SCM vs Operations

by Rohit Kumar education consultant - MBA,BBA,PGDM and Executive

Before we talk of the differences, it is important to know what areas of business does SCM (Supply Chain Management) and Operations each deal in. A packet of rice siting on the shelf of a retail store is basically at the end of its journey as a product and is ready to be consumed. But its journey actually begins way back starting from the farms it was initially produced at, from where it was then transported and processed several times before it finally reached the retail store. The basic understanding of the elements in a supply chain is what is required for the proper understanding of the distinction between SCM and Operations. While the former deals primarily in managing the links between several entities in a supply chain like farmer, suppliers, manufacturer, distributor, wholesaler, retailer and finally the customer. The latter is primarily focused on managing the processes that goes within these entities.

A clearer understanding can be achieved if we look at how a manufacturer deals with its suppliers and distributors. Here the role of Supply Chain Management becomes extremely prominent. Whereas the way a manufacturer achieves the transformation of its raw material into final product is looked upon as a concern of operations management.

However in reality the truth is Supply Chain Management as a subject can be confined to certain specific roles. But when we talk of operations management it actually acts as the bigger umbrella under which supply chain management can be defined. Operations is part of every sphere of a business and no function or vertical can remain out of its scope. Whatever job role a supply chain manager must be handling, he/she is in some way or the other dealing with handling operations of some kind.

Therefore a person working in Operations can be anyone who can provide administrative support and complete clerical tasks that are done to aid the daily functioning of any department. Whereas Supply Chain Management can be confined to tasks that basically deal in handling operations of supply chain.

Operations can have different meaning to different companies and has no single definition. Supply chain Management too has a broad spectrum of roles to offer but can basically be looked upon as a field that revolves around the management of the interlinks between various supply chain entities.

Some of the biggest organizations in the world like Walmart and Amazon completely rely on the efficiency of their supply chains to create a distinction between them and their competition. At Lloyd Business School this realization about the importance of supply chain management has been realized which is why a separate course of PGDM in supply chain management is being offered by the institute. Supply Chain Management offers ample opportunities to students seeking a good career. Companies like Coca cola, Pepsi, Amazon, Flipkart, Zomato, OYO and others are always looking out for good supply chain candidates as the efficiency of those reflects highly on their profitability.