Question

Assemble and evaluate the differences of performance measures that are relevant to a manufacturing company vs. a service company.

Answer 1

The differences of performance measures that are relevant to a manufacturing company vs a service company are as follows:

MANUFACTURING COMPANY	SERVICE COMPANY
Manufacturing operations converts inputs like materials, labour etc. Into tangible outputs.	Service operations also transform inputs into outputs but outputs are intangible.
Manufacturing operations allow separation between production and consumption.	Customer receive service as it is performed. Thus, there is production as well as consumption of service at the same time.
Productivity is easily measured in manufacturing operations because manufacturing operations produce tangible products.	Productivity is not easily measured in service operations because the outputs of service operations are intangible.
Expenses required for material handling is more in manufacturing operations.	Expenses required for material handling is less as compared to manufacturing operations.
Customers have less contact with people who provide manufacturing operations.	Customers have more contact with people who provide services.
Quality standards are relatively simple and easy to establish in manufacturing operations.	Quality standards are difficult to establish and product quality is difficult to evaluate in service operations.
Manufacturing operations are depend on maintenance and repair work.	Service operations do not depend on maintenance and repair work.
Manufacturing operations are flexible in manufacturing work, methods, scheduling work.	Service operations are inflexible because services are in direct contact with the customers and customers are part of service system.
Manufacturing operations can standardized less customized.	Service operations cannot produce outputs that can be stored.
Higher amounts are required to be invested on assets like equipment, building etc.	Higher amounts are not required to be invested since most of they are labour performance.
Quality assurance is relatively easy and controllable variation. In inputs can be controlled and defects can be rectified in output before reach the customer.	Quality assurance in service is challenging. There is high level of variation in input in case of services. This affects the service quality.
Manufacturing operations usually are large in size and operation.	Service operations meet direct contact with customer and hence they are relatively smaller in size and operation.