Operations Management and Services

Management of Goods and Services Difference between the operations management chain for both goods and services Difference between the management of goods and services Difference between the production of goods and services What gets companies business Difference between the operations management chain for both goods and services The basic difference between goods and services is that the former is tangible and hence can be stored whereas the latter is intangible and cannot be inventoried. From the perspective of operations management, there are some basic differences between goods and services.

Forecasting of goods involves long-term horizons where manufacturers are able to use physical inventory as a buffer to tackle forecast errors. In the case of services, the forecast periods are shorter and are more variable and time- dependent. Hence, forecasting is generally done on a daily or hourly basis. In terms of facility location, for goods, the manufacturing facilities can be situated close to where the raw materials are available and could be away from the customer.

For services, however, the facilities have to be close to where the customers are situated. The design of the facility or the outlet for goods can be done according to the manufacturer as there are very few customers there at any one point in time. On the other hand for services, since there are a number of customers present or expected to be present at any point in time, the facilities have to be designed according to what the customers want.

The technology used in goods manufacturing is flexible and can be of many types to suit production strategy but services technology is more information based. Quality for goods is tangible and measurable but for services it is not so. The process design for goods can be more mechanic as customers do not have any role in the process whereas for services the process is reliant on the customer as they have a large participation in service creation and hence cannot be automated but needs to be customized.

Scheduling for goods manufacturing is centered around movement and location of the materials, parts, and the subassemblies and is at the discretion of the manufacturer. In the case of services, however, the scheduling is entirely dependent on the capacity of services available, the demands of the customers and availability of the parts where the service provider have little discretion. Difference between the management of goods and services There are a number of differences in the way and manner goods and services are managed.

As already discussed, the primary difference between goods and services is that the former is tangible and the latter is intangible. Therefore, the first difference that occurs in the management of the two is that for goods, the management process has more time to set up a strategy as the goods can be stored for a certain period of time. However, since services cannot be stored management decisions have to be instant.

Forecasting is possible for goods and they can be produced and stored for future sale or store the products when there is a shortfall in demand. This is not possible for services as they have to be delivered there and then and can in no way stored for future use. Therefore, from a management perspective, services need instant management decisions. Maintenance and ascertaining quality for goods are simple as they can conform to certain set standards that can be verified physically and corrected if necessary.

However, the quality of services is completely dependent on the satisfaction level of the customers and it is the customer who can only decide the quality of a service. The quality of services is intangible and varies from one customer to another. Hence from a management perspective, it is easier to ascertain the quality of goods compared to that of services. One advantage for services, however, is the feedback from customers is instant as customers remain in direct contact with service providers.

Service providers can have firsthand experience of what customers think about the service provided. However, feedback process for goods is longer and often indirect as there is much less direct contact with customers. Difference between the production of goods and services There are some differences in the production process for goods and services. The facility where production takes place for goods can be adjusted according to what the manufacturer thinks suitable as there is virtually no contact with customers there.

However, for services, the production place has to be designed to suit the needs and benefits of the customers as customers are invariably present at the site of production of services. The production process for goods can be mechanized and standardized according to the demand in the market as customers play no direct role. In the case of service production, the process of production is usually customized according to the needs and demands of the customer.

Scheduling of the production process for goods can be done according to forecasts and availability of raw materials for production and is at the discretion of the producer. But the production of services is not at the discretion of the producer and is dependent on the customer needs and the capacity to fulfill the needs. Nothing can be planned for the future as far as production of services is concerned. What gets companies business In the case of both goods.