What are products and services?
Products and services are the results of value-adding processes. Both products and services require a complete supply chain.
Many companies offer products and services at the same time, e.g. a car dealership that sells cars but also carries out regular servicing for these vehicles. However, there are also pure product companies (e.g. manufacturers of windshield wiper blades) or pure service providers (e.g. driving schools).
Products
Products are tangible or intangible results of value-adding processes, e.g. baked rolls or a software product. The production of the products requires a complete supply chain, e.g. procurement of flour for the bread rolls.
Products are increasingly manufactured by automated systems (e.g. baked rolls in large bakeries) and robots (e.g. the body shell of cars made of steel and aluminum). Humans tend to take on monitoring and maintenance tasks. Regardless of the level of automation, production must always be perfectly synchronized with the supply chain: if the flour is missing, no bread rolls can be baked.
Services
Services are intangible results of value-adding processes, e.g. serving baked rolls in a bakery-café. Similar to products, services also require a supply chain, e.g. the equipment in a bakery-café. As a rule, services also require products.
Services are also increasingly being automated through digitalization. For example, many schools offer their students prepared learning modules via video, insurance companies put important documents in their portals and automatically inform their customers about updates. This allows companies and organizations to significantly reduce their own costs, while the opposite is true for customers. The customer is taking on more and more tasks that employees used to do.
Responses