Modern executives no longer work in silos but collaborate to achieve common goals. Sharing information, team work, cross functional roles, interdependence, use of technology to drive transparency, visibility, business process improvement and cost leadership, strategic alliances and improved relationship with suppliers and customers have become a permanent feature of today’s end-to-end (E2E) supply chain management.
However, questions still arise in the workplace regarding the relationships between production, operations and supply chain management. Who should supply chain manager report to? Who should production manager report to? And who should operations manager report to? In some organizations heads of supply chain and operations report independently to the managing director while supply chain managers report to head of operations in others.
Production managers oversee production teams and processes, plan, control and co-ordinate production operations to meet target on a day-to-day basis, The Chief Operations Officer (COO) or Vice President/Director of Operations provides strategic vision, operational leadership while overseeing company’s daily operations. Organizational structure and practices vary depending on corporate policy and strategy.
In this review we are looking at the basics: the relationship between operations, production and operations management.
Let me explain why roles and job titles should not be seen as prescription of boundaries but rather an opportunity to serve. Roles are not permanent. Relationships are important.
The chief goal of supply chain management is to achieve optimum flow of a product or service to the customer by matching supply with demand in the face of uncertainty. To explain this framework I developed the Supply Chain Operations Body of Knowledge (SCOBOK) model. Production is not restricted to a departmental function. Every worker, supervisor, manager or director is a production person. Production creates the product or service and provides all types of economic utility aimed at customer satisfaction and business profitability. Production creates value which marketing and sales teams harps on to generate maximum customer patronage and sales revenue.
Operations may be specific or general. Every department of an organization is involved in operations. For example: production operations, customer service operations, marketing operations, quality operations, HR operations, engineering/technical/maintenance/project operations, financial operations, procurement operations and safety/security, health and environmental operations. Every economic/industrial sector is involved in operations. For example: agricultural operations, manufacturing operations, construction operations, banking operations, transport operations, maritime operations, airline operations, etc. Also we can refer to other dimensions of general operations such as business operations, government operations, administrative operations, service operations, public service operations and so on.
Nigerian Institute of Production Management (NIPM) is the body of professional managers that engaged in the practice of production and operations management including, logistics, supply chain and general operations management. Every organization is a production organization, whether it is producing goods or services.
2.0 What Are Operations?
Fundamentally operations cover all business activities such as human resources, sales, finance, manufacturing, quality, safety, maintenance, procurement, logistics, supply chain and general operations. We have business operations, public sector operations, government operations, technology operations and so on.
Operations cut across the entire organisational or business processes. The CEO or COO oversees the day-to-day operations of an organization. Operations management involves the planning, organising, control, directing and co-ordination of all processes and systems. Operations management focuses on efficiency and results associated with the use of assets and resources.
3.0 What is Production?
Production is a key business process. There would be nothing to be created in the form of goods and services and an organization will have nothing to sell or deliver to customers, hence no profit without production. Production is the essence of every organization, private or public. There is government production. Also, production may be agriculture, manufacturing, mining, energy (electricity, coal, oil and gas), construction or services. Supply chain cannot exist independently of production and operations. A supply chain is a network of people and organizations that are involved in production and delivery of finished product or service to the customer or end user. In production, customer value, budget, productivity, safety, quality, reliability, cost, delivery and order fulfilment are emphasis.
4.0 Objectives of Production Management and Supply Chain Management
The main objective of production management (PM) is to produce goods and services of the right quantity, right quality, at the right place, at the right time, at most economical cost and for the right market or customer. The main objective of supply chain management is to ensure flow of materials/goods/services, flow of finance and flow of information from the suppliers (upstream) to the end-user or consumer (downstream) with focus on balancing demand and supply through planning using data analytics, speedy or quick, timely response and efficient order fulfilment, dealing with risk proactively, improving visibility, optimizing the chain and lowering costs for greater competitiveness and higher profitability.
5.0 Production and Supply Chain
The need to understand the relationship between production and supply chain is crucial. Fundamentally all logistics and supply chain managers work in production organizations be they public sector, manufacturing or service industries. Supply chain management is the effective and efficient flow of goods, information, data and finances from raw materials sourcing through production to the customer of a product or service for optimum return on investment. Production is at the core of global end-to-end (E2E) supply chains. In supply chain management, integration, speed, cost, collaboration and visibility are emphasized.
6.0 Operations and Supply Chain
Operations Management and Supply Chain Management are closely related roles that meet at a confluence where quality, volume, efficiency, safety, cost, customer experience, profit and other targets must be met. Such titles as logistics operations manager and supply chain operations manager show the thin line between supply chain management and operations management. To succeed as a supply chain manager you need production and operations management skillset and vice versa.
From the foregoing it is clear that operations, production and supply chain management are interrelated. Operations cut across all production and supply chain processes. Everyone in any of these roles needs others for collective professional success.
Dr. Olaniyi Opanuga, PhD, MLS, MBA, FNIPM, FCIAM, FCMAI, FIMC, CMC, COPOM(C), Provost Operations, Logistics and Supply Chain Leaders Academy (OLSCLA) and President Nigerian Institute of Production Management (NIPM), an internationally certified management consultant whose clientele include multinational companies and federal government organizations with over 200 published works to his credit. He impacts knowledge of Production, Operations, Logistics and Supply Chain Management to enhance professional development and career growth of Universities and Polytechnics graduates and executives in industry.
Nigeria Institute of Production Management
Acme House, 23, Acme Road,
Ogba Industrial Estate,
P.O. Box 7798, Ikeja, Lagos, Nigeria
Tel: 08023140750, 08066411565, 08069006671, 09023194157
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