The customer's role is different. In service industries, personal service is offered and the customer is more immediately active. Customer reaction is more immediate and less predictable so such systems demand more sensitive, personal control. The degree of customer contact affects system efficiency. The Medical profession's case about health service reforms argues that a doctor cannot plan her work as effectively as she would like as the consulting needs of patients vary.
Productivity is more difficult to measure and quality involves more subjective assessment.
Many organisations do all four. BMW make cars, sell and transport them direct to dealers, offer finance deals and provide after-sales support. Restaurants transform veg. Conflicts and Objectives. Staff productivity without extra pay may be souyght but workers may resist increased work tempo.