Essential Guide to
Operations Management
The revised and updated second edition of the popular and practical guide to contemporary operations management – now featuring a new chapter on managing sustainable
supply networks.
The Essential Guide to Operations Management explores fundamental operations management principles and shows how they are applied in real-life situations in both the services and manufacturing sectors. It adapts a strategic stance by providing a framework
for effective decision-making: determining operations strategies; designing processes,
products and work organisations; managing change through effective project management and technology transfer; exploring contemporary approaches to operations planning and control; and then managing quality and improvement strategies. As such, it
addresses the needs of practising managers, postgraduate MBA and MSc students and
final-year undergraduates in advanced operations management elective courses.
The Essential Guide to Operations Management: Concepts and Case Notes, Second Edition,
is supported by updated case studies throughout and online support materials for lecturers.
David Bamford, PhD, is an experienced industrialist/academic who has published over
100 articles, book chapters and reports, as well as having presented widely on his topics
to both academic and practitioner audiences. Knowledge transfer has been at the centre
of David’s career strategy; it provides a focus and direction for his research, grant applications, publications, teaching and major administrative roles. His research interests are
operations management improvement strategies, supply chain management, quality management, sports operations management, strategic organisational change and leadership.
Paul Forrester, PhD, has specialisms in production and operations management, project management, supply management, quality management, cross-cultural management and research and development, all with a work organisation and social science
perspective. He has over 30 years of lecturing and executive education experience
and 20 years’ experience of directing MBA programmes at three top UK universities
(Keele, Aston and Birmingham). In addition, Paul has practical experience in the carpet
textiles, computer and automotive manufacturing sectors.
Iain Reid, PhD, is a qualified industrial engineer who is recognised as an expert in
operational agility, Industry 4.0, knowledge transfer in SMEs and new innovations
professional services such as legal technologies. He has a talent for Knowledge Transfer Partnership (KTPs), developing collaborative partnerships across several industry
sectors. He has undertaken research collaborations with universities across the world,
including the University of Baltimore, USA, Swinburne University, Australia, the University of Palermo, Italy, and the University of Athabasca, Canada.
Essential Guide to
Operations Management
Concepts and Case Notes
SECOND EDITION
David Bamford, Paul Forrester
and Iain Reid
Designed cover image: © Getty Images
Second edition published 2023
by Routledge
4 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2023 David Bamford, Paul Forrester and Iain Reid
The right of David Bamford, Paul Forrester and Iain Reid to be identified as
authors of this work has been asserted in accordance with sections 77 and 78
of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
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known or hereafter invented, including photocopying and recording, or in
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Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
First edition published by Wiley 2010
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
ISBN: 978-1-032-32427-2 (hbk)
ISBN: 978-1-032-32426-5 (pbk)
ISBN: 978-1-003-31499-8 (ebk)
DOI: 10.4324/9781003314998
Typeset in Bembo
by codeMantra
Access the Instructor and Student Resources: www.routledge.com/9781032324265
Contents
Acknowledgements
vii
1 Operations Management in Context
1
2 Designing Business Processes
15
3 Developing Service and Product Value
31
4 Operations Management and Digital Transformation
45
5 Controlling Enterprise Resources
57
6 Lean and Resilient Operations
72
7 Managing Sustainable Supply Networks
83
8 Managing Operations Strategically
99
9 Managing Quality Systems
112
10 Improving Global Operations
125
11 Operations Management in Practice
141
Index
151
Acknowledgements
In this textbook, we present a range of case examples that showcase the real-world
­application of theory in practice. In collating the examples, we have tried not to interfere with our contributors’ style because we believe this is an intricate part of getting
the message across to the reader. The brief was given to the contributors to keep the
level of technical detail to a minimum and provide some specific contextualisation. We
wish to thank all the case contributors for their time, expertise and richness of examples
provided. We have learned much from them. We hope the readers will too.
Contributors
Aimée-Louise Baker, Head of Operations (Race Director), Human Race Ltd
Alexander Dixon, BSc (Hons) MBA CIHCM
Ben Cowcill, MSc, Head of Stadium Operations & Facilities, Bolton Wanderers FC
Fatima-Zahra Zamzam, Russell IPM
Dr Jim Bamford, York St John University
Jon Tudor, Founder and Director, True North Excellence
Jonathan Sibley, Manchester Metropolitan University
Michael Kennedy, Senior Manager: Addleshaw Goddard LLP
Lucy Pittaway, Manchester Metropolitan University
Marcus Mayers, FRSA, MBA, APMP, Visiting Research Fellow, Manchester Metropolitan University
Dr Marina Papalexi, Manchester Metropolitan University
Dr Norman Ratcliffe, British Antarctic Survey
Sonia Dumitru, Aviation Insider
Vicky Roberts, Venue Operations Manager, Birmingham 2022 Commonwealth Games
1
Operations Management
in Context
Figure 1.0 Conceptual Model of Operations Management
Introduction
This chapter introduces the topic of operations management and outlines the structure
and logic of the book. It defines some core theories, including the input–­transformation–
output model, the principles of value, the five key performance indicators (KPIs) of
quality, speed, dependability, flexibility and cost and the four Vs framework of volume,
variety, variation and visibility. It suggests ways of conceptualising the scope of operations management by considering the components of an operations system, the life cycle
of products and the organisational scope of operations management. Finally, to better
conceptualise the topic, it provides a synopsis on the evolution of operations management, right up to the current emphasis on digitisation, servitisation, the triple bottom
line and the importance of sustainable and resilient operations.
What Is Operations Management?
Operations management is not merely a business function. It pervades the work of
all managers to a greater or lesser degree, as they are required to operationalise their
DOI: 10.4324/9781003314998-1
2
Operations Management in Context
strategies into outcomes that create value for stakeholders, are concerned with the design
of processes and products, need to control processes and systems appropriately and seek
to improve the designs, processes and controls over time to deliver quality outcomes.
This book is a contemporary and novel treatment of the important subject of operations
management. It is structured around a conceptual teaching model, developed by the
authors over the past 20 years, from multiple delivery of core operations management
modules, which explores fundamental operations principles. Adopting a strategic stance
throughout, this book provides a framework for effective decision-making to reflect
the concerns of the contemporary manager. Each chapter develops an understanding of
the theory and practice of key operational concepts to enable delivery of the strategy.
The model centres upon the idea that operations management comprises three essential
components:
1. Design of operations processes and the work of individuals
2. Planning and control of operations once designs are in place and operational
3. Ensuring the quality of outputs, and (wherever possible) improving on these
However, these cannot be addressed in isolation. The essential element of effective operations management is the integration of these components. The book therefore contains
three integrated chapters:
1. We need to understand operations management in context (Chapter 1). What
is its purpose in a business sense? And how and where does it relate to the other
business functions?
2. How might we manage operations strategically (Chapter 8)? Design, planning
and control activities must not be conducted totally independently of one another,
so we need the means to coordinate our activities within a formulated operations
strategy. We believe that operations strategy is best covered not at the start or end
of the text (as you find in most other operations management books), but in the
middle, after the principles of design and operations planning and control are well
understood.
3. We need to consider the implementation of the principles contained in this book, so
we need to look at operations management in practice (Chapter 11) in the final
chapter. Implementation is identified by practitioners as the most critical activity
but is often overlooked or skimmed over in texts, so we address this head-on in this
book.
The conceptual model (Figure 1.0) offers a comprehensive view of the operations management function, and we have integrated contemporary topics such as agile and resilient operations, digital transformation and managing supply networks. But, before
embarking on these topics, it is important that we fully grasp and comprehend what
the practice of operations management comprises, and from where it has evolved in an
historical and theoretical context.
In many operations management textbooks, the term ‘customer’ is widely used to
identify the recipients or consumers of the service or product offered. This language,
however, can be distracting for many readers, as it appears biased towards private sector
businesses. In most public sector and third sector settings, the recipients of the service
Operations Management in Context
3
or product are referred to in more meaningful terms. For example, hospitals treat ‘patients’, care services and consulting companies consider their ‘clients’ and educational institutions teach ‘students’. Although some of these organisations prefer to view end users as
customers, many others believe the term does not adequately reflect the nature and complexity of their relationship. By extension, there is often a tendency to regard operations
management textbooks, and what is taught in the classroom, as being somewhat irrelevant
simply due to the loose use of the term customer, or a failure of the reader or student to
grasp the term customer in its more generic sense. In this book, we do use the term customer in its more generic sense in places to refer to the recipient for the sake of brevity, but
we have taken the effort at times to stress and remind the reader that operations systems
serve clients, patients and students, and whatever other term an organisation might use.
Principles of Value
The task of the operations manager can be summarised at a basic level as converting
a range of resource inputs (such as budgets, stakeholders, information, expertise and
capacity), through a transformation (the operations process), into a range of outputs
(products and services, in addition to the achievement of objectives, addressing KPIs,
etc.). This is represented by Figure 1.1.
Of course, this needs to be designed with a focus on the value proposition of the
transformation process. But what do we mean by value? From an operations perspective, value can be defined as ensuring the economic, ergonomic, aesthetic and technical
aspects of the design of the product or service are met. These four elements translate
into the operationalisation of processes and systems that will be capable of delivering
the required output objectives.
The various elements that make up the operations function are diverse and complex
in nature. The operations manager must possess competencies in human resource management, strategic awareness, product knowledge, systems and organisational design
and, at the operating level, planning and control. Moreover, the task of the operations
manager is often misunderstood and relegated to a reactive rather than a positive and
proactive role within the organisation. To indicate the importance of the operations
function to the business, it is useful to identify five KPIs (5KPIs) for any operations system. These are quality, speed, dependability, flexibility and cost, where:
1. Quality reflects the extent to which operations are performed in line with specifications and/or satisfy the customer (i.e. getting things right).
2. Speed reflects how quickly and responsively we supply and deliver our products and
services (i.e. doings thing quickly).
Figure 1.1 Input–Transformation–Output Model
4
Operations Management in Context
3. Dependability indicates our reliability to the customer or recipient of the product
or service (i.e. doing things consistently and on time).
4. Flexibility reflects our ability to adapt and respond to differing needs (i.e. being able
to change what we do).
5. Cost reflects the expense we have incurred in a financial sense to deliver the product
and/or service to the recipient (i.e. doing things cheaply).
Figure 1.2 is a representation of the above and can be used to indicate the priority or
degree of importance (e.g. less important aspects in the centre, more important aspects
towards the outside) for comparison or even gap analysis.
In a simplistic sense, and in the ‘ideal world’, one might argue that an operation
should seek to optimise all five of these performance objectives. If an operation delivers
the best quality in the fastest time, more reliably, in the most flexible way and at the
cheapest cost, it is inevitable that this operation would perform better and therefore
more effectively than its competitors. However, this is a panacea. As Hill (1993) originally and others have since argued, operations management comprises a set of ‘trade-off’
decisions, whereby a decision to improve performance for one indicator often (though
not always necessarily) results in a negative effect on another. The most obvious in this
respect is cost. Often, decisions to reduce cost can impact quality, speed, reliability and
flexibility if they are improperly thought through. This book will, later, indicate where
costs and other indicators might be simultaneously improved, but we need to recognise
there are often constraints on what we might be able to achieve. And this indicates the
second important factor of operations management: it is about managing constrained
resources (human, physical and financial) that place limitations on what we can achieve.
In the same way as the performance objectives shown in Figure 1.2 can be used to compare and contrast different operations systems, so can the ‘four Vs’. Let us investigate each
of these individually, starting with volume. Figure 1.3 shows low volume on the left side of
the continuum and high volume on the right. Operations systems producing low volumes
of products and services invariably result in low repetition of tasks, operations performing
a large proportion of the job in hand, less systemisation and invariably high unit costs. The
opposite applies to high-volume operations: greater repetition, a greater division of work,
greater systemisation and lower unit costs through economies of scale. The other three Vs
run counter to volume, with ‘high’ on the left side and ‘low’ on the right. This reflects
the tendency for low-volume operations systems to have high variety, high variation and
frequently higher visibility. So high-variety operations, those that produce a wide range
Figure 1.2 Five Key Performance Indicators (5 KPIs)
Operations Management in Context
5
Figure 1.3 Four Vs: Volume, Variety, Variation and Visibility
of products and services, offer flexibility, can cope with and match customer needs and
tend towards higher unit costs. Low-variety operations, those that produce more standard
products and services, have the opposite features. Variation reflects the ability of the operations systems to flex and change, usually in response to the nature of demand (frequent
and rapid changes on the left side, very stable, unchanging demand on the right. High-­
variation operations systems feature the ability to change the capacity of output, anticipation, flexibility response and generally high unit costs. Finally, visibility reflects the extent
to which operations facilities and workers are physically seen or capable of being monitored by customers and clients, or whether they are out of sight and contact (back-office
type operations). High-visibility operations feature short waiting tolerance, the need for
customer contact skills, variety and responsiveness in service and high unit cost.
It has already been noted that the four Vs are arranged in Figure 1.3 so that volume is
low on the left side of the scale and high on the right, whilst the other Vs run opposite
to this. This is for a reason. The features of operations systems that occupy positions near
the left side of the scale have flexibility as a major concern: the ability to be flexible in
terms of range or response and/or to provide a flexible service. Conversely, operations
systems with right-side profiles are concerned with repeatability: the ability to economically produce products and services in high volume and at a relatively low unit cost. An
example at this point serves to illustrate this.
Example 1
You have decided to take a vacation at an Island Resort. You want to be accommodated in a small
house by the ocean. It’s an oasis where people come to you and cook meals for your family, then slip
away to leave you in peace. You don’t see anybody else. For this Island Resort volume would be
relatively low, given our definitions above. The variety would be high. You expect them to provide a
range of facilities. If you want to cycle, they would be able to provide a bicycle. If you want to Scuba
Dive on the coral reef, they would be able to arrange this, plus transportation and any necessary
instruction. The cost to you might be high, but the Resort can supply what you need. Variation
6
Operations Management in Context
is potentially high for the Island Resort because of the unpredictability and needs for varied control
systems for the services. Finally, visibility is high. You want attentive service and are likely to have
a short waiting tolerance: if you are paying considerable amounts of money, you want and expect
efficient service, now. The Island Resort, therefore, needs to design and plan their operations with
the needs of its customers in mind. The Resort needs excellently designed and constructed accommodation and administrative buildings; staff with good customer contact skills; there is a need to
recruit flexible employees who seem genuinely pleased to meet and greet customers and efficiently
respond to their every need. All this comes at a high cost, but the customer is willing to pay for this.
Now contrast the Island Resort with a chain of Express Hotels, serving the needs of people
who are on business or touring, and need to stay just one night, usually for about eight hours. The
Express Hotel needs to have a bed, a television, tea and coffee making facilities and sometimes a
telephone, not often though because we all have mobile phones. As a customer you need to be able
to check-in and check-out quickly and know that the room meets a standard quality. You don’t care
whether you see a member of staff or not. You just want to get into your room for the night, pay
your bill and leave. You probably do not even want breakfast because you will take ‘breakfast to go’
with a coffee on your way to your next destination. So, in contrast to the Island Resort, volume
is high, because the Hotel and customer alike require fast throughput and high repeatability. They
are geared to a high volume of customers with very similar needs, and only willing to pay budget
prices. Variety is low. Most of the Express Hotel chain’s rooms look and feel identical. Variation is
low because you, as the customer, are not expecting any differences. There is a stable routine, predictable operations and high utilisation. Most of these hotels are located adjacent to major highway
intersections so they are convenient and easy to get too. Visibility is low. Ideally you do not want
to see anybody. After a long day’s work or journey you are in no mood to talk to anybody and just
want to soak in the bath or take a shower, then get a good night’s sleep and depart.
To summarise, the four Vs are used within organisations to assess their operations.
Organisations can profile customer needs across the four continuums, compare this to
their existing facilities (where the operations are currently placed in terms of product or
service delivery) and also develop profiles for direct competitors. Such profiling enables
gap analysis where, for example, one can identify any problematic differences between
customer needs and actual delivery from our operations system, as well as comparative
benchmarking against competitors.
The Scope of Operations Management
Operations management relates to the function of an organisation concerned with the
design, planning and control of resources to produce goods or provide services. As a
discipline, it is not merely confined to a collection of techniques and quantitative methods. It makes appropriate use of the tools of operational research (OR) and statistics
where relevant but is primarily concerned with the broader issues involved in the design, planning and control of products, services and processes. There are several ways to
conceptualise the scope of operations management, some of which are suggested below.
By Considering the Components of an Operations System
Models of innovation suggest that any system should be considered as comprising three main
elements: product (the output, the value created), process and work organisation. It is useful
to consider the operations manager as having responsibilities in all three of these areas.
Operations Management in Context
7
By Considering the Life Cycle for Processes
The operations management function is concerned with, and should have an input into,
all stages in a system’s life cycle. The life cycle of introduction, growth, maturity and
decline can be equated here, as illustrated in Figure 1.4. The responsibilities of the operations manager, therefore, should not be merely confined to the output/value creation
(transformation) stage but at all stages of the process life cycle.
By Considering the Organisational Scope of Operations Management
‘Operations Management’ should not be confused with the term ‘operational management’. The management of operations permeates all levels of organisational decision-­
making and is not merely confined to low-level and short-term decisions. The operations
manager should, in turn, enter more widespread strategic debates in addition to maintaining contact with day-to-day operations. Thus, the scope of operations management
in decision-making covers operational management right through to strategic management, as per Figure 1.5.
The conceptual model employed in this book (Figure 1.0) identifies and distinguishes
‘design’ activities from operations ‘planning and control’ and ‘quality’. Design, which is
covered in Chapters 2–4, involves:
•
•
•
Designing business processes: The organisation and arrangement of facilities, information and ‘flow’ and labour resources to enable the conversion of inputs (budgets,
stakeholders, information, expertise and capacity, etc.) into outputs (providing services and goods, performing to KPIs, etc.).
Developing service and product value: Interrelated with process design and the configuration of the processes in producing and delivering.
Operations management and digital transformation: An activity frequently cited and
identified as important but often overlooked in other texts. Design activity will always involve the transfer of ‘know-how’ to others in the design process. This is true
whether we are talking about new processes (research and development transferred
Figure 1.4 The Process Life Cycle
8
Operations Management in Context
Figure 1.5 The Levels of Operations Management Decision-Making (Bennett and Forrester, 1993)
from the laboratory or simulation into regular operations) or the transfer of existing
technologies (e.g. expanding operations, including establishing new facilities overseas
based upon home operations as part of an international operations strategy).
Planning and control of operations are contained within Chapters 5–7. Planning and
control comprise the organising and monitoring of operations systems, projects and
programmes, together with the feedback of variances from the plan for process or programme adjustment where necessary. It includes:
•
•
•
Controlling enterprise resources: The resources of the organisation (its facilities,
people and materials) need to be effectively managed in terms of operational schedules, workflow, management and throughput.
Lean, agile, resilient operations: The operations need to be managed in such a way
that waste (of time, resources, money, effort, etc.) is minimised. Lean operations
have evolved in terms of theories and practice since the 1980s, so to be competitive,
organisations must grasp these proven and evidence-based principles.
Managing sustainable supply networks: Organisations need to manage their supply
network activity actively, and managers need to understand the complex interrelationships among suppliers and producers, people and technology. The value and
importance attached to sustainable supply (environmentally, socially, ethically, and
cost-efficiency) encompass much of the operational ‘value add’, and the management of these assets can be critical.
Regarding quality management, the main themes for operations managers include not
only quality control but also an emphasis on improvement. This is the reason why this
Operations Management in Context
9
book punctuates the chapters on design and planning/control from quality management chapters with the coverage of managing operations strategically (Chapter 8). Our
argument here is that ‘improvement’ forms the core of any effective operations strategy, so the main strategy chapter should be placed here to integrate and link preceding
principles from the improvement process covered later. The main principles of quality
management, covered in Chapters 9 and 10, include:
•
Managing quality systems: Quality control systems need to be effectively designed
and put into practice to enable the capture and evaluation of quality data and customer feedback, whether this data is quantitative or qualitative in nature.
•
Improving global operations: Contemporary practice stresses that operations systems
should not stand still, merely adopting quality management systems that measure
whether performance conforms to prior specifications. Instead, they should evolve
with an emphasis on continuous improvement, whereby there is a commitment by the
organisation to the future development of the operations.
The practice of operations and quality management is now accepted as an essential
function. When one talks of a theory or discipline of operations management, there
are a range of competencies required: human resource skills, technical knowledge,
problem-­solving abilities, logic, quantitative methods and strategic insight. As a result,
no single line of theory has emerged within the discipline. The model presented in this
book provides a structure for understanding operations in context, but it needs to be appreciated that operations management has developed using theories and principles from
a range of other disciplines. The final section of this chapter, therefore, now conveys a
historical understanding of the subject.
The Evolution of Operations Management: From Craft
Production to Sustainable Systems
Operations management will now be set within its rich historical context. The major
influences and developments in the subject over time will be highlighted. Figure 1.6
shows these historical influences in chronological order and should be referred to in
conjunction with reading the following text. It illustrates the history of operations
management and shows the major influences upon the subject through its development.
Operations systems have always been in existence, albeit in different configurations
to what one might expect to find today. Consider the ingenuity and industry involved
in the following projects from history: Stonehenge on Salisbury Plain in the UK; the
Egyptian Pyramids; the Great Wall of China; the cities, aqueducts and roads of the
Roman Empire; and the programme of shipbuilding that preceded the sailing of the
Spanish Armada in 1588. These would not have materialised without some form of
operations management thinking.
Prior to 1750, products were manufactured quite differently than they are today.
Most production took place in the homes, cottages and workshops of independently
trading craftsmen, hence the descriptive terms we tend to use nowadays of ‘the cottage
system’ and ‘cottage industries’. Production before the advent of the Industrial Revolution can be characterised by direct contact between producers and consumers, little
mechanisation and the production of bespoke, custom-made and personalised products.
10
Operations Management in Context
Figure 1.6 The Evolution of Operations Management as a Subject and Practice
The Industrial Revolution began in England in the 1700s. The early years can be
summarised by two principal developments. First, there was a substitution of machines for human power. The inventors of machine power gave rise to the ‘Process
School’, and their activities gave rise to the various engineering professions. Foremost
amongst the early process developers were James Watt with the further development of the steam engine in 1764, Hargreaves and the ‘Spinning Jenny’, Cartwright’s
‘Power Loom’ and Maudsley’s ‘Screw Cutting Lathe’. These inventions gave the Industrial Revolution its initial impetus. This led to the increasingly widespread establishment of the ‘factory system’. Adam Smith’s The Wealth of Nations (from 1776)
proclaimed the benefits of the division and specialisation of labour. Thus, activities
came to be broken into small, specialised tasks assigned to workers through the process, as opposed to the craftsman’s ‘make-complete’ approach. Increased capital intensity through mechanisation and new ways of planning and controlling production
workers using the principles of specialisation led to a move away from the cottage
system to that of factory work.
Operations Management in Context
11
Two notable developments occurred in the nineteenth century. First was the concept
of interchangeability. One of the earliest attempts at production using interchangeable
parts was successfully accomplished by Eli Whitney, a manufacturer of rifles for the US
government, in 1790. Whitney designed and built on an assembly line such that parts
were produced to tight tolerances, enabling every part to fit right the first time into a
rifle assembly. Previously, parts were handcrafted, or else they were merely sorted from
large batches to find those components that fit together neatly or only required minor
modifications. The concept of interchangeable parts was not easily grasped at first but
is today taken for granted.
By 1850, the cottage system was almost completely replaced by factory work. Industrial empires were being constructed by a new class of entrepreneurs and businessmen.
By 1900, the high level of capital and production capacity, the expanded urban workforce, new Western markets and increasingly effective transportation and communication set the stage for the great production output explosion of the twentieth century.
Around 1900, the scientific management approach was being developed. This was
initially based upon the pioneering work of Frederick Winslow Taylor (1856–1915),
outlined in his Principles of Scientific Management (Taylor 1911). At the time, scientific
management represented a concerted attack on the prevailing techniques used in the
management of production. The work of Taylor, Lilian and Frank Gilbreth and Henry
Gantt, amongst others, was analytical and stressed the need for the development of
standards for work and improved efficiency. There was little consideration, however, of
human feelings, and most practitioners of scientific management viewed operators as
mere extensions of their machines working within a wider, controlled system.
Several ideas and techniques were developed at this time, including piecework
payment systems, time and motion study, the principles of efficiency, standards and
management by exception. Criticised as scientific management is today, and in many
respects rightly so, its development constituted the first truly rigorous and structured
theory of production management to replace the more general and less analytical methods of factory management used before. Scientific management principles culminated
with the opening of the Ford Motor Company’s Rouge plant in Detroit to produce the
Model-T. The Rouge plant featured standardised product designs using interchangeable
parts; mass production; low costs; mechanised assembly lines; and high specialisation of
labour. Ford was an adapter rather than an inventor of scientific management, and the
Rouge plant formed the model for factory design and work organisation well into the
twentieth century (the approach now commonly known as ‘Fordism’). So, around the
1920s, was born the era of mass manufacturing and standardised, low-variety products.
In the 1930s, an opposing view to scientific management began to emerge, in which
behavioural issues were identified as being important to productivity. Knowledge of psychological and sociological features started to influence job design, strategies for worker
motivation and management control policies. The organisational forms of production and
service companies have been influenced by several ‘behaviouralist’ theories and practical approaches. A seminal programme of research at this time was the Hawthorne Studies, a series
of experiments conducted by researchers from the Harvard Business School at Western
Electric Company that illustrated the importance of human aspects in determining output
and productivity. These were later followed by further theories of motivation (see, e.g.
Maslow, 1943; McGregor, 1960; Likert, 1961; Herzberg, 1974).
A major contribution to our understanding of operations management was made by
sociotechnologists. On the evidence of the development of work design in the British Coal
12 Operations Management in Context
Mining industry, the teamwork approach to flowline assembly at Philips, Eindhoven,
and the experiences of Volvo in Sweden with autonomous group working, theorists
(most predominantly from the Tavistock Institute) stressed the need for the parallel development of social and technical systems for the success of operations. More recently,
the need for flexible labour to cope with changes in the market and environment has
been identified. ‘Post-Fordism’ has now developed, whose supporters argue that the era
of mass production is now over with more flexible and less rigid work structures now developing, which sees a revival of craft forms of operation and the need for multi-­skilling
in the workforce. Of course, we also have the more recent arrival of zero hours contracts, which has created both opportunities and challenges, perhaps in equal measure.
In terms of tools and techniques for operations management, we are indebted to the
OR School. OR originated in the military and defence organisations of Britain and
the USA in the 1940s, during World War II, to help solve problems of civilian defence,
bombing strategies, transportation and military logistics. Subsequently, OR theorists
turned to business and industry to apply their techniques. The spin-offs for operations
management included new quantitative techniques for stock control, scheduling, forecasting, project management, quality control, simulation and linear programming, to
name just a few. In the 1950s, OR was responsible for the introduction of computers in
the management of operations. OR seeks to replace intuitive decision-making for large,
complex problems with approaches that identify ‘optimal’ or ‘best’ solutions through
analysis. It is in its logical and methodological approach that OR has contributed to the
developing theory of operations management.
There has been a vast expansion in the service and public sector industries since the
1960s. During this time, manufacturers and service operators have come to realise that
they have a considerable amount to learn from one another and have innumerable areas
of similarity in the management of their operations. All products have an element of
physicality and service associated with them, and many services have some form of tangible product content (e.g. a McDonald’s burger is both a physical ‘good’, and associated
with a ‘package of service elements’). The need to manage service operations efficiently
and effectively is just as necessary as the productive management of manufacturing,
especially as many service operations have high visibility for the customer or client.
For example, all service operators have inventories to manage, quality to control, work
to schedule, output to deliver, facilities to layout, employees to remunerate and so on.
However, the lessons are not one-way. Manufacturing organisations are learning much
in terms of customer care, service reliability and flexibility (so-called servitisation of
their package of operations) from the service industries.
The economic expansion of Asia, most notably Japan, since the 1960s has stimulated
the development of alternative operations theory and practice. New concepts such as
‘just-in-time’ management, new approaches to quality and design management (such
as Total Quality and Kaizen) and the encapsulation of these principles into ‘lean operations’ evolved in Japan particularly. This served as a warning of a new challenge to the
traditional Western manufacturers.
Another development has been the shift in emphasis from techniques and systems at
the operating level to a broader and more balanced strategic perspective on operations.
As indicated earlier in this chapter, operations management is not merely confined to
low-level, limited-impact decision-making but has a strategic consequence. Businesses
that expect to remain competitive now need to grasp this and ensure that product service and delivery live up to the claims made in advertising and promotion campaigns.
Operations Management in Context
13
New technologies have also had a profound impact on the design of original processes with the development of flexible and programmable systems. Most significantly,
the control afforded by digital technology has made possible the provision of service
solutions in mass volumes, in a wide variety of forms and, in some instances, configured
to suit individual customer requirements (see an Amazon web page for examples of all
these elements).
Referring to Figure 1.6, it has been illustrated how the development of operations
management has been closely tied to the emergence of several schools of thought over
the last 200–300 years. In the 1800s, the prime focus was the management of the factory, but as scientific management practices became more widespread in the early twentieth century, the discipline changed from general factory management to production
management. The wider operational perspective brought in by OR to encompass transportation, logistics and supply plus the growing need to incorporate and learn from service operations has broadened the discipline further. Now, subject to the influences of
artificial intelligence, augmented reality, supply chain management disruption and the
need for resilient and agile operations in the face of global challenges (e.g. COVID-19),
the theory and practice of operations management continue to develop under the influence of different, and often conflicting, schools and paradigms.
Chapter Summary
This chapter has introduced the topic of operations management and outlined the structure and logical presentation of the book. It has defined some core theories, including
the input–transformation–output model, the basic principles of value, the five KPIs of
quality, speed, dependability, flexibility and cost and the four Vs of volume, variety,
variation and visibility. It suggested ways of conceptualising the scope of operations
management by considering the components of an operations system, the life cycle
of products and the organisational scope of operations management. Finally, to historically contextualise the topic, it provided a synopsis of the evolution of operations
management.
Reflective Questions
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What is operations management?
What is the I-T-O model?
What are the five key performance indicators?
What are the four Vs?
Who was F.W. Taylor and what was their contribution?
Further Reading
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Bennett, D.J. and Forrester, P.L. (1993). Market-Focused Production Systems: Design and Implementation, Prentice Hall, Hertfordshire.
Herzberg, F.I. (1974). Work and the Nature of Man, Crosby Lockwood Staples, London.
Hill, T. (1993). The Essence of Operations Management, Prentice Hall, New York.
Johnston, R., Shulver, M., Slack, N. and Clark, G. (2020) Service Operations Management:
Improving Service Delivery, 5th Edn, Pearson, Harlow.
Likert, R. (1961). New Patterns of Management, McGraw-Hill Inc., New York.
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Operations Management in Context
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Maslow, A.H. (1943). Preface to Motivation Theory, Psychosomatic Medicine, Vol.5, Iss.1,
pp. 85–92.
McGregor, D. (1960). Theory X and Theory Y, Organization Theory, Vol.358, Iss.374, p. 5.
Radnor, Z., Bateman, N., Esain, A., Kumar, M., Williams, S., Upton, D. (2015) Public
Sector Operations Management, Routledge, London.
Slack, N., Brandon-Jones, A., Burgess, N. (2022) Operations Management, 10th Edn, Pearson, Harlow.
Smith, A. (1776, reprinted 1970) The Wealth of Nations, Everyman’s Library, London.
Starr, M.K., Gupta, S.K. eds. (2017) The Routledge Companion to Production and Operations
Management, Routledge, London.
Taylor, F.W. (1911, reprinted 1967) The Principles of Scientific Management, Norton, New
York.
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Useful Websites
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www.euroma-online.org. European Operations Management Association (EUROMA).
www.informs.org. Institute for Operations Research.
Useful Academic Journals
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European Sport Management Quarterly
International Journal of Operations and Production Management
International Journal of Public Sector Management
International Journal of Production Research
International Journal of Quality and Reliability Management
Journal of Health Organization and Management
Journal of Operations Management
Journal of Place Management and Development
Managing Service Quality
Manufacturing and Service Operations Management
Production and Operations Management
Production Planning and Control
Supply Chain Management: An International Journal
Operations Management in Context
Bennett, D.J. and Forrester, P.L. (1993). Market-Focused Production Systems: Design and Implementation,
Prentice Hall, Hertfordshire.
Herzberg, F.I. (1974). Work and the Nature of Man, Crosby Lockwood Staples, London.
Hill, T. (1993). The Essence of Operations Management, Prentice Hall, New York.
Johnston, R. , Shulver, M. , Slack, N. and Clark, G. (2020) Service Operations Management: Improving
Service Delivery, 5th Edn, Pearson, Harlow.
Likert, R. (1961). New Patterns of Management, McGraw-Hill Inc., New York.
Maslow, A.H. (1943). Preface to Motivation Theory, Psychosomatic Medicine, Vol.5, Iss.1, pp. 85–92.
McGregor, D. (1960). Theory X and Theory Y, Organization Theory, Vol.358, Iss.374, p. 5.
Radnor, Z. , Bateman, N. , Esain, A. , Kumar, M. , Williams, S. , Upton, D. (2015) Public Sector Operations
Management, Routledge, London.
Slack, N. , Brandon-Jones, A. , Burgess, N. (2022) Operations Management, 10th Edn, Pearson, Harlow.
Smith, A. (1776, reprinted 1970) The Wealth of Nations, Everyman’s Library, London.
Starr, M.K. , Gupta, S.K. eds. (2017) The Routledge Companion to Production and Operations Management,
Routledge, London.
Taylor, F.W. (1911, reprinted 1967) The Principles of Scientific Management, Norton, New York.
Designing Business Processes
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Hill, T. (1993) The Essence of Operations Management, Prentice Hall, New York.
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