differences and similarities between a manufacturing organization and a service industry

differences and similarities between a manufacturing organization and a service industry

Service and manufacturing organizations or industries are critical components in a business environment and form significant activities in trade. The two industries complement each other in terms of meeting consumer needs and striking an equilibrium in production and supply. The two, however, have many differences that are mostly derived from their nature of operations. Even with the many variations, the two share some similarities, which are very significant and vital to learn about as they also help define the nature of operation run by either the service industry or the manufacturing industry. In regard to this subject, this discussion essay aims at identifying and explaining the various differences and similarities between a manufacturing organization and a service industry while comparing the various key functions and core processes between them.

For clarity purposes, the definitions of the two industries are relevant. The service industry refers to a type of business that is entirely meant to work for customers in terms of providing services and sometimes goods for the customer. It is important to note that the service industry offers and provides needed services and goods to customers but does not manufacture the goods. On the other hand, a manufacturing industry dwells with the transformation of sometimes what can be called as raw materials into better items and goods that are improved and perhaps more sophisticated to meet the needs of the customers. Manufacturing industries add value to products and customize some of the goods to meet the needs of the market.

Both manufacturing and service industries co-exist in an economy though they have notable differences and similarities, which are all related to the nature of activities and their functionality. One of the major differences is in terms of the tangibility of their output. Manufacturing industries produce physical goods to the customers who purchase them to meet a given need at a particular time. Manufacturing industries, for example, a cement manufacturing industry has to manufacture cement, which will be bought by, for instance, a constructor to build. In such a type of transaction, customers pay to receive tangible goods, and a transaction is completed by the exchange of cash for physical products. On the other hand, the service industry provides intangible services. Examples of service industries include, for instance, a consultancy firm, learning, or training institutions, among many others.

Another key difference is the nature of their production and demand. Unlike manufacturing industries, service industries provide services on request, whereas manufacturing industries can stock goods as they await orders. Unique with the service industries, they do not hold inventories, thus create or offer a service only when a customer needs the service. Still very relevant with the example of a consultancy firm. Clients seek consultations services when in need and can only pay for them at the time of delivery. Manufacturing industries have the advantage of producing as they wait for demand to arise and thus can produce in surplus to cater for future needs of the market and customers.

Also, note that service industries provide services particularly tailored to meet the needs of a specific client. With the characteristic of customer specification, service industries can not provide a service unless needed by a customer. It should, however, be understood that with the production of service tailored to meet customer needs, the service industries can, however, design and develop the scope, content, and extent of their services before demand arises. As opposed to the service industry, manufacturing industries, more often than not, produce goods with specifications and regarding meeting a particular need of a customer’s order.

As there are many differences, there are also many similarities between the two industries. One of the similarities is that both meet customer needs. Manufacturing industries venture into a business to meet a specific need created by the market demand. For example, a cement industry gets into the cement business intending to avail cement to in the market that will be used in various construction activities. Also, a consultancy firm offers its services to clients to help find a solution to a particular problem or even offer advice. In such a manner, they both have an obligation to meet and satisfy the need of customers.

Also, the two industries are similar because they all provide a good or service for payment. Both manufacturing and service industries, more often than not, are in the market for money, and a good or service can only be delivered once transactions are completed. In other words, just as one can buy a good from the manufacturer for use, another customer also will have to pay to get a particular service. For instance, in a legal consultancy firm, an individual who, for example, seeks legal advice, will have to pay a certain amount set by the firm for each bag before he or she can be accorded a service. The same applies to cement buyers who also have to pay to get as many bags of cement as they may want.

Lastly, both the service industry and the manufacturing industry require skilled personnel. It is undebatable that for one to own and give legal advice, the consultants must be lawyers. On the other hand, manufacturers also need to be skilled in terms of how to operate specific machines and manufacturing plants. The requirements are fundamental in both industries and compulsory to remain relevant and enhance profitability. Without the necessary training and skills in human resources, the two sectors can hardly be efficient.