Week 9 - Operations Management and Supply Chain

1. Define the term operations management

Copyright © 2010 McGraw-Hill Australia Pty Ltd

Baltzan, Philips, Lynch & Blakey, Business Driven Information Systems (Australian/New Zealand edition)

Operations management (OM) is the management of systems or processes that convert or transform resources (including human resources) into goods and services. It is also responsible for managing the core processes used to manufacture good and produce services.

2. Explain operations management’s role in business

The scope of OM ranges across the organisation and includes many interrelated activities, such as forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, deciding where to locate facilities and more. 

In the example of Airline business, it's role involves:

• Forecasting
• Capacity Planning
• Scheduling 
• Managing Inventory
• Assuring Quality
• Motivating and training employees
• Locating facilities

3.Describe the correlation between operations management and information technolog

Today many organisations operate in terms of Strategic Business Units (SBUs). Decisions at SBU level focus on being effective. Information technology can enhance the requirement of effectiveness with the systems specially designed for them. Such as Materials requirement planning (MRP) systems, Global inventory management systems, Operational planning and control (OP&C) and Inventory management and control systems

 

Materials requirement planning (MRP) systems use sales forecasts to make sure that needed parts and materials are available at the right time and place in a specific company. 

Global inventory management systems provide the ability to locate, track and predict the movement of every component or piece of material anywhere upstream or downstream in the production process. This allows an organisation to locate and analyse its inventory anywhere in its production process.

Operational planning and control (OP&C) deals with the day-to-day procedures for performing work, including scheduling, inventory and process management. 

Inventory management and control systems provide control and visibility to the status of individual itmes maintained in inventory. The software maintains inventory record accuracy, generates material requirements for all purchased items and analyses inventory performance. 

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

The supply chain is a business process that links all the procurement from suppliers, the transformation activities in side a firm (the value chain) and the distribution of goods or services to customers via wholesalers and retailers.

A supply chain is a network of organizations and facilities that transforms raw materials into products delivered to customers.

Supply Chain Management (SCM) – involves the management of information flows between and among stages in a supply chain to maximise total supply chain effectiveness and profitability

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

Copyright © 2010 McGraw-Hill Australia Pty Ltd

Baltzan, Philips, Lynch & Blakey, Business Driven Information Systems (Australian/New Zealand edition



plan

This is the strategic portion of supply chain management. A company must have a plan for managing all the resources that go toward meeting customer demand for products or services. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less, and delivers high quality and value to customers.

source

companies must carefully choose reliable suppliers that will deliever goods and services required for making products. Companies must also develop a set of pricing, delivery, and payment processes witth supplier and create mmetrics for monitoring and improving the relationships.

make

This is thhe step where companies manufacture their products or services. This can include scheduling the activities necessary fro production, testing, packaging, and preparing for delivery this is by far the most metric-intensive portion of the supply chain, measuring quality levels, production output and worker produtivity.

deliver

This step is commonly referred to as logistics. Logistics is the set of processes that plans for and controls the efficient and effective transportation and storage of supplies from suppliers to customers During this step, compaies must be abe to receive order from customers, fulfil the orders via a network of warehouses,, pick transportation companies to deiever the products, and implement a billing and invoicing system to facilitate payments.

return

This is typically the ost problematic step in the supply chain. Companies ust create a network forreceiving defective and ecess products and support customers who have problems with delievered products.

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

The relationship between information technology and supply chain

With the modern advances in technology, it has enhanced the five SRM components significantly by improving companies’ forecasting and business operations. These integrated systems have provided companies with greater visibility over the supply chain inventory levels.

Information technology’s primary role is to create integrations or tight process and information linkages between functions within an organization.

Operations Management

source: youtube (http://www.youtube.com/watch?v=LeeTy3YaMu0)

Reference:

Cosmo Strategic Business Unit, COSMO BUSINESS SYSTEM AEBE, available on http://www.cbs.gr/Company/StrategicBusinessUnits%CF%84%CE%B7%CF%82Cosmos/tabid/398/language/en-US/Default.aspx accessed on 9th Oct 2011
Textbook: Baltzan, Phillips, Lynch & Blakey, Business Driven Information Systems, 1st Australian/New Zealand ed, pp.353, 355, 365, 367, Figure 8.3 p363 and  Figure 8.10 pp. 368