Tuesday, July 12, 2016

Principles of Industrial Engineering - Centenary Year

The book, Principles of Industrial Engineering, by Charles Buxton Going was published in the year 1911. 2010-11 is its centenary year. Industrial engineers can read this book now in http://www.archive.org/details/principlesofindu00goinrich.

In the first chapter Going explained the work of industrial engineers in a very clear and vivid manner. Every industrial engineering student is to be advised to read this chapter. The chapter is given below. (Summary of the chapter is available in  What is industrial engineering? Going's Answer in 1911  )

This book has survived long enough for the copyright to expire and the book 
to enter  the public domain.  A public domain book is one that was never subject 
to copyright or whose legal copyright term has expired. 

CHAPTER I 

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THE ORIGIN OF THE INDUSTRIAL SYSTEM 

INDUSTRIAL engineering is the formulated science of management. 
It directs the efficient conduct of manufacturing, construction, transportation, or even 
commercial enterprises of any undertaking, indeed, in which human labor is directed to 
accomplishing any kind of work. It is of very recent origin. 

Indeed, it is only just emerging from the formative period has only just crystallized, so to
speak,from the solution in which its elements have been combining during the past one or
two decades. The conditions that have brought into being this new applied science, this
new branch of engineering, grew out witnessed in other fields of human effort when some
great change, internal or external, forced them from a position of very minor importance
into that of a of the rise and enormous expansion of the manufacturing system. This
phenomenon of the evolution of a new applied science is like those that have been major
service to civilization. Columbus could blow across the ocean in a caravel to an unknown
landfall; but before a regular packet service could be its own, by which new practitioners
can be trained, by which certainty, safety run between New York and Liverpool navigation
must be made a science.
It has drawn upon older, purer sciences for its fundamental data upon astronomy, meteorology
and hydrography, and later upon marine steam engineering and electricity; but out of all 
these it has fused a distinct body of science of and efficiency of performance may be 
substantially assured. 

Navigation is not merely making correct observation of the sun and stars, of lights and
beacons, of log and lead; it is not merely directing the propelling and steering machinery;
it is not merely knowledge of courses and distances; it is not merely storm strategy. It is
the co-ordination of all these in handling the equipment provided by the marine engineer and
naval architect, through the work of a crew of men.
In somewhat like manner, industrial engineering has drawn upon mechanical engineering, upon
economics, sociology, psychology, philosophy, accountancy, to fuse from these older sciences 
a distinct body of science of its own. It does not consist merely in the financial or 
commercial direction, nor merely in running the power-plant or machinery, nor merely in 
devising processes or methods. It consists in co-ordinating all these things, and others, in 
the direction of the work of operatives, using the equipment provided by the engineer, 
machinery builder, and architect. 

The cycle of operations which the industrial engineer directs is this: Money is converted 
into raw materials and operations of purchase, manufacture, sale, and the administration 
connected with each. labor; raw materials and labor are converted into finished product or 
services of some kind; finished product, or service, is converted back into money. The 
difference between the first money and the last money is (in a very broad sense) the gross 
profit of the operation. Part of this is absorbed in the intervening conversions

Now the starting level (that is, the cost of raw materials and labor) and the final level
(the price obtainable for finished product) these two levels are generally fixed by
competition and market conditions, as surely and as definitely as the differences in level
between intake and tail race are fixed in a water power. Hence our profit, like the energy
conversions between these levels. In the hydroelectric delivered at the bus bars, varies not
only with the volume passing from level, to level, but with the efficiency of the losses are
commercial, manufacturing, administrative. It is power-plant, the conversion losses are
hydraulic, mechanical and electrical. In any industrial enterprise the conversion many
mechanical engineers superintending special depart- with the efficiency of these latter
conversions that industrial engineering is concerned.
The industrial engineer may have in his organization staff cient and economical production.
He is concerned not only ments  design or construction, or the power-plant, for in- 
stance  while his own duty is to co-ordinate all these factors, and many more, for the one 
great, central purpose of effi- is the inclusion of the economic and the human elements es- 
with the direction of the great sources of power in nature, but with the direction of these 
forces as exerted by machinery, working upon materials, and operated by men. It 
pecially that differentiates industrial engineering from the agement of men and the 
definition and direction of policies older established branches of the profession. To put it 
in another way : The work of the industrial engineer not only covers technical counsel and 
superintendence of the technical elements of large enterprises, but extends also over the 
man- is analytical  we might almost call it passive to distinguish in fields that the 
financial or commercial man has always considered exclusively his own. 

In general, the work of the industrial engineer, or, to use a yet more inclusive term which 
is coming into general use, the efficiency engineer, has two phases. The first of these in a 
form that increases our useful working knowledge of it from the second phase, which is 
synthetic, creative, and most emphatically active. The analytical phase of industrial or 
efficiency engineering deals merely with the things that already exist. It examines into 
facts and conditions, dissects them, analyzes them, weighs them, and shows them are normal. 
To this sort of work Harrington Emerson ap- the industry with which we have to deal. To this province 
of industrial engineering belong the collection and tabulation of statistics about a business,
the accurate determination and analysis of costs, and the comparison of these costs with 
established standards so as to determine whether or not they systematic inquiry into the 
means and methods used for replies the term ** assays," speaking of labor assays, expense 
assays, etc., and maintaining (with good reason) that the expert efficiency engineer can make determinations of this 
sort as accurately, and compare them with standards as intelligently, as an assayer can 
separate and weigh the metal in an ore. To this province belong also such matters as 
total result are often made surprisingly and effectively man-
ceiving, handling, and issuing materials, routing and transporting these materials in process
of manufacture, the general arrangement of the plant, and the effect of this arrangement upon
economy of operation. To this province belongs, also, the reduction of these data and other 
data to graphic form, by which their influence and bearing upon 
ifest. It is wonderful how much new knowledge a man The great purpose and value, indeed, of 
these analytical may gain about even a business with which he thinks he is thoroughly 
familiar by plotting various sorts of data on charts where, say, the movement of materials 
back and forth, or the rise of costs under certain conditions, are translated immediately 
into visible lines instead of being put into the indirect and rather unimpressive form of 
long descriptions or tabular columns of figures. 




creative and synthetic phase, goes on from this point and functions of industrial engineering
is that they visualize the operations of the business and enable us to pick out the weak
spots and the bad spots so that we can apply the right remedies and apply them where they are needed. They make us apprehend the presence and the relative importance of elements which would otherwise
remain lost in the mass, undetected by our unaided senses. 

The second phase of industrial engineering the active, 
ufacture; the correction of inefficiencies, whether of power, effects improvements, devises
new methods and processes, introduces economies, develops new ideas. Instead of
merely telling us what we have been doing or what we are doing, it makes us do the same thing
more economically or shows us how to do a new thing that is better than the old. 
To this part of works management belongs, for example, the rearrangement of manufacturing 
plants, of departments, or of operations so as to simplify the process of man- 
requires that he shall have technical knowledge and scien- transmission, equipment or labor;
the invention and application of new policies in management which make the ideals
and purposes of the head operate more directly upon the conduct of the hands; the devising
of new wage systems by which, for example, stimulus of individual reward proportioned to 
output makes the individual employee more productive. 

The exercise of these functions, whether analytical or creative, by the industrial engineer 
or the efficiency engineer, 
It deals with materials, but not so much with their me
tific training, but in somewhat different form from the equipment of the mechanical engineer
and somewhat differently exercised.
Industrial engineering deals with machinery; but not so much with its design, construction,
or abstract economy, which are strictly mechanical considerations, as with selection, 
arrangement, installation, operation and maintenance, and the influence which each of these 
points or all of them together may exert upon the total cost of the product which 
that machinery turns out. 

in progress and visualizing the result so that the manager
chanical and physical constants, which are strictly technical considerations, as with their
proper selection, their standardization, their custody, transportation, and manipulation.
It deals very largely with methods ; but the methods with which it is particularly concerned
are methods of performing work; methods of securing high efliciency in the output of 
machinery and of men; methods of handling materials, and establishing the exact connection 
between each unit handled and the cost of handling; methods of keeping track of work 
their most effective work.
of the works may have a controlling view of everything that is going on; methods of recording
 times and costs so that the efficiency of the performance may be compared with known 
standards; methods of detecting causes of low efficiency or poor economy and applying the 
necessary remedies. 

It deals with management that is, with the executive and administrative direction of the 
whole dynamic organization, including machinery, equipment and men. 

It deals with men themselves and with the influences which stimulate their ambition, enlist 
their co-operation and insure 

chanical engineer, the electrical engineer, the mining en-
It deals with markets, with the economic principles or laws affecting them and the mode of
creating, enlarging, or controlling them. 

The most important elements of industrial engineering are summed up in this alliterative list
 machinery, materials, methods, management, men and markets. And these six elements are 
interpreted and construed by the aid of another factor whose name also begins with  Money. 
Money supplies the gauge and the limit by which the other 
 

factors are all measured and adjusted. This of course is true not alone of industrial 
engineering; the civil engineer, the mechanical engineer being retained to carry out some 
piece of 
gineer, each and all must normally be expected to make money for his employer or client. One 
of the simplest principles of the profession, but one which the mere technician sometimes 
finds it hardest to keep in mind, is that the primary purpose for which the engineer is 
usually engaged is to direct the employment of capital so that it may pay back 
dividends to its owners. And while this is generally true of all engineering employment, it 
is most particularly, con- 
tinuously and everlastingly true of works management. It is much easier to conceive of the 
civil engineer or the me- 
work in which scientific accuracy is demanded regardless of the $75 cost with some actual 
item of material, labor, or cost, than it is to conceive of a shop superintendent being 
directed or even permitted to manufacture a line of product regardless of cost. 

It is the ever-present duty of the industrial engineer, of the efficiency engineer, to study 
constantly, and to study constantly harder and harder, the question of equivalency between 
the dollars spent and the things secured. It is not sufficient, for example, for him to know 
that a machine sold for $100 costs $75 to make. This may be a very good 
profit and the machine itself may be an excellent one. There may be vouchers honestly 
connecting every cent of expense. Nevertheless, the industrial engineer must con- 
dustrial engineer is tt) determine with the utmost possible stantly look back of these
figures to see whether by some change of machinery, some modification of materials, some
alteration of methods, some higher skill in management, some stimulus to the men, he can
make the machine cost less than $75 for its manufacture, or can make it a better ma- 
chine for the same cost, or perhaps can do both. 

In short, the industrial engineer is under unending and unremitting pressure to secure a true
 proportion between what he spends and what he gets. And the proportion is never true so 
long as the smallest opportunity remains for getting more in return for what he spends, or 
for spending less in payment for what he gets. The function of the in- 
afterward, as they were under the older order. If you con-
wisdom and insight whether and where any disproportion between expenditure and return exists,
 to find the amount of the disproportion, the causes of such disproportion, and to 
apply effective remedies. 

The forces causing this pressure for the reduction of cost are principally two. The older 
and cruder is competition. The later and larger, which in itself carries the answer to 
competition, is the effort toward efficiency. 

Competition was not created by the manufacturing system. It existed from the foundation of 
the world. But it took on a new meaning and new activity when the things began to be made 
first and sold after (as they are under the manufacturing system) instead of being sold first
 and made 
he can only compare the thing which has been made with what
tract to buy something which is not yet in existence a bridge, a house, a suit of clothes, or
 what not the bargain is largely a matter of estimate, often, indeed, a matter of guess work,
 on both sides. You have to strike a mental balance between the several alternatives 
presented and compare in your mind net results of cost, design, quality, certainty and 
promptness of delivery, personality, credit, and perhaps many other things, some of them 
intangible, and some only to be proved by the outcome. The proposition that seems 
most attractive is closed; the competing ones are never carried out at all. The buyer never 
can tell with absolute certainty whether or not he got the best value for his money; 
the ability to reduce costs become fundamental. Competi-
he thinks the other things would have been if they had been made. The seller does not know
until everything is over whether or not he made a profit, or how much. But when you sell 
things already made, like lathes or high-speed engines or dynamos, off the sales-room floor, 
the prospective buyer can make the most absolute and intimate comparison between the things 
and their prices. He can compare Brown & Sharpe with Lodge & Shipley, Harrisburg with 
the Ball engine, Westlnghouse with Crocker- Wheeler. He can compare accurately design, 
quality, cost before a word or a dollar passes. The necessity for offering the best goods 
for the least money and yet making a fair profit becomes vital and insistent, and so the 
knowledge of actual costs and secured among producer, consumer, and employee. Effi- 

tion has therefore been in one way a tremendous force for economy in manufacturing. And yet, 
by a paradox, in another way competition has been one of the great sources of waste, by 
causing duplication of plant, of organization, of equipment, of sales effort, and of 
middle-men — none of which may have any better reason for existence than some- 
one's desire to share in tempting-looking profits, but all of which must be paid by the 
consumer — all of which become a burden on society at large. 

The new and ethically fine ideal, therefore, is efficiency the reduction of costs and the 
elimination of waste for the primary purpose of doing the thing as well as it can 
be done, and the distribution of the increased profits thus 
ciency is a concept as much finer than competition as crea- 
inefficient and develop the efficient, thus producing a nation
tion, conservation, is finer than warfare. It is a philosophy an interpretation of the relations of things that may be applied not only to industry but to all life. Let me quote a few sentences from Harrington
 Emerson's ** Efficiency as a Basis for Operation and Wages " : 

** If we could eliminate all the wastes due to evil, all men would be good; if we could 
eliminate all the wastes due to ignorance, all men would have the benefit of supreme wisdom; 
if wc could eliminate all the wastes due to laziness and misdirected efforts, all men would 
be reasonably and health- fully industrious. It is not impossible that through efficiency 
standards, with efficiency rewards and penalties, we could in the course of a few generations
 crowd off the sphere the of men good, wise and industrious, thus giving to God what 
is His, to Caesar what is his, and to the individual what is shall see particularly something
 that it is of the utmost im- 

his. The attainable standard becomes very high, the attainment itself becomes very high. . . 

" Efficiency is to be attained not by individual striving, but solely by establishing, from 
all the accumulated and available wisdom of the world, staff-knowledge standards 
for each act by carrying staff standards into effect through directing line organization, 
through rewards for individual excellence; persuading the individual to accept staff stand- 
ards, to accept line direction and control, and under this double guidance to do his own 
uttermost bpst." 

Efficiency, then, and in consequence industrial engineering, which is the prosecution of 
efficiency in manufacturing, involves much more than mere technical considerations or 
technical knowledge. If we consider the way in which the manufacturing system came into 
existence, we can quite easily and clearly discover its most important elements; wc 
practical achievement must always be interwoven with the*
portance for us to understand, and that is that it did not originate in technical advances
alone, and it has never depended upon technical advances alone, but it has been in- 
fluenced at least in equal and perhaps in larger proportion by economic or commercial 
conditions, and by another set of factors which are psychological that is, which have to 
do with the thoughts and purposes and emotions of men. 

The point is very important, because true and stable in- 
dustrial progress, whether for the individual, the manufac- 
turing plant or corporation, or the nation at large, depends
upon a wise co-ordination and balance between technical, 
commercial, and human considerations. It is frequently 
necessary in addressing a commercial audience to empha- 
size the importance of the technical element. Before a 
technical audience, on the other hand, emphasis must often 
be laid on the commercial and psychological factors that in 
had been perfected to a point of practical service.
technical factor. Every great industrial organization and every great step in industrial progress to-day includes all three elements, but they will perhaps appear more distinct if we look at the origin and source of the manufacturing sys- tem, out of which this new science of industry has sprung. The origin of the manufacturing system was clearly enough the introduction of a group of inventions that came in close sequence about the end of the eighteenth century and be- ginning of the nineteenth. These were the steam engine, mechanical spinning and weaving machinery, the steamboat, the locomotive, and the machine-tool. It is commonly as- sumed that the great cause of the entire movement was Watt's improvement of the steam engine — that the indus- trial era which began a little more than a century ago was, so to speak, waiting in suspense, in the hush of things un- born, ready to leap into being as soon as the prime mover
ways had something near the quality and quantity of en-
This view seems to be incomplete. The steam engine had been discovered, forgotten, and rediscovered, it would be difficult to say how often, from the time of Hero or earlier down to the time of Watt — forgotten and ignored because the world had no use for it ; the economic conditions were not ripe for it. If there had been the same demand for power to pump the mines in England, the same demand for machinery in the textile industries of England, the same need for better vehicles to transport commercial products by land and by sea, in the time of Papin or the Marquis of Worcester that there was in the time of Watt, I think it is quite conceivable that the inventions which made Watt fa- mous would have come a full century earlier, and his genius would have been exerted upon a later stage of the problem, as the genius of Willans and Corliss and Parsons and Curtis has been within the period of our own lives. I am strongly inclined to believe that the world has al-
success depends upon commercial opportunity. There must
gineering talent it has been able to use. When civilization was dependent chiefly upon roads, aqueducts, bridges and buildings, it got them. We have never done some of these things better, technically speaking, than the Assyrians, or the Romans, or the architects of the great cathedrals of the middle ages; some, indeed, we perhaps never shall do again as well. Newcomen, Watt, Arkwright, Stephenson, Besse- mer, applied genius to a new sort of opportunity, rather than embodied in themselves a new order of genius. They may indeed have been greater than other workers who preceded them, but the more important element in their success is that the world was at last ready and waiting as it never had been before for the peculiar product of genius they had to offer. This readiness that opened the door to their success was due to economic or commercial conditions, not merely to the technical invention. In its larger relations, then, technical be a potential market. Bessemer steel could not have found
mercial factor. There must be a potential market; but it
any welcome in the Stone Age. The typewriter would not have succeeded in the dark ages when no one but a few clerics could read and write. Savages who traded cocoa- nuts for beads and brass wire could afford no encouragement to the manufacturer of the cash register or the adding ma- chine. It was not because of thermodynamic inefficiency that Hero's engine failed of adoption. On the other hand, when the world was ready for steam power it accepted very gladly to begin with a very crude machine, and technical im- provement went step by step with larger practical utilization, sometimes leading and sometimes following. There must, then, be a potential market or application, or advance in the applied sciences will be limited. This is an axiom to be placed alongside of another — that there must be scientific study and research, or industries based upon the applica- tions of science will stagnate and remain at a low stage of efficiency. The second factor in industrial progress, then, is the com-
shown us that in many cases there is no such thing as a fixed
does not follow from this that technical progress is wholly subordinate to economic conditions. The inventor or the engineer is not of necessity merely a follower of progress in commerce or industry. Many of the great* advances in ap- plied science, or in branches of industrial achievement per- haps too lowly to be called applied science, have been made by man who foresaw not only technical possibilities but commercial possibilities — who undertook not only to per- fect the invention but to show the world the advantage of using it. I think this was substantially the case with wire- less telegraphy, with the cash register and typewriter. No- body had demanded these things because nobody had thought of them, and the productive act in each instance included not only technical insight into the possibilities of doing the thing, but human insight into the fact that people would ap- preciate these things and use them if they could be furnished at or below a certain cost. Modern industrial methods have
cian. This would not have been because the extraordinary
demand beyond which supply can not be absorbed, but that demand is a function of cost of production. There may be no demand at all for an article costing a dollar, but an al- most unlimited demand for the same article if it can be sold at five cents. A large part of the work of the production engineer lies in the creation of methods by which the cost of production is decreased and the volume of production is thereby increased, with advantages to both the producer and the consumer. In all these cases you see that technical achievement, technical success, is closely
interlocked with industrial or economic conditions, and with the understanding and control of
industrial or economic influences and forces. 

The third factor in industrial progress is the psychological factor — the element 
contributed by the mental attitude, emotions, or passions of men. I might suggest its 
possible importance by reminding you that there were centuries in which the inventor of the 
steam engine, far from being rewarded, would have been burned at the stake as a magi- 
ficient to energize an industrial movement. In the case of
character of the achievement was unrecognized, but because its nature was misinterpreted.
That particular form of expressing intellectual dissent has gone out of date. We are 
much more civilized now, and nineteenth- or twentieth-century inventors who are far ahead of 
their times are no longer burned; they are merely allowed to starve to death; while 
those who are timely, but not commercially shrewd, are usually swindled by some promoter, who
 in turn is frozen out by a trust. In any case, you see, the simple technician gets 
the worst of it industrially, not because his physical science is weak, but because his 
commercial and mental shrewdness is not correspondingly developed. 

Taking a larger view of it, we shall see that almost every important advance in engineering 
progress is made only after a period of pause, an interval following proof of the tech- 
nical achievement, following even demonstration of its commercial economy. We might call this
 the psychological lag the time necessary for the growth of human faith suf- 
the electric railway, or the motor vehicle, for example, this this psychological or human 
element is of immense, even 

lag was measured by years. Bessemer could not convince 
the ironmasters of England, and had to build his own plant. 
Westinghouse, having gained after much difficulty an audi- 
ence with the greatest railroad manager of that day, was 
told that this practical railroad man had no time to waste 
on a damn fool who expected to stop railroad trains with 
wind. The matter deserves emphasis because it is almost 
certain to enter into the individual experience of every man. 
You will have to make someone believe you, and believe in 
you, before you can get anywhere or do anything. When a 
technical man has a proposition to put before an individual, 
or a group of individuals, or society at large, he is very 
likely to think that scientific demonstration of its technical 
soundness ought to be convincing. You will find, however, 
that men at large will substantially ignore scientific proof, 
and that you must add to it, second, proof of the commer- 
cial or economic argument, and third, that psychological 
force which convinces not the reason, but the emotions. In 
all industrial engineering, which involves dealing with men, 
trial activities go badly wrong in their philosophy, and get
controlling importance. The principles of the science are absolute, scientific, eternal. But methods, when we are dealing with men, must recognize the personal equation (which is psychologic) or failure will follow. The differ- ences between the several philosophies of works management as expressed in the wage systems which we are going to con- sider later are psychological. Success in handling men and women, which is one of the most important parts of the work of the industrial engineer, is founded on knowledge of human nature, which is psychology. The great industrial movement, then, with which we have to do is triune in its nature, the
three chief elements being the technical or scientific, the economic or commercial, and 
the psychological or human. They seldom respond at equal rates to the impetus of advance. 
Sometimes the technician pushes so far ahead that the world loses touch with what he 
is doing and his work lies long unused until civilization catches up; sometimes the 
commercial tendency is unduly aggressive, and discourages or impedes real scientific achieve- 
ment; very often the men most concerned with the indus- 
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disastrously false notions as to what makes for real progress and real welfare. More
difficulties, perhaps, come from this cause than from any other. 

To the technical man, it is an ever-present duty to keep in view absolute ideals, to seek 
every chance for their advancement, and to mould conditions and men so as to obtain con- 
stantly nearer approach to these ideals; but in doing this he must never forget to attach 
full weight to economic conditions, and he must never allow himself to ignore human nature. 

 
Footnote

1 A systematic presentation of the field of industrial engineering from 
an entirely different point of view and by a very different method will 
be found in " Factory Organization and Administration," by Prof. Hugo 
Diemer; McGraw-Hill Book Co. 


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Updated 15 July 2016,  11 January 2012

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