In: Operations Management
The two differences between services and manufacturing is as follows:
The tangibility of Output: A manufactured product can be seen, and touched. It is visible and can be assigned definite value in terms of weight and dimension. A manufactured product is a Tangible product and has a physical form. We can also maintain an inventory of tangible products. Taking the example of a car. We can touch and see the car. We can see Its attributes, its features, its shape etc.
In contrast Service is an intangible product as you cannot see it or touch it. For example the way the person selling the car interacts with the customer is service. The attitude and the behavior of the sales staff cannot be seen or touched or measured but it adds value to the consumer. Good customer service can help to increase sales and maximize customer satisfaction levels. It also helps to build brand image and contributes to maximizing the profits of the company.
Production On Demand: A manufactured product can be stocked. The production can be planned and forecasted. The customer demand is predicted and then the production is planned. The entire supply chain is based on the expected demand of the product. So manufactured product has an inventory a raw material supplier, stocking levels, minimum stocks, an a stock level at the retailer point too. Manufactured product will need time to be delivered if it is not available in stock for example some fast selling cars have a waiting period of 2 to 6 weeks. It is because when customer places order the car will be ordered from the manufacturing facility. It will be dispatched immediately if it is in stock but if it si to be manufactured it will take some time to assemble test and dispatch. The company has to closely monitor the demand of the car to maximize its sales.
In contrast service is available immediately. A service cannot be stocked. A service company will not produce a service till a customer demands for it. Also if a service is not used it cannot be stocked. A service sis consumed at the moment of delivery itself. So the car salesman selling the car is offering immediate service which he is generating on the spot because of his knowledge and skill set. The way the sales man communicates and satisfies the customer is the service which is provided.
To conclude manufacturing is tangible while service is intangible. Manufacturing can be stocked and planned whereas service is instantaneous and cannot be stocked.