Week 9 – Operations Management and Supply Chain Management

Define the term operations management.

Operations management is the management of systems or processes that convert or transform resources into goods and service.


Explain operations management’s role in business.


The scope of operations management ranges across the organisation and includes many interrelated activities such as forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, deciding where to locate facilities and more.


Describe the correlation between operations management and information technology.


IT can be utilised by managers to influence operations management decisions including productivity, costs, flexibility, and quality and customer satisfaction. Since operations management emphasises considerable influence over the degree which goals and objectives of the organisation are realised, it aids IT in making operational decisions when used with operations management.


Explain supply chain management and its role in a business.


Supply chain management involves the management of information flows between and among stages in a supply chain to maximise its total supply chain effectiveness and profitability. Components that are used in supply chain management includes planning, sourcing, making, delivering and returning.


Effective supply chain management can enable an organisation to decreases 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 and increase efficiencies while seeking a competitive advantage through cost leadership.


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


Plan: a company must plan for managing all the resources that go toward meeting customer demand for products and services. It involves setting up metrics to monitor the supply chain so that it is efficient, cost less and delivers high quality value.


Source: Reliable suppliers must be chosen to ensure the goods and services are delivered for making the products. Companies also need to set prices, delivery and payment processes with suppliers and create metrics for monitoring and improving relationships.


Make: This is where companies manufacture their products or services; this includes scheduling activities necessary for production, testing, packaging and preparing for delivery


Deliver: Also known as logistics and involves the process the plan and controls for efficient and effective transportation and storage of supplies from suppliers to customers.


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.


IT's main role in supply chain management is creating the integrations or tight process and information linkages between functions with a firm. It integrates planning, decision-making processes, business operating processes and information sharing for business performance management.