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Production and Operations Management




                    Notes          In fast clock speed industries, the focus of operations management is on the structural components
                                   of the discipline, i.e. product design, process, capacity and location. In slow clock-speed industries
                                   the focus of the discipline is  on the  infrastructural components,  i.e., quality, manufacture,
                                   outsourcing, planning and other components of the transformation process.
                                   The success of Operations Management can be measured by its ability in creating world class
                                   companies.


                                          Example: In moderate clock-speed industries, Bajaj Auto has focused on Operations
                                   Management to emerge as lowest cost manufacturer of  two-wheelers in the world. Reliance
                                   Industries leads worldwide in project management. In slow clock-speed industries, Tata Steel is
                                   the lowest cost steel producer, internationally. Infosys, Tata Consultancy Services and Wipro
                                   have established their superiority over their international rivals in fast clock-speed products
                                   like software.

                                   1.1 Historical Background


                                   A leisurely cruise through the history of any subject offers the reader a historical perspective
                                   and an opportunity at reflection. Tracking the changing concepts of the subject, and what it has
                                   been at different points in time, also helps in identifying patterns in the development of ideas.
                                   Most important, I hope, an understanding of history should foster the ability to sort through the
                                   barrage of ideas – some good and some not so good – about the subject.
                                   Operations Management has been variously known as Industrial Management, Management
                                   Science/Operations  Research,  Production  Management, and  Production  and  Operations
                                   Management.
                                   The concepts associated with Operations Management, perhaps, have their roots embedded in
                                   the development of early organizations.  The class  of problems  represented by  Operations
                                   Management came into high relief in the era after the Industrial Revolution. This was a period
                                   of radical changes. People got replaced by machines, and water and mule power replaced human
                                   muscular effort. These developments changed the nature of production. As production moved
                                   from the cottage to the factory, the seeds of operations management spouted on fertile ground.

                                   1.1.1  Scientific Management – Time and Motion Studies


                                   In 1769, James Watt applied for the patent of the steam engine. By 1785, the steam engine was
                                   being manufactured and used. In 1799, Eli Whitney began mass production and introduced the
                                   concept of standard interchangeable parts. By the late 1700s, this had resulted in the development
                                   of the machine tool industry – metal tools and machines  that built the parts of other machines
                                   or goods became  available.  Many  organizations  evolved into  large,  vertically  integrated
                                   businesses. Managers of organizations faced coordination problems of unprecedented scope.
                                   Treatises on organizing, measuring, and managing production in  these challenging  settings
                                   were published. Frederick Winslow Taylor enunciated his theory of “scientific management” in
                                   the late 19th and early 20th centuries.  The basis of “scientific management” was a focus  on
                                   machines and the system of their utilization. It was based on Taylor’s postulations:
                                   1.  Scientific laws govern work, so scientific methods can be used to analyze work.
                                   2.  Workers are different, so match workers to their job and then train them thoroughly.

                                   3.  Use employee self-interest to motivate.
                                   4.  Separate the responsibilities of workers and managers.




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