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Introduction To Operations Management-Session 1 A

While manufacturing and services differ in some key ways, they share important similarities from an operations management perspective. Manufacturing deals with physical, durable products that can be inventoried, whereas services provide intangible, perishable experiences. However, both sectors aim to balance capacity and demand through planning, scheduling resources, and estimating customer needs. The main principles, tools, and techniques of operations management apply to effectively managing both manufacturing and service organizations.

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51 views3 pages

Introduction To Operations Management-Session 1 A

While manufacturing and services differ in some key ways, they share important similarities from an operations management perspective. Manufacturing deals with physical, durable products that can be inventoried, whereas services provide intangible, perishable experiences. However, both sectors aim to balance capacity and demand through planning, scheduling resources, and estimating customer needs. The main principles, tools, and techniques of operations management apply to effectively managing both manufacturing and service organizations.

Uploaded by

kevin johns
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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OPERATIONS MANAGEMENT

Although services and manufacturing are classified as separate sectors


in a macroeconomic sense from perspective of OM a pure product and
pure service are just two ends of a spectrum,
A vast majority of operations share a continuum of services and
products
Most principles, tools and techniques of OM apply to both the sectors

Differences Between Manufacturing and services


Intangibility
Services are experiences rather than objects they cannot be touched,
tasted or felt.At most recipients of services can form an opinion about
quality of service offered
The product is defined by certain attributes and the customer faces
less ambiguity with respect to the product, its attributes and its
performance
Heterogeneity
Since experiential component is dominant in a service it is likely that
no two services are exactly alike. The differences are attributed to the
differences in the service receivers (customers),the service providers
and other parameters of the service delivery system
Simultaneous production and Consumption
Service occurs in the presence of customer who may also be involved
at the time the service is produced for his/her consumption. In
example of a dentist and patient the doctor and patient are in the
system together to produce and consume the service
This holds for education, entertainment, travel, tourism and hotel
services as well
In case of manufacturing most goods are produced at some point in
time and distributed to customer later.
Perishability
Services are perishable. This implies that they cannot be inventoried.
Thirty minutes of a doctor’s consulting expertise today cannot be
stored for future use, reused or returned to a future period.
The possibility of inventorying the supply and using it at a later time
is very common in a manufacturing system.

Manufacturing Organisations Service Organisations


Differences
Physical, durable product Intangible, Perishable product
Output can be inventoried Output cannot be inventoried
Low customer contact High customer contact
Long response time Short response time
Regional, National, International Local markets
markets
Large facilities Small facilities
Capital Intensive Labour intensive
Quality easily measured Quality not easily measured

Similarities
• Is concerned about quality ,productivity and timely response
to its customers
• Must make choices about capacity, location, layout
• Has suppliers to deal with
• Has to plan operations, schedules and resources
• Must balance capacity with demand by a careful choice of
resources
• Has to make an estimate of demand

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