Product-service system

Product service systems, put simply, are when a firm offers a mix of both products and services, in comparison to the traditional focus on products. As defined by (van Halen, te Riele, Goedkoop)[2] "a marketable set of products and services capable of jointly fulfilling a user's needs", PSSes can be realized by smart products.

The initial move to PSS was largely motivated by the need on the part of traditionally oriented manufacturing firms to cope with changing market forces and the recognition that services in combination with products could provide higher profits than products alone.[3] Faced with shrinking markets and increased commoditization of their products, these firms saw service provision as a new path towards profits and growth.[4]

While not all product service systems result in the reduction of material consumption, they are more widely being recognized as an important part of a firm's environmental strategy. In fact, some researchers have redefined PSS as necessarily including improved environmental improvement. For example,(Mont)defines PSS as "a system of products, services, supporting networks, and infrastructure that is designed to be competitive, satisfy customers' needs, and have a lower environmental impact than traditional business models"[5] Mont elaborates her definition as follows: A PSS is a pre-designed system of products, service, supporting infrastructures, and necessary networks that is a so-called dematerialized solution to consumer preferences and needs. It has also been defined as a "self-learning" system, one of whose goals is continual improvement