The Development of the Field of Operations Management

Photo courtesy of The Open UniversityOpens in new window Modern operations management can probably be traced to Frederick Taylor’s (1911/2005) The Principles of Scientific ManagementOpens in new window, although Alexander Hamilton wrote “On the Production of Manufactured Goods” in 1800. Taylor’s principles of specialized labor and time and motion studies became popular in the early part of the 20th century and were mocked in Charlie Chaplin’s classic silent film Modern TimesOpens in new window. Taylor’s methods, simply put, were designed to get the most out of workers, but they treated workers as cogs in a machine.

Taylor (1911/2005) began his work with the statement, “The principle object of management should be to secure the maximum prosperity for each employee” (p. 9).

Taylor’s work revolved around four major principles:

1. Methods from scientific study should replace rule-of-thumb methods.
2. Workers should be selected, trained, and developed using scientific methods.
3. Scientific methods should be written as a rule and standard operating procedure.
4. Once an acceptable level of performance has been established, a pay system that has rewards for performance above the acceptable level should be established.

Frank and Lillian Gilbreth (Gilbreth & Carey, 1948) advanced the field of scientific management by employing motion picture photography to study time and motion. They applied their own time-and-motion principles to family life, leading to a humorous book and a funny film, Cheaper by the DozenOpens in new window. The remake of the film, starring Steve Martin, changed everything—the parents were no longer industrial analysts but a football coach and a writer.

The Hawthorne studiesOpens in new window (Gillespie, 1993) were industrial productivity studies conducted at the Hawthorne Works of the Western Electric Company. The study was designed to find the effect of lighting on productivity and fatigue.

The researchers discovered that a lighting in the plant increased, so did the output of the workers. When they decreased the lighting, productivity continued to rise. Their conclusion, called the “Hawthorne effect,” was that the workers were so pleased that someone was paying attention to them that they worked harder without any regard to the lighting. This sparked an entire field of humanistic studies of work and reduced the importance of scientific management.

Operations management can best be described as a synthesis of industrial engineering, operations research, and service management. Economics played an important role in making operations management a requirement in business schools. The recession of the late 1970s and the rise of Japanese manufacturing led to a series of reflective articles in the Harvard Busienss Review.

The Middle Eastern oil embargo of the mid 1970sOpens in new window caused the price of oil and gasoline to rise rapidly, and consumers sought new automobiles that were more fuel efficient. For the first time, consumers embraced models from Toyota, Nissan, and Honda. The new converts to Japanese automobiles quickly noticed that their vehicles were remarkably superior in quality, too.

Operations Management at Boeing

To illustrate the production process at Boeing (O’Neal & Greising, 2005), the airplane manufacturer, we can take a look at the development of the new 7E7 airplane. Boeing designed this plane with composite materials rather than steel. The plane required a completely new manufacturing process. Suppliers in Japan, Italy, and Texas built the fuselage and wing. Each section was then sent to the main plant in Seattle to be assembled.

The fuselage was placed on a spindle and rotated until multiple layers created the fuselage skin. The production of a new plane does not mean that a company can simply step it through the way the previous model produced. Here, in one company, we have so many operational issues going on:

1. Who will be our suppliers for the new plane?
2. Where will we assemble the final product?
3. How will it affect our current workforce? With over 30,000 layoffs in recent years, Boeing must be careful when it takes new orders that it has the workforce to get the job done on time.
4. Quality in an airplane has to be 100%, so new materials require all sorts of testing to guarantee the safety of the plane.
5. How do we set up an effective chain of suppliers so that we have an efficient production process?
6. How do we lay out the facility to accommodate manufacture of this new airplane?
7. How do we incorporate the new materials involved in production into our existing inventory system?

Airline companies order new planes years in advance of delivery because it takes months to build one plane. This puts operations into focus because of the pressure to deliver on time and with perfect quality.

Operations Management at a Luxury Hotel

Hotel patrons take for granted that all the operations in a hotel are successfully carried out. But things can go wrong: A toilet does not flush. A showerhead leaks. The housekeeping staff forgets your room, or bursts in on you when you are taking a nap and have a “Do not disturb” sign on the door.

Here are functions that are part of operations in a hotel:

1. The reservation system: In this system rooms are checked for availability.
2. Employee labor scheduling: After comparing hotel occupancy rates and times, staffing is matched to optimize customer service.
3. Customer service: Customer problems arise and have to be handled. A customer service incident damages the reputation of the hotel.
4. Linen and towel distribution: The amount of linen distributed is a function of occupancy. Timely delivery must be handled by knowing which hotel patrons have checked out and which ones have continuing stays.
5. Laundry: The use of water and detergents is an operations function.
6. Purchasing: The purchasing agent sources supplies such as toilet paper, shampoo, soap, restaurant supplies, and so on, trying to obtain quality supplies at a low price.
7. Event coordination: A special event requires additional resources to ensure that it is run smoothly.

Peripheral functions that coordinate with operations would include the maintenance or engineering department and the janitorial or housekeeping departments. These functions are operational in nature but are usually supervised by managers with special training in these fields.

Operations Management at Your University

The fact that you are in a particular classroom at a particular time and are being taught by a certain professor is all operations management at work. Typically, the schedule is set by studying the demand in the previous year. Sometimes, changing the time affects the demand.

Sometimes, changing the professor can alter demand. If your favorite professor is changed to a different course and is replaced by an unpopular substitute, word-of-mouth can kill a course’s demand.

The university’s purchasing department is responsible for furnishing the room with all the equipment and supplies that are needed. There is nothing worse for a professor than to arrive in a room that lacks equipment.

Academic departments monitor classes to make sure that the enrollments are adequate, the professors show up, the class is conducted successfully, the evaluations are distributed, and the students have a rewarding experience.

Students come to class with a variety of motivations. Some just “wanna have fun.” Passing the course is enough. Others want to get exceptional grades to prepare for graduate school. Whatever the motivation of the students, the professor must meet their expectations.

The teaching evaluations are a forms of quality control, as the students give administrators their two cents on how the class was conducted. The professor assigns a grade, another form of quality control.

As you commute back home at the end of the day, if you look around, you will see operations at work in every store you pass by and in the mode of transportation you have selected. If you are driving, there is someone out there who has the responsibility to make sure the roads and streets are clear. If snow and ice have fallen, trucks must be scheduled to shovel the roads and drop salt or sand on the roadways to prevent slippage. Operations management, it is certain, is going on all around you.