1. The term operations management refers to the management of the different systems and processes in place within a business that convert or transform resources into goods and services.
2. Operations management's role within business is to forecast, oversee, design and redesign business operations in the development of goods or services. It is vital in order to ensure efficiency and effectiveness within the business.
3. In order for operations management to be the most effective, managers require specific information (or data) that is available within real time (constantly up to date) and accurate. Also having the opportunity to automate specific, repetitive and important business practices the business will be able to work more efficiently, reduce overhead, increase agility, and improve insight into business processes.
Information Technology provides necessary information and helps control and improves accuracy within business operations, thus helping contribute to a greater output of goods and services. Without a strong relationship between operations management and information technology systems – a business will be unable to produce quality, on time goods or services.
4. A Supply chain is a network of organizations and facilities that transforms raw materials into products delivered to customers. Supply chain management overlooks these information flows between and among stages in a supply chain. Its role is vital within a business in order to maximize total supply chain effectiveness and overall profitability.
5. The 5 components of a typical supply chain include:
- Plan: The strategic part of SCM. It is a strategy implemented for managing all the resources that go towards meeting customer demand for their product or service.
- Source: Choosing suppliers for raw materials in order to create goods and services. Managers must develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships.
- Make: The manufacturing stage. It is here activities necessary for production, testing, packaging and preparation for delivery are implemented.
- Deliver: (This stage is also referred to as Logistics). It is here managers need to coordinate the following:
o Of orders from customers
o Develop a network of warehouses
o Pick carriers to get products to customers
o Set up an invoicing system to receive payments
- Return: A responsive and flexible network for receiving faulty and excess products back from customers and supporting customers who have problems with delivered products.
6. Information technology helps to ensure the effectiveness of supply chain practices in order to provide the best goods and services to the customer. Information technology can help this throughout the following stages:
- Information Flows: Gives accurate and real time information for all data related to demand, shipments, orders, returns and schedules as well as changes in any of these data. This helps with decision-making and control.
- Financial Flows: Helps to control all transfers of money, payments and credit-related data.
Effective Information technology systems within the supply chain helps to increase visibility, competition, speed and consumer behaviour (Consumer behaviour software generates demand forecasts using statistical tools and forecasting techniques).
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