Service operations and manufacturing operation - Essay Example

Discussion of how service operations are difference manufacturing operation Executive summary This is an article giving full details about the service operation system. This is a system that is labor intensive, thus depending substantially on the labor force. There is the incorporation of the manufacturing system, as well. This is to create a basis for comparison. For the article, it is evident that the service operation system has higher capabilities than the manufacturing operations system because of its structural functionalities. The system has the capability to relate with the customer on healthy grounds; it is also able to markets its services, as there are direct relationships with the consumers. On the other hand, there is an analysis on the deficiencies of the manufacturing system. There is also a discussion on the benefits behind the integration of the two systems. From the discussion relating to the difference, it is evident that, there will be an improvement in supervision, operations, and the cost of production. Introduction Service, manufacturing, and agriculture are the key economic activities in any economy. In most of the developed nations, services and manufacturing sectors of the economy constitute around 75% of the Gross Domestic Product. However, in the recent decades the growth and development is as a result of these sectors of the economy. For the last ten years, it is evident that the service sector in the economy has steadily increased from 40% to 53%. This is in reference to the world’s economy. Growth of sectors such as the IT sector is the key factors leading to the admirable change. If we refer to the history of economics, it is evident that exceedingly few governments had a taxing system to charge the service industry. The act was in favor of the sector, but remarkably few nations had a substantial service industry. On average, taxation began between 1980s and 1990. The actions did not suppress the sectors because of the computer era, which is playing a crucial role in developing the industry. All in all, service operations are the concept of when, how, and by whom the services in an economy operate. On the other hand, manufacturing operations are activities concerning the operation of facilities, as opposed to supplying, distributing, maintenance, safety, and health. In short, it is a sector concerning the manufacturing setting (Quinn and Paquette, 1990.). Characteristics of services There are endless services with most services sharing a number of characteristics. Services execution follows a perspective of an open system, where the consumer association is different from manufacturing systems. The degree of consumer contact is exceptionally high all through the service process; the consumer participates frequently in this process. There is the simultaneous production and consumption due to complete consumer participation in the entire process. This ensures that there are no fluctuations in demand as a result of both delayed and stored services. Services can either have tangible or intangible attributes, but they are highly intangible; one cannot test, see, or feel its performance until one purchase it. Reputation is, therefore, hugely valuable. Services cannot be patented because they are intangible. A service firm may find it difficult to identify their product due to the intangibility of services. Difficulty in measuring the output arises as a result of intangibility. The service output is nonstandard and variable thus productivity measurement and quality control are a problem. Further still, personal judgment makes homogeneous input close to impossibility. Efficiency and effectiveness measures are also subjective. There is a significant difference in relation to service operations and the manufacturing operations. These differences encompass: 1. Customer consumption 2. The use of labor and equipment 3. Tangibility and intangibility of output 4. The participation of customers in conversation and conservation process Customer consumption In the world economy, it is close to impossible to predict the consumption pattern. The capability to anticipate is directly proportional to the customer choices. In the global economy, it is advisable to anticipate these trends, so as to meet customers’ demands. To analyze this, one has to determine highly consumable products. Here, comes the difference between the products from the service operation and the manufacturing operation. This is because these two economic sectors’ have different products, which offer different levels of satisfaction. The consumption trends in these industries differ because of the variation in relation to economic status, cultural practices, fashion, and preference (Hill, 2011). The two industries have different products, that is, they satisfy different utilities. In many instances, service operation products are secondary products. This means that, the consumption of these products results from the need of extra pleasure. Such services are traveling, and teaching among others. On the other hand, manufacturing operations revolve around production, consumption, and distribution of goods. In reference to this, it is a branch of economics that deals with elements of the economy. There is also another difference in relation to customer consumption; products under the manufacturing operations strictly follow the law of supply and demand. This means that, an increase in demand, result to a decrease in supply. On the other hand, services operations offer many services, which have abnormal demand curves. Meaning that and increase in the cost of these service lead to an increase in demand. In other cases, an increase in price has no significant impact on the prevailing demand. The explanation behind this abnormal demand behavior is the ideology that, the higher the cost of the service, the higher the quality of the services (Cook, and Chung, 1999). The use of labor and equipment There is a large different in the production of the service operation products and the manufactured products. This is because services are products sold in the form of human resource. This means that labor is the equipment for the production of these services. Therefore, the industries have to hire individuals aiming to offer a high level of performance in order to meet the industries targets. On the other hand, manufacturing operations deals with converting raw materials, as well as labor to consumable good with the aim of meeting consumers’ demands. In this, industry has the capability of catering for the utility of customers in that line of the economy. With this, we learn that, these two sectors of the economy play different roles in ensuring customers’ needs attain significant concentration (Quinn, and Paquette, 2007). Tangibility and intangibility of output Tangibility refers to the essence of an output to have physical characteristic. From the above discussion, we learn that the two industries use different means to produce consumable products. In precision, the service sectors uses labor, while the manufacturing uses both labor and raw materials. Through this, it is practical that the final products of these to the sector will be of different forms. The service sectors have the capability of producing intangible output, while the manufacturing sector produces tangible output. This is in reference to the input in the individual sectors (Paton, 2011). The participation of customers in conversation and conservation process Service operations companies stand a better ground than the manufacturing operations in conserving the customer. This is because communication is vital in building customer basis. This is in reference to the illustration in the point above. That is, the service industries have an opportunity to handle customers directly; unlike the manufacturing industry. It is the duty of businessmen to take care of the customer. This may not be fruitful as it would be, if the manufacturing sector had the capability (Lusch, Vargo, and Malter 2006). In return, the manufacturing sectors produce products after field surveys to enhance the process of maximizing the customers’ utility. This is because products rhyme must with the prevailing demand in the market. An explanation of how service operations can benefit from implementing manufacturing approaches and systems. Quality management Quality management is essential for the success of each and every sector of the economy. This is because the expertise will facilitate proper resource allocation, time management, and fairness in reference to award (performance appraisal). By this, the economy will have the capability of evading instabilities arising from incompetence in management. After a keen evaluation and analysis of the manufacturing sector, it is evident that the sector has strong ground in relation to quality management. This is as a result of the business structure and formulation. From the above discussion regarding service and manufacturing operation, it is evident that, if the integration of the systems is initiated, the company will have higher competitive ground than its competitors. This is because it would end up in a collaboration of ideas and ideologies. Manufacturing operations have advantages and disadvantages as well as the service operations. In that, customers’ specifications can only be fully met by filling the gap in the two sectors of the economy. For a sector to attain a sustainable portion in the, it must have competitive advantages over its competitors. The competitive advantage either facilitates productions of goods and services under low cost, production of highly competitive products, or ready market and raw materials (Normann, 2004). From this analysis, we can depict that the incorporation of the manufacturing systems in the service operation would result to quality services. This will entail the use of machinery and other capital intensive techniques to offer services. The level of coordination will also increase; this will ensure that all the employees use their time optimally. There will be a reduction in the company’s expenditures; this is because misuse of firm’s assets will be minimal. All in all, the industry will have the capability of standing in a more competitive than before, therefore, improving its base (Paton, 2011). The basis of quality management would also arise for the fact that the manufacturing operation has a strong management. This is because of coordination in the above discussion. There is centralization of management as well as delegation of duties in reference to the job description and expertise. This creates a matrix structure within the organization, thus solution of emerging issues. This ideology can be a key toll to improve the performance of the service operation organizations. However, this structure will reduce the extent of corruption, fund embezzlement, and will build the basis of award. Specialization will also increase in each and every sector of the company (Paton, 2011). Resource planning systems This is a system that integrates external and internal management information across the company, embracing accounting/financial, sales, manufacturing, and customer relationship management. It is commonly known as the Enterprise Resource Planning (ERP). In the recent year, with the evolution of application, the system is encompassed with simplicity. Its key function is to facilitate communication between all organization functions, as well as the external stakeholders (Cook, and Chung, 1999). All in all, the two sectors have different settings. Service operation sector fully depends of the level of expertise among its employees. This means that the human resource team is the key driver of the sector. In the manufacturing sector, the key measure of resources encompasses raw materials, human resource, machine, and equipment. This brings a basis, where the quality of final products depends on many factors. It calls for high level of coordination within the company to ensure that end products are within the acceptable standards. From this information, it is evident to state that incorporation of the EPR in service operation will impact on the coordination between departments. This is from the fact that the system is efficient in enhancing communication in organizations (Quinn, and Paquette, 2007). Customer contact refers to the relationship between the customer and the seller of either the manufactured goods or service. In reference to the records put down by different leading economists, there is a claim that the relationship between customers and the producers of the service is high. This is because customers’ needs get immediate attention, thus creating a rapport between the two parties. Another reason behind the tight relationship between the service producers and customers is the mode of selling the service. The process of offering the service takes place in relation to the demands of the buyers. With this knowledge, the EPR will facilitate this task by bringing in automated systems of impacting the relationship. Such systems include online customer feedbacks, reviews among others. The system will impact on the fact that the service sector fully depends on the customer relations (Cook, and Chung, 1999). There will also be benefits relating to communication with external stakeholders such as customers, so as to identify their needs. This is because the system balances the information from all types of customers before forwarding to for analysis. In the manufacturing sector, it is the operational system in collecting customers’ needs in reference to tastes and preferences (Cook, and Chung, 1999). Conclusion This is an article that expounds different operation systems in industries. The key operations systems in the article are the service operations and the manufacturing operations. The two industries use a different system to meet the needs of their customers. From the paper, we can conclude that the service operation firms stand better ground to market their services, and create a sustainable share in the market than the manufacturing. This is because they can easily get feedbacks from customers, listen to their complaints, advise them, and treat all in the aim of winning the market share. It is also evident that an implementation of the manufacturing concepts in the service sector would improve all operations. References Chase, D. 2009. The Customer Contact Approach to Services: Theoretical Bases and Proactical Extensions. Operations Research. 21(4) Cook, G. and Chung 1999. Service Typologies: A State of the Art Survey. Production and Operations Management. 8(3). Hill, A. and Hill, T. (2011). Essential operation management . Palgrave. Karni, H. and Kaner, M. 2006. An engineering tool for the conceptual design of service systems. In Advances in Service Innovations, edited by Spath and Fahnrich. Springer. NY. Lusch, Vargo, and Malter 2006. Marketing as Service-Exchange: Taking a Leadership Role in Global Marketing Management. Organizational Dynamics. 35(3). Normann, D. 2004. Reframing Business: When the Map Changes the Landscape. Wiley. New York, NY. Paton, S. Clegg, B., Hsuan, J. and Pilkigton, A. 2011. Operation Management. McGraw-Hill. Quinn, D. and Paquette, G. 2007. Technology in Services: Creating Organizational Revolutions. MIT Sloan Management Review. 31(2). Read More