watch the two videos “Introduction to Supply Chain Management” and “Global Supply Chain Management Lecture”, all of which are posted in Module 2 (Lesson 2).
In at least 250 words, please answer the following:
(a) What is supply chain management, and why is it important to manage the supply chain?
(b) How are capacity and supply chain management related to one another?
(c) Please describe the relationship between operations management and strategy. What are the global operations strategy options discussed by the authors of the textbook?
Supply chain management is the management of supply chain activities. Supply chain activities include the cumulative effort of multiple organizations, such as product development, production, sourcing, and logistics. These organizations are linked together and referred to as the supply chain. The entire chain of activities delivers products to the final customer as well as the information systems needed to coordinate these activities. Supply chain management is to develop and run supply chains in the most efficient and effective way in order to maximize customer value and achieve competitive advantages (Handfield, 2020).
In supply chain management, capacity refers to a company’s capability to generate outputs over a period of time. Capacity management is to determine the production to meet the demands and tighten the links in the supply chain in order to outperform competitors. It is one of the aspects of a supply chain optimization strategy (Logistics Titans, 2021).
Operations management is related to the activities that create goods and services, and add values for the customers by transforming inputs to outputs (Heizer, Render, & Munson, 2017, p. 4). The goal of operations management is to improve efficiency and profitability. The options that are used to reach the goal are strategies. According to Heizer, Render, & Munson (2017), there are four global operations strategies, which are international strategy, multidomestic strategy, global strategy, and transnational strategy.
Heizer, J., Render, B., & Munson, C. (2017). Operations management: Sustainability and supplychain management (12th ed.). Pearson Education.
Handfield, R. (2020, February 19). What is supply chain management (SCM)? NC State University.https://scm.ncsu.edu/scm-articles/article/what-is-supply-chain-management-scm (Links to an external site.).
Logistics Titans. (2021). What is capacity in supply chain management? https://logisticstitans.com/blog/what-is-capacity-in-supply-chain-management (Links to an external site.).
Supply chain management refers to the application and regulation of programs to enable the smooth flow of goods and services from producers to end-users. Management activities begin at the level where raw materials are transformed into finished products. Supply chain activities range from product designing, material sourcing, actual production, and logistics services (Supply Chain Analytics, 2017). Information flows connect business and production partners who coordinate the transformation, transportation, storage, and delivery of goods and services. By streamlining business operations, supply chain management minimizes loses, promotes accountability, and maximizes customer value. It has allowed Boeing to gain competitive advantage in the global air travel market (Heizer, Render & Manson, 2017).
Capacity determines the capability an organization has in producing specific products or services over a given period. Capacity generates business availability, which is necessary for the execution of supply chain management. Organizations consider events in the areas of sales, operations planning, finance, and procurement when assessing capacity and its influence on supply chain. The sales department must constantly communicate their firm’s ability to deliver orders according to schedule. On finance, regular checks on the stock of finished goods ensures timely planning for deliveries and enhanced customer satisfaction (Heizer, Render & Manson, 2017).
Strategy allows businesses to leverage their strengths and opportunities while neutralizing threats and minimizing weaknesses in the quest to create competitive advantages through supply chain management. Reliable global strategy options for the achievement of organizational mission are differentiation, response, and cost leadership. Differentiation enables the production of unique and high quality products. Responsiveness means leading competitors in meeting orders, addressing customer complaints, and assessing changing needs through effective communication. Cost leadership requires that firms win more customers and expand markets by producing and supplying cheaper goods (Finegan, 2015).