Simultaneous Production and Consumption

Whereas most goods are produced first, then sold and consumed, most services are sold first and then produced and consumed simultaneously. A restaurant services cannot be provided until they have been sold, and the dining experience is essentially produced and consumed at the same time. Frequently this also means that the customer is present while the service is being produced and thus views and may even take part in the production process. This also means that frequently customers will interact with each other during the service production process and thus may affect each others’ experiences. For example, strangers seated next to each other in an airplane may well affect the nature of the service experience for each other. That passengers understand this fact is clearly apparent in the way business travelers will often go to great lengths to be sure they are not seated next to families with small children. Another outcome of simultaneous production and consumption is that service producers find themselves playing a role as part of the product itself and as an essential ingredient in the service experience for the consumer.

Because services often are produced and consumed at the same time, mass production is difficult if not possible. The quality of service and customer satisfaction will be highly dependent on what happens in “real time,” including actions of employees and the interactions between employees and customers. Similarly, it is not usually possible to gain significant economies of scale through centralization. Usually operations need to be relatively decentralized so that the service can be delivered to the consumer in convenient locations. Also because of simultaneous production and consumption, the customer is involved in and observes the production process and thus may affect (positively or negatively) the outcome of the service transaction.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

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