Operations management is the act of controlling and directing the design, production and delivery of products. Although people have been producing and selling products since the very beginning of civilization, the implementation of operations management is a relatively new phenomenon. Operations management came to prominence in the 20th century, but its roots can be traced back to the 18th and 19th centuries.
One of the first people to address the issues of operations management was the Scottish philosopher -- and father of modern economics -- Adam Smith. In 1776 Smith wrote "The Wealth of Nations," in which he described the division of labor. According to Smith, if workers divided their tasks, then they could produce their products more efficiently than if the same number of workers each built products from start to finish. This concept would later be used by Henry Ford with the introduction of the assembly line.
During the industrial revolution, machinery allowed factories to grow in capacity and greatly increased their output. Despite this growth, there was considerable inefficiency in production. Two individuals helped to overcome these inefficiencies in the early 20th century: Frederick Winslow Taylor and Ford. Taylor developed a scientific approach for operations management, collecting data about production, analyzing this data and using it to make improvements to operations. Ford increased efficiency in production by introducing assembly line production and improved the supply chain through just-in-time delivery.
Post-World War II
Technological developments during the second world war created new possibilities for managers looking to improve their operations. Specifically, the development of computational technology allowed for a greater degree of data to be analyzed by firms. The abilities of computers have continued to increase exponentially, allowing for a high degree of data analysis and communication. Modern producers are now able to track their inventory from raw materials, through production and delivery.
Quality management systems are popular in today's operations management. Quality management is a system for mapping, improving and monitoring operations processes. A variety of quality management systems are in use among top firms, the most notable systems being the ISO systems and Six Sigma. These systems aim to increase the efficiency of business processes. Although operations management has typically dealt with the manufacturing process, the growth of the service industry has created a field of service operations management.