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Sourcing Manufactured Products versus Services

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Explain the differences between sourcing manufactured products versus services. Identify some key challenges that would occur in defining service specifications versus manufacturing specifications.

Provide an example of each.

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Differences between sourcing manufactured products versus services are:

1) When sourcing manufactured products, the desired result is that the correct goods will arrive in a timely manner, at the right location, in the amount ordered, in the desired quality, within budget. When the product is received, the customer and supplier may terminate their relationship. When sourcing products, the main focus is on finding a company with the right goods, comparing quality and prices, and determining the logistics for the delivery.

Sourcing services, however, is more about a management of information. When sourcing services, the service contract is only the beginning of the relationship between the client and the provider of the service. When sourcing services, uncertainties need to be managed. A process for transferring information between customer and supplier may need to be developed.

2) When sourcing manufactured products, the customer and supplier can outline what is expected from the transaction. Because the product is a tangible item, its specifications can be determined, and the product tested and inspected. ...

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