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  • September 29, 2022
  • Last Update March 12, 2022 2:43 pm
  • Hannover

A Brief History of Transaction Management

History; Despite being replete with examples of efficient production such as the Egyptian Pyramids, the Great Wall of China, the roads and aqueducts of Rome, the worldwide production of consumer goods, and thus transactions management, did not begin until the Industrial Revolution in the 1700s. Prior to this time, skilled artisans and their apprentices produced goods for their personal customers in workshops they created in their own homes. Each piece was unique, home-made and completely one-person. This period is known as the craft production process. Although craft production still exists today; The existence of coal, iron ore, and steam power has put into use a host of industrial inventions that have radically changed the way work is done. Large and powerful mechanical machines replaced the labor force, which was the main factor of production, and moved the workers to a central location to perform their duties under the direction of the “foreman” in a place called the “factory”. The Industrial Revolution first appeared in weaving mills, mills, ironworks and machinery making facilities.

At the same time, Adam Smith, in his book Wealth of Nations (1776), argued that the production process was divided into series of small tasks, which revealed the division of labor in which each task was performed by different workers. The small number of workers doing the same work and the repetitive tasks made the workers highly proficient at what they did and encouraged the development of specialized machinery.

Eli Whitney’s definition of replaceable parts (1790s) turned from customized and individualized production to standardized production, enabling the mass production of firearms, watches, sewing machines, and other goods. This meant that the factory needed measurement, control, a standardized production method and inspectors to control the production quality of employees.

From the early 1800s, advances in technology continued. Cost accounting and other control systems were developed, but management theory and practice was virtually nonexistent.

In the early 1900s, an enterprising worker (later chief engineer) from the Midvale Steelworks named Frederick W. Taylor turned to labor management as a science.

He defined the concept of using the best method to perform a task based on observation, measurement and analysis. As soon as it was introduced, the method was standardized for all employees and economic rewards were applied to encourage employees to comply with the standards. The Taylor Philosophy became known as scientific management. His ideas were also embraced and expanded by productivity experts Frank – Lilian Gilberth, Henry Gantt, and others. One of Taylor’s greatest advocates was Henry Ford.

In 1913, Henry Ford applied scientific management to the production of the Model T car, greatly reducing the time it took to build a vehicle. With the help of 6 workers, a Model T chassis would slowly move a conveyor belt by slowly picking up the hollow parts from the ground and placing them on the chassis.1 Short assembly time per vehicle has made.

Over the next fifty years, American manufacturers mastered mass production and easily dominated worldwide production. The human relations movement, spearheaded by the work of Elton Mayo and Hawthorne in the 1930s, gave birth to the idea of ​​employee motivation and the technical aspects of work, which in turn affected productivity. Motivational theories were developed by Herzberg, Maslow, McGregor and other theorists. Quantitative models and techniques uncovered by World War II operations research groups continued to successfully implement and improve manufacturing and services. Computers and automation were also applied to the processes, which caused another sudden and rapid increase in technological developments.

From the Industrial Revolution until the late 1960s, the United States was both the world’s largest producer of goods and services and the most important source of management and technical expertise. In the 1970s and 1980s, however, American manufacturing superiority was shaken by the low cost and high quality enjoyed by foreign manufacturers, led by Japan.

A number of studies published in those years confirmed that customers already knew that American-made products at that time were of poor quality and not competitive in the world market. With the acquisition by Japanese Company Matsushita of the failed television factory Quasar of American company Motorola in Chicago and subsequent successes of Japanese factories in the United States, the initial rationalizations that Japanese success in manufacturing is a cultural phenomenon have proven false. Part of the procurement contract clearly states that Matsushita’s current 1000 employees must be employed per hour. Just 2 years later, with the same employees, half the number of management, and almost no capital investment, Matsushita has doubled its production, reduced assembly repairs from 130 percent to 6 percent, and reduced warranty costs from $16 million to $2 million per year. By considering Motorola, you can get an idea of ​​the rest of the American industry.

How did that happen? How did a country suddenly lose its power when it was the dominant power in production for most of the 20th century? It’s pretty simple! American companies were uninterested. They thought that mass production had solved the entire production “problem”, and so they delegated a production function to technical experts who overlooked changes in the consumer environment and the strategic importance of operations.

Decisions were made with short-term financial goals in mind rather than long-term strategic initiatives. Mass production can produce high volumes of goods quickly, but does not adapt very well to changes in demand. Today’s consumer market; production expansion, shortened product life cycles, shortened product development times; The change in technology is characterized by more personalized products and segmented markets.

Mass production does not “fit” in such environments. Using a concept known as just-in-time, Japanese manufacturers changed their production rules from mass production to low-cost production. low cost production; It places emphasis on flexibility (rather than efficiency) and quality (rather than quantity). The term total quality has begun to spread around the world, and this is the underlying strength of today’s successful operations.

The renewed attention to quality and the strategic importance of operations have made American companies competitive again. Technology; With the changing political and economic conditions, it has led to an era of industrial globalization in which companies compete worldwide for both market access and production resources. The emergence of the Internet has set this trend in globalization in motion.

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