Understanding the the difference between supply chain management (SCM) and operations management (OM)begins by getting a solid grasp on how they’re both specifically defined. The following are some of the most basic elements that define and differentiate these closely-related but slightly distinct terms.
Managing the Supply Chain
The supply chain concerns the specific goods and services that a business supplies in order to meet the demand of the market. The “links” in this chain are priorities such as raw material transportation, inventory storage, and delivering the final product from the manufacturing facility to the customer.
The path of manufacturing and delivery that threads through the acquisition of raw material, to the company’s manufacturing facility, to the final point of customer consumption is what forms the complete “chain”, and the managers of these supply chains are counted on to have it flow it as smoothly as possible. The more efficiently this chain is managed, the less disruptions there will be in the company’s ability to prepare and supply its product in a timely manner.
If you consider SCM to be a chain that stretches out from the company’s manufacturing facility and into its customers’ homes, then OM can be considered a circular railroad track that circulates around the interior of the company’s facilities. Whereas a large part of SCM externally-based, OM is a fundamentally internally-based aspect of the company’s manufacturing process.
With high-quality OM practices, every essential operation that a company needs to conduct in order to remain functional and profitable as a goods provider can be consistently and efficiently accomplished on a regular basis. OM is a matter of making sure that the company’s internal workflow is optimized to the point of maximum effectiveness, from the productivity of the workforce to the conversion of the company’s raw material stores into product inventory.
Comparing and Contrasting SCM to OM
There are naturally a few areas where SCM and OM overlap in the manufacturing and delivery process. Both SCM and OM practices are relevant to the storage of raw material and physical production of products. Rather than imagining the pathways of SCM and OM as intersecting tracks, it would be more accurate to envision the both of them as a single original pathway that eventually splits off into two diverging directions when it nears the product delivery stage.
While the SCM path extends out of the manufacturing facility to meet the company’s customers far away with finished products, the OM path remains within the facility and circulates to monitor interior workflow and ensure that things remain on track. Eventually, the SCM path rejoins the OM path as they converge once again at the raw material stage of the next manufacturing cycle.
When OM and SCM form one cohesive process of managing both supplies and overall operation fluidity, they are collectively referred to as OSM. The slight difference between the textbook definitions of these two aspects of manufacturing doesn’t mean that they’re fundamentally independent from one another. The two terms simply indicate separate yet occasionally shared layers of a company’s manufacturing process.
Depending on the nature of the company’s needs, slightly distinct skill sets may be required of those hired to oversee primarily OM or SCM-oriented tasks specifically; nevertheless, the roles of all personnel involved in either OM or SCM will undoubtedly depend upon one another’s cooperation in order for the roles to be fulfilled smoothly. A coherent, consistent and productive line of communication between all of a company’s supply managers and the operation management specialists will be vital for the entire company’s manufacturing and delivery efficiency.