Challenges in the Service Industry

There are many challenges in service industries that do not exist for manufacturing firms. Scheduling, labor cost, forecasting demand, ensuring inventory levels stay at appropriate levels, facility maintenance, and a higher degree of customer contact are some yet certainly not an exhaustive list of challenges. Scheduling to meet demand and labor cost in a service environment i.e. a restaurant demand can be a tough area to balance.  Acute weather changes such as a rainstorm are just one of many factors that can have a massive affect on the demand experienced by service firms. In my tenure in foodservice i recall ore than one occasion when an evening would start out slow and then instantly get busy as soon it started raining, usually after the first two servers had been allowed to leave.

Ensuring inventory stayed at appropriate levels is always a challenge due to fluctuations in demand and eating preferences. Selling more fish due to lent would be a seasonal demand change that can be planned for, yet a pop health show mentioning a new superfood was discovered and can cause an unforeseen spike in demand if it is an item that is sold. Facility maintenance poses a perticular challenge for service firms due to a higher degree of customer contact and facility utilization by non-employees. Customers are less likely (sadly) to be respectful of a facility than employees because they are paying guests and not directly affected if something breaks, when they are done eating they leave and go home. This can cause challenges in maintaining a clean and well maintained facility and create more expense. 

All of these challenges can be multiplied by the high percentage of low-skill entry-level jobs in the service industry. These low-skill jobs experience a higher degree of turnover, I can back this up from first-hand experience, this creates even more cost in training and a lower degree of service being provided to customers. As a whole service industries are consistently pressed to be more efficient, which typically entails more sales at lower cost. This translates to pushing addons and alcoholic or specialty drinks to customers while providing better service with less people. Sound crazy? You're right, this is just the tip of the many challenges for management and employees in the service sector.

This was an assignment for one of my college courses I felt compelled to share rather than just allow it to sit on the digital shelf, my hope is that a meaningful conversation will break out on this.

What other challenges are faced in service firms?The example I used was a restaurant, what other services have specialized challenges that must be overcome?