Operations management refers to the management of systems, procedures or processes that are used to convert or transform resources into final goods and services. This notion is also attributed to ensuring business processes are efficient, in that they use as little resources as possible and are also effective; by ensuring customer requirements are met.
Explain operations management’s role in business
Operations management plays a crucial role in business. Operations management consists of a scope ranging across firms and includes interrelated activities e.g. forecasting, scheduling, assuring quality, motivating employees. Operations management also plays a significant role in business as it ensures the business forecasts, conducts capacity planning (estimating number of g/s that can be produced), appropriately creates schedules, manages inventory, assures quality, motivates and trains employees and locates facilities.
Describe the correlation between operations management and information technology
IT plays a significant role in operations management. This can be displayed as management employs the use of IT to make operations management decisions regarding various issues related to productivity, costs, flexibility, quality and customer satisfaction. IT is used when making operation management decisions as most
- what resources will be needed
- when resources will be needed (use of JIT mechanism and reports [error rates])
- where the processes will be performed e.g. political, social, cultural, economical influences
- how well the firm structure their resource
and
- who will perform the work
Q: How does IT assist with OM and SCM?
IT acts as a bridge for effective operations management:
Explain supply chain management and its role in business
Supply chain management involves the management of information flows between stages in a firms supply chain. This is performed to maximise total supply chain effectiveness and profitability. Supply Chain Management monitors the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. (Harland, C.M. (1996) Supply Chain Management, Purchasing and Supply Management, Logistics, Vertical Integration, Materials Management and Supply Chain Dynamics.
List and describe the five components of a typical supply chain
Plan | Firm must have a plan for managing al resources that go toward meeting customer demand for g/s |
Source | Firms must carefully choose reliable suppliers |
Make | Manufacturing stage |
Deliver | Known as logistics: set of processes that plans for and controls the efficient and effective transportation and storage of goods |
Return | Most problematic step in supply chain – firms must create networks for receiving defective and excess products and support customers w/ problems with their goods |
The five persons in the supply chain include: (these may change depending on what business model is used e.g. e-commerce)
1. supplier
2. manufacturer
3. distributer
4. retailer
5. customer
Define the relationship between IT and the supply chain
IT plays a crucial role in the supply chain. IT enables the integration of process and information linkages between functions of a firm or between other firms, suppliers, customers etc to be analysed. IT also enables firms to monitor their supply chain and through the information gathered from this stage create informed forecasts and plans for future business goals and objectives. SCM heavily relies on IT to make accurate decisions regarding inventory, need for business processes, reducing costs etc. Without IT, it would be impossible to accurately monitor a large supply chain.
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