Variety and Variation in Service Industry versus Manufacturing

In this post, we discuss the one key difference between service and manufacturing, Previously, we discussed how production and consumption is different in service versus manufacturing; we also covered the intangible differences between service and manufacturing and the concept of Inventory and how the concept of inventory might be understood in a service context and a manufacturing context.

Today, we’ll discuss the concept of “variation” in a service context.

What is Variation in Manufacturing?

In a manufacturing context, we understand “variation” to be the non-standard or not-expected experience of a product. For example, suppose you manage a tire manufacturing operation; in that operation, variation might refer to the exact thickness of the tire tread; or the exact spaces between the treads on the tire; or, variation might refer to the height in which the tire bounces when it undergoes fault testing.

All of these measures of “variation” is often captured mathematically by the term sigma, or the average distance from the mean.  Because of the exactness of this measurement, “variation” can often be mathematically modeled in manufacturing.

What is Variation in Service?

Because many important aspects of service are intangible, defining the concept of “variation” can be difficult.

• How does that person waiting on tables serve you today?
• How does the lawyer or accountant serve you today versus how they served you yesterday?
• How is the doctor’s treatment of you today different from last week?

While we might “feel” variation in the above examples, they are very difficult to actually model, capture in the form of numbers, or mathematically explain them.

Why?

Because variation in a service context is often intangible.

Series on Difference Between Service Versus Manufacturing

Go here for details on applying Lean for Service Operations. For other posts in this series, please refer to the table below:

Quality Control

[ad#Chitika-1]Because many services include intangible aspects, it is difficult to quantify and measure.  With a physical product like a stereo system that comes off the production line, we can look at it, subject it to testing, examine it for defects, and easily measure whether or not it meets the specifications.

• How do we measure whether or not a person had a positive experience in a restaurant or other service business?

From a manager’s point of view, clearly this is important, but unlike with a manufacturing business, it is much more difficult to know if you are meeting customer expectations.

As a consequence of our inability to accurately measure what we are accomplishing in the delivery of our service, quality control is a much greater challenge. In service businesses, it is much more difficult to achieve quality control and maintain consistency because of the measurement problems that exist.

What Can We Do?

What are you trying to achieve in the service business? Depending on the kind of service package you are offering the consumer, there are certain things that are vital to the service and they have to be emphasized in its delivery. For example, Federal Express emphasizes speed and reliability – these are often the key drivers of customer satisfaction.

There can be considerable variability due to human nature and how people are feeling at different points in time, the pressure they are under or how they are treated by their employer.

Yet, we see various misapplications of Six Sigma in a service context when, maybe, Six Sigma isn’t a good approach for the specific problem.

Here’s the key takeaway:

It is much more difficult to get consistency in delivering a service than in producing a physical product in a manufacturing system where there are detailed specifications and tight quality control.

It is much more difficult to get consistency in delivering a service than in producing a physical product in a manufacturing system where there are detailed specifications and tight quality control.

Often, our attempts to mathematically model variation in a service context takes on the form of “customer satisfaction surveys” and the like, but those often fail to actually model the variation that happened in the service itself. Instead, it is a measurement on whether we subjectively feel happy with the service or not, not whether the service was consistent.