Supply Chain Management vs. Operations Management

What is Supply Chain Management?

Supply chain management is the administration of the flow of goods and services and incorporates all practices that change raw materials into final products. It requires the recasting of a business's supply-side undertakings to develop utility and gain a competitive superiority in the marketplace.

By executing the supply chain, companies can cut surplus costs and deliver goods to the customer faster. Good supply chain management keeps companies out of the caption and away from costly recalls and legal action.

Supply chain management is the controlling of the whole manufacturing flow of a good or service - establishing from the raw materials all the way to providing the final product to the customer. An organization generates a network of distributors that move the product along from the distributor of raw materials to those companies that deal directly with users.

What is Operations Management?

Operations management (OM) is the management of business execution to create the top level of planning possible within an organization. It is concerned with changing materials and labor into goods and services as efficiently as possible to enhance the profit of an organization. Operations management team try to balance costs with income to attain the highest net operating profit possible.

Operations management requires utilizing assets from employees, materials, appliances, and technology. Operations managers obtain, expand, and deliver goods to customers based on client needs and the capacities of the company.

Operations management holds several policy issues, including determining the size of producing plants and project administration methods and executing the structure of information technology networks. Other operational issues comprise the management of inventory levels, including business process levels and raw materials purchasing, quality control, manual handling, and maintenance policies.

Supply Chain Management (SCM) vs. Operations Management (OM)

Supply chain management and operations management are two closely linked areas, and some executives in these areas are well informed about both areas. There are differences in what each type of executives handles, Although, including that they supervise separate parts of the business. If you are attentive in using your organizational, transmission and managerial skills, either field could be a good fit for you.

Some of the differences between supply chain management and operation management are given below −

• Management of Force vs. Management of Functions

Supply chain management mostly involves management of force activities, that are goods and services. Whereas operations management mostly involves on management of operations or functions.

• Concerns Within Company vs. Outside Company

Supply chain management mostly focuses on things that happen outside the company or trade, such as delivery products at suitable places, getting materials, etc.

Operations management mainly focuses on things that happen inside a company or trade.

• Supply vs. Process

SCM manages supply or movement of goods products; whereas OM manages the process of goods products.

• Evaluation vs. Planning

Most of the time of supply chain management is spent on assessing that is evaluating and approving distributors by qualitative and quantitative evaluation, and negotiable contracts that is making contracts between parties.

On the other hand, most of the time of operations management is spent on planning, directing, organizing, or functions.

• Supply Chain activities vs. Development activities

Process of supply chain management includes design, planning, implementation, control and observing of all supply chain activities. Process of operation management includes planning, organizing, directing activity and in turn increases developments.

• Various tools

Various supply chain management tools available are stock control management, lean inventory, demand forecast, etc. Various operation management tools available are objective and key results template, lean, Six Sigma, etc.

• Reduction in Operating Costs vs. Increase in Revenue

SCM benefits include reduction in operating costs, increase in cash flow, increase in risk reduction, increase in quality control, etc. Whereas, OM benefits include increase in revenue, motivated employees, improvement in customer satisfaction, improvement in product quality, etc.

• Difference in Objectives

The main objectives of Supply chain management is to enhance total value that is generated, improve total performance of organization, controlling inventory effectively, etc.

Whereas the main objectives of operations management include utilizing resources of organization to generate products or services or goods, improving customer satisfaction, and producing good of expected quality on given time.

Conclusion

It can be concluded that here, we have defined what supply chain management is, what operations management is, how the two areas compare and what jobs are available in each area.

Supply chain management is very important for every organization as it enhances the efficiency, effectiveness and managing the resources. On the other hand, operations management involves planning, organizing, staffing, controlling and leading and monitoring the activities of the organization.