Quality, capacity and productivity in service industries

Abstract

This paper presents a four part model of service delivery based on inputs, intermediate output, and outcomes, It argues that productivity is largely determined by managing stage 1, the relationship between inputs and intermediate output; capacity is stage 2, the relationship between intermediate output and actual output; and quality is concerned with the issue of ensuring successful outcomes from actual output. The model is hierarchical in that both capacity management and quality management depend upon actions taken in the preceding stages. The paper then goes on to relate the model and these issues to three clear trends in service provision: production-lining, decoupling and increasing consumer participation in the experience. The role of the proposed model is to facilitate students and managers of service operations understanding of operations at unit level.