Product or Service? Custom Engineered Capital Equipment Manufacturer

WilBryan

Involved In Discussions
#1
So Im struggling a little here and likely overthinking it...
9000:2015 defines:
"Product" as the output of an organization that can be produced without any transaction taking place between the organization and the customer.
and defines:
"Service" as the output of an organization with at least one activity necessarily performed between the organization and the customer.

Our company builds custom engineered capital equipment (precision automation cells and high-level assemblies for the same). It would be impossible to build these devices without in depth customer communication and cooperation on all levels.

According to the above definitions, do we have a product or are we a service provider? If read in the literal it would appear we are in the rare category of a service with a deliverable.
Not really sure it will impact how we approach the standard, but I am really curious about everyone's opinion on the topic.
thanks in advance for all insight and opinions...
have at it folks! :bigwave:
 
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Sidney Vianna

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Staff member
Admin
#2
Your output is clearly a (tangible/hardware) PRODUCT. But, and obviously, you have a component of interactions with the customer. Probably some of the interactions, described as service delivery, would happen when installing the equipment, training users, etc...

You buy a car and, obviously, the product quality is critical, but, as you bring the car in for service, you expect the experience to be pleasant as well.

These are not mutually exclusive.
 

WilBryan

Involved In Discussions
#3
But a car can be manufactured without my input as a customer.
The automation we build is not possible to create without deep recurring interaction with the customer.

Is a portrait taken by a photographer(or captured by painter) a product or a service? It is an output with an activity necessarily performed with the customer. It is certainly not a product as it could not be created without a customer interaction.

Installation is clearly a service, but my question goes to the definition of the actual physical deliverable. According to the current definition is it a product if it is not executable without the customer?

Can a single piece of hardware be both a service and a product?
 

Sidney Vianna

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Staff member
Admin
#4
Can a single piece of hardware be both a service and a product?
Most products these days have a combination of tangible and intangible components. That's how Starbucks can justify a $5 cup of coffee. They are not selling you coffee. They are providing you with the Starbucks experience.
 

yodon

Staff member
Super Moderator
#5
I feel your pain and frustration. My company provides design services. These efforts produce tangible artifacts (design documentation, etc.). My customer, takes what we do to create a product that can be reproduced in manufacturing and sold. We have no stake in the "product."

I've struggled with this for years and so have our auditors (it always took years to have them come to grips with what we do and how the standard applies to us... and then the auditor would change. Lather, rinse, repeat). We tried the tack of our 'product' being service but I think that got a bit messy in places.

Sorry I can't offer any answers, though. It ended up evolving into a "pick your battles" situation
 

WilBryan

Involved In Discussions
#6
Most products these days have a combination of tangible and intangible components. That's how Starbucks can justify a $5 cup of coffee. They are not selling you coffee. They are providing you with the Starbucks experience.
Exactly why I am having such a hard time understanding why the IOS has chosen to draw such a hard line between the two. I find it an interesting choice and wonder what the intended wisdom they are trying to communicate is.

or maybe I just overthink things
 
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