Foundations and Implications of A Proposed Unified Services Theory

PRODUCTION AND OPERATIONS MANAGEMENT POMS
Vol. 15, No. 2, Summer 2006, pp. 329 –343

issn 1059-1478 兩 06 兩 1502 兩 329$1.25 © 2006 Production and Operations Management Society
Foundations and Implications of a Proposed

Unified Services Theory
Scott E. Sampson • Craig M. Froehle

Brigham Young University, 660 TNRB, Provo, Utah 84602, USA
University of Cincinnati, 2925 Campus Green Drive, Cincinnati, Ohio 45221-0130, USA
ses3⫹[email protected] • [email protected]
D iverse businesses, such as garbage collection, retail banking, and management consulting are often
tied together under the heading of “services”, based on little more than a perception that they are
intangible and do not manufacture anything. Such definitions inadequately identify managerial and
operational implications common among, and unique to, services. We present a “Unified Services
Theory” (UST) to clearly delineate service processes from non-service processes and to identify key
commonalities across seemingly disparate service businesses. The UST defines a service production
process as one that relies on customer inputs; customers act as suppliers for all service processes.
Non-services (such as make-to-stock manufacturing) rely on customer selection of outputs, payment for
outputs, and occasional feedback, but production is not dependent upon inputs from individual
customers. The UST reveals principles that are common to the wide range of services and provides a
unifying foundation for various theories and models of service operations, such as the traditional
“characteristics of services” and Customer Contact Theory. The UST has significant operational corol-
laries pertaining to capacity and demand management, service quality, services strategy, and so forth.
The UST provides a common reference point to which services management researchers can anchor
future theory-building and theory-testing research.
Key words: services management theory; service operations; business process models
Submissions and Acceptance: Received March 2005; revision received July 2005; accepted September 2005
by Michael Pinedo.
1. Introduction both into a single list (Eiben and Davis 1995). Castells
One significant challenge faced by researchers inter- and Aoyoma (1994) laid out the problem this way
ested in services management is that there is no single, (citations in original):
comprehensive, and consistently used unifying struc-
“The notion of ‘services’ is often considered at best
ture that defines what services are and what they are
ambiguous, at worst misleading (Gershuny and Miles
not (Lovelock and Gummesson 2004; Nie and Kellogg 1983; Daniels 1993). In employment, it has been used as
1999; Vargo and Lusch 2004). This deficiency makes it a residual notion embracing all that is not agriculture,
difficult to achieve coherence within the field and mining, construction, utilities, or manufacturing. Thus,
creates a barrier to discovering the managerial and the category of services includes activities of all kinds,
operational implications (Cook, Goh, and Chung 1999; with roots in various social structures and productive
Roth and Menor 2003). systems. The only feature common to these service
activities is what they are not (Castells 1976; Stanback
The problem of discriminating a “service” from
1979; Cohen and Zysman 1987; Katz 1988; Daniels
some other kind of process has been widespread and 1993).”
has affected many. Fortune magazine gave up trying to
differentiate services firms from manufacturers when, This perspective of seeing services as a disjointed
after many years of publishing both the Fortune In- “residual”—leftovers when all other sectors are ac-
dustrial 500 and the Fortune Service 500, it collapsed counted for—is peculiar. In most developed nations,
329
Sampson and Froehle: Foundations and Implications of a Proposed Unified Services Theory
330 Production and Operations Management 15(2), pp. 329 –343, © 2006 Production and Operations Management Society
that “residual” accounts for the majority of both em- code) and the production process is very labor inten-
ployment and GDP and is larger than all other sectors sive (computer programmers), but the output can in-
combined. This “residual” perspective has been per- deed be inventoried and used or sold later. Therefore,
petuated by the way governments have classified eco- the characteristics of intangibility and labor intensity
nomic activities (Schmenner 1995). In fact, these gov- do not inherently define something as a service. In
ernmental classifications continue to shift with the other words, we could conclude that if something is a
political wind. In a 2004 u.s. corporate tax bill, the tax service, its outputs might tend to be intangible and
code definition of “manufacturer” was expanded to labor intensive, but not the other way around.
include businesses like plumbers, architects, civil en- Other definitions of services focus on the produc-
gineers, NASCAR venues, and movie rental. Obvi- tion process. Levitt (1972) describes a service as being
ously, there is little scientific value in such an arbitrary “invariably and undeviatingly personal, as something
and politically motivated definition. performed by individuals for other individuals.” Vio-
Academics have also offered various and evolving lating this definition would be all automated services
definitions of service industries (Cook et al. 1999). For or services rendered on inanimate objects, such as an
example, Ammer and Ammer (1984, p. 421) define unattended car wash (Thomas 1978). Hill (1977) de-
them as “an industry that produces services rather fines a service as “. . . a change in the condition of a
than goods.” Gonçalves (1998, p. 1) asserts that “. . . a person, or of a good belonging to some economic unit,
service business is one in which the perceived value of which is brought about as the result of the activity of
the offering to the buyer is determined more by the some other economic unit . . . ” Some have defined a
service rendered than the product offered.” Harvey service as a product that is a process (Henkoff 1994;
simply defines a service as “a result that customers Shostack 1987). Chase (1978) sought to define services
want” (1998, p. 583). based on the amount of “customer contact,” which he
Some academic definitions have focused on the defines as the physical presence of the customer in the
characteristics of services. Pearce (1981, p. 390) ob- system. Froehle and Roth (2004) pointed out the lim-
served that services “. . . are sometimes referred to as itation of this definition in that it does not consider
intangible goods; one of their characteristics being that situations where the customer is not corporeally in-
in general, they are ‘consumed’ at the point of produc- volved in the production environment, but is receiv-
tion.” Bannock, Baxter, and Reese (1982, p. 372) said ing service just the same (e.g., telephone support).
services are “. . . consumer or producer goods which Murdick et al. (1990) define services as “economic
are mainly intangible and often consumed at the same activities that produce time, place, form, or psycho-
time they are produced . . . Service industries are usu- logical utilities,” to which Riddle (1985, p. 12) adds
ally labor-intensive.” Operations management text- “while bringing about a change in or for the recipient
books commonly define services as intangible prod- of the service.”
ucts. Karmarkar and Pitbladdo (1995, p. 397) stated There is a lot of truth (and some confusion) in these
that distinguishing characteristics of services include statements from the literature, but they still do not
“. . . intangibility of service output, the lack of inven- sufficiently answer the fundamental question about
tories, the difficulty of portability, and complexity in why we are justified in studying disparate industries
definition and measurement . . . and often involve under the single heading of “services.” How can we
joint production between the buyer and the supplier.” rationalize simultaneously encompassing business
Harvey (1998, p. 596) states, “Customer contact and processes from health care and garbage collection,
intangibility are the two most important distinguish- consulting and ski resorts, airlines and pawn shops,
ing features of services.” Pine and Gilmore (1998, p. pet grooming and architecture firms, universities and
12) define a service as “a set of intangible activities butcher shops? A single commonality that comprises
carried out on [the customer’s] behalf.” In the top- all services, in effect defining them categorically in a
selling introductory marketing textbook, Kotler (2006, managerially relevant way, is a principal contribution
p. 402) defines a service in this way: “A service is any of this article.
act or performance that one party can offer to another The next section will discuss theory building and
that is essentially intangible and does not result in the present why a unifying theory is so valuable. The
ownership of anything.” (Kotler might thus not con- subsequent section provides a formal statement of the
sider a restaurant to be a service.) Unified Services Theory and requisite definitions of
Such definitions can provide insights into important the concepts upon which it is based. Then, a section
issues of services. However, we might question reconciles the Unified Services Theory with other pop-
whether something is a service because it possesses ular prescriptive and descriptive services concepts. A
such characteristics, or if it has those characteristics section shows how the Unified Services Theory clari-
because it is a service. For example, software develop- fies supply chain issues for services. The penultimate
ment results in a product that is intangible (computer section applies the Unified Services Theory to several
Production and Operations Management 15(2), pp. 329 –343, © 2006 Production and Operations Management Society 331
key operations concepts, such as capacity and quality, tives need to be reconciled with service operations
demonstrating its usefulness as an analytical mecha- perspectives (Karmarkar 1996). We need to under-
nism. The final section offers concluding thoughts and stand how professional services, menial-labor ser-
presents some future research topics motivated by the vices, and capital-intensive services can all possibly
Unified Services Theory. fall under the same discipline. The distinctions be-
tween front-office and back-office services have been
2. Value of Theories and Paradigms well documented (Chase 1978; Chase 1981), but the
The basis for any scientific discipline is theory (Mc- commonality also needs to be established.
Mullin 1993). Theories can be, and should be, much Perhaps the most well-known example of a unifying
more than vague suppositions about the unknown, theory is the Unified Field Theory, wherein Einstein
but provide order and meaning to things that are proposed that electromagnetism and gravity were dif-
well-studied and known to be true (Stafleu 1987, p. ferent manifestations of a single phenomenon (Tonne-
15). Theories are valuable in explaining observations lat 1966; Yurth 1998). Similarly, the goal of the Unified
and data (Dictionary.com 2005, “theory”). Even the Services Theory is to provide a “good” theory that
process of direct observation relies upon theory for unifies the various branches of services management
interpretation and characterization (Cartwright 1993). to a common trunk.
Closely related to theories are paradigms, which the
esteemed scientific philosopher Thomas Kuhn charac- 3. Building a Unified Services Theory
terizes as assumptions shared by members of a given The foundational core of the Unified Services Theory
discipline (Kuhn 1970). Paradigms form the basis for is as follows: “With service processes, the customer pro-
advancement: “A paradigm shapes the formulation of vides significant inputs into the production process.” This
theoretical generalizations, focuses data gathering, statement simultaneously defines what services are
and influences the selection of research procedures and what makes them services. The presence of cus-
and projects” (Lovelock and Gummesson 2004, p. 21). tomer inputs is a necessary and sufficient condition to
The discipline of services management cannot exist define a production process as a service process. Any
and advance without theories and paradigms. Yet it is production process that is a service process must have
not enough to have theories; they must be “good” customer inputs (they are necessary), and the presence
theories (McMullin 1993, p. 63). There are many per- of customer inputs establishes a production process as
spectives about what constitutes a “good” theory. The a service process (their presence is sufficient). Why
motivational theorist Locke (2005) identified six char- does it make sense to define a service process this
acteristics of a good inductive theory: way? Answering that question and demonstrating to
(1) It is based on observations and data, the reader that the presence of customer inputs is
(2) It defines concepts in a way that differentiates indeed a necessary and sufficient condition to identify
from other concepts, a service process in a managerially relevant way are
the objectives of this section.
(3) It integrates concepts and resolves apparent
Some production processes do not involve customer
contradictions,
inputs. Because of that, these processes behave differ-
(4) It identifies causal relationships,
ently, and should be managed differently, than service
(5) It typically takes time to develop, and
processes. Such processes are often referred to as man-
(6) It is open ended, allowing for extensions and
ufacturing or extractive processes. In manufacturing,
re-applications.
groups of customers might contribute ideas to the
We will revisit this list in the final section. For now,
design of the product, but individual customers’ roles
it is important to consider the third item, integration.
are limited to the selection and consumption of the
Locke (2004) states that theories that integrate other
outputs, not the contribution of inputs specific to pro-
theories are especially useful, which is the idea behind
duction for that particular customer. And, just as
a unifying theory. This is consistent with Feigl’s ob-
many products are more accurately thought of as bun-
servation that “The aim of scientific explanation
dles of tangible and intangible benefits, production
throughout the ages has been unification, that is, the
systems tend to be mixtures of service and non-service
comprehending of a maximum of facts and regulari-
processes (Boyer and Metters 2004). To fully represent
ties in terms of a minimum of theoretical concepts and the Unified Services Theory, each of the components
assumptions” (Feigl 1970, p. 12; Kitcher 1988, p. 167). of the above maxim—inputs, customer, and the pro-
To progress, the field of services management needs duction process—must be defined.
to be unified (Roth and Menor 2003). Service research-
ers need a shared foundation and a common language 3.1. Inputs
upon which various areas of study and practice can An input is “something put into a system or expended
build (Cook et al. 1999). Service marketing perspec- in its operation to achieve output or a result” (Dictio-
nary.com 2005). Inputs to a production process may eral feedback from customers can be valuable, but that
come from various sources and suppliers, and may feedback is not an essential input to the production
include “materials, personnel, capital, utilities, and process for a specific customer. Both manufacturers
information” (Gaither and Frazier 1999, p. 15). “Cus- and service providers conduct this type of market
tomer inputs” are defined as inputs that are provided research, and general customer feedback is not exclu-
by customers (Davis and Heineke 2005, p. 7). The sive to either domain. So, this type of customer in-
literature has typically identified three general types volvement differs from specific customer-provided
of customer inputs (Wemmerlöv 1990): the customer’s “inputs” in that customer feedback does not, by itself,
self, his belongings or other tangible objects, and in- define a production process as a service.
formation. The second type of customer involvement that we
Customer-self inputs are common, for example, in differentiate from customer inputs is “selecting and
services involving co-production (i.e., the employment consuming the output.” Customers select and con-
of customer labor in the process) and in services in- sume the output from processes of all types, not just
volving the physical presence of the customer. Com- service processes. Although selection processes vary,
mon examples are health care offices, buffet restau- the act of selection does not define service or non-
rants, and taxi services. These service providers can service processes. For example, a customer may select
prepare for production, but they cannot execute the a candy bar to buy. That customer act of selecting the
actual service process until necessary customer-self product does not make the candy manufacturing pro-
inputs are present. Some services, such as movie the- cess a service process because the customer provided
aters, require the customer’s physical presence, al- no input into the production of that particular candy
though the customer’s mind is primarily being acted bar. However, the vending machine from which he
upon (movie theaters can show movies even without buys the candy bar is indeed executing a service pro-
customers present, but that would hardly be called cess since, among other things, the customer must
“production.”) Lovelock separates customer-self in- enter his selection information into the keypad for the
puts into those involving the body and those involv- process to proceed. As we will discuss, manufacturing
ing the mind (Lovelock 1992; Lovelock 1996). an item and selling that item are two different types of
Tangible belongings (or property) and physical ob- processes when the former does not involve customer
jects make up another type of input a customer can inputs but the latter does.
provide to the service process. One’s car is an essential
input into the automobile repair service process, and 3.2. Customers
one’s clothing is a necessary input to the dry cleaning The concept of “customer” is so fundamental as to
service process. Providing tangible inputs often allows almost elude definition. The American Marketing As-
the service process to proceed even without the cus- sociation (AMA) defines “customer” as “the actual or
tomer being physically present. A watch repair service prospective purchaser of products or services” (Ben-
might be performed remotely by having the customers nett 1995, p. 73). Such a definition is adequate for most
send their broken watches in via mail, and photo- situations, but imprecise in others. For example, who
graphic film printing service processes have operated is the customer of a textbook publisher? Is it the stu-
this way. dents who pick up and purchase the textbooks at the
Customer-provided information is a third type of bookstore? Or is it the instructors who require stu-
input to the service process. The tax return prepara- dents to purchase specific textbooks for their courses?
tion process requires that customers provide financial The AMA’s definition of “consumer” is a bit broader:
information as process inputs. Without that informa- “Traditionally, the ultimate user or consumer of
tion input, the service production process cannot be- goods, ideas, and services. However, the term also is
gin, even though the tax preparer can prepare for used to imply the buyer or decision maker as well as
production (such as by studying the tax code or du- the ultimate consumer. A mother buying cereal for
plicating blank forms). consumption by a small child is often called the con-
An important distinction must be made between sumer although she may not be the ultimate user”
customer-provided inputs, which are central to the (Bennett 1995). This allows for the separation of pur-
definition of a service, and two types of customer chasing decision-makers and output users.
involvement that do not inherently define a production Consistent with that thought, we define customers
process as a service process. First, as mentioned pre- as the individuals or entities who determine whether or not
viously, groups of customers or potential customers the service provider shall be compensated for production
might be involved in market research to guide product (Sampson 2001, p. 28). This captures the concept of
design. In this case, customers provide opinions about purchase decision-making ability but also allows for
general products destined for future production, with complex decisions made by more than one entity. For
possible consumption by them or by others. Such gen- example, who makes the purchasing decision in the
case of medical care? It may be the patient, who is the generates money through sales.” Goldratt emphasizes
recipient of the care. It may be the insurance company, that “if you produce something, but don’t sell it, it’s
who determines whether the provider and/or proce- not throughput.” We therefore limit “production” to
dure is covered by the medical plan. Or it may be the refer to only productive activities that contribute to
state medical licensing board, who determines if the throughput or sales, which is an elevated specification
medical service provider is permitted to charge for of the term “production.”
healthcare services. Each of these entities participates There are often process activities that do not directly
in determining whether or not the service provider lead to sales, but which are nonetheless necessary for
shall be compensated for production, so each, to some the organization to execute. We define these “support-
degree, is a customer. ing processes” as processes that normally must be
Indeed, all customers are not on equal standing in accomplished for ongoing production activities to oc-
the purchase decision. Some may be paying custom- cur. Few would argue against the importance of clean-
ers. Others, however, may be “indirect customers”— ing the equipment at a restaurant, but few customers
entities that paying customers may require to be sat- would pay to watch the equipment be cleaned, much
isfied before allowing the service provider to be less pay to participate in the cleaning process. Other
compensated for production. Airline passengers are supporting processes at a restaurant include hiring
customers in that they directly determine whether or employees, ordering food ingredients, and creating
not the airline is compensated for each seat-mile menus. They are important activities even though cus-
flown, but they also require that the airline satisfy the tomers do not directly pay for them. More impor-
Federal Aviation Administration’s regulations. So the tantly, we observe that those supporting processes can
FAA only indirectly decides if the airline can be com- be accomplished independently from the customers,
pensated for production. This relationship with the without customer inputs.
airline’s customers makes the FAA an indirect cus- Nearly all processes are composed of sub-processes,
tomer of the airline’s safety and other processes. smaller sets of tightly linked action steps. One may
In some cases, identifying the customer is neither decompose a large complicated process into smaller
easy nor obvious, but it is essential to understanding processes for more detailed study (Sampson 2001, p.
the service nature of the process. For example, con- 38). An overall production system may have some
sider a commercial broadcast radio station. Its listen- processes that are replete with customer inputs, and
ers listen to the broadcast but provide nothing in others that are devoid of customer inputs. Studying
terms of inputs to the production process. Are the service production processes is akin to studying news-
listeners the customers? Do the listeners determine print from a traditional offset press. From a distance it
whether the radio station shall be compensated for appears that even black-and-white pictures have
production of the radio signals? Not directly. Com- many shades of gray. However, finer observation re-
mercial radio stations are compensated for broadcast- veals that gray pictures are composed of black dots of
ing by advertisers, not by listeners. Advertisers pro-
various sizes. Metaphorically, the black dots represent
vide an essential input into the radio process, namely
customer inputs. Some processes have significant cus-
advertisements. The “radio broadcast” process is
tomer inputs (large dots). Other processes have minor
packaging advertisements (which listeners may not
customer inputs (small dots). Still others have no cus-
care to receive) with music and talk (which listeners
tomer inputs whatsoever, and thus are not consis-
desire to receive) and then distributing that package
tently subject to the unique managerial issues that
over the airwaves. Can commercial radio stations
concern service processes.
“produce” (i.e., generate revenue) without advertise-
In the past, companies and even entire industries
ment inputs from customers? No, not to any sustain-
have been categorized as services (e.g., Kellogg and
able level, but they can “prepare for production” by
Nie 1995; Schmenner 1986), yet such can lead to con-
acquiring content, building a listener base, etc. The
voluted analysis with unclear or incorrect conclusions
listeners are important because they are indirect cus-
(Verma and Young 2000). It is like trying to study a
tomers who advertisers desire to be satisfied with the
sidewalk painting from the top of a skyscraper: al-
radio broadcasts.
though one can make general observations about color
3.3. Production Process and form, it is difficult to appreciate the details. It is no
In the Unified Services Theory, the unit of analysis is wonder some casual observers conclude that “all busi-
a production process. A “process” is a sequence of nesses are service businesses,” even though it would
steps. We consider “production” to be modifying in- be naı̈ve to assume that all business processes have
puts in a way that is valued by customers. This view similar management characteristics and concerns.
is consistent with Goldratt’s (1992, p. 60) concept of When we observe a business process from a thousand
“throughput, [which] is the rate at which the system feet up, at the company or industry level, it is difficult
to accurately differentiate between service processes 4. Reconciliation with Prior Service

and non-service processes.
Perspectives
For this reason, the Unified Services Theory consid- The Unified Services Theory is primarily a generaliza-
ers the unit of analysis to be the process, versus the
tion of various theories of services that have been
firm or industry. The firm, the total production system
previously offered. In that sense, the UST indeed
itself, is a mixture of service and non-service produc-
“stands on the shoulders of giants.” In this section, we
tion processes. It is important to remember that pro-
hope to demonstrate that the UST is easily reconciled
cesses involving customer inputs are fundamentally
with, and is a generalization of, some of the most
and managerially different from non-service pro-
commonly cited perspectives on services.
cesses. Firms differ widely in composition of service
and non-service processes, and therefore differ widely 4.1. Characteristics of Services
in relevant managerial principles. Further, service pro- We previously mentioned how researchers have at-
cesses differ widely in terms of customer inputs, even tempted to establish what services are by identifying
with processes in similar businesses. Full-service in- key characteristics and/or attributes that services
vestment brokers and discount brokers share many share. Over the years, thought has generally focused
things in common but differ in intensity of customer on five supposed characteristics: intangibility, hetero-
inputs. However, processes involving even slight cus- geneity, simultaneity (inseparability), perishability,
tomer inputs differ dramatically from processes de- and customer participation. Each of these five charac-
void of customer inputs. teristics is either completely explainable by the pres-
3.4. The Unified Services Theory (UST) ence of customer inputs (the core element of the
The Unified Services Theory is formally stated as fol- Unified Services Theory) or is refutable as being char-
lows (Sampson 2001, p. 16): acteristic only of service processes (Lovelock 1992;
Sampson 2001; Vargo and Lusch 2004).
“With service processes, the customer provides signif-
Heterogeneity is the observation that individual
icant inputs into the production process. With manu-
facturing processes, groups of customers may contrib-
units of service production tend to be unique, espe-
ute ideas to the design of the product, but individual cially when compared with non-service processes
customers’ only participation is to select and consume such as mass production (Nie and Kellogg 1999). Ac-
the output. All managerial themes unique to services commodating that variability is one of the biggest
are founded in this distinction.” challenges for service operations. But what is the root
cause of this variability? The Unified Services Theory
The Unified Services Theory is not unique in its
contends that heterogeneity in processing and out-
foundations but rather in its implications. In fact, we
are eager to point out that the founding concepts of come is primarily caused by heterogeneity in process
the Unified Services Theory have been well docu- inputs, specifically customer inputs (Sampson 2001, p.
mented in research literature. The unique contribution 108). One conclusion we can make is that a viable way
of the Unified Services Theory is in codifying and to reduce variability in service processes is to reduce
applying the customer-input concept. The statement, variability in customer inputs. For example, research-
“All other managerial themes unique to services are ers have discussed the “service factory” concept in
founded in this distinction” might be said in different which a service provider limits the range of service
ways: offerings by limiting the range of customer inputs
• Service processes are distinguished from non-ser- (Chase 1978). McDonald’s limits the range of customer-
vice processes only by the presence of customer information inputs by providing a limited menu. Fed-
inputs and implications thereof. eral Express limits the range of customer-belonging
• For those familiar with business management in inputs by providing standardized containers like the
general, understanding those additional issues “FedEx envelope.” Shouldice Hospital limits the range
unique to managing services requires only under- of customer-self inputs by limiting surgical offerings to
standing the implications of customer inputs. a specific type of hernia. Some service processes and
• Customer inputs are the root cause of the unique strategies lend themselves to limiting customer inputs
issues and challenges of services management. but many do not. Instead, services may need to accom-
In the next section, we will illustrate this universal- modate variability in customer inputs (Shingo 1986).
ity of the Unified Services Theory by showing how it Simultaneity, also called inseparability, refers to the
explains some widely held services management con- observation that services are generally produced and
cepts and frameworks. The purpose is both to show consumed at the same time (as compared with non-
how prior approaches justify the Unified Services The- services’ tradition of producing well in advance of
ory and how the Unified Services Theory helps shed demand and consumption). With service processes,
insights into those approaches. significant portions of production cannot begin until
after customer inputs have been presented by the ceived, and service outcomes are often as tangible, or
customer, which corresponds with demand (Sampson more tangible, than manufacturing outputs (Laroche
2001, p. 52). Because the customer is involved, some et al. 2001, p. 27). For example, how might one justify
aspects of consumption may begin during the produc- an assertion that a dental root canal procedure eludes
tion process. We call this concept “inadvertent JIT perception, especially by the sense of touch? The den-
(Just-in-Time),” implying that JIT production in ser- tal office uses “facilitating goods,” such as needles and
vices is a necessity, not a choice (Karmarkar 1996; mouthwash, as well as a very tangible “supporting
Sampson 2001, p. 310). Contrast this with non-service facility” (the building), which are common compo-
processes where inventory is used to separate produc- nents of the “service package” (Fitzsimmons and
tion and consumption and where JIT is an option Fitzsimmons 2006, p. 19; Porter 1980).
(usually only attempted by manufacturers who are Consider the auto-painting process. If it takes place
not faint of heart). in an auto factory in Detroit, it is considered a tangible
Perishability alludes to the time-sensitive nature of manufacturing process. It is no less tangible if it takes
a service provider’s capacity to produce the service. It place in your home town and involves your car. In
is not the service product itself (e.g., the dental work fact, it may be more tangible if it involves your car: you
or the tax return) that is perishable (Sampson 2001, p. may actually observe the process and you may be
82), but rather the capacity (e.g., the empty dentist’s more sensitive to tangible process output details (since
chair or the accountant’s time). Service capacity is it is your car that was painted). The confusion about
time-perishable because significant elements of pro- tangibility is rooted in assumptions about ownership
duction cannot begin before customer inputs are of production items (Kotler and Keller 2006, p. 402),
present (e.g., the patient’s teeth or the client’s tax with the tangibility of customer-owned inputs appar-
information) (Sampson 2001, p. 60). ently being ignored. All production processes have
Related to perishability is the mistaken belief that tangible and intangible elements. Intangibility neither
service processes are unable to produce inventory. We
defines nor uniquely characterizes services.
understand inventory to be items of production that
In summary, these four “characteristics” of services
are available before needed. Inventory is the result of
are not defining characteristics but, when they occur,
a mismatch between production and demand. With
are simply “symptoms” of the customer inputs. Just as
service processes, we cannot produce before demand
symptoms of the flu can be caused by things besides a
due to the reliance on customer inputs. However,
flu virus, these symptoms of services can be caused by
there can still be delays in the system if customer
things other than the presence of customer inputs and,
inputs arrive in excess of available capacity. In such
therefore, can also show up in non-services. We must
cases, the customer inputs are in “inventory” either
until sufficient server capacity becomes available or beware of “manufacturing in sheep’s clothing,” which
until the customer decides to withdraw his or her are non-service processes that exhibit customer-input
inputs from the process (Sampson 2001, p. 90). This symptoms (Sampson 2001, p. 154). For example, fuel
“customer inventory” is commonly called a “queue” production is a manufacturing process, but electricity
or a “waiting line,” and it experiences a “holding cost” is so expensive to store that it is produced “just in
much more time sensitive than traditional manufactur- time” with demand (not because producing electricity
ing inventories (Garnett, Mandelbaum, and Reiman requires customer inputs). Pre-packaged software and
2002). Manufacturing inventory holding costs are cal- recorded music may be intangible products, but they
culated over weeks or months, whereas service cus- are generally produced without customer inputs
tomer inventory holding costs are typically measured through non-service processes (Laroche et al. 2001, p.
in minutes or hours. 27). (Although intangibility is not unique to services, it
Intangibility is the characteristic that has perhaps is a common cause of confusion.)
been most commonly attributed to services. Despite A fifth characteristic, customer participation, is
being frequently cited in texts and research literature, identified as descriptive of some, but not all, services
it is unfounded and has been discredited in recent (Bitner et al. 1997; Chervonnaya 2003). Also called
literature (Laroche, Bergeron, and Goutaland 2001; “co-production,” it is essentially a limited view of
Lovelock and Gummesson 2004; Vargo and Lusch “customer inputs” in which the customer provides
2004). The Unified Services Theory sheds light on the himself as a labor input. Nevertheless, customers can
intangibility misconception by considering the tangi- participate in production not only by providing them-
ble items provided by customers (Sampson 2001, p. selves as labor but also by providing property and/or
100). information. If a customer contributes to production
“Intangibility” means that something is “incapable through the provision of any inputs (not just partici-
of being perceived by the senses” (Dictionary.com pation), then the production process is a service pro-
2005). Service processes are capable of being per- cess.
4.2. Customer Contact Theory and Related trast, those tasks that can be decoupled, standardized,
Concepts and moved to the back-office generally rely only on
A valuable tenet of service operations is that the po- non-self customer inputs (e.g., tangible property,
tential efficiency of a service process depends largely goods, and information) or don’t rely on customer
on the amount of customer contact involved (Chase inputs at all. Decoupling essentially splits out service
1981; Chase and Tansik 1983). Chase has characterized processes that require customer “self” inputs from
customer contact as “. . . the physical presence of the those service processes that do not.
customer in the system” (Chase 1978, p. 138) when Custom manufacturing, mass customization, and
“. . . the customer is in direct contact with the service delayed differentiation are similar concepts from
facility” (Chase 1981, p. 700). These descriptions sug- goods production that relate to this idea. In custom
gest there is some inherent personal physicality in- manufacturing, the customers trigger production by
volved in customer contact, and this is indeed how the presentation of their custom specifications. These
customer contact has been traditionally viewed and customer-information inputs define custom manufac-
measured (e.g., Kellogg and Chase 1995). The Unified turing as a service process. Indeed, custom manufac-
Services Theory defines a service process as one in- turing has many management challenges found in
volving customer inputs, which inputs may include, service operations and not present in typical make-to-
among other things, the customer’s physical self. In stock mass production manufacturing settings (Samp-
that light, the traditional notion of customer contact son 2001, p. 142). For example, Dell “custom manu-
(i.e., physical presence) becomes a special case, or factures” a computer when a customer places an order
subset, of the Unified Services Theory. for it, but this simplified description confuses two
We might extend the traditional definition of cus- discrete stages in the production process. First, before
tomer contact to include service situations where the the order is placed, Dell executes a non-service process
customer and service provider are not physically co- that readies a variety of components that customers
located during the contact episode (e.g., call centers may want, resulting in standard sub-assemblies; this is
and distance learning). The Unified Services Theory done without any individual customer’s inputs. Then,
tells us the inefficiencies arising from face-to-face con- once a customer has placed an order (i.e., provided an
tact might also exist in these situations due to the essential customer input), the service processes asso-
presence of significant customer inputs. As men- ciated with completing the assembly and delivering
tioned, Lovelock (1992, 1996, p. 29) differentiates in- the finished good can be executed. This production
puts associated with the customer’s physical self from approach decouples processes that depend on cus-
those associated with the customer’s mind/conscious- tomer inputs from processes that can be done inde-
ness. These latter “virtual self” inputs can be as het- pendently from customer inputs, allowing higher ef-
erogeneous as the customers themselves. This sug- ficiency. This consistent reliance on information about
gests that removing the customer’s physical body customer inputs to efficiently organize production fur-
from the service process does not eliminate customer ther substantiates the Unified Service Theory.
contact, nor does it necessarily reduce the variability
of the customer’s inputs (Froehle and Roth 2004). The 4.3. The UST at the Core of Service Classification
UST suggests that we would expect operational effi- Schemes
ciency implications to arise both in face-to-face and Over the years, various service classification schemes
“virtual” customer contact, and that differences arise have been proposed as means for generating manage-
from the nature and variety of the customer inputs. rial insights. We observe that all useful schemes have
A concept rooted in customer contact theory is at their core a classification of customer inputs or the
front-office/back-office differentiation (Metters et al. treatment of customer inputs.
2006; Shostack 1984; Shostack 1987). Traditionally, the For example, The Service Process Matrix (Schmen-
front-office has been described as “where the custom- ner 1986) was developed to help classify different
ers are,” while the back-office is where processes not kinds of services so that operational insights might be
directly involving the customer are carried out. Decou- gleaned and better management decisions could be
pling is the popular practice of removing low-cus- made. The variables the Service Process Matrix uses to
tomer contact components of front-office work, stan- classify services are (a) service customization and cus-
dardizing them, and relocating them into the back- tomer interaction, and (b) labor intensity. Customiza-
office in hopes of increased efficiency (Metters and tion only occurs as a response to comply with unique
Vargas 2000). Decoupling is only possible because the customer inputs including specifications. Customer
nature of the customer inputs is different. For the high- interaction is a primary means for providing customer
variance, high-contact activities that have to remain in and labor inputs, including preference specifications.
the front-office, the customer inputs generally include However, customization can occur independently of
the customer’s physical or conscious presence. In con- interaction, such as an audit firm providing a unique
audit process based on the financial records of a client customer inputs causes system requirements to be
firm. Labor intensity is an antecedent of customer simple or complex.
inputs, in that variance in customer inputs often pro-
hibits automation. In other words, the differentiating 5. Bidirectional Service Supply
power of the Service Process Matrix originates from Chains
considering customer inputs of differing types. The Unified Services Theory also aids our understand-
A second example is the framework proposed by ing of the relevance of supply chain concepts to ser-
Wemmerlöv (1990), which categorized service pro- vice businesses, an important contribution (Roth and
cesses based on three criteria: technologization (i.e., Menor 2003). Various publications on supply chain
“rigid” versus “fluid” processes), the degree and na- management claim that the principles are applicable
ture of customer contact, and the object of the service to services, yet the vast majority of the stated examples
(what is being acted upon— goods, information, or are from manufacturing supply chains (Ellram, Tate,
people). The first dimension examines the technology and Billington 2004). Service examples, such as retail
necessary to accommodate variability in the process. and logistics, involve the processing of physical goods
As has been discussed, much of the variability in and are quite obviously part of manufacturing supply
service operations is customer-induced, so a desire to chains (Bozarth and Handfield 2006, p. 4; Wisner,
accommodate variability in customer inputs necessi- Leong, and Tan 2005, p. 6). But applying supply chain
tates more fluid processes and appropriate flexible management to “pure services” like consulting and
technologies. The second dimension—the degree and psychology can seem forced and unclear. Two clear
nature of customer contact— directly relates to those exceptions are Anderson and Morrice (2000) and Ak-
customer inputs associated with interaction (i.e., phys- kermans and Vos (2003), which studied upstream am-
ical presence, indirect technology-mediated communi- plification in mortgage and telecoms service process/
cation, or no interactions). The object of the service supply chains respectively.
action, which is Wemmerlöv’s third differentiating Traditional manufacturing supply chains are rela-
dimension, ties directly to the three types of customer tively linear, as depicted in Figure 1 (although obvi-
inputs identified earlier. Clearly, customer inputs lie at ously more expansive than this simplified figure).
the heart of this valuable typology. Normal production flows are typically unidirectional,
In another classification framework, Kellogg and with items flowing from suppliers to customers (the
Nie (1995) suggested the “Service Process/Service solid-line arrows in Figure 1). Reverse logistics aside,
Package Matrix,” for deriving operational decisions the primary thing flowing upstream is information:
based on the nature of the service package in a way orders, feedback, and payment information (not de-
similar to the well-established Product-Process Matrix picted in Figure 1). Although customer focus groups
(Hayes and Wheelwright 1979). The key element their may contribute opinions about general product design
framework relies upon to define the service process (the dashed-line arrows in Figure 1), customers are
dimension is “customer influence,” which is described otherwise completely downstream from the manufac-
as, “the customer, by his/her presence, interaction turing stages of the supply chain.
and/or participation, in some way influences the ser- The Unified Services Theory indicates that service
vice process” (p. 325). These authors later empirically supply chains have an expanded role for customers,
found that customer influence is “the most important
characteristic in affecting OM strategies and deci-
sions” (Nie and Kellogg 1999, p. 349). This clearly Figure 1 Typical Manufacturing Supply Chain.
depicts the reliance upon customer inputs, which
wholly determine a customer’s participation, pres-
ence, and overall impact on the service system.
As a final example, Napoleon and Gaimon (2004)
propose a model that categorizes information technol-
ogy worker systems as either simple or complex, with
differences arising from the standardization (or, con-
versely, unpredictability) of the decision-making ele-
ments and the job requirements for service workers.
Figure 2 Bidirectional Service Supply Chain.
That model provides useful insights, but does not
examine the factors that determine whether a system is
standardized or unpredictable; we posit those factors
inherently involve customer inputs. The Unified Ser-
vices Theory would therefore suggest that there is
additional value in determining how the nature of
namely as suppliers of inputs to service provider pro- operational issues, such as quality, will be discussed in
cesses. This means that service processes are bidirec- the next section.
tional, as shown in Figure 2. Prior to being recipients
of process outputs, customers are suppliers of process 6. Operational Implications of the
inputs. The arrows of Figure 2 represent flows of
goods, information, and/or human (e.g., labor) inputs
Unified Services Theory
The Unified Services Theory is, in part, a descriptive
involved in the service production process.
theory in that it describes why a service process is a
Further, Figure 2 shows that service providers may
service process. It is also a prescriptive theory in that
employ other service providers to supply necessary
it helps guide decision-making; a great many insights
services. For example, a patient may provide a blood
about managing services emerge from applying the
sample (“self” input) to a physician who is the service
theory to various operational problems. This section
provider. In turn, the physician may deliver the blood
provides examples of this by examining some critical
sample (tangible good) to a lab service for analysis.
service operations issues through the lens of the Uni-
The lab returns the results (information) to the physi-
cian who provides diagnosis (information) to the pa- fied Services Theory.
tient. Such a relationship has been referred to as a 6.1. Capacity and Demand Management
two-level bidirectional service supply chain (Fitzsim- The prior section alluded to the way that the use of
mons and Fitzsimmons 2006, p. 483; Sampson 2000). capacity in service situations is analogous to the use of
Bidirectional service supply chains differ from pri- inventory in manufacturing situations. A significant
marily unidirectional manufacturing supply chains in proportion of the operational issues encountered in
many respects. First, service supply chains tend to be services management are concerned with capacity
hubs, not chains (Fitzsimmons and Fitzsimmons 2006, (e.g., adding, deploying, and scheduling) and accom-
p. 482– 486). Service managers are concerned with
modating variable demand (Hur, Mabert, and Bret-
product flows going in both directions. For two-level
thauer 2004; Jack and Powers 2004). A variety of tac-
bidirectional supply chains, the service provider acts
tics have been devised to address these issues. On the
as an agent for the customer when dealing with out-
demand management side, reservation systems keep
side suppliers. A car repair shop may outsource the
customers from inserting their inputs into the produc-
rebuilding of engines to a machine shop. The car re-
tion process until the service provider is likely to be
pair shop acts as a hub and represents the customer’s
ready for them, thereby minimizing pre-production
needs to the machine shop.
waits. Price incentives and promotion of off-peak de-
Second, bidirectional supply chains tend to be short
mand work similarly in that they motivate customers
(Sampson 2000, p. 355), as depicted in Figure 2. Service
providers tend to interact directly with consumers of to time their inputs so as to correspond with a period
the services without the buffer of distributors and of lower demand. For labor-intensive service opera-
retailers. Advantages of short supply chains include tions, capacity management is often aided by asking
reduced complexity and easier sharing of information. the customer to take on some of the production (i.e.,
Third, service providers cannot treat suppliers who the customer provides labor inputs, such as self-check-
are customers the same way they would treat suppli- out). The use of self-service is increasing as the capa-
ers who are not customers. Supply base reduction for bilities of automated service systems improve (Pra-
customer-suppliers is precarious, since it means re- halad and Ramaswamy 2004, p. 98).
ducing the number of customers. Traditional criteria In services, many of the variable inputs are pro-
for supplier selection are of little value for customer- vided by the customers, who do not charge the service
suppliers. Managing the quality of supplied inputs is provider for those inputs. This tends to keep variable
no easy task; even well-defined input quality specifi- costs down, but tends to make fixed costs a larger
cations are likely to be violated by customers. Supplier proportion of overall expenses for the service pro-
certification for customer-suppliers can be difficult to vider. In fact, service labor costs in many situations
enforce. tend to be largely fixed for two reasons: first, service
Fourth, service operations need to be robust enough providers need to schedule labor based on forecasted,
to handle the stochastic nature of customer-supplied rather than actual, customer demand; and second,
inputs (Sampson 2001, p. 355). This includes being time-perishable capacity (discussed above) forces the
capable of dealing with random arrivals, inconsistent service provider to pay scheduled workers even
specifications, and varying input quality. Manufactur- though there are no customers currently needing ser-
ers can use inventory as a tool for dealing with ran- vice. This high “operating leverage” implies that
dom demand, but inventories of customer inputs can many service operations will be much more cost-com-
be very expensive, so other tools of capacity and de- petitive if they have higher utilization levels (Sampson
mand management are used instead. These and other 2001, p. 240) or, alternately, increase their volume
flexibility (Jack and Powers 2004). Some service oper- 368). Service customers remember process failures
ations tend to have higher variable service costs, such even if they are corrected.
as custom home building and retail, so utilization does Even defining service quality can be precarious due
not have as great an impact on process cost perfor- to customer-imposed expectations about the process
mance in those situations. and outcome. Customers of manufacturing processes
We previously discussed how JIT production is may also impose expectations about the process out-
mandatory for most services, with extremely time- come (i.e., the product). However, manufacturing cus-
sensitive “holding costs” for customer inventory. tomers generally accept that product specifications are
When demand exceeds capacity (even temporarily) dictated by some engineer somewhere who does not
and customer inventory results, service providers can have access to each customer’s specific needs and
shift demand, as just discussed, or they might alterna- wants. As a result, customers are quite tolerant of
tively focus on reducing the holding cost. When cus- manufactured goods. Further, manufacturers manage
tomers are in inventory, the holding cost is primarily suppliers to ensure consistently high-quality process
psychological, and might be reduced by managing inputs. Customers are key suppliers of service pro-
customers’ perceptions (Sampson 2001, p. 319). cesses, providing both process inputs and opinions
Maister (1985) pioneered a customer-inventory man- about how the process and outcome should be. These
agement approach that has come to be known as the opinions can make specifying quality like buying cloth
“psychology of queuing.” The idea is to make the wait based on the ancient “cubit” (distance between a per-
more acceptable, such as by providing entertainment son’s elbow and the tip of the longest finger): The
and a sense of fairness, thus reducing perceived wait specification varies depending on whose cubit is being
times. Manufacturing managers generally do not have used at the time.
the luxury of using psychological means to reduce Service quality is not only difficult to specify, but it
inventory holding costs. is equally difficult to measure (Prahalad and Krishnan
1999; Sampson 2001, p. 388). Assessing the outcome of
6.2. Quality Management service production often requires measuring the cus-
Managing quality is difficult in service processes for a tomer’s perception of the service experience, which is
variety of reasons, many of which stem from customer far from precise (Hays and Hill 2001). The Unified
inputs. As Fitzsimmons and Fitzsimmons (2006, p. Services Theory suggests that since customer inputs
483) state, “Customer inputs can be incomplete (e.g., define service processes, we should also attempt to
tax documents), unprepared (e.g., students), or have measure the quality of the customer inputs involved
unrealistic expectations (e.g., cancer patient). This lack in the service. After all, if a customer provides inap-
of consistency in the quality of customer-supplied in- propriate or inadequate inputs to service process, that
puts represents a challenge for the service provider to could explain a great deal of his/her dissatisfaction
deliver on promises when inputs are questionable.” with the service outcome. Anyone who has attempted
They emphasize the importance of effective commu- to teach unprepared students knows this scenario. Inter-
nication in establishing customer expectations before estingly, one of the most commonly-used service quality
service delivery in order to avoid misunderstandings. instruments, SERVQUAL (Parasuraman, Zeithaml, and
Further, customer-executed process steps can have Berry 1988), does not explicitly include any customer
higher variability because customer-provided labor inputs in its measurements.
varies more dramatically in terms of training and ex- A related issue that can be problematic is the spec-
perience, and customers make different types of mis- ification of service productivity. We consider produc-
takes (Stewart and Chase 1999). Customer-provided tivity to be the amount of output for a given amount of
property/good inputs can vary dramatically (e.g., a input, such as labor. Customer inputs confound pro-
car repair shop sees great variability in terms of ductivity measurement by introducing heterogeneity,
makes, models, type of repair, etc.). Customer-pro- implying that outputs cannot be simply counted
vided information inputs are particularly subject to (Sampson 2001, p. 400). For example, one attorney
variability, including effects of varying communica- wins nine out of 10 court cases and another wins only
tion skills. Customer moods vary, which can result in five out of 10 cases—who is more productive? The first
assessments of quality that differ from one mood to attorney may only take on easy or trivial cases, and the
the next, even with consistent service delivery. Finally, second may only take on high-risk or precedent-set-
in-process quality correction is difficult because the ting cases with high potential pay-outs or social im-
customer, unlike a physical piece of raw material in a plications. Due to the heterogeneity imposed by het-
manufacturing process, experiences the service pro- erogeneous customer inputs, it is common practice for
duction process as it happens and updates his percep- attorneys to charge not according to some output mea-
tion of quality as production occurs (Sampson 2001, p. surement (such as success of court judgment), but
rather according to an input measure they have direct By handling customer inputs differently than its com-
control over (i.e., billable labor hours). petitors, it can generate service outcomes that are dis-
tinctive and perhaps hard to duplicate. However, the
6.3. Services Strategy UST suggests that it can be more difficult to sustain
The Unified Services Theory suggests that service or- differentiation in services than in manufacturing due
ganizations can stand out from their competitors by to the difficulty in maintaining production trade se-
focusing on certain, or different, customer inputs crets. With manufacturing, companies can keep se-
and/or by employing similar customer inputs in dif- crets in factories by requiring all who enter to sign
ferent ways. This idea applies to all three of Porter’s non-disclosure agreements. With services, competitors
(1980) generic strategies— cost leadership, focus, and posing as customers can have free access to service
differentiation—which are applicable to services facilities.
(Fitzsimmons and Fitzsimmons 2006, p. 41; Sampson The distinction between a focus strategy and a dif-
2001, p. 176). ferentiation strategy, which is often difficult to discern,
For a cost leadership strategy, the goal is reducing is made easier by examining customer inputs. While a
costs well below one’s competitors. This is often based
focus strategy targets a specific niche of customers with
on low-cost inputs and efficient operating systems; the
similar inputs and needs, a differentiation accommo-
achievement of both is highly dependent on customer
dates a potentially wider array of inputs and employs
inputs. Many customer inputs can save the firm
them in the production process in a unique way. For
money (e.g., self-service labor), but not all can. Some
example, Amazon.com has differentiated itself through
customer inputs, such as unusual specifications, drive
the use of customer preferences (customer-provided
up process and outcome heterogeneity (even beyond
information inputs), seeking to customize its recom-
what most customers may require) and increase other
mendations and customers’ experiences by tracking
costs (such as extra production labor or customer sup-
customer activity and buying patterns over time.
port). Variability in customer inputs is the enemy of
efficiency; it diminishes the advantages of learning
through repetition, non-divergence, and economies of 7. Conclusions and Research
scale. Thus, if a company wishes to pursue a cost Opportunities
leadership strategy, it must assess the relative merits The Unified Services Theory states that all managerial
of each customer input to the production process in issues unique to services stem from the fact that ser-
order to determine how and when to accept and/or vice processes involve customer inputs. Earlier we
require that input and how to specify/control that spoke about Locke’s attributes of a good inductive
input’s variability. theory (2005). Examining the Unified Services Theory,
A focus strategy is meeting the exclusive needs of a we see that it meets those attributes:
narrowly defined target customer base. A focus strat- (1) It is based on a wide variety of research litera-
egy can benefit from critically thinking about cus- ture and industry observations,
tomer inputs: the goal should be to identify a set or (2) It defines services and service concepts in a way
sets of customers with specific and similar customer that differentiates them from traditional manufactur-
inputs and expectations and then design the service ing concepts,
process around those inputs and expectations. For (3) It integrates prior models of services manage-
example, Shouldice Hospital has so refined this ap- ment under a common basis,
proach that it pre-screens potential customers using a (4) It shows the cause of various service phenom-
very simple and low-cost process: the patient applica- ena (i.e., the requirement of customer inputs),
tion survey (Fitzsimmons and Fitzsimmons 2006, p. (5) It is based on time-tested research (Although the
140). Before it permits a customer-patient into its pri- theory was first formalized in the late nineties, it is
mary production process, it determines whether or founded in the earlier writings of Hill (1977), Chase
not he has the right inputs (e.g., type of hernia, overall (1978, 1981, 1983), Lovelock (1983), and others.)
physical condition, etc.). Once admitted, the customer (6) It defines services in a way that is very open-
is propelled through a production process designed to ended in terms of implications and applications.
minimize complications and risk while maximizing Despite being parsimonious and simple, the UST is
healing and recuperation. A customer with mis- not simplistic—its ramifications are significant and
matched inputs would likely cause significant opera- far-reaching. We can come to understand that the
tional problems due to needing special care and ac- fundamental reason why service processes can be
commodation. harder to manage than non-service production pro-
Finally, a firm adopting a differentiation strategy cesses is the presence of customer inputs. The host of
strives to provide a unique service or to provide a complications arising from this one defining aspect
service in a way that is different from its competitors. will continue to challenge practitioners and research-
ers alike. However, because we can point to customer One problem is that, as yet, process technologies are
inputs as the cause for the unique issues found in not as adaptable to high-variance customer inputs as
services, we are better equipped to begin investigating human labor is. Automating technologies in services
how to address each problem or take advantage of can significantly damage customer satisfaction be-
each opportunity. cause they fail to recognize or accommodate the
Space limitations prevent us from providing more uniqueness of each customer’s inputs (i.e., they over-
than a cursory review of applications and implications standardize) while not providing customers with ob-
of the Unified Services Theory. Interested readers are vious or adequate cost savings. An example might be
directed to Sampson (2001), which is a more complete automated voice response systems that never let cus-
and detailed recitation on the UST and includes many tomers talk to a human. Examining the interactions
practical examples and extended discussion on related between aspects of customer inputs (e.g., quantity,
topics. type, and variety) and aspects of technology (e.g.,
There are many rich opportunities for future re- ease-of-use, customizability, and responsiveness) of-
search involving the Unified Services Theory. One fers a fertile area to which services researchers can add
area we have looked at is how to measure customer valuable and innovative insights.
inputs. We have discussed the problems associated The Unified Services Theory serves as a framework
with measuring service production, but similar and for the study of services management. However, it is
additional problems emerge when trying to measure hoped that an even greater contribution of the UST
customer inputs. First, different types of inputs are will be in providing coherence to the services manage-
likely to need different measurement approaches; ment discipline, thereby acting as a foundation for
measuring customer-provided labor and measuring future research on managing services.
customer-provided information are unlikely to use the
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PRODUCTION AND OPERATIONS MANAGEMENT POMS

Vol. 15, No. 2, Summer 2006, pp. 329 –343

Foundations and Implications of a Proposed

Scott E. Sampson • Craig M. Froehle

to accurately differentiate between service processes 4. Reconciliation with Prior Service

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