Service Productivity Concepts

    To develop an understanding of service productivity, we need to have a clear understanding of the following services production concepts:


    The rate at which inputs are converted into outputs, e.g., calls per sales representative; customers served per catering assistant.

    The emphasis is often on quantitative measurement, and the objective is one of securing the maximum output from the minimum input.


    The extent to which purposes/goals are achieved, e.g., the number of productive and profitable calls per sales representative and the nature of customer relationships established and fostered; the number of satisfied customers served per catering assistant.

    The emphasis is on qualitative measurement and the objective of meeting customer needs and delivering service quality.


    The cost of selecting and hiring people, materials, and equipment and conversion through training and installation into resource inputs capable of providing service.

    It is not a measure of performance but can have an impact on the level of performance.

    Production Function

    All the resources (staff, buildings, equipment, and consumables) are combined to produce Intermediate outputs, i.e., the capacity to produce the relevant service (hospital beds, train seats, restaurant seats).

    Capacity Utilisation

    The ratio of intermediate output to final output, i.e., how good is management at converting the intermediate output to final output into customer take-up?

    For example, what percentage of seats will be taken up by customers in a restaurant? For services in general and in particular, where advance preparation is involved (meals in a restaurant), accurate demand forecasting will become part of effective marketing management.

    Disclaimer: While we make every effort to update the information, products, and services on our website and related platforms/websites, inadvertent inaccuracies, typographical errors, or delays in updating the information may occur. The material provided on this site and associated web pages is for reference and general information purposes only. In case of any inconsistencies between the information provided on this site and the respective product/service document, the details mentioned in the product/service document shall prevail. Subscribers and users are advised to seek professional advice before acting on the information contained herein. It is recommended that users make an informed decision regarding any product or service after reviewing the relevant product/service document and applicable terms and conditions. If any inconsistencies are observed, please reach out to us.

    Latest Articles

    Related Stories

    Leave A Reply

    Please enter your comment!
    Please enter your name here

    Join our newsletter and stay updated!