The paper "Operations and Supply Chain Management" is a perfect example of a management assignment. Logistics management is the process of managing resources of an organization from their origin to their consumption so that the organization will be able to meet some specific requirements of an organization like meeting the needs of the customers. It involves material handling, production, packaging transportation and warehousing (Lyson & Farrington 2007). Materials management is the process of planning the design with which to move tangible materials in the supply chain. It covers the acquisition of materials, their replenishment, quality control, ordering of the materials and warehousing. Physical distribution is the process of moving finished products from their point of origin, storage and distribution to customers using various channels of distribution.
It helps to improve the delivery of products to customers. Supply chain management is the active management of all activities involved in the supply chain from the point of origin to the point of consumption. It helps to improve customer value and also helps to improve the competitiveness of an organization. Make or buy decisions There are various theories that try to explain the make or buy decisions taken by an organization.
The transaction costs theory explains that there are many contracts that are incomplete because of the buying decisions made by an organization. The reason why all transactions are not carried on by one big firm is that when a firm gets big, the management starts to experience diminishing returns to management (Lyson & Farrington 2007). By deciding to internalize all the functions, it will be a waste of resources because some functions are better to buy than making. In this regard, therefore, an organization can decide to make the products when lead time is longer while it has the skills to make the materials or products especially when it is cheaper to make them.
For instance, when the supply of spare parts for an assembly factory is expensive than making, an organization can opt to make rather than buying them.
ReferenceLyson, K & Farrington, B 2007, Purchasing and supply chain management, Pearson Education Limited.