Product-service-system, A strategy for Corporate Real Estate Management to minimize material leakage in the office (transformation)

Abstract

The world is moving toward environmental sustainability and a circular economy. The construction industry generates more than one-third of waste in landfills around the world is considered a critical sector. Material leakage is becoming one of the most concerning issues in the construction industry globally.

Due to globalization, many corporations are growing in size, as a result, there are numerous corporate real estate (CRE) changes. These changes in the corporate real estate sector lead to a significant amount of material leakage generation which could cause negative effects on company stakeholders as well as the environment. Many researchers claim that office refurbishment is the main material leakage contributor, hence the company should apply a circular strategy to minimize the material leakage effects.

A product-service system (PSS) is a procurement strategy that provides a combination of products and services to meet consumers' demands. Most of the PSS product ownership remains with the PSS providers while consumers can access or possess products in other ways such as leasing or subscribing instead of traditional purchasing. By doing so, the PSS providers take more responsibility for the products, and the products are treated more effectively and properly by the PSS providers because they have specialized facilities and knowledge to support product treatment. This will also lead to a reduction in material leakage. In sum, the PSS strategy could directly contribute to the circular economy and it seems to be a proactive solution to minimize material leakage in office refurbishment.

According to a built-up story, the main research question is formulated, which is “To what extent does the Product-Service system (PSS) help corporate real estate (CRE) in minimizing material leakage?”

To assert that implementing PSS could minimize material leakage in CRE, theoretical research, empirical research, and the analysis of both theoretical and empirical research findings have to be conducted. The theoretical research is to identify all research-related concepts and the relationship between each concept, namely PSS, material leakage, and CRE. Also, the potential of PSS in minimizing material leakage is studied while the theoretical research is conducted by literature review.

The empirical research investigates how and to what extent can PSS contributes to material leakage minimization in real-life practice. This is will be conducted by a case study.

Thereafter, an analysis of the theoretical and empirical research findings is conducted to find whether both of them are aligned before using the result to answer the research questions.

The result of the research shows that material leakage minimization seems to be a consequence of PSS implementation. The circularity of the PSS product is greater compared to a similar product that is provided by a linear economy strategy (take-make-dispose). However, material leakage minimization is not yet a primary factor for consumers (CRE) to use PSS.