Week 9- Operations Management and Supply Chain

Define the term operations management

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


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




Explain operations management’s role in business

Operations management ranges across the organisation and includes activities such as:

1. Forecasting
2. Capacity Planning
3. Scheduling
4. Managing Inventories
5. Assuring Quality
6. Motivating Employees
7. Deciding where to locate facilities

Describe the correlation between operations management and information technology

Managers can use Information Technology to heavily influence Operations Management decisions including productivity, costs, flexibility, quality and customer satisfaction. One of the greatest benefits of IT on OM is in making operational decisions because OM exerts considerable influences over the degree to which the goals and objectives of the organisation are realised. 

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. The five basic components of supply chain management are plan, source, make, deliver and return.

List and describe the five components of a typical supply chain

1. Plan - A company must have a plan for managing all the resources that go toward meeting customer demand for products or services.
2. Source - Companies must carefully choose reliable suppliers that will deliver goods and services required for making products. 

3. Make - This is the step where companies manufacture their products or services. This can include scheduling the activities necessary for production, testing, packaging and preparing for delivery. 

4. Deliver - During this step, companies must be able to receive orders from customers, fulfill the orders via a network of warehouses, pick transportation companies to deliver the products, and implement a billing and invoicing system to facilitate payments.

5. Return - Companies must create a network for receiving defective and excess products and support customers who have problems with delivered products. 

Define the relationship between information technology and the supply chain.


Information Technology's primary role in SCM is creating the integrations or tight process and information linkages between functions within a firm-such as marketing, sales, finance, manufacturing and distribution-and between firms, which allow the smooth, synchronised flow of information and product between customers, suppliers and transportation providers across the chain.
Information technology integrates planning, decision making processes, business operating processes and information sharing for business performance management. 

Effective and efficient supply chain management systems can enable a business organisation to:

• decrease the power of its buyers;
• increase its own supplier power;
• increase switching costs to reduce the threat of substitute products or services;
• create entry barriers thereby reducing the threat of new entrants;
• increase efficiencies while seeking a competitive advantage through cost leadership.