Types of Eras - Operations management PDF

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Operations management...

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The ERAs: According to Brown et. Al (2000), there were 3 main eras of operations management: - 2. Mass Production Era-

- 1. The Craft EraBefore the industrial revolution. It’s when artisans made individual goods (usually in their small businesses).

1.

Period of large-scale production & the growth of large scale operations. The term refers to assembly of products on a production line.

- 3. Strategic Operations EraThis period covers the past 30 years, in which features of the craft era have been incorporated into features of mass production (e.g. individualized products).

The Craft Era

Operations which took place in this era include: 2.

Simple projects – Example including: craftspeople, groups, skilled professionals etc. Job shop – Refers to ‘The production of very small batches of different products (which need a different set/ sequence of processing steps.’) Batch process – Refers to ‘Production of small batches using flow processes’. Mass Production era

The emergence of 4 new types of processes include: -

Complex projects Batch production – Refers to ‘Production system in which an operation is broken down into distinct processes that are completed in a small number or ‘batches’ of product at time.’ Assembly line Flow process production – Refers to ‘A series of processes through which a product moves or flows continuously’

Firms also produced goods in high volumes which is known as ‘Economics of scale’. Economies of scale – As the scale of the output increases, the average unit cost of production falls. This is for a number of reasons which include: -

(Purchasing): Manufactures are able to negotiate long-term deals with suppliers to buy in bulk. Why? Large scaleproduction needs a high volume of parts. (Marketing): The price for advertising, promotion etc. is spread more over outputs (Technical): Increasing returns to scale for certain equipment e.g. tanks, vats etc. (Financial): Negotiating better deals with banks when production is at a large scale for the firm. (Managerial): Larger firms can develop managers & specialists which smaller firms cannot.

3.

Strategic Operations era

Strategic approaches to operations examples: -

Lean production Agile manufacturing Mass customisation (MC) Servitization Ubiquitization E-business Innovation and continuous improvement Low-cost competition Globalization (See page 65 for explanations to these factors)

It’s important to note that there are some industries which have operated/ continued to operate only in the context of one era. For example: Hairdressing & Sculpture remain as ‘craft-orientated operations’, Petroleum refining is a ‘flow-process operation’. Building construction can either be craft or mass production....