The Service Factory: Implications for Manufacturing Managers
| Date | 01 January 1992 |
| Pages | 18-22 |
| Published date | 01 January 1992 |
| DOI | https://doi.org/10.1108/EUM0000000001445 |
| Author | Binshan Lin,John A. Vassar |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
18 INDUSTRIAL MANAGEMENT & DATA SYSTEMS 92,1
The Service
Factory:
Implications for
Manufacturing
Managers
Binshan Lin and John A. Vassar
T
he importance off the service factory and
resultant implications for manufacturing
managers are explored.
Industrial Management & Data Systems. Vol. 92 No. 1. 1992. pp. 18-22.
© MCB University Press Limited. 0263-5577
Manufacturers that thrive in the future will compete by
bundling services with products, anticipating and
responding to
a
comprehensive range of customer needs.
Manufacturing firms become more competitive by
employing
a
broader range of services provided
by
factory
personnel and facilities[1]. Manufacturing now responds
much like a professional service industry, customizing its
offerings to the preferences of
special
market segments[2].
The increasing dominance of the service factory has
spurred a wide range of attention in the manufacturing
environment.
Three major factors make this interest and attention
important. First, the economy
has
shifted from
an
industrial
to a post-industrial service economy. Second, the service
industry
can
serve as
a role model
for manufacturing. Third,
service has emerged as a crucial strategic weapon in the
manufacturing environment. The purpose of
this
article is
to investigate the three significant implications of
the
service
factory for manufacturing managers:
● The service factory is strategic in nature
● The dimensions and attributes of the service
factory should be addressed
● Managerial aspects must be included.
The article begins with a literature review in service and
service operations.
A
strategic perspective of
the
service
operations is discussed. Next, a strategic framework for
developing the service factory is then suggested.
Managerial concerns and considerations of the service
factory are addressed for manufacturing managers.
Service, Service Operations, and the Service
Factory
Services can be defined as economic activities that
produce
time,
place, form or psychological
utilities.
Service
operations process refers to how a service is provided
or delivered to a customer. Studies have led to wide
distinctions between service operations and manufacturing
operations: differences in the nature of outputs and
differences in the underlying production
processes[3].
The
intangibility of services, simultaneous production and
consumption, labour intensity, customer service
specialization, perishability, and direct customer
involvement, are some of
the
challenging issues that have
impeded the development of
a
comprehensive theory base
for the service operations.
The majority of research in the service field has been
shown diversity in the conceptualization of service. For
instance, marketers focus on the intangible nature of
service[4].
Services can be characterized
by
both palpable
and mental
intangibility.
Economists have viewed services
from both the demand and the supply side. They view
the customer as one who buys a service, with the level
of tangibility of the
firm's
output as not being particularly
relevant.
For services, the process and the output of the system
are the same or closely related. The design, process, and
personal sales activities of a service are bound together
in what is referred to as the service
package[5].
Based on
this system view of service, an important input to the
service process is the design of the service package. The
service package includes specifications of
the
facility where
the service
will
be provided, designations of
any
goods that
are necessary in providing the service, and descriptions
of the physical and mental services to be provided for the
customers. The role of the operations manager is to
monitor and control the service process based on the
feedback from the system to ensure that the perceived
needs of the customer
and
service personnel
are
being met.
The idea of the service factory emphasizes two
characteristics:
(1)
the factory provides a range of services
as well as goods, with an emphasis on a combination of
the two, and (2) the factory is managed so that these
services are a central focus[6]. The concept of service
has broadened to include both breadth of product offerings
and the ability to customize to meet specific
needs.
Thus,
the concept of the service factory focuses on exchange
of services rather than just goods, and involves strategy
development.
To continue reading
Request your trial