Importance of Operations Management and Supplies Chain

Importance of Operations Management and Supplies Chain

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Introduction

For any organization to be fully functional, the operations must be well coordinated. For effective and efficient functioning, the supply chain must be well managed such that there is a smooth flow of through the up and down streams of the organization’s supply chain network. Management of the supply chain network is not just a task left to the operations manager but rather to every member of the supply chain network. The main goal of operations and supply chain management is customer satisfaction and the overall success of the company (Smith, Watson, Baker, & Pokorski, 2007). This implies that supply operations and supply chain management is a critical part of any business and therefore needs to be well operated for the organization to be successful.

Evolution of operations and supply chain management

Over the last century, operations and supply chain management has undergone tremendous evolution from a simple labor intensive operation to the present day complex engineering operated system and comprised of wide networks. In relation to this, the main factors that have contributed to the growth and evolution of this system include technology, globalization, education and research, and industrialization.

Initially, the operations and supplies chain management mainly focused on the mechanization of various systems and operations within an organization. However, with the emergence of the new technology, the ERP systems emerged in the 1990s to replace the MRP systems which had been operational since the 1970s (Zsidisin, & Ellram, 2003). With the emergence of the computing technology later in the 1990s, there was more advancement in the computerization and sophistication of various systems within organizational operations. The emergence of the computer systems led to the development of complex inventory systems, increased use of data in operations management as well as improved accuracy (Zsidisin, & Ellram, 2003). Today, complex Advanced Planning and Scheduling (APS) software has been developed and is playing and crucial role in operations and supplies chain management.

Secondly, globalization has been very instrumental in the evolution of operations and supplies chain management. Through improved transport systems, interconnectivity and improved communications, the world has become a global village. There has been an increase in the exchange of ideas from various parts of the world and as a result, there has been a tremendous improvement in operations and supplies chain management (Wu, Blackhurst, & O’grady, 2007). For instance, many companies have adopted the Japanese Toyota JIT system in their operations. On the same note, industrialization in the global economies has also played a great role in the evolution of the operations and supplies chain management. The increased industrial activities has made it necessary to have better practices in place for operations and supplies chain management. Education and research have also been crucial in the evolution of operations and supplies chain management. With scholars and institutions spending more resources on the research and the development, a lot of transformation has been experienced in operations and supplies chain management.

Benefits and costs of good quality, and the costs of poor quality

Quality is an important factor in operations and supplies chain management. Poor quality tends to have an effect on both the internal and external operations of an organization. At the same time, good quality influences the cost of investing and appraising a product. Some of the benefits of good quality include customer satisfaction since they are provided with high quality products and in time, profits in the business operations as more customers will be willing to transact with the business, reduced reworks and redesigns on the products and SDLC (Wu, Blackhurst, & O’grady, 2007). The products and services offered by the organization will last for a much longer period of time. Some of the costs of good quality include costs for quality planning, supplier evaluation, capability evaluations, educations and training, checking and testing, products testing and error proofing. Some of the costs of poor quality include delays in the organization’s operations, shortages, downtimes, re-designing, failure analysis, complaints from customers, unnecessary costs in repairs, reductions in sales and loss of customers.

Quality tools and the DMAIC methodology in problem solving

To manage and control quality at the organization, a number of tools including graphs, pareto charts, run charts, cause effect diagrams and histograms will be used. These tools will be used track the performance of the products and the various responses to the market. Where anomalies are noted, the necessary measures will be taken. The Six sigma methodology will also be used to solve the problems at the organization. At the define phase, a number of issues are defined including the customer requirements, the goals of the organization, resources and a high level process map is developed. The second stage where the process id measured, the defects, metrics and opportunities will be determined. A data collection plan will also be developed. The third stage involves the analysis of the root cause of the problem. At this stage, the sources of the problem and its relationship to various other parameters will be determined. The fourth stage involves the improvement of the process through the elimination of the errors. Finally, the future performances are controlled at the control phase (Zsidisin, & Ellram, 2003).

References

Smith, G. E., Watson, K. J., Baker, W. H., & Pokorski Ii, J. A. (2007). A critical balance: collaboration and security in the IT-enabled supply chain. International journal of production research, 45(11), 2595-2613.

Wu, T., Blackhurst, J., & O’grady, P. (2007). Methodology for supply chain disruption analysis. International Journal of Production Research, 45(7), 1665-1682.

Zsidisin, G. A., & Ellram, L. M. (2003). An agency theory investigation of supply risk m anagement. Journal of Supply Chain Management, 39(2), 15-27.