Historical background of operations management


This management function is not very old. It can however be said that seminal concept of ‘division of labor’ propagated by Adam Smith (Wealth of Nations, 1776) led to the evolution of the present day operations management. Charles Babbage (1832) advocated the use of scientific methods for shop-floor problems. E W Taylor however could aptly be described as the pioneer in this field (1878), whose work and method study brought about significant changes in productivity Taylorism consists of:

1. Replacement of rule-of-thumb by scientific methods
2. Right selection for the right job, and training and development of the selected person on individual basis
3. Harmony between workers and management, the aim being maximization of production, and better wages for the working class
4. Specialization of workers and management, each doing the work in which they are most proficient.

‘The Principles of Scientific Management’ (1911) laid the foundation of operation management. Taylor and his colleagues and contemporaries also deserve a mention.

Mr and Mrs. Gilbreth contributed significantly to motion study. Frank Gilbreth developed the concept of Therblig (Gilbreth inverted) and chrono-cycle graphs (1911). Lillian Gilbreth authored the book ‘The Psychology of Management’.

Henry Ford (1913) attempted mass production and arranged work stations into an assembly line, with the conveyor belt. In the same year (1913), Henry Gantt made known his studies of production scheduling Gantt Charts used even today.

H. Emerson (1913) applied Taylorism for the development of organizational structure and suggested staff functionaries for improving efficiency. EOQ – Economic order Quantity — Formula to control inventory was developed by Wilson (1928). There were further refinements later in this formula.

Dodge, Roming and Shewhart (1931) put forward the concept of sample inspection and produced statistical tables. Prior to that in 1924, Stewhart developed control charts and laid the foundation of SQC — Statistical Quality Control.

Between1933–39, Mayo and his associates conducted the famous Hawthorne Experiments emphasizing the importance of the human element and informal groups to raise productivity. The behavioral school thus emerged with Mayo’s work. Blake and Mouton’s Managerial Grid, Douglas McGregor’s theory X & Y and Maslow’s Need Hierarchy Theory were further development in the area.

Tipett (1937) developed the concept of Work Sampling to set up work standards. One vitally important discipline in the meantime that happened to influence operation management most came on the scene in the form of Operation Research (OR) during the war time (1950). Mathematical models of optimization and system approach came to be applied extensively to resource allocation, scheduling, inventory control and location and layout problems of facilities.

Value engineering came forward as a cost reduction technique, trying to identify the unnecessary costs, not relevant to the functional utility of the product.

Computer applications in later years, especially for Industrial engineering and OR problems, changed the very complexion of the Operations Management function.

Project Management techniques of PERT/ CPM (1958) gave an effective tool of planning and control of large projects.

Computer simulation, computer aided design and manufacturing (CAD/CAM), group technology (GT), cellular manufacturing system (CMS) are some of the recent developments making us optimistic about operations management’s role and utility in future.