Difference between Manufacturing and Service Process

A pure manufacturing process will be one, where the manufacturer only produces a product and do not provide any service at all. If there is an organization that provides some service and service alone, like a hospital, then it follows pure service process.

  • The output of a manufacturing process is tangible, meaning that the consumer can hold it in their hands. On the contrary, the output of a service process is intangible. It's something you can only feel. It doesn’t have a physical presence. Also, the output of a service process is perishable. Suppose a customer avails a service today, it doesn’t mean that they won’t need the service tomorrow.

  • In the manufacturing process, the output can be produced and stored in advance to meet any unexpected demand. But the same cannot be done for service process. The output of a service process is consumed as it is produced.

  • In a manufacturing process, the customer interaction is very low. The end user almost never comes in contact with those who make the products. But in service process, the customer interaction is very high and of utmost importance. The service is delivered straight away to the end user.

  • Another difference is in terms of the response time. In a manufacturing process, the time it takes to deliver a product could be long and the customer is willing to wait for that period of time, in most cases. But in a services process, the response time should be as low as possible, as the customer is in need of the service then and there.

  • In terms of reach, the output of a manufacturing process will have access to both local and international markets as it is possible to ship the product anywhere in the world the customer wants. But the market for a service provider, in most cases, will be local as it is not possible to transport services and the end customer must come in contact with the process that provides the service. But with the onset of latest communication technologies, this scene is changing slowly.

  • A manufacturer requires a large facility to operate from whereas a service provider can operate from even a smaller facility.

  • A manufacturer can automate the processes involved in manufacturing while the service process is more labor intensive and can’t be easily automated.

No firm can be categorized as a pure manufacturing firm or pure service firm. Every firm provides some level of service at one point or the other. If two-thirds of a company’s revenue comes from the manufacturing process, then it can be considered as a manufacturing firm and if two-thirds of its revenue comes from providing services, then the company is categorized as a services company.