What are the differences between goods and services from an operations management perspective? What is an example of a good and a service?
Operations management involves managing business processes that occur during the conversion of inputs, which include raw materials and labor, into outputs in the form of goods and/or services. From an operations perspective, then, goods and/or services are the creation of value that consumers desire or expect. In this regard, goods and services are referred to in their traditional sense.
- Services are intangible and without physical attributes. On the other hand, goods are tangible and can be weighed or measured based on their physical aspects.
- Services cannot exist separate from the customer. For instance, a doctor needs a patient in order to conduct a diagnosis, which is a medical service. On the other hand, goods do not require customer interaction in order to be goods. For instance, a bottle of soda is a good even before it reaches the customer.
- Services are susceptible to changes in the consistency of how they are delivered, while goods can be created consistently using the same process and materials.
- Services can’t be preserved for future use. Goods, on the other hand, can be stored.
There are many differences between good and services from a management perspective. Since you want an example from the food industry, let me list a few of them.
First, goods are perishable in a food industry. So, it will require a lot of planning to order the right amount, so that you do not lose money. This is something unique to the food industry.
Second, service in the food industry is complicated by the type of business. For example, if you open a high-end restaurant, you will need a certain type of staff that fits into the ethos of the place. Also unlike goods, there is no shelf-life for good staff.
Third, another difference with goods is that the prices will fluctuate depending on the season. This is not something that you have to worry about with services.