STUDENTS' CORNER - 134
We learned some basic facts about Finance and Strategy and now we will
move on to last component, Operations.
Operation, rather a high sounding word with somewhat snobbish flair,
simply means work. Nothing can happen
without work, working. A business involves endless works, operations to be
attended to. Taking the major areas of
business into account, you have manufacturing which is an operation. Then,
selling what you have manufactured is another operation. Choosing a right person, right agency, right
channel is also an operation. Any business involves a series of well
coordinated operations with a goal in focus. Getting all the works of business
promotion done in the right time and in the right way with and towards the
right people is what is generally called operations management.
If your business is a small
one, say, you run a small grocery shop with no assistants, all the work of the
shop must be done by you. That is, you act, you do what is essential and cannot
be avoided. If your business is a very large one with many employees, then, you
cannot do all those tasks and therefore you get those works done through some
people whom you employ for some specific purpose. You will have to see to it
that all your employees do their assigned work in the right time and this is
what is generally called is operations management.
Supply chain management is
another term that always goes together with operations management; in fact,
they are closely linked with one another.
We have already spent a lot of
time on knowing the basics of supply chain management.
There is, however, a big
difference between the Supply Chain Management and the Operations Management.
Of course, in many organizations, supply chain management is part of the
operations management. In supply chain, you largely deal with people outside of
the company. For example, you deal with the supplier of your raw materials and
he is not your employee. Your agent, your stockists, your warehouse owner—all
these people you need and they do not come under your direct employment. But
you need all the support from them. You thus deal with the external factors, so
But in Operations management,
you primarily deal with your own people in the sense the people that come under
your direct administration. Your department manager, say, is your man and
managing his work is doing an internal task.
Whether you take care of the
work of the people outside of your company or inside your company, the goal is
always the same: the bottom line. All kinds of management derive their
significance from the bottom line only. And securing and sustaining the bottom
line are the be-all and end-all of the supply chain management.
In our next session, we shall
move on to the next strategy in supply chain management: Sustainability in
supply chain management.