•We classify types of production according to their different operations
processes a.k.a transformation technology.-> specifically if their operations
process combines resources or breaks them apart.
•We can describe services according to the extent of customer contact required.
Goods Producing Processes
All goods-manufacturing processes can be classified in two different ways:
1)Types of Transformation Technology
Manufacturers use the following types of transformation processes to turn raw
materials into finished goods:
•Chemical Processes: raw materials are chemically altered. E.g aluminum,
paint and fertilizer industry.
•Fabrication Processes: mechanically alter the basic shape or form of a
product. E.g metal forming or textile industry
•Assembly processes: put together various components e.g appliance industry
•Transport processes: goods acquire place utility by being moved from one
location to another
•Clerical processes transform information e.g compiling inventory reports at a
2)Analytic Versus Synthetic Processes
- the way in which resources are converted into goods.
An analytic process: breaks down the basic resources into components (e,g
extracting metal from ore)
A synthetic process: combines a number of raw materials to produce a finished
product such as fertilizer or paint.
Services are classified according to the extent of customer contact
High-Contact Processes: A system in which the service cannot be provided
without the customer being physically in the system (e.g transit systems)
Low-Contact Processes: A system in which the service can be provided without
the customer being physically in the system (e.g lawn care or auto repair shops)
Differences Between Service and Manufacturing Operations