Operations management refers to administering business practices to maximize efficiency and profit by converting materials and labor into goods and services. Key developments include the division of labor, use of interchangeable parts to enable mass production, scientific analysis of work methods, high-volume mass production, and lean production which emphasizes quality and flexibility. The early 20th century saw further contributions to operations management in areas like economic decision making, inventory problems, incentives, factory layout, material handling, and organizational principles.

1. 1
• Operations management refers to the administration of business practices to create
the highest level of efficiency possible within an organization. It is concerned with
converting materials and labor into goods and services as efficiently as possible to
maximize the profit of an organization.
• Evolution of Operations Management
• Division of labor: dividing a job into a series of small tasks each performed by a different
worker
• Interchangeable parts: standardization of parts initially as replacement parts; enabled
mass production
• Scientific management: systematic analysis of work methods
• Mass production: high-volume production of a standardized product for a mass market
• Lean production: adaptation of mass production that prizes quality and flexibility (i.e., by
eliminating wastes)
Evolution of Operations Management

2. 2
• Many other industrial engineering pioneers contributed to the early development of
the profession. During the 1920’s and 1930’s much fundamental work was done on
economic aspects of managerial decisions, inventory problems, incentive plans,
factory layout problems, material handling problems, and principles of organization.
• Although these pioneers are too numerous to mention in this brief chronology, more
complete historical accounts are available elsewhere.
Industrial Engineering