Essay on Operations Management and Supply Chain Management

1244 Words Jun 16th, 2011 5 Pages
Question:
How does Operations and Supply Chain Mgmt enhance company profitability?
1. Content
2. Charts and Graphs
3. Evidence to support your position
4. Examples that highlight your conclusion

Table of Contents:
I. Executive Summary…………………………………………………………………………………………………………………….2
II. Operations Management and Profitability………………………………………………………………………………….3
III. Supply Chain Management and Profitability……………………………………………………………………………….5
IV. Examples/Case Studies……………………………………………………………………………………………………………….8
V. References………………………………………………………………………………………………………………………………..10

Today more than before have the functions of Operations and Supply Chain Management (SCM) impacted the bottom line of companies that recognize the facets of
…show more content…
The graph below demonstrates as SCM is now touching all areas of the business, this has resulted in cost advantages of 5 – 6% year over year.

REVENUE ENHANCEMENT by Supply Chain Management: illustrated by The Purchasing Multiplier
For Each $1 savings by Supply Chain Management
-divided by Known % Company Profit Margin
-Equals $ Equivalent in increase in Sales Revenue. THE COMPELLING BUSINESS CASE:
In our example, here is the Sales Equivalent for our $5 million in Spend Area
Cost reductions
(1) $750 Million in Sales
(2) SCM Saves $5 million
(3) Profit Margin is 4.3% ($32M Profit / $750M Sales)
(4) $5M / 4.3% = 116 Million in Increased Sales

Sainsbury Supermarkets Ltd.:
Sainsbury Supermarkets Ltd., the third largest chain of supermarkets in the United Kingdom with a supermarket share in the UK supermarket of 16.5% with XXXX number of employees. Through increasing efficiencies in their operations, in October 2010 reported an increase in the underlying profit by 8.2 per cent to £370 million compared with the same period the previous year.

Part of this increase was attributed to efforts to simplify aspects of its running and deliver costs

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