In: Operations Management
The following are the two key differences between the services and manufacturing processes.
1. The first difference between manufacturing and services is that manufacturing produces tangible physical goods and can be stored in inventory. Whereas services are intangible offerings and cannot be produced ahead of times or stored in inventory. For example, consumer products like cars, trucks or computers that are the outputs of manufacturing process are tangible and can be felt by the customers. However, service offerings like professional advises, taxation services etc., are all intangible. These involve offerings which cannot be felt by the customers however can be used by them to save costs, implement improvements etc., in their operations.
2. The second difference between manufacturing and services is the interaction between customer and the producer. In manufacturing the end customer almost always never comes in contact with the producer. For example, end consumers of consumer products like Frito Lays or Pepsi cola etc., will never be directly in contact with the factories of production. These are typically supplied through a network of distributors and suppliers. However, in case of services, provider of services is almost always directly in contact with customers while delivering the service. For example, a barber at barber shop or a doctor at the hospital are always needed to be directly in contact with the customer or patient to provide their services. Here the service provider takes the customer feedback continuously and improves on his offerings.