TheServiceFactory Reading Summary

Reading Summary: The Service Factory
A factory can no longer be limited to manufacturing excellence. Low costs, high quality
and differentiated products are a part of every factory now. New products and processes can be
imitated easily. The manufacturers who can bundle services with products and anticipate
customer requirements will prosper. The factory will have to be able to engage the customer and
respond to his needs. Production managers and factory workers should be able to build
relationships with customers. Adaptable factories today will become service factories tomorrow.
Traditionally, the most accommodating craftsman has been the most successful because
he engaged with the customer prior to the purchase, during the manufacturing process and after
delivery. However, mass production came to prominence as standardization of goods gained
acceptance. Upstream supply chain activities like design and product development,
manufacturing activities and downstream activities like sales and after-sales service got
separated and compartmentalized. This resulted in miscommunication and lack of collaboration.
In order to become a flexible factory, manufacturers tried to break the barriers between product
designers and manufacturing engineers and between R&D team and quality control managers.
Competition started transforming from just building products to serving customers before and
after product sale. Unlike the earlier conception of commitment to deliver by due-dates, flexible
factories have a broader concept of service which includes both commitment to product variety
and capacity to see the customer in specialized terms. The role of the factory has become multi-
dimensional. They have to contribute at the product design stage by providing feedback on
manufacturability of new designs. They can serve as a resource for sales and marketing teams by
demonstrating their flawless procedures. They can aid customers with installation and
maintenance of the product.
The factory should begin its transition into a service factory by identifying a focused set
of consumer needs and satisfying those needs quickly. Four alternatives of doing so are as
follows:
 The Laboratory – The factory’s capability to test new products and processes and ensure
the manufacturability and quality of goods provides an opportunity to serve as a lab.
Group No. 4 | Marketing of Services

 The Consultant – Factories can form talent pools that provide expertise advice. The
workers can be trained in matters such as design and quality and then sent to customers
for providing them with solutions.
 The Showroom – In high-technology businesses, the factory can serve as a live unit of the
systems, processes and products it manufacturers. In order to implement this strategy
successfully, marketing and manufacturing employees have to work in tandem to satisfy
customer expectation, shop-floor workers have to be trained in soft skills and the
factory’s layout should highlight the processes which are profit-maximizing.
 The Dispatcher – Factories can support the sales of their products by providing customers
with replacement of defective parts and replenishment of stock. They can supply
customers with computer terminals linked to the factory’s production-control system.
Though these models have been described individually, there is a certain amount of
overlap. A factory can be an effective dispatcher when it has customer information readily
available. Similarly, it can serve as a consultant only when it has detailed product and market
knowledge. This change has to be facilitated by manufacturing managers. They have to
believe in an open system in order to become a full-fledged service factory. Strategy helps
the factory thrive in an open system approach. Working collaboratively helps the factory
achieve competitive advantage through improved productivity. It is inevitable for businesses
to master the science of manufacturing. The factory has to develop knowledge workers who
can help innovate in selected aspects of product performance. Service tasks of a business
have to be integrated with the work of a factory.
Group No. 4 | Marketing of Services

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Reading Summary: The Service Factory

Group No. 4 | Marketing of Services

Group No. 4 | Marketing of Services

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