Modern production and operations management embraces both manufacturing and non-manufacturing systems. A firm’s approach for relating operations management issues to the other functional areas of the business, to the business itself, and to the relevant product market environment can make the crucial difference in profitability, mere survival, or bankruptcy.
To manage operations effectively in today’s environment requires as understanding of product process technology as well as modern decision making technology. Some of the concepts involved in a modern view of operation management are quantitative, often requiring computers for solution, as with linear programming solutions to problems of aggregate planning, location, and distribution. In recent year, the importance of the operations function in corporate strategy has been recognized and integrative concepts have been developed to formulate operations strategy and its link with the corporate strategy.
Production and operations management have not always been quantitative, scientific, and a part of advanced computer technology. To gain perspective, we must look back more than 250 years to see the flow of ideas that developed the field to its present state so that we can also look forward to envision the operations systems of the future.
There are four dominant themes that, when related to one another, describe our progress in developing the effective systems for producing goods and services that we know today: the changing nature of products ad markets; the development of product and process technology; the evolution of organizational form and structure related to information, decision making, and control technology; and productivity as a broad measure of the economic violability of the productive systems that we have developed.
Beginnings – the Industrial Revolution:
We do not know who conceived the first productive systems, but we do know that the great monuments of the ancient world required both technical know how and managerial systems. These systems made it possible to organize resources and make the grand plans that were executed with such admirable results. Examples are the Egyptian pyramids and sphinxes at Giza, built in about 2500 B C; the Greek Parthenon, built in about 440 B C., the great Wall of China, built in about 214 B C and the construction marvels of the Roman world – aqueducts public buildings, roads, and temples which span a period from at least 400 B C to 100 B C.
During and following the period of the building of the ancient monuments, a wide variety of products were produced through the handicraft system. Something akin to a production and operations management system began to develop with the Industrial Revolution, since it was during that period that the factory system began to evolve from the handicraft system where production took place in homes. A series of changes in industrial techniques and economic conditions made possible the development of larger productive units, though markets were still largely local and products were largely customized and handcrafted. Though we do not have records of productivity statistics for these early periods, we are sure that it was very low compared to modern times or even the later 1800s, when the era of keeping productivity statistics began.
Substitution of Machine for Manpower:
In 1764, James Watt made improvements on the steam engine that made it a practical power source. This event was the beginning of a long period of replacing human muscle power with machines that extends to the modern era. Other major technological developments that increase the power available to do work were the internal combustion engine, which offered greater mobility; electricity and power generation and distribution; transportation and many others.
The substitution of external power for human power has been he source of most of the productivity increases that have occurred in the past 200 years in all kinds of activities in factories, construction, and agriculture. Indeed the common measure of productivity in terms of output per worker hour regards labor as the resource of significance, focusing on the labor substitution process that has been ongoing during the same period.