3-1 Forecasting

Introduction to
Operations Management

Operations Management, Eighth Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
3-2 Forecasting

Responsibilities of Operations Manager

Planning Organizing
– Capacity – Degree of centralization
– Location – Process selection
– Products & services Staffing
– Make or buy – Hiring/laying off
– Layout – Use of Overtime
– Projects Directing
– Scheduling – Incentive plans
Controlling/Improving – Issuance of work orders
– Inventory – Job assignments
– Quality
– Costs
– Productivity
3-3 Forecasting

Business Operations Overlap

Operations

Marketing Finance
3-4 Forecasting

Operations Interfaces
Industrial
Engineering
Maintenance
Distribution

Purchasing Public
Operations Relations

Legal
Personnel

Accounting MIS
 3-5 Forecasting

Historical Evolution of Operations Management

• Industrial revolution era (1770’s) [Steam Engine – 1769 (James Watt),
Division of Labor – 1776 (Adam Smith)]

• Scientific management era (1911’s) [Principles of Sc. Mgt. – 1911 (Fredrick

Winslow Taylor), Gantt Chart – 1912 (Henry L. Gantt), Moving
Assembly Line – 1913 (Henry Ford), Inventory Models – 1915 (F.W.
Harris)

• Human relations movement era (1920-60) [Hawthorne Studies – 1930 (Elton

Mayo), Statistical Process Control – 1935 (H.F. Dodge and et al.),
Motivation Theories -1940 (Maslow), 1950 (Frederick), 1960
(McGregor)]
 3-6 Forecasting

Historical Evolution of Operations Management

• Management science era [Linear programming – 1947 (George Dantzig),
Digital Computer – 1951 (Remington Rand), Simulation, Waiting Line
Theory, Decision theory, PERT (Performance Evaluation Review
Technique)/CPM (Critical Path Method) – 1950s to 1960s (various)]

• Quality revolution era [Lean Production – 1970s (Taiichi Ohno), JIT - 1980s
(Toyota), TQM – 1980S to 1990s (W. Edward Deming, Joseph Juran and
et al.)

• Process revolution era [Computer Integrated Manufacturing (CIM),

Concurrent Engineering – 1980s to 1990s (various) Reengineering –
1990s (Michael Hammer and James Champy)]