Historical Development of Operations Management

Evidence of formal management of operations can be traced back as far as the Babylonian kingdom of Hammurabi, around 2100 BC but few attempts to set down principles were made until the onset of the industrial revolution in Britain, in the middle of the 18th century.

The division of labour

In 1776 the Scottish philosopher and economist Adam Smith wrote one of the most influential books on economic activities, An Inquiry into the Nature and Causes of the Wealth of Nations. Using the manufacture of pins as illustration, he demonstrated that, whereas a single operator carrying out all of the necessary processing operations could produce around twenty pins per day, a small group of operators, each member specialising in a particular operation, could produce 48,000 pins per day. This division of labour was shown to have three distinctive features which contributed to the spectacular increase in productivity demonstrated:

1. By repetition of a restricted range of actions each operator developed a high level of dexterity

2. No time was lost in changing procedures and equipment, which would otherwise be required in moving from one operation to another

3. Operations of limited scope, repeated very many times, created the circumstances which allowed mechanisation to become economically viable, leading to even greater levels of productivity.