3.01 - A Process View of Manufacturing

Some business history

Many manufacturing business have their foundation in the first half of the twentieth century and for much of this time effective management of been shaped by almost forgotten pioneers and opinion formers Frederick Taylor and Henri Fayol. Taylorism or “scientific management” with its view of specialism, work measurements and incentive payment transformed manufacturing businesses in the 1920’s and 1930’s and his theories dramatically improved the competitiveness of businesses at that time.

The scientific management ideas were coupled with the organisational theories of Henri Fayol and resulted in specialised functional, organisational structures which were widely adopted in the USA and Europe in both manufacturing and non-manufacturing business.

Specialist tasks and functional structures brought with them:-

• Reduced training costs
• Reduced training time
• Access to a large unskilled labour pool
• Lower labour costs
• Opportunities for rapid expansion
• Efficient manufacture

They also brought:-

• Department boundaries
• Fragmented responsibility for business processes
• Lost of customer visibility
• Boredom
• Incentive Payments
• Demarcation
• New and increased support functions
• “Them and Us” and adversarial industrial relations
• Group pay bargaining / differential terms and conditions of employment.

However, overall success led to the ideas being adopted in non-manufacturing processes and non-manufacturing businesses.

Notes:

See Groupthink (guide 10.02)