Production and Operations Management (POM): An Introduction
• • • • • Introduction Historical Milestones in POM Factors Affecting POM Today Different Ways of Studying POM Wrap-Up: What World-Class Producers Do
• Production and operations management (POM) is the management of an organization’s production system. • A production system takes inputs and converts them into outputs. • The conversion process is the predominant activity of a production system. • The primary concern of an operations manager is the activities of the conversion process.
Finance Sales HRM
The Industrial Revolution
• The industrial revolution spread from England to other European countries and to the United Sates. • In 1790 an American, Eli Whitney, developed the concept of interchangeable parts. • The first great industry in the U.S. was the textile industry. • In the 1800s the development of the gasoline engine and electricity further advanced the revolution. • By the mid-1800s, the old cottage system of production had been replaced by the factory 8 system
Post-Civil War Period
• During the post-Civil War period great expansion of production capacity occurred. • By post-Civil War the following developments set the stage for the great production explosion of the 20th century:
– – – – increased capital and production capacity the expanded urban workforce new Western U.S. markets an effective national transportation system
• Frederick Taylor is known as the father of scientific management. His shop system employed these steps:
– Each worker’s skill, strength, and learning ability were determined. – Stopwatch studies were conducted to precisely set standard output per worker on each task. – Material specifications, work methods, and routing sequences were used to organize the shop. – Supervisors were carefully selected and trained. 10 – Incentive pay systems were initiated.
• In the 1920s, Ford Motor Company’s operation embodied the key elements of scientific management:
– – – – – – standardized product designs mass production low manufacturing costs mechanized assembly lines specialization of labor interchangeable parts
Human Relations and Behavioralism
• In the 1927-1932 period, researchers in the Hawthorne Studies realized that human factors were affecting production. • Researchers and managers alike were recognizing that psychological and sociological factors affected production. • From the work of behavioralists came a gradual change in the way managers thought about and treated workers.
• During World War II, enormous quantities of resources (personnel, supplies, equipment, …) had to be deployed. • Military operations research (OR) teams were formed to deal with the complexity of the deployment. • After the war, operations researchers found their way back to universities, industry, government, and consulting firms. • OR helps operations managers make decisions when problems are complex and wrong decisions are costly.
The Service Revolution
• The creation of services organizations accelerated sharply after World War II. • Today, more than two-thirds of the U.S. workforce is employed in services. • About two-thirds of U.S. GDP is from services. • There is a huge trade surplus in services. • Investment per office worker now exceeds the investment per factory worker. • Thus there is a growing need for service operations management.
Today's Factors Affecting POM
• Global Competition • U.S. Quality,...