Manufacturing operations excellence focuses on producing uniform, reliable, and high-quality products. In general, manufacturers have a standardized way of producing goods. Goods are produced en masse in a factory or warehouse-type environment. One finished product is generally the same as the next. Service Operations, on the other hand, refer to the provision of intangible services to customers.
Basis of comparison | Goods | Services |
Nature | Tangible | Intangible |
Ownership | Transferable | Non transferable |
Separability | Can be separated from provider | Cannot be separated from the provider |
Storage | Can be stored for later use | Cannot be stored |
Perishability | Not all goods are perishable | Perishable |
Production & Consumption | Consumed after production | Production and consumption happen together |
- Its difficult to measure the productivity of services due to its intangible nature.
- An increase in the number of customers served doesn't translate to improved service quality. In fact, it might even lead to deteriorated quality.
- Being a labor intensive industry, productivity cannot be improved by decreasing the input (service providers)
- Using machine technology and other labor saving devices is also difficult
- Most service organizations are small scale and operate in local markets as well.
These notes are intended to give you a quick summary and recap of Services vs Products and help you answer questions such as -
- Why is it more difficult to increase the productivity of a service system as compared to a production system ?
- Explain the differences between services and goods production.
- What are the major distinctions between a manufacturing organization and a service organization? Discuss with suitable examples.
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