Differences Between Manufacturing and Service Operations

Generally speaking, process efficiency is the most important to manufacturing operations while production and marketing are inseparable to service operations.

Manufacturing’s tangible output can be consumed overtime, less labor and more equipment are used in production, since automation has increased capital intensity while as a result reduced customer contact. Consumers rarely take part in the manufacturing process, many manufacturing operations have emphasized efficiency while compromising flexibility, the methods for monitoring and using resources are sophisticated while producing.

On the other hand, service operations are different from those of manufacturing operations. Consumption and production of services takes place simultaneously or closely, and there are more labor and more customer participation, which means service businesses, usually are more customer-oriented. while elementary methods are frequently used for monitoring and using resources.

To be specific, there are mainly six differences between manufacturing operations and service operations.

1. Basic organize style in operation

Basically, manufacturing companies usually make production and purchase plans based on the demand of the market and their customers. Then human resources and equipment are settled to produce. So the manufacturing companies operation management is mainly product-cantered the aim is to control the process of production, keep the quality of outcomes and reduce cost. Yet the service organizations seem organized differently as they have greater amount of interaction with their customers. There are more uncertainties in the process, so specific plans cannot be made in advance, and the results are diverse if the service personals or the customers change. For that reason, the service operations are human-centred.

2. Design of products and operation systems

In manufacturing factories, the products and production systems can be designed separately because one same product can be produced by different manufacturing systems (i.e. two equipment’s with different automation degree). However in the service operations, the service provides system is part of the whole “service” itself. Different service provides system have different characteristics which make the service not the same, so those two systems must be designed together within the service operations.

3. The use of inventory in adjusts supply and demand

Since the companies cannot decide the demand of the market while their productivities are controllable, the manufacturing companies can use their inventory to deal with unexpected demand increases. So those companies should pay more attention to plan reasonable inventory strategy. To most of those service companies, their products cannot be inventoried as readily as goods. They cannot produce service in advance and store them for later customers, so what they can do is to make better use their service abilities while the demand happens.

4. Customers effect

The production systems in the manufacturing companies are usually enclosed to customers, manufacturing firms generally evaluate their products quality from internal perspective rather than external (customer’s) perspective, thus they can have few influences on the manufacturing operations. However, customers take part in the service operations; they may have positive and negative effects to the process. So the service companies need to make full use of those good effects and try to minimize the undesirable ones.

5. Boundaries of function division and human resource characteristic

In the manufacturing companies, there are clear boundaries within the operation, marketing and human resource management. The time and places are different between producing and selling the goods. Besides most products need to transport through a complex channel before the customers get them. As a result, there must have different people take response of different departments. Moreover, since the manufacturing operations are product-centered, the working process and quality are strictly controlled, which means human’s behavior will have few influences to the results. Nevertheless, to the service companies, the human factor is critical while operating. Managing people must become a critical part of line managers job in service operations. So the three parts which had been mentioned at the beginning have to be integrated while managing.

6. Measure the output

Clearly, the output of the manufacturing operations can be easily measured through count the yield and test the product quality. However, in the service operations, the quantitative indicators are unsuitable for measuring the output service. Productivity measurement it is more complex in service industries owing to the inherent characteristics of services. Besides, the qualitative indicators of service are more difficult to define than those of manufacturing operations. Furthermore, as a lot of service organizations have multiplex goal such as long-term benefits and social benefits, evaluating these organizations could be even harder.

In a word, although there are some basic features in common, different type of output of manufacturing and service operations lead to dissimilar emphasis of the two operations. As a result, while dealing with these two kinds of operations, the management methods would not be the same.

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