Service Based And Manufacturing Based Operations Management Marketing Essay

1820 words (7 pages) Essay

1st Jan 1970 Marketing Reference this

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Although there are many similarities in manufacture base operation management and the service base operation management we can see some difference between these two as well . however before we start discussing about the differences the author likes to pay attention briefly about some of the similarities these two has.

Entail customer satisfaction as a key measurement of effectiveness

Require design of both the product and the service

Involve purchase of material supplies and service

Forecasting and capacity planning to match supply and demand.

Process management.

Managing variations.

Monitoring and controlling costs and productivity.

Supply chain management.

Location planning, inventory management, quality control, and scheduling.

: Jay Heizer & Barry Render ( Operation Management),Global edition ,10th edition 2009

Those are some of the similarities that we can see in between service and the manufacturing operation management .however when we do operation in day to day life, practically we can see most of the differences between these two.

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Manufacturing operation management involves producing a product after doing designing and field trial. But in service operation management is all supportive functions carried out to support manufacturing. We can point out some differences between these two as below,

In service operation management we can see these characteristics

Create intangible product as services (perishable product).

service are unique, at the time only individual with exceptional talent could deliver it.

the service output is difficult to be inventories or store.

services are produce and consume at the same time.

customer interaction is crucial for success of the service deliveries.

services can’t be make into standard or at certain specification (at times inconsistent).

services are often knowledge-based, only well train or educated are able to perform the service (e.g. doctor, lawyer and professor).

labor or human centric, largely depend on individual output.

difficult to measure the quality of services

seldom incur high capital investment and facilities.

Operation management in manufacturing sector focus on different perspectives, there are as follow:

.

goods can be resold and inventoried.

it output in a form of physical, durable product.

quality can be measured and controlled easily.

selling and production is a separate activities.

goods can be transported.

location and facilities influence on cost structure.

revenue are generated base on tangible and unit sold.

intensive investment on capital.

Actually we can show these differences in a chart as below,

Characteristic

Manufacturing

Service

Output

Tangible

Intangible

Customer Contact

Low

High

Uniformity

high

low

Labor content

Low

High

Uniformity of output

High

Low

Store of output

Easy

Difficult

Measurement of production

Easy

Difficult

We can understand these differences in details when we evaluate those differences with examples.

First of all when e consider about the output of the service operation management they produce intangible products as output. Those products are hard to see. For example we can categories some majority of service output jobs as below,

Professional services (e.g., financial, health care, legal).

Mass services (e.g., utilities, Internet, communications).

Service shops (e.g., tailoring, appliance repair, car wash, auto repair/maintenance).

Personal care (e.g., beauty salon, spa, barbershop).

Government (e.g., Medicare, mail, social services, police, fire).

Education (e.g., schools, universities).

Food service (e.g., restaurants, fast foods, catering, bakeries).

Services within organizations (e.g., payroll, accounting, maintenance, IT, HR, janitorial)

Shipping and delivery (e.g., truck, railroad, boat, air).

Residential services (e.g., lawn care, painting, general repair, remodeling, interior design).

Transportation (e.g., mass transit, taxi, airlines, ambulance).

Travel and hospitality (e.g., travel bureaus, hotels, resorts).

But in manufacturing operation management we can easily identify the output as tangible goods. For examples we can categories those as below,

Next we talk about the customer contact. In service operational management do not produce service unless customer request it. Even though they develop and design the structure of the service in advance in any order. Manufacturers can produce goods without a customer order or forecast of customer request. However, producing goods that do not meet market needs is a poor management.Many services involve a high degree of customer contact, although services such as Internet providers, utilities, and mail service do not. When there is a high degree of contact, the interaction between server and customer becomes a “moment of truth” that will be judged by the customer every time the service occurs.1

Introduction to operation management /chapter one, page 8

The performance of a service typically occurs at the point of consumption. Before that it is very hard to measure the performance of the service. Manufacturing allows a separation between production and consumption.as long as they fallow the procedures it can be produce the product as the customer requirements. For an example if we think about the car manufacturing industry in japan, they can produce cars even without meeting the end customers.as long as they fallow the procedures they can sell the cars to a customer in America.

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Next we have to talk about the uniformity of these two sectors. Service operations are often subject to a higher degree of variability of inputs. Each client, patient, customer, repair job, and so on presents a somewhat unique situation that requires assessment and adjustability.but in manufacturing operations often have a greater ability to control the variability of inputs, which leads to more-uniform job requirements. Actually in manufacturing operation management the uniformity in output can be measured by terms like standardization, low variability, smooth, efficient, etc. for an example if we take a car we can measure the performance like efficiency, comfort ability, engine capacity, rpm, etc.

And there is another differentiation in these service operational management and the manufacturing operational management called labor content. Compared to manufacture base operation management, service base operation management requires more labor content. Every time service is going along with the labor power. For an example if we take service shop like tailoring, car washing and also professions like doctors, lawyers, teachers, and all these services goes with the person who is supplying it and each and every time it is involving with the labor power. Not only can’t that in this service management the service be separated from the supplier. But in manufacturing industry it can be separated. However in manufacturing management the investment in capital is higher than the service operation management. Because it needs more machines .technical support, than the service. For an example if we take car manufacturing industry and the car washing service, we can see we need more capital in manufacturing cars than washing the cars.

The next difference we can see in these two operation management is storing of output.in service industry the product is difficult to store and inventories whereas in manufacturing industry the output can be stored and inventories as well. Most of the time service should be consumed at the same time it is produced. If the customer couldn’t consume it at that time it cannot be produce as it is again. Sampson (2000) even called this essentially a JIT system. Combined with difficulty to store, it is then not surprising to see that a flexible capacity is critical to the success of a service supply chain . For an example if we produce some garment in a textile manufacturing company we can store it until we get the demand in the market and sell it. But for services like doctoring, lawyer, teachers we cannot store it to use in the future.

Sampson, S. E, “Customer-Supplier Duality and Bidirectional Supply Chains in Service

Organizations,” International Journal of Service Industry, Vol. 11(4), 2000, 348 – 359.

Next difference we can see in these two operation management is measurement of the production. In manufacturing, measurement is more direct but in service operation, measurement is more difficult due to differences in demand forces. And also because the manufacturing goods are easier to measure the revenue can be generated base on the unit sold. But in service it is very hard to measure the service because it capabilities are different from another .for an example when we sell the cars we can measure and identified the amount we sell and we can calculate it as a bundle. So we can measure the revenue and the profit on it .but in service for example one doctor might have a higher level of routine cases to deal with, while other might have more difficult cases. Unless a careful analysis is conducted, it may appear that the doctor with the difficult cases has a much lower productivity than the one with the routine cases. But we cannot measure it because their capabilities are different from each person.

And the next different we can identify in these service operation management and the manufacturing operation management is Quality assurance. Quality assurance is usually more challenging for services because of the higher variation in input, and because delivery and consumption occur at the same time. In manufacturing, this occurs away from the customer and allows mistakes that are identified to be corrected. the customer has less opportunity to identify mistakes and expose it in services. For an example when we take hair cutting service we got less chance to rectify the problems at the same time because the service and the production is done at the same time. But in manufacturing industry before we do the final product the producer has the chance to rectify the problem that occurs and finish the product as a good quality product. Not only that we can go for some quality standards like ISO, as well.

So these are the major differences that we can see in service base operation management and the manufacture base operation management are having.

Although there are many similarities in manufacture base operation management and the service base operation management we can see some difference between these two as well . however before we start discussing about the differences the author likes to pay attention briefly about some of the similarities these two has.

Entail customer satisfaction as a key measurement of effectiveness

Require design of both the product and the service

Involve purchase of material supplies and service

Forecasting and capacity planning to match supply and demand.

Process management.

Managing variations.

Monitoring and controlling costs and productivity.

Supply chain management.

Location planning, inventory management, quality control, and scheduling.

: Jay Heizer & Barry Render ( Operation Management),Global edition ,10th edition 2009

Those are some of the similarities that we can see in between service and the manufacturing operation management .however when we do operation in day to day life, practically we can see most of the differences between these two.

Manufacturing operation management involves producing a product after doing designing and field trial. But in service operation management is all supportive functions carried out to support manufacturing. We can point out some differences between these two as below,

In service operation management we can see these characteristics

Create intangible product as services (perishable product).

service are unique, at the time only individual with exceptional talent could deliver it.

the service output is difficult to be inventories or store.

services are produce and consume at the same time.

customer interaction is crucial for success of the service deliveries.

services can’t be make into standard or at certain specification (at times inconsistent).

services are often knowledge-based, only well train or educated are able to perform the service (e.g. doctor, lawyer and professor).

labor or human centric, largely depend on individual output.

difficult to measure the quality of services

seldom incur high capital investment and facilities.

Operation management in manufacturing sector focus on different perspectives, there are as follow:

.

goods can be resold and inventoried.

it output in a form of physical, durable product.

quality can be measured and controlled easily.

selling and production is a separate activities.

goods can be transported.

location and facilities influence on cost structure.

revenue are generated base on tangible and unit sold.

intensive investment on capital.

Actually we can show these differences in a chart as below,

Characteristic

Manufacturing

Service

Output

Tangible

Intangible

Customer Contact

Low

High

Uniformity

high

low

Labor content

Low

High

Uniformity of output

High

Low

Store of output

Easy

Difficult

Measurement of production

Easy

Difficult

We can understand these differences in details when we evaluate those differences with examples.

First of all when e consider about the output of the service operation management they produce intangible products as output. Those products are hard to see. For example we can categories some majority of service output jobs as below,

Professional services (e.g., financial, health care, legal).

Mass services (e.g., utilities, Internet, communications).

Service shops (e.g., tailoring, appliance repair, car wash, auto repair/maintenance).

Personal care (e.g., beauty salon, spa, barbershop).

Government (e.g., Medicare, mail, social services, police, fire).

Education (e.g., schools, universities).

Food service (e.g., restaurants, fast foods, catering, bakeries).

Services within organizations (e.g., payroll, accounting, maintenance, IT, HR, janitorial)

Shipping and delivery (e.g., truck, railroad, boat, air).

Residential services (e.g., lawn care, painting, general repair, remodeling, interior design).

Transportation (e.g., mass transit, taxi, airlines, ambulance).

Travel and hospitality (e.g., travel bureaus, hotels, resorts).

But in manufacturing operation management we can easily identify the output as tangible goods. For examples we can categories those as below,

Next we talk about the customer contact. In service operational management do not produce service unless customer request it. Even though they develop and design the structure of the service in advance in any order. Manufacturers can produce goods without a customer order or forecast of customer request. However, producing goods that do not meet market needs is a poor management.Many services involve a high degree of customer contact, although services such as Internet providers, utilities, and mail service do not. When there is a high degree of contact, the interaction between server and customer becomes a “moment of truth” that will be judged by the customer every time the service occurs.1

Introduction to operation management /chapter one, page 8

The performance of a service typically occurs at the point of consumption. Before that it is very hard to measure the performance of the service. Manufacturing allows a separation between production and consumption.as long as they fallow the procedures it can be produce the product as the customer requirements. For an example if we think about the car manufacturing industry in japan, they can produce cars even without meeting the end customers.as long as they fallow the procedures they can sell the cars to a customer in America.

Next we have to talk about the uniformity of these two sectors. Service operations are often subject to a higher degree of variability of inputs. Each client, patient, customer, repair job, and so on presents a somewhat unique situation that requires assessment and adjustability.but in manufacturing operations often have a greater ability to control the variability of inputs, which leads to more-uniform job requirements. Actually in manufacturing operation management the uniformity in output can be measured by terms like standardization, low variability, smooth, efficient, etc. for an example if we take a car we can measure the performance like efficiency, comfort ability, engine capacity, rpm, etc.

And there is another differentiation in these service operational management and the manufacturing operational management called labor content. Compared to manufacture base operation management, service base operation management requires more labor content. Every time service is going along with the labor power. For an example if we take service shop like tailoring, car washing and also professions like doctors, lawyers, teachers, and all these services goes with the person who is supplying it and each and every time it is involving with the labor power. Not only can’t that in this service management the service be separated from the supplier. But in manufacturing industry it can be separated. However in manufacturing management the investment in capital is higher than the service operation management. Because it needs more machines .technical support, than the service. For an example if we take car manufacturing industry and the car washing service, we can see we need more capital in manufacturing cars than washing the cars.

The next difference we can see in these two operation management is storing of output.in service industry the product is difficult to store and inventories whereas in manufacturing industry the output can be stored and inventories as well. Most of the time service should be consumed at the same time it is produced. If the customer couldn’t consume it at that time it cannot be produce as it is again. Sampson (2000) even called this essentially a JIT system. Combined with difficulty to store, it is then not surprising to see that a flexible capacity is critical to the success of a service supply chain . For an example if we produce some garment in a textile manufacturing company we can store it until we get the demand in the market and sell it. But for services like doctoring, lawyer, teachers we cannot store it to use in the future.

Sampson, S. E, “Customer-Supplier Duality and Bidirectional Supply Chains in Service

Organizations,” International Journal of Service Industry, Vol. 11(4), 2000, 348 – 359.

Next difference we can see in these two operation management is measurement of the production. In manufacturing, measurement is more direct but in service operation, measurement is more difficult due to differences in demand forces. And also because the manufacturing goods are easier to measure the revenue can be generated base on the unit sold. But in service it is very hard to measure the service because it capabilities are different from another .for an example when we sell the cars we can measure and identified the amount we sell and we can calculate it as a bundle. So we can measure the revenue and the profit on it .but in service for example one doctor might have a higher level of routine cases to deal with, while other might have more difficult cases. Unless a careful analysis is conducted, it may appear that the doctor with the difficult cases has a much lower productivity than the one with the routine cases. But we cannot measure it because their capabilities are different from each person.

And the next different we can identify in these service operation management and the manufacturing operation management is Quality assurance. Quality assurance is usually more challenging for services because of the higher variation in input, and because delivery and consumption occur at the same time. In manufacturing, this occurs away from the customer and allows mistakes that are identified to be corrected. the customer has less opportunity to identify mistakes and expose it in services. For an example when we take hair cutting service we got less chance to rectify the problems at the same time because the service and the production is done at the same time. But in manufacturing industry before we do the final product the producer has the chance to rectify the problem that occurs and finish the product as a good quality product. Not only that we can go for some quality standards like ISO, as well.

So these are the major differences that we can see in service base operation management and the manufacture base operation management are having.

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