Unit 1

Historical Evolution of OM

1
 Historical Evolution of Operations
Management

 System for P & O have existed since ancient times.

 The great wall of China
 Egyptian pyramids
i.e. More than 100000 workers for 20 years.
 The ships of Roman empire
 The roads and aqueducts of the Roman
 These are all examples of the human ability to organize for
operation and production
 These also show the roots of the Industrial Revolution

2
 Historical Evolution of
Operations Management
 Industrial revolution (1770’s)
 Scientific management (1911)
 Mass production
 Interchangeable parts
 Division of labor
 Human relations movement (1920-60)
 A psychologist focusing on human factor in work-tiredness and motivation.
 Decision models (Harris 1915-inventory model, 1960-70’s)
 The factory movement was accompanied by the development of several
quantitative techniques. After ww II-the importance of military and
manifucturing sectors, the models of forecasting, inventory man., project
man were developed.
 JIT production, quality revolution, continual improvement etc.
3
 The Evolution of OM

 Production of goods remained at a handicraft level untill the Industrial

revolution took place. In 1764, the Industrial revolution began and James
Watt invented the steam engine and advanced the use of mecanical power
to increase productivity.
 Eli Whitney (1798) found out and introduced the concepts of standardised
parts and interchangeable parts. He then developed musket system
because the type of muskets were handcrafted-he produced 10000 muskets
by using the concept of interchangeable parts.
 By using the same concept, he allowed the manifacture of fire-alarms,
clocks, watchs, sewing machines etc..
 Soon after, by conducting the concept of steam engine, Richard Trevithick
(1802) invented the first train and Richard Fulton (1807) invented the first
steam boat.

4
 The Evolution of OM

 The first steam boat and the first train indicate a long stream of application
in which human anad animal powers were replaced by engine power.
 The Industrial revolution was the transformation of a society from peasant
and local occupation into a society with world wide connections in terms of
great use of machinery and large-scale commercial operations. This is the
first step of factory system.
 This system replaced the traditional production system by the concept of
mass-production by bringing together large numbers of semi-skilled
workers.
 Adam Smith’s ‘The wealth of nations’ (1776) pointed out the importances
and advantages of the division of labor where the production process was
broken down into series of small tasks and each performed by a different
worker.

5
 The Evolution of OM

 With aid of the concept of the division of labor:

 Workers who continually perfomed the same task, they would gain skill
and experience.
 Saving time or avoiding lost time due to changing jobs.
 Workers’ concentration on the same job increased would lead to the
development of special tools and techniques for faster and easier task.
 Specialization jobs and division of labor began to take place. A prominent
mathematician and engineer Charles babbage (1832) promoted an
economic analysis of work and pay on the basis of skill requirement.
 In the earliest days of manufacturing, goods were produced using craft
production-highly skilled workers conducting simple, flexible tools to
produce small quantities customized goods.

6
 The Evolution of OM

 Frederick Taylor (1911) published ‘the priciples of scientific

management’. This helped to achieve wide tasks in industry.
 Frank Gilber (principles of motion economy), Henry Gantt (schudeling and
charts design for system) and Herrington Emerson (organizational
efficiency) used Taylor’s ideas to improve the system of operation and
production management.
 Influence of Japanese manufacturers
 JIT production, quality revolution, continual improvement etc.
 Using the concept of JIT production, Japanese manufacturers changed the
rules of production from Mass Production to Lean Production.
 Lean production prizes flexibility rather then efficiency, as well as quality
rather than quantity. This indicates the first step of ‘Era of Industrial
globalization’.

7
The Evolution of OM

8
 School of Management

 The process school of management

 was developed by Henry Fayol in 1900
 management can be viewed as a continuous process
 the function of planning, organizing and controlling
 The behavioural school of management
 was developed by Elton Mayo in 1920
 human relation movement on production output
 Productivity depends not only on the physical environment
but also on social norms and personal feelings (i.e. Western
Electric’s Hawthorne plant)

9
 School of Management

 The quantitative school of management

 is concerned with decision making, mathematical
modeling as well as system theory
 represents a productive system
 In 1915, Harris developed an Economic Order Quantity
model for inventory management
 In 1931, Shewhart developed a Quantity decision model
for use in Statistical quality control work
 In 1947, George Dantzing developed PERT/CPM
 In the late 1950s and early 1960s Edward Bowman, Robert
Fetter and Elwood Buffa developed the concept called
Modern poduction Management
 As computers became available in the 1950s, the power of
opeartions research was multiplied
10
 School of Management

 The School of Modern Management

 In the late 1960s, MRP and CPR were introduced by
Joseph Orlicky and Oliver White
 In the late 1970s, MRP II, JIT, TMQ and KANBAN
systems were developed
 the School of Modern Management includes the system
and the contingency approaches.
 these are also called new contemporary management
approaches
 the system approach points out that an organization has
interdependent factors as such individuals, status, motives,
goals etc and must work together
 the contingency approach reveals that organizations are
different so different and changing cases need to conduct
different approaches and techniques 11
Summary for Historical Evolution of
Operations Management

12
13
14
15