Operations Management and Supply Chain Management

8.1 Define the term operations management.

Operations management is the administration of the procedures that transform resources into goods and services

8.2 Explain operations management's role in business.

Operations management is responsible for forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, facility location decisions, along with others. Forecasting includes predicting future demands and estimating future growth and reduction. Capacity planning maintains cash flow and increase revenues. Schedules are set routines that must be maintained.  Inventory is managed by recording and managing products relevant to the business. Quality is a key component to customer satisfaction and business priority. Employees must be trained and motivated to perform the job to the best of their ability. The location of the facility is crucial to target specific customers as well as to the success of the business.

8.3 Describe the correlation between operations management and information technology.

Operations management is effected by information technology with regards to decisions such as productivity, costs, flexibility, quality, and customer satisfaction. The goals of the organization can be influenced by the aid of information technology for operations management to make operational decisions. These well informed decisions are crucial to the outcome of the organization as a whole.

8.4 Describe the five characteristics of competitive priorities.

Competitive priorities consist of cost, quality, delivery, flexibility, and service. When customers make purchasing decisions, cost is one of the main factors that influence which product to choose.  There are two forms of quality, product quality and process quality. The level of quality depends on the projected market. Therefore, organizations must focus on the market in order to produce the appropriate product quality. Process quality is implemented in order to produce flawless products. In turn, this results in stronger customer relationships and higher revenues.

8.5 Explain supply chain management and its role in a business.

Supply chain management organizes information flows throughout the supply chain in order to maximize effectiveness and profitability by supply chain strategy, partners, operation and logistics. Supply chain strategy is the method of meeting customer demand for products by managing all resources. The partners in the supply chain are responsible for delivering finished products, raw materials, and services such as pricing, delivery and payment. Supply chain operation is measured by productivity and quality for production activities. Supply chain logistics is the product delivery processes. If all the processes in the supply chain are managed effectively an organization will benefit from increasing supplier power, efficiencies and switching costs. An organization can also decrease the buyer power, reduce threat of substitute products and threat of new entrants by creating entry barriers.