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Operations

Оглавление

Operations is the third key function in supply chain management, involving the processes that your company focuses on to create value. Here are some examples:

 In a manufacturing company, operations manages the production processes.

 In a retailing company, operations focuses on managing stores.

 In an e-commerce company or 3PL, the operations team may also be the logistics team.

Operations managers usually focus on capacity utilization, which means asking “How much can we do with the resources we have?” Resources can be human resources (people) or land and equipment (capital). The operations department is measured by how effectively and efficiently it uses available capacity to produce the products and services that your customers buy. Common goals for operations teams include

 Reducing the amount of capacity wasted due to changeovers and maintenance

 Reducing shutdowns for any reason, including those caused by running out of raw materials

 Aligning production schedules and orders for raw materials with forecasts received from customers

Although increasing operations efficiency sounds like a great idea, sometimes it actually creates supply chain problems and does more harm than good. Companies may invest in increasing their capacity only to find out that their suppliers or logistics infrastructure can’t support the higher production levels or that they’re making more product than they can sell.

Supply Chain Management For Dummies

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