With raw material prices crashing down, input costs are looking favorable. (some friends confirm that the prices of petroleum based raw mateirials have dropped by 30% within four weeks.) But will these lower prices reflect in better margins? Probably not!
There are changes on the demand side too! With 'Credit' fueled 'Consumption Engine' staving for fuel, the demand for produced goods is going down. That means the installed operations capacity (logistics + manufactuering) will not be utilized at a high level. Look at it from 'Break-even analysis' point of view.
This idle capacity means less profits or even loss...
Also the 'pipeline inventory' has a role to play. Lower priced raw materials may be not be available for immediate use. my guess is that 'low cost' raw materials will be available only by start 2009.
Next couple of months will be a dark period. We will have to review our cost structures and pricing strategies, and also the profit expectations! Also during this time some supply as well as demand streams will dry up. This means the supply and demand profiles and related structures and dynamics will change. Byuing and selling terms (credit terms) will also undergo a change. Buyers will expect / impose longer credit terms.
In short, several organizations will have to restructure their major part of their operations.
This will also be a good opprtunity to start working on green initiatives which probably could not get the priority because of time pressure from routine operations running at a very high capacity utilization levles.
Few organizations will come out with new reduced prices probably in combination with low-price versions of their products and services in Q1 - 2009.
With new product-proce positioning, new demand profiles will emerge. At this moment it is not clear how this demand will be but it will be a learning experience to observe business organiozations passing through this economic downturn.

OM has many dimensions viz.:
1. Manufacturing Planning and Control

2. Supply Chain Management

3. Technology Management

Introduction to Operations Management (OM)

In my opinion Operations Management (OM) is going to gain prominance and more attention in coming days. for organizations engaged in 'products', OM encompasses both logistics and manufacturing.