP Conference on Manufacturing Systems 52nd CIRP Conference on Manufacturing Systems

www.elsevier.com/locate/procedia

Characterization of the impact of digitalization on the adoption of 28th CIRP Design Conference, May 2018, Nantes, Characterization of the impact of digitalization onFrance the adoption of sustainable business models in manufacturing sustainable businessa models inb manufacturing a A new methodology to analyze the* Sten functional and physical architecture of Antonio Maffei Grahn Cali Nuur a b a Antonio Maffei * oriented Sten Grahn Cali Nuurfamily existing products KTH forRoyal anInstitute assembly product identification of Technology, Brinellvägen 68, 100 44 Stockholm, Sweden a

b Mälardalens högskola, Eskilstuna,, Swdden KTH Royal Institute of Technology, Brinellvägen 68, 100 44 Stockholm, Sweden b * Corresponding author. Tel.:+46 (0)8 790 78 71; E-mail address: [email protected] Mälardalens högskola, Eskilstuna,, Swdden a

Paul Stief *, Jean-Yves Dantan, Alain Etienne, Ali Siadat

* Corresponding author. Tel.:+46 (0)8 790 78 71; E-mail address: [email protected] École Nationale Supérieure d’Arts et Métiers, Arts et Métiers ParisTech, LCFC EA 4495, 4 Rue Augustin Fresnel, Metz 57078, France

Abstract

* Corresponding author. Tel.: +33 3 87 37 54 30; E-mail address: [email protected]

Abstract

Sustainability and digitalization are fast growing sub-topics in the domain of manufacturing research and they will both be main forces shapingand the digitalization future production systems. An sub-topics overview of reveals two big bodies of knowledge being Sustainability are fast growing in the the related domainliterature of manufacturing research and they will both be main created in these fields, but also a little intersection among them. The reason lies in the fact that while digitalization is a trend Abstract forces shaping the future production systems. An overview of the related literature reveals two big bodies of knowledge being aimed technological sustainability requires long term towhile reshape the whole approach createdmainly in theseat fields, but alsoadvancement, a little intersection among them. Theareason lies commitment in the fact that digitalization is a trendto of a manufacturing firm. However, there is a growing indication in literature that digitalization can be a powerful tool Inbusiness today’s business environment, the trend towards more product variety and customization is unbroken. Due to this development, the need of aimed mainly at technological advancement, sustainability requires a long term commitment to reshape the whole approach to in the necessary road towards sustainable manufacturing. This work analyses the related scientific contribution through the lens of agile and reconfigurable production systems emerged to cope with various products and product families. To design and optimize production business of a manufacturing firm. However, there is a growing indication in literature that digitalization can be a powerful tool in the ofroad Business Model (BM) and Business Model (BMI)theasare understood by leading economic literature. systems as well as to choose the optimal product matches, product analysis methods needed. Indeed, most of the known methods The aim to the concept necessary towards sustainable manufacturing. ThisInnovation work analyses related scientific contribution through the lens of analyze a product or one product family onpossible the physical level. Different product families, however, may differmanufacturing largely in terms of the number and result is a characterisation, and when a description of the ways digitalization can support firms in the the concept of Business Model (BM) and Business Model Innovation (BMI) as understood by leading economic literature. The nature of components. Thisbusiness fact impedes an efficient comparison and choice of appropriate product family combinations for the production adoption of sustainable models. result is a characterisation, and when possible a description of the ways digitalization can support manufacturing firms in the

system. A new methodology is proposed to analyze existing products in view of their functional and physical architecture. The aim is to cluster adoption of sustainable business models. these products in new assembly product foropen the optimization existing lines and the creation of future reconfigurable © 2019 The Authors. Publishedoriented by Elsevier Ltd.families This is an access articleofunder the assembly CC BY-NC-ND license © 2019 The Authors. Published by Elsevier Ltd. the physical structure of the products is analyzed. Functional subassemblies are identified, and assembly systems. Based on Datum Flow Chain, (http://creativecommons.org/licenses/by-nc-nd/3.0/) © 2019 The Authors. Published by Elsevier Ltd. This is license an open(http://creativecommons.org/licenses/by-nc-nd/3.0/) access article under the CC BY-NC-ND license This is an open access under the scientific CC BY-NC-ND aPeer-review functional analysis is article performed. a hybrid functional and physical architecture (HyFPAG) is the output which depicts the under responsibility of Moreover, the committee of the 52nd CIRP Conference on graph Manufacturing Systems. (http://creativecommons.org/licenses/by-nc-nd/3.0/) Peer-review under responsibility of the scientific committee of the 52nd CIRP Conference on Manufacturing similarity between product families by providing design support to both, production system planners and Systems. product designers. An illustrative Peer-review under responsibility of the scientific committee of the 52nd CIRP Conference on Manufacturing Systems. Keywords: sustainability, circular economy An industrial case study on two product families of steering columns of example of digitalization, a nail-clipperproduction is used tosystem, explain the proposed methodology. thyssenkrupp Presta France is then carried out to give a first industrial evaluation of the proposed approach. Keywords: digitalization, production system, sustainability, circular economy © 2017 The Authors. Published by Elsevier B.V. Peer-review under responsibility of the scientific committee of the 28th CIRP Design Conference 2018.

1. Introduction

issues in production related scientific contributions: however, for thisintoproduction yield actual results, it is necessary to expand into 1. Introduction issues related scientific contributions: however, The fourth industrial revolution (Industry 4.0), as an practice the scope of sustainability research [2]. In this context, for this to yield actual results, it is necessary to expand into incubator of concepts belonging to the(Industry domain of advanced traditional research aimed at eliminating waste by The fourth industrial revolution 4.0), as an practice the scope of sustainability research [2]. the In this context, manufacturing, is emerging as result of a mixed applicationoptimizing cost, reliability and quality, for performance of concepts belonging to the domain of advanced of traditional research aimed at eliminating the waste by 1.incubator Introduction the product range and characteristics manufactured and/or pull and technology-push trend. On oneofside producers demand reasons, is increasingly beingand integrated with specific effort manufacturing, is emerging as result a mixed applicationoptimizing cost, reliability quality, for performance assembled in this system. In this context, the main challenge in systems that are both trend. agileOnadonesustainable, i.e.demand short targeted, is forincreasingly example, at lowering the emission and minimizing pull and technology-push side producers reasons, being with specific effort Due to the fast development in the domain of modelling and analysis is now integrated not only to cope with single development periods, individualization on demand, flexibility, the energy consumption [3]. systems that are both agile ad sustainable, i.e. short targeted, for example, at lowering the emission and minimizing communication and ongoing trend ofondigitization and products, a limited or existing product families, decentralization and an resource efficiency; the other side, paper focusproduct on [3]. therange promising technological trend of development periods, individualization onare demand, flexibility, theThis energy consumption digitalization, manufacturing enterprises facing important but also to be able to analyze and to compare products to define technology providers offer increasing capabilities of digitalization and its potential impact on the dimension of decentralization and resource on the other side, newThis paper focus on the be promising technological trend of challenges in today’s market efficiency; environments: a networking continuing product families. Itshows can observed that classicalsearch existing mechanization and automation, digitalization and sustainability. Table 1 the result of a literature on technology providers offer increasing capabilities of digitalization and its potential impact on the dimension of tendency towards reduction of4.0 product development times and product are regrouped in function of clients features. and miniaturization. Industry address this through a variety the Webfamilies of Science (WoS) Scopus theorfollowing mechanization andlifecycles. automation, digitalization and networking sustainability. Tableoriented 1 showsand theon result of a using literature search on shortened product In addition, there is an increasing However, assembly product families are hardly to find. of contributions spanning from Cyber-Physical systems to threeWeb keywords sets: Manufacturing AND Sustainability, and miniaturization. Industry 4.0 address this through a variety the of Science (WoS) and on Scopus using the following demand of customization, beinganatincrease the sameintime in a global On the product family level, productsManufacturing differ mainly inAND two Smart Factories but also with corporate social Manufacturing Digitalization, of contributions spanning from Cyber-Physical systems to main three keywordsAND sets: Manufacturing AND Sustainability, competition with competitors all over the world. This trend, characteristics: (i) the number of components and (ii) the responsibility [1].but The necessary work to support this Sustainability AND Digitalization. Smart Factories also with anresearch increase inmacro corporate social Manufacturing AND Digitalization, Manufacturing AND which is inducing the development from to micro type of components (e.g. mechanical, electrical, electronical). process has increased the trendresearch of including responsibility necessary worktotosustainability support this Sustainability AND Digitalization. markets, results[1].inThe diminished lot sizes due augmenting Classical methodologies considering mainly single products process has increased the trend of including sustainability product varieties (high-volume to low-volume production) [1]. or solitary, already existing product families analyze the 2212-8271 © 2019 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license To cope with this augmenting variety as well as to be able to product structure on a physical level (components level) which (http://creativecommons.org/licenses/by-nc-nd/3.0/) 2212-8271 possible © 2019 The optimization Authors. Publishedpotentials by Elsevier Ltd. This is existing an open access causes article under the CC BY-NC-ND license an efficient definition and identify in the regarding Peer-review under responsibility of the scientific committee of the 52nd CIRP Conference on difficulties Manufacturing Systems. (http://creativecommons.org/licenses/by-nc-nd/3.0/) production system, it is important to have a precise knowledge comparison of different product families. Addressing this Keywords: Assembly; Design method; Family identification

Peer-review under responsibility of the scientific committee of the 52nd CIRP Conference on Manufacturing Systems.

2212-8271 © 2019 The Authors. Published by Elsevier Ltd. This is an©open article Published under theby CC BY-NC-ND 2212-8271 2017access The Authors. Elsevier B.V. license (http://creativecommons.org/licenses/by-nc-nd/3.0/) Peer-review under responsibility of scientific the scientific committee theCIRP 52ndDesign CIRPConference Conference2018. on Manufacturing Systems. Peer-review under responsibility of the committee of the of 28th 10.1016/j.procir.2019.03.191

Antonio Maffei et al. / Procedia CIRP 81 (2019) 765–770 Antonio Maffei et al. / Procedia CIRP 00 (2019) 000–000

766 2

Table 1. Number of instances for bibliographic search on based on keywords. Keywords used for the research Manufacturing Sustainability

Manufacturing Digitalization

Manufacturing Sustainability Digitalization

WoS - Scopus

WoS - Scopus

WoS - Scopus

2006-2008

214 - 78

11 - 4

0-0

2009-2011

483 - 226

11 - 2

0-0

2012-2014

959 - 457

17 - 4

1-0

2015-2017

2004 - 776

111- 31

6-1

Period

The table shows how both Sustainability and Digitalization are concept with an exponentially growing interest in combination with manufacturing, but scarcely jointly investigated in the manufacturing domain. One key to understand this lack of unified research efforts lies in the very definition of innovation as a sum of two factors: (1) invention and (2) application. While (1) includes the activities related to advance technology, (2) is concerned with how to propose, create and capture the potential value of such technology. In other words, “application” represents all the issues related to successfully bring to the market the invention, e.g. couple the technology with the right Business Model (BM). In a value based definition of BM this means identify the value proposition and define coherent strategies to create and capture this value. As stated above, Digitalization is a technological push of the fourth industrial revolution, not yet showing a standard pattern to application in industry: being a relatively new domain, , the focus of the research community is on “inventing” new ways of achieving the initial promises of such advancement: i.e. increase in productivity and quality by using data as “new oil” or “new soil”. This approach is in line with the current industrial working paradigm that is predominantly not aware of the need to value natural capital and ecological systems as part of their business logic. The existing research supporting a sustainable approach to manufacturing has often a narrow focus on single objective in some form of economic value addition and oriented at the short time [4]. As recent review studies confirmed, however, the logic assumption that tackling the issues of increasing the manufacturing sustainability is a long term endeavor: effective research contribution must be aimed at re-thinking the underlying business model exploiting such installation [5, 6]. In detail, two main trends emerge: reduction of consumption by shifting the focus from the focal company to the whole network of stakeholders of a manufacturing system and redesign of linear value chain toward new configurations that support closed loop product and production systems lifecycles [7]. Both these objectives require a radical re-shaping of the BM from the very definition of the value for each stakeholder involved to the consequent alignment of the process of value creation and capturing. Summarizing, while digitalization advances focus on delivering invention to maximize profits of current application schemes (or BMs), sustainability is concerned with proposing a new application paradigm based on business models with

completely different attributes compared to the current ones. However, literature describe and shows also examples of how towards sustainable manufacturing [6]: at the same time, there is a lack of rigorous studies to qualify and quantify the extent of this contribution.

Invention + Application = Innovation Industry 4.0 • Smart Factories/CPS • Self-Organization • Individualized systems • Adaptation to human • Corporate Social Responsibility

Mechanization and Automation Miniaturization Digitalization

Business Models. Value: • Proposition • Creation • Capturing

Short devel. period Individualization Flexibility Decentralization Resource Efficiency

Application-pull

?

Production System desired features: - Agility - Sustainability

Technology-push

Fig. 1. Graphical summary of the research domain and objective.

This work aims at addressing part of this gap: a graphical summary of the domain in exam as extrapolated and described in this work and the related research challenge are shown in Figure 1. In detail this contribution uses emerging concepts in the BM research domain to characterize, and when possible describe, how the current knowledge in the domain of digitalization can contribute to a change of paradigm in the direction of sustainable manufacturing. It is important to remark that this work refer to BM in relation with the whole operation of a focal manufacturing firm and related stakeholders and not, as often seen in literature, to a specific product. 2. Background In order to understand how digitalization can impact the domain of sustainability in manufacturing it is necessary to borrow and expand the characterization of BM and Business Model Innovation (BMI) from the economics domain. While the BM of a company is a static portrait of how the firm is defining, creating and capturing value in a given moment, BMI is the dynamic transition between two of such static statuses: i.e. current one and desired one [8]. This transition can be triggered by factors that are endogenous, or exogenous in relation with the business model, but affect only the former category. In other words, BMI can be seen as the re-alignment of the internal factors of a BM to fit new conditions originated inside or outside the BM itself. Value proposition is an exogenous factor of the BM in the sense that it affects the BM by being its generative input, but it is not part of a specific BM, i.e. can be fulfilled by many different BM. The endogenous factors the one related to value creation and capturing. In general value creation is related with key activities, resources, channel, partners and technology while value capture with cost



Antonio Maffei et al. / Procedia CIRP 81 (2019) 765–770 Antonio Maffei et al. / Procedia CIRP 00 (2019) 000–000

structure and revenue stream [9, 10]. One important additional point is that not all the innovation processes require a BMI to occur. Minor perturbations of the current BM can be accommodated internally. This is often the case for example of incremental innovation, or more correctly sustaining innovation [11]. This kind of innovation “sustain” the current BM, and does not, thus, require a re-alignment of it. When instead the perturbation is such that requires a BMI, it is possible to talk of radical innovation. Figure 2 represents two possible processes for BMI that are useful to further this work: • (a) BMI is triggered by the change of one factor in the current BM, e.g. new technology, partner, institutional requirement etc. • (b) BMI is triggered by the need to move to a specific desired state of the BM from the current one, e.g. increase of billing capability, move from manual to automated work, introduce green processes.

(a)

Current BM

BMI

components. Although BM is a “sponge” absorbing different theories and perspectives, systematic attempt to map the BM components date back to the early 2000´s and have now produced a mainstream approach known as integrated business model (hereby then IBM). The IBM includes three component families, each one featuring three areas and related models [12]. Figure 3 represents graphically the IBM components and the partial models in them. Integrated Business Model Strategic Model Strategic Components

Customer and Market Components

New BM

Value Creation Components

New factor

• Strategic Position and development paths • BM value Proposition

Resource Model • Core competencies & competencies • Core assets and assets

Customer Model

Market offer Model

• Customer relationship/target groups • Channel configuration

• Competitors • Market structure • Value offering/product services

Manufacturing Model

Procurement Model

• Manufacturing model • Value generation

• Resource acquisition • Information

Network Model

• BM networks • BM partners

Revenue Model • Revenue streams • Revenue differentiation

Financial Model • Financing Model • Capital Model • Cost structure Model

Fig. 3. Component and partial models of an integrated business model (adapted from [12]).

(b) Current BM

767 3

BMI

Current BM Desired

Fig. 2. (a) BMI as consequence of one factor changing. (b) BMI as consequence of mismatch between current state and desired state.

Both processes can be dependent or not on the BM stakeholders wishes and plans. The digitalization impact on manufacturing industry can be modelled according to the process (a). New digital solutions are available to manufacturing firms and can trigger BMI by replacing or integrating current ways of working and related infrastructure. The shift towards sustainable manufacturing can be understood as a (b)-like process where manufacturing firms want to achieve objectives such as carbon neutrality. This work aim at characterize independently the main features of both the BMIs processes associated with digitalization and sustainability and compare them to identify synergies, absence of mutual influence and trade-offs. In order to describe the aforementioned processes, it is necessary to refer to a model that encompasses the elements of a BM and thus the domain of the BMI, in other words the valuebased view of BM needs to be expanded to a set of actual

The IBM main contribute to this work is the possibility to target exhaustively all the different theories and perspectives supporting the related research endeavour, but it is also useful to highlight and structure the other requirement for the analysis. In detail: • BMI triggered by digitalization. The model allows to identify a working definition for Digitalization by narrowing down the very open and dynamic general understanding of it as Integration of digital technologies into everyday life by the digitization of everything that can be digitized (Businessdictionary.com 2018-08-22). In detail, the focus of this work is on how the digital technologies can transform the activities, processes, actors, interactions and goods involved in the IBM domain above. This refers not only to the “analogue” to “digital” transformation, but also to how this impact the process of value creation by, for example, facilitating higher degree of accessibility, availability and transparency [13]. • BMI triggered by shift towards sustainable manufacturing. The main input for this analysis is the “desired BM”: i.e. a business model supporting sustainable manufacturing. There is not a definitive answer in literature, however a certain level of consensus have been reach regarding the archetype of BM that can be called sustainable and quite a few examples have been brought forward [14]. Table 2 presents a selection of such archetypes and examples that is deemed interesting in this context. The bolded entries are the ones analysed in detail in this paper.

Antonio Maffei et al. / Procedia CIRP 81 (2019) 765–770 Antonio Maffei et al. / Procedia CIRP 00 (2019) 000–000

768 4

Table 2. A selection of the sustainable business model archetypes (adapted from [14]. In bold the cases analysed through literature review.

Organizational

Social

Technological

Group

Archetype

Example

Maximise material and energy efficiency

• • • • •

Create Value from waste

• • • • • • •

Deliver Functionalities rather than ownership Develop scale solutions

• • • • • • • • • • •

Low carbon/manufacturing solution Lean manufacturing Additive Manufacturing De-materialization (of products/packaging) Increased functionality (to reduce total number of product required) Circular economy/closed loop Cradle-to-cradle Industrial Symbiosis Reuse, recycle, re-manufacture Take back management Use excess capacity Sharing assets (shared ownership and collaborative consumption) Extended producer responsibility Product-oriented Product Service System (PSS) – maintenance, extended warrantee Use oriented PSS – rental, lease, shared Result oriented PSS – pay per use Private Finance Initiative (PFI) Design, Build, Finance, Operate (DBFO) Collaborative approaches (sourcing, production, lobbying) Incubators and entrepreneur support models Licensing, franchising Open Innovation (platform) Crowd sourcing, funding

The analysis of the two BMI processes for Digitalization and Sustainability is based on literature that contribute to the single components of the IBM framework. Such component are not homogeneous in both spatial and the temporal dimension. In view of this, it is safe to assume that a BM, if considered from an holistic perspective, is in fact a complex object: this leads to an important consideration that must be done regarding the use of it. The current level of description of BM is sufficient to describe the required output in term of, for example, an objective function. Thus, it is suitable to describe and steer the BMI process accordingly. However, the afore mentioned complex nature of the interactions among the BM components prevent the result of this process to have any absolute predictive value. In complex system, any perturbation of the current equilibrium can result in improvement, but also worsening of the initial condition when compared with the desired output. That is why it is impossible, at the current level of formalization of the construct, to robustly design successful BM: the validation of the design choice can only be done on the actual market, after implementation. This does not diminish the value of BM related research. The literature presented above clearly point out that analysis like the one presented in this paper allow understanding different perspective of the problem and identify successful application patterns. This, in turn, helps building knowledge that can significantly lower the risk of implementing new technologies.

3. Method This analysis is based on a literature review of the contribution deemed relevant to describe the two BMI processes related to digitalization and shift toward sustainable manufacturing as described in the background. In detail, the specific instances of BM for sustainable manufacturing, presented in bold in Table 2, are matched with the technological possibilities offered by digitalization and, when available, specific implementation. Given the broad spectrum of this literature research, the results are limited to the main concepts identified in each area and are presented in a general form, often summarizing more contributions and reporting only the most relevant. 4. Results The work focused on three examples of how the sustainability of manufacturing operation can increase based on two BM archetypes. In detail: • BM that create value from waste: o Circular Economy (CE)/closed loop o Sharing Assets (shared ownership and collaborative consumption) • BM that deliver functionality rather than ownership: o Use oriented PSS- rental, lease, shared The first step to characterize the impact of digitalization on the BMI process related with transitioning to the BMs above is to describe the strategy behind such change. Strategy is the generative aspect of the BM so it can be described without direct reference to its embodiment: i.e. it is not impacted by digitalization per se. The firm that wants to position themselves in networks that create value from waste are targeting the following Value Proposition: The concept of “waste” is eliminated by turning existing waste streams into useful and valuable input to other production [14]. With reference to CE modern contributions put the emphasis on changing the prevailing economic view that industrial processes operate as open systems with unlimited resource supply: CE assumes a limited amount of resources and thus advocates for a systematic approach to closed system [15]. In the domain of manufacturing the “Sharing Assets” example refers to manufacturing firms having technological needs that cannot be supported by their own volume of business. For example, SMEs often cannot afford mechanization and automation of their operation due to high cost of ownership and integration. In this sense sharing manufacturing assets is conceptually similar to pay for their functionality rather than pay for ownership. In view of this the sharing asset example will be characterized as a specific case of “use oriented PSS” were the shared resource is the manufacturing asset. The reference Value proposition can be then formulated as: provide services that satisfy user needs without users having to own physical products. Business focus shifts from manufacturing “stuff” to maximizing consumer use of products, so reducing production throughput of materials, and better aligning manufacturers ‘and consumers ‘interest [14]. It is important to notice that the manufacturing firm here is a central entity that serves the general market, but it is also



Antonio Maffei et al. / Procedia CIRP 81 (2019) 765–770 Antonio Maffei et al. / Procedia CIRP 00 (2019) 000–000

customer of other firms delivering the production system and other means. The following Table 3 summarizes the key findings of the Sustainability and Digitalization BMI review related to the CE example. Results are presented according to the IBM framework and include relevant literature or extrapolated trends to support the synthetic considerations regarding the single impacts of Digitalization. Table 3. Digitalization and Sustainability BMIs towards CE: summary and comparison. Model Resource

Network

Customer Market

Revenue

Manufacturing

Requirement: CE Closed system: no input of resources from outside or leakage [16]. Integration of new competences and equipment [17]. New actors able to design and deliver solutions to support the closed system approach. Focus on value network Multiple product LifeCycle [20] Rethinking market segmentation and increasing the B2B related shares of profits

Circular flows: objective is the sustainability of the closed loop rather than maximization of profits. Redistribution of benefits Design for multiple cycles. New processes to use “waste”

Procurement

Transition from productselling to serviceoriented system[25]

Financial

From linear lines of credits (payback time) to circular lines of credit (based on impact).

Digitalization impact Fundamental: digitalization of information flows reduces material and transport needs. Positive: increased accessibility enable networked value configuration [18]. enables industrial symbiosis [19] Neutral Positive: enable more accurate market analysis from direct content with the customer [18]. Enable one-piece flow [21] Enhance retailing strategies [22] Positive: increased transparency enable fair redistribution of the benefits [18, 23]. Fundamental: Support approach towards resource conservative manufacturing [15, 16] Lower cost through incremental innovation [24] Positive: increases accessibility and transparency and allow remote and /or Joined monitoring [15, 25] Neutral

The impact of Digitalization on the transition towards Circular Economies is overwhelmingly positive: Digitalization has a positive role in almost all the BM areas and it is a fundamental requirement for some of the necessary alignment in the described BMI towards sustainable manufacturing. Similarly to Table 3, the following Table 4 summarizes the key findings to the Use oriented PSS/Sharing asset example.

769 5

Table 4. Digitalization and Sustainability BMIs towards Use oriented PSS/Sharing assets: summary and comparison. Model Resource

Network

Customer

Market

Revenue Manufacturing

Requirement Use-oriented PSS Focus on core competences and activities. Leverage current assets. Atomization of the value proposition with related new stakeholders [23] Channel configuration through integration of product and services Follow closer customer. Faster innovation Competition driven by the offer for integrated solution [27]. From fixed priced to combined revenue models [29] Manufacturing as a service, cloudmanufacturing [30]

Procurement

Transition from productselling to serviceoriented system [25]

Financial

Reduced ownership of assets. Transition from fixed to variable costs [32]

Digitalization impact Positive: support adaptation of resources to new requirements [26] Positive: increased accessibility enable networked value configuration [18]. Fundamental: services can be provided independently and proactively [24] Positive: support remote contact with customer for feedback [28] Positive: increased transparency Fundamental: enable sharing of manufacturing asset [31] Positive: increases accessibility and transparency and allow remote and /or Joined monitoring [15, 25] Neutral

Literature suggest that Digitalization is a fundamental enabler of sustainable business models requiring sharing assets. 5. Conclusion and discussion The current research on Digitalization on production systems focuses mainly on how the technological promises of such trend can improve current processes toward traditional objectives of today’s industry: i.e. quality and productivity. In this sense digitalization per se could be prone to generate “rebound” effects, where increased efficiency create more consumption instead of the vice-versa. However, Digitalization has already been recognized also as a key ingredient of the paradigm shift towards sustainable business model and this work confirm these findings. In detail, the analysis shows the largely positive impact that digitalization has in enabling the BMI towards sustainable manufacturing for the proposed scenario. It also accounts for the specific contribution of digital technology in each area of a BM and by differentiating them it can then be used as reference for further studies. Another interesting finding is that the two example analyzed, CE and use oriented PSS, have many common embodiment in practice: PSS are considered by many authors an approach to implement CE. CE is often mentioned as long term goal of PSS implementation. The reduced scope of this work allowed only focusing on a limited set of sustainable business models archetypes and related examples: the ones deemed more relevant and

770 6

Antonio Maffei et al. / Procedia CIRP 81 (2019) 765–770 Antonio Maffei et al. / Procedia CIRP 00 (2019) 000–000

interesting for the analysis. However, the review process highlighted how Digitalization can have impact also on other aspects left out of the analysis. The need for further work in this direction is evident. The new perspective introduced by this work contributes also to understand the perception that industry has of Digitalization and Sustainability issues in manufacturing. In detail, Digitalization is perceived as force that can positively impact the BM of manufacturing companies from the inside through selected application of this technology: i.e. BMI brought by digitalization makes the company more profitable. Sustainability, on the other hand, is mostly framed as an external requirement where any required BMI must be aimed at limiting the losses. This is in line with leading literature in the field [33]. Although an increasing amount of literature shows how sustainable choice coincide often with profitable choice, this bias is very pervasive. References [1] H. Lasi, P. Fettke, H.-G. Kemper, T. Feld, and M. Hoffmann, "Industry 4.0," Business & Information Systems Engineering, vol. 6, no. 4, pp. 239242, 2014. [2] J. Sarkis and Q. Zhu, "Environmental sustainability and production: taking the road less travelled," International Journal of Production Research, vol. 56, no. 1-2, pp. 743-759, 2018/01/17 2018. [3] M. Jin, R. Tang, Y. Ji, F. Liu, L. Gao, and D. Huisingh, "Impact of advanced manufacturing on sustainability: An overview of the special volume on advanced manufacturing for sustainability and low fossil carbon emissions," Journal of Cleaner Production, vol. 161, pp. 69-74, 2017. [4] A. Jayal, F. Badurdeen, O. Dillon Jr, and I. Jawahir, "Sustainable manufacturing: Modeling and optimization challenges at the product, process and system levels," CIRP Journal of Manufacturing Science and Technology, vol. 2, no. 3, pp. 144-152, 2010. [5] F. Jovane et al., "The incoming global technological and industrial revolution towards competitive sustainable manufacturing," Cirp Annals, vol. 57, no. 2, pp. 641-659, 2008. [6] K. R. Haapala et al., "A review of engineering research in sustainable manufacturing," Journal of Manufacturing Science and Engineering, vol. 135, no. 4, p. 041013, 2013. [7] P. Ghisellini, C. Cialani, and S. Ulgiati, "A review on circular economy: the expected transition to a balanced interplay of environmental and economic systems," Journal of Cleaner production, vol. 114, pp. 11-32, 2016. [8] N. J. Foss and T. Saebi, "Business models and business model innovation: Between wicked and paradigmatic problems," Long Range Planning, 2017. [9] A. Osterwalder, Y. Pigneur, and C. L. Tucci, "Clarifying business models: Origins, present, and future of the concept," Communications of the association for Information Systems, vol. 16, no. 1, pp. 1-25, 2005. [10] J. Richardson, "The business model: an integrative framework for strategy execution," Strategic change, vol. 17, no. 5‐6, pp. 133-144, 2008. [11] C. M. Christensen and M. E. Raynor, The innovator's solution: Creating and sustaining successful growth. Harvard Business Press, 2003. [12] B. W. Wirtz, A. Pistoia, S. Ullrich, and V. Göttel, "Business models: Origin, development and future research perspectives," Long Range Planning, vol. 49, no. 1, pp. 36-54, 2016.

[13] R. Amit and C. Zott, "Value creation in e‐business," Strategic management journal, vol. 22, no. 6‐7, pp. 493-520, 2001. [14] N. M. Bocken, S. W. Short, P. Rana, and S. Evans, "A literature and practice review to develop sustainable business model archetypes," Journal of cleaner production, vol. 65, pp. 42-56, 2014. [15] M. Lieder and A. Rashid, "Towards circular economy implementation: a comprehensive review in context of manufacturing industry," Journal of Cleaner Production, vol. 115, pp. 36-51, 2016. [16] A. Rashid, F. M. Asif, P. Krajnik, and C. M. Nicolescu, "Resource Conservative Manufacturing: an essential change in business and technology paradigm for sustainable manufacturing," Journal of Cleaner production, vol. 57, pp. 166-177, 2013. [17] I. Jawahir and R. Bradley, "Technological elements of circular economy and the principles of 6R-based closed-loop material flow in sustainable manufacturing," Procedia Cirp, vol. 40, pp. 103-108, 2016. [18] G. C. Nobre and E. Tavares, "Scientific literature analysis on big data and internet of things applications on circular economy: a bibliometric study," Scientometrics, vol. 111, no. 1, pp. 463-492, 2017. [19] M. R. Chertow, "“Uncovering” industrial symbiosis," Journal of Industrial Ecology, vol. 11, no. 1, pp. 11-30, 2007. [20] K. Joshi, A. Venkatachalam, and I. Jawahir, "A new methodology for transforming 3R concept into 6R concept for improved product sustainability," in IV global conference on sustainable product development and life cycle engineering, 2006, pp. 3-6. [21] D. Kolberg and D. Zühlke, "Lean automation enabled by industry 4.0 technologies," IFAC-PapersOnLine, vol. 48, no. 3, pp. 1870-1875, 2015. [22] J. Hagberg, M. Sundstrom, and N. Egels-Zandén, "The digitalization of retailing: an exploratory framework," International Journal of Retail & Distribution Management, vol. 44, no. 7, pp. 694-712, 2016. [23] A. Maffei, "Characterisation of the Business Models for Innovative, NonMature Production Automation Technology," PhD, Production Engineering, Royal Institute of Technology, Stockholm, 2012. [24] C. Lerch and M. Gotsch, "Digitalized product-service systems in manufacturing firms: A case study analysis," Research-Technology Management, vol. 58, no. 5, pp. 45-52, 2015. [25] S. Witjes and R. Lozano, "Towards a more Circular Economy: Proposing a framework linking sustainable public procurement and sustainable business models," Resources, Conservation and Recycling, vol. 112, pp. 37-44, 2016. [26] T. Stock and G. Seliger, "Opportunities of sustainable manufacturing in industry 4.0," Procedia Cirp, vol. 40, pp. 536-541, 2016. [27] B. J. Pine, J. Pine, and J. H. Gilmore, The experience economy: work is theatre & every business a stage. Harvard Business Press, 1999. [28] A. Tukker, "Product services for a resource-efficient and circular economy–a review," Journal of cleaner production, vol. 97, pp. 76-91, 2015. [29] T. Sadek and M. Steven, "Design of PSS Revenue Models," in Proceedings of the 2nd CIRP IPS2 Conference 2010; 14-15 April; Linköping; Sweden, 2012, no. 077, pp. 245-252: Linköping University Electronic Press. [30] L. Wang, X. V. Wang, L. Gao, and J. Váncza, "A cloud-based approach for WEEE remanufacturing," CIRP Annals-Manufacturing Technology, vol. 63, no. 1, pp. 409-412, 2014. [31] X. Xu, "From cloud computing to cloud manufacturing," Robotics and computer-integrated manufacturing, vol. 28, no. 1, pp. 75-86, 2012. [32] A. Neely, "Exploring the financial consequences of the servitization of manufacturing," Operations management research, vol. 1, no. 2, pp. 103118, 2008. [33] C. M. Corral, "Sustainable production and consumption systems— cooperation for change: assessing and simulating the willingness of the firm to adopt/develop cleaner technologies. The case of the In-Bond industry in northern Mexico," Journal of cleaner production, vol. 11, no. 4, pp. 411-426, 2003.