History of Operations Management

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Achievement

Understand the evolution of Operations Management through history to

current modern practices.
Contents

Scientific Management

Moving Assembly line

Hawthorne Effect

Operations Research

Operations Management
Contents

Computers and MRP

Just-in-Time

Total Quality Management

Supply Chain Management

Electronic Enterprise
Scientific Management
Scientific Management is a theory of management that
analyzes and synthesizes workflows. Its main objective is
improving labor productivity.

Developed by Frederick Taylor in the United States

during the 1880s and '90s within manufacturing
industries, especially steel.

It was one of the earliest attempts to apply science to

the engineering of processes and to management.

Its peak of influence came in the 1910s.

Scientific Management
The philosophy of this system is that:

1. Scientific laws govern how much a worker can produce per day.

2. It is the function of management to discover and use these laws in the

operation of productive systems.

3. It is the function of the worker to carry out management´s wishes without

question.
Moving Assembly Line
Developed by Henry Ford in 1913.

An assembly line is a manufacturing process in which

parts are added as the semi-finished assembly moves
from workstation to workstation until the final
assembly is produced.

By mechanically moving the parts to the assembly

work, a finished product can be assembled faster and
with less labor than by having workers carry parts to a
stationary piece for assembly.

It has been one of the major technological

innovations in the history of industry.
Moving Assembly Line
Assembly lines are common methods of assembling complex items such as
automobiles and other transportation equipment, household appliances and
electronic goods.
The Hawthorne Effect
The Hawthorne Effect is a type of reactivity in which individuals modify an
aspect of their behavior in response to their awareness of being observed.

The Hawthorne Studies were conducted in the 1930s by a research team from
Harvard. The experiment was designed to study the effects of certain
environmental changes on assembly´s workers output at the Western Electric
plant in Hawthorne, Illinois.

The first experiment was to see if workers would become more productive in
higher or lower levels of light.

The workers' productivity seemed to improve when changes were made, and
slumped when the study ended.
Hawthorne Studies
It was suggested that the productivity gain occurred as a result of the motivational
effect on the workers of the interest being shown in them.

Although illumination research of workplace lighting formed the basis of the

Hawthorne effect, other changes such as maintaining clean work stations, clearing
floors of obstacles, and even relocating workstations resulted in increased
productivity for short periods.

These studies preceded the birth of Human Relations Departments in firms.

Operations Research
Operations Research is a discipline that deals with the application of advanced
analytical methods to help make better decisions.

It appeared during World War II, where complex logistics and weapons systems
required a type of interdisciplinary and mathematical discipline for control and
decisions.

Operations Research is a sub-field of applied mathematics: mathematical

modeling, statistical analysis, and mathematical optimization.

Operations Research is often concerned with determining the maximum (of

profit, performance, or yield) or minimum (of loss, risk, or cost) of different
objectives.
Operations Management
Operations Management is an area of management concerned with designing
and controlling the process of production and redesigning business operations in
the production of goods or services.

It appeared during the late 1950s and early 1960s, as opposed to industrial
engineering or operations research.

It involves the responsibility of ensuring that business operations are efficient in

terms of using as few resources as needed and effective in terms of meeting
customer requirements.
Material Requirements Planning
Material Requirements Planning (MRP) is a production planning, scheduling, and
inventory control system used to manage manufacturing processes.

It appeared in the early 1970s when computers started being used in industry
operations.

This program requires to manipulate massive data to quickly adjust production

schedules and inventory purchases to meet changing demands for final products.
Just-in-Time
Just-in-time (JIT) manufacturing is a methodology aimed primarily at reducing
flow times within production systems as well as response times from suppliers
to customers.

JIT is an integrated set of activities designed to achieve high-volume production

using minimal inventories of parts that arrive at the workstation just in time.

It appeared in Japan, during the 1980s and particularly at Toyota.

Total Quality Management
Total Quality Management (TQM) is a philosophy of management that takes a
comprehensive, high-level view of quality improvement.

TQM has been the unquestioned major development in the field of operations
management, as well as in management practice in general.

TQM involves all employees within the company.

TQM became really important in the 1990s and was the origin of many continuous
improvement methodologies: Business Process Reengineering, Six Sigma, PCDA
Cycle, Kanban, Value Stream Mapping, Lean Systems, etc.
Total Quality Management
All organizations follow the messages of quality gurus like: W. Edwards Deming,
Joseph M. Juran, and Philip Crosby.
Supply Chain Management
Supply Chain Management (SCM) is the management of the flow of goods and
services. Involves the movement and storage of raw materials, work-in-process
inventory, and finished goods from point of origin to point of consumption.

The idea of SCM is to apply a total system approach to managing the flow of
information, material, and services from raw material suppliers through factories
and warehouses to the end customer.

The focus is on optimizing those core activities to maximize the speed of response
to changes in customer expectations.
Electronic Enterprise
Electronic Enterprise refers to the use of the Internet as an essential element of
business activity.

It started in the late 1990s.

It is also called Online Business or e-Business.

Factory of the Future (FOF)
Factory of the Future (FOF): also called Industry 4.0, cyber-factory or connected
factory. Is a production system characterized by merging advanced technologies
like augmented reality, 3D printing, virtualization, internet of things, cyber-
physical systems, cloud technology, customization, individualization, virtual 3D
factory, Big Data, among others.
Significant Events in Operations Management