Manufacturing and services

MANUFACTURING AND SERVICES
Manufacturing and service operations answer different questions and formulate different strategies when it comes to planning and managing the way in which their organizations operate and grow revenue.Manufacturing Industries engage in the production of goods (finished products) that have value in the marketplace. These fall under either Process Industries (flow production or continuous process production industries) or Discrete Manufacturing Industries.In manufacturing, the contact with the customer/client/actual user is rather low in terms if visibility and interactions.In general, manufacturers have a standardized way of producing goods. Goods are produced en masse in a factory or warehouse-type environment. One finished product is generally the same as the next.Service Industries include those industries that do not produce goods and instead provide services. Often in service industries, consumption of the service takes place while it is in generation. Service operations provide certain intangible services that may not be easily identifiable. Service operations can be classified into many industries, such as banking, insurance, hospitality, advertising, logistics and consultancy.
There are more opportunities to customize the services they provide. Even in service operations where you receive a tangible product, the service you receive from workers may not always be the same.It gets more complicated when a service based company adds products or when a manufacturing company begins to sell services. While there are potential revenue opportunities, a different sales approach and a new sales compensation plan might be required.
Other considerations occur when a service company provides services to a manufacturing company. There might be confusion with expectations as they both look at the world with a different perspective. This can also be true for a manufacturer who delivers products to a service company. Each might have a different world view and definition of “excellence”.Consider the differences between manufacturing and service organizations as you create a revenue plan:
Service Providers:
Sell intangible products
Products can’t be inventoried
There is high customer contact
Requires a short response time
More labor intensive
More customization is possible
Manufacturing Companies:
Sell tangible products
Products can be inventoried
Lower customer contact is typical
Longer response time is acceptable
Capital intensive
Standardization – Generally have a standardized way of producing goods
What they both have in common:
Use of technology
Quality, productivity and response issues
The need to forecast demand
Capacity, layout and location issues
Customer, supplier, scheduling and staffing issues.
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Manufacturing does not just offer products, and service organizations do not just offer services. Both types of organizations normally provide a package of goods and services.Although service provides cannot inventory their outputs, they must inventory the inputs for their products.As for customer contracts, many service operations have little outside customer contracts. Such as the backroom operations of a bank or the baggage handling area at an airport.Strategic Decision: Manufacturers do not just offer products, and service organization does not just offer services. Both types of organizations normally provide a package of goods and services. Customers except both good service and good food at a restaurant and both good service and quality goods from a retailer. Manufacturing firms offer many customer services, and a decreasing proportion of the value added by them directly involves the transformation of materials.Process: Even though service providers cannot inventory their outputs, they must inventory the inputs for their products. These inputs must undergo further transformations during the provision of the service.Quality: As for customer contact, many service operations have little outside customer contacts, such as the backroom operation of a bank or the baggage handling area at an airport. However, everyone in an organization has some customers outside customers or inside customers whether in services or manufacturing.Operations management is relevant to both manufacturing and service operations. You need to know about operations management, regardless of the type of organization.
Definition of Manufacturing and Service
Manufacturing process: Manufacturing can be defined as the process of covering raw materials, components, or parts into finished goods that meet customer satisfaction.Service process: A valuable action, deed, or effort performed to satisfy a need or to fulfill a demand. Differences between manufacturing and servicing are as follows:Similarities between Manufacturing and Service
The similarities between manufacturing and service operations are given the following:
Manufacturers do not just offer products, and service organizations do not just offer services. Both types of organizations normally provide a package of goods services.
Generally, service organization cannot inventory their outputs, but manufacturing firms that make customized product also cannot inventory their output.
Everyone in an organization has some customers, whether in service or manufacturing.Both of the organizations require hard labor.
Both have a very good return on investment.
Both have huge marketing potential.
Both have forecasting and capacity planning to match supply and demand.

Organizations can be divided into two broad categories: manufacturing organizations and service organizations, each posing unique challenges for the operations function. There are two primary distinctions between these categories. First, manufacturing organizations produce physical, tangible goods that can be stored in inventory before they are needed. By contrast, service organizations produce intangible products that cannot be produced ahead of time. Second, in manufacturing organizations most customers have no direct contact with the operation. Customer contact occurs through distributors and retailers. For example, a customer buying a car at a car dealership never comes into contact with the automobile factory. However, in service organizations the customers are typically present during the creation of the service. Hospitals, colleges, theaters, and barber shops are examples of service organizations in which the customer is present during the creation of the service. Operations is a core functional area of an organization, along with marketing, human resources and accounting. Operations management plays a crucial role in enhancing the quality of products and efficiency of the production environment. According to the Corporate Finance Institute, operations management is the process of administering business practices to maximize the efficiency of operations and enhance the quality of output. Operations management involves activities such as planning, organizing and overseeing operational activities to reduce costs and improve profitability.

Manufacturing Operations тThe term "manufacturing operations" refers to a framework in which man, machine and material come together to produce a tangible product. It deals with all the supply chain activities such as gathering requirements from customers, procuring raw materials, allocating resources, scheduling the production, maintaining the inventory, and delivering end products to customers. Manufacturing operations are classified into process manufacturing and discrete manufacturing. Process manufacturing is an operational method that produces goods by following a specified sequence of steps or a predefined formula. Discrete manufacturing emphasizes producing individual finished goods that are distinct from one another. While pharmaceutical and food and beverage industries adopt the process manufacturing method, automobiles and smartphone manufacturers adopt a discrete manufacturing method.
Service-Providing Organizations
Services are intangible and non-physical products offered by one party to another in exchange for money. As reported in the Harvard Business Review, service-providing operations aim to deliver an experience that leads to customer satisfaction. Service operations engage a wide range of teams to deliver services, including professional service teams, customer support teams and customer experience teams. Organizations that engage in hospitality, travel, media, sports, health care and entertainment are service-providing organizations. Service-providing operations send employees to their customers' locations or meet the customers at the company's premises to facilitate the service provision.
The important components of service-providing operations are labor, service model and service environment. Labor could be a skilled workforce or semi-skilled workforce that directly engages with customers to provide services. The service model is the approach that the organization adopts to deliver intangible value to customers. SAAS (Software-As-A-Service) is a perfect example of a service operations model adopted by software firms. A restaurant drive-in option is another service operations model that lets customers remain in parked vehicles while they eat. Service environment refers to the ambiance of the premises where the service provision takes place.
Similarities of Goods Production and Service Operations
Goods production and services operations look similar to an extent. Both goods production and service operations engage human and physical resources to deliver the desired output. For example, the goods production environment of an automotive company uses human resources such as mechanical engineers, production labor and physical resources like fabrication, welding and drilling machinery to deliver finished goods. Similarly, service operations at a beauty salon engage human resources, including haircutting experts and beauticians, and physical resources, such as conditioners, straighteners, clippers, wands and combs, to offer the desired services.
Differences Between Goods Production and Service Operations
While manufacturing operations focus on producing goods and storing them at a warehouse before delivering them to customers, service-providing operations facilitate simultaneous production and consumption of services. For example, an automobile company makes a car and keeps it in the warehouse until a customer comes forward to purchase it. A beauty salon needs to provide haircutting services in the presence of the customer.
Services cannot be stored for later use. When there is a high demand for services, service operations should engage additional human resources and modify operational activities accordingly to manage the supply-demand equation. Due to their nature of producing and storing finished goods, manufacturing operations don't need to engage additional resources and modify operational activities when there is a high demand for products.
So you have a great idea that you’ve pitched to a few investors and have backing to produce your product. This is where the rubber meets the road; it’s time to build a line of prototypes or a full production run of your finished product. There’s a good chance you don’t have a full assembly line in your garage, and even if you could produce the product yourself, you likely wouldn’t be able to keep up with the quality and quantity that a full scale manufacturing service can provide.
What is a Manufacturing Service?
A full scale manufacturing service is any business that uses components, parts, or raw materials to make a finished good. Fields involved with manufacturing services range anywhere from pharmaceutical companies to aerospace firms.
These manufacturing businesses use a number of computer programs, robots and manual labor, to ensure they all work as a group to complete the process as quickly as possible. After production, these goods can be either be shipped to you, sold to another business, or even sold to another manufacturing businesses.
Should I Bring My Product to a Manufacturing Service?
If you have a prototype that is ready to go, have done all your homework and can answer, in extreme detail, “am I ready for production,” then yes, a manufacturing service would be right for you. However, if you still have some questions, need prototypes, or want some guidance when it comes to bringing your product from idea to reality, you may want to consider a Contract Manufacturing Service.
What is a Contract Manufacturing Service?
A Contract Manufacturing Service tends to be more flexible than a Manufacturing Service, and allows a designer to fabricate one component of their product, or take a concept and turn it into a reality. These Contract Manufacturing Services may specialize in one service area, or like Pivot International, specialize in a variety of industries, from foodservice to circuit board and electronics manufacturing.
If you just have an idea, Contract Manufacturing can assist with research and development, suggestions for improved design, and assembly material options. Once you’ve worked with this service, they will then complete a full, or partial run, depending on your needs.
So Which is Right For Me?
The answer to this question depends greatly on your product, and the people around you. If you have a tested prototype and a team of well-respected professionals who know your field and the product’s design, a Manufacturing Service could be all you need to get your product off the ground. However, if you need more feedback, are a very small scale operation, or are looking to get a prototype in the hands of potential investors and professionals, a Contract Manufacturing Service may be your best bet.
How Do I Find Out More?
Pivot International can serve both your Manufacturing, and Contract Manufacturing needs. With FDA approval, clean rooms, and ISO:9001 and ISO:13485 certifications, Pivot is ready to handle any manufacturing needs you may have.For more on our product manufacturing services, please click here. click here.