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Historical Development of Operations Management

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Updated: Jun 17th, 2022

Introduction

With the increasing competition in the manufacturing industry, many businesses have adopted the use of operations management. Over the years, it has been a bridge toward a company’s success as well as the economic growth of a nation. It involves the absolute control of the use of resources and other raw materials and turning them into more valuable products. Businesses have, ever since, benefited from the use of the developments associated with the concept, which has, consequently, seen great economic growth rates in many countries.

The history of operations management traces back to manufacturing management. Later, it developed into its present form following the advancements in technological know-how. The main idea of the concept, both traditional and advanced, is to promote the achievement of production goals within companies with as minimal struggle as possible. (Inman, 2011, p. 1)

In this essay, the author has explored the historical development of operations management and its impact on businesses and progress.

History of Operations Management

The idea of operations management began in the eighteenth century as manufacturing management. An economist, Adam Smith, realized that specialization of labor could be very beneficial to any organizations economy.

He therefore came up with the idea of breaking up jobs into sub units where only workers specialized in a certain field would take up the task not only to ensure efficient delivery of the task but also to further increase their skills (Kumar, and Suresh, 2009, p. 284). Early in the twentieth century, F. Taylor enforced this law which then resulted to the development of scientific management. Since then until in the early nineties, many developments were made based on the traditional of the operation.

In 1776, Adam Smith developed the theory of specialization of labor in the manufacturing industry (Kumar, and Suresh, 2009, p. 284). This was followed by development of cost accounting in 1799 by Eli Whitney among other scientists. Later in 1832, Charles Babbage developed division of labor and assigning of tasks depending on employees’ skills as well as the necessity of time management (Kumar, and Suresh, 2009, p. 284).

From the scientific management of time, Frederick Taylor developed planning and work performance in the year 1900. Soon after, in 1900, Frank Gilbert came up with the motion of studying jobs (Wilson, 995, p. 87). This was followed by the development of techniques for scheduling of work for employees as well as the development of manufacturing jobs which required the use of machinery.

These two developments were done by Henry Gantt in 1901. In 1915, F.W. Harris developed the use of inventory for economic controls. The human relations department was developed by Elton Mayo in 1927 (Kumar, and Suresh, 2009, p. 284). Following this development was the use of statistical information to check and control the quality of various products by use of quality control charts.

This development was by W.A. Shewart in 1931. This contribution was further developed into sampling techniques to control quality of products and for inspection purposes in 1935 by H.F. Dodge and H.F. Roming. In 1946, a group of scientists among which was P.M. Blacker contributed in the application of operations research in the Second World War (Meredith, 2006, p. 189).

A very significant contribution happened in 1946 when John Mauchlly and J.P. Eckert developed digital computers. Following the use of computers, G.B. Dantzig and William developed software for programming business operations in 1947.

Linear mathematical programming was later developed in 1950 by two scientists, A. Charnes and W.W. Cooper. Since the initial digital computer was multipurpose, large scale computers were developed in 1951 by Sperry Univak to help in computation of data. Later in 1966, L. Cummings and L. Porter introduced organizational behavior whose aim was to continuously study people at workplace (Kumar, and Suresh, 2009, p. 284).

In 1970, W. Skinner and J. Orlicky developed the incorporations of all operations in an organization into a unified strategy with common policies. In the same year, G Wright introduced the use of computers in the manufacturing industry alongside control and planning of required materials. In 1980, application of quality productivity was introduced by W.E. Deming from Japan (Kumar, and Suresh, 2009, p. 284).

The term production management therefore was the term for since 1930s up to 2950s. Managers worldwide developed techniques for efficient manufacturing operations. From then, other scientists started studying sociology especially on human behavior in workplace while mathematical as well as computer scientists developed more advanced techniques for data analysis.

With these new advancements, the name operations management came into be which put a lot of emphasis on expansion of the manufacturing sector. Emphasis was also put on production in the management practices rather than the usual analyzing duties (Johnston, 1998, p. 1).

Historical Development of Operations Management: Its Impact

The development of these management operations has resulted to many positive impacts on businesses although some negative effects have been felt as well. Production in manufacturing industries has now been an organized activity where every sector of the factory has its own specialists. As a result, every sub system has an objective which it works towards achieving it. This has ensured efficiency in productivity with quality production of products.

Since the subsections operate together with the whole of the organization, it becomes easier to get feedback from all the sections concerning the activities involved (Lewis, 2003, p. 64). This has enabled the organizations to control and make necessary adjustments on the system performance. The system of classifying productions has made it possible for manufacturers to produce a given quantity of products for specific customers at a fixed cost and time which is beneficial to both the business and the customer.

The idea of a job shop has been useful where there is a variety of products supplied to customers but in low volumes. Detailed planning of required materials has helped in determining the essential requirements of each product and consequently, priorities of orders by customers (Evans, 2005, p. 55).

One of the major impacts of operations management is mass production where the manufacturing system operates in large volumes in terms of inputs as well as outputs. This has mainly been made possible by the advancements of machinery where the machinery is arranged in a layout which allows automatic process of production. This has also enabled standardization of products to ensure quality maintenance.

Mass production has been applied in many factories today especially those that involve large volume of productions within shorter periods of time. However, for mass production to be cost effective, flow of raw materials should be continuous to ease the process of controlling and planning the production operations (Paterson, 2000, p. 25).

Mass production has also been beneficial in capacity utilization as machines are always outlined in a balanced manner. This has enabled businesses to utilize only a limited space but produce large volumes of products leading to increased profits.

Only a few skilled operators are required to operate the machines and this has impacted businesses by reducing expenditures on salaries and wages. The cost of manufacturing a unit of products has reduced compared to production of small volumes of products. Basically, the major impacts of the development of operations management have been felt through mass production in many manufacturing businesses which is a very cost effective way of production (Mark, 2004, 340).

Another significant impact of the development of operations management in manufacturing businesses is continuous production which is facilitated by the sequential arrangement of machines and other production equipments.

This has made the production process faster that it was before and this has helped many manufacturing businesses meet their customers’ requirements and orders in time. However, the production process is not flexible something which has made manufacturing businesses unable to accommodate changes in product manufacture especially on quantity.

These operations developments have as well enabled businesses to provide quality products to their customers through the standardization of products. Manufacturing businesses have been enabled to satisfy the needs of their customers by producing quality products depending on the cost of production of a particular product. This way, customers get satisfied and the business obtains comfortable profits (Finch, 2006, p. 103).

Through operations management, businesses have made use of right quantity production to prevent capital build up as well as shortage of products which would otherwise lead to lose of customers. In addition, planned production of goods has enabled many manufacturing businesses to deliver the products in time to their customer since all the involved processes are in place at all times.

Through production planning, manufacturing businesses have been in a better position to pre-determine the production cost prior to the actual manufacturing process. This has helped the businesses’ managements to make suitable decisions after comparing the cost of production to the expected inflow.

Planning activities have also helped business to set goals and objectives with which to work on towards quality production. The operations development has promoted organization activities in businesses which have in return played a key role in achieving the set goals and objectives by specifying the role of every individual as well as determining authority and the responsibilities involved (Chase, 1999, p. 113).

With the increasing competition in businesses especially in manufacturing firms, operations management has impacted the global business environment. Manufacturing products (both goods and services) are now being delivered to distant locations because of the competitiveness of the products which have resulted from the advancements of the operations management.

As a result, international manufacturing has been practiced by many businesses due to the globalization of the operations with many local manufacturing businesses producing goods specifically for the international markets rather than selling them locally (Chopra, 2006, p. 75). The chains of supplies have as well been affected with many businesses obtaining their economic inputs form all over the globe.

Due to the ramifications involved in the manufacturing industry nowadays, specialized chains of supply for inputs have been developed to meet the ever rising demand for such services. Many businesses have now embraced the basic dimension of satisfying customers’ needs considering the competitive markets (Lowson, 2002, p. 619). This has resulted to understanding the values of customers and therefore putting into considerations the specific needs and preferences of customers.

This understanding has promoting the manufacture of products or provision of service that makes the most of the customers’ needs. Another very key concern that businesses are now working on is the minimization of costs and utilization of resources with the objective of making maximum profits. Many businesses have also changed from the traditional ways of mass production to the approaches of producing goods on-demand (Jacob, 2001, p. 501).

Conclusion

The development of operations management has, no doubt, brought about significant advancements in the manufacturing industry. With the development of new production technologies and machinery, businesses have been able to affect their production activities. The definition of the role of management in production has as well promoted organization, planning and effective control of all production activities especially with the introduction of specialization and division of labor.

The assignment of tasks to specific employees who have specialized in that particular field of production has been widely adopted to enhance quality product provision which would lead to customer satisfaction and consequently meet the competitive marketing requirements. Customer satisfaction should always be the key objective of any business while putting into considerations the profitability concerns.

For this objective to be achieved, the management should be very careful in effective planning and organization of the production activities. Continuous availability of inputs is very essential in ensuring that all customers’ needs and orders are met within the specified time frame. The costs of products should as well be favorable to customers, failure to which a business is likely to lose its customers to other firms who are offering lower prices.

However, the cost of production should be considered when designing price limits to prevent loses by the business. It is therefore the role of the management to ensure smooth running of a business. Besides effective management, dedicated employees play a significant role by working towards the common goal of making the business a success. Proper implementation of the operations management is a close guarantee of any businesses’ success in today’s competitive world.

Reference List

Chase, R. (1999). Fundamentals of Operations Management. Boston. Irwin McGraw- Hill.

Chopra, S. (2006). Managing Business Process Flows: Principles of Operations Management. Upper Saddle River, NJ: Prentice Hall.

Evans, J. (2005). Principles of Operation Management. New York. Barnes & Noble.

Finch, B. (2006). Operations Now. Boston. McGraw-Hill Irwin.

Hendry, L. (2011). Innovative Development in Operations Management. Web.

Inman, A. (2011). Web.

Jacob, B. (2001). Operations Management for a Competitive Advantage. Ninth Edition, McGraw-Irwin.

Johnston, R. (1998). Service operations management: return to roots. Web.

Kumar, S. and Suresh, N. (2009). Production and operations management. New age International publishers. Second Edition.

Lewis, M. (2003). Operations Management. California. Wadsworth Publishing.

Lowson, R. (2002). Strategic Operations Management: The New Competitive Advantage. New York. Routledge.

Mark, R. (2004). A Framework for Operation Management: The Value Chain. International Journal of Operations and Production Management. Vol. 3, pp. 337-345.

Meredith, J. (2006). The Evolution of the Intellectual Structure of Operations Management. Journal of Operations Management. Vol. 27, pp. 185-202.

Paterson, A. (2000). Manufacturing Operations and Strategic Flexibility: Survey and Cases. International Journal of Operations and Production Management. Vol. 1, pp. 7-30.

Wilson, J. (1995). An Historical Perspective on Operations Management. Production and Inventory Management Journal.

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