The process it takes for a product to reach a customer’s hands is a complex one. It involves multiple internal and external reviews and audits along the way. Each player in the supply chain oversees its part in the process.
It is a dynamic world of production, where efficiency and effectiveness and improvement are key. This becomes more evident in operations management and supply chain management. They are both critical components of modern business strategy, each with distinct roles yet interconnected objectives.
Business professionals must understand how to use them to enhance efficiency and value, thus boosting profits. Let’s see how these two sectors “operations management vs supply chain management” differ from each other.
What is Operations Management?
Management of business execution is necessary to create top-level planning within an organisation. This is operations management. In the operations management vs supply chain management debate, the former involves changing materials and labour into goods and services.
It must be done as efficiently as possible to enhance the profit of an organisation. The operations management team uses income to balance costs so they can attain the highest net operating profit possible.
It needs assets from employees, materials, appliances and technology. They obtain, expand and deliver goods to their customers based on their needs. They also have several policy issues. Some of them include deciding the size of producing plants and project administration methods.
Other operational concerns involve managing inventory levels, including procurement of raw materials, quality control, manual handling, and maintenance policies.
So, with this, shall we see how the latter works in operations management vs supply chain management?
What is Supply Chain Management?
This refers to the administrative journey of goods and services. It includes all practices that transform the raw materials into final products. It entails refining internal processes to enhance efficiency and gain a competitive edge.
By streamlining supply chain operations, companies can cut extra costs and deliver products to customers faster. Good supply chain management helps companies to stay away from costly recalls and legal actions.
Supply chain manufacturing is the lever that controls the manufacturing flow of a good or service. It looks at raw materials for the final product. It deals with the distributors and retailers of those companies who directly cater to their customers.
Apart from the core functions, there are also differences of responsibilities when it comes to the two parties. Each of the contenders for this operations vs supply chain debate has a special set of duties. Shall we have a loo, then?
Supply Chain Management Responsibilities
A supply chain manager usually pay attention to five areas:
Planning
This includes scheduling incoming materials to meet production schedules depending on customer purchasing cycles. This is the most critical component of the supply chain.
It helps to maintain proper inventory levels and schedule the receipt and shipment of outgoing and incoming materials. With effective planning, supply chain managers can reduce costs and keep production costs down by improving efficiencies.
Sourcing Materials
You need to find, qualify and work with good suppliers. These suppliers must abide by environmental and government standards. This means they ethically source the materials. Today, communications, planning, negotiations and relationship management are all part and parcel of a supply chain manager’s portfolio.
Manufacturing Products
The reason why supply chain management exists is to manufacture products for sale to consumers. As the companies monitor the production cycles and processes, it allows for better inventory control and efficient transportation of inbound and outbound shipments.
Delivery
Make sure that the finished products reach the customers. But transporting the precious cargo to the destination takes more than just shipping tape. Manufacturers need to practise caution, time, attention and buffet to ensure that the final products safely securely and undamaged arrive at their ultimate destination
Returns
Unfortunately, in the former of this debate-“operations management vs supply chain management” things do not always go according to plans. You have to return products or materials. Reversing the flow of goods is complicated. Some companies give a lot of time to the outbound system to deal with the returned system. They set up things like customer support and complying with internal control quality standards.
Let’s see how the other party in this debate compares to the former.
Operations Management Responsibilities
The Operations Manager oversees supply chain management within a broader scope. Managing the flow of goods from suppliers to final delivery involves various considerations such as customer service, quality assurance, and global markets.
Operations management addresses these to cut costs, boost efficiency, enhance competitiveness, and align with company goals.
Efficiency Optimisation
Operations management focuses on streamlining processes, minimising waste, and maximising productivity across various business functions. This involves continuous improvement initiatives, resource allocation strategies, and the implementation of technology to enhance operational efficiency in the internal supply chain management.
Quality Control
In the former of the two operations management vs supply chain management, operations managers carry out the activities. They are responsible for ensuring consistent quality standards in products or services through rigorous inspection processes, adherence to industry regulations, and the implementation of quality management systems to meet customer expectations and maintain competitiveness.
While these are the differences, there is one area of commonality in the operations management vs supply chain management debate. Shall we check it out?
Working Hand-in-Glove
There are two areas in businesses that have to work together when they involve supply chain management and operations management. This is because, without any materials, there is nothing to sell and bring in profits. Some of these areas are:
- Budgeting and Finance
- Risk Control and Management
- Quality Control and Customer Support
- Interdepartmental Communications
- Regulatory and Statutory Compliance
Before we wrap this up, let’s see a quick difference between the two types: operations and supply chain management.
Operations Management vs Supply Chain Management: Quick Overview
As you know supply chain management in operations management is a necessity in the supply chain. Let’s see how they differ.
| Operations Management vs Supply Chain Management | |
| Operations Management | Supply Chain Management |
| Focuses on management of operations or functions. | Focuses on management of supply activities like goods and services. |
| Manages the process of producing product | Manages supply or movement of produced product |
| Operations management primarily focuses on planning, managing, and organising daily operations or functions, utilising time to ensure smooth execution. | Supply chain management predominantly involves evaluating suppliers through qualitative and quantitative assessments, and negotiating contracts to establish agreements between parties, optimising time spent on supplier management and contract negotiations. |
| There is planning, organising, monitoring processes that may facilitates improvements in the process of operation management. | The supply chain management process includes design, planning, executing it and monitoring all supply chain operations. |
Here are some more differences between the two depending on various factors:
Tools Used
| Operation Management Tools | Supply Chain Management Tools |
| Objective and Key Results Template | Warehouse Management |
| Lean | Lean Inventory |
| Six Sigma | Demand Forecast |
Benefits:
| Operation Management Benefits | Supply Chain Management Benefits |
| Increase in revenue | Reduction in overhead costs |
| Motivated employees | Improvement in cash flow |
| Increase in customer satisfaction | Improvement in risk mitigation |
| Increase in product quality | Improvement in quality control |
Objectives:
| Operation Management Objectives | Supply Chain Management Objectives |
| Utilise resources to create products or services | Maximise overall value generated |
| Increase customer satisfaction | Improve overall performance of organisation |
| Produce goods of expected quality on time | Manage inventory effectively |
In short, in operations management vs supply chain management, the former optimises internal processes, while supply chain tools enhance efficiency across the entire network for organisational success.
FAQs: Difference Between Operations Management vs Supply Chain Management
What is an operations strategy?
It is a set of decisions of an organisation overseeing its production and delivery of goods. Organisations may assess each step they take when it comes to manufacturing and delivering a product.
What are the three main areas of operations in supply chain management?
The main aspects of supply chain operations are Purchasing (sourcing), Planning (scheduling) and Logistics (delivery).
What are the seven operational processes in supply chains?
The primary areas of concern are Purchasing, Manufacturing, Inventory Management, Demand Planning, Warehousing, Transportation, and Customer Service.
Conclusion
Operations management vs supply chain management are both crucial concepts in business management, while they have some similarities, they differ in management approach scope and focus.
Understanding the differences between these two concepts is a critical step in managing day-to-day business operations. For more supply chain information and the latest technology updates, contact Qodenext.
