Managing operations is important in order for products and services to be efficient for the end user. In organisations, there are not only operations at the point of production, but also various forms of operations taking place simultaneously across it, including supply and logistics, inventory management, quality control, information processing and others that are necessary for the production of the final product and service. Operations Management helps organisations in orchestrating all these different operations. Brown et al. (2013, p.4) indicate the simplistic definition of operations management: ―Operations Management is connected
with those activities that enable an organisation (and not just one part of it) to transform a range of basic inputs (materials, energy, customers‟ requirements, information, skills, finance, etc.) into outputs for the end customer”. Hill and Hill (2012) and Sprague (2007)
argued that Operations Management can be considered as the management of the design, planning and control, and the improvement of a production system that provides products and/or services to customers.
Bamford and Forrester (2010, p.2) highlighted that ―operations management covers decision
making in the organisation, from top level management issues, such as developing an operations strategy congruent with the company‟s business and marketing strategies, to the immediate control of operations‖. This is in line with Slack et al.‘s (2006, p.38) four
identified missions of Operations Strategy: i) to articulate a vision of how the business‘s processes can contribute to the overall strategy; ii) to translate the customer requirements into clear processes and defines the level of performance objectives; iii) to make decisions to
42 shape the operations capabilities, allowing long term development and sustaining a potential competitive edge; and, finally; iv) to reconcile market requirements, operations policy and capabilities (Dehe, 2014, p.47). In the modern era of operations management, organisations have to be keen to form strategic relationships with other firms operating in the same or similar sector, in order to be competitive.
Before the role of Operations Strategy in manufacturing and service sector is explored, a brief overview of the relevant history of Operations Management as a discipline would add value to this chapter discussion.
The history and the evolution of Operations Management: an industrial perspective
To provide a more parsimonious analysis of this discipline, reviewing its history from an industrial and academic perspective is necessary. Radnor & Barnes (2007, p.386) suggested that there were three distinctive periods, throughout the 20th century, related to the concepts of Operations and Process Management: 1) From the end of the ninetieth century to the Second World War; 2) From the Second World War to the mid-1980s; 3)From the 1980s to the Present.
Taylor in 1911 stated that management can be considered as a scientific problem and according to Bamford and Forrester (2010), Frederick Taylor (1911) is the father of Scientific Management; improving economic efficiency and workforce productivity was the main objective of Scientific Management theory. His theory ―Taylorism‖ focused on the analysis of the existing processes based on data collected through observations, measurements and experiments. However, this theory was criticised because of the existence of de-humanisation aspect (Radnor & Barnes, 2007). During this period of time, Taylor‘s contribution to what is known today as Operations Management (OM) was not the only one; there wereseveral other contributors: Henry Gantt (i.e.: Gantt chart); Frank and Lillian Gilbreth (i.e.: work studies); and Henry Ford (i.e.: Fordism) (Bamford & Forrester, 2010).
During the second period, the main incident was the quantitative development within the discipline.Voss (1995, p.17) reported that two factors were responsible for this development: i) the progress of Operational Research (OR); and ii) the application of statistical principles in the management of quality, based on the work from Shewhart and Deming. Besides the
43 expansion of the quantitative perspective throughout the discipline, there was also a human relations influence, according to Radnor and Barnes (2007). This fact changed firms‘ culture and enhanced employees‘ relationship by supporting teamwork.
From the 1980s the Japanese production model started to influence the Western way of production, emphasising mass-customisation. Mass-customisation was accompanied by the theory of Quality Management and Lean approaches (Goetsch & Davis, 2014; Lillrank, 1995). This emphasis promoted a strategic perpective of operations (Radnor & Barnes, 2007).
The history and the evolution of Operations Management: an academic perspective
The academic development of the discipline started in 1959, according to Singhal and Singhal (2007). Koskela and Ballard (2012, p.726) supported their statement and reported that ―the most important turn in the evolution of the science of management occurred in 1959
and was the switch from a production-centric view of management to a social science- oriented view‖. Two influential books from Gordon and Howell (1959) and Pierson (1959)
were published in that year; both of them focusing on the challenges of teaching and research management in American business schools. They concluded that there was the need for a different approach to the discipline and they suggested focusing on three branches: i) behavioural science; ii) neoclassical economics; and iii) quantitative modelling, supported by the technology development. As a result, teaching and research of management had begun to become more analytical, focusing more on understanding and analysing operations (Koskela & Ballard, 2012).
By the 1980s, the content of Operations Management (OM) was extensively conducted by researchers including Buffa (1982) and Voss (1984). Table 2.1 shows the outputs of their reviews, which reveal the evolution of OM. It also confirms the analytical and quantitative focus of the discipline (i.e.: critical path methods, linear programming and other relevant techniques)(Voss, 1995).
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Table 2.1: Content of Operations Management in the 1980s (adapted from Voss, 1995)
During this period of time, the OM content had been established both in the USA and the UK; academic journals had been launched in both geographic areas (i.e.: the Journal of Operations Management in the USA and the International Journal of Operations and Production Management in the UK) (Voss, 1995). The debates related to OM‘s identity attracted a number of researchers to focus on developing the OM research agenda (Chase, 1980; Miller et al., 1981; Voss, 1984; 1995). Miller in the USA and Voss in the UK identified five OM research areas: i) Operations Policy (OP); ii) Operations Planning and Control (OPC); iii) Service Operations (SO); iv) Productivity and Technology; v) Quality – Total Quality Management (TQM) (Voss, 1995). Having reviewed the key OM themes, Voss (1995) summarised and compared the research approaches undertaken both in the USA and the UK. The majority of the US publications (69% of papers) adopted modelling and simulations research; on the other hand, in the UK 80% of the publications adopted a conceptual, field and case-based research approach. As Voss (1995) explained, the US
45 researchers had been influenced by the quantitative aspects of the discipline, lacking empirical research which was the UK‘s research strength.
This differentiation in OM research approaches adopted can be explained in one sense by Slack et al. (2006, p.372) who stated that ―OM‟s underpinnings are fragmented. Indeed it
could be argued that the specific genealogy of modern OM is a curious amalgam of very different academic disciplinary inputs, for example: systems theory, strategy theories and practical application‖. This is supported by Godsell et al.‘s, (2013) research related to the
application of Management Theories (MT) within the Operations Management (OM) field. They listed MT applied in OM research, over a ten-year time period (2002-2011), by reviewing the top OM journals based on Barman et al.‘s (1991) ranking. The findings of their research are presented in the table below (Table 2.2); they concluded that there is a great variation of Management Theories (MT) usage with the ―Transaction cost economics‖ and ―Resource based View‖ to be considered as the most popular applied MTs.
Table 2.2: The nine most popular management theories as used in OM Research 2002-2011 (adapted from Godsell et al., 2013)
46 Having reviewed the history related to Operations Management as a discipline, it is seems pertinent to analyse the practical role of OM within the organisation.