Operations Management and Supply Chain - Week Nine Questions

1.       Define the term operations management

Operations management (OM) is the management of systems or processes that convert or transform resources (including human resources) into goods and services.

2.       Explain operations management’s role in business

Operations management is responsible for managing the core processes used to manufacture goods and produce services.

3.       Describe the correlation between operations management and information technology

Information technology enables businesses to differentiate themselves from competitors to gain competitive advantage and works to maximise the efficiency of IT operations so that the business can focus on their resources on providing value for the business. In conjunction to this operations management ensures that these efficiencies of IT operations are conducted as a result of being the core processes used to manufacture goods and produce the services.

4.       Explain supply chain management and its role in a business

Supply chain management (SCM) involves the management of information flows between and among stages in a supply chain to maximise total supply chain effectiveness and profitability.  

5.       List and describe the five components of a typical supply chain

1)      Plan – Strategic portion of supply chain management. A company must have a plan for managing all the resources that go towards meeting customer demand for products or services.  A significant part of planning is developing a set of metrics to monitor the supply chain so that it is efficient, effective, costs less, and delivers high quality and value to customers.

2)      Source – Companies must carefully choose reliable suppliers that will deliver goods and services required for making products. Companies must endeavour to develop a set of pricing, delivery, and payment processes with suppliers and create metrics for monitoring and improving the relationships.

3)      Make – Companies must manufacture their products or services. This can include scheduling the activities necessary for production, testing, packaging, and preparing for delivery. This is the most metric-intensive portion of the supply chain, measuring quality levels, production output and worker productivity.

4)      Deliver – Commonly referred to as logistics. It is the set of processes that plans for and controls the efficient and effective transportation and storage of supplies from suppliers to customers.  During this, companies must ensure they are able to receive orders from customers, fulfil the order via a network of warehouses, pick transportation companies to deliver the products, and implement a billing and invoicing system to facilitate payments.

5)      Return – This is typically the most problematic step in the supply chain, companies must ensure they create a network for receiving defective and excess products and support customers who have issues with delivered products.