April 2001
Volume 8 • Number 2
Contents
Comparing Quality Management Practices in the Manufacturing and Service Industries: Learning Opportunities
by Hongyi Sun, City University of Hong Kong
This article records empirical research regarding the ways in which quality management practices differ between manufacturing and service industries. It also identifies the ways in which these two industries can learn from each other. The research is based on a survey conducted in Norway. The main findings follow: (1) manufacturing industries exceed service industries in many aspects of quality management; (2) service industries exceed manufacturing industries in customer consideration and satisfaction. Manufacturing companies that focus solely on process and product quality should include service quality as a concern, learning service quality management and customer satisfaction techniques from leading service companies. Conversely, service companies should maintain a balance between external customer satisfaction and internal productivity and profitability, learning quality assurance, management and methods from leading manufacturing companies. Implications for future research and quality award models are also discussed.
Key words: comparative study, manufacturing service, quality management
INTRODUCTION
Research on quality management has increased dramatically in the past decade, both in the manufacturing sector (Filippini 1997; Chapman and Hyland 1997; Goulden and Rawlins 1997; Kasul and Motwani 1995; Maani, Putterill, and Sluti 1994; and Müller 1995) and in service industries (Shemwell, Yavas, and Bilgin 1998; Vuorinen, Järvinen, and Lehtinen 1998, Fung 1998, and Terziovski and Dean 1998). However, there is a big gap in empirical research related to the differences and similarities in quality management practices between the two industries and in what the two can learn from each other. This study aims to fill this gap.
Manufacturing and service industries are different in their operations processes, customers, and product features (Chase, Aquilano, and Jacobs 1998). In manufacturing companies, when demand is higher than supply, orders can be taken in advance and supplied later. During slow seasons, products can be stored for seasons of higher demand. In service companies, service must be delivered on time and cannot be stored. For example, beds in hotels cannot be reserved for the high season. The implication is that quality issues have to be dealt with on the spot and on time.
Manufacturing and service industries have differing customer relationship needs. For example, product quality is controlled by the producers during the manufacturing process. Although companies produce according to customer specifications, customers do not influence the manufacturing process once the specifications are determined and the product is designed. In service companies, service producers and service consumers are each involved in both the operation and the delivery process. For example, in hospitals, the cooperation between health care professionals and patients influences the effects of treatment.
Another way in which the two industries differ is in their specifications of products and services. In manufacturing industries, customers directly influence product specifications. Factors that influence customer satisfaction can be considered in advance during the design and production stages. In service industries, however, customers do not propose standards and official requirements for service specifications; requirements may vary considerably from customer to customer.
The ways in which product and service quality are measured and evaluated differ between the two industries. Products from manufacturing industries are tangible and visible, while services are intangible and invisible. As a result, service quality is difficult to measure and depends upon the perception of customers. The quality of manufacturing products is relatively easier to quantify. A product is either accepted or rejected. By contrast, the quality of a service is difficult to measure and quantify. In addition, when a customer is dissatisfied, identifying the problem may prove difficult.
The indicators of goods quality and service quality are defined differently, as well. Dimensions of quality for physical goods include performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality (Garvin 1987). Parasuraman, Zeithaml, and Berry (1985, 1988) proposed five dimensions for service quality. They are tangibles, reliability, responsiveness, assurance, and empathy.
Because of the differences in product natures, operations processes, customers, and indicators of quality, quality management is also different and the two industries have different problems and difficulties (Dale et al. 1997). Defining and controlling service quality is more difficult (Ross 1994). Unlike manufacturing industries, service industries share unique characteristics that make the process of quality control less managerial. Moreover the level of quality expected is less predictable. Several features, including the intangible nature of the output and the inability to store the output, affect the operations of service companies. However, the most significant problem with the delivery of services is that it is typically measured at the customer interface, the one-to-one and face-to-face interaction between supplier and customer. If a problem occurs, it will be too late for correction.
According to these discussions, now it can be proposed that the management of quality in a service environment may be different from that in a manufacturing environment. However, empirical research on this topic is very scarce (Solis et al. 1998; Beaumont, Sohal, and Terviovski 1996). This research aims to empirically investigate the differences in quality management between service and manufacturing industries and explore the areas in which manufacturing and service companies can learn from each other.
This article is structured as follows. The next section introduces a framework of total quality management (TQM) and relevant hypotheses. After that, research methods and empirical data are described. Then, the differences in quality management practices between manufacturing and service sectors are analyzed. Finally, contributions, practical implications, limitations, and future research are concluded.
