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INTRODUCTION TO
OPERATIONS MANAGEMENT
Historical Milestones in Operation
Management
Industrial Post-Civil Scientific
Revolution War Period Management
Science Operations Human Relations
Revolution Research and Behaviorism
Operation Management refers to the
administration of business practices to
Operation Management
create the highest level of efficiency
possible within the organization.
Operations management is
concerned with converting materials
and labor into goods and services as
efficiently as possible to maximize the
profit of an organization.
HISTORICAL EVOLUTION
1776 1799 1832 1900 1900 1901
Specialization of Interchangeable Division of labor Scientific Motion of study Scheduling
labor in parts, cost by skill; management time of jobs techniques for
manufacturing accounting assignment of study and work –Frank B. employees,
- Adam Smith –Eli Viihitney and jobs by skill; study develop; Gilberth machine jobs in
others basics of time dividing planning manufacturing
study and doing of work –Henry L. Gant
–Charles –Frederick W.
Babbage Taylor
ADD A FOO
HISTORICAL EVOLUTION
1915 1927 1931 1935 1940 1946
Economic lot Human Statistical Statistical Operations Digital computer
relations: the inference sampling applied research –John Mauchlly
size for
Hawthrone applied to to quality control; applications and J.P. Eckert
inventory in World war
studies product quality: inspection
control quality control II
– Elton Mayo sampling plans
–F.W Harris charts –H.F. Dodge & – P.M.
–W.A. Shewart H.G. Roming Blacker and
others.
HISTORICAL EVOLUTION
1947 1950 1951 1960 1970 1980
Linear Mathematical Commercial Organizational Integrating Quality and
programming programming, digital computer; behavior; operations into productivity
–GB. Dantzig, on-liner and large-scale continued study overall strategy and applications from
Williams & stochastic computations of people at work policy. Computer Japan robotics.
others processes available. -L. Cummings, L. applications to CAD-CAM-W.E.
–A. Charnes, –Sperry Univae Porter manufacturing. Deming and J.
W.W. Cooper & Scheduling and Juran
others control. Material
requirement
planning (MRP)
• -W. Skinner J.
Orlicky and G.
Wright
INDUSTRIAL REVOLUTION
Began in the 1770s in England and spread to the rest of Europe
and to the United States during the 19th century.
Most significant machine was steam engine invented by James
Watt in 1764.
• Thus the late 1700s factories had not only machine power but
also ways of planning and controlling the tasks of workers.
Substituted machine power for human power
• Adam Smith’s The Wealth of Nations in 1776 touted the
economic benefits of the specialization of labor.
• In 1790 an American, Eli Whitney, developed the concept of
interchangeable parts.
• In the 1800s the development of the gasoline engine and
electricity further advanced the revolution.
POST-CIVIL WAR PERIOD
During the Post-Civil War period great expansion of
production capacity occurred.
By Post-Civil War the following developments set the
stage for the great production explosion of the 20th
century:
• Increased capital and production capacity
• Expanded Urban workforce
• New western US markets
• An effective national transportation system
SCIENTIFIC MANAGEMENT
Frederick Taylor is known as the Father of Scientific
Management. His system employed these steps:
• Each worker’s skills, strength, and learning ability were
determined.
• Stopwatch studies were conducted to precisely set
standard output per worker on each task.
• Material specification, work methods, and routing
sequences were used to organize the shop.
• Supervisors were carefully selected and trained.
• Incentive pay systems were initiated.
OPERATIONS RESEARCH
• During World War II, enormous quantities of
resources (personnel, supplies, equipment) had to
be deployed.
• Military Operations Research teams were formed
to deal with the complexity of the deployment.
• After the war, operations research fond their way
back to universities, industry, government, and
consulting firms.
• OR helps operations managers make decisions
when problems are complex and wrong decisions
are costly.
SERVICE REVOLUTION
• The creation of services organizations
accelerated sharply after World War II.
• Today, more than two-thirds of the Us
workforce is employed in services.
• There is huge trade surplus in service.
• Investment per office worker now exceeds the
investment per factory worker.
• Thus there is a growing need for service
operations management.
Human Relation Theory
is characterized by a
shift and emphasis from
TASKS to WORKER.
• Need for attention
• Social Interaction
• Individual Achievement
• Intended as move away
from the “organization as
machine” metaphor
• Management recognizes
employee as human with
needs rather than cogs of
a machine
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