DIFFERENCES BETWEEN

SUPPLY CHAIN MANAGEMENT

AND
OPERATION MANAGEMENT

In regards to manufacturing industry and service industry

M A N U FA C T U R I N G I N D U S T RY V S S E RV I C E I N D U S T RY

Manufacturing Industry Service Industry

Produces tangible, generally Provides intangible products that are

standardized products. often customized to satisfy specific
needs.
Holds inventories. Do not hold inventory

Produces goods without a customer Do not produce a service unless a

order or forecast of customer demand. customer requires it
 SCOPE AND AREA OF MANAGEMENT

Supply Chain Management Operations Management

Activities that happens outside the Activities that happens inside the
company. company.

Concerned with processes such as Concerned with processes such as

source planning i.e. planning to buy planning, production control,
raw materials, manufacturing, resource allocation quality control,
delivery of finished goods, and etc. for producing goods at greater
finally, processing returning system. efficiency
 SCOPE AND AREA OF MANAGEMENT
Supply Chain Management
Managers oversee the process of
delivering goods or services starting
from raw materials to finished goods
Management of suppliers,
procurement of raw materials and
tracking , distribution of finished
good and tracking of the progress
Operations Management
Managers oversee the process of
converting resources such as raw
materials and human resources into
goods or services.
Production tracking , quality control ,
production planning
 SCOPE AND AREA OF MANAGEMENT

Supply Chain Management Operations Management

Mostly related to tracing of customers Customers satisfaction in delivery of

order and delivery of the service services by use of information and
data

Procurement of supplies Differentiation of the products as per

the needs of the customer, Customer
service
 TANGIBLE VS. INTANGIBLE OUTCOME
Manufacturing Industry
The manufacturing industry is more
focused on delivering quality product
at low cost . So we can see these type
of industries are more focused on
quality control, productivity and
optimization of resources. For
example: P&G is more focused in
delivering the standard goods as to
the customers, by delivering generic
products
Service Industry
While in the service industry the
service delivered are not the same or
generic, they are differentiated as per
the need of the customers. Here, the
focus is more on customer service
where the outcome is intangible,
while the procurement process
includes products that aids the
working environment. For example:
office supplies materials
 EXAMPLE
Manufacturing Industry
P&G has to spend lots of efforts in
checking the quality of raw materials
and the final goods. Here satisfaction
is granted if the product is of quality
and affordable and easily available
Service Industry
By whereas for a salon the customer
satisfaction is more broad. The
quality of the service can not be
defined in tangible form, and these
services can also vary from person to
person.