Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

1.1.5b Logistics, Operations, Logistics Management, Operations Management, and Value-Added Management

Intended learning outcomes: Differentiate between terms such as logistics, operations, logistic management, operations management, and value-added management.

Continuation from previous subsection (1.1.5).

Logistics is involved with products over their entire life cycle:

Logistics is the organization, planning, and realization of the forward and reverse flow and storage of goods, data, and control[note 103] along the entire product life cycle.

Logistics management is the efficient and effective management of logistics activities to meet customers' requirements.

The term “operations management” is very similar to the above definition of logistics management.

Operations, according to [RuTa17], is a function or a system that transforms input to output of greater value.

Operations management, according to [ASCM22], is the planning, scheduling, and control of the activities that transform input into finished goods and services.

Operations Management also denotes concepts from design engineering to industrial engineering, manage­ment information systems, quality management, production manage­ment, accounting, and other functions as they affect the operation. According to [RuTa17], it denotes the design and operation of productive systems — systems for getting work done.

It also makes sense to view the other functional terms found all along the company’s value chain, namely, procurementproduction, and sales, from the management perspective. In the literature, functional terms are usually defined clearly and distinctly. In contrast, for management terms — like procurement management, production management, and sales management — there often are no formal definitions. In practical usage, however, these terms are increasingly similar to the definitions given above for logistics or operations management. This is not surprising, for it is impossible to conduct successful operations management if it is applied to only a part of the value chain. For this reason, we assume in the following that there are no significant differences among all these management terms.

Value-added management can thus be used as a generalized term for all the types of management mentioned above. [note 104].

Figure shows a graphical representation of how the terms fit the company’s world.

Fig.        Assignment of terms to value-added management.

This animation shows a graphical representation of how the terms fit the company's internal and external activities
Click on the start button to begin the demonstration.

Course section 1.1: Subsections and their intended learning outcomes