Discuss the role of production operations in the supply chain. Provide examples of how effective/ineffective production operations impact supply chain performance.
Production operations play an important part in the supply chain.
It comprises a concept called form utility. Form utility includes all activities and processes involved in changing the appearance or composition of a good or service fabricated components, assembling the product, and executing the service request.
Its role is very important and vast because it takes a lot of effort and communication or coordination to run, and be an effective and efficient production operation that is supported by and also supports the supply chain.
The goal is to make the product or service more attractive to potential and actual users so that demand is created. Processes should be designed in a way that it works effectively and is executed without any disruptions.
Supply chain tradeoffs must be understood and made, and demand needs to be achieved, all while the organization handles competitive challenges and other problems. Effective production helps in managing the supply chain through an uninterrupted supply of goods and services.
Production operations aim to meet the demand of the public otherwise the whole supply chain can collapse. Effective production operations impact supply chain performance by making the process run smoothly and effectively.
Example 1: People can consider the success of the Phone I. A combination of great product design, procurement, assembly distribution coordination and heavy marketing contributed to the success of this commercial enterprise. Fast and good execution of the plan, buy, make, and move supply chain processes is essential to meet the global demand for this innovative smartphone.
Ineffective production operations slow down the supply chain process and can have adverse or opposite consequences. It can make it difficult to compete in the global market by limiting its supply. Also, the traveling costs increase as the products are not produced on time. So, repeated transportation activities need to be done to reach the customers to meet their demands.
Example 2: When an automobile company, Company T introduces automobile products like new cars such as Car R, the company needs a certain approach to supply chain processes that fulfill customer demands for ease in transportation. It is important to arrange key materials quickly, gather or collect production resources and must have the capacity to assemble the components and move the finished goods to automobile showrooms in quantities required to meet demand.
Ineffective production operations can slow down the supply of raw materials needed to produce the final product. It can lead the competitors to snatch the opportunity and business from the company. The competitors can take advantage of the limited supply and offer the customers better deals to attract them. This can cause a loss of loyal customers which can reduce the revenue of the company. It can also harm the goodwill and reputation of the company as it is not able to meet the customers' demands.
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