It originated in the early 1970s, at a time when various quality control techniques were being successfully implemented on production assembly lines.
Theodore Levitt (1972) argued that the reason the service sector suffered from inefficiency and wide variations in quality were that it was based on the craft model.
He felt that service encounters could be systematized through planning, optimal processes, consistency, and capital intensive investments.
Employees found working under these conditions disempowering, resulting in low morale, high staff turnover, and reduced service quality.
Subsequently, scholars developed the service-profit-chain concept to understand how employees and customers interact to create value.