Operations Management For Dummies, 2nd Edition
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What’s currently called operations management evolved from a long line of discoveries, inventions, and revolutions. You may find it hard to believe that there was a time when products weren’t mass-produced and available on command. If a person wanted something, she had to make it or persuade someone to make it for her. Thankfully, human developments shaped operations management into what it is today.


Beginning before the Roman legions, armies have always “marched on their stomachs” and developed increasingly robust methods to quickly move large quantities of food and supplies where needed. Thanks to those military needs, civilizations throughout the world have what’s known today as logistics. And one might say that logistics is the foundation of what has become known as supply chain management.

Today, the Council of Logistics Management defines logistics as “the process of planning, implementing, and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.”

Division of labor

In his book, The Wealth of Nations, published in 1776, Adam Smith expounded the virtues of the division of labor. Up to this point, a single craftsperson would execute all the steps to produce a finished item, often a slow and costly process.

This movement away from craft production fueled the Industrial Revolution. Division of labor helped workers become highly specialized and led to increased productivity. This was the foundation upon which Henry Ford built his empire, and the increased productivity is what allows humankind access to the wide array of affordable products and services available today.

Interchangeable parts

The idea of using interchangeable parts made the concept of the assembly line possible. Previously, you couldn’t even repair a broken machine with a part from another (same) machine without adjusting the part. Each machine and its components were slightly different. Now, companies could place bins of identical components near an assembly line and use any of them to make the end product as it moved by.

Eli Whitney popularized this concept when he applied it to the manufacturing of muskets in the late 1700s and early 1800s for the United States military.

Scientific management

Scientific management is the study and analysis of processes and workflows. Frederick Winslow Taylor is regarded as the father of scientific management because he focused on industrial efficiency by breaking work into well-defined tasks with specific assigned times. His efforts were complemented work from Frank and Lillian Gilbreth, who studied how tasks should be completed to remove waste in effort and motion. Now standards could be set for efficient production.

Mass production

Combining logistics, division of labor, and interchangeable parts into standardized output, Henry Ford started the mass-production revolution when he implemented the moving assembly line in his plant in Highland Park, Michigan, to produce the Model T automobile. Mass production was further advanced by interchangeable parts and the use of standardized gauges to quickly measure the dimensions and quality of those parts.

Statistical quality control

After World War II, consumers were flooded with mass-produced goods that were incredibly affordable thanks to mass production. The goods were so affordable that consumers could forgive the often shoddy quality of the finished product. American manufacturers were forced to embrace quality only because of international competition, and thus, is the result of statistical quality control.

Walter Shewhart, an American physicist, engineer, and statistician, was at the heart of the application of statistical quality control, developing the process control chart and the concepts of common and special cause variation in the early 1900s.

Lean manufacturing

Lean manufacturing started with the Toyota Motor Company and is often referred to as the Toyota Production System. The revolution began when Kiichiro Toyoda was looking for a way to save his failing company after World War II.

Taiichi Ohno, inspired by the American grocery store, took the idea of providing frequent replenishment of small lots of inventory to the production floor, thus creating just-in-time manufacturing. Shigeo Shingo further enhanced lean manufacturing in the 1950s by developing the idea of quick changeover, where equipment could rapidly be changed from producing one product to another.

Scientific project planning

The modern project-planning tools that operations managers use to plan and manage projects originally developed out of the work of several men:

  • Frederick Winslow Taylor, in the early 1900s, produced the work breakdown structure, which separates a project into discrete tasks.

  • Henry Gantt, in the 1910s, created what has come to be known as the Gantt chart, a bar chart that shows a project’s schedule and helps identify where resource constraints exist.

  • Morgan Walker and James Kelley Jr. identified the concept of the critical path, or those activities in a project that determine the project’s overall timing for completion, in the 1950s.

The major impact of these tools was to introduce a far greater measure of control over the progress of complex projects, greatly enhancing the project manager’s ability to anticipate and plan for future developments rather than having to react to a crisis when it occurred.

Electronic data interchange

Electronic data interchange (EDI) is responsible for the transmission of data from one computer to another, allowing people to communicate digitally and enabling e-commerce. Perhaps the first known use of e-commerce was in 1910 by a group of florists who started the Florists’ Telegraph Delivery Association to transmit flower orders throughout the country.

Supply chain management

The elements that make up what today is called supply chain management were started at Ford and Toyota. At his assembly plants, Henry Ford integrated an array of vertically integrated suppliers, and Toyota extended the management principles to include independent suppliers.

The importance of supply chain management can’t be underestimated. The complexity of managing a supply chain has increased significantly over the last few decades, as the number of suppliers to an individual company has increased and as these suppliers have become globally dispersed.

About This Article

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About the book authors:

Mary Ann Anderson is a consultant in supply chain management and operations strategy. Edward Anderson is an associate professor of operations management at the University of Texas McCombs School of Business. Geoffrey Parker is a professor of management science at the A. B. Freeman School of Business at Tulane University.

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