Operations Notes – Service Factory

People don’t think of service as related to manufacturing because:

• service doesn’t start with a planned design
• service is often haphazard
• there is a lack of rigor in service

A factory approach to services includes:

• uniform, systematic, process-oriented tasks
• planned design
• measurements and monitoring

Levitt’s Principles

• Limit discretionary action of personnel (reduces variability)
• Limit service provided (standardize)
• Engineer entire service process
• Encourage customer involvement
• Develop employee pride and involvement (remove un-pleasant tasks or free up time for pleasant tasks)
• Substitute systems for people
• Stay focused (limit range of activities and specialize in a few – core competence)
• market segment focus
• process focus
• product/service focus
• hybrid focus

Benefits of Focus

• expertise → lower cost position
• higher quality
• speed
• better reputation → barrier to entry

Risks of Focus

• lack ability to do other things
• non-responsive
• boredom