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Cem Canel
The University of North Carolina at Wilmington, Wilmington, North Carolina, USA
Drew Rosen
The University of North Carolina at Wilmington, Wilmington, North Carolina, USA
Elizabeth A. Anderson
University of Houston, Houston, Texas, USA
Stouffers Hotels, Saks Fifth Avenue, Spiegel example, Lovelock (1984) defines services as
retailers, and 20th Century Fox, have already ``all those economic activities in which the
changed ownership to foreign investors. primary output is neither a product nor a
Additionally, in 1982, the USA was viewed as construction''. This definition seems
a world leader in services. In 1986, The straightforward, but is not particularly
Economist ranked the USA sixth in helpful when one attempts to classify a
worldwide services behind the UK, Spain, restaurant, or a company such as IBM, for
France, Switzerland, and Italy, respectively. that matter. IBM manufactures equipment
In March 1987, the Institutional Investor had but also provides customer service,
lowered the credit rating of the USA from education, maintenance, etc. In fact, all
first to fourth place behind Japan, organizations can be looked at in terms of the
Switzerland, and Germany (Riddle and continuum shown in Figure 1, which depicts
Brown, 1988). This threat to the US service the service content of the organization
sector is real and must not be ignored. (Snyder et al., 1982).
As the underdeveloped countries of the We think about service in humanistic
world progress and gradually catch up with terms; we think about manufacturing in
Table I
Rate of growth of US jobs, January 1982-January 1992
Non-farm jobs, Non-farm jobs, Non-farm jobs, Non-farm jobs, Growth of
January 1982 January 1982 January 1992 January 1992 non-farm jobs
('000s) % ('000s) % %
Service-producing: Finance,
insurance, real estate 5,341 6.0 6,665 6.2 24.8
Miscellaneous services 19,036 21.3 28,577 26.4 50.1
State and local
government 13,098 14.6 15,476 14.3 18.2
Wholsesale trade 5,296 5.9 6,010 5.6 13.5
Retail trade 15,161 16.9 19,118 17.7 26.1
Transportation and utilities 5,082 5.7 5,746 5.3 13.1
Federal government 2,739 3.1 2,981 2.8 8.8
Total 65,753 73.5 84,573 78.3
Goods producing:
Construction 3,905 4.4 4,587 4.2 17.5
Mining 1,127 1.3 657 0.6 ±41.7
Manufacturing 18,781 21.0 18,283 16.9 ±2.7
Total 23,813 26.7 23,527 21.7
Total jobs 89,566 108,100 20.7
Source: Council of Economic Advisors (1992)
[ 53 ]
Cem Canel, Drew Rosen and Figure 1 into intimate contact with the production
Elizabeth A. Anderson The service continuum process'' (Carmen and Langeard, 1980).
Just-in-time is not just for
manufacturing: a service Simultaneous production and
perspective consumption also eliminates many
Industrial Management & opportunities for quality control
Data Systems intervention. Unlike manufacturing,
100/2 [2000] 51±60
where the product can be inspected before
delivery, services must rely on a sequence
of measures to ensure the consistency of
technocratic terms. This is why
output. This emphasizes the importance of
manufacturing industries are considered to
process control in services even more so
be progressive and efficient while service
than in manufacturing, since services at
industries are, by comparison, primitive and
times do not deal with a physical product
inefficient. Levitt (1972) argues that service
to inspect.
industries must take a manufacturing
2 Intangibility. Because services are
approach to service activities ± one that
performances, ideas, or concepts, rather
substitutes ``technology and systems for
than tangible objects, they often cannot be
people and serendipity''.
seen, felt, etc., in the same manner in
Given the unique operational nature of
which goods can be sensed (Zeithaml et
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[ 54 ]
Cem Canel, Drew Rosen and new players that are challenging the practices Integration of JIT themes and service
Elizabeth A. Anderson and philosophies of individual companies, characteristics
Just-in-time is not just for whole industries, indeed the entire US service
manufacturing: a service The main themes of JIT consist of:
sector. Service companies should not make 1 total visibility;
perspective
the same mistakes as their manufacturing
Industrial Management & 2 synchronization and balance;
counterparts did: cutting costs at the expense
Data Systems 3 respect for people;
100/2 [2000] 51±60 of securing enduring competitive strength.
Overzealous cost-cutting may make the 4 flexibility;
companies more efficient over the short run 5 continuous improvement;
but unable to motivate, respond to customers, 6 responsibility for the environment;
or provide quality services over the long run. 7 simplicity; and
The US service sector must re-examine its 8 holistic approach (Chase et al., 1998;
strategy to meet the imperatives of a new Stonebraker and Leong, 1994).
competition . . . (Burnham, 1987).
These basic themes of JIT have been
The above discussion expresses the need to successfully applied in the manufacturing
improve productivity and quality in service sector and they can be modified and extended
businesses. Many of the JIT techniques used further in application to the service sector.
by manufacturing firms can be successfully These themes of JIT can be examined within
applied by service organizations (Chase et al., the framework of the differences between
Downloaded by Carleton University At 20:10 16 March 2015 (PT)
numerous studies in the literature. Chase, R.B. and Tansik, D.A. (1983), ``The
Transferring this body of knowledge in the customer contact model for organizational
manufacturing sector to service industries design'', Management Science, Vol. 29 No 9,
requires further research in various areas. pp. 1037-50.
One of these is an analysis of how the Chase, R.B., Aquilano, N.J. and Jacobs F.R. (1998),
philosophy of JIT relates to services where Production and Operations Management,
Irwin/McGraw Hill, New York, NY.
the factors under consideration are customer
Chase, R.B. and Stewart, D.M. (1993), ``Make your
contact/interaction, labor intensity, and
service failsafe'', COMER Working Paper
customization, as outlined by Haywood-
93- 018R.
Farmer (1988). Each of these factors is
Crosby, P.B. (1979), Quality is Free, McGraw-Hill,
present in all services at various levels. New York, NY.
Research has shown that advances in Council of Economic Advisors (1992), Economic
productivity and efficiency in services are Indicators, prepared for the Joint Economic
directly related to the design of the service Committee, Government Printing Office,
system (Rosen, 1990). Further research needs USA, June, p. 14.
to explore the applicability of JIT in services Drucker, P. (1991), ``The new productivity
that offer a tangible output as opposed to challenge'', Harvard Business Review,
those services whose primary output is an November-December pp. 69-79.
act or performance (i.e. consulting services). Fitzsimmons, J.A. and Sullivan, R.S. (1982),
Other research avenues could entail the Service Operations Management, McGraw-
investigation of the supplier's role in the Hill, New York, NY.
implementation of JIT concepts in services. Fitzsimmons, J.A. and Fitzsimmons, M.J. (1994),
Can we assume that the supplier's role in Service Management for Competitive
services will be the same as in a manufacturing Advantage, McGraw Hill, New York, NY.
GroÈnroos, C. (1983), ``Innovative marketing
environment, or will there be a different set of
strategies and organizational structures for
roles to analyze? Finally, the problems of
service firms'', in Berry, L.L., Shostack, G.L.
measuring service quality and productivity
and Upah, G.D. (Eds), Emerging Perspectives
need to be addressed. The problems may be
on Services Marketing, American Marketing
caused by the measurement technique in use Association, Chicago, IL, pp. 9-21.
and not by the process employed. This is an Hernandez, A. (1989), Just In Time
important area for future research. The service Manufacturing, Prentice-Hall, Englewood
industry will not be able to document any true Cliffs, NJ.
gains in productivity and quality without a Inman, R.A. and Mehra, S. (1991), ``JIT
valid measurement methodology. applications for service environments'',
Production and Inventory Management
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[ 59 ]
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[ 60 ]
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