Thursday, February 16, 2012
Principles of System Efficiency Engineering
Difference between Performance Engineering (Effectiveness Engineering) and Value Engineering (Efficiency Engineering)
L.D. Miles brought out this difference more clearly. Designing a product to given specification and getting a prototype made that is acceptable to customers is a demanding task. This is performance engineering. Redesigning this working prototype to manufacture it at the lowest cost without sacrificing any feature that the customer desires is value engineering (efficiency engineering). These two activities can be better performed as two separate activities and this will give better results. As Adam Smith noted, division of labor improves productivity. Industrial engineering is efficiency engineering while traditional engineering disciplines are effective engineering disciplines.
In particular economic growth, to be interpreted as growth in per capita income, has to be reconducted to two factors: labor productivity and the proportion of productive to unproductive workers. Labor productivity, which is considered the most important of the two, essentially depends on the division of labor which: a) improves the dexterity of the worker; b) allows the worker to save the time necessary to switch among di¤erent activities; c) puts the worker in the condition of inventing machines to facilitate his job.
Principles of Efficiency - Harrington Emerson
Harrington Emerson contributed to the systems efficiency focus of industrial engineering. His book Twelve Principles of Efficiency was classic.
He discussed efficiency design of organization through 12 principles
1. Clearly defined ideals.
2. Common sense
3. Competent counsel
5. The fair deal
6. Reliable, immediate and adequate records
8. Standards and schedules
9. Standardized conditions
10. Standardized operations
11. Written standard-practice instructions
In On the Economy of Machine and Manufacture, Babbage described what is now called the Babbage principle, which identified advantages with division of labour. Babbage noted that highly skilled—and thus generally highly paid—workers spend parts of their job performing tasks that are "below" their skill level. If the labour process can be divided among several workers, it is possible to assign only high-skill tasks to high-skill and -cost workers and leave other working tasks to less-skilled and paid workers, thereby cutting labour costs. (page 137-138).
Role of Efficiency
Producers exist to convert inputs into desired goods and services in an efficient manner. Given that output prices and factor prices are determined in competitive markets, efficiency means exploiting existing production technology to the greatest extent possible. Profits earned by the entrepreneur represent the reward for taking risks (facing an uncertain demand for the output) and achieving efficiency in production (relative to competing producers) -- profits that are least equal to what the entrepreneur could earn by working for someone else.
Principle of suboptimization
PRINCIPLE OF SUBOPTIMIZATION
Optimizing each subsystem independently will not in general lead to a system optimum, or more strongly, improvement of a particular subsystem may actually worsen the overall system. The principle of suboptimization provides the basis for a link between organizational structure and the policies adopted.
The well-being of an element is dependent on the well-being of the system of which it is a part. It is sometimes necessary for an element to limit its goals and actions in order to preserve the well-being of the system. In acting to achieve its goals one element may come to constrain the actions of another element to the point of serious injury to the other element.
( http://pespmc1.vub.ac.be/ASC/PRINCI_SUBOP.html )
Marginal Productivity Theory
Resources are employed till their marginal productivities are equal for the addition unit of payment for optimizing the resources employed in the production.
On the Economy of Machinery and Manufactures http://books.google.co.in/books?id=4QWZq4FDoH4C
Only preview available
Division of Labor and Economic Growth: From Adam Smith to Paul Romer and Beyond
The optimization principles - role of efficiency - http://www.digitaleconomist.org/optimization.html
System Efficiency Engineering - Bibliography