Operations Management and Supply Chain Management :Understanding the Nuances
Operations managers and supply chain managers are two of the most in-demand jobs in today’s market. According to the Bureau of Labor Statistics, expected job growth for operational management professionals is about 12.5 percent through 2022. Forbes, Supply Chain Quarterly, and Fortune all note that supply chain and logistics professionals are in high demand, with higher salaries on the table.
If you’re a professional ready to level up to a management or leadership position, it’s important to note the similarities and differences between the fields of operations and supply chain management before you take the next step in your career.
Operations and Supply Chain
In smaller organizations, there can be overlap between operations and supply chain management. One person or department can manage or play a role in both supply chain and operations. In part this is because Supply Chain Management has become more complex over time and the demand for highly trained professionals has emerged. Previously, the roles in SCM were handled by Operation’s professionals. Both positions require leadership, goal setting, organization, finance, and decision making. Managers in both areas oversee people, parts, and supplies. They both require the ability to communicate across departments internally and externally, to lead people and teams, and to manage human capital.
If you’re a skilled engineer or technician, but need to add these skills, a master’s degree in operations management or supply chain management provides the information, training, and knowledge needed.
But how do they differ?
“Overall, supply chain is sourcing and moving both the raw materials and the finished product. Operations management is the part in the middle where the product is created from the raw materials. Supply chain is how you get it and get it to customers. Operations is how you make it,” stated Lee Buddress, an Associate Professor of Supply and Logistics Management at Portland State University.
What is Operations Management?
Depending on the size of the organization, operations managers manage day-to-day operations for an entire business or they may manage a specific part of the production process. Operations has a more internal company focus relative to supply chain. Operations managers make key decisions on design, production, planning, workflow, and staffing. Typical responsibilities include:
- Directing and coordinating production, pricing, sales, or distribution of products
- Managing finance activities including sales and other data
- Evaluating performance data to make appropriate decisions regarding productivity, cost control, and improvements
- Managing staff, work schedules, and assigning specific duties
- Directing and coordinating budget activities
- Determining products to be sold based on forecasts of customer demand
What Is Supply Chain Management?
Generally, supply chain managers work more externally than operations managers. In today’s global market, supply chain managers are expected to have an understanding of working with suppliers, logistics, and customers all over the world. They make key decisions on suppliers, coordinate purchasing, warehousing, and forecasting.
Supply Chain manager duties may include:
- Forecasting demand for materials or products
- Creating supply plans to ensure availability of raw materials
- Evaluating suppliers and determining the effectiveness of multiple supplier strategies
- Evaluating risks to supply chains and suppliers as well as troubleshooting issues in the chain
- Analyzing inventories to determine how to increase inventory turns, reduce waste or optimize customer service
- Managing activities related to purchasing, inventory control, and warehousing
- Coordination of supply chain with other functional areas, such as sales, marketing, finance, production or quality assurance
- Manage supply chain staff
Supply chain students focus on global markets, global supply chains, quality control, inventory control, transportation and logistics, decision modeling, forecasting, and designing value into the supply chain.
While operations managers and supply chain managers lead different areas of an organization, they are both called to contribute to the value of the business. Learning effective strategies to implement agile, profitable, efficient, and productive systems point to a more successful bottom line.
To learn more about how you can contribute to a more successful bottom line by leveling up to a position in operations management or supply chain management, talk to a Kettering University Professional Advisor.