Operations and supply chain management

Most people don’t consider operations and supply chain management during normal times. They assume that if they need or want something and have the money for it, it’s just a short shopping trip or internet click away.

It’s only when there’s a disruption in the supply chain that its importance becomes clear.

Some disasters, such as the Arab Oil embargo in the early 1970s, Hurricane Katrina in 2005, and the COVID-19 pandemic, disrupt almost all supply chains to affected areas and can’t be easily avoided.^1,2,3

However, others, such as when over half of Kentucky Fried Chicken’s UK locations had to close because they ran out of chicken, are due to failures in effective operations and supply chain management practices.⁴

Effective operations and supply chain management underpin all aspects of business success by making customers happy, reducing operating costs, and increasing profitability. They also play a broad role in improving societal welfare by making sure people get the goods and services they need.⁵

This article will examine how to develop strategies to streamline operations and optimize supply chains—skills that you can learn with an operations management MBA.

Operations management includes many practices that promote the smooth running and strategic growth of any organization. It revolves around optimizing production, fostering customer satisfaction, and maximizing profitability by overseeing daily activities and managing the supply chain effectively. Here are some of the factors that go into operations management:⁶

Efficiency in operations management focuses on how well resources achieve outcomes—minimizing waste and reducing costs without sacrificing quality.

Effectiveness is about achieving the desired result—making sure the product or service meets customer needs and contributes to the business objectives

Balancing efficiency and effectiveness sets organizations up for long-term success by using resources optimally and meeting or exceeding customer expectations.⁶

Quality management includes quality control in business, quality assurance, and continuous improvement processes to improve customer satisfaction and operational performance. By implementing quality management practices, businesses can reduce defects, improve customer satisfaction, and build their reputation in the market.⁶

Process design and improvement involve creating efficient workflows and continually seeking ways to make them better. Operations managers analyze existing operations, identify bottlenecks or inefficiencies, and implement changes that streamline operations, improve productivity, and reduce costs.⁶

Capacity planning is the process of determining the production capacity a business needs in order to meet changing demands for its products.

Companies must calculate the maximum amount of work they’re capable of completing in a given period. This information allows them to plan for adequate resources to meet current and future business needs without taking on excessive inventory or experiencing bottlenecks.⁶

Businesses have to optimize the amount of inventory they have at every stage of operations. They oversee the flow of goods from raw materials to manufacturers to warehouses to point of sale.

This process guarantees the right amount of product is available to satisfy customer demand.⁶

This course covers a wide set of topics to develop both strategic and analytical skills in supply chain management. The course will provide a conceptual framework and a set of analytical tools to analyze, coordinate, and improve organizational processes.

Objectives of the course include:

• An introduction to the strategic and operating issues and decisions involved in managing the operational and supply chain processes within and across firms
• An understanding of the concept of supply chain coordination by managing information and inventory
• To develop a basic understanding of purchasing, supplier relationship management, and outsourcing.

Topics include process and cycle time analysis, lean/JIT production system, six sigma, inventory management, managing information flows in supply chains, and purchasing and supply management. Prerequisite: BSAN 706 or equivalent.

Supply chain management focuses on the efficient and effective flow of goods, services, and information from suppliers to customers. Effective supply chain management helps organizations streamline operations, reduce costs, and improve customer satisfaction.

Here's a brief overview:

Supply chain networks are the interconnected systems of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. These networks must be optimized to drive efficiency and responsiveness to market demands.

Effective management of these networks is one of a supply chain manager’s most important jobs, as it provides a competitive advantage in today's global market.⁷

Businesses have to continually evaluate suppliers' contributions to determine their strategic importance and develop strategies to strengthen their performance. This approach to supply relationship management emphasizes collaboration and long-term partnerships with key suppliers. The goal is to improve product quality, reduce costs, and guarantee timely delivery.⁷

Demand forecasting predicts future customer demand using historical data, market trends, and statistical tools. Accurate demand forecasting helps businesses plan production, manage inventory levels efficiently, and allocate resources effectively.

Companies can avoid overproduction, minimize stockouts, and better ensure customers can get what they want by anticipating market needs.⁷

Logistics and transportation cover how goods, services, and information are moved within the supply chain.

Managers have to select the most efficient modes of transportation, route planning, and load optimization to get materials and products delivered as quickly and cheaply as possible without sacrificing quality or compromising ethical and environmental standards.⁷

Warehousing and distribution include storing raw materials and finished goods and then delivering them to stores and customers. Efficient warehousing and distribution strategies allow businesses to manage inventory effectively, fulfill orders accurately, and deliver products promptly.⁷

Effective supply chain management is a critical part of business process optimization.

Integrating operations and supply chain management gives businesses a competitive advantage by allowing them to achieve operational excellence. Integration focuses on the following areas:

The objectives and activities of operations management need to be aligned with those of supply chain management to support the overall business strategy. This means that decisions regarding production processes, capacity planning, inventory control, and logistics are made with a clear understanding of how they impact operations and the supply chain.⁸

The seamless exchange of real-time data and information between departments, suppliers, and customers improves transparency and enables more informed decision-making.

Advanced information systems that use Internet of Things (IoT) technology facilitate this by providing a unified platform for tracking production schedules, inventory levels, order fulfillment, logistics, and business. This process gives businesses the flexibility to respond to market changes and customer demands promptly.⁹

Business leaders collaborate and coordinate with internal teams and with external partners like suppliers, distributors, and logistics providers to optimize all areas of operations. They engage in joint planning, problem-solving, and project management.

By working closely together, all parties can identify inefficiencies, develop innovative solutions, and implement best practices to drive reduced costs, improved quality, and faster time to market.¹⁰

Business is now a global affair, so business leaders need to be able to navigate complex challenges that affect operations.

A top-ranked online MBA from the University of Kansas, taught by KU’s faculty of renowned business and management experts, will equip you with the skills and knowledge you need to become a global-minded business leader for any company.¹¹

Don’t hesitate to contact one of our admissions outreach advisors about a supply chain MBA today to learn more.