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Supply Chain Management vs. Operations Management

By University Alliance
Supply Chain Management vs. Operations Management

Every day, around the world, businesses of all sizes are collaborating to produce and deliver the goods that consumers need through a vast, interconnected series of processes. Each of the companies involved along the way utilize both supply chain management and operations management in producing goods.

The terms supply chain management and operations management is often confused. They do have similarities, but their differences make them completely separate processes.

If you’re interested in a career in the business world, it’s important to learn what these two terms mean and how companies use supply chain management and operations management to improve efficiencies and increase value for their customers, while maximizing profits.

Supply Chain Management

Supply chain management is a discipline that came about as companies began to see the supply chain as one entity, rather than separate pieces of a puzzle. Effective supply chain management controls costs and ensures efficiency, from the point of origin of raw materials or components, through the manufacturing process and delivery to the consumer.

One distinct difference between supply chain management and operations management is that supply chain management is focused externally. Its focus is on:

  • Planning products that consumers will want to buy
  • Sourcing raw materials, components or parts
  • Transporting and warehousing products
  • Delivering the goods to the point of purchase

When costs are out of line, or inefficiencies are discovered along the supply chain, the supply chain manager must step in and negotiate better pricing, find alternative sources or solve the issues causing the inefficiency.

Supply chain management professionals need a broad foundation of business knowledge as well as specialized skills, which can be obtained through an MS in Supply Chain Management program. With coursework including managerial accounting, supply chain management, materiel acquisition, and global supply chain management and logistics, this advanced degree program is a great choice if a career in supply chain management interests you.

Employers all over the globe are recruiting skilled supply chain managers. Great opportunities can be found with software and technology companies, petroleum and chemical companies, utilities, retailers, manufacturers and more.

Operations Management

The two disciplines of supply chain management and operations management are closely linked and dependent upon each other. In most organizations, supply chain management is part of operations management. But one contrast between supply chain and operation management is that operations management occurs internally.

Operations managers work with various departments toward common goals – such as making sure the company’s products are manufactured according to specifications, packaged properly, sold to the right retailers and marketed successfully.

Whether they’re working for a restaurant chain, a healthcare system or an automobile manufacturer, operations managers share many duties, including:

  • Forecasting sales
  • Improving productivity
  • Increasing responsiveness
  • Meeting customers’ demands
  • Maintaining quality standards
  • Contributing to the bottom line

Operations management can be strategic, tactical and operational. For example, an operations manager may be responsible for determining where a manufacturing plant is located, or the structure of a communications network. Designing the physical plant and selecting equipment may come under their direct supervision, along with managing inventory and monitoring quality control.

Operations management careers can be found in a wide variety of industries and businesses. Landing a job typically requires a strong understanding of business essentials, as well as the fundamentals of operations management – all of which are covered in an MS in Supply Chain Management degree program. Earning this respected credential can give you an advantage over the competition when pursuing operations management positions.

The major difference between supply chain management and operations management is that supply chain is mainly concerned with what happens outside the company – obtaining materials and delivering products – while operations management is concerned with what happens inside the company. Your first steps to either of these exciting careers is determining your career goals, and then planning your educational path, so you’ll be better prepared to reach them.

Category: Supply Chain Management