Product manufacturing operations can be described as a three stage transformation model of inputs.
Inputs
- Inputs are intangible. Unlike a traditional product, a service does not rely on a stock of physical raw materials but is more reliant on the interpersonal skills and abilities of its workforce.
- For a product the process of transformation is normally unseen by the customer. By comparison, customers participate in the delivery process of a service by interacting with an employee or representative of the organisation.
- Service processes tend to be more labour intensive than most manufacturing processes which can rely heavily on plant and equipment.
- Greater customisation of the service is needed to meet customer needs meaning that standardisation of process is complex to achieve.