Service Factory

The service sector plays an increasingly important role in modern economies. Recent news indicates that while the manufacturing sector in the USA lost jobs for 40 consecutive months preceding the fourth quarter of 2003, the service sector had a net gain over the same period. With the service sector contributing 80 percent of the 2002 Gross National Product (CIA World Fact Book, 2003) and accounting for nearly 80 percent of the US workforce (Fitzsimmons and Fitzsimmons, 2004), attention is being focused more and more on this sector. Consequently, service managers and academic researchers are now directing their efforts to understanding how customers perceive the quality of services, as well as how these perceptions translate into customer satisfaction and behavioral intentions.

Overview

Service has held a limited position in manufacturing strategy research. Service, as a desired outcome, generally has been described as meeting delivery dates, achieving certain inventory service levels, or providing after-sales service. Indeed, most models of manufacturing strategy have focused on methods of achieving, and trading off, cost, quality, flexibility, and delivery performance objectives. The result of this limited view is that the full range of services that could be provided by the factory largely has been overlooked as a source of manufacturing competitiveness.

A study conducted by the Forum Corporation ( 1988) also found that poor after-sales service was the primary reason customers switched from one vendor to another.

But now it is gaining importance. Some researchers has also emphasized the importance of service in manufacturing firms; they pointed out that computer manufacturers with technically superior products have been driven from the market because of poor customer service and a lack of software. They also cite General Electric's intensive company-wide efforts to focus on the