Universidad Autónoma de Nuevo León

Facultad de Contaduría Pública y Administración

Bachelor’s degree in international business

Subject

Production Management

Professor

Arturo Iván Lara Blancas

Luisa Fernanda Ovalle Salazar 2099858

Juan Manuel Ramírez Ochoa 2100068

August 18th, 2024

 Introduction

In this essay, we will talk about Supply chain vs. Operation management; first, we
must understand what supply chain and operations management are.

“Operations management (OM) is the administration of business practices to create

the highest level of efficiency possible within an organization. It is concerned with converting
materials and labor into goods and services as efficiently as possible to maximize the profit
of an organization.” (Adam Hayes of Investopedia, 2023) it refers to the administration of
business practices to ensure the maximum efficiency within an organization or company, it
has to do with converting labor and raw materials into goods and services as efficiently as
possible to maximize profits. An operations manager is usually the one that leads this
department, supervising the daily operations to produce goods and services, it’s particularly
dominant in manufacturing and service industries where managing resources, capacity,
inventory, and scheduling are outstanding, operations management is concerned with
planning, organizing, and supervising in production or the provision of services, it’s about
making sure that business operations are efficient, using as few resources as needed and
effective, meeting customer demands.

There are many positions in operations management, some of them are:

• Operations manager: he is responsible for ensuring, designing and controlling

the process of production and redesigning business operations
• Quality control manager: he makes sure that products meet specific quality
standards
• Inventory manager: he is the one that oversees the management purchase
and replenishment of goods to ensure a safe operation
• Project manager: plans, initiates, and manages projects, making sure they
are completed on time and within budget
• Logistics manager: most of the time he is responsible for efficient and
effective coordination of everyday operations and plans to meet delivery timelines.

On the other hand, we have supply chain, “a supply chain is the network of all the
individuals, organizations, resources, activities and technology involved in the creation and
sale of a product. A supply chain encompasses everything from the delivery of source
materials from the supplier to the manufacturer through to its eventual delivery to the end
user. The supply chain segment involved with getting the finished product from the
manufacturer to the consumer is known as the distribution channel” (Ben Lutkevich on
TechTarget, June 2021) which is basically the coordination and management of all business
that satisfy customer request, this includes planning, control, and execution of daily supply
chain activities, companies collaborate to influence each other’s strengths, this results in a
more efficient path from raw materials to delivery of the final product. “A supply chain
manager is tasked with everything involved in the supply chain process, from planning to
implementation” (Operations Management vs Supply Chain Management: Their Key
Similarities and Differences, November 2023). Their role focuses to minimize shortages and
reduce costs, ensuring business can meet the demand of their customers, a crucial aspect
in today’s global marketplace where customer expectations are slightly high, and the market
dynamics are unpredictable.

Like in operations management, there are also positions in supply chain, some of
them are:

• Supply chain manager: basically, he focuses on planning, implementation,

and controlling the forward and reverse flow of goods, services and information
between the point of origin and the point of consumption
• Logistics coordinator: he is responsible for organizing and moving goods from
the manufacturer to consumers
• Inventory analyst: he is the one that manages and analyzes stock levels to
ensure there are enough goods to meet customer demands without resulting in
overstock or stockouts.
 BODY

Going through the processes of operations management and supply chain

management, finding out their characteristics and impacts on organizational efficiency and
productivity is essential. Both are still very essential to a company’s success, they have
distinct roles, functions and benefits that contribute to various business operations and
growth aspects

Operations management and supply chain management share several similarities

and are closely interconnected. Both rely on each other to manage services, materials, data,
and information for a company, requiring effective communication to exchange knowledge.
According to Indeed, here’s how they are similar:

They both focus on efficiency: both styles put above everything enhancing
efficiency in business processes, they also aim to reduce costs, optimize resources and
maximize output

Customer satisfaction: making sure customers' needs are met in a timely and
effective way is central to operations and supply chain management, they strive to enhance
the quality of products and services and ensure timely deliveries

Quality assurance: both management styles involve rigorous quality and control
processes to ensure products or services meet set standards and expectations, also
enhancing customer satisfaction and loyalty.

Risk management: identifying and helping mitigate risks in production and supply
processes is a common concern, aiming to ensure business continuity and reliability

Inventory management: they both manage inventory levels to align with customer
demands and business goals, balancing the needs to reduce costs and ensure product
availability

Integrated Processes: operations management focuses on internal processes

within an organization to efficiently produce goods or services, while supply chain
management oversees the entire journey from raw materials to product delivery,
coordinating activities across multiple organizations.

Coordination and Collaboration: operations management coordinates internal

departments and resources, while supply chain management requires collaboration with
external partners, like suppliers and distributors, to optimize the entire supply chain network.

Continuous Improvement: operations management focuses on continuous

improvement of processes, often using methodologies. Similarly, supply chain management
strives for ongoing enhancements in the supply chain, aiming for greater visibility,
responsiveness, and efficiency.

In the evolving business landscape, both operations management and supply chain
management are currently undergoing important transformation, shaped by technological
advancements and changing market dynamics, adding new tech like artificial intelligence,
machine learning and revolutionizes process efficiency, real time decision making and
customer experience.

Supply chain has the advantage of technologies, like blockchain is enhancing

transparency and security in global supply chains. Automatic logistics, AI powered
forecasting and very advanced analytics that enable supply chain managers to make
informed decisions, optimize processes, and enhance customer satisfaction in real time.

“One of the biggest benefits of supply chain management is that it gives you greater
visibility and control over your business.

Good supply chain management improves the flow of information along the supply
chain so you can mitigate risks, know exactly when goods are coming in and out of the
business, and react quickly to unexpected disruptions”. (Oliver Munro, November 2023)

On the other hand, operations management is benefiting from automation, data

analytics and AI to improve production schedules, enhance quality control and reduce
operational costs, technologies like robotics and automation are shortening the process of
manufacturing, reducing resource waste and improving efficiency.

In business, reducing costs is always a priority. Operations management is key to

making that happen. By carefully analyzing how things are done and making smart
decisions, you can find ways to save money that you might not have noticed before. This
could mean keeping a closer eye on production schedules, tracking expenses, renegotiating
with suppliers, or even changing how your supply chain is set up. Operations management
helps you spot inefficiencies and make changes that can directly boost your profits.

But it’s not like they are outshining each other, they both are evolving more and more
each day, operations management is witnessing the new addition of smart technologies for
efficient processes, while supply chain is expanding with enhanced connectivity, decision
making and global outreach.

As businesses navigate future challenges, a balanced approach that improves the

strengths of both management styles will be fundamental in fostering sustainable growth
and innovation, while operations management focuses more on internal processes, supply
chain management extends beyond organizational boundaries to encompass the entire
network of entities involved in bringing a product or service to the end consumer. They both
are crucial for organizations seeking to achieve operational excellence, deliver value to
customers and remain competitive in the market.

When comparing these two, they both sound extremely alike, however if we do more
and more research, we will spot the differences between them, operations management
largely deals with internal processes, such as tracking finance, data, materials, and more
within a company, supply chain management oversees external processes that include any
materials that are sent or received from outside the company, while these two work closely
together to function correctly, they are distinct operations
 The primary difference between these two is that the supply chain deals with
materials that are received or sent from external places and operations management is more
involved with the internal processes, some companies may have a team for each area,
someone who handles each area or one person who handles both areas. The two areas
don't usually cover similar duties, but they interact to ensure customers receive their orders
on time, and the skill set required is similar.

Supply chain management covers the entire journey of a product or service, from
suppliers to manufacturers and finally to distributors. It’s about managing the whole
network involved in getting a product to the customer. On the other hand, operations
management is more focused on what happens inside a single organization, like how
products are made, or services are delivered.

Operations management is about improving the processes and resources within a

single company to run as smoothly as possible. Supply chain, on the contrary, is about
making sure all the different parts of the supply chain (like suppliers, manufacturers, and
distributors) work well together.

Supply chain management looks at the big picture and makes long-term decisions,
like where to get materials, which suppliers to work with, and how to design the supply
network. Operations management, however, is more focused on short- term tasks, such as
planning daily production, managing capacity, and ensuring product quality.

The supply chain focuses on meeting customer needs, ensuring products are
delivered quickly and efficiently. Operations management is more about improving the
processes and resources within the company to make things run smoothly.

Operations management is more focused on what happens inside the company

itself. It’s about fine-tuning the internal processes, making sure that everything from
production to resource use is as efficient as possible. While supply chain management looks
at the whole journey of a product, operations management focuses on the internal workings
to keep everything running efficiently within the organization.

The business processes often pass back and forth between supply chain and
operations management, for instance, an operations manager may have a budget for a
certain amount of supplies, so the supply chain manager places the order and work along
with the supplier, in addition to receiving the shipment when it arrives, then, the operations
manager oversees the process of those supplies being made into the product their business
sells and the employees and equipment that are involved. Once the products are
manufactured, they go to the supply chain manager to be sent to customers.

Two examples of supply chain manager and operations manager are:

• A supply chain manager for a company that manufactures computers is

responsible for coordinating component deliveries with suppliers, including choosing
suppliers and placing orders, so that their company can make the computers as
needed, then the manager would also manage the computer inventory and getting
orders shipped to retailers and customers.
• An operations manager who works at a company that manufactures
computers might discover that reorganizing the manufacturing process would make
building the computers go faster and work with their teammates to improve that
change, they coordinate with the supply chain manager to ensure inventory will be
available and fit within the company budget, they manage the staffing of the
manufacturing area to ensure there are enough employees building computers to
meet customer demands, they also work with other company managers to make new
strategies for the future of the business.
 CONCLUSION

The supply chain is a comprehensive approach to the production and delivery of an

item, covering the stages from the acquisition of raw materials to the provision of the service
to the end user. All phases of production, data exchange, natural changes, human and other
resources in creating the final product or service.

Wrapping up the dilemma on operations management vs supply chain, it’s crucial to

underline their distinct yet interlinked roles in optimizing business processes and enhancing
customer satisfaction.

They may not be the same but, both are evolving, adding smart technologies to meet
the dynamic demands of today’s global marketplace. While they each have unique focuses,
their function is important for organizational agility, efficiency, and competitive edge, they are
two closely related fields, and even some professionals in these fields are aware, however
there are differences including that they oversee separate parts of the business. Both fields
aim to improve performance and value creation, supply chain management looks at the flow
of goods and information across multiple companies, while operations management focuses
more on the process that happen within a company, we have to understand the distinction
between these two areas because it is crucial for businesses to manage both external
relationships and internal processes effectively, therefore achieving organizational success.

They are complementary but distinct fields, each critical to the overall success of a
business, ensuring that the external network of suppliers and distributors work seamlessly
to deliver value to customers, and lastly the other one ensures that the company’s internal
process are efficient, cost effective, and capable of meeting demand. Additionally, the
metrics of success in supply chain and operations management often vary, in supply chain,
key performance indicators might include delivery reliability, inventory turnover, and supplier
performance, in operations management, metrics might focus more on production efficiency,
equipment utilization and defect rates, both fields aim for the same almost the same thing,
they do so from different perspectives and with different tools. Each contribute differently to
a company’s success, even though they are interconnected, supply chain involves the
orchestration of a network of entities, including suppliers, manufacturers, distributors and
retailers, all working together to ensure that products or services reach the end consumer
efficiently, it covers a wide range of activities, from sourcing raw materials to managing
logistics and distribution, often requiring strategic coordination across global networks
supply chain makes sure that the right products are available at the right time in the right
quantity, and at the right cost

Operations management is more about planning, scheduling, and control of activities

that transform inputs, like materials, labor and technology into outputs, it is deeply concerned
with optimizing efficiency by improving productivity and maintain quality standards, making
sure that the organization’s internal processes are running smoothly and effectively,
maximizing resource utilization and reducing a lot of waste. The key difference basically lies
in their scope and focus, the wide range of capabilities that supply chain provides can help
achieve your business objectives with reliability, speed, agility, resilience, and sustainability
 “The journey of completing a product and dispatching it to a buyer is a lengthy and
tedious process. It entails multiple external and internal processes. Different departments or
companies handle every phase of this journey, with each player playing a significant role in
the process. All of them handle different operations of supply chain management and
operations management” (Sahil Bajaj, 2023)
 References

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https://www.unleashedsoftware.com/blog/benefits-of-supply-chain-management

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https://www.indeed.com/career-advice/finding-a-job/supply-chains-and-operations-
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