The Industrialization of Services

Recognition of the developing trend towards the industrialization of services can be traced back as far as 1972 and Theodore Levitt’s seminal Harvard Business Review (HBR) paper of that year, “Production-line Approach to Services” and his later HBR paper in 1976, “The Industrialization of Service”.

Indeed in these same papers he pointed out that this has actually been evolving since the beginning of the 1900’s as the effects of the leaps in technology and know-how, achieved during the Industrial Revolution of the late 18th and early 19th centuries, spilled over into the services sector.

This “industrialization” is following a form of Darwinian evolution, engulfing sectors and organisations where a form of “natural selection” is taking place (or not!) in the face of the changing economic and competitive environment.

It is a feature of this evolutionary process that the industrialization of the “products” sector, driven by the Industrial Revolution, developed sophisticated methods, tools, technologies and processes first and why together these best practices have become known as “industrialization”.

For the reasons above, some sectors have evolved sophisticated methods, tools, technologies and processes early, in evolutionary terms, in their constituent organisations while other organisation and sectors have lagged behind.

Industrialisation therefore brings to an organisations the capabilities and know-how required to provide to customers a set of defined services with high levels of effectiveness, efficiency, service and quality using the sophisticated methods, tools, technologies and processes that in the main are to be found in the best practices of the best organisations in the industrial sectors.

There are three main challenges in bringing industrialisation to a non-industrial organisation.

1. The first challenge is in developing the skills & competences that constitute industrialisation.
   
2. The second challenge is in adapting these skills & competences to suit the sector and organisation in particular.
   
3. The third challenge is the lack of exposure & experience of non-industrial sector management & staff in working with and applying these (modified) industrialisation methods and tools.

The tendency for non-industrial sector management and staff to have developed their careers within the non-industrial sectors exclusively, thereby having little or no exposure to industrialization tools and methodologies, has only served to exacerbate this.

t has taken the motor industry, regarded by many as the most one of the most advanced industries, over 100 years to achieve the heights of excellence. Toyota, its recognised leader in this respect, itself came new to the motor industry in 1933 but had extensive industrial experience developed in the automation of the textile industry going back to 1926 under its parent, Toyoda Industries.

There is no reason to believe therefore that sectors or organisations that have lagged behind those that have adopted industrialisation can acquire and embed these best practices overnight.

Equally however, sectors or organisations who fail to adopt industrialisation best practices and begin the journey are facing the unenviable position of being left behind by those competitors who adopt early and with commitment.