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What is Operations and Supply Chain Management?

Posted by [email protected] on Nov. 17, 2020  /  Subscribe 0

There have been a lot of changes in the world of supply chains in regards to their manufacturing and production processes. Current economic and political shifts have brought about many modifications to traditional models and protocols in almost every industry imaginable. This has led to increased focus on supply chain management and has brought up questions from the public like, “What is operations and supply chain management anyway?” And for many manufacturers, securing a reliable supply chain vendor with a proven track record of strong oversight, control, and maintenance abilities is reason enough to answer this question and shed light on current supply chain conditions.

Complementary Capabilities

There are several similarities between operations management and supply chain management. There are also several pronounced differences depending on the type of organization each management sector is supporting. In any case, both disciplines support the same overarching goal—smooth functioning of the processes required to manufacture and deliver products. There are, however, two key differences to consider: the supply chain focuses on internal processes to acquire, move, store, and manage materials used in production, while operations teams manage the overall functioning of the business, including its supply chain activities.

Big or Small Doesn't Matter

Smaller companies may have both jobs filled by one individual or department, while larger manufacturers will have separate groups dedicated to each function. Recent developments in supply chain management applications, as well as the introduction of Artificial Intelligence to enterprise-wide risk management software, have produced paradigm-shifting capabilities in the overall management process of acquiring and controlling goods. The amount of materials sourced, the regions they originate from, the transportation protocols needed to move them, and the processes for assuring quality must be monitored 24/7/365. Supply Chain Management (SCM) has rapidly evolved into one of the major focal points that organizations and manufacturers—both large and small—must pay attention to.

Supply Chain Management

The standard definition of supply chain management is the acquisition, production, and delivery of products to consumers. Three simple things that involve many complex processes and protocols, including the following:

• Vendor Qualification and Selection
• Raw Materials Testing
• Transportation Oversight
• Shipping Regulations and Documentation
• Inventory Control
• Production Scheduling
• Inbound and Outbound Shipping

Supply Chain Management Responsibilities

The average day for a supply chain manager usually involves five areas of attention and responsibility. Those areas include:

1. Planning 

This involves scheduling incoming materials to meet production schedules based on customer purchasing cycles. This is the most critical component of the entire supply chain function: maintaining proper inventory levels and scheduling the receipt and shipment of incoming and outgoing materials. By planning effectively, supply chain managers are able to reduce costs and keep production costs down by improving efficiencies.

2. Sourcing Materials 

The ability to find, qualify, and work with important suppliers takes more than just a purchase order pad and a telephone. In today's world, communications, planning, negotiations, and relationship management are all part and parcel of a supply chain manager's repertoire.

3. Manufacturing Products 

The purpose behind the entire exercise of supply chain management is to manufacture products for sale to consumers. Monitoring production cycles and processes allows for better inventory control and more efficient transportation of inbound and outbound shipments.

4. Delivery 

Making sure that the finished products make it to the consumers is the goal line everyone strives to cross, but transporting precious cargo to its final destination takes more than just a box and some shipping tape. And this is not the stage for things to fail, especially since a great deal of time, attention, and budget are dedicated to ensuring the final products arrive at their ultimate destination safely, securely, and undamaged.

5. Returns 

Every now and then, things don't go according to plan and products or materials have to be returned. Reversing the flow of goods can be just as complicated as setting up the outbound system in the first place. Some organizations devote a great deal of time and budget to dealing with returned products, providing customer support, and complying with internal quality control standards.

Operations Management Responsibilities

The role of Operations Manager includes the responsibilities of supply chain management under its more overarching umbrella. The flow of goods from primary suppliers through manufacturing and final delivery requires a complex management process that includes many other important considerations. And regardless of whether the supplied item is a product or service, issues concerning customer service, quality assurance, information systems, global markets, and other matters must be addressed. Operations management handles these concerns to reduce costs, improve efficiency, increase competitive advantage, and provide the best practices toward achieving a company’s goals.

Working Hand-in-Glove

The two areas involving supply chain management and operations management have to work together very closely. This is because, without materials for production, there is nothing to sell and generate revenue, and without sales and administration, there is no one to make the deals and collect the money to pay the bills. 

For this reason, the two disciplines have several overlapping areas of interest and activity and also work together on:

• Budgeting and Finance
• Interdepartmental Communications
• Risk Control and Management
• Quality Control and Customer Support
• Regulatory and Statutory Compliance

Educational Resources

Professionals interested in expanding their education, certification, and utilization of current supply chain management protocols know where to go to get what they seek. The Association for Supply Chain Management (ASCM) has a program that provides the foundational knowledge necessary to be competitive in the world of supply chain management. The ASCM Supply Chain Operations Reference (SCOR) model links business processes, performance metrics, organizational practices, and human processes into an interactive, interlinked, and unified structure. In other words, it helps consolidate the big picture into more understandable and actionable data. The time and attention devoted to supply chain processes dictate the need for streamlined information systems, and the SCOR system brings it all together in one place.

Paradigm Change

Whether it is self-induced or externally-motivated, the time for changing how supply chain management works has arrived. And wanted or not, current conditions demand a re-evaluation of all systems—both internal and external—to assure continued supply of critical materials. There are many answers to the question, what is operations and supply chain management? Modern computer applications serve to support the most complex systems with easily understood data reports that can be quickly acted upon. Time and money are two of the main guiding factors in all business decisions, and for supply chain managers and operations managers everywhere, the time to make those changes is right now. Too much is at stake to put off making changes any longer, and the future is only getting more competitive.

APICS

At APICS, our mission is to continue the advancement of end-to-end supply chain management through a body of knowledge, innovative research, and methods to create value for customers, members, and organizations alike. For more information on operations and supply chain management or the certifications and exam preparation courses we offer to help prepare you for success in these roles, visit our certifications and credentials page today!

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