Page 8 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Unit 1: Operations Management Basics

The concept of Scientific Management led to the development of ‘time and motion study’. The Notes
first contribution in this direction was made by Taylor in the 1880s. Early in the 20th century,
Frank and Lillian Gilbreth developed a more systematic and sophisticated method of ‘time and
motion study’, taking into account the limits of human physical and mental capacity and the
importance of a good physical environment.
Time and motion study is an analysis of the operations required to manufacture an article in a
factory, with the aim of increasing efficiency. Each operation is studied minutely and analyzed
in order to eliminate unnecessary motions and thus reduce production time and raise output,
which increases productivity.

In the early 1900s, Alfred P. Sloan of General Motors introduced the concept of ‘organizational
management’ and Henry Ford introduced ‘assembly-line manufacturing’. The Hawthorne Studies
by Elton Mayo, in 1927, resulted in the Human Resources Movement. These developments
changed the way operations were managed in many businesses, during this period.

1.1.2 World War II to the 1960’s – Operations Research

Before World War II the focus of ‘scientific management’ was based on the micro-environment
in the manufacturing sector. During the War, the focus moved from the micro-environment to
the macro-environment.
A new multi-disciplinary approach to problem solving, called Operations Research, was
developed. This was a quantitative approach basically concerned with the efficient allocation
and control of resources. Multi-disciplinary operations research groups, largely initiated and
founded by government and quasi-governmental organizations, were formed.
These groups focused on developing algorithms and methodologies to solve optimization
problems that arose in a broad range of functional areas. They successfully developed models
on linear programming, network flow problems, inventory theory, dynamic programming,
machine maintenance, queuing and game theory, etc., to identify how operations could be
improved.

Example: While Dantzig applied linear programming to the travelling salesman problem;
Clark, Scarf, etc., developed models on inventory theory and so on.
The Ford Harris Economic Order Quantity model, however, dates as far back as 1915. These
early successes resulted in the birth of operations research groups at many business organizations
which were formed with the objective of finding ways of improving performance.
During the late 1960s, business schools began to take interest in the more scientific and rigorous
approaches advocated by operations research groups for decision making and incorporated this
discipline in business curricula.

Notes Mathematical Models in Operations Management
At the centre of operations research, practice and theory is a diverse set of mathematical
models that are used to capture and explore a wide range of real-world settings. An
operations research model is a mathematical abstraction or simplification of reality. The
degree of simplification is a function of data availability, time and resources, and the
situational issues and decisions that the model is designed to address. Mathematics is,

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