Page 7 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

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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