Operations Management

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South University Online
Good and Services
Instructor:  Susan Horne

What is the difference between the operations management chain for both goods and services?
The operations management cares about the study of how products and services are created in an efficient way while meeting customer needs. The main focus lies in managing the process that convert raw material or human labor into goods and services. According to article written in the Journal of Supply Management by Sengupta, K; Heiser, D; Cook, stated: “The distinction between the operation management of goods and services chains is that the supply chain, human labor forms a significant component of the value delivery process. In manufacturing supply chain physical handling of a product leads to standardized and centralized procedures and controls. In supply chains, in services this is not entirely possible as many of the decisions are taken locally and the variation and uncertainties in outputs are higher because of the human involvement”

Sengutpta et al (2006) stated that “demand management, customer relationship management and supplier relationship management” are areas in which both share similarities in operation. Is there a difference between the management of goods and services?

Yes there is, scholars agree that supply chain for service is more complex and difficult for manufacturing than services due to the fact that flow of physical goods and services focuses on human resources capabilities, ethics. Sales are intangibles in the service industry and decision are making at the one site as opposed to different location as it happens in the manufacturing industry. The behavior of humans regardless of how much training an employee is given, the outcomes is unique by each individual delivering the service. Therefore, human touch is what makes service In addition; the focus of efficiencies in service supply chains is on management of capacity, flexibility of...
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