This paper discusses the changing service delivery model in the US service industry; from long back service industry was following the trend of adopting industrial mass production model, which focuses on machines, lowering the cost of production, increasing profit and gaining operational efficiency. However, these elements are not providing benefit to organizations any more. With increasing competition and development in the market, organizations are finding it hard to strive profitably in the market and also lower down customer turnover rates. For instance, McDonald, who was famous for its mass production strategy is also facing tough time to compete with changing market demand.
Further analysis on the model helped in understanding various big reasons for service failure, which include failure in service design, which states that majority of the focus was given on machines and not improving employee performance, examples discusses scenarios in which customers are seeking help and employees don't step ahead to help them, which causes high dissatisfaction. Front line employees who are in direct contact with customers, representing the company to them are recruited without proper interviews and other selection criteria; no adequate training is being given to staff on customer management. Apart from this, failure to resolve customer complaint also causes high dissatisfaction among customers.
Other problems include focus towards lowering cost of production, poor performance measurement criteria etc. there is serious need for implementing change in the service model, the new model states that there is need to become customer centric organization from product or operation centric company; customer demand should be analyzed first; employees who are in direct contact with the customer must be selected and trained well; a strong workforce is more powerful than new technology, it is difficult to copy. Apart from this, performance based measurement system should be kept. Finally, analysis on this paper showed that Service Company can be simply defined as the one which is for the customer, according to their needs, give them highest importance and manage them through effective relationship building with efficient workforce.