Introduction
In the history of operational management, some of the key persons who have contributed to the philosophies and methods of operations management are; Smith, Babbage, Whitney, Gantt, Gilbreth, Taylor, Ford, Sorcensens. Although, you may have never heard of them Smith and Babbage developed early concentrations of labor specialization. They had the idea to have a person specialize in a small part of the overall craftsmanship. Whitney worked on standardized parts. With the idea of using the same part in as many products as possible you can inventory less and buy in higher quantities of the same part. For example, in a car a cup holder is a cup holder. Originally every car manufacturer designed a custom solution for each of their car models. Today, many manufacturers either use a standard design in most of their vehicles or use a drop-in design that multiple manufacturers are using.
Gantt worked on the idea of scientific management, with Gilbreth developing motion and time studies and Taylor developing process analysis. While Ford and Sorensen pioneered the idea of the assembly line. Ford’s assembly line would not have been possible or maybe even a thought without those who came before him. The assembly line changed products and has changed the world forever. With each worker or workstation focusing on one specific small part of an assembly the skill level of each worker does not need to be as advanced. With a person completing the same task over and over again they can become more efficient and less likely to make a mistake.
Without the assembly line modern products such as the smartphone would most likely not be possible. The complexity of such a product it is almost impossible for a person other than the designer to master. If only a few could master the entire assembly of a complex product, then very few units would be able to be produced. With the modern assembly line workers sit at a station with a conveyor belt and they install their one part to the overall complex product. The assembly line simply makes the complex simple and the time consuming efficient. It is important to note, our modern-day lifestyle and world were made possible by these men who one small step at a time made it possible for the most complex items to be produced by unskilled labor and at a lower materials cost.
How Do Services Differ from Goods?
Surprisingly, many do not understand the difference between a service and a good. Let’s dive in.
First, services are not tangible, and goods are. Goods are a physical item or at least a digital file such as software. An example, of service would be the post office delivering your mail. They might deliver a tangible item but the act of transporting the item is a service. At the same time, the act of creating software can be described as a service while the software itself is a good.
Second, services typically require some degree of interaction. For example, if you would like someone to create a website or software, you will need to talk to them and describe what you want. While many products can be found complete, as is, in brick and mortar stores such as Walmart or an ecommerce stores such as Amazon. Someone, such as a car manufacturer can create a product without discussing it with you or any customer and then put that product on the market for you to buy assuming you like the product that was created. This is mostly how Apple Inc. founder Steve Jobs operated. He viewed his products as works of art. He made his art and you either liked it or you did not. Jobs had no place for focus groups or reviews of his products. He simply made what he thought was a perfect piece of art and history shows most of his art was wildly successful.
Third, much like the end of our second point, services vary to the customer’s needs while goods are created to fit specific needs or a market. When a service is being performed most likely that service will provide the purchaser exactly what is needed or requested. While a good would have been created to fill a market in the assumption of a need to be filled.
There are more points that can be made distinguishing the difference between a service and a good. Some have suggested a service appeals to the five senses but this can also be said about many goods. For example, a candy apple is a good, but it appeals to my eyes it is attractiveness, the smell of all the sugar as I approach, taste as I bite into it, hearing as it makes the desired crunch sound, and feeling as I struggle to crack the candy coating. Most importantly, typically a service is an intangible while a good is a tangible item.