An era of Remarkable Progress (1900 – 1950)

During the 1900 – 1950 period, productivity in terms of output per worker hour increased by more than four times, reflecting progressive mechanization in the earlier years and automation near the need of the period. Within the 50 year period, there were landmark events, some of which simply marked growth and some of which must have been the generators of progress. Henry Ford made the moving assembly line a practical fact in 1919, and it is associated with the reality of national markets for high volume, standardized products that became the hallmark of US manufacturing excellence. In the true spirit of Taylor’s scientific management philosophy, there were early formulations of models of operations problems. F W Harris formulated the classic EOQ inventory model in 1914. This contribution was the forerunner to the extensive use of mathematical models in operations management today and, indeed in 1931 when Walter Shewhart introduced statistical quality control concepts and methods to industry. This event not only impacted the field of quality control, but it paved the way for the acceptance of probability and statistical concepts in forecasting inventory control, and so on.

Near the end of this fifty year period, a new impact on the field of operations management was made apparent by trends in consumer expenditures and employment patterns. Service systems had become so important in our economy that their effectiveness as operations systems was important and became a subject for study along with manufacturing systems. Percentage expenditures for services surpassed those for consumer nondurable goods. Currently, employment in service operations exceeds that in manufacturing.

The stage was being set for the current era of dynamic changes in markets, technology, organization, and information and decision making technology.

The Current Era:

The beginning of the current era is selected as 1950 to correspond roughly with the beginning of the use of computers in operations management. The extraordinary impact of electronic computers on operations management has been pervasive, extending into product-process technology, information systems, and decision making and control technology.

During World War II, research into war operations produced new mathematical and computing techniques that were applied to war operations problems. These problems had many attributes that were similar to operations problems in industry, and applications began of what would be called management science. It was scientific management, but with more powerful tools. All the mathematical methods that have been discussed and are a part of that development: In the order in which they appear in the text, these include forecasting models, inventory models, MRP, linear programming, aggregate production planning models, simulation, PERT/ CPM, SQC, waiting line models, and location and distribution models.

Not all the developments in this era were quantitative in character. In the early 1950s, there were important experiments that questioned the fractionation of jobs that had continued unabated since the dawn of the Industrial Revolution. Experiments with job enlargement at IBM suggested that division of labor had lost the workers’ interest. Experiments with teams and semiautonomous work groups in Great Britain indicated higher productivity and job satisfaction.

Computers and Management Science:

The practical use of some of the foregoing quantitative models was dependent on the development of computers. For example, linear programming without computers would have had a small field of application. MRP is essentially a computer based information system. Simulation usually requites large samples and is therefore computer dependent. Projects large enough to require PERT/CPM also call for computer solutions. Significant location and distribution problems require computers for solution, as do significant line balance problems.

Computers and Product–Process Technology:

The substitution of machines for human power did not end with the advent of computers; it continues to this day. But computers have added an entirely new dimension of substitution. Even with power substitution, humans retained the unique capabilities of sensing and control. But with the automation technologies of numerical control of machines and robotics combined into flexible manufacturing systems, these human functions are substituted for by machines. The result is that machines seem to have few restraints limiting their application other than economic justification. These automation technologies coupled with soon to be realized extensive CAD/ CAM capabilities mean that the technological barrier to the automatic factory has virtually been removed.