Manufacturing, Service Converge

by Deb Spehar

A caller left me a voice-mail message the other day in which he complained bitterly about several recent issues of Quality Progress. His unhappiness was based on a belief that we were going "soft," with too much emphasis on topics like teamwork and communications. At one point in his tirade, there was a pause--and then a thunk. "That was the sound of me throwing your magazine in the trash," the caller added, and then he hung up.

It's probably not too much of a stretch to guess that the reader was from the traditional, manufacturing side of quality. And I can imagine that he and others who work in industry may look at this month's issue on quality in the service sector and wonder if there is anything for them to gain by reading it.

The short answer is yes. And here's why:

The explosion of growth within the service sector has masked the fact that services have not only grown as a separate part of the economy but have also become an increasingly important component of manufacturing. With every passing day companies that are known for their manufacturing prowess are starting to behave more and more like service providers.

Consider some statistics. A 1996 Commerce Department study found that from 1977 to 1987 U.S. industries increased their use of service inputs by as much as 500%. That same Commerce study showed that in 1992 "about a third of all workers employed in U.S. manufacturing industries were actually doing service-type jobs (e.g., in finance, purchasing, marketing and administration)."

Listen to Jack Welch, who has become one of quality's biggest boosters from his position atop General Electric Co. In addition to six sigma and globalization, Welch has staked the future of his company on its ability to compete as a service provider.

"The headset of the company [has changed] from that of a provider of products augmented by ancillary services to a company that is overwhelmingly a source of customer focused, high value, information technology based productivity solutions--as well as a provider of high quality products," Welch wrote in this year's GE annual report.

This shift means that even quality professionals who view themselves as working in manufacturing need to be aware of the special challenges presented by the service environment. Even without leaving employers, even without changing departments or job titles, they may soon find themselves confronted with the assignment of using quality in the service sector.

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Miles Maguire

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