Manufacturing and Service Organisations

Manufacturing and Service Organisations

Manufacturing Organisation focuses on the process of transforming inputs into an output which is a tangible good to be sold to consumers.

Service Organisation focuses on the process of transforming inputs into an output which is an intangible service which is sold to consumers.

Differences

MANUFACTURING ORGANISATIONS SERVICE ORGANISATIONS
A manufacturing organisation is one that produces a tangible good to sell to consumers. A service organisation is one that provides an intangible service to sell to consumers.
This type of organisation uses mainly raw materials as inputs. This type of organisation uses mainly human resources and information as inputs.
Transforms inputs into identifiable and tangible goods Transforms inputs into intangible products or service
Capital intensive operations Labour intensive operations
The Goods produced are generally permanent The Services produced are usually consumed as they are produced
The goods produced can generally be stored and reused The services produced cannot generally be stored
The Consumer does not usually have to be present when the goods are produced The Consumer usually has to be present when they are produced.
Examples of tangible products include cars and clothes. Examples of intangible services include education and health care.

Similarities

  • Both types of organisations create a Mission and Vision statement.
  • Service and manufacturing organisations both aim to meet the needs of consumers
  • Both service and manufacturing organisations seek to make a profit.