Production Line Approach to Service
The service sector of the economy is growing in size but shrinking in quality. So say a lot of people. Purveyors of service, for their part, think that they and their problems are fundamentally different from other businesses and their problems. They feel that service is people-intensive, while the rest of the economy is capital-intensive. But these distinctions are largely spurious. There are no such things as service industries. There are only industries whose service components are greater or less than those of other industries. Everybody is in service.
Often the less there seems, the more there is. The more technologically sophisticated the generic product (e.g., cars and computers), the more dependent are its sales on the quality and availability of its accompanying customer services (e.g., display rooms, delivery, repairs and maintenance, application aids, operator training, installation advice, warranty fulfillment). In this sense, General Motors is probably more service-intensive than manufacturing-intensive. Without its services its sales would shrivel.
Thus the service sector of the economy is not merely comprised of the so-called service industries, such as banking, airlines, and maintenance. It includes the entire abundance of product-related services supplied by manufacturers and the sales-related services supplied by retailers. Yet we confuse things to our detriment by an outdated taxonomy. For example:
The First National City Bank (Citibank) is one of the biggest worldwide banks. It has about 37,000 employees, over half of whom deal directly with the public, either selling them things (mostly money and deposit services) or helping them with things they have already bought (cashing checks, taking additional deposits, writing letters of credit, opening lock-boxes, managing corporate cash). Most of the other employees work back in what is called “the factory”—a massive congeries of people, paper, and computers