The challenge for the operations function is to produce high-quality goods and services on time, at minimum cost while responding to shifting market demands. This requires understanding and management of the whole supply chain from beginning to end. Executives responsible for operations in both manufacturing and service businesses face similar challenges in supply chain optimization.

As outsourcing has increased and companies co-ordinate with customers and suppliers, the importance of operations management has progressed rapidly. In this chapter the authors outline the developments that have lifted the role of the senior operations officer into that of the chief supply chain officer (CSCO), and discuss the challenges faced today and those of the future.

The operations management task

Operations is responsible for producing the goods and services that the company sells. This function must orchestrate effective planning, organization and control of all the resources and activities necessary to manage the supply chain from beginning to end (see Figure 7.1). In today's business world, efficient supply chain management is necessary to remain competitive and profitable. Underperform, and customers and shareholders will punish you.

Management of the supply chain and transformation of business processes are two main areas of operations management's responsibility.