HISTORICAL DEVELOPMENT OF OPERATIONS MANAGEMENT

At the onset of the 1970s, while Japan's productivity continued its healthy
surge the leaders of business and government worldwide were Alarmed that
productivity is stagnating in the United States and

THE FOLLOWING QUESTIONS ARISED,

Q1.What had happened to the gait (step) of commerce and industry?
Q2.What led to its lethargy?
Q3.What have we learned in the ensuing years?
Q4.What can be done to restore its majestic posture?
Answers to these questions reside in the way we manage our
organizations and their operations.
 HISTORICAL DEVELOPMENT OF OPERATIONS MANAGEMENT

While U.S. productivity decline, Americans grew increasingly concerned

about other related issues:
1. Maintaining adequate energy sources,
2. Protecting the environment and meeting the demand for goods and
services at home and abroad.

These facts continue to impose complex demands on our organizations.

Today management faces unparalleled challenges from a society more
educated, affluent demanding, and concerned than ever before, and from
international competition keener than ever before.
 HISTORICAL DEVELOPMENT OF OPERATIONS MANAGEMENT

 Operation management came into existence in 1970`s.

 The service sector became more prominent as the change from

“production” to “operations” emphasized the broadening of service
organization.

 More emphasis was laid on synthesis rather than analysis.

 Previously preoccupied with an intensive analytical orientation and an

emphasis on marketing and finance, managers had failed to integrate
operation activities coherently into the highest levels of strategy and policy.

 Today the operations function is experiencing a renewed role as a vital

strategic element . Hence, organizational goals are better focused to meet
consumer`s needs throughout the world.
 Operations as a System

Production System

Conversion
Inputs Outputs
Process

Control
Management variables and operations conversion system

Random fluctuations

PLANNING ORGANISING

Adjustment
needed Monitor

Input Conversion Process Output

Models
Behavior

CONTROLING

Feedback
 Introduction to operations Management
• Operations: All activities that involved in the Conversion
Process of Input to Output (Goods/service)

• Management: The Process of Planning, Organizing and

Controlling in achieving the desired objectives.
 University as an Example:

Input Planning & Supportive Output

controlling Subsystems

Students Class Times Bookstore Educated

Students
Professor Course Library Research
Development Outcomes
School
Buildings Regulations Computer Service to
Lab Public
Operations Management as
a Function
Operations System : of an organization is the part that produces the organization's physical
products or services.

Basic operations system (function) of an organization

Random fluctuations

INPUT Monitor
Adjustment
• Land needed output
• Labour Output
• Material CONVERSION •Goods
• Machine PROCESS •Services
• Capital
• Management

Comparison
actual vs. desired
feedback
Basic operations system for a Department store

Random fluctuations
• Late deliveries
• Recession
• Labour turnover
INPUT Adjustment Monitor
needed output
• Land Output
• Labour CONVERSION • Service customer
• Building ,equipments PROCESS
With desired
merchandise
merchandise
• Management

(+ or -)

Feedback
• Inventory levels
• Labour efficiency
• Sales Volume
Basic operations system for a Farm

Random fluctuations
• Weather
• Inflation
• Govt. Control
• Equipment breakdown
INPUT
• Land Adjustment Monitor
needed output
• Animals
Output
• Farmer labour CONVERSION • Grain
• Tractors, combines etc. PROCESS •Milk
• Building
• Management skills of
farmer

(+ or -)

Feedback
• Observation of crop and soil conditions
• Prices received
 Manufacturing operations versus Service operations
Manufacturing operations : A conversion process that includes manufacturing (or
production ) yields a tangible output: a product.

Service operations :In contrast, a conversion process that includes service yields an intangible
output: a deed, a performance, an effort .

For example
McDonnell Douglas Corporation (MDC), an aerospace firm and the United States‘ largest
defense contractor. Subsidiary Douglas Aircraft Company produces airplanes, clearly a
product.
Yet,other MDC components, such as the Information Systems Group (ISG),provide
services. for example, ISG delivers computer services to hospitals, architects, and other
businesses-services such as programming, data analysis, and data storage using ISG's computers.
Distinction between Manufacturing operations and
service operations

• Nature of output (Tangible/Intangible?)

• Consumption of output

• Nature of work/jobs

• Degree of consumer contact

• Customer participation in conversion

• Measurement of performance
 Manufacturing vs Service
• Manufacturing: Provide Tangible Goods (Cars /
TV Sets / Foods /……

• Service: Provide Intangible

， (Goods) (Education /
Banking / Legal/Repairing / Medical Service /
Transportations/……

Apart from this Four Major Differences between Manufacturing and Service:
Manufacturing Vs Service

Manufacturing Service

Measure of Productivity Easy Difficult

Measure of Quality Easy Difficult

Customer Involvement Low High

Ability to Inventory Yes No

 WHY STUDY OPERATIONS MANAGEMENT

STSTEMATIC APPROACH
TO ORGANIZATIONAL PROCESSES

CAREER
BUSINESS OPERATIONS
EDUCATION OPPORTUNITIES
MANAGEMENT

CROSS FUNCTIONAL
APPLICATIONS
Systems view of operations : Defining the subsystem
In a very general sense, a system is a collection of objects related by regular
interaction and interdependence.

Finance
Personnel
Accounting

Production/ operation

Distribution
Engineering
Purchasing

Marketing
 IMPORTANCE OF OPERATION MANAGEMENT

• Maintain high quality of life: better quality products and services ensure
secured and comfortable future

• Transition from industrial era to intelligence era: combining of human

activity and artificial intelligence expands business horizons

• Controls and checks the declining rate of increase in productivity

• Acknowledges the shift in economic structure from goods manufacturing to

service generation sector

• Helps in maintaining balance between manufacturing and service activities

to maintain economic leadership