Industrial Engineering Management Lecture PDF

Industrial Engineering Management Contents  Study of Industrial Management  Production  Engineering Economics  Maintenance Management  Depreciation  Quality Assurance  International Organization For Stand...

Industrial Engineering Management Contents  Study of Industrial Management  Production  Engineering Economics  Maintenance Management  Depreciation  Quality Assurance  International Organization For Standardization (I.S.O)  ‫ﺍﻝﻡﻥﻅ ﻡﺓﺍﻝﺩﻭﻝﻱﺓﻝﻝﺕﻭﺡﻱﺩ ﺍﻕﻝﻱﺍﺱﻱ‬ INDUSTRIAL ENGINEERING & MANAGEMENT Management: - The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently. Managers: - The people responsible ‫ﻝﻡﺱﺅﻭﻝﻱﻥ‬ ‫ ﺍ‬for supervising the use of an organization’s resources to meet its goals. Resources are organizational assets:-  People Skills Knowledge Information Raw materials Machinery Financial capital Efficiency, Effectiveness, and Performance in an Organization Organizational Performance:-A measure of how efficiently and effectively managers are using organizational resources to satisfy customers and achieve goals.  Efficiency :-A measure of how well or productively resources are used to achieve a goal. Effectiveness:- A measure of the appropriateness (suitability) of the goals an organization is pursuing and the degree to which they are achieved. Study Management Proper management directly impacts improvements in the well-being of a society. Studying management helps people to understand what management is and prepares them accomplish managerial activities in their organizations. Studying management opens a path to a well-paying job and a satisfying career. Production: production can be defined as follows; 1- Production is a sequence of technical processes, requiring either directly or indirectly the mental and physical skill of craftsman ‫ﺭﻑﻱ‬ ‫ ﺡ‬and consists of changing the shape, size and properties of materials and ultimately converting them into more useful articles. Production includes manufacture of goods and services, and they are four recognized factors for this procedure: 1- Natural resources including land 2- Labour. 3- Capital i.e. factory building, machinery, tools, raw materials….etc. 4- Organization. A simple production system is shown in the following figure; FIG-1 Production system Production function: Most important task of the production management is to deal with decision making related to production processes so that the goods manufactured are according to the specifications, in the required quantity, at minimum cost as per schedule. A popular production function derived by Mr. Cobb and Mr. Douglas is as follows: P  b.L.C 1 Where p = Total output. L = Index of employment of labour in actual manufacturing. C = Index of fixed capital in manufacturing. α and 1 – α are known as elasticities of production and measured in a percentage. Types of production : Different types of production can typically be placed under two categories: 1- Intermittent production. 2- Continuous production.  In intermittent production, machinery is used for a short duration of time for producing an item, and then changed to produce another item. While in continuous production, set up of production is fixed and used to produce same item. FIG-2 Types of production (a) Job production : This is the oldest method of production on a very small scale. With this method individual requirements of the consumers can met. Each job stands alone and is not likely to be repeated. This type of production has a lot of flexibility of operation and hence general purpose machines are required. Factories adopting this type of production are generally small in size. This type of production is used for things which cannot be produced on a large scale. Advantages: 1- It is the only method which can meet the individual requirements. 2- There is no managerial problem because of very less number of workers. 3- This type of production required less money and is easy to start. 4- There is less risk of loss to the factory adopting this type of production. 5- Because of flexibility, there is no chance of failure of factory due to the reduction of demand. Disadvantages: 1- There is no scope of commercial economy.  2- As the purchase of raw materials is in less quantity, hence cost of raw materials is slightly more. 3- For handling different type of jobs, only skilled and intelligent workers are needed, thus labour cost increases. (b)Batch production : This type of production is generally adopted in medium size enterprises. Batch production is a stage in between Job production and Mass production. Batch production is bigger in scale than the Job production while it is smaller than that of Mass production. Batch production required more machines than that of Job production and less machines than that of Mass production. As in this type of production, two or more types of products are manufactured in lots (i.e. batches) at regular interval, therefore this is known as Batch production. Most of the engineering concerns are adopting Batch production. Advantages: 1- While comparing with mass production it requires less capital. 2- If demand for one product decreases then production for another may be increased, thus the risk of loss is very less. 3- Comparing with job production, it is more advantageous commercially. Disadvantages: 1- Comparing with mass production, cost of sales and advertisement per unit is more. 2- Raw materials to be purchased are in less quantity than in mass production. Therefore, it is slightly costlier than of mass production. (c) Mass production : This type of production is a larger scale production and is a continuous production. In job production, factory works only when orders are received and when orders are not received for some time then for that period work may come to a standstill. But mass production is a continuous production and it does not have any non-producing time. In this method with the use of automatic machines, articles automatically move forward from one stage to the next stage of manufacturing operation. In mass production, simplification and standardization of products are made. In this type of production, different machines are assigned a definite nature of work. Throughout the run of the plant, only one type of product can be manufactured. Advantages: 1- Mass production gives better quality and increased production. 2- Wastage is much minimum. 3- As raw materials are purchased on a large scale, higher margin of profits are available, while purchasing them. 4- Sales promotion and advertising do not prove to be costly as their expenses are spread over thousands of articles produced, hence cost per unit is low. 5- Only few skilled and rest semi-skilled workers are required hence labour cost is reduced. Disadvantages: 1- During the period of less demand heavy losses on the invested capital may take place. 2- Because of all the machines used are one purpose machines therefore, this type of production is not changeable to other type of production. 3- Most of the workers handle only particular operation. They may get skill in their job but after sometime they feel bored with the repetition of same type of work. 4- As this type of production is on large scale, consequently it cannot fulfill individual taste. It produces things of standardized from which are demanded on a large scale. (d)Process production : In this type of production, the plant and its equipment and layout have been primarily designed to manufacture the desired product. Examples of such production are automobiles, chemical plants, fertilizer ‫ﺱﻡﺩﺓ‬.‫ ﺍ‬plants etc. Unlike other production systems, switch over to other product is very difficult and costly affair especially when special. Industrial or production management Production management is a branch of general management which is concerned with production activities. Operation management can be defined as the management of the conversation process, which converts land, labour, capital, and management inputs into desired outputs of goods and services.  (a) Process production : In this type of production, the plant and its equipment and layout have been primarily designed to manufacture the desired product. Examples of such production are automobiles, chemical plants, fertilizer ‫ﺱﻡﺫﺓ‬.‫ ﺍ‬plants etc. Unlike other production systems, switch over to other product is very difficult and costly affair especially when special. Industrial or production management Production management is a branch of general management which is concerned with production activities. Operation management can be defined as the management of the conversation process, which converts land, labour, capital, and management inputs into desired outputs of goods and services. Scope of production management 1. Relating to designing of production system: these activities concern the production engineering, and include design and development of tools and installation of equipment, and selection and optimization of the size of the firm. Selection of plant location, plant layout, materials handling systems are functions of production engineering. The problems of human factor, and research and development are also considered. 2. Relating to analysis and control of production operation: these activities include production planning, production control. Production control activities are looked after at three levels: control of inventory, control of flow of materials, and control of work -in- progress. Other controls to be looked into are quality control, cost control and labour control. Value added process ‫ﻉﻡﻝﻱﺓﺍﻝﻕﻱﻡﻭﺍﻝﻡﺽﺍﻑﻭ‬ All operations add value to the object thereby enhancing its usefulness. In view of this, we can define an operation as "the process of changing inputs into outputs and thereby adding value to some entity". Systems approach to production management A system can be defined as an orderly arrangement of components like, men, materials, money, machine and environment that are inter-related and act and interact with one another to perform task or function in a particular environment. A system is composed of elements or sub-systems that are related and dependent upon each other. A systems approach is a systematic and organized approach to get the task accomplished more efficiently, effectively and economically. A system can be considered as a structure of sub-system, each having the following characteristics: (a) Inputs (b) Transformation( conversation) process (c) Output (d) Feed back. FIG-3 Conceptual ‫ﺥﻱﺍﻝﻱﺕﺹﻭﺭ‬model of production management A systems model of the organization has several sub-systems as shown in the below figure. Any business organization has finance, marketing, accounting, personnel, engineering, purchasing, and distribution systems besides operations system. All these systems are interrelated to one another in many ways.  Fig -4 A systems view of a business organization indicating its sub-systems Production Competitiveness ‫ﻑﺱﻱﻭ‬ ‫ﺕﻥﺍ‬ ‫ﺍﻝﻕﺩﺭﻩ ﺍﻝ‬ in function In order to compete in the global market, there are four dimensions of competitiveness that measure the effectiveness of the production function. These four dimensions are: 1. Cost 2. Quality 3. Dependability as a supplier ‫ﺍالﻉﺥﻡﺍﺩﻱﻩ ﻙ ﻡﻡﻯﻥ‬ 4. Flexibility 1-Cost :-Price is an important weapon used in the competitive market place. Profitability is also related to the difference between price and cost. Therefore, in order to compete on the basis of price, operations function must be capable of producing at low cost 2-Quality :-Due to Japanese concept of quality and dominance of Japanese market in consumer electronics, automobiles, steel, machine tools etc., more attention is being paid now-a-days on quality. 3- Dependability as a supplier Dependability of supply of off-the-shelf availability is considered as a strong favorable point in competitive market for an organization. Customers, sometimes, may compromise on cost or quality in order to get on –time delivery when they need it.  4- Flexibility A firm must be flexible enough to meet customers' needs. Customers needs may be about service, change in specifications, change in delivery schedule etc. Productivity "Productivity" is nothing but the reduction in wastage of resources. The resources may be men, machines, material, power, time and building space etc. It may also be defined as human Endeavour (Effort) to produce more and more with less and less inputs of resources as a result of which the benefits of production may be distributed more equally among maximum number of people Difference between Production and Productivity Sometimes, there arises confusion between production and productivity. It is, therefore, necessary to differentiate them, so that there may not be any confusion. "Production" of any commodity or service is the volume of output irrespective of the quantity or quality of resources employed to achieve that level of output. Once we put in it element of efficiency with which the resources are employed, we enter the area of productivity Qualities of good industrial management A good industrial management is that which can steer through different problems and is capable of achieving its fixed targets. Some of the important qualities of the management are: 1- Collection and analysis of data. It should go on collecting the data about the products, its manufacturing including trends of sales, availability of raw materials etc. 2- Proper research. It should have properly equipped research wing. 3- Not too-rigid. Management should always be prepared to review its decisions. 4- Not too much centralization. As far as possible management should avoid over centralization. 5- Division of labour. The management should be in a position to properly divide the available man-power in such a way that there is no wastage or there is no over-lapping.  6- No wastage. Good management is expected to avoid wastage as far as possible, whether it may be human resource or material. It should see that money is spent in such a way that maximum profits are available to the industry. 7- Proper control. Good management is supposed to exercise discipline and controls over employees and over –expenditure. 8- Stress on training. Management should ensure that the employees at all the levels got refresher and in service training to keep their knowledge up to date. 9- Contacts with the employees. Employees are the life and blood of an organization. Hence management should have both formal and informal contacts with the employees. 10- Clear targets. Management must have clear and realistic planning. It must also know about its target and the way how it is to be achieved. 11- Association of employees. Management must associate with the workers while making the policy for the industry. 12- Providing incentives and initiatives. If management fails to provide incentive, initiative and adequate wages to its employees, it is bound to be miserable failure. Functions of industrial production management FIG-5 Functions of industrial production management Major functions covered in the production management system are as follows: A- Planning :- Planning is the main function of management. All other functions follow the planning function. (a) Designing conversion systems.  - Operations strategy - Forecasting - Product and process selection - Capacity planning - Facility location planning - Layout planning (b) Scheduling conversion systems - Scheduling systems - Aggregate planning - Operations scheduling Planning Identifying and selecting appropriate goals and courses of action for an organization.  The planning function determines how effective and efficient the organization is and determines the strategy of the organization. Three Steps in the Planning Process:  Deciding which goals to pursue. ‫ﻱﻕﻩﺍ‬ ‫ﺡﺱﻉﻯﻝﺥﺡﻕ‬ ‫ﺍﻝﺏ ﺝﻑﻱﻩﺍ ﺃﻩﺫﺍﻑ‬.  Deciding what courses of action to adopt. ‫ﺍﺡﺥﺍﺭﻕﺭﺍﺭﺏﺵﺃﻥ ﻡﺍ ﻡﺱﺍﺭﺍﺙﺍﻝﻉﻡﻝ‬ ‫ﻉﻝﻯﺡﺏﻥﻱ‬.  Deciding how to allocate resources. ‫ﻱﺕﺡﺥﺹﻱﺹﺍﻝﻡﻯﺍﺭﺩ‬ ‫ﺡﺡﺫﻱﺫﻱﻙﻑ‬ Advantages of planning Following are some of the main advantages of proper planning: -planning gives direction. -planning helps to offset change and uncertainty. -planning helps in economic operation. -planning focuses attention on important activities in order to fulfill its objectives‫ﻑﻩ‬ ‫ﻕﻱﻕ ﺃﻩﺫﺍ‬ ‫ﺡﺡ‬. -planning helps in control. -planning helps in growth. B- Organization:- Organizing is an important function of management by which it combines the human power with other resources to give desired output The process of organization is a managerial function of organizing, and Involves determination of objectives, deciding various activities, grouping of activities, assignment of responsibilities, delegation of authority, providing facilities and proper environment. Organization is an identifiable group of people contribute their efforts towards the attainment of goals. Characteristics of a good organization 1- Purposeful i.e. to accomplish an objective. 2- Boundaries and limitations. Limits imposed by resources and environment. 3- Interdisciplinary 4- Empirical i.e. based on real world observations and interactions. 5- Make use of information. 6- Decision oriented. 7- Feedback oriented. 8- Responsive and learning oriented. 9- Adaptive. Organizational Structure  A formal system of task and reporting relationships that coordinates and motivates organizational members.  Creating organizational structure: Grouping employees into departments according to the tasks performed. Laying out lines of authority and responsibility for organizational members. C- Leading 1- Staffing For a new enterprise, staffing function is followed by planning and organizing functions. Staffing function comprises, the activities essential to manage and keep manned the positions created by the organization structure 2- Directing is a function which includes all those activities which are designed to encourage subordinates ‫ﺍﻝﻡﺭﺅﻭﺱﻱ ﻩ‬to work effectively both in short and long run.  Articulating a clear vision to follow, and energizing and enabling organizational members so they understand the part they play in attaining organizational goals.  Leadership involves using power, influence, vision, persuasion, and communication skills.  The outcome of leadership is highly motivated and committed organizational members. D- Controlling Controlling is a continuous process of measuring actual results in relation to those planned. Controlling can also be defined as that managerial activity whereby the manager compares actual performance against the planned one, fined out the deviation, and take corrective actions. Controlling function of the management has following four main elements: (i) Establishing standards of performance. (ii) Measuring current performance. (iii) Comparing performance with the established standards. (iv) Taking corrective action, if any deviation is detected. Evaluating how well an organization is achieving its goals and taking action to maintain or improve performance.  Monitoring individuals, departments, and the organization to determine if desired performance standards have been reached.  Taking action to increase performance as required. The outcome of control is the ability to measure performance accurately and to regulate the organization for efficiency and effectiveness