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 to say.

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.