Service manufacturing or Manufacturing services?

Ford is remembered for his production genius. But he was actually a marketing genius. He figured out that if he can make Model T cheap, he can sell millions of cars to American public and make a lot of money. His production is the result of his marketing acumen, not the other way round. Thus born the assembly line that Charley Chaplin makes fun of, in the movie of same name.

Overtime, the production system is being perfected to such an extent that any job can be broken into separate parts and studied, what Taylor did in scientific management. This led to phenomenal productivity although it assumed worker is also a machine (alternative was Hawthorne studies which said happy worker is productive worker)

But services were a different ball game. How can you increase the productivity of a knowledge worker? But that is exactly what the BPO companies are doing. They have deskilled every aspect of the work, creating standards for tasks like answering the customer call to creating research reports, Financial statements etc. in the process driving down costs for big companies. The companies like Asian paints have the practice of checking the workers’ lunch boxes before they leave after work for expensive parts, while BPO companies have eliminated paper, banned mobiles during work and scan employee mails and implemented a thousand other policing strategies to protect equally expensive data.

Not just BPO, even SAP, which was once considered the domain of consultants have been deskilled to such an extent that office boys do the entry now. Standards have been created for every application, be it mining data or preparing chef’s special soup. Due to this, services are slowly acquiring the flavor of assembly line manufacturing, creating a similar productivity revolution.

If service is becoming manufacturing, what is manufacturing becoming? In olden days, modern factories (GM tried unsuccessfully to build an automated factory at a whopping $50 billion) were a sign of triumph. Not anymore. The less the company produces the better. GM is now an assembly line with all functions from design to manufacturing of complex parts being outsourced to Chindia. What is it left with? After sales service, of course. The companies are discovering that a lot of money can be made with maintenance and service contracts.

So, with the line becoming thin, what is the end? Infosys BPO CEO reckons people especially in developed countries who had been long doing what was once complex jobs may suddenly find jobless unless they learn newer things, or work in India!