Due to customer pressure and growing competition, industrial companies are increasingly moving towards providing integrated offerings of products and services (PSS). Despite this trend, literature providing a deep understanding of the challenges associated with this transition is limited, while publications discussing approaches that focus on overcoming these challenges are particularly lacking. This article is based on a multi-case study of two Swedish industrial companies undergoing the transition to designing and providing PSS. It reports on the challenges identified at the case companies as well as opportunities arising from and solutions to these challenges. Subsequently to initial research on the challenges, prescriptive approaches such as a lifecycle costing method and a PSS design method were applied in the case companies over an extended timeframe. On the one hand, these prescriptive approaches provided both a deeper understanding of the challenges, which include a persistent product centred mindset, a lack of adjustment to changed incentive structures and the separation of productand service design. On the other hand, they also led to effective solutions such as focusing on customer value and introducing a PSS transition facilitator for the design team. These solutions were adapted to the situations in the respective companies and they partly went beyond the prescriptive measures first introduced. Therefore, the article shows the applicability of prescriptive approaches and methods to detect, understand and alleviate the challenges of PSS design and provision. Further, the article provides broadly applicable learnings for industrial companies undergoing this process.

Extending the lifetime of passive products, i.e., products that do not consume materials or energy during the use phase, by implementing product-service systems (PSS) has a potential to reduce the environmental impact while being an attractive and straightforward measure for companies to implement. This research assesses the viability of introducing PSS for passive products, by documenting five real product cases of prolonging the lifetime through repair or refurbishment and by quantifying, through life cycle assessment (LCA) and life cycle costing (LCC), the change in environmental and economic outcome. The environmental impact (measured as global warming potential over the life cycle) was reduced for all cases because extraction and production dominated the impact. This reduction was 45–72% for most cases and mainly influenced by the number of reuses and the relative environmental burden of the components whose lifetime was prolonged. The costs for the company (measured as LCC from the manufacturer’s perspective) decreased too by 8–37%. The main reason that costs reduced less than the environmental impact is that some costs have no equivalent in LCA, e.g., administration and labor costs for services. The decreases in both LCA and LCC results, as well as the willingness of the companies to implement the changes, demonstrate that this measure can be financially attractive for companies to implement and effectively contribute to a circular economy.

The circular economy (CE) can drive sustainability. For companies to select and implement circularity strategies, they need to evaluate and compare the performance of these strategies both in terms of progress towards CE but also based on their feasibility and business outcomes. However, evaluation methods for circularity strategies at the product level are lacking. Therefore, this research proposes a multi-criteria evaluation method of circularity strategies at the product level which can be used by business decision-makers to evaluate and compare the initial business of the company, transformative and future circularity strategies. This multi-criteria evaluation method aims to assist business decision-makers to identify a preferred strategy by linking together a wide variety of criteria, i.e., environmental, economic, social, legislative, technical, and business, as well as by proposing relevant indicators that take into consideration, where possible, the life cycle perspective. It also allows for flexibility so that criteria, sub-criteria, and weighing factors can be altered by the business decision-makers to fit the needs of their specific case or product. Two illustrative examples based on case companies are presented to verify and illustrate the proposed method.

The implementation of circular measures in businesses constitutes a solution to future resource scarcity, which has yet to gain momentum. To select and implement such measures, companies, with limited resources need practical and easy-to-use guides that help them understand the financial outcomes while leading them towards more circular solutions. To this end, a guideline based on Lifecycle Costing (LCC), which fulfils the aforementioned criteria, has been created. The guideline directs the companies towards measures at the top of the CE hierarchy and LCC is used to assess profitability and provide information on material circularity. Its development follows the Design Research Methodology (DRM) and is based on using LCC at three case companies when selecting circular measures and on literature. Insights on the companies' process and decision criteria as well as the LCC results are presented. One identified critical criterion is the profitability of a circular measure, but comparing the LCC of alternatives is only an adequate measure of profitability, if the alternatives are functionally equivalent and of equal value for the customer, otherwise revenue and customer costs need to be compared as well. In addition, because labour is included in LCC, by categorizing the costs companies can be guided towards exchanging material costs with labour costs. Concerning circularity, in this comparative context, the difference in material cost between the alternatives can be used to measure circularity performance without additional effort. Finally, customization of products was also identified in the company research as a barrier to the implementation of various circular measures.

A transition from a product-selling to a Product-Service Systems (PSS) business model incurs a transition in costs from customer to provider. Due to this shift in cost ownership, Life Cycle Costing (LCC) is used by providers and customers to better understand the PSS costs spanning from design to end-of-life. Through a literature review the paper determines that there are similarities in the approach to LCC for specific types of PSS e.g. availability type, but further research needs to be undertaken to identify commonalities between different types of PSS. The review also discerned that the terminology for LCC is not consistent and sometimes it is used to identify only the costs incurred by a specific actor. Furthermore, the end-of-life stage and the implications of a second life for a remanufactured PSS in LCC are also yet to be fully understood. A number of challenges associated with obtaining quality data for costing within PSS were identified. These include the lack of availability, the relevancy due to use of pre-PSS data that does not reflect the redesign of products and services to fit in PSS and challenges associated with the design paradox. Finally, a lack of empirical studies is noted