operations and supply chain management

operations and supply chain management

The Role of Operations and Supply Chain Management in Modern Business

1. Introduction to Operations and Supply Chain Management

This book attempts to address critical issues through the presentation of an integrated, comprehensive, effective set of tools and techniques to lead businesses in higher levels of effectiveness. This is to assure the integration and synchronization of processes and activities that achieve greater levels of results, yielding greater success and competitive advantage. The complexity of business today, coupled with great customer service expectations, has forced organizations to become more supply chain aware. Customers demand better, faster, and more efficient services at lower costs. The competition, of course, must be more vigilant and at a higher performance level to meet these challenges. This book addresses these emerging supply chain issues in terms of integration and synchronization.

The processes and systems that drive operations create value and provide benefits to both customers and other key stakeholders. Thus, a comprehensive understanding of the key responsibilities of operations management is necessary for any organization that strives for best practices. The management of operations and supply chain management is no less than the direction and control of transforming inputs and resources into finished goods and services. Operations management is a field not well understood by the general public, yet it performs functions vital to the organization’s survival or profitability.

2. Key Concepts and Principles in Operations and Supply Chain Management

Operations management (OM) involves the systematic and focused transformation and control of inputs such as human resources, technologies, raw materials, work instructions, and money into accurate materials or services. Meanwhile, several advocates suggest supply chain management (SCM) involves coordinating the orderful of raw materials, materials management, and work-in-process products and managing order fulfillment of finished products, even within a single organization. While operations management tends to focus on the internal activities of an organization, supply chain management seeks to link together the activities of different organizations. For instance, in addition to transportation, supply chain management includes connecting different organizations such as sales, system support, and an electronic on or customer technical support. If any of these connections are neglected, customers might be disappointed by their perceived service quality, which might result in future order delays. The performance of operations and supply chain management directly affects the efficiency of the processes and, ultimately, the competitiveness of a firm. It is essential to have a holistic approach for optimizing activities across the supply chain as a whole rather than for just one managerial area within the firm.

Within the field of business, production encompasses everything from the process of converting raw materials to high-quality finished products to the planning and coordination of these activities. Operations and supply chain management are sub-disciplines of the broader field of production/operations management with common focuses. Both are involved in coordinating, planning, and executing business activities necessary to ensure the production and delivery of high-quality products and services. They are closely associated with other business areas, such as marketing, accounting, finance, engineering, information systems, and human resources management. Because of its critical importance, research and practice in operations and supply chain management have evolved greatly over the years.

3. Technological Innovations and Trends in Operations and Supply Chain Management

6) IoT real-time tracking: IoT data in real time helps firms manage equipment and data related to suppliers, routes, and delivery times while also providing plenty of information on in-transit inventory. As a result, the likelihood of producing weaker results is fundamentally diminished.

5) Augmented Reality / Virtual Reality: AR/VR can be used to overlay the digital information model over the physical equipment, providing valuable insight.

4) Robots: Robotic process automation (RPA) is used to execute repeatable processes such as order closing and reconciliation, eliminating the scope for human error.

3) Digital Twins: To simulate and test how changes in the real world will impact operations and supply chain activities, digital models (digital twins) are often used. For example, a digitally connected mirror image of an automated picking system can be created, with all flows of goods and information in/out—without the usual business disruption of a testing phase in an actual operating environment. This allows an analysis of areas that might not be functioning as planned or pose problems for order flow.

2) Advanced Analytics: Cloud-based analytics is now becoming an essential tool in the hands of operations and supply chain professionals to more effectively manage complex processes and improve organizational performance. Business process analytics helps ensure system stability and data integrity.

1) Advanced Machine Learning: Machine learning (artificial intelligence) can now be integrated with the Internet of Things (IoT) and powerful data analytics to vastly improve performance and accuracy in real-time decision-making. This applied intelligence can help in predictive maintenance by using sensory data to make effective forecasts and enable much more effective utilization of critical machinery.

Organizations are rapidly modernizing their operations, supply chain structures, and capabilities to achieve new levels of agility and stay ahead of the competition. What is driving many of these trends is the power and intelligence that digital technology can bring to a company’s value chain and service model. Some examples of technology trends and their impact on operations and supply chain management models are briefly discussed below:

4. Sustainability and Ethical Practices in Operations and Supply Chain Management

In 2015, 193 United Nations (UN) member states committed to 17 Sustainable Development Goals (SDGs). The SDGs were adopted with the aim of ending poverty, protecting the planet, and ensuring prosperity for all by 2030. The goals and their 169 individually specified targets are designed as a guide for eradicating global poverty and inequality and represent the core areas essential for worldwide sustainability. The areas addressed by the SDGs include the economy, environment, and social matters, guaranteeing a unique and complex connection between economic and social development for manufacturers, suppliers, and consumers. Sustainable development starts with livelihood and values and is influenced by global consumer demand. But even though many firms limit their operations due to financial restrictions, their operations should not subject society to excessive health and safety risks or contribute to damaging environmental issues.

5. Challenges and Future Directions in Operations and Supply Chain Management

Challenges that relate to specific aspects of operations and supply chain management include forecasting in a web-enabled world, supply chain segmentation, operations strategy, aligning supply chain operations performance with business performance, operations risk management, supply chain design and performance, better production operations management, managing revenue management globally, supply chain models, and optimization algorithms. In addition to these growing areas of interest, one area that will become increasingly important includes the study of how to adjust the role of operations and supply chain management in business education, research, and practice in response to these general trends and broader challenges in operations management. The place of operations and supply chain management within colleges of business administration is also an issue that has implications for many who work in the field. Given these challenges and potential research directions, the future is certainly bright not only for operations and supply chain management, but for the many organizations and people that operations management affects.

While there have been many advances in the field of operations management, many challenges and future research directions remain. Some challenges are associated with general trends in the business world that have implications for operations and supply chain management. These trends include the globalization of supply chains, the increase in outsourcing of production and service activities, cross-functional integration and collaboration, the increasing need for location-specific know-how, the increasing importance of services, the effects of information and communication technologies, the changing workforce, and the need for increased flexibility and responsiveness. Additionally, new areas of focus such as environmental sustainability, corporate social responsibility, and global supply chain challenges are becoming important to the field. These general trends have given rise to a number of challenges that include alternative manufacturing and distribution structures, e-commerce and reverse logistics, lean management and sustainability, and oversight and regulation.