The competition among the organizations has become immense and is getting tougher and tougher day by day, since more new companies are starting the businesses in the same industry. Whether they are from the manufacturing sector or service sector, the need for cutting the unnecessary costs, achieving maximum efficiency, and implementing operations management strategies is increasing with the passage of time (Shaikh, 2009).
Therefore, more focus is being laid on the Supply Chain Management these days by the businesses in order to set up certain operations approaches, distribution systems, and capacity layouts that not only reduce redundant costs but also provide better quality goods and services to the customers. So, the paper would discuss two operations approaches for each of these sectors – manufacturing and service – and would relate those approaches to quality control and efficiency that can be achieved by the businesses.
Operational Approaches for Manufacturing Organization There is no wonder to know that the manufacturing organizations deal with the inventory much more as compared to the service organization. The inventory includes raw materials, complementary parts, actual or finished products, and other packing materials; therefore, the two most used operational approaches for by these organizations are Lean manufacturing approach and Outsourcing.
Lean manufacturing is the approach that identifies and minimizes waster by adopting continuous improvement to satisfy the customer’s demands; moreover, it ensures maximum quality by examining each part of the good after its production to identify the flaws that might be there (Blacharski, 2010). Second approach is outsourcing, where the organizations that are not efficient enough in producing a certain product or material, assigns that production task to some other company, entity, business, or vendor that actually possesses the skills, mastery, technology, and resources to produce and deliver it.
Operational Approaches for Service Organizations Just-in-time approach and the Balance between Degree of labor and degree of customization are the two operational approaches that are often used by the service organizations. Just-in-time or JIT system is designed and implemented in order to produce or deliver services just as they are needed. In this approach, the raw material or inventory (potatoes or chicken) is delivered to the service department or facility such as, Mc Donald’s restaurant just at the time when it is needed.
And secondly, service organizations often try to maintain the balance between the degree of labor employed for the provision of services and the degree of customization based on the needs and wants of the customers. Advantages and Disadvantages The advantages of Lean manufacturing include reduced set up times, less lead times, lower expenditure of materials, simplification of materials for easy identification, reducing wastes, standardizing operating procedures, sustaining better environment and results, good maintenance, and safe practices (Heizer & Render, 2006).
Disadvantages can be excess time spent on cleaning and identification purposes, along with the use of resources and money. Advantages of outsourcing include reduction in inventory costs, reciprocity, preserve supplier commitment, better production results, and offsetting the lower technical expertise and capacity the company has. Disadvantages include increase in expenditure, high production costs, and the company might not obtain desired quality or core competence.