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Journal of Cleaner Production 32 (2012) 173e182

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Journal of Cleaner Production

journal homepage: www.elsevier .com/locate/ jc lepro

Dynamic and multidimensional measurement of product-service system (PSS)sustainability: a triple bottom line (TBL)-based system dynamics approach

Sora Lee a, Youngjung Geuma, Hakyeon Lee b, Yongtae Park a,*

aDepartment of Industrial Engineering, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 151-742, Republic of KoreabDepartment of Industrial & Information Systems Engineering, Seoul National University of Science and Technology, 232 Gongneung-ro, Nowon-gu, Seoul 139-743, Republic of Korea

a r t i c l e i n f o

Article history:Received 9 September 2011Received in revised form26 March 2012Accepted 28 March 2012Available online 4 April 2012

Keywords:Product-service system (PSS)SustainabilityDynamicMultidimensionalTriple bottom line (TBL)System dynamics (SD)

* Corresponding author. Tel.: þ82 2 880 8358; fax:E-mail addresses: soralang@snu.ac.kr (S. Lee), ks

hylee@snut.ac.kr (H. Lee), parkyt@cybernet.snu.ac.kr,

0959-6526/$ e see front matter � 2012 Elsevier Ltd.doi:10.1016/j.jclepro.2012.03.032

a b s t r a c t

Despite the noteworthy changes towards product-service system (PSS) as a sustainable solution,a systematic methodology to measure sustainability is surprisingly sparse. Previous literature inmeasuring sustainability still remains no more than static and fragmentary, which cannot fully incor-porate the characteristics of PSS: a ‘dynamic’ system which includes various actors and a large, complexsystemwith ‘multidimensional’ impacts. To support the dynamic and multidimensional characteristics ofPSS, we employ system dynamics (SD) to cover the dynamics, and triple bottom line (TBL) to encompassthe multidimensionality of PSS sustainability, respectively. To illustrate the working of proposedapproach, the case study of a public bicycle system is presented. The proposed approach is expected toeffectively measure PSS sustainability through a comprehensive view.

� 2012 Elsevier Ltd. All rights reserved.

1. Introduction

With the rise of sustainable development, there have beenincreasing needs for the sustainable solution rather than a singleproduct. As a remedy, product-service system (PSS) has receivedgreat attention (Manzini and Vezzoli, 2002). PSS is generallyaccepted as ‘product(s) and service(s) combined in a system todeliver required user functionality in a way that reduces the impacton the environment’ (Goedkoop et al., 1999; Mont, 2002). Seenfrom the definition, what is at the core in PSS is sustainability whichis closely linked with lower environmental impact (Manzini et al.,2001). To achieve sustainability, it is required to change the tradi-tional production and consumption system; firms sell products,and customers purchase them. However, with the change towardsPSS, firms nomore sell the product only. Instead, by adding servicesto the product, firms start to emphasize the provision of function,not the product itself. This effort has led the significant businesschange: functional economy which optimizes the use of goods andservices and thus the management of existing wealth (Stahel,1997). Evidences can be found in the practices. In many cases,

þ82 2 878 3511.leeper@snu.ac.kr (Y. Geum),parkyt1@snu.ac.kr (Y. Park).

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many PSS concepts have been adopted without ownership transfer,and turned out to be effective and successful in terms of sustain-ability (Manzini and Vezzoli, 2003).

For more successful achievement of sustainability through PSS,a systematic approach to measuring sustainability is highlyrequired (Heiskanen and Jalas, 2000; Komoto et al., 2005; Zhaiet al., 2009). Although PSS has been widely accepted as an effec-tive sustainable solution, its effect has not been systematicallymeasured due to the lack of quantitative methods (Tasaki et al.,2006; Tukker and Tischner, 2006). However, increasing impor-tance of PSS reveals the significant needs for quantitative methodsfor measuring sustainability to deal with strategic decisions such asthe implementation of PSS concepts or policies for sustainability.

However, previous literature reveals the significant limitation:lack of dynamic and multidimensional measurement. In the liter-ature, sustainability of PSS has primarily been measured by indi-vidual indicators at certain points which mainly focus on theenvironmental effect (Komoto et al., 2005; Tasaki et al., 2006).Though there have existed the studies considering other aspectssuch as economic value creation or human safety with the envi-ronmental effect, they also remained no more than measuringvalue of each indicator individually, not providing a comprehensiveview. This resulted in the static and fragmentary measurement ofPSS, reflecting just the unconnected pieces among full-scale char-acteristics of PSS.

S. Lee et al. / Journal of Cleaner Production 32 (2012) 173e182174

As an integrated system with various stakeholders (Goedkoopet al., 1999; Maxwell and van der Vorst, 2003), PSS is inherentlydynamic and multidimensional. Firstly, the complex and interre-lated structure of stakeholders in PSSs, who have a long-termrelationship and communication with each other (Mont, 2004;Baines et al., 2007), results in the dynamics of PSS. Secondly, asa deliverable that replaced the traditional production andconsumption system (Goedkoop et al., 1999), PSS has the charac-teristics of multidimensionality. To allocate the economic value toeach relevant stakeholder, the economic impact should beconsidered. As well, to measure the behaviour changes required forthe replacement to the PSS, the social impact such as labour, well-being, and safety should be closely associated with the measure-ment of PSS (Goedkoop et al., 1999; Maxwell and van der Vorst,2003). Furthermore, the social impact itself has also driven themovement towards PSS. Therefore, the economic and socialimpacts of PSS should be considered along with the environmentalimpact (Manzini and Vezzoli, 2002; Mont, 2001).

With these two important streams for PSS measurement:dynamics and multidimensionality, this paper proposes a method-ology for measuring sustainability of PSS. To deal with the dynamicand multidimensional features of PSS sustainability, the proposedapproach employs system dynamics (SD) and triple bottom line(TBL) to measure sustainability. Firstly, as a measurement tool inthe proposed approach, the SD supports the dynamics of PSSsustainability. The SD is a simulation method to study the system’sdynamic behaviour on the basis of the system’s structure (Sterman,2000). Secondly, to reflect the multidimensional characteristics ofPSS, this paper employs TBL as the theoretical framework tosupport the three important aspects of PSS sustainability: economic,social, and environmental perspectives. Overcoming the fragmen-tary nature of previous studies on PSS sustainability, TBL isexpected to be usefully employed to measure PSS sustainability.Furthermore, the integration of SD and TBL provides a compre-hensive view, which depicts dynamic interaction among the threedimensions of PSS sustainability.

The paper is organized as follows: after the concept of PSS andits sustainability are briefly described, the limitations of the relatedworks are addressed in Section 2. Then, the proposed approach isexplained in detail in Section 3. Section 4 introduces an illustrativeexample of the proposed approach, with various implications.Finally, Section 5 concludes the paper and discusses its contribu-tions and limitations.

2. Background

2.1. PSS and sustainability

One of the most important characteristic of PSS is sustainability,which is easily captured in Goedkoop et al. (1999) definition of PSS:‘a system of products, services, networks of players and supportinginfrastructure that continuously strives to be competitive, satisfycustomer needs and have a lower environmental impact thantraditional business models’ (Goedkoop et al., 1999). In PSS, theultimate goal of adding services to traditional products lies in theachievement of sustainability (Manzini et al., 2001). Even thoughsome studies do not explicitly link the purpose of PSS to sustain-ability, achieving sustainability by functional economy or demate-rialization has been frequently discussed in most studies (Baineset al., 2007; Manzini and Vezzoli, 2003; Mont, 2001). Sustain-ability can be achieved through the transition towards functionaleconomy by changing customers’ behaviour from product owner-ship to relevant function usage (Manzini and Vezzoli, 2003;Maxwell and van der Vorst, 2003; Stahel, 1986, 1997). Through thischange, the use of resources can be optimized by sharing or

collectively utilizing the products or managing the product life-cycle. This resource optimization can be linked to the concept ofdematerialization in PSS (Goedkoop et al., 1999) which refers to theopportunity that a PSS offers to break the link between valuedelivered to the customers and the amount of physical materialneeded to create the value (Baines et al., 2007). All these activitiescan contribute to reducing environmental impact, thus achievingsustainable development.

2.2. Measuring PSS sustainability

To achieve sustainability, the first and foremost issue to beconsidered is “how to” measure sustainability. Although it is notexplicitly explained as an “evaluation criterion”, environmentalperformance has been suggested as an important aspect in manystudies to evaluate sustainability (Goedkoop et al., 1999; Lamvik,2001; Luiten et al., 2001; Maxwell and van der Vorst, 2003;Mont, 2004; Zaring, 2001). Quite naturally, most of the literature onthe evaluation of PSS has tried to measure ‘environmental’performance. Komoto et al. (2005) introduce a method of lifecyclesimulation to analyse the PSS and suggest a method to evaluate theenvironmental performance on the basis of the amount of resourceusage. Tasaki et al. (2006) devised a quantitative method to eval-uate the level of material use in lease/reuse the PSS systems forwaste prevention. However, even though these methods are worthto measure sustainability, there has been a common deficiency inprevious approaches. From the theoretical perspective, previousattempts are limited to measuring the environmental perspectiveonly (Tasaki et al., 2006), without consideration of social oreconomic value which is also important measure of sustainability(Manzini and Vezzoli, 2002; Mont, 2001). Although some studieshave employed other perspectives besides the environmentalperformance such as the economic perspective or customer satis-faction (Goedkoop et al., 1999; Komoto et al., 2005; Omann, 2003;Van Halen et al., 2005), those are limited to the individual assess-ment of each perspective, missing an integration of perspectives.From the methodological perspective, most studies individuallymeasure the relevant indicators at a certain point, using the staticlevel approach (Komoto et al., 2005; Omann, 2003; Van Halen et al.,2005). In summary, previous approaches are limited in providinga fragmentary and static approach.

However, when investigating the characteristics of PSS andsustainability (Manzini and Vezzoli, 2002; Omann, 2003; Roy,2000; Tukker, 2004; Zhai et al., 2009), it seems obvious that themeasurement of sustainability in PSS requires a dynamic andmultidimensional approach. In terms of dynamics, PSS consists ofmany elements including products, services, and relevant actors, or,in other words, stakeholders (Baines et al., 2007; Goedkoop et al.,1999). This complex and interrelated structure of stakeholdersneeds to be evaluated on the basis of the long-term relationshipsamong the different stakeholders and their communication withone another to achieve sustainability (Baines et al., 2007; Mont,2004). Therefore, the long-term feedback during the product life-cycle is expected, resulting in the dynamics of PSS (Komoto et al.,2005).

In terms of multidimensionality, the measurement of PSSsustainability cannot be limited to its environmental impact.Rather, it requires three pillars of sustainability e an economic,social, as well as environmental impact (Maxwell and van der Vorst,2003; Zaring, 2001). First, since PSS is a deliverable of a firmwhosemain purpose is to create profit, the economic impact has to takeinto account as well as environmental impact. Considering that PSSis a large-scale concept in which many stakeholders are involved(Goedkoop et al., 1999; Maxwell and van der Vorst, 2003; Zaring,2001), the allocation of economic value to each stakeholder is

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a top priority and cannot be neglected. Second, PSS is the maindriver of social change towards the functional economy (Baineset al., 2007). A transition to PSS requires high levels of behaviourchanges which are critically associated with the social impact onrelated stakeholders (Goedkoop et al., 1999; Maxwell and van derVorst, 2003), implying that the social impact of PSS should becaptured and evaluated accordingly. Furthermore, the social impactitself takes a role as a key driver of PSS development. In summary, itcan be concluded that economic and social impacts should bemeasured in addition to environmental impact (Manzini andVezzoli, 2002; Maxwell and van der Vorst, 2003; Mont, 2001);this requires a multidimensional measurement of PSS sustain-ability. Furthermore, the multidimensional measurement of PSSsustainability requiresmore than consideringmultiple dimensions;rather it requires the comprehensive view explaining the linkageamong the dimensions.

By examining previous studies on PSS evaluation, as shown inFig. 1, we find that the multidimensional and dynamic approach,which remains void, is required to evaluate sustainability of PSS.

3. Proposed approach

3.1. TBL-based SD approach: the rationale

To suggest a dynamic and multidimensional approach tomeasure PSS sustainability, two methods are employed. The role ofeachmethod clearly represents the contribution of this paper; SD isemployed to support the dynamic approach and TBL is used toreflect the multidimensional approach.

Firstly, SD is a representative method for measuring the long-term dynamics of the complex system, which fits for measuringthe dynamics of PSS sustainability. It is a simulation method toidentify behaviour changes according to the structural character-istics of a system on the basis of the causal relationships amongsystem factors (Rabelo et al., 2005; Sterman, 2000). Starting withIndustry Dynamics (Forrester, 1961), SD has been applied to variousfields (Angerhofer and Angelides, 2000). It has been applied to gainan understanding of complex social or economic problems at themacro level, including economic behaviour changes (Sterman et al.,1983), public management and policy (Homer and Clair, 1991),energy and environmental changes (Ford and Lorber, 1977), anddynamic decisionmaking (Sterman,1989). At the micro-level, it hasbeen applied to improve the understanding of decision making orstrategic development. More specifically, it has been utilized forstrategic planning, policy making (Forrester, 1961; Lyneis, 1980),and supply chain management (Akkermans et al., 1999). Since SDanalyses the time-based flow of specific variables, it focuses onmeasuring the tendency of changes rather than the specific value ofvariables. For this reason, the utilization of SD fits this paper interms of measuring the ‘dynamic’ pattern of PSS.

Fig. 1. Methodological needs for measuring PSS sustainability.

The second method, TBL, is also a well-known approach whichencompasses the three important aspects of sustainability, which isevidently and clearly linked with the strong theoretical fit formeasuring multidimensionality of sustainability. The term ‘triplebottom line’, is often attributed to John Elkington, the co-founderand chairperson of SustainAbility, a sustainable business consul-tancy (Brown et al., 2006; Elkington, 2004). What is notable in TBLconcept is that sustainability consists of three integral constituents:social, economic, and environmental dimensions (Allen ConsultingGroup, 2002; Brown et al., 2006; Deegan, 1999a, 1999b; Elkington,1998, 1999; Norman and MacDonald, 2004). These dimensionsshould be treated differently but eventually integrated (Brownet al., 2006). Sustainability can be achieved by a systematicallylinked ‘socio-economic-environmental system’ and not by a singlecomponent (Wang and Lin, 2007). TBL has beenwidely accepted asa framework for evaluating sustainability (Elkington, 2004; Foranet al., 2005; Ho and Taylor, 2007; Hubbard, 2009; Mahoney andPotter, 2004; Pope et al., 2004; Wang and Lin, 2007). The threedimensions of TBLe economic, social, and environmentale need tobe considered in the multidimensional evaluation of PSS, implyinga theoretical fit for the multidimensional approach of PSSevaluation.

In summary, SD simulation is employed to support the dynamicevaluation of PSS, whereas TBL is applied to support the multidi-mensional approach of PSS evaluation. The intersection of thesetwo approachese dynamic andmultidimensionale can be realisedby using a creative combination of SD and TBL. More specifically, byusing the TBL as the conceptual framework and SD as themeasurement tool, this paper tries to fill the void in the existingliterature and suggests a TBL-based SD approach to support thedynamic and multidimensional evaluation of PSS, as shown inFig. 2.

In addition, the creative combination of SD and TBL results ina strong synergy, complementing each other’s shortcomings, asshown in Table 1.

3.2. Measurement procedure

The measurement procedure follows typical steps of SD:conceptualization, formulation, testing, and analysis (Luna-Reyesand Andersen, 2003). Especially, what we focus in this paper isthe conceptualization, in which the applicability of SD in differentarea is, or should be, distinctly shown. To highlight the distinctivefeatures of measuring PSS sustainability with the TBL framework,the conceptualization is divided into three steps of the proposedapproach. The first step, defining the indicators copes with theproblem clarification. For this, the sustainability of PSS in each TBLperspective was defined, thus the required views related with the

Fig. 2. Conceptual positioning of the TBL-based SD approach.

Table 1Complementary role of SD and TBL.

Concept/method General purpose Usage in the sustainabilitymeasurement of PSS

Complementary role in the combined usage

SD (system dynamics) Studying the system’s behaviour onthe basis of the system’s structure

Measurement tool supportingthe dynamics of PSS sustainability

To provide a more systematic method to integratethe three perspectives by considering theinterrelationships among them and to improvethe practicality of TBL

TBL (triple bottom line) Capturing an expanded spectrum ofmeasuring organizational success

Conceptual framework supportingthe multidimensional significance ofPSS sustainability

To provide a more sophisticated way to buildingcomplex CLD (causal loop diagram) of SD

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measured indicators were suggested. The second and third stepsdeal with building causal loop diagram (CLD).

The CLD is a simple but powerful visualization of the interrela-tionships of the elements of the system, using directional arrows.Despite its simplicity, CLD has come to play a central role in theconceptualization and communication of feedback structure(Morecroft, 1982); finding the feedback structure of system, whichis the work of building CLD, is the core of SD (Sterman, 2000).Moreover, several analysts (Morecroft, 1985; Wolstenholme andCoyle, 1983; Wolstenholme, 1985) have proposed that SD studiescan be carried out without the development of formal models at alland the CLD figures prominently in such analysis (Sterman, 1986).

Nevertheless, the difficulties to draw CLDs, even by the experts,have been depicted in studies (Richardson, 1986). Furthermore, thelarger a model to be conceptualized is the more difficult it is tounderstand the model. Thus it is clear that a small model hasadvantages over a large model in SD modelling (Forrester, 1987).Accordingly, a trend in SD has been towards small models to beused for enhancing insight (Forrester, 1987).

The model which is conceptualized in this study is thesustainability of PSS from TBL perspective; as it is a large andcomplex system having multidimensional aspects, if everything isconsidered at once, things can quickly become overwhelming. Toovercome this, we suggest the phased process breaking the modelup into individual perspectives. As a result, combining the testingand analysis, the five steps of proposed approach were suggested.

The stepwise procedure is depicted in Fig. 3. Based on thegeneral procedure of SD, the detailed explanation of each stepfollows this section, focussing on the distinctive features forapplication to measuring PSS sustainability.

3.2.1. Step 1: define indicatorsThe first step in measuring PSS sustainability is to define the

indicators to be measured for each perspective of the TBL.

Fig. 3. Framework of the TBL-based SD approach to measuring PSS sustainability.

Depending on the objective and specific purpose of sustainabilitymeasurement, various indicators based on the TBL have beensuggested and employed. Focussing on the activity of firm itself,practically, various tools which are sets of indicators for assessingand reporting sustainability have been suggested and increasinglyadopted by corporations worldwide (Lozano and Huisingh, 2011).Labuschagen et al. (2005) suggested the framework for hierarchicalindicators to measure the overall business sustainability at theindustry level. Hubbard (2009) used the sustainability-balancedscorecard, which is based on the general balanced scorecard, asan economic pillar of TBL to measure the organization’s perfor-mance from the sustainability perspective. In addition, studies onsustainability measurement of technology have been conducted(Assefa and Frostell, 2007; Dunmade, 2002); the adopted sets ofindicators adhered differently to the specific purpose ofmeasurement.

To define the indicators for measuring sustainability of PSS, themeaning of PSS sustainability in each aspect of TBL should be firstlyclarified. Although many studies have tried to define sustainability(Hjorth and Bagheri, 2006), a clear and unified definition does notexist. Solow (1992) considered sustainability as a restrictiveconcept that preserves production capacity into a long future. Onthe other hand, Brundtland Commission defined sustainability asa comprehensive concept that preserves the ability of humans tomeet their needs (WCED, 1987). While these are commonly basedon environmental aspects, the Global Reporting Initiative (2000)suggested some guidelines for the three dimensions of sustain-ability under TBL. Even literature on PSS sustainability has relied onthe general perception without a clear definition, regardless ofdimensionality.

To adopt TBL for the measurement of PSS sustainability, thesustainability of each dimension: environmental sustainability,economic sustainability, and social sustainability, is firstly definedas shown in Table 2. In each definition, the systematic attributes ofPSS and the contextual characteristics of PSS adoptione considered

Table 2Definition of PSS sustainability from the TBL perspective.

TBL of PSSsustainability

Definition

Environmentalsustainability

That PSS is environmentally sustainableimplies that the producing and consumingactivities of PSS elements are more capableof resisting resource foundation than theexisting product, which has a similar functionto PSS

Economicsustainability

That PSS is economically sustainable impliesthat the PSS is sustainably operational, fulfillingthe economic motivation of each stakeholderstructurally

Socialsustainability

That PSS is socially sustainable implies thatthe PSS is sustainably and actively acceptableto socio improving public welfare withoutinvalidating social justice

S. Lee et al. / Journal of Cleaner Production 32 (2012) 173e182 177

as a substitute for a consumption pattern based on the ownershipe

are reflected.In the definition of sustainability under TBL, some key points for

defining indicators are captured. For the environmental sustain-ability, the indicators should measure the relative superiority of theenvironmental effect compared with the existing product. Withregards to the economic sustainability, the indicators should takeinto account the various stakeholders acting in PSS, including thosewho are at a disadvantage owing to the adoption of PSS. Finally, theindicators of social sustainability should be developed with theconsideration of the possibility of meeting the challenges oropportunities of PSS and changing consuming behaviour. The set ofindicators is defined by considering the type of PSS or the specificpurpose of measurement. More specifically, the concernedresources or pollutants among environmental factors, stakeholders’interests, the main objective of adoption of PSS, the ultimate goal ofmeasurement such as concept testing for modification, alternativeevaluation for concept selection, and policy evaluation should beconsidered to develop indicators in this step.

3.2.2. Step 2: build partial causal loop diagrams (CLDs)Recently, as previously mentioned, building CLD has been

considered as the most critical step in SD (Morecroft, 1982, 1985;Sterman,1986).Much of the art of SDmodelling is about discoveringand representing the feedback process which determines thedynamics of a system (Sterman, 2000) and that is the work ofbuilding CLD. Despite the gravity of CLD, however, drawing a CLD isa difficult task that requires thorough knowledge and a deepunderstanding of the system. It gets more difficult when the systemis getting larger, and has various aspects to be analysed; this is howPSS sustainability ismeasured. To understand the large and complexsystem from various perspectives, the stepwise approach is useful:first, drawa partial CLD and then an integrated CLD. Prior to buildinga complete CLD for PSS sustainability, partial CLDs for the threedimensions of TBL are prepared. This partial approach enhanceslearning in each dimension of PSS by presenting a clear view.

Meanwhile, we suggest the general models for building CLD. TheCLDs should be built specifically including the variables defined atthe micro-level. There exist various types of PSS and the measuredindicators can be defined variously depending on the purposes,thus the CLDs for measuring PSS sustainability in practice mightappear variously depending on the real cases. The suggestedgeneral models present the core and common concept of indicatorsfor measuring PSS sustainability and typical relationships amongthem, suggesting the applicability of SD and TBL for measuring PSSsustainability. As a basis of practical CLDs in various real cases, thegeneral models of CLDs are expected to be useful for practitioners.

First, in this step, Fig. 4 is suggested as the general model ofpartial CLDs, which includes main variables and relationships at themacro level. From the definition of PSS sustainability in Table 2,some key points for defining indicators are caught; the generalmodels for partial CLDs were built on them: (a) for the environ-mental dimension, the parameters and their relationships weredrawn from the comparative view of existing product and PSS, (b)for the economic dimension, the parameters and their relationshipswere drawn from the economical interests of typical stakeholderssuch as the customer, the provider of product, and the provider ofservice, and (c) for the social dimension, the typical factors such ashealth, income, and environment which have been considered asrelated with welfare in the literature were presented as the moti-vation of changing consuming behaviour.

3.2.3. Step 3: build an integrated CLDThe partial CLDs for the three dimensions of TBL are integrated

into the final CLD. On the basis of the overlapping variables or

relationships in the partial CLDs, new variables and relationshipsare added to integrate these three partial CLDs. The interrelation-ships among the three dimensions of TBL have been identified inmany works (Azapagic, 2004; Wang and Lin, 2007). The generalmodel of the integrated CLD, presenting typical linkages among thethree dimensions of TBL for PSS sustainability in literature, isshown in Fig. 5. Depending on the defined indicators for eachdimension of PSS sustainability, the employed linkage can bespecified with parameters and causal relations.

3.2.4. Step 4: simulate modelTo simulate the model, the integrated CLD is converted into

a quantitative model, called the stock and flow diagram. In thestock and flow diagram, the variables in the CLD are divided intostock variables and flow variables. Conceptually, stocks are quan-tities of material or other accumulations; they are the states of thesystem. The flows are the rates at which these system states change.From the perspective of the units of measure, stocks are usuallyquantities while the associated flows must be measured in thesame units per time period. The concepts and units can help indistinguishing stocks from flows (Sterman, 2000). Practically, thedistinction between stocks and flows is recognized in many disci-plines (Sterman, 2000). In PSS sustainability, each indicator fromTBL perspective can be considered as stock variable, which showsthe state of PSS. For example, in the general model of partial CLD ofeconomic dimension, the profitability of each stakeholder might beconsidered as a stock variable; the sales rate makes the associatedflow as flow variable. The notation for the quantitative modeldepends on the software, but stock variable is generally repre-sented as a box whereas the flow variable is represented as a valveon the pipe connected to the box. Then, the relationships amongthe variables are portrayed in the diagram using quantitativeequations. Given the initial values of some variables, this stock andflow diagram is simulated.

3.2.5. Step 5: measure and analysisFinally, on the basis of the results of the simulation, sustain-

ability of PSS is measured and analysed. The sustainability of eachdimension is measured on the basis of the long-term behaviour ofeach indicator, which might be presented as stock variabledepicting the state change of PSS from the sustainability aspect.However, a comprehensive view should be assumed regarding theinterpretation of these resultse the support they offer is more thansimply to go ahead with PSS if sustainability is measured as highfrom all aspects of TBL, and not to go ahead if otherwise. Thestrength of this approach lies in the capability of an intensiveanalysis based on the simulation technique. The relationshipsamong the three dimensions can be clarified through a sensitivityanalysis which shows how the change in the sustainability of onedimension affects the behaviours of the others. This providesstrategic insights for redesigning the PSS concept: the achievedlevels of sustainability of the three dimensions could be setdifferently, depending on the purpose. Moreover, a scenario-basedanalysis provides more information on PSS sustainability such ashow sensitive to external changes the structure of PSS is.

4. Illustrative example

4.1. Overview

This section presents a case study of the public bicycle system toillustrate the proposed approach. As the energy and the environ-ment have been highlighted as global issues, the green trans-portation system has received great attention. The public bicyclesystem has beenwidely adopted inmany cities in Europe and North

Fig. 5. General model of the integrated CLD at the macro level.

Fig. 4. General model of partial CLDs at the macro level: (a) environmental dimension, (b) economic dimension, and (c) social dimension.

S. Lee et al. / Journal of Cleaner Production 32 (2012) 173e182178

America as a typical form of the green transportation system.Recently, Seoul, which is a large and complex city as the capital ofKorea, has introduced a public bicycle system as a sustainablesolution to the serious traffic and air pollution problems. As a publicbusiness in the pilot stage, the public bicycle system of Seoul hasa need of strategic decision-making for the efficient investment andeffective policy to achieve sustainability. Responding to the need,we aimed to aid in strategic decision-making with providing theestimations of the system’s sustainability, achieving the illustrationof proposed approach. Moreover, this case is suitable for illustratingthe working of proposed approach, since it considers the environ-mental purpose as well as the economic and social impacts due toits public characteristics.

However, although the case study is based on the real businessreflecting the context of public bicycle system of Seoul, to achievethe simple and intelligible illustration focussing on the purpose ofcase study, some assumptions were employed; the number ofmeasured indicators, the type of considered stakeholders, and thescope of targeted users were reduced in the presented model.Additionally, for the data of some contextual variables, the behav-iour patterns were assumed with the clues in literature and othercases. The details of assumed setting are explained in each relevantstep.

Table 3Defined indicators of the public bicycle system.

Dimension Indicator Note

Environmental Reduction of energyconsumptionReduction of airpollution emissions

Economic Budget reduction ofthe local government

Stakeholders include users,public bicycle system operators,petty merchants of bicycles,and local bus companies

Profitability of eachstakeholder

Social Human health status

Fig. 7. Integrated CLD for the public bicycle system at macro level.

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4.2. Step 1: define the indicators in the TBL perspectives

For sustainability measurement of the public bicycle system ofSeoul, indicators are defined for the three dimensions. For thesimple and intelligible illustration, the five indicators in Table 3 areonly considered in this study. For environmental sustainability, twoindicators: resource usage and pollutant emission are defined,focussing on the ‘reduction’ as the relative concept, not the absolutequantity. Second, for economic sustainability, the economic benefitto each stakeholder is considered. Based on the assumption that theuser of privately owned car or public buses is targeted by the publicbicycle system of Seoul, the considered stakeholders are defined.Thus, the public bicycle system operator as a new participant andpetty merchants of bicycles and local bus companies as the oldparticipants whomight have resistance to the public bicycle systemare included. Finally, among the various indicators related withpublic welfare, human health is considered as an indicator of socialsustainability.

Fig. 6. Partial CLDs of TBL for the public bicycle system at macro level: (a) env

4.3. Step 2: build partial CLDs for each perspective of TBL

On the basis of the defined indicators, simple causal relation-ships within each dimension are identified. The variable ‘use of thepublic bicycle system’ is adopted as a causal factor for the change ofthe indicators’ values. Referring the assumptions mentioned, themove of users from private car or public buses to public bicyclesystem is only considered as a causal factor of the change of ‘use ofthe public bicycle system’. Closed feedback loops are also

ironmental dimension, (b) economic dimension, and (c) social dimension.

Fig. 8. Integrated CLD at micro-level (view from the environmental dimension).

Fig. 9. Behaviour patterns of the input variables.

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constructed and are influenced by the indicators. By adapting thegeneral model in Fig. 4, the partial CLDs for TBL at the macro levelare represented, as shown in Fig. 6. They show the main relation-ships among the indicators and the main causal variable, includingthe adoption of PSS (presented in bold). Each of these relationshipsis detailed in the partial CLD at the micro-level by adding morevariables and indicating the direct relationships among them.

4.4. Step 3: build the integrated CLD

In this step, the partial CLDs are integrated into the unified CLD,as shown in Fig. 7. The connecting factors among the dimensionsare identified and employed for completing the causal structure ofPSS. Although the partial CLDs of the environmental and socialdimensions show only the positive (reinforcing) feedback loops, theintegrated CLD reveals the negative (balancing) feedback loops inthe three domains. For example, the educational and promotioncosts for the public, which increase environmental sustainability,have a negative relationship with the budget reduction of the localgovernment in the economic dimension; further, the safety cost toincrease the human health status, which is an indicator of socialsustainability, conflicts with the government’s economic benefit.The partial CLD of economic sustainability includes negative feed-back loops rising from the conflicting interests among stakeholders.(The software used for this case study is Vensimwhich supports theintegration using the variables included in the other view-namedshadow variables. As shown in Fig. 8, the integration of partialCLDs uses the shadow variables which are shown in grey in theangle brackets.) Finally, the integrated CLD is completed with morethan 80 variables.

4.5. Step 4: simulate the model

To simulate the model presented as the CLD, a quantitativemodel is built with the stock and flow diagram. Reflecting thebusiness plan of public bicycle system of Seoul, the variables relatedwith policy and situation of Seoul are quantitatively defined.However, for the environmental variables which cannot be

designed by the structure of PSS, some assumptions are madebased on the empirical clues frommassive literature review (Hong,2010; Hyoung et al., 2011; Kim et al., 2009; Lim et al., 2007; Ryu andLim, 2008; Shin, 2010) with considering the characteristics of Seoul.For example, the behaviour pattern of variable “No. of the stolen ordestroyed bicycle” was assumed to be similar with that of Velib inParis. This hypothetical approach which has been generallyemployed for various forecasts with lack of historical data is usefulfor the public bicycle system of Seoul, which is at the initial stage ofworking. Fig. 9 presents some of them.

4.6. Step 5: measure and analysis

Finally, the model of the public bicycle system for measuringsustainability is simulated. As shown in Fig. 10, the results presentthe long-term behaviours of the five indicators. As a proxy for the

Long term behavior of TBL for the dynamic change of public bicycle use

0.02 change rate0.02

6 change rage0.4 Won 6

200 0.1B Won0.08 rate

44 4 4 4

4

4

4

3

1

0.01 change rate0.01

3 change rage0.2 Won100 0.1B Won0.04 rate

6

6

5

5

5

5

4

4

44

4 4

2

2

1

0 change rate0

6

5

55

55

5 5

5

54 4

4

3

3

33 3 3 3 3

3

3 3

3

2

2

1

1

0 change rage0 Won0 0.1B Won0 rate 6 6 6 6 6 6 6 6 6

6

6

5 55

5

53 3 3

2 2 2 2 2 2 2 2 2 22

2

1 1 1 1 1 1 1 1 1 11

1

0 6 12 18 24 30 36 42 48 54 60 66 72 78 84

Time (Month)Reduction of energy consumption change rate1 1 1 1 1 1 1 1 1 1 1 1 1Reduction of air pollution emissions chage rate

chage rate

chage rate

chage rate

2 2 2 2 2 2 2 2 2 2 2 2 2Human health status change rage3 3 3 3 3 3 3 3 3 3 3 3 3 3Profitability of individual Won4 4 4 4 4 4 4 4 4 4 4 4 4 4Budget reduction of local government 0.1B Won5 5 5 5 5 5 5 5 5 5 5 5 5Transportation share of bicycle rate6 6 6 6 6 6 6 6 6 6 6 6 6 6

Fig. 10. Behavior pattern of the indicators from the TBL of the public bicycle system.

S. Lee et al. / Journal of Cleaner Production 32 (2012) 173e182 181

use of the public bicycle system, the transportation share of bicyclesis adopted in the graph. This is based on the assumption that thetransportation share of bicycles primarily depends upon the use ofthe public bicycle system. The pattern of environmental indicatorsfollows the use of the public bicycle system; the environmentalimpact is directly linked to the mode share of transportation. Theprofitability of individuals follows the pattern of human health; theprice policy of transportation system is supposed to be fixed; andthe benefit of the transportation mode change is lower than thehealth cost. On the other hand, the budget reduction behaviour ofthe local government appears to be different and is affected byhuman health as well as environmental pollution, from the publiccost aspect. Typically, the patterns seem to be almost stable afterabout seven years, which makes it possible to expect the publicbicycle system to be sustainable after seven years.

5. Conclusion

This study proposes a dynamic and multidimensional approachto the measurement of PSS sustainability, using the creativecombination of SD and TBL. In this approach, TBL and SD ensure themultidimensional and dynamic measurement of PSS sustainability,respectively. Specifically, the measurement of PSS sustainability isdivided into five steps, focussing on the integration of the threeperspectives of TBL. Consequently, this approach can be used toidentify the long-term behaviour of PSS sustainability, while takinginto account the interdependency among the three pillars of PSSsustainability. As a dynamic and multidimensional measurementtool which considers the features of PSS sustainability, thisapproach can be effectively employed to evaluate several PSSalternatives or to analyse PSS concepts.

In addition, this approach contributes to this field of research byimproving the practicality of the TBL and SD. The creative combi-nation of the TBL and SD provides a more systematic method ofintegrating the three perspectives of TBL by considering the inter-relationships among them. It also provides a more sophisticatedand stepwise method of building a complex CLD for SD by sug-gesting the concept of building partial CLDs in a complex system.

However, this study can be improved upon. Although the casestudy of the public bicycle system is useful for the example ofsimple and understandable settings, the employed assumptionslimit the utility of the results. Therefore, elaborating on theproposed approach into a more practical situation would bea fruitful area for the future research. It includes building specificCLDs for certain industry or specific case. On the basis of the liter-ature and case study, the utility of this study can be improved byenriching and systematizing the pool of indicators for eachdimension and for the linkages among dimensions when creatingCLDs and by suggesting CLD prototypes for the various types ofPSSs. Furthermore, more fundamentally, the possibility ofemploying other sophisticated frameworks to understand PSSsustainability better than TBL still remains as an ongoing issue.

Acknowledgements

This work was supported by the National Research Foundationof Korea (NRF) grant funded by the Korea Government (MEST) (No.2011-0030814).

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