Business Management - Operations management: distinction between
manufacturing and service organisations
Distinction between manufacturing and service organisations
Manufacturing organisations produce tangible physical products or goods
Service organisations produce a non-physical output and involve the
customer in the production process
Operations Management is a crucial function of both manufacturing and
service organisations. [1]
A manufacturing organisation is defined as one that produces an easily
identifiable, tangible physical product or good. Whereas, a service
organisation is one which provides or produces a non-physical output that
can not be kept as inventory [2] and involves the customer in the actual
production process.
The essential differences between manufacturing and service organisations
[3] (which must be considered by management when designing their operations
management system) include the facts that:
* the customer of a service organisation is directly involved in the
production process of the service being purchased
* the end products of a manufacturing organisation may be stored or held
as inventory [4]
However, both types of organisations face similar operational problems:
* both must obtain suitable and sufficient materials to be used in the
production process
* both must determine suitable scheduling tasks
* both should be concerned with both the quality of their end products
and with their productivity levels [5]
