Service Factory (Encyclopedia of Management)
The term service factory, coined by Richard B. Chase and Warren J. Erikson, represents the idea that the factory can be a source of customer service in addition to a place where products are manufactured. Since those who make products (factory workers) are often more knowledgeable about them than those in field service, it stands to reason that they can contribute to sales and marketing efforts. In addition, factory workers can be a resource for installation, maintenance and troubleshooting issues involving the products they had a hand in producing.
Richard B. Chase and David A. Garvin identify four (although there can be more) roles that the service factory can play in strengthening a firm's marketing efforts. These roles are (1) laboratory, (2) consultant, (3) showroom, and (4) dispatcher.
The service factory can easily serve as a laboratory for testing new products and processes thereby enhancing potential quality and manufacturability of the new products. In addition, the laboratory can serve as a test site for traditional to high-risk experiments to modify or improve existing operations. Chaparral Steel claims that their research and development is done right on the factory floor.
The service factory can also serve as a consultant, solving problems out in the field. Since they have worked extensively with both the firm's products and processes, factory workers are a natural source of technical expertise when problems arise. Tektronix serves as a service factory consultant by providing a postcard with a toll-free number to a phone on the shop floor. In addition, factory floor workers can also serve as trainers for use of the product and quality control.
As a showroom, the service factory can serve as a working demonstration of the systems and processes the firm uses to manufacturer products as well as a showcase for the factory's products themselves. Nissan in Smyrna, Tennessee offers weekly tours, open to the public, where visitors ride a small train, complete with tour guide, through the manufacturing facility. Throughout the tour the train stops at points of interest, such as robots painting car bodies, where the tour guide emphasizes the quality and superiority of Nissan's processes. Frito-Lay's Vancouver, Washington plant offers three different factory tours, one for wholesalers, one for retailers, and one for the public.
As a dispatcher the service factory serves as the linchpin of after-sales support. The service factory can help their customers avoid stock-outs and the resulting downtime by quickly providing replacement parts. This responsiveness can then be emphasized by the company's sales force. Of course, this requires that the dispatcher firm be able to anticipate demand surges.
In order to make the service factory work, manufacturing and marketing personnel must work well together. Shop floor employees will need to be trained in communication skills. In addition to marketing personnel, factory managers and workers must understand customer needs.
There is evidence that the service factory concept can be applied in countries other than the U.S. as examples have been explored in the U.K., Germany and Hungary. In addition there are recommendations that the service factory concept be applied throughout global supply chains and not just limited to single factory use.
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