According to an article Titled "The Big Picture" by Daniel Altman in the May 2004 issue of Business 2.0, Fifty years ago the typical manufacturing worker produced $48,000 worth of products/services (in 2000 dollars) and the typical service sector worker produced about $39,000. Today the service worker's output has risen by 47% to $54,000, but the manufacturing worker's output has shot up by an astounding 330% to more than $207,000.
Manufacturing's productivity has increased because they had to compete with the rest of the world. Until recently the service-based industries had been sheltered from global competition. No more... Now not only must service sector companies compete with other companies worldwide, but individual service workers must compete for their jobs to stop them from being outsourced overseas.
So is there anything that service-based industries can learn from manufacturers; who have been competing on a global scale for 50 years? Yes ==> Quality isn't just for products! Manufacturers have achieved their tremendous increases in productivity by taking the teachings of W. Edwards Deming and others and driving quality into every aspect of the company.
In a manufacturing company, any activity that does not produce customer value is considered waste, and therefore a quality defect. Just like a software bug or a product malfunction, waste is tracked and eliminated.
Do you know of many service companies that consider meetings that start late a quality defect? A report that no one reads a quality defect? A stack of work in an inbox a quality defect? If the service sector learned from its manufacturing brethren and more did, the service sector could start to see similar productivity increases to the 330% achieved by manufacturing.
Do the math. If any service company increased its output per employee by 20% what would that do to its revenue? To its profits? Sure seems like a no brainer.