The topic discusses operations supply chain management, briefly OPSCM, in the manufacturing industry. The goal is to learn the difference between supply chain management and operations management, stages and benefits, as well as processes and planning. The sources used for the research include Intuit QuickBooks, Harvard Business Review, Indeed, TechTarget, Kettering Global, and Wiley Online Library. The paper illustrates the complexities between operations and supply chain management, the role of managers, teams, suppliers, and their relationships, and highlights the digital transformation of the OPSCM.
Operations and Supply Chain Management: Understanding the Complexities
Essentially, the supply chain refers to obtaining and transporting raw materials and completed goods. Operations management is the field at the core of the business that generates the product from raw materials (Kettering Global, 2018). Determined by the size of the company, operations managers may oversee the day-to-day functioning of the business or a specific section of the manufacturing process (Kettering Global, 2018). Compared to the supply chain, operations are primarily internal to the organization. Operations managers make designing, development, planning, workflow, and personnel choices. On the other hand, supply chain managers engage more externally than operations managers (Kettering Global, 2018). For instance, supply chain managers must understand how to interact with vendors, transportation, and customers worldwide in today’s global economy. Additionally, they make crucial supplier selections and arrange sourcing, warehousing, and forecasting. While operations and supply chain managers lead separate divisions of a company, they are both expected to add value to the business (Kettering Global, 2018). Therefore, learning effective ways to implement profitable, competitive, and dynamic systems leads to a more efficient bottom line.
Significantly, supply chain management and operations management are two fields that are strongly linked, and some professionals are skilled in both areas. According to Indeed Editorial Team (2022), there are variances in what each specialist does, such as overseeing different firms’ aspects. The significant distinction between supply chain management and operations management is that the former works with resources acquired or distributed from outside sources. At the same time, the latter is primarily concerned with internal activities (Indeed Editorial Team, 2022). Moreover, some businesses may have a team for each field, one expert for each area, or one professional who manages both.
Business processes frequently shift between supply chain and operations management. For illustration, an operations manager may allocate a particular number of goods; thus, the supply chain manager places the order, interacts with the vendor, and collects the shipment when it reaches the destination (Indeed Editorial Team, 2022). The operations manager then supervises the process of converting those materials into the product their company offers and the equipment and personnel needed. After the goods are manufactured, they are sent to the supply chain manager for distribution to clients.
Supply Chain Management and Its Stages
Supply chain management may be divided into five stages or sectors. Daniel (n.d.) states that the first stage is planning; firms establish strategic plans to fulfill consumer requirements for products while avoiding a bullwhip impact by utilizing supply chain analytics and materials methods and technologies in ERP systems. The second phase is sourcing when businesses find and identify providers capable of supplying materials seamlessly and effectively following contracts and arrangements (Daniel, n.d.). Supply chain cooperation begins here and is critical throughout the supply chain management process.
Consequently, the following step is making or, in other words, manufacturing; goods are produced at this point. It comprises manufacturing scheduling, testing, assuring regulatory needs are met, packaging, warehousing, and distribution (Daniel, n.d.). Multiple machines are inclined to engage, particularly in larger firms, which progressively utilize technology such as IoT and AI to perform more productively (Daniel, n.d.). The fourth phase is delivery, which is related to logistics and is concerned with getting completed products to customers by whatever mode of conveyance is required. Supply chain executives are now expected to collaborate more directly when dealing with customers; inventory and warehouse management systems are vital at this point (Daniel, n.d.). Finally, all product returns are included in the return stage, particularly damaged items and products that will no longer be maintained. This stage also incorporates features from previous phases, such as inventory and logistics services.
Hence, supply chain management (SCM) is the improvement of a product’s development and movement from raw material sourcing to manufacturing, transportation, and ultimate consumer shipment. Daniel (n.d.) claims that SCM refers to processes’ integrated implementation and scheduling. They are necessary to handle the flow of material, relevant data, and capital resources in operations such as sales forecasting, sourcing, manufacturing, warehouse management, logistics, and returning excess or malfunctioning goods. Supply chain management necessitates a combination of business strategy, specialized tools, and cooperation to operate successfully.
Operations management refers to the monitoring of a company’s operations. The Indeed Editorial Team (2022) acknowledges that it involves how a firm’s facilities and technology are maintained, how production systems operate, and how the manufacturing of products or services is ensured to be reliable and on schedule. In business, operations are linked to how the firm works, mainly how employees spend time at the workplace (Indeed Editorial Team, 2022). An operations manager may devise more effective manufacturing methods to boost the company’s product performance. They may also be responsible for the company’s budget and personnel requirements and collaborate with other managers to develop business plans and determine how to achieve the firm’s long-term objectives. Operational managers may create a maintenance schedule for manufacturing equipment to ensure that machinery lasts longer and has fewer failures due to predictive maintenance measures.
For instance, an operations management professional at a computer manufacturing business may determine that rearranging the production process will accelerate the development of computers and collaborate with colleagues to introduce improvements. According to the Indeed Editorial Team (2022), they work with the supply chain management to ensure that inventory is available within the specified budget. These professionals oversee the production area’s personnel to guarantee that there are enough people making computers for matching consumer demand (Indeed Editorial Team, 2022). They also collaborate with other corporate executives to develop a business vision for the future.
The Role of Technology: Digital Transformation in the OPSCM
Businesses are undergoing digital transformation, resulting in the development of new goods, procedures, and service offerings. Saénz et al. (2022) assert that companies use digital technology to exchange supply chain data and resources in novel ways. For instance, it allows businesses to share warehouses and transportation capabilities. Collaboration prediction guided by machine-learning-based algorithms, which analyze factual information on shopping behavior to uncover new characteristics that impact consumption, is one supply chain mechanism that necessitates such interaction (Saénz et al., 2022). Stronger connections with external providers and end consumers are required to use this knowledge and new technologies properly.
Managers in charge of developing and executing these new partnerships must be open to new methods of conducting business. They should be able to assess the worth of non-traditional prospects, select the best suppliers, and design agreements that optimize the value captured while avoiding any hazards (Saénz et al., 2022). Thus, organizations that want to digitize their supply chains must encourage new roles and supporting technologies. Saénz et al. (2022) inform that boundary spanners will be critical agents of change in the new era enabled by the digital revolution. Companies will struggle to succeed in a competitive environment without them.
The advancement of technology is inextricably linked to the future of OPSCM by empowering supply chain teams to enhance or add extra value to their existing procedures. Connectedness via Internet technologies between devices and users across the supply chain is at the heart of IoT (Min et al., 2019). Its deployment demands open technological design, in addition to proprietary software and a transparent organizational structure free of boundaries, with collected data shared across enlarged supply chains whenever appropriate. Min et al. (2019) suggest that the convergence of faster computer processors, the collection of comprehensive data via IoT, and the use of AI have stimulated the growth and acceptance of robots, potentially leading to advances in supply chain management, implementation, and monitoring. More precisely, the usage of autonomous mobile robots (AMR) will most likely be adopted by more businesses, including the manufacturing field (Intuit QuickBooks, n.d.). Organizations that use this technology will be able to automate and expedite picking and packaging procedures. While AMR technology, for instance, emphasizes automating the actual picking process, it depends on data from the firm’s inventory management system, which is handled by the supply chain team.
Crucial technology that has the potential to alter supply chain processes significantly is blockchain. Min et al. (2019) emphasize that blockchain enables businesses to digitally encode and preserve transaction records in transparent and shared databases resistant to deletion, manipulation, and rewriting. Furthermore, 3D printing is a cutting-edge technology influencing OPSCM in manufacturing. It is a tool for producing three-dimensional solid products by stacking materials in sequential patterns, similar to traditional manufacturing (Min et al., 2019). As a result of breakthrough technologies such as laser sintering, which enables the utilization of specific metals, 3D printing is currently a viable choice for efficient, low-volume, customized manufacturing (Min et al., 2019). Hence, 3D printing provides a new supply chain design option in which consumers edit or modify orders online, and manufacturers make the product in nearby factories and deliver it to the purchaser in a rapid processing time.
OPSCM is an abbreviation for operations and supply chain management, two inextricably interwoven fields. The primary contrast between supply chain management and operations management is that the former deals with resources purchased or supplied from outside sources, whereas the latter focuses on internal activities. Nonetheless, business activities regularly shift between supply chain and operations management in the manufacturing industry. The digital revolution is changing the OPSCM, allowing organizations to exchange supply chain data and resources and improve operations in unique ways. For instance, 3D printing is a viable choice for efficient, low-volume, customized production. Furthermore, organizations that use autonomous mobile robots (AMR) may automate and help accelerate picking and packaging operations. Businesses may share warehousing and transportation capacities thanks to digital technology. Stronger relationships with external suppliers and end customers are essential to fully employing technological advances. Digital progress is intimately related to the future of OPSCM by enabling supply chain professionals to improve or add to their traditional operations.
Daniel, D. (n.d.) Supply chain management (SCM). TechTarget.
Indeed Editorial Team. (2022). Supply chain management and operations management: Differences and career. Indeed.
Intuit QuickBooks (n.d.). 10 supply chain management trends.
Kettering Global. (2018). Operations management and supply chain management: Understanding the nuances.
Min, S., Zacharia, Z. G., & Smith, C. D. (2019). Defining supply chain management: In the past, present, and future. Journal of Business Logistics, 40(1), 44-55.
Saénz, M. J., Revilla, E., & Borrella, I. (2022). Digital transformation is changing supply chain relationships. Harvard Business Review.