Blurring the boundary: convergence of factory and service processes

Abstract

Purpose In order to emphasize the universality of operations management concepts, this paper develops an integrative view of the similarities and continuities between “services products” and operations; and “goods products” and factory operations. The purpose of this paper is to move toward a better understanding of the impact of this convergence. Design/methodology/approach By reviewing the literature and trade press examples of evolution in both manufacturing and services businesses, it develop a model for understanding the observed phenomena. Findings This paper finds that services operations are continually adopting the characteristics of traditional manufacturing as they seek to grow and gain increased profitability through economies of scale. At the same time, traditional manufacturing/factory operations continually seek to differentiate themselves by offering more services such as customization, flexibility, and just‐in‐time; without giving up their economies of scale. As goods and services products become more integrated, these two distinct types of operating systems also converge. This paper also finds that information technology (IT) is pervasive, but used differently; and it develop new models to help us to understand the role and importance of IT in different operating systems and its impact upon the economics of innovation in operations. Originality/value This paper offers an integrative platform for future discussion and research on the convergence of factory and service operations, the integration of marketing and operations concepts and decisions, the design/management of operations processes, and the role of information systems and technology; in achieving sustained competitive advantage for any business.

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