Application of Operations Management in Manufacturing Sector vis-à-vis Service Sector

Application of Operations Management in Manufacturing Sector vis-à-vis Service Sector
Answer 1
Yes, I agree with the above statement that every business engaged in production activity of
producing goods whether tangible or intangible has operating activity.
Any production industry producing goods or any service industry providing services to
customers has operational activity wherein the process flow is determined by application of
operation management. For understanding this, we first need to understand the definition of
operation management. Operations Management is an area of management which involves
planning, organising and supervising the business processes undertaken in a business for
production of goods or services and make necessary changes or alterations in the process and
ensure that the business operations are efficiently functioning with limited use of resources as
needed for the process and effectively matching the requirements of the customers.
Operations Management is now a multidisciplinary functional area in the company along with
finance, supply chain, marketing and human resources for meeting the goals and achieving the
vision and mission of the organisation. The functioning of Operations management makes sure
that the inputs like material, labour and any other inputs used in the production of goods or
services are used in the most effective and efficient manner so that to maximise the output or
result of the organisation.
Operations Management plays the transformation role in the process of conversion of inputs
into finished goods or services. Like at a manufacturing plant, the transformation is the
physical change of raw materials into products such as transforming steel into automobiles,
clothes into shirts and many other conversions. Like at a service sector in airlines, the
transforming role encompasses the function of transporting passengers and their belongings
from one location to another. Nowadays, this transformation role of Operations management
makes it the “engine” of the organisation.
Further, it can be seen that every business engaged in producing goods has a process flow
starting form procurement of raw materials to ultimate delivery of finished goods to ultimate
customers. Further, under tertiary sector there is operations involved in the way the services
will be delivered. For instance, the method of scheduling of flights and other ancillary
activities.
Thus, it can be stated that every business engaged in production activity of producing goods
whether tangible or intangible has operating activity.
Answer 2
Introduction
Operations Management is an area of management which involves planning, organising and
supervising the business processes undertaken in a business for production of goods or services
and make necessary changes or alterations in the process and ensure that the business
operations are efficiently functioning with limited use of resources as needed for the process
and effectively matching the requirements of the customers.

Operations Management is now a multidisciplinary functional area in the company along with
finance, supply chain, marketing and human resources for meeting the goals and achieving the
vision and mission of the organisation. The functioning of Operations management makes sure
that the inputs like material, labour and any other inputs used in the production of goods or
services are used in the most effective and efficient manner so that to maximise the output or
result of the organisation.
Operations Management plays the transformation role in the process of conversion of inputs
into finished goods or services. Like at a manufacturing plant, the transformation is the
physical change of raw materials into products such as transforming steel into automobiles,
clothes into shirts and many other conversions. Like at a service sector in airlines, the
transforming role encompasses the function of transporting passengers and their belongings
from one location to another. Nowadays, this transformation role of Operations management
makes it the “engine” of the organisation.
Operations Management in Manufacturing Industry
Nowadays, all manufacturers set out to perform the function to transform resources into the
finished goods with more operational efficiency and effectiveness. The process involves
various step by step processes which includes Planning of the production process and how the
facilities for manufacturing will be laid out, Controlling the production process by monitoring
and follow-up with the processes and responding to the feedback and making necessary
adjustments in the processes where possible for efficient functioning and Controlling the
quality of the goods produced and monitoring whether the same adheres to the requirement of
the customers.
Operations Management in Service Industry
Operation Management has a deep impact in the service industry with every now and then
techniques of operation management are applied to smoothen the business process and flow of
services. For instance, in aviation industry, operation management find its application on
procurement of aviation fuel, scheduling of flights, passenger seating arrangement etc. Thus,
operation management finds a core position in the heart of planning cost and increasing profit
of company. Let take another example of call centre wherein the wait time of a client is
managed through operation management in a manner that total wait time for a caller is reduced
to minimum and quality of service to consumer increases to maximum. Further, operation
management in service industry finds its hand in planning of service, execution of service and
delivering of service. Thus, in short it can be seen that service industry is deeply driven by
operation management where in the entire flow of activity is channelized through management
of operation and tools of operation management.
Differences in manufacturing v/s Service Operations
In the present generation, we don’t find much difference in the application of operation
management tools in service vis a vis manufacturing sector. Under both the sectors i.e.
secondary and tertiary sectors, operation management helps in controlling cost, maximising
revenue and as an outcome increasing profits of the company. The two major difference that
has been identified in the manufacturing vis a vis service sector has been detailed here-in-
below:

(a) Under manufacturing industry, there is standardisation of products wherein similar goods
are produced in a lot through machinery while under the service sector there is
customisation of services delivered every time as there is involvement of human being to a
large extent who cannot emulate to 100% the last delivered service (Operations
Management in Manufacturing and Service Industries, 2019). In the
manufacturing industry, products are produced in bulk with machines with a standardised
parameter set. For instance, production of biscuits in a factory with similar ingredient and
in bulk while on the other hand delivering of service by a beautician or by a hair dresser
cannot be standardised, there shall always be an element of customisation involved in the
same; (CSCMP and Nada Senders, 2019)
(b) The second major difference identified between the manufacturing and service sector is the
focus element under both the industry. In the manufacturing operation, the focus is on the
manufacturing layout while on the other hand service sector has focus on the environment
to focus on the customers. For instance, under the production operations manufacturing
layout focus can be on fixed, process focussed or on product focussed (Manufacturing
versus Service Operations, 2019). While for service sector the focus is generally how
the ambience shall be for the customers. Thus, dimension of service management shall
generally focus on layout of furnishings, arrangement of signs and tangible cues, such as
colors and sounds designed to enhance the customer experience (Schieltz, 2019)
Answer 3 part A
For answering the question 3 part A, one needs to first understand the smoothing factor.
Exponential smoothing is a rule of thumb technique used for the purpose of smoothing the data
of time series and uses the function of exponential window. This technique uses exponential
function instead of simple moving average or weighted moving average for the purpose of
predicting the future variable based on achieved result in the past. Under this method, the
weights decrease over time as compared to average which has equal weight over the time
series.
Smoothening under the current statistical tool is done using the smoothening factor alpha
which in the current case is 0.2 and is used for the purpose of predicting the next month
variable. The formula used for the purpose of computation of variable are as follows
Car demand for the month of February predicted = 150
Car demand for the month of February actual = 163
Smoothening Factor= 0.2
Formula for computation
(Actual Demand-Forecasted Demand)* Smoothing Factor + Forecast predicted or
Most Recent Actual Result * smoothening factor + Forecasted result * (1- Smoothening
Factor)
Based on above formula the computation is presented as under:
(163-150)*.2+ 150

152.6 or 153
Answer 3 part B
For answering the question 3 part B, one needs to first understand the smoothing factor.
Exponential smoothing is a rule of thumb technique used for the purpose of smoothing the data
of time series and uses the function of exponential window. This technique uses exponential
function instead of simple moving average or weighted moving average for the purpose of
predicting the future variable based on achieved result in the past. Under this method, the
weights decrease over time as compared to average which has equal weight over the time
series.
Smoothening under the current statistical tool is done using the smoothening factor alpha
which in the current case is 0.3 and is used for the purpose of predicting the next month
variable. (Piaseck, 2019)The formula used for the purpose of computation of variable are as
follows
Car demand for the month of February predicted = 150
Car demand for the month of February actual = 163
Smoothening Factor= 0.3
Formula for computation
(Actual Demand-Forecasted Demand)* Smoothing Factor + Forecast predicted or
Most Recent Actual Result * smoothening factor + Forecasted result * (1- Smoothening
Factor)
Based on above formula the computation is presented as under:
(163-150)*.3+ 150
153.9 or 154
Brief snapshot is presented as under:
February predicted 150
Actual Demand 163
Smoothing Factor 0.2
Part A Demand for March 152.60
Part B Demand for March 153.90