Industrial product classifications

SUPPLEMENTARY READING

SPEECH PRACTICE

1. Give a brief summary of Unit 11.

2. A product is sometimes defined as a “psychological bundle of satisfaction”. Do you agree with this definition? If not, say why.

3. Give any example illustrating four stages of a product life cycle.

4. Comment on the following: “The last stage of fitting the product to the market is fitting the market to the product”.

Based on their characteristics and intended uses, indus­trial products can be classified into the following categories: raw materials, major equipment, accessory equipment, com­ponent parts, process materials, supplies, and services.

A raw material is a basic material that actually becomes a part of a physical product. It usually comes from mines, forests, oceans, or recycled solid wastes. Raw materials are usually bought and sold according to grades and speci­fications.

Major equipment includes large tools and machines used for production purposes. Examples of major equipment are lathes, cranes, and stamping machines. Some major equipment is custom-made for a particular organization, but other items are standardized products that perform one or several tasks for many types of organizations.

Accessory equipment is standardized equipment that generally can be used in several ways within a firm’s pro­duction or office activities. Examples include hand tools, typewriters, fractional-horsepower motors, and calculators. Compared with major equipment, accessory items are usu­ally much less expensive and are purchased routinely.

A component part becomes a part of a physical product and is either a finished item ready for assembly or a pro­duct that needs little processing before assembly. Although it becomes part of a larger product, a component part can often be identified easily. Clocks, tires, and switches are examples of component parts.

A process material is used directly in the production of another product; unlike a component part, however, a process material is not readily identifiable. Like compo­nent parts, process materials are purchased according to industry standards or to the specifications of the individual purchaser. Examples include industrial glue and food pre­servatives.

A supply facilitates production and operations, but it does not become a part of the finished product. Paper, pen­cils, oils, and cleaning agents are examples.

An industrial service is an intangible product that an organization uses in its operations. Examples include finan­cial, legal, marketing research, and janitorial services. Pur­chasers must decide whether to provide their own services internally or to hire them from outside the organization.

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