Understanding operations management
Understanding operations management

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Understanding operations management

2.2.3 The modern period

Mass production worked well as long as high volumes of mass-produced goods could be produced and sold in predictable and slowly changing markets. However, during the 1970s, markets became highly fragmented, product life cycles reduced dramatically and consumers had far greater choice than ever before.

An unforeseen challenge to Western manufacturers emerged from Japan. New Japanese production techniques, such as total quality management (TQM), just-in-time (JIT) and employee involvement were emulated elsewhere in the developed world, with mixed results.

More recently, the mass production paradigm has been replaced, but there is as yet no single approach to managing operations that has become similarly dominant. The different approaches for managing operations that are currently popular include:

  • Flexible specialisation (Piore and Sabel, 1984) in which firms (especially small firms) focus on separate parts of the value-adding process and collaborate within networks to produce whole products. Such an approach requires highly developed networks, effective processes for collaboration and the development of long-term relationships between firms.

  • Lean production (Womack et al., 1990) which developed from the highly successful Toyota Production System. It focuses on the elimination of all forms of waste from a production system. A focus on driving inventory levels down also exposes inefficiencies, reduces costs and cuts lead times.

  • Mass customisation (Pine et al., 1993) which seeks to combine high volume, as in mass production, with adapting products to meet the requirements of individual customers. Mass customisation is becoming increasingly feasible with the advent of new technology and automated processes.

  • Agile manufacturing (Kidd, 1994) which emphasises the need for an organisation to be able to switch frequently from one market-driven objective to another. Again, agile manufacturing has only become feasible on a large scale with the advent of enabling technology.

In various ways, these approaches all seek to combine the high volume and low cost associated with mass production with the product customisation, high levels of innovation and high levels of quality associated with craft production.

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