Week 9: Operations Management and the Supply Chain

1. Define the term operations management.

Operations Management is the management of the processes that transform inputs into outputs (goods and services); processes are efficient and productive in producing outputs.

2. Explain operations management's role in business.

Operations management is responsible for managing the core processes used to manufacture goods and produce services. Its role is varied, typical activities include forecasting, capacity planning, scheduling, managing inventory, assuring quality, motivating and training employees and locating facilities.

3. Describe the correlation between operations management and information technology.

There is a strong correlation between operations management (OM) and information technology, so much so that modern OM's could not do their jobs without IT. OM information systems allow managers to work out what resources will be needed and in what amounts, when the resources will be required, where the work will be performed, how resources will be allocated and who will perform the work.

4. Explain supply chain management and its role in business.

Supply chain management involves the management of information flows between an among stages in a supply chain to maximise total supply chain effectiveness and profitability. Supply chain management is important to a business as it allows it to become more efficient in its production of goods and services (better at turning inputs into outputs).

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

The five components of a typical supply chain are:

• Supplier: supplies the raw materials (inputs).
• Manufacturer: turns raw materials into products (outputs).
• Distributor: obtains the products form the manufacturer in bulk and sells to retailers.
• Retailer: retailers sell the products to the customer.
• Customer: the customer is the end party in the supply chain.

E-commerce may lead to dis-intermediation, which would remove components from the supply chain (e.g. the distributor and retailer).

6. Define the relationship between information technology and the supply chain.

Information technology plays a significant role in the supply chain; it is relied on to make accurate decision regarding each step of the supply chain. Without IT businesses would be overcasting or undercasting. IT facilitates JIT (Just In Time) stock management systems. IT allows managers to know where specific stock is in the supply chain and can predict how much will be needed int he future.