Manufacturing does not just offer products, and service organizations do not just offer services. Both types of organizations normally provide a package of goods and services.
Although service provides cannot inventory their outputs, they must inventory the inputs for their products.
As for customer contracts, many service operations have little outside customer contracts. Such as the backroom operations of a bank or the baggage handling area at an airport.
- Strategic Decision: Manufacturers do not just offer products, and service organization does not just offer services. Both types of organizations normally provide a package of goods and services. Customers except both good service and good food at a restaurant and both good service and quality goods from a retailer. Manufacturing firms offer many customer services, and a decreasing proportion of the value added by them directly involves the transformation of materials.
- Process: Even though service providers cannot inventory their outputs, they must inventory the inputs for their products. These inputs must undergo further transformations during the provision of the service.
- Quality: As for customer contact, many service operations have little outside customer contacts, such as the backroom operation of a bank or the baggage handling area at an airport. However, everyone in an organization has some customers outside customers or inside customers whether in services or manufacturing.
Operations management is relevant to both manufacturing and service operations. You need to know about operations management, regardless of the type of organization.
Definition of Manufacturing and Service
Manufacturing process: Manufacturing can be defined as the process of covering raw materials, components, or parts into finished goods that meet customer satisfaction.
Service process: A valuable action, deed, or effort performed to satisfy a need or to fulfill a demand. Differences between manufacturing and servicing are as follows:
Similarities between Manufacturing and Service
The similarities between manufacturing and service operations are given the following:
- Manufacturers do not just offer products, and service organizations do not just offer services. Both types of organizations normally provide a package of goods services.
- Generally, service organization cannot inventory their outputs, but manufacturing firms that make customized product also cannot inventory their output.
- Everyone in an organization has some customers, whether in service or manufacturing.
- Both of the organizations require hard labor.
- Both have a very good return on investment.
- Both have huge marketing potential.
- Both have forecasting and capacity planning to match supply and demand.
Difference between Manufacturing and Service
The difference between manufacturing and service operations fall into the eight categories as follows:
|Physical nature of the product||Manufacturing organization provides physical and durable products.||Service organization provides the intangible and perishable product.|
|Inventory||Output can be inventoried.||Output cannot be inventoried.|
|Customer contact||It involves low customer contact.||It involves high customer contact.|
|Response time||It requires a long response time to meet customer demand.||It requires a short response time to meet the customer’s demand.|
|Location and size of the operation||It serves the regional, national, even international market.||It serves in the local market.|
|Facilities||It requires a larger facility, more automation, and greater capital investment.||It requires small facilities.|
|Intensive||It is capital intensive organization.||It is a labor-intensive organization.|
|Quality||Quality can be easily measured.||Quality can’t be easily measured.|
|Nature||Manufactured goods are physical, durable products||Services are intangible, perishable products often being ideas, concepts, or information.|
|Facilities||Manufactured goods are output that can be produced, stored, and transported in anticipation of future demand.||By contrast, service cannot be produced.|
|Contact||Most customers for manufactured products have little or no contact with the production system.||However, in many service organizations, the customer is input and active participation.|
|Time||While manufacturers generally have days or weeks to meet customer demand.||Many services must be offered within minutes of customer arrival.|
|Transport||Manufacturing facilities often serve regional, national, or even international markets.||Service cannot be shipped to distant locations.|
|Quality||As manufacturing systems tend to have tangible products and less customer contact, quality is relatively easy to measure.||By contrast, the quality of service system which generally produces intangible is harder to measure.|