Operations and supply chain management is an umbrella term for managing organizations’ operations and supply chains. The concept encompasses sourcing, operations planning, materials management, logistics, retail, distribution, demand forecasting, and several other tasks. Moreover, OSCM is a holistic management approach that aims to reduce expenses and enhance operational efficiency. A detailed insight into the concept would help in understanding its effectiveness in organizational management.
Understanding Operations Management
The concept of operations management (OM) is, as the name implies, the management of various organizational operations. This management is the way of driving an organization towards its goals effectively and efficiently. Starting from material planning to production system analysis, operations managers establish coordination between internal business operations.
The main objective of OM is to use organizational resources efficiently for goods or service generation. This eventually results in the production of high-quality goods and boosts customer satisfaction. OM’s major tasks are managing day-to-day operations and supervising the production process.
What is Supply Chain Management?
The circle circumambulating the production of goods to their delivery refers to the supply chain. Supply chain management (SCM) is the process of collecting raw materials, manufacturing products, and finally delivering them to the customers. Supply chain managers are responsible for regulating suppliers, logistic teams, and consumers. Purchasing orders, suppliers, warehouses, and forecasting are overseen by supply chain managers. Apart from supply chain navigation, supply chain managers also evaluate and manage associated risks.
Managing the supply chain is crucial to any business as it helps reduce costs and supplier efficiency. It also allows lean inventory management and improved customer services, ensuring speedy delivery. SCM also considers environmental impacts and encourages sustainability in goods manufacturing and delivery.
Ins and Outs of OSCM
Operations and Supply Chain Management encompasses designing, operations, and continuous supply chain improvements with the aim of efficient product and service delivery. OSCM is a key to organizational competitiveness. The more optimized the supply chain is, the more likely it is to drive organizational success.
Importance of Operations and Supply Chain Management
OSCM provides multifaceted benefits. Let us look at how OSCM benefits organizations and why it is so important.
- Improves Organizational Efficiency: OSCM streamlines and optimizes operations and supply chains that eventually increase efficiency. A well-planned and managed operations and supply chains ensure responsible use of resources and reduction in expenses, contributing to organizational efficacy.
- Enhances Collaboration: OSCM effectively coordinates between departments and organizations across the supply chain to enhance team communication and more streamlined operations.
- Cost Savings: The comprehensive advantage of OSCM is cost savings through effective supply chain and operational strategies. Efficient use of resources through OSCM harnesses organizational growth potential. Integration of technology with efficient resource usage.
- Increased Customer Satisfaction: A perfect and fast delivery of high-quality goods is what a customer desires. OSCM activities work towards attaining customer satisfaction through well-managed production, quality assurance, and quick product or service delivery.
Challenges of OSCM
OSCM like any other business practice is not an exception in terms of challenges. Some of the biggest hurdles of OSCM are as follows-
- Rapid Digitalization: Customer satisfaction enhancement is the only goal of OSCM in this era of digitalization. Integration of technology to alter organizational operations is what OSCM needs to consider to ensure an outstanding customer experience. Failing to adapt to the changing digital scenario can result in poor customer delivery and the failure of the OSCM.
- Lack of Skilled Personnel: Not having qualified and skilled personnel is one of the crucial challenges faced by operation and supply chain managers of organizations. With advancements in management approaches and technological development, effective management of operations and supply chains requires skilled professionals to work efficiently.
- Costing: Managing supply chain operations involves multiple resources and the costs associated with their usage. From raw materials to labor costs, expenses become a challenge for OSCM.
- Risk Management and Forecasting: Ongoing market changes such as global sourcing, political turmoil, changing consumer demands, and others pose a threat to OSCM. Organizations must have a risk management plan beforehand to deal with the risks.
Best OSCM Practices
Here are some of the best OSCM practices for shaping organizational operations and making them future-ready:
Leveraging Technology
One of the best OSCM practices is to leverage technology at every scale of organizational operations. Adopting suitable technology solutions can enable process optimization, making the OSCM more advanced and effective in organizations.
Strong Supplier Relationships
The stronger the supplier relationship is, the smoother the product delivery gets. Maintaining transparent and strong relationships with the suppliers can enhance the communication between the seller and the buyers.
Corporate Social Responsibility
Operating by being socially responsible can be wonderful for OSCM of any business. Exercising corporate social responsibility activities within organizational operations and supply chain operations can help win a competitive edge.
In today’s highly competitive business climate, relying on only one management is not enough for any business. Adoption of both operations and supply chain management can contribute to organizational growth and success collaboratively. So, choose the best OSCM practice that aligns with your organizational objectives.
