The unique challenges of managing services supply chain Essay

The unique challenges of managing services supply chain - Essay Example tween a manufacturing and service sector supply chain is that manufacturing operations require lots of inventory, while in service operations there is none or little miscellaneous inventory such as office supplies. There is a difference in terms of how the labor is utilized in each supply chain. In manufacturing labor is used for procuring, transporting, and handling physical material, while almost all service industries labor is used to manipulate information and develop relationships. SCM includes supplier relationships, supplier network, and supplier collaboration (Sengupta, Heiser, Cook). Logistics and transportation costs in the supply chain of manufacturing companies are high, while service firms do not incur in these types of costs. The inventory category in manufacturing firms is subdivided into finished goods, work in process, and raw materials. None of those inventory accounts categories exist in the service industry. The service supply chain has more human involvement whic h makes it harder to standardize solutions to problems since they are resolve on case by case basis. In manufacturing lines processes are standardized. Take for instance the service that is provided by a barber. Each individual hair cut service is different because each human on earth has a different set of hair. In order to improve the supply chain of a service company the managers have to divide their strategy into three levels: strategic, tactical, and operational level. The service supply chain is more visible at the operational level. A fast food restaurant can improve its operational level offering by always having three cashiers instead of one taking orders from the customers. Such a strategy would reduce the waiting time of the customers by eliminating the long lines. At the tactical level a service organization such as the global managing consulting firm Accenture can begin recruiting its new batch rookie college graduates a year become the students graduate. Giving these