MAKERERE UNIVERSITY BUSINESS SCHOOL

ECONOMIC PRODUCTION MANAGEMENT

KIBUUKA OLIVIA

BESBM 11
Question:

Discuss in details the difference between manufacturing and service operation clearly bringing
out the differences between goods and services illustrate your answers using real local examples

According to goods the difference between operation service firms and manufacturers is that
tangibility of their out. The output of service firms such as consultancy training or maintenance
is intangible while manufacturers produce physical that customer can see and touch. For example
Uganda clays limited manufacture clay materials that customers can see and touch.

Operation service do not hold inventory, they create a service when a client requires it for
example network services like MTN, Airtel while manufactures like Picfare industries produce
goods with inventory levels aligned to forecast market demand and their production capacity to
meet demand just kin time.

Manufactures produce goods without customer order or customer demand forecast while
operation firms cannot do service unless a customer requires it although their design and develop
the scope and content in advance in case of any orders i.e they generally produce a service
tailored to customer needs such 12: 00 hours of consultancy, 14 hours of design and ten hours of
installation.

Operation services recruit people with specific knowledge and skills in the service discipline. Its
labour intensive and cannot be easily be automated although knowledge management system
enable a degree of knowledge capture and sharing while manufacturers employee many laborers
to reduce labour requirements although some organization are labour intensive.

Service Operation can be located anywhere so they do not require physical production sites
because they use network, to access the most appropriate services and skills while manufacturers
must have physical location of their production and stock holding.