Difference between Manufacturing and Service Operations | Operation Management

Difference between Manufacturing and Service Operations

Businesses that manufacture goods or products by utilizing labor, machinery, and raw materials are manufacturing concerns. Factory, plant, or workshop that produces consumer goods or industrial materials can be included here. Creating jobs and driving economic growth are important functions of manufacturing concerns in the global economy. Manufacturing concerns face challenges such as rising raw material costs, competition from other companies, and staying up-to-date with new technologies.

Businesses that provide services to their customers are called service concern businesses. Among the businesses that fall into the category of service concern are consulting firms, law firms, accounting firms, and healthcare providers. As opposed to tangible goods, these businesses deliver value to their customers through expertise, knowledge, and skills. Some of the differences between Manufacturing Operations and Service Operations as follows:


Manufacturing OperationsService Operations
1.Manufacturing operations produces tangible output (ie; which can be physically seen) from the the conversion process.Service Operations produces intangible output( ie; which cannot be physically seen) from the conversion process.
2.The output from the manufacturing operations can be consumed over a longer period of time.The output from the service operations is consumed immediately.
3.Manufacturing Operations are generally based on capital intensive technique as they use more capital(ie; more use of machines and equipments) and less labour.Service Operations are generally based on people intensive technique as they use more machines and equipment than machines and equipments.
4.In manufacturing Operations, there is no need to contact customer frequently and no need of customer’s participation.In service operations, there is need to contact customers frequently and need of customer’s participation as without customer contact no service can be generated.
5.In order to measure the performance of the manufacturing operations, sophisticated methods are used.In order to measure the performance of the service operations, simple methods(fast and easier) are used.
6.Manufacturing operations covers large area as they produce goods for local level, national level or international level.Service Operations covers small area as they generally provide services for local people.
7.Manufacturing operations which includes production of goods and services are generally technology based.Service operations are mainly knowledge and skill based but sometime technology is also required to produce services.

Manufacturing and Service Operations FAQs

Which is not an area of significant difference between manufacturing and service operations?

a. uniformity of input
b. forecasting demand
c. customer contact
d. labor content of jobs
e. measurement of productivity

The Correct Answer for the given question is Option b. forecasting demand

Forecasting demand is not an area of significant difference between manufacturing and service operations. Both sectors rely heavily on forecasting to ensure that the necessary resources are available when needed and to plan for future needs. In both sectors, predictive modeling and simulation are widely used to make accurate forecasts.

The main differences between the two types of operations involve the degree to which demand is forecast and how it is used in decision-making. Manufacturing organizations typically use forecasts to control production levels and plan for future growth. Service organizations, on the other hand, use forecasts to anticipate customer needs and provide timely responses.

Which of the following is not a characteristic of service operations?

a. high customer contact
b. high labor content
c. intangible output
d. easy measurement of productivity
e. low uniformity of input

The Correct Answer for the given question is d. easy measurement of productivity 

Easy measurement of productivity  is not a characteristic of service operations. Service operators often make the mistake of believing that productivity is a characteristic of service operations. In reality, this is not always the case. Productivity in service operations can be measured in a number of ways, but it is not always a straightforward task. Often times, factors such as customer satisfaction or employee morale are more important than actual productivity numbers. When measuring productivity in service operations, it is important to take into account all aspects of the operation.

According to PCN analysis, service operations exist only within the area(s) of:

a. independent processing.
b. independent processing and surrogate interaction.
c. independent processing and direct interaction.
d. surrogate interaction and direct interaction.
e. independent processing, surrogate interaction, and direct interaction.

The Correct Answer for the given question is d. surrogate interaction and direct interaction.  

According to a study conducted by PCN, service operations only exist within the area of surrogate interaction and direct interaction. This means that most customer service is handled through automated systems or employees who are not actually interacting with customers. This results in poorer service quality and can cause customer dissatisfaction. The study found that companies that rely more on direct interaction have better service outcomes.

Which of these four conflicting goals do service operations balance

Ans: The four conflicting goals balanced by Service ooperations include:

  1. Internal IT vs. external business view
  2. Stability vs. responsiveness
  3. Quality of service vs. cost of service
  4. Reactive and proactive activities

Which of the following is generally related to service operations

a. Tangible product
b. Need for flexible capacity
c. Separation of production from consumption
d. Large amount of inventory

The Correct Answer for the given question is b. Need for flexible capacity  

A need for flexible capacity is generally related to service operations. Flexible capacity allows for an organization to quickly and easily respond to changes in demand, whether that be due to increased traffic, increased customer activity, or a shift in seasonality. This capability can be especially important for companies that provide online services, as the need for instant gratification can lead to increased demand during peak hours. In addition, having the ability to quickly ramp up or down resources can be key when dealing with outages or other incidents.

Which one is not distinctive characteristic of service operations

a) inseparability
b) inconsistency
c) perishability
d) variability
e) intangibility

The Correct Answer for the given question is b) inconsistency 

Inconsistency is not a distinctive characteristic of service operations. Indeed, most service operations exhibit a high degree of variability in the quality and timeliness of their outputs. This variability can be seen in many different aspects of service delivery, such as how quickly customers are served, how accurately orders are filled, and the quality of products or services received. This variability is often attributed to the fact that service operations are complex and involve a large number of interacting stakeholders. However, this does not have to be the case.

In fact, there are several ways to reduce or even eliminate variability in service delivery. By understanding how variability affects customers and employees, providers can identify areas where improvements can be made. Additionally, providers can use technology to improve coordination among different departments within the organization and to track performance over time.

People Also Ask:

Why is manufacturing operations important?

In the production of goods and products, manufacturing operations play a key role. Transforming raw materials into finished products involves designing, developing, and implementing processes and systems. The speed and quality of production, as well as the company’s costs and profits, depend on these operations for the overall efficiency and effectiveness of a manufacturing company.

The manufacturing sector is also relevant to the economy as a whole, as it can help create jobs, generate income, and make a country or region more competitive.

What are some examples of manufacturing operation?

  • Plastic products are manufactured by injection molding by injecting molten plastic into a mold.
  • Machines are controlled by computers to cut or shape materials in CNC machining.
  • Metal fabrication is the process of cutting, bending, and forming sheet metal.
  • Computers, smartphones, and other electronic products are assembled by assembling various electronic components.
  • In order to distribute and sell products, they must be packaged and labelled.
  • Heat and pressure are used to join metal pieces through welding.
  • A process by which a material is pushed through a die to shape or size it in a particular way.
  • It is the process of combining ingredients in order to create a specific product, such as a beverage or food.


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