Difference Between Manufacturing and Services Sector Essay Example for Free

Difference Between Manufacturing and Services Sector Essay Difference between manufacturing and service organization’s operations To compare the operations between the manufacturing organization and service organization, I have taken the example of Mahindra automobile sector as a manufacturing organization and State bank of India banking sector as service organization. The Mahindra Company imports its raw materials from Japan, where after getting its parts it first initially makes a body structure of the car with the obtained parts. The second stage is axle assembly, where it fixes the wheels to the vehicle. The third stage is the transmission assembly where they fix the gear box for speed and torque of the vehicle. Coming to fourth stage they fix the suitable engine for the vehicle, and the fifth stage is followed by fixing the chassis which is chassis assembly Stage. The manufacturing of body is completed upto this stage and finally the vehicle goes into body shop where it gets paint in desired colours. Finally the output is ready to go into to the market. From there it goes it to the distributor where it is distributed to different wholesalers and from there it goes to retailers in different parts of the city or state. Where the end customer will go and buy the vehicle at the nearest retail shop to him. Later the company consults the customers who brought their vehicles and get the feedback from them, where the implement the customer changing tastes and views into the RD department for further improvisation of their vehicles. In the service sector like State Bank of India the main motto of this sector is to provide customer service’s like ATM services, Safety deposit locker, foreign inward remittances, E-pay. Where their focus is to give customer the utmost satisfaction with their service, for example for a customer to open an account in the bank the stages are, first the customer need to get a form from the counter available in the bank, fill it and attest the necessary required documents along with an introducer who already has an account there. So, with these inputs from the customer the bank process the application form creates an account in the name of customer for which he was initially provided with a passbook and ATM card. Further with the choice of customer the bank provides an internet banking account, mobile banking and other services. In Banking Sector value of operations depend upon the product-quality (Some examples: Electronic vendor finance, Electronic dealer finance, Direct debit) as well as the service quality model (Some examples: Utility bill payment, Direct indirect tax payment). Also collaboration with foreign firm made SBI the most High Tech Bank in India following a very secured as well as a better performance matrix model than other banks. The basic difference between manufacturing and service sector is that, in the manufacturing sector the vehicles that are produced can be felt, touch by the customers physically, but in service sector like banking their operations cannot be felt physically i. e. , intangible. 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 firm like banking generally produce a service tailored to customers needs, such as internet banking and mobile banking are given to customers who needed that service, in manufacturing firm they can produce vehicles without a customer order or forecast of customer demand. They manufacture the vehicles keep them in warehousing and send to the outlets where the demand is to be met. Service firms do not require a physical production site. The people creating and delivering the service can be located anywhere. For example different SBI branches located in different parts of city, but for manufacturers like Mahindra Company must have a physical location for their production and stock holding operations. Production does not necessarily take place on the manufacturers own site, it can take place at any point in the supply chain. Issue of environmental concern and the affects to the organization The carbon footprint (Green House Gas emission caused by an organization) of making a car is immensely complex. Ores have to be dug out of the ground and the metals extracted. These have to be turned into parts. Other components have to be brought together: rubber tyres, plastic dashboards, paint, and so on. All of this involves transporting things around the world. The whole lot then has to be assembled, and every stage in the process requires energy. The companies that make cars have offices and other infrastructure with their own carbon footprints, which were needed to somehow allocate proportionately to the cars that are made. Corporations do not operate in spreadsheets and documents. They operate in, interact with and affect the economy, society and the environment. This awareness is growing and is becoming the norm in the disclosure policies of corporations. No longer can an organization just report its financials and expect to satisfy the stakeholders – investors, customers and regulators. An organization must articulate to its stakeholders its approach to sustainability and communicate its social and environmental initiatives towards sustainability. In according to the environment concern Mahindra has established a green manufacturing facility in bangalore for the production of an eco-friendly electric car called REVA. The facility follows rigid green guidelines right from reuse of construction waste to utilization of solar energy for ongoing car manufacturing process, this manufacturing plant majorly uses the electricity from solar of about 35% of plant load is supplied from it, this plant saves about 53000 kg Co2 emission/year and also saves 22000 litres of diesel/year. This saves a lot of Green house gas emission into the air. There are 3 major factors came into light for the reason of development of the eco-friendly cars. First is evolving customers, where the customers in present generation are becoming eco-conscious and cost conscious. Second is Macro factors like rapid urbanization, rising fuel costs and pollution-congestion. Third is raising technology where lot of research is done and implemented in ideology to manufacture a new advanced technology car. This environmental concern by Mahindra led it into a major investment into the technology development and also for the construction of eco-friendly plant which is advanced and sophisticated when compare to regular plants, where this cost burden has led to the high price of the car, where it has been launched for 3. 10 lakhs. In view of an middle class customer why he has choose to buy a reva car, even though there are factors like environment concern, and increasing cost of fuels, there are other high performance cars in the market at same price which run on diesel or petrol. So he majorly opts for going for the high performance cars. Even though by implementation of high end technology has led to the increase in cost, Mahindra has to take up cost reduction measures as the electric car is majorly a middle-class targeted product, they should be able to sell the product at much cheaper price where already Tata has launched Nano with a cost of around 1. Lakhs, Where it attracts the major of the customers. Even though in the customers the environmental concern has increased, but majority of users desire of using regular diesel/petrol based cars which they have been using for several years. So the automobile companies like Mahindra were also unable to completely focus on these eco-friendly cars, where their major concern is of losing their place of selling the regular automobile vehicles in the global markets. Even though they initiated this project with their motive of reduction of carbon footprint, it may take several years to come to get their product in reach to majority of consumers. Irrespective of their sales of the ‘green manufacturing’ product Reva, Mahindra was the first automobile manufacturing facility in India to be recently awarded the ‘Platinum’ rating by IGBC (Indian Green Building Council). The plant has been developed in accordance with the standards set by the IGBC-India, a universally accepted benchmark for the design and operation of high performance green buildings. Impact of growing customer expectations on an organization their operations In the current economic environment, survival and continued business triumph assent is â€Å"exclusive concentration to the customer†. It is believed that, smart customer interactions are the pouring force for sustainable value creation. Failure to understand and manage customer expectations successfully over the years will accelerate a company’s disgrace. Today there is a grave need for effectual and flourishing customer expectation management in any type of business. A process-centric organization that focuses on customer expectations creates processes that go beyond the efficiency gains of process improvement. They proactively avoid failures like missed customer expectations before they occur. It is said that, the proper processes generate a high degree of customer loyalty, thereby securing the top line with a stable and expanding customer base which in turn gives profits. The example I want to quote here is the mobile phones manufacturing industry. From the year 2000 with the innovation of mobile phones into the world has occurred, this led to the usage of new equipment to man, so initially when mobile is introduced it has just only one option i. e. , making a call’s. The user can make a call to other number or receive a call from other numbers. This didn’t satisfy the need of the customer, so the key players in the mobile manufacturing has made a research and equipped the mobile with other two major options they are sms service and radio in the phone. That didn’t stop and there was a continuous evolution of different options in the mobile phones where later a mp3 player was introduced along with other accessories like calculator, alarm, calendar which is insertion of important things into a single device which also had some entertainment games. This is one era of mobile phones, but man had consecutively got used to computer and had become heavily depended on internet, to access his different websites either for official or personal use, then there raised a expectation from customer where he wanted to access internet even when he is not in front of computer, so this led to revolution in mobile phones where browsing internet has been added as a feature to the existing mobile through the services offered by respective networks the customer use. It didn’t stop there but the customer expect a quick browsing without any delay that led to emergence of 3G and now currently 4G is into action, where this is both change in operations of mobile manufacturing sector and network services offering sector. In today’s globalized world each and everyone in every corner is coming know about the variety of products that are being launched, this opportunity must be utilized by the firms by improving their logistics and supply chain operations where they were able to reach maximum number of customers in the market. The improvisation is of utmost important in every operation they perform because this gives the utmost efficiency to the customer. The majority of companies today have made it a practice to get the information from the customers about their experience of them with their product and still what they expect that could have been in it to give them maximum satisfaction. By this process of feedback they can plan their operations in the areas they need to improve like research and development or the quality of product or giving the customer the product in stipulated time, so by looking into these factors they will gain a satisfied customers in market, which makes them to retain with their product and use their products or services in coming years also.