Question

Operations management is an intricate web of internal and external interrelationships of people, processes, and resources. Identifying and assessing these relationships can help keep operational strategies and development headed in the right direction.

What is Supply Chain Management (SCM), and why is it important to business operations?

In what ways is SCM for a manufacturer similar or different than that of a service provider?

What is Enterprise Resource Planning (ERP), and how is it related to SCM?

Does this relationship introduce any specific issues or complexities into managing business operations? If so, how? If not, why?

Answer 1

1. Supply chain management is an alignment of an end to end business process to avail products to the consumers. It includes everything starting from obtaining raw material to delivering the end product to the consumer. It is an integral part of any organization and is very important to be efficient for customer satisfaction and company's success. The ultimate aim is to reduce the operational cost of the product. Supply chain Management makes the product available at the right time, right place and right quantity. It has the potential to improve the financial position of the country.

2. SCM for a manufacturer is different than that of a service provider due to the following reasons:

a) IN manufacturing, the products are manufactured and inventory is maintained in an anticipation of the future demand whereas in the service industry service is generated (produced) and delivered simultaneously.

b) In manufacturing, the focus is more on finished goods, therefore, SCM focuses on optimizing the operations of the plant where the product is manufactured whereas in the service industry, SCM focuses on decreasing the lead time to deliver the service.

c). Inventory Optimization is the core part of SCM in the manufacturing companies whereas it is not applicable for the service industry.

3. Enterprise Resource Planning is used to manage and integrate the data from different parts of the business. The insight from the data is used for Planning, Purchasing, Inventory, Sales and Marketing. ERP is basically a software which accumulates all the data from finance, HR, Marketing, and Operations. The integration of the ERP with the Supply Chain gives a better insight into the business operations to increase the efficiency and overall customer satisfaction.