2. Decision Area Basic Issues
Design:
Product and service
design
Capacity
Process selection
Layout
Customer demands,
improvement of products
Capacity needed and how the
organization best meet
capacity requirements.
What process should the
organization use?
What is the best arrangement
for departments, equipment?
3. Decision Area Basic Issues
Design of work systems
Location
Operations:
Quality
Quality Control
What is the best way to motivate
employees? How can
productivity be improved?
What is the satisfactory location
of the facility/store, etc.?
How is quality defined? How are
quality goods achieved and
improved?
Are processes performing
adequately? What standards
should be used?
4. Decision Area Basic Issues
Supply Chain
Management
Inventory Management
Aggregate Planning
How to achieve effective flows of
information and goods throughout the
chain?
How much to order? When to
reorder? Which items should get the
most attention?
How much capacity will be needed
over the intermediate range?
5. Decision Area Basic Issues
Materials Requirement
Planning
Just-in-time and Lean
systems
Scheduling
Project Management
Waiting Lines
What materials, parts and
subassemblies will be needed,
and when?
How to achieve a smooth,
balanced flow of work using
fewer resources?
How can jobs and resources best
be scheduled? Who will do which
job?
Which activities are most critical
to the success of a project?
What service capacity is
appropriate?
6. Implementing health and safety procedures
Managing staff training issues
Motivating other members of the team
Project management
Setting Objectives
Inspires a shared vision
Good Communicator
Competence
7. Ability to delegate tasks
Team-Building skills
Problem-Solving skills, and above all,
A good planner
8. The Industrial Revolution:
The industrial revolution began in 1770’s in England.
The revolution spread to the rest of the Europe and
United States during the 19th
century.
Prior to revolution:
Goods were produced in small shops by craftsman
and their apprentices.
It was common for one person to be responsible for
making a product.
Only simple tools were available.
9. Goods were produced using craft production.
Craft production is a system in which highly skilled
workers use simple, flexible tools to produce small
quantities of customized goods.
Shortcomings of Craft Production:
Products were made by skilled craftsmen who
custom fitted parts, production was slow and costly.
When parts failed the replacements were also
custom made.
Production cost did not decrease as volume
increased.
10. No economies of scale that could provide incentive
for companies to expand.
The revolution:
A number of innovations in the 18th
century
changed the face of production forever by
substituting machine power for human power.
The most significant innovation was the steam
engine, because it provided a source of power to
operate machines in the factories.
Factories began to spring up and grow rapidly.
11. Despite major changes that were taking place,
management theory and practice had not progressed
much from early days.
The Scientific Management: The term “Scientific
management” relates to the development of various
methods and their application to the problems of personnel
and production management. It requires a detailed inquiry
into the conventional methods and developing basic
management principles for improving the efficiency of
workers leading to higher wages through incentive for
increased productvity.
12. The scientific management era brought widespread
changes to the management of factories.
The term owes much to the efficiency engineer and
inventor Frederick Winslow Taylor (1856-1915) who
joined Midvale Steel Company at Philadelphia in
1878 and worked there as a laborer, machinist,
foreman and finally as a chief engineer. Then he
joined Bethlehem Steel Company in 1898 and rose
to the post of director and president of the company
later on.
13. Taylor believed in a “ science of management”
based on observation, measurement, analysis and
improvement of work methods, and economic
incentives.
He took keen interest in each of three areas of
management i.e., human relations, technical work
and the organization.
He was disturbed with the wastage of time both by
the workers and management. He studied work
methods in great detail to identify the best method
for doing each job.
14. Taylor floated a new idea based on the following
principles:
1. Management should be responsible for appropriate
planning and organization of work.
2. It should select and train workers on scientific grounds.
3. Work should be assigned according to a standard of
time, quality and quantity.
4. Ensure improvements in layout and workplace.
5. Piece rate system of wage payment and incentive plan
is adopted.
15. Standard of Time and Production as suggested by
Taylor: Taylor suggested that necessary time study
should be made so as to fix a standard of production in
relation to a standard of time. In his words:
“The average individual accomplishes the most when he
either gives himself or someone else assigns him a
definite task namely a given amount of work which he
must do within a given time and the more elementary
the mind and character of the individual the more
necessary does it become that each task should extend
over a short period only”
16. The system originally was called as a Taylor system in
1881 and later on in 1896 it was given the name “ a
Piece-Rate System” by Taylor himself. It was
unacceptable to the workers and he gave it the name of
“The task system” which indicates that a daily task
target will be given with a reward of higher pay for
success and penalty for failure. The idea was again
opposed severely and in 1903 it was named as “Shop
Management” but again failed to describe the system
accurately. Ultimately in a meeting of management
people in 1911 it was finally agreed as “Scientific
Management” to which Taylor agreed.
17. The benefits of the standards fixed as perceived by
Taylor were:
It will help in planning the flow of work.
It will help in estimation of order completion dates.
It will help in suggesting machinery replacement
schedule.
It shall help in introducing workable wage system.
It will help in making comparative cost analysis.
It shall help in increasing workers efficiency.
18. The idea floated by Taylor was much criticized by the
workers as well as other management writers on the
following grounds:
Workers thought the methods were used to unfairly
increase production without corresponding increase
in compensation.
Workers thought that the system treats the man
equal to the machine. It requires a worker to show
the same efficiency throughout the day as
performed by a machine which is not at all possible.
Contd.
19. The theory does not provide any fatigue allowance
to workers for his diminishing efficiency.
The efficiency of different workers will be different.
There will be limitation of fixed standard time in
group movement job.
The workers may suffer due to inefficiency of
officers in guiding them properly.
