3C: CHARACTERISTICS OF MANUFACTURING AND SERVICE BUSINESSES Flashcards
Manufacturing Business
Use resources and raw materials to produce a finished physical good.
Service business
Provide intangible products, usually with the use of specialised expertise
Characteristics of a manufacturing business
Manufacturing businesses tend to have highly automated processes that are capital intensive, production and consumption occur separately, there is a low degree of customer contact due to the production stage being separate from the consumption stage, outputs and tangible, outputs can be stored as inventory, produce standardised goods
Characteristics of a service business
Service businesses tend to have production processes that are labour intensive, production and consumption occur simultaneously, there is a higher degree of customer contact due to production occurring simultaneously with consumption, outputs are intangible, cannot be stored as inventory, not standardised and are instead tailored specifically to fulfil individual customer needs
Similarities of manufacturing and service businesses
- both service and manufacturing businesses aim to optimise their operations to produce high-quality outputs at a low cost of production
- both service and manufacturing businesses have to deal with suppliers during the process of managing operations
- both service and manufacturing businesses can utilise forms of technology in the operation systems
- both service and manufacturing businesses aim to optimise efficiency and effectiveness in their operations
Differences between the characteristics of operations at manufacturing and service businesses
Manufacturing businesses: Capital intensive, P and C occurs seperately, Low degree of customer contact, Tangible outputs, Can be stored, Standardised production
Service businesses: Labour intensive, P and C occur simultaneously, High degree of customer contact, Intangible output, Cannot be stored, Tailored production
