The Historical Evolution of Operations Management

THE HISTORICAL
EVOLUTION OF
OPERATIONS
MANAGEMENT
The Historical Evolution of
Operations Management

The Industrial Revolution

Craft production - System in which highly
skilled workers use simple, flexible tools to
produce small quantities of customized
goods.

A major change occurred that gave the

Industrial Revolution a boost:
• the development of standard gauging
systems. This greatly reduced the need
for custom-made goods.
• Factories began to spring up and grow
rapidly, providing jobs for countless
people who were attracted in large
numbers from rural areas.
The Historical Evolution of
Operations Management

Scientific Management
• Scientific Management is also called Taylorism.
He earned the title "Father of Scientific
Management" and the "Efficiency
Movement“

Frederick Winslow Taylor believed in a “science

of management” based on observation,
measurement, analysis and improvement of
work methods, and economic incentives.
The Historical Evolution of
Operations Management

Several other pioneers also

contributed heavily to this
movement, including the
following:

Frank Gilbreth was an industrial

engineer who is often referred to
as the father of motion study. He
developed principles of motion
economy that could be applied to
incredibly small portions of a task.
The Historical Evolution of
Operations Management

Lilian Moller Gilbreth

• At the school of Industrial Engineering, she
helped establish a laboratory and applied
motion of study techniques to home
economics categorizing it as "work
simplification"
• She was influential in the development of the
modern kitchen, creating the "work triangle"
and linear kitchen layouts.
• Lillian Gilbreth, a psychologist and the wife of
Frank Gilbreth, worked with her husband,
focusing on the human factor in work.
• Many of her studies in the 1920s dealt with
worker fatigue.
The Historical
Evolution of
Operations
Management
Henry Gantt recognized the
value of non-monetary rewards
to motivate workers, and
developed a widely used
system for scheduling, called
Gantt charts.
• He also designed the "task
and bonus" system to wage
payment and additional
measurement methods
worker efficiently and
effectively
The Historical
Evolution of
Operations
Management
Harrington Emerson applied
Taylor’s ideas to organization
structure and encouraged the
use of experts to improve
organizational efficiency.
• He testified in a
congressional hearing that
railroads could save a million
dollars a day by applying
principles of scientific
management.
The Historical Evolution of
Operations Management

Henry Ford, the great industrialist,

employed scientific management
techniques in his factories.
Among Ford’s many contributions was
the introduction of mass production
to the automotive industry, a system
of production in which large volumes
of standardized goods are produced
by low-skilled or semiskilled workers
using highly specialized, and often
costly, equipment.
The Historical Evolution of Operations Management: The
Human Relations Movement

Satisfaction of Increased in Workers'

Employees' basic needs Productivity

"Effective control comes

from within the individual
worker rather than from
strict and authoritarian
control."
The Historical Evolution • Hawthorne studies
of Operations
• The studies responsible for
Management: The
Human Relations • creating the human relations movement, which focused on
Movement giving more consideration to workers’ needs.
 The Historical Evolution of
Operations Management

Hawthorne Studies
1. Effect of Lighting to workers' output
• The experimenter effect
- making the changes was interpreted by workers as
a sign that management cared, and more generally,
it was provided some mental stimulation that was
good for morale and productivity.
• A social effect
- being separated from the rest and being given
special treatment, the experimenters developed a
certain bond and camaraderie that also increased
productivity.

This Photo by Unknown Author is licensed under CC BY-SA

The Historical Evolution
of Operations
Management

Hawthorne Studies
2. Relay Assembly Test Room
(Bank Wiring Room)

• the focus of the study is on the

social effects in the workplace
assembling telephone switching
equipment.
• Conclusion
- money was not the cause of
increased productivity but
improved Human Relations
 • During the 1930s, Elton Mayo conducted studies
The Historical at the Hawthorne division of Western Electric.
Evolution of Operations His studies revealed that in addition to the
Management: The physical and technical aspects of work, worker
Human Relations motivation is critical for improving productivity.
Movement
The Historical Evolution of Operations Management:
The Human Relations Movement

• Based on his study, he

suggests that using the
X style get poor results
while "enlightened"
managers using the Y
style produce better
performance and
results, and allows
people to grow and
develop.
The Historical Evolution of
Operations Management:
The Human Relations
Movement
Abraham Maslow

He was the designer of the popular

Hierarchy of Needs Theory.
He studied how mentally healthy and
successful people achieved towards self-
actualization.
He stressed the importance of focusing on
the positive qualities in people as opposed
to treating them as a "bag of symptoms".
OPERATIONS TODAY

• Electronic business, or e-business, involves the use of

the Internet to transact business. E-business is
changing the way business organizations interact with
their customers and their suppliers.
• E-commerce, consumer–business transactions such
as buying online or requesting information. However,
business-to-business transactions such as e-
procurement represent an increasing share of e-
business.
OPERATIONS TODAY

• In order to succeed, companies must be masters of

the basics of operations management. To achieve this
ability, many companies are implementing a concept
called lean systems.
• Lean systems take a total system approach to
creating an efficient operation and pull together best
practice concepts, including just-in-time (JIT), total
quality management (TQM), continuous
improvement, resource planning, and supply chain
management (SCM).
OPERATIONS TODAY

• The need for efficiency has also led

many companies to implement large
information systems called
enterprise resource planning (ERP).
• Enterprise resource
• planning (ERP)
• Large, sophisticated software
systems used for identifying and
planning the enterprise-wide
resources
• needed to coordinate all activities
involved in
• producing and delivering
• products.
OPERATIONS TODAY

• CRM encompasses software

solutions that enable the firm to
collect customer-specific data,
information that can help the
firm identify profiles of its most
loyal customers and provide
customer-specific solutions.
• Customer relationship
• management (CRM)
• Software solutions that enable
the firm to collect customer
specific data.
OPERATIONS TODAY

• Cross-functional decision making

• The coordinated interaction and decision making
that occur among the different functions of the
organization.

• Today many companies bring together experts

from different departments into cross-functional
teams to solve company problems.

• Employees from each function must interact and

coordinate their decisions, which require
employees to understand the roles of other
business functions and the goals of the business as
a whole, in addition to their own expertise.