Question

Respond to the following in a minimum of 175 words:

Most manufacturing organizations have a service component which, if not incorporated into the business, will jeopardize the survival of the business.

Discuss the difference between the service industry and the manufacturing industry. How can you determine which organizations fall into which industry?

Answer 1

Service and manufacturing industries are two broad types of industries present in the market. They have many differences among them which distinguishes the one from the other. Some of those differences are:

1. Tangibility: In manufacturing industry the final product is a tangible good that customers can see and touch. While in a service industry the final product is intangible.
2. Production on demand: Service industries do not hold any inventory like those of manufacturing firms. They produce the service when the client asks for it. While in a manufacturing industry, the firm produces a certain inventory of finished goods according to the market forecast.
3. Labor and staff: Service industries are more labor intensive as there is very less scope of automation in the processes. If we talk about manufacturing industries then most of the processes in it are now being automated to reduce the labor expenses. There are such firms also where there is zero human workforce operating.
4. Physical location: While in the service industry the workforce do not need to present at some common place to create the service, in manufacturing industry the labor needs to be present at the manufacturing plant in order to produce a good.

To determine which organisation falls into which category, just look at the type of final product it produces. If it is a tangible product then the organisation falls into the manufacturing category and if the final product is intangible then the organisation falls into the service category.

Please do not forget to upvote the answer. Thanks :)