The business organizations work for producing a product or service which can add value to the customer’s life. But these work on entirely different procedures and criteria. There are different and unique challenges for both of the businesses processes. To understand the primary differences between them we need first to recognize the essential functions of each one of them.
Fundamental differences between the service and manufacturing firms
This article talks about the main aspects and the significant differences in their final products and the processes. Each heading will explain one business type and its characteristics:
Manufacturing organizations: The manufacturing businesses use the raw material which is called the inputs and transform them to create a product which is named as the finished good. There can be several processes through which the material has to go through to become the end product. These finished goods are sometimes sold to the end consumers directly and they sometimes these products can be used by other manufacturing companies to create their product.
In a manufacturing business, the companies have to make use of computers, machinery, equipment sometimes robotic machines and human resources who have to work in a particular way to create a specific product. The inputs or raw material go through a set of sequential processes which ultimately gives out the desired outcome at the end.
- The manufacturing business produce physical goods which can be seen, touched and felt.
- These products can be made ahead of time and stored in an inventory to use when their need arises.
- The customers usually do not come under the direct contact with the manufacturing people of the site. They get their product through the retailing store's or distributors.
- Manufacturing firms can easily measure the product quality quickly and immediately. For example, if there will be a fault in the machinery of equipment, it can be examined by just starting to operate it. If it does not work correctly, the quality issue can be judged easily.
- The manufacturing business can work on the same process because they have to produce the standardized products.
- The production procedure of the manufacturing units does not include the end consumer in it.
Service Organizations: The business firms which produce intangible products such as assistance, information or ideas to its customers are called as service organizations.
- The service organizations produce intangible products which cannot be seen or touched but can only be experiences of felt.
- In the service industry, the final product is produced and delivered at the same time.
- This industry works on the principle of customization as they have to provide service according to the specific demands of the customers. They need to strategize their processes and final products as per the consumer’s needs.
- In the service organizations, the business houses have to include the consumers as the participants when the service is being produced.
There are many differences between this business, but at the same time, there are various similarities as well. Both of them have to concentrate on producing high-quality products and services. The marketing and promotion are equally essential no matter what kind of business the company is operating in. The basic idea is to enhance the customer experience and add value by meeting or exceeding their needs.