Week Eight: Weekly Questions

Define the term operations management

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.

Youtube video thoroughly explaining operations management: http://www.youtube.com/watch?v=oJG0G1K2tnU

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.

http://technet.microsoft.com/en-us/library/Bb497004.uamv5c2_01_big(en-us,TechNet.10).gif

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 OM decisions involve many alternatives, thus OM information systems are essential for mgrs to make well informed decisions. Decision support systems and executive information systems driven by IT can also be used to help management perform a what-if analysis, sensitivity analysis, drill-down and consolidation. IT has a strong correlation with operations management in that it enables operation managers attain visibility across the firms processes and analyse the following:

- 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:

http://bookfiesta4u.com/wp-content/uploads/2009/09/Operations-management.jpg

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. UK: Blackwell.) Supply chain management plays a crucial role in business as it enables firms to clearly see how much each input is contributing to the final value of the good or service being produced. Through this evaluative stage, a business may be able to alter their supply chain to maximise profitability and customer satisfaction through improved products. There are various tiers of a supply chain which include goods and services, information and financial flows.

http://dspace.mit.edu/bitstream/handle/1721.1/39816/ESD-260JFall2003/NR/rdonlyres/Engineering-Systems-Division/ESD-260JFall2003/C63EDF2B-1583-46F8-A430-5A2330821E3A/0/chp_supchain.jpg

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

http://www.productionplanning.com/graphics/production_planning/DLOGSupplyChain.jpg

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.