Chapter 8 - Operations Management

1. Define the term operations management.

Operations management (OM) is the management of systems or processes that convert or transform resources into goods and services.

2. Explain operations management's role in business.

Operations management's role in business ranges across the organisation and includes many interrelated activities such as, 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.

Management can us Information Technology (IT) to heavily influence operations management decision including productivity, costs, flexibility, quality, and customer satisfaction. One of the greatest benefits of IT on OM is in making operational decisions because OM exerts considerable influence over the degree to which the goals and objectives of the organisation are realised.

• What: What resources will be needed and in what amounts?
• When: When should the work be scheduled?
• Where: Where will the work be performed?
• How: How will the work be done?
• Who: Who will perform the work?

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

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.

A supply chain consists of all parties involved, directly or indirectly , in the procurement of a product or raw material. The five basic supply chain management components are:

• Plan: 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.
• Source: Companies must carefully choose reliable suppliers that will deliver goods and services required for making products.
• Make: The step where companies manufacture their products or services.
• Deliver: The step is commonly referred to as logistics. This is the set of processes that plans for and controls the efficient and effective transportation and storage of suppliers from suppliers to customers.
• Return: The most problematic step. Companies must create a network for receiving defective and excess products and support customers who have problems with delivered products.

A typical supply chain could look like this:

http://www.biz-development.com/SupplyChain/6.20.1.supply-chain-management-overview.htm

Supplier > Manufacturer > Distributor > Retailer > Consumer

1. Supplier - Provides the resources, raw material to manufacturer.
2. Manufacturer - creates the product.
3. Distributor - Distributes the products to retailers or sellers. 
4. Retailer - Orders product from distributors to sell to customers.
5. Customer - Consumer who purchases the product.

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

IT's primary role in the supply chain is to create integrations or tight process and information linkages between functions with an organisation.It advances in the five typical supply chain components which significantly improve companies forecasting and business operations.