In 1972 Theodore Levitt and the Harvard Business Review (HBR) published a piece on Customer Service titled - Production-Line Approach to Service.
It’s fascinating to me how nearly 50 years later the same challenges and conversations are still relevant in the Manufacturing and Service industries.
I think that technology and the realization that ALL aspects of one's business needs to have Servitization at the center of every conversation and process is now FINALLY very much a reality.
“ Servitization: In essence servitization is a transformation journey - it involves firms (often manufacturing firms) developing the capabilities they need to provide services and solutions that supplement their traditional product offerings.”
So let’s take a step back in time to highlight some of this evolution of thinking presented by Theodore and highlight some of the key points and why now is the time for change.
In short, service thinks humanistically, and that explains its failures.
The more technologically advanced the product is, the more reliant its sales are on the service components.
So in order for Manufacturing organizations to evolve and succeed, they must think of themselves as performing manufacturing functions when it comes to their so-called “service” activities.
Establishing Manufacturing Processes & Thinking Beyond the Shop-Floor!
Manufacturing has always been Lean Focused around the Product. Optimizing flow, reducing waste and improving quality with continuous process improvement.
Service, on the other hand, has been in the field, in call centers, even outsourced, distant and loosely supervised and controlled with variable conditions.
In short, manufacturing thinks technocratically, and that explains its successes.
Manufacturing looks for solutions - continuous improvements.
Continuous improvements around what kinds of technologies, automation, tools, skills, processes, organizational change, incentives, controls, and audits should be improved to deliver the intended outcomes.
Conversely, service looks for solutions in the people or performers of the task.
Service remains antiquated; old school, and lacks the technology and processes that our tech savvy world expects.
The solution to improved service has always been treated with the mentality of we need more people, and we’ll improve the skills and attitudes of the performers of that service to make it successful.
Time for Transformation
While it may seem like there hasn’t been major updates in these industries over the past 50 years to fix our thinking or address the true problems - I think technology and disruption is occurring at such a rapid pace that change is now inevitable.
Manufacturing is now all about the Customer and their experiences and journey, not just the product.
This is why we are so passionate about helping Manufactures move their ERP systems to the Cloud and more specifically to Rootstock on the Salesforce platform. If all these truths exist - and the focus is on servicing the customer, then moving your business to be on the same platform as the #1 Customer Relationship Management (CRM) system in the world is only logical right?
Customers want transparency. Customers want self-service, customers want tools and technologies to make buying and servicing EASY.
They want personalization. They want to be marketed to differently. They want omni-channel experiences that yield results and not frustration.
It’s now 2018 and it’s time for Manufacturers to break the mold and extend their manufacturing processes and thinking beyond the shop-floor!