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Define operations strategy. What are the differences between manufacturing and service organisations in terms of operations strategy?

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Question added by Sathish Prabhu.V , Manager - Operations & Process Improvement , Revolution Valves
Date Posted: 2016/04/20
د Waleed
by د Waleed , Management - Leadership-Business Administration-HR&Training-Customer Service/Retention -Call Center , Multi Companies Categories: Auditing -Trade -Customer service -HR-IT&Internet -Training&Consultation

In addition to the answers I would say that the main difference in these organization is about the progresses and activities which are needed in order to achieve the outcomes of the company which is delivering the final product or service to the customers !

 

Thank You

Sathish Prabhu.V
by Sathish Prabhu.V , Manager - Operations & Process Improvement , Revolution Valves

Operation Strategy is a plan specifying how an organization will allocate resources in order to support infrastructure and production. An operations strategy is typically driven by the overall business strategy of the organization, and is designed to maximize the effectiveness of production and support elements while minimizing costs.

Difference between Service and Manufacturing Operations are

  1. Goods - The key difference between service firms and manufacturers is the tangibility of their output. The output of a service firm, such as consultancy, training or maintenance, for example, is intangible. Manufacturers produce physical goods that customers can see and touch.
  2. Inventory - Service firms, unlike manufacturers, do not hold inventory; they create a service when a client requires it.Manufacturers produce goods for stock, with inventory levels aligned to forecasts of market demand. Some manufacturers maintain minimum stock levels, relying on the accuracy of demand forecasts and their production capacity to meet demand on a just-in-time basis. Inventory also represents a cost for a manufacturing organization.
  3. Customers - Service firms do not produce a service unless a customer requires it, although they design and develop the scopeand content of services in advance of any orders. Service firms generally produce a service tailored tocustomers' needs, such as 12 hours of consultancy, plus 14 hours of design and 10 hours of installation.Manufacturers can produce goods without a customer order or forecast of customer demand. However, producing goods that do not meet market needs is a poor strategy
  4. Labor - A service firm recruits people with specific knowledge and skills in the service disciplines that it offers. Servicedelivery is labor intensive and cannot be easily automated, although knowledge management systems enable adegree of knowledge capture and sharing. Manufacturers can automate many of their production processes toreduce their labor requirements, although some manufacturing organizations are labor intensive, particularly incountries where labor costs are low
  5. Location - Service firms do not require a physical production site. The people creating and delivering the service can belocated anywhere. For example, global firms such as consultants Deloitte use communication networks to accessthe most appropriate service skills and knowledge from offices around the world. Manufacturers must have a physical location for their production and stock holding operations. Production does not necessarily take placeon the manufacturer's own site; it can take place at any point in the supply chain

For manufacturing organisation operational strategy suitable is establishing Product  leadership.This will help company to rapidly increase its foothold in the market.

While customer intimacy and operational excellence is important but in service industry it is important to have adequate service differentiation to retain the customer mindshare and loyalty.

Ghada Eweda
by Ghada Eweda , Medical sales hospital representative , Pfizer pharmaceutical Plc.

Thanks for invitation.

Definitions 

Basically, the operation strategy is part of firm's business strategy. business strategy  is a long-term plan for accomplishing the mission set forth in the mission statement. Each function within the business can then derive its own strategy in support of the firm's overall business strategy (financial strategy, marketing strategy, and operations strategy).

Therefore, Operations strategy could be defined as the collective concrete actions chosen, mandated, or stimulated by corporate strategy. It is, of course, implemented within the operations function. This operations strategy binds the various operations decisions and actions into a cohesive consistent response to competitive forces by linking firm policies, programs, systems, and actions into a systematic response to the competitive priorities chosen and communicated by the corporate or business strategy. In simpler terms, the operations strategy specifies how the firm will employ its operations capabilities to support the business strategy. Since, Operations strategy has a long-term concern for how to best determine and develop the firm's major operations resources so that there is a high degree of compatibility between these resources and the business strategy. Very broad questions are addressed regarding how major resources should be configured in order to achieve the firm's corporate objectives. Some of the issues of relevance include long-term decisions regarding capacity, location, processes, technology, and timing. The achievement of world-class status through operations requires that operations be integrated with the other functions at the corporate level. In broad terms, an operation has two important roles it can play in strengthening the firm's overall strategy. One option is to provide processes that give the firm a distinct advantage in the marketplace. Operations will provide a marketing edge through distinct, unique technology developments in processes that competitors cannot match.

Service versus manufacturing organizations

There are five main differences between service and manufacturing organizations: the tangibility of their output; production on demand or for inventory; customer-specific production; labor-intensive or automated operations; and the need for a physical production location. However, in practice, service and manufacturing organizations share many characteristics. Many manufacturers offer their own service operations and both require skilled people to create a profitable business.

1-Goods

The key difference between service firms and manufacturers is the tangibility of their output. The output of a service firm, such as consultancy, training or maintenance, for example, is intangible. Manufacturers produce physical goods that customers can see and touch.

2-Inventory

Service firms, unlike manufacturers, do not hold inventory; they create a service when a client requires it. Manufacturers produce goods for stock, with inventory levels aligned to forecasts of market demand. Some manufacturers maintain minimum stock levels, relying on the accuracy of demand forecasts and their production capacity to meet demand on a just-in-time basis. Inventory also represents a cost for a manufacturing organization.

3-Customers

Service firms do not produce a service unless a customer requires it, although they design and develop the scope and content of services in advance of any orders. Service firms generally produce a service tailored to customers' needs, such as 12 hours of consultancy, plus 14 hours of design and 10 hours of installation. Manufacturers can produce goods without a customer order or forecast of customer demand. However, producing goods that do not meet market needs is a poor strategy.

4-Labor

A service firm recruits people with specific knowledge and skills in the service disciplines that it offers. Service delivery is labor intensive and cannot be easily automated, although knowledge management systems enable a degree of knowledge capture and sharing. Manufacturers can automate many of their production processes to reduce their labor requirements, although some manufacturing organizations are labor intensive, particularly in countries where labor costs are low.

5-Location

Service firms do not require a physical production site. The people creating and delivering the service can be located anywhere. For example, global firms such as consultants Deloitte use communication networks to access the most appropriate service skills and knowledge from offices around the world. Manufacturers must have a physical location for their production and stock holding operations. Production does not necessarily take place on the manufacturer's own site; it can take place at any point in the supply chain.

Refer to:http://smallbusiness.chron.com/

 

 

TARIG BABIKER AL AMIN
by TARIG BABIKER AL AMIN , Head of Planning and Studies Unit , Sudanese Free Zones and Markets Co.

Operational strategies refers to the methods companies use to reach their objectives. By developing operational strategies, a company can examine and implement effective and efficient systems for using resources, personnel and the work process

There are five main differences between service and manufacturing organizations: the tangibility of their output; production on demand or for inventory; customer-specific production; labor-intensive or automated operations; and the need for a physical production location. However, in practice, service and manufacturing organizations share many characteristics. Many manufacturers offer their own service operations and both require skilled people to create a profitable business

I leave the answer to experts who specialize in this area, this is not my specialty field

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