Service Firms and Manufacturing

Difference Between Service and Manufacturing Firms

Several industrial and service companies have been built around the world. Manufacturing and service enterprises both have a substantial impact in diverse countries, including the provision of work opportunities for members of the local community. As a result, the primary goal of this research is to identify the differences between the service firm and the manufacturing firm. In addition, the research seeks to identify the difficulties that service organizations must face globally when expanding into new markets. Another goal of this research is to identify the elements to consider while locating a service firm. There are a number of differences between the service and the manufacturing firms. To begin with, the main difference is the palpability of their productivity. For instance the output of service firm like training, maintenance or even consultancy is immaterial whereas manufacturing firms produce products that are material and can be touchable to the consumers;. In addition, unlike service firms which create services only on client request or rather requirement and don’t embrace record, manufacturing firms produce products in stock form aligning their inventory levels to predict as per the market request. Nevertheless, various manufacturing organizations, depending on the exactness of demand prediction as well as the bulk of the manufacture, they uphold minimum amount of stock in order to meet a demand on a just-in-time basis (Wisner, Tan, & Leong 2014).

Physical Production Place

Furthermore, service firms do not necessarily need a physical production place as the individuals providing their services have no specific point of location. For instance, in cases of global firm like training networks for communication are used so as to access suitable provision abilities together with information from offices worldwide. In contrast to service firms, manufacturers must have a physical location where their products can be traced from as well as for holding their stock and production procedures. Still, individuals are recruited as per their specific abilities and knowledge on a particular field in service firms while in manufacturers easily automate a number of their production procedures in order to minimize the amount of labour required despite the fact that some of the manufacturing firms are labour demanding (Wisner, Tan, & Leong 2014).

Challenges of Global Service Businesses

Additionally, the global service businesses have to deal with a number of factors especially when expanding into external markets. Firstly, matters to do with regulation and compliance must be dealt with accordingly. Rules and regulation always change just like there is shift in technologies as well as in markets and the new regulations must be strictly complied with by every member of the firm. Moreover, companies must learn to maintain the online reputation of their organizations (Chen, & Tsai 2016). This is because consumers are in a position to highly condemn any discontentment portrayed by the company more publicly than before. Therefore, a third party, meant to closely observe and intercede from a distance is recommended. Likewise, technology as well as client services issues must be addressed by all firms. All companies must be innovative especially in development of new apps and cloud computing. Similarly, provision of instant clients’ services is important as customers can quickly display their displeasure on unsatisfactory services provided by the company on the web, as a result, spoiling the company’s reputation.

Importance of Service Location Decision

Furthermore, service location decision is of significance in that important factors such as availability of infrastructure, availability of skilled labour, customer proximity, government policies and even the surrounding environment must be considered when locating a company. This is important because constructing the firm in the right site provides skilled labour, easy accessibility of the services by the consumers and also ensures that the firm is successful especially in the modern competitive environment (Chen, & Tsai 2016).

Queue and Virtual Queue

A queue is a chain of things or sequence of individuals who are waiting for their time in order to be served or awaiting for their turn so that they can be attended. For example, customers are supposed to queue in order to collect their responses or keenly observe the rate at which services are provided. Contrary, a virtue queue is a form of management system whereby customers are permitted to get their feedbacks sooner rather than waiting in an Automatic Call Distributor which embraces the queue system of management (Courtois 2014). A virtual queue might be used by small businesses customers through virtual queue apps. The app remotely takes the virtue queue number for the customer who then remotely waits rather than waiting at the exact site of the company.

Four-Channel, Three-Phase System

Considering the meaning of a four-channel, three phase system, this is a type of management system whereby there are a number of channels as well as multiple phases for queueing by customers. Also, this system allows a number of customers to be attended at following a specific order from a frequency of individuals giving the services as seen especially in health care facilities (Courtois 2014).


In conclusion, various organizations have different systems of management most preferable in accordance to the type of services provided by their companies. However, the 'first come-first served' management system is the most fair and preferred method of management thus should be adopted by various firms.


Chen, L. F., & Tsai, C. T. (2016). Data mining framework based on rough set theory to improve location selection decisions: A case study of a restaurant chain. Tourism Management, 53, 197-206.

Courtois, P. J. (2014). Decomposability: queueing and computer system applications. Academic Press.

Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A balanced approach. Cengage Learning.

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