Difference Between Service and Manufacturing Operations
Purchasing professionals' perceived differences between purchasing materials and purchasing services
Services account for about 71 percent of the gross national product (GNP) and 75 percent of the employment in the United States (West 1997). A study sponsored by GAPS Research (formerly the Center for Advanced Purchasing Studies) found that in a cross-section of 116 large organizations, over half of the purchase dollars (54 percent) were spent on services (Fearon and Bales 1995). Consequently, purchasing departments are becoming more involved with the purchase of services. According to Dobler and Burt (1996), the purchasing department is now assuming a larger role in the purchase decisions related to services because of its knowledge of the purchasing process. An article in the popular press asserts that companies are discovering "a lost, lush continent for cost reduction" in services (Tully 1995).
As purchasing departments begin to give more attention to the purchase of services, can it be assumed that purchasing services is essentially the same as purchasing materials, or do differences exist? Is one type of purchase more complex than the other? These questions have been posed (Grave and Maples 1994; File, Cermark, and Prince 1994), but have not been directly answered with empirical research. If purchasing services differs from purchasing materials, several implications exist for curriculum development, purchasing management practices, and future research agendas. First, skill sets would need to be differentiated and integrated into curriculum development as well as various certification programs, such as the Certified Purchasing Manager (C.P.M.) Exam. Second, the differences would have human resource implications; job descriptions and requirements may need to be altered and employee evaluations would need to be adapted. Third, research should be conducted to determine precisely how and to what extent these differences manifest themselves in the purchasing
Services account for about 71 percent of the gross national product (GNP) and 75 percent of the employment in the United States (West 1997). A study sponsored by GAPS Research (formerly the Center for Advanced Purchasing Studies) found that in a cross-section of 116 large organizations, over half of the purchase dollars (54 percent) were spent on services (Fearon and Bales 1995). Consequently, purchasing departments are becoming more involved with the purchase of services. According to Dobler and Burt (1996), the purchasing department is now assuming a larger role in the purchase decisions related to services because of its knowledge of the purchasing process. An article in the popular press asserts that companies are discovering "a lost, lush continent for cost reduction" in services (Tully 1995).
As purchasing departments begin to give more attention to the purchase of services, can it be assumed that purchasing services is essentially the same as purchasing materials, or do differences exist? Is one type of purchase more complex than the other? These questions have been posed (Grave and Maples 1994; File, Cermark, and Prince 1994), but have not been directly answered with empirical research. If purchasing services differs from purchasing materials, several implications exist for curriculum development, purchasing management practices, and future research agendas. First, skill sets would need to be differentiated and integrated into curriculum development as well as various certification programs, such as the Certified Purchasing Manager (C.P.M.) Exam. Second, the differences would have human resource implications; job descriptions and requirements may need to be altered and employee evaluations would need to be adapted. Third, research should be conducted to determine precisely how and to what extent these differences manifest themselves in the purchasing