Industrialization as a Business Model


IndustrializationWhen we talk about industrialization, we generally think of an assembly-line setup or a factory production environment where people are working on standard processes and functions. In general perspective, we can look at Industrialization as a part of a wider modernization process, where development is closely related with process, technological and innovation. Looking back at the history of Industrialization, we see it as a phase in social and economic change that transformed human groups from an agrarian society into an industrial one.

In a modern day society the definition of Industrialization has gone through a transformation. Businesses are adapting the theory of industrialization and are combining it with strategic management initiatives. The service sector in particular is now being closely linked to the process of Industrialization. The key factor in industrialization is to plan and provision services as an industry process that is subject to industrial optimization procedures, such as standardization, bench marking and quality control.

The reason why the concept of Industrialization came into picture as a business model is because in the year 1972 the service sector suffered from high degree of inefficiency and variation in quality. The reason was that each service offering was treated as an isolated entity or event. There was an anxious need for a system or process that could amalgamate all different elements of service events and standardize the offering. So more like defining and executing repeatable function with predictable result, that is accelerated by technology to achieve far higher levels of productivity. The influence came from the manufacturing sector; where with the help of automation and statistical quality control, better products could be manufactured with consistency and quality. The same theory was applied to the service industry and the results were remarkable. Two apt examples are the case of McDonalds and WalMart.

WalMart in specific has been very instrumental in adopting the Industrialization process, specifically in their supply chain management system, ex. products are always moving and the supply-demand cycles flow almost instantaneously to market demand, with inventories kept at a bare minimum always.

However, after almost a decade of business Industrialization influence, many companies and industries are now facing varied consequences. Things like low employee morale, attrition and a gradual dip in service quality are the outcomes of and industrialized working environment. Customers feel that they are missing that “personal touch” or “human factor” while doing business. Many employees of such industrialized companies feel like working in a very robotic environment where there is great dependability on processes and technology.

Latest developments in Industrialization environment show that companies are now gradually becoming more cautious about personalizing their service offerings. Employees are now been trained and empowered to customize the service encounter to the individual characteristics of customers. So we see a trend where industrialization is now been followed more as a backbone to perform a function, but the emphasis is still on giving that personal or human touch to business and customers.

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