Historical Evolution of Operations

ManagementBSc.Financial Management (special) Degree

Sabaragamuwa University of Sri Lanka

Shashini Wijekoon

Lochana Fernando

Nilani Rathnapriy

a

Surekha Dilrukshi

GROUP MEMBE

RS

Historical Milestones in OMIndustrial revolution (1770’s)Post civil war periodScientific management (1911)

Mass productionInterchangeable partsDivision of labor

Human relations movement (1920-60)Unemployment insurancePension plans

Operations researchService revolutionComputer revolutionInfluence of Japanese manufacturers (1970-

1990)

Operations Management

A production system takes inputs and converts them into outputs.

The conversion process is the predominant activity of a production system.

The primary concern of an operations manager is the activities of the conversion process.

HistoryEvolution

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INDUSTRIAL REVOLUTION Ancient times and before 1700

The production system was a “ Cottege system”

In 1700’s the Industrial Revolution begins

The human power was replaced by the machine power and the “Factory System” developed

James Watt (1764) invented steam engine- gathering of the workers became easy.

Industrial RevolutionSteam engine 1769 James WattDivision of labor 1776 Adam SmithInterchangeable parts 1790 Eli Whitney

Historical Events in OM Industrial Revolution

Adam Smith(1776) published “ The Wealth of Nations” touted the economic benefits of “Division of Labor”.

He suggested that the huge increases in productivity obtainable from technology or technological progress are possible because human and physical capital are matched, usually in an organisation.

In 1790, Eli Whitney invented the concept of “Interchangeable parts”.

Whitney's defenders have claimed that he invented the American system of manufacturing the combination of power machinery, interchangeable parts, and division of labor that would underlie the nation's subsequent industrial revolution.

POST-CIVIL WAR PERIODDuring 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 capacitythe expanded urban workforcenew Western US marketsan effective national transportation system

SCIENTIFIC MANAGEMENT -1911 The need to develop the great production machine to

satisfy the massive market of that day gave birth a new philosophy called “Scientific Management”.

Frederick Winslow Taylor, known as the “Father of Scientific Management”

Invented new scientific procedure to improve the production efficiency.

Later he invented the “ Shop System”. The implementation of this system increased the

efficiency of the workers.

Scientific ManagementPrinciples 1911 Frederick W. TaylorTime and motion studies 1911 Frank & Lillian GilbrethActivity scheduling chart 1912 Henry GantMoving assembly line 1913 Henry Ford

Historical Events in OM

Scientific Management

Henry Ford(1863- 1947) popularized the concept of “Assembly Lines” by implementing it in his own company.

He published the book “ Today and Tomorrow” in 1926.

OTHER PIONEERS OF SCIENTIFIC MANAGEMENT

Frank B. Gilbreth Lilian M. Gilbreth Henry L. Gantt Carl G. Barth Harrington Emerson Morris L. Cooke

HUMAN RELATION AND BEHAVIOURALISM

During 1800 and 1900’s the legacy of rigid control prevailed over the company.

Between World War-1 and World War-2 , a philosophy emerged in United States that the workers also needs to be treated with dignity.

The “Human Relation Movement” began by Elton Mayo, F. J. Roethlisberger, T. N. Whitehead at Hawthorne, Illinois.

The “Hawthorne Studies” show that psychologiacal and sociological factors affected not only human motivation and attitude but production as well.

The work of the behaviouralists , A. Maslow Frederick Herzberg Douglas McGregor Peter Druckker

Forced the employers of the companies to think about the human relations in company.

Human Relations

Hawthorne studies 1930 Elton MayoMotivation theories 1940s Abraham Maslow

1950s Frederick Hertzberg1960s Douglas McGregor

Historical Events in OM : Human Relations & behaviorism

OPERATIONS RESEARCH

European campaign at the time of world war- 2 used enormous quantities of manpower.

Because of the chaos situation the companies experienced more complexed situation than the previous times .

As a result of the need for the proper operational strategy the concept of “Operatio Research” arrive.

THE SERVICE REVOLUTION The mushroomed growth of the services in the world

economy made the service revolution.

Different offices mushroomed in world

More than two third of the world workforce is employed in services.

More than two third of the GDP is produced by services.

THE COMPUTER REVOLUTION

Helps in the Enterprise Resource Planning(ERP)

Softwares like SAP, Peoplesoft, Oracle helps the managers to get real time news about the different section of the company.

The improvement in the communication system- e-mail, internet technology also influenced the operations management.

Historical Events in OM Information Age/Internet Revolution

Information Age/Internet Revolution

Internet, WWW, ERP 1990s ARPANET, TimSupply chain Berners-Lee, SAP, i2management, Technologies, ORACLE,E-commerce PeopleSoft, Amazon,

Yahoo, eBay,and others

Influence of Japanese Manufacturers

Refined and developed management practices that increased productivity.

Credited with fueling the quality revolutionJust-in-time production

Quality RevolutionJIT1970s Taiichi Ohno, ToyotaTQM 1980s W. Edwards Deming,

Joseph Juran, et. al.Strategy and operations Skinner, HayesReengineering 1990s Hammer, ChampyWorld Trade Organization 1990s Numerous countries

and companies

Historical Events in OMQuality Revolution and Globalization

OPERATIONS MANAGEMENT TIME LINE

(1776-1900) - Division of labor (1900-1920) - Scientific

Mgmt. ,Time&Motion Study (1920-1940) - Hawthorn study (1940-1960) - Operations research (1960-1980) - Just-in-Time (1980-2000) - Total Quality Management

RetrospectionIndustrial revolution

(1770’s)

Post civil war period

Scientific management (1911)Human relations movement

(1920-60)

Operations research

Service revolution

Computer revolution

Influence of Japanese manufacturers (1970-1990)