What Is a Product-Service System?

Product-service systems (PSS) are integrated offerings that combine products and services. This combination creates an innovative business model that better meets customer needs. Rather than merely selling cars, a PSS approach might include a variety of services, such as maintenance, repair, insurance, and car-sharing programs, in addition to the vehicle itself. PSS also include "product-as-a-service" offerings, sharing offerings (e.g., car sharing), total care solutions, and other concepts.

Fraunhofer IPK supports companies in developing forward-looking PSS solutions to help them remain competitive in changing market conditions.

The transition from being a product provider to being a service provider usually requires significant changes to the product and the company's processes. Often, IoT technologies must be integrated, business processes must be adapted, and support infrastructures and IT networks must be created.

Further developing a company's products into product-service systems offers numerous advantages to the company and its customers.:

• Product USP and avoidance of commoditization: Integrating services into products allows you to offer a unique value proposition. This enables you to stand out from your competitors.
• Generate higher profit margins and recurring revenue through service offerings. Pay-per-use and pay-per-month models generate predictable income.
• Sustainable solutions in line with the principles of the circular economy. Product-service systems can be designed to reduce waste and increase resource efficiency.
• Overview and influence across the entire product life cycle: Thanks to PSS, data can be collected and evaluated from conception to disposal. This enables the quick identification of customer needs and the provision of appropriate services (e.g., maintenance, repair, and upgrades). Usage data can also provide feedback for future product and solution development.
• Access to new customer segments: Offering services can help reach new customer segments, making the product appealing to people who weren't interested before or couldn't afford it.
• Improving customer loyalty: Providing integrated services can increase customer loyalty and retention.