Business Management - Operations management: distinction between
manufacturing and service organisations
Distinction between manufacturing and service organisations
Manufacturing organisations produce tangible physical products or goods. Image.
Service organisations produce a non-physical output and involve the
customer in the production process. Image.
Operations Management is a crucial function of both manufacturing and
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 and involves the customer in the actual
The essential differences between manufacturing and service organisations
(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
However, both types of organisations face similar operational problems:
* both must obtain suitable and sufficient materials to be used in the
* both must determine suitable scheduling tasks
* both should be concerned with both the quality of their end products
and with their productivity levels
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