Service Design

Dematerialization

Green service design commonly seeks to dematerialize the customer experience. Dematerialization refers to reducing the amount of material resources required to deliver a given benefit. Services are generally thought to be intangible; however, most service delivery requires significant tangible components. For example, a hotel stay, from a customer [Page 440]perspective, leaves few tangible traces, but the manufactured capital required to provide that stay is substantial.

Green service design accomplishes dematerialization in a couple of ways. One is simply to find ways to reduce the total amount of material designed into a product. For example, television providers may offer on-demand movies and entertainment as part of their service. Rather than hooking up separate pieces of hardware, consumers can choose to receive streaming digital content through their existing hardware without additional devices, physical media, or postage costs.

The other methods of dematerialization entail moving the locus of product usage and control farther up the value chain, centralizing and consolidating the materials required to deliver a service. This centralization may be achieved through strategies of renting or sharing, or through a complete replacement of products with services. In the cases of sharing and renting—also called use-oriented product service systems—consumers have the use of products as needed, but without the added burdens of ownership. In the latter case—referred to as result-oriented product service systems—consumers are relieved not only of the ownership and possession of products, but also of the labor needed to use them.

Renting allows consumers to save the costs, in terms of money, time, and space, of owning certain products. Financial savings may come from eliminating such costs as product replacement due to obsolescence and depreciation; maintenance, repair, and storage; and insurance, all of which are carried more efficiently by the business. Businesses benefit from efficiencies and from control over product maintenance and longevity, reducing their own costs and allowing them to add value for customers. To be successful, rental service businesses must assure that customers can use their services as easily and conveniently as if they owned the products themselves. Familiar examples of rental services include rental car companies, self-move rental truck companies, men's formalwear, and heavy home and garden equipment rentals, such as stump removers, air compressors, and generators. Innovators are taking the rental idea a bit further. For example, several communities now operate tool lending libraries, which allow patrons to borrow common household tools for a small fee. High fashion accessories, such as designer handbags, can be rented by the week or month.

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