Service and Manufacturing Organization – Production and Operations Management
What is service
Following are the features of service
Intangibility of Service – The service is that it is not tangible like the physical goods and is usually ‘felt’ thus, connected with the mind or psychology of the persons.
Non-inventoriability of Services – The other distinguishing feature of services as opposed to the physical goods is that the services are not inventoriable. A service is produced and consumed simultaneously. In this sense, a service does not exist; however, the results of the service last for some time.
Customer Involvement – Besides the quality aspects, the non-inventoriability of services also means that the customer may be directly involved in operations, the production and consumption taking place simultaneously. The service provider and the service, both, are there with the customer. The implications are:
^ Since the customer is involved directly, he introduces uncertainty into the design of the service product and into its production and delivery process, which is difficult to control.
Controlled Flexibility – The whole point raised by services is controlled flexibility. Flexibility should be present in the operations but without introducing chaos into the production/delivery system. Therefore, standardisation of the operations procedures and systems is as essential as the room provided for continual improvement.
Services in Indian Economy
The service sector’s contribution to the Indian economy in increasing at a high rate. In terms of the percentage of GNP, it may not be as dramatic as in USA where it is over 70 per cent or as in Europe where about 75 per cent of the employment is in services. However, there has been a tremendous growth in the demand for services since India’s independence. For instance, transport services demand in terms of the goods movement by roads grew from 6 billion tonne-km in the year 1951 to 400 billion tonne-km in the year 1995. During the same years, the passenger traffic by roads increased 65 times. It further doubled by the year 2001. The number of registered vehicles on the Indian roads increased from 1,865,315 during the year 1971 to 48,392,925 during the year 2000—a whopping rise of over 25 times.
The growth in the number of telephone lines has also been spectacular during the past decade. From 5.8 million lines in 1991-92, it has grown to more than 37.8 million lines in 2001-02, which is an increase of more than 500 per cent in just 10 years.
Globalization of Services
Services are offered by most businesses and those in manufacturing, offer package consisting of various services. For example car manufacturer, offers warranty. We have called it as ‘service product’ or ‘service package’. In any service, there is the ‘core product’ and the supplementary elements (which are termed as ‘augmented product’ and ‘extended product’). There can be several different supplementary elements. Lovelock* has called the service product, which consists of the core product surrounded by supplementary elements as the ‘flower of service’
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