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Operational Managment - Essay Example

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Operational Management Operational Management Introduction: Service operations management refers to the responsibilities, decisions and activities undertaken by the managers of the service industry…
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Operational Managment Essay
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"Operational Managment"

Download file to see previous pages There is no one specific definition of services, from a customer point of view a service is a combination of customer experience and his perception of the outcome of that particular service. The customer puts in its time, efforts and financial cost to avail the services. In most of the services obtained there are two aspects service experience and service outcome. Both of which should be managed for customer satisfaction. The most significant difference between service and manufacturing industry is that at the of a relationship with manufacturing industry the customer gets a physical tangible product, while in the service industry the customer gets an intangible outcome. (JOHNSTON & CLARK. 2008) Manufacturing and Service Industries: Service industry is different from a lot of aspects from manufacturing industry which are the reasons why operational management in service and manufacturing industry differ. In manufacturing a job is undertaken to add value to a physical component and in service industry the activity involves people. These differences include inventorying of physical goods; including the processing of these inventories in manufacturing industry while the planning in services industries focuses more on capacity utilization and yield management. Secondly manufacturing functions usually has fixed resources while the resources in the services industry changes over time and are not constant. Thirdly revenue management is crucial in services industry as refusing a customer to provide services is a more common practice than unable to provide a product in the manufacturing industry. These all differences affect the planning, scheduling and management of the operations and make the operations of both the industries different from each other. However, there are certain similarities found between the manufacturing and services industry and there is a certain level of similarity in there planning and management. Interval scheduling, reservation models and timetabling are all concepts which are similar in both the industries. (PINEDO. 2009) The sales and services industry is different from that of manufacturing. In the sales the transaction is between an employee and a customer for sales or services while in the manufacturing there is an interaction between technology and worker to produce a product. In the service sector the employee or the service provider is the shaper of the customer relations and loyalty unlike the manufacturing business where the customer loyalty and relations are built up by the product itself. (BATT. 2000) The greatest difference that is there between the service and manufacturing operation is that of the customer’s involvement. In service operation the customer himself becomes part of the whole process and becomes essential to the process. This will also cause the service to become less consistent as the customer will behave in different ways unlike the manufacturing process where same process is performed consistently. Even in services there are classifications that involve high level of customer interaction and some involve low level of it. The higher the customer interaction in providing certain services, for e.g. in businesses where the core process is performed in the presence of the customer like health care services education etc, the more the emphasis is given on the contact staff, instantaneous demand and difficulty of storage etc. The scope of operational efficiency decreases if the customer involvement is high. On the other hand in the manufactur ...Download file to see next pagesRead More
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