Getting a product into the hands of a consumer is a complex process, involving multiple internal and external processes and companies along the way. Each player involved is overseeing its part in the process through several types of oversight, including supply chain management and operations management.
Despite some similarities, these are two distinct roles and processes. It’s essential for business professionals to understand how organizations use supply chain management and operations management to enhance efficiency and value, ultimately boosting profits.
Here, we assess the differences and commonalities between supply chain management and operations management and what you should consider to determine which path is best for you.
What is Supply Chain Management?
Supply chain management includes the collection of materials, the manufacture of products and the delivery to the consumer. Supply chain managers coordinate with key players in the supply chain: suppliers, logistics teams and customers, often working globally and overseeing suppliers, purchasing orders, warehouses and forecasting.
One critical facet of supply chain management is risk evaluation and security. Today, this also means looking at cybersecurity in the supply chain. Supply chain managers must regularly evaluate suppliers and their strategies and protocols, forecast demand to avoid over-supply, improve customer service, and coordinate with other departments in the business including marketing, finance, sales and quality assurance.
Supply chain management is vital to businesses because it can help reduce costs with better efficiency from suppliers and leaner inventories, provide better customer services with faster delivery and react faster to market demands and innovations. It also offers assurance of corporate responsibility in every facet of production.
What is Operations Management?
Operations management focuses on running a business effectively and efficiently, including maintenance, material planning and the analysis of production systems. Operations managers coordinate the internal business operations, driving not how the product or service is moved, but how it is developed. This generally requires professionals to be skilled in building rapport with organizational stakeholders, current in technology applications and adept at analysis.
Operations managers should also be skilled at recent trends within operations management, including Agile and Lean concepts to help reduce waste and improve efficiency.
Regardless of industry, operations managers forecast sales, work to increase responsiveness, ensure customer demands are met and uphold quality standards.
Why is Supply Chain Management Important in Operations Management?
Both operations management and supply chain management are expected to add value to the business, supporting more efficient processes and ultimately driving better revenue for the company. In fact, in pursuit of those objectives, the two roles are inextricably linked together. Supply chain management controls the process for having the product produced; without it, operations management wouldn’t have a product to oversee operations for.
Many industries require both supply chain management and operations management, whether the business is moving services, products, raw materials, data or money into the hands of its customers.
In smaller organizations, it’s also possible for these roles to overlap or be fulfilled by a single person or department, as the necessary skillset for both roles is similar, including:
- Organization
- Decision-making
- Goal-setting
- Cross-functional leadership
- Communication
The Difference Between Supply Chain Management and Operations Management
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.
This means the supply chain manager spends time negotiating contracts and evaluating suppliers, whereas the operations manager is often planning and overseeing the daily operations and processes. Supply chain management activities are generally the same across industries; however, operations management roles and responsibilities can vary widely depending on the product or service the business produces.
Supply Chain Management or Operations Management: Which is Right For You?
Although these roles share many overlapping skills and even intersect, aspiring professionals should consider whether they would prefer the external focus supply chain managers adopt or the internal lens of an operations manager.
If global markets, quality control, transportation and logistics and designing value in the supply chain are of greater interest, you may wish to pursue supply chain management. Alternatively, if you would prefer to spearhead production, planning, workflow and staffing, you may thrive as an operations manager.
To launch a career in either field, professionals should earn a bachelor’s degree in management, business administration, or related field. Often, professionals look for a competitive edge with additional degrees or certifications that can equip you with in-depth knowledge of fundamentals for these roles. This can include earning an MS in Supply Chain Management or a Master’s of Business Administration (MBA).
Interested in Florida Tech’s M.S. Supply Chain Management program?