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3rd International Business Servitization Conference 13-14 November 2014 Bilbao
Citation preview
A case study of servitization in the farming
livestock sector: organizational change
and potential environmental improvement
3rd International Business Servitization
Conference
Bilbao, 13th-14th November
Ángeles Pereira, Adolfo Carballo, Manuel González, Xavier Vence
Dept. of Applied Economics – University of Santiago de Compostela
PRESENTATION SUMMARY
Conclusions
Results
Carbon footprint methodology
Case study: cooperatives for farm services
Servicizing and sustainability
Defining servicizing
Research objectives
3rd International Business Servitization Conference
Research objectives
3rd International Business Servitization Conference
• A conceptual framework to clarify how servicizing is
present in the farming sector
• Measuring the potential contribution of servicizing to
diminishing the environmental impact of farming activities
What is servicizing?
Servitization
• PSS
• Servicizing
• Transaction / business
model
• Combination of
products & services
• Selling functions
• Satisfaction of
customer’s needs
3rd International Business Servitization Conference
Types of servicizing
3rd International Business Servitization Conference
Tukker (2004)
Servicizing in the agri-food sector
3rd International Business Servitization Conference
Organic food home-delivery
Biological pest management
Services in PSS
Agricultural phase
Integrated pest management
Organic farming
Soil conservation
activities
Processing & transportation
Sharing common
processing facilities
Common transportation
Internal capacity building
On eco-sound agriculture
On Fair Trade and organic certification
Marketing (international)
International and national marketing
Fair Trade and organic
certification
Promotion (local)
Coffee museum
Coffee bar
Tourism programmes presenting
coffee production
Maintenance services
Cleaning, repair and
maintenance of coffee
processing equipment
EOL treatment
Worm-composting system for
waste
Biological wetland
treatment for waste water
Services to coffee growers. Devissher&Mont (2008)
Servicizing generic elements
3rd International Business Servitization Conference
Enabling platform
Products &services
Functional result
Servicizing and environmental sustainability
3rd International Business Servitization Conference
• Servicizing vs green servicizing
• Eco-efficiency improvements due to extended producer
responsibility:
• Use and disposal costs
• End-of-life value
• Profit linked to units of service
• Role of design:
• Closing material loops
• Alternative scenarios of product use
• Increasing productivity of resources use and dematerialization
• Providing system solutions
Case study: agricultural cooperatives
3rd International Business Servitization Conference
Machinery services Heifer breeding
Fodder production and delivery
Servitization through cooperatives
• Combination of products & services: material inputs,
technical advice, maintenance and reparation,
transportation
• Enabling platform: access to the last technological
advances and technical knowledge
• Functional result: land labored, healthy productive cows,
adequate animal feeding
3rd International Business Servitization Conference
Servitization through cooperatives: organizational
changes
• Cultivation planning adapted to machinery services
availability
• Heifers breeding in common facilities and pay per day of
stay
• Commitment to planned growing and harvesting
• Farmers avoid acquiring expensive machinery and
carrying out some risky works at farm
• Farmers get genetically improved cows while avoid
potential problems from animal diseases
• Farmers are released from feeding their cows
3rd International Business Servitization Conference
Servitization through cooperatives: environmental
improvement potential
3rd International Business Servitization Conference
SERVICIZING PRACTICE Potential sources of environmental improvement
Farm machinery Reduction of processes and material requirements to
produce farm machinery
Efficient consumption of fuel and less emissions to the
atmosphere
Professional and efficient use of machinery
Diffusion of more efficient technologies
Heifer breeding Effective disease prevention, with less needs of medicines
Optimized food portions
Efficient use of facilities
Fodder production and
delivery
Optimal use of land
Local distribution, less kilometres
Efficient ensilage process: less loss and less plastics
Elimination of the mixing kart at farm
Reduced demand for external concentrated food
Measuring environmental impacts from
servicizing: the carbon footprint
• OBJECTIVE: identifying environmental improvements in
farms shifting to servicizing
• INDICATOR: the carbon footprint (CF), which includes
CO2 and other greenhouse gases emissions
• METHOD: Composed method based on financial
accounts MC3 (Carballo-Penela & Doménech, 2010; Coto Millán, Doménech, &
Mateo Mantecón, 2008; Penela, García-Negro, & Quesada, 2009)
• COMPARISON of the three farms’ CF before and after
joining into cooperatives (2002 – 2011)
3rd International Business Servitization Conference
Results: absolute change in the CF
• Increase in the farms’ size: number of heads of cattle and
milk production
• Overall increase in the farms’ CF
• Emissions due to the production of animal food purchased
by the farms are the main source of CF
• Reduction in the CF due to electricity and materials
• Increase in the CF due to services
3rd International Business Servitization Conference
Results: the CF considering the farms’ size
3rd International Business Servitization Conference
FARM 1 FARM 2 FARM 3
2002 2011 2002 2011 2005 2011 Carbon
footprint
(tCO2)
704.31 1919.97 1010.58 1304.44 1272.64 1385.81
Number of
heads of
cattle
80 210 232 321 135 150
Liters of milk 544.115 1.766.101 938.203 1.672.679 1.288.394 1.708.34
tCO2 / heads
of cattle 8.80 9.14 4.36 4.06 9.43 9.24
tCO2 / liters
(thousands) 1.29 1.08 1.07 0.7 0.98 0.81
tCO2 / heads
of cattle
(2002=100)
100 103.86 100 93.11 100 97.98
tCO2 / liters
(2002=100) 100 83.98 100 72.40 100 82.12
Results: CF average relative variation (tCO2/litres)
3rd International Business Servitization Conference
FARM 1 FARM 2 FARM 3
1.-FUEL -3,20% 12,37% 23,54%
2.-ELECTRICITY -2,50% -20,66% -9,44%
3. MATERIALS -19,84% -14,42% -8,19%
4. SERVICES 65,40% 57,72% -2,89%
5
AGRICULTURAL
RESOURCES
-0,29% -2,44% -3,77%
6 FOREST
RESOURCES -51,77% -100,00% -
TOTAL [tCO₂] -1,92% -3,52% -3,23%
Conclusions
• Main contributions:
• Understanding servitization in the farming sector
• Measuring the environmental impact from shifting to servicizing
• Agricultural cooperatives represent a shift to servicizing in
the farming sector
• Products do not disappear but the service component is
the relevant element of the value proposal to the farmers
• Servicizing through agricultural cooperatives helps to
reduce the individual CF of farms
3rd International Business Servitization Conference
Conclusions
• Specialized services provided by the cooperatives (such
as those related to the cows’ feeding and genetic
improvement) allow to improve the efficiency of dairy
farms
• Environmental gains from servicizing in the farming sector
are linked to a more efficient use of resources:
• More efficient and intensive use of strong machinery
• Reduced material and energy intensity based on experts
consultancy for animal care and feeding
3rd International Business Servitization Conference
3rd International Business Servitization Conference
Thank you very much for your attention!
Ángeles Pereira, Adolfo Carballo, Manuel González, Xavier Vence
Dept. of Applied Economics – University of Santiago de Compostela