Industrial Management PDF

Industrial Management  MANAGEMENT Management is an art of getting things done through people Management is a process of accomplishing certain objectives through the utilization of human and other resources.  Definition Management is the creation and maintenance...

Industrial Management  MANAGEMENT Management is an art of getting things done through people Management is a process of accomplishing certain objectives through the utilization of human and other resources.  Definition Management is the creation and maintenance of an internal environment in an enterprise where individual, working in groups, can perform efficiently and effectively towards attainment of group goals. Management as a process IMPORTANCE OF MANAGEMENT For the accomplishment of the goals. For effective utilization of the resources. Sound Organization. Providing vision &Foresight. For the harmony in work. To help employees in achieving personal objective. Development of the society and nation.  INDUSTRIAL MANAGEMENT Industrial management is now a branch of engineering which facilitates creation of management system and integrates same with people and their activities to utilize the resources. Industrial management is structured approach to manage the operational activities of the organization. Need of industrial management To ensure maximum output with minimum cost of production. To ensure that activities of different individuals are coordinated to attain the common purpose in the factory. Goods are produced and delivered on the promised dates. Goods are manufactured in strict specification of customer’s orders. Proper accounting, reporting and controlling the operations in the factory. To prevent wastage and losses. Quality products. Utilization of full capacity of the factory. Innovation  Scope of industrial management Industry Planning Industry Organization Factory Management Materials Management Labor Administration Industry Control  Application of Industrial Management Planning Function Controlling For Designing Conversion System Function For Scheduling Conversion Quality System Quantity Organizing Function Time Structuring of Operation Inventory Staffing Job & Work Design. Cost For Production & Operation Maintenance Standard. For Payment system.  Development of Industrial Management. Three Basic Approaches : Classical Approach Neo Classical System Approach  Classical Approach Contributions Criticism Emphasis on division Ignores human of work, specialization and processes. relations Efficiency of the Strict rules and organization can be regulations increased by making each individual Closed system efficient. organization Based on centralization of authority  Neo Classical Approach Contributions Criticism Social System Limited Application Social Environment Lack of scientific Leadership Validity Communication Invalid Assumption Fragmental Approach  Systems Approach ENVIRONME NT TRANSFORMA OUTPUT INPUT TION PROCESS FEEDBACK  System Approach Contd. Contribution Critics Interacting Failed to specify Elements the nature of Interaction and Vulnerable to Interdependencies. changes in the Environment. Does not apply tools and techniques for analysis.  Production It is a process of creating or enhancing utility by transforming a set of inputs such as men machinery, material & money into a specific set of output such as finished goods or services It is a process by which goods & services are created  Transformatio n Process: Outputs: Inputs: Product Design Process Products Men Planning Services Machinery Production Material Money Control Maintenance  Productivity It may be defined as the ratio between output & input Output means the amount or numbers of items produces & inputs are the various resources employed such as men machinery, material & money It is the measure of the quantity of output per unit of input Productivity = Amount of Output/Amount of Input  Productivity Index Labor productivity = Raw material productivity = Output Output No of Labour employed Cost of raw materials Direct labor cost Direct cost productivity = productivity = Output Output Sum of all direct costs Amount of wages paid Material productivity = Capital productivity = Output Output Cost of (Raw Material+ Packaging material+ Capital Employed Supplies) Energy productivity = Total Factor Productivity = Output Output No. of Units of power used Labour+ Capital Invested  Factors affecting Productivity Factors affecting national productivity 1. Human resources 2. Technology and Capital Investment 3. Government Regulation Factors Affecting Productivity in organization:- 1. Product( or system ) design 2. Machinery and Equipment 3. Skill and Effectiveness of the worker 4. Production Volume  Measures to Increase Productivity Material Labor Plant, Equipment and Machinery Land and Buildings  Types of Production Methods / Systems 1. Continuous Mass production Process or continue flow type 2. One time Large Projects 3. Intermittent Batch production Job Production Chapter -3 Industrial Ownership  Sole Proprietorships The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person, usually the individual who has day-to-day responsibilities for running the business. Sole proprietors own all the assets of the business and the profits generated by it. They also assume complete responsibility for any of its  Advantages of a Sole Proprietorship Easiest and least expensive form of ownership to organize. Sole proprietors are in complete control, and within the parameters of the law, may make decisions as they see fit. Sole proprietors receive all income generated by the business to keep or reinvest. Profits from the business flow directly to the owner's personal tax return. Disadvantages The business of ifadesired. is easy to dissolve, Sole Proprietorship Sole proprietors have unlimited liability and are legally responsible for all debts against the business. Their business and personal assets are at risk. May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans. May have a hard time attracting high-caliber employees or those that are motivated by the opportunity to own a part of the business. Some employee benefits such as owner's medical insurance premiums are not directly deductible from Business income (only partially deductible as an  Partnerships In a Partnership, two or more people share ownership of a single business. Like proprietorships, the law does not distinguish between the business and its owners. The partners should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be resolved, how future partners will be admitted to the partnership, how partners can be bought out, and what steps will be taken to dissolve the partnership when needed.  Advantages of a Partnership Partnerships are relatively easy to establish; however time should be invested in developing the partnership agreement. With more than one owner, the ability to raise funds may be increased. The profits from the business flow directly through to the partners' personal tax returns. Prospective employees may be attracted to the business if given the incentive to become a partner. The business usually will benefit from partners who have complementary skills. Disadvantages of a Partnership Partners are jointly and individually liable for the actions of the other partners. Profits must be shared with others. Since decisions are shared, disagreements can occur. Some employee benefits are not deductible from business income on tax returns. The partnership may have a limited life; it may end upon the withdrawal or death of a partner.  Advantages of a Partnership Partnerships are relatively easy to establish; however time should be invested in developing the partnership agreement. With more than one owner, the ability to raise funds may be increased. The profits from the business flow directly through to the partners' personal tax returns. Prospective employees may be attracted to the business if given the incentive to become a partner. The business usually will benefit from partners who have complementary skills. Disadvantages of a Partnership Partners are jointly and individually liable for the actions of the other partners. Profits must be shared with others. Since decisions are shared, disagreements can occur. Some employee benefits are not deductible from business income on tax returns. The partnership may have a limited life; it may end upon the withdrawal or death of a partner.  Types of Partnerships that should be considered 1. General Partnership Partners divide responsibility for management and liability as well as the shares of profit or loss according to their internal agreement. Equal shares are assumed unless there is a written agreement that states differently. 2. Limited Partnership and Partnership with limited liability Limited means that most of the partners have limited liability (to the extent of their investment) as well as limited input regarding management decisions, which generally encourages investors for short-term projects or for investing in capital assets. This form of ownership is not often used for operating retail or service businesses. Forming a limited partnership is more complex and formal than that of a general partnership.  Types of Partnerships that should be considered 1. General Partnership Partners divide responsibility for management and liability as well as the shares of profit or loss according to their internal agreement. Equal shares are assumed unless there is a written agreement that states differently. 2. Limited Partnership and Partnership with limited liability Limited means that most of the partners have limited liability (to the extent of their investment) as well as limited input regarding management decisions, which generally encourages investors for short-term projects or for investing in capital assets. This form of ownership is not often used for operating retail or service businesses. Forming a limited partnership is more complex and formal than that of a general partnership.  Joint Venture Acts like a general partnership, but is clearly for a period of time or a single project. If the partners in a joint venture repeat the activity, they will be recognized as an ongoing partnership and will have to file as such as well as distribute accumulated partnership assets upon dissolution of the entity.  Joint Venture Acts like a general partnership, but is clearly for a period of time or a single project. If the partners in a joint venture repeat the activity, they will be recognized as an ongoing partnership and will have to file as such as well as distribute accumulated partnership assets upon dissolution of the entity.  Corporations A corporation chartered by the state in which it is headquartered is considered by law to be a unique entity, separate and apart from those who own it. A corporation can be taxed, it can be sued, and it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes.  Advantages of a Corporation Shareholders have limited liability for the corporation's debts or judgments against the corporations. Generally, shareholders can only be held accountable for their investment in stock of the company. (Note however, that officers can be held personally liable for their actions, such as the failure to withhold and pay employment taxes.) Corporations can raise additional funds through the sale of stock. A corporation may deduct the cost of benefits it provides to officers and employees. Disadvantages of a Corporation The process of incorporation requires more time and money than other forms of organization. Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations. Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible from business income; thus it can be taxed twice.