1700’s Cottage Industry.... Machine power for human power.... factory system which resulted in greater productivity. 1790 Eli Whitney invented concept of interchangeable parts. Forced consistent production of parts. Variation evil. 1865 -1900 Joint stock companies formed changing capital structure of companies. Expansion into West created demand for products, development of rail lines provided quick, cheap transportation of goods. Also influx of labor from farm to urban centers. Early 1900’s Frederick Taylor developed the concept of Shop System. Henry Ford put concepts into practice with assembly lines that utilized modern scientific management concepts..... Standardized product design, mass production for low mfg. costs, mechanized the lines, specialization of labor, & interchangeable parts. 1927 -32 Hawtorne studies at Western Electric plant demonstrated human factors also impacted production. World War II required enormous qty’s of supplies, people, etc. Operations Research teams formed to develop models to manage the complex logistics. Linear programming, PERT/CPM, forecasting developed/refined. Accelerated after WWII, 2/3’s workforce in service and 2/3’s GNP generated by service industry.
Table 1.5 discusses the concepts, Figure 1.2 shows the model of inputs, conversion, and outputs, and Table 1.6 shows the diversity of production systems. Table 1.7 shows various jobs available in OM. Highly paid, active market right now. More companies recognize strategic importance of OM. E.G.. Assets management..... inventory. Millions of $ tied up that could be applied to NPI, process improvement, R&D. Strategic ... what kind of product, process, and facility... location.. LONG-TERM Operating .... Planning production to meet demand Control .... Day-to-day activity of workers, product, process