Total Cost and Total Value of Ownership in PSS: A Model for Economic and Environmental Sustainability

Manufacturing companies interested in moving towards the Product-Service Systems (PSS) offering need tools to show customers the value of the offering they are proposing. In the context of PSS, quantifying the lifecycle costs and the value generated by an offering can serve as a key selling point that companies can leverage to increase their market share. This paper presents a Total Cost of Ownership (TCO) model for assessing the lifecycle costs associated with a PSS offering. Additionally, by incorporating a Total Value of Ownership (TVO) approach, the model can quantify both the economic value generated and the environmental impact of the offering. This allows for a comprehensive evaluation of both economic and environmental sustainability. After presenting the model steps, the paper proposes a test application in a machinery company to show the potentialities of the model before clarifying the future extensions.