Toward resilient product-based service supply chains

Licentiate thesis, 2021

Circular economies represent a step toward breaking the linear production model in supply chains. As drivers of enhanced circularity, product-based service (PBS) offerings extend and/or intensify the utilization period of products and thus decelerate the flow of resources. As a result, transitions to PBSs can yield outstanding, sustainable commercial benefits, including minimized resource input into production and the reduction of waste, all without jeopardizing growth. At the same time, PBS settings are highly servitized, entail different flows of people and knowledge, and engender new uncertainties, especially regarding product lifetime and product quality. Although a new way of handling such variation in PBS supply chains involves optimizing logistical tradeoffs, PBS supply chains are subject to uncertainties not only during normal market situations but also during volatile situations, including the COVID-19 pandemic.

This thesis is based on research that followed a qualitative approach using abductive reasoning. Compiling three papers drawing from three studies conducted across several manufacturing industries, the thesis outlines the relationship between circularity and resilience and provides guidance toward realizing resilient PBS supply chains. Study 1 investigated logistical tradeoffs that support enhanced circularity in PBS supply chains, whereas Study 2 probed disruptions and responses in PBS supply chains following a major external event. Last, Study 3 examined the intersection between resilience and sustainability in manufacturing supply chains. The results of those studies in light of findings in the literature underscore three major findings. First, PBS supply chains have to be understood from a wider perspective on logistical tradeoffs (i.e., material versus people, people versus knowledge, and knowledge versus information) added to the traditional logistical tradeoff between material and information in product-based supply chains. Second, the intersection between circularity and resilience showcases the capacity of those logistical tradeoffs to respond to disruptions and thus cultivate resilience in PBS supply chains. That finding highlights the importance of improved local knowledge that is as close to consumers as possible. Third, the thesis provides a framework of three building blocks for developing resilience in PBS supply chains: (i) developing adaptive resilience, related to Mode I of resilience, to alter normal service offering or delivery; (ii) developing transformative resilience, related to Modes 2 and 3, meaning the notion of extending or radically changing the service offering or delivery; and (iii) integrating those dimensions of resilience with sustainability.