Friday, March 30, 2012

Management and Industrial Engineering

Industrial Engineering (IE) is a service to management and MBA curriculums must include IE as a subject to appreciate its role in proper management of the organizations.

Management Definition

Management of an organization is the process of establishing objectives and goals of the organization periodically, designing the work system and the organization structure, and maintaining an environment in which individuals, working together in groups, accomplish their aims and objectives and goals of the organization effectively and efficiently (Narayana Rao).

The above definition was developed by me by modifying the definition given by Koontz and O'Donnell.

The definition implies the following.

(i) Management is a process.
(ii) Management applies to every kind of organization, government, profit making, or nonprofit making.
(iii) It applies to managers at all levels in the organization.
(iv) Management is concerned with effectiveness and efficiency.

Effectiveness and efficiency when combined are explained as productivity by Koontz and O'Donnell.
Weihrich and Koontz defined Management and explained it as follows in the tenth edition of their book Management: A Global Perspective (p.4).
"Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently and accomplish selected aims." This definition needs to be expanded:
1. As managers, people carry out the managerial functions of planning, organizing, staffing, leading, and controlling.
2. Management applies to any kind of organization.
3. It applies to managers at all organizational levels.
4. The aim of all managers is the same: to create a surplus.
5. Managing is concerned with productivity; this implies effectiveness and efficiency.

Industrial engineering is a discipline that evolved out of the involvement of engineers in managing engineering departments of enterprises. Frederick Taylor and Frank Gilbreth are pioneers of this branch - which is a hybrid  of engineering and management and  is a service to management.

Narayana Rao defined industrial engineering as: "Industrial Engineering is Human Effort Engineering and System Efficiency Engineering. It is an engineering discipline that deals with the design of human effort and system efficiency in all occupations: agricultural, manufacturing and service. The objectives of Industrial Engineering are optimization of productivity of work-systems and occupational comfort, health, safety and income of persons involved." (  Industrial Engineering )

The statement "Industrial Engineering is Human Effort Engineering and System Efficiency Engineering" appeared in the Industrial Engineer (March 2010 issue), magazine of Institute of Industrial Engineers (IIE), which is the global association of Productivity and Efficiency professionals.

When both the definitions are examined together, one can easily conclude that industrial engineering is a service to management focusing on the efficiency aspect, which is a function of the management. Managers whenever they require a specialist looking after efficiency, in the division of labor based work organization, employ the services of industrial engineers.

Industrial engineering techniques and tools build efficiency into systems. Production management texts do cover some of the techniques of industrial engineering. Design professionals get some inputs in value engineering. A better system would be to introduce a course on industrial engineering in business curriculums so that business school graduates understand the profession and discipline of industrial engineering appropriately and make use of the services of IE departments in various functions of management.


Industrial Engineering
Industrial Engineering - Knols of Narayana Rao K V S S

Original knol - 2utb2lsm2k7a/ 2380

Mechanical Engineering - Production Processes - Revision Topics for Industrial Engineers

1. Foundry

Mould types and methods
Cleaning and cutting
2. Forging

3. Turning

4. Milling


5. Drilling

6. Grinding

7. Welding

8. Joining Processes

9. Assembly Processes
Mechanical Assembly MIT Course Materials
Work station design considerations

10. Dismantling

11. Carpentry

12. Fitting

Machine Tools

1. Lathe
Story of Home Made Lathe
Lathe , Part 23, 4, 56, 7, 8, 9, 10, 11

2. Semiautomatic lathes

3. Automatic lathes

4. Horizontal Milling Machines

5. Vertical Milling Machines

For detailed information and photos of many different makes of various machine tools visit

A big source for all resources on various production processes in various industries

Original knol - 2287

Cloud Computing - Cost Reduction Technology - Adoption Case Studies and News

Microsoft and Google in open war in India in Cloud computing business, 29 March 2012, ET news item

SBI is using Google's services. Indian YouthCongress, India Mart, India Infoline, Flipcart, and Sterlite Technoliges are using Google's servces. Google claimed 200,000 business are using Google's services.

Thursday, March 29, 2012

Industrial Engineering Opportunity in IT Departments - Cloud Computing

Cloud computing is an efficiency improving technology. Industrial engineers have to understand the potential of this technology and advocate its adoption in the organization and thereby reduce cost of providing IT services.

IBM in a white paper claims reduction of 20 to 29% is possible through adopting cloud computing facilities.

Engineering Economics of Cloud Computing

ComputingCloudonomics - A rigorous approach to cloud benefit quantification - Joe Weinman, October 2011, Journal of Software Technology. Joe Weinman is regarded as a top ten cloud experts.

Overview of Cloudonomics - Blog post by Joe Weinman,  April 2011

Wednesday, March 28, 2012

PLIBEL - A Method for Identification of Ergonomic Hazards

PLIBEL - A Method for Identification of Workplace Injury Hazards - Task Hazards
PLIBEL is a questionairre developed by Kristina Kemmlert for identification of musculoskeletal stress factors which may have injurious effects on operators or workmen. The check list examines issues related to five body regions.
1. Neck, shoulders, upper part of the back
2. Elbows, forearms, hands
3. Feet
4. Knees and hips
5. Low back
The questionairre has 17 items with some items having sub-items.
For some more details and references of Kemmlert's articles
For a filled checklist (Table B-6 and Table B-11) along with other types of evaluations for shear Operators)
Original knol - 2utb2lsm2k7a/ 1570

Tuesday, March 27, 2012

Industrial Engineer Magazine Article Summaries by 2010 IE Students NITIE, Mumbai, India

Industrial Engineer Magazine Article Summaries

Please insert your articles in serial order of roll number
8. Summary on "A World Gone Green"
9. Summary on "Red Hot Chili Processing-A case study"
13. Summary on "DUBAI A CLASS OF ITS OWN"
14. Summary on Taking a risk
21  summay:From Tortoise to Eagle:Management  of  change:
27 Summary on "Lightening the Load ".
28 .Telecommunication Fraud :
29. Summary on "Leveraging Supply Chain"
38. Summary on "Final Item Adjustment"
43. Summary on  "Higher Education reinvented"
44.Summary on "Mighty Chain of Management"
45. Summary on "Cross Docking"
52. Summary on "Predicting performance of Complex Systems"
54 Summary  of "losing  our span  of  control"
58. Summary on "Great expectations"
60. Summary on "Automate Purchase-to-Pay"
63 .Summary on "Global Situational Awareness"
69 Summary on "Power Saving Heroes"
71 Summary on "Banking on food and Technology"  (Roll  No  -71 )
74. Summary on "Policy of ages" 
76 . summary on "Toyota’s quality lapse"
90.  Summary on "MAKING GOOD EVEN BETTER" -
manufacturing-works/cy0t975kgh95/5 - roll no-90  SECTION - B PGDIE -४०
94.Summary on "Ergonomics in food processing industry"-
95. Summary on "Statistical concepts associated with Six-Sigma"-
98. Summary on the Taguchi's application in a Multi response optimization -
100. A technology to produce ultra fine grain(UFG) materials-ECAS by Sudhanshu Yadav Roll. No.-100
101.Summary on "Optimal maintenance decisions for asset managers"
108. Biometrics - An Overview Summarised By Suraj Mahapatro Roll No 108 Sec B PGDIE 40 NITIE Mumbai
109. Summary on the article "Photo book guru"- roll no.-109, PGDIE40, Swapnil S Bhure
117.summary on Article"BUILT TO SERVE-Law enforcement vehicle designed with human factors in mind"३
120. summary on"Made with wood,solar cell and food" by sanjay kumar jena,roll no-120

Related Knols

Knol Day of Industrial Engineering  -  Write your comments on it.
Original Knol - Knol Number 2702

Sunday, March 25, 2012

Sales Force Productivity Improvement - An Industrial Engineering Activity

Industrial engineering is human effort engineering and system efficiency engineering. Industrial engineering takes care of efficiency dimension of management in all activities and functions of an organization. Efficiency improvement takes place through employment of latest efficiency improving technologies as well as efficiency improvements brought about by special studies within the organization and efficiency improvement carried out by various managers, supervisors and operators. Industrial engineering is responsible for all these ways of efficiency engineering of an enterprise.

Industrial engineering has a responsibility to help sales and marketing managers to improve the efficient of sales force.

References for Sales Force Productivity  23 February 2012

The New Science of Sales Force Productivity, HBR article - 2006

Increasing Sales Productivity by Making by Getting Salespeople to Work Smarter,
Paper published in Journal of Personal Selling and Sales Management, August 1988

Friday, March 23, 2012

Job and Work Analysis - Brannick, Levine and Morgeson - Book Information and Review

Job and Work Analysis

Methods, Research, and Applications for Human Resource Management Second Edition

Michael T. Brannick University of South Florida
Edward L. Levine University of South Florida
Frederick P. Morgeson Michigan State University, Eli Broad Graduate School of Management
Sage Publications 2007
Table of Contents
1. Introduction
Overview of the Book
The Uses of Job Analysis
Building Blocks of Job Analysis Methods 
A Couple of Job Analysis Projects 
2. Work-Oriented Methods 
Overview of the Chapter 
Time-and-Motion Study 
Functional Job Analysis 
Task Inventories 
Critical Incident Technique 
Chapter Summary 
3. Worker-Oriented Methods 
Overview of the Chapter 
Job Element Method 
Position Analysis Questionnaire 
Other Trait-Based Worker-Oriented Measures 
Cognitive Task Analysis 
Chapter Summary 
4. Hybrid Methods 
Overview of the Chapter 
Combination Job Analysis Method 
Multimethod Job Design Questionnaire 
Occupational Information Network 
Chapter Summary 
5. Management and Teams 
Overview of the Chapter 
Management and Leadership 
Job Analysis for Teams 
Chapter Summary 
6. Job Analysis and the Law 
Overview of the Chapter 
Federal Legislation 
Enforcement of Equal Employment Opportunity Laws 
Executive orders 
Professional Standards 
Prescriptions for Job Analysis 
Chapter Summary 
7. Job Description, Performance Appraisal, Job Evaluation, and Job Design 
Overview of the Chapter 
Job Description 
Performance Appraisal 
Job Evaluation and Compensation 
Job Design/Redesign 
Chapter Summary 
8. Staffing and Training 
Overview of the Chapter 
Chapter Summary 
9. Doing a Job Analysis Study 
Overview of the Chapter 
Matching Purpose and Job Analysis Attributes 
Selecting Approaches 
Observations and Interviews 
Analyzing Data 
A Note About Accuracy in Job Analysis 
Chapter Summary 
10. The Future of Job Analysis 
Overview of the Chapter 
Changing Conditions 
Implications for Jobs and Job Analysis 
Chapter Summary 
A Final Note 
About the Authors
An important book to be browsed by industrial engineers
Original Knol - 2utb2lsm2k7a/ 1842

Thursday, March 22, 2012

Job Evaluation - Purpose - Consultants

Job evaluation is an instrument available to ensure integration of internal fairness and external competitiveness. A well-designed, carefully implemented job evaluation system is not only a basic tool for driving changes in your company’s reward structures and achieving equal pay for work of equal value, it also defines the value of a job within your company.

PricewaterhouseCoopers (PwC)

PricewaterhouseCoopers (PwC) can help you in the process

PricewaterhouseCoopers (PwC)  can help you develop and implement all, or part, of a job-evaluation system designed to meet the specific needs of your company.
They claim:
Our experienced professionals know how to listen, and they know what questions to ask so that they get the right answers. We can then help you to create the processes and the tools you will need, and, if needed, train your staff in their use. Or, if you would prefer, we can undertake the entire process for you: writing job descriptions, designing or selecting a job-evaluation method, and implementing the chosen method—either PricewaterhouseCoopers’ own IFA or STRATA method, or a 100% customised system, or a system based on a combination of existing methods (already gathered in a database or customised methods). We can also negotiate with the unions in your company; create an effective communications plan, and hold information sessions for your employees; deploy new job classifications, benchmark your salary structure, and implement and maintain the complete procedure, from beginning to end. At PwC our aim is to make your job as easy and effective as possible.

PWC says you consider them when:
• You need a refined evaluation system that includes people's competences.
• You need a evaluation process that can be easily be monitored and adjusted quickly when needed.
• Your company is complex enough to require a number of job evaluation systems that target different groups and objectives.
• You want to develop a job classification procedure that is not a self-contained process but is wholly integrated into the HR value chain—recruitment, salary management, performance management, development and career management).
• You need a new evaluation system that allows you to manage people development and ensure that appropriate skills are developed.

Hay Group

Hay group provides assistance in job evaluation. It claims:
A consistent, objective framework

Thousands of organizations – including more than half of the world’s largest companies – rely on Hay Group’s job evaluation methodologies to help them bring together the right people, jobs and structures to execute their strategies.
The main Hay Group methodology, the Hay Guide Chart®-Profile Method of Job Evaluation provides you with a consistent and objective framework to:
  • analyze your organizational structure and identify ways to make it more effective
  • evaluate people and jobs to match the right individuals to the right roles
  • define career progressions both from individual roles and across related job groups and
  • develop targeted pay and reward programs, using Hay Group’s global compensation database.

All of this ultimately leads to an increased ability to manage your human resources more effectively.
Evolving evaluation

Crucially, this isn’t a one-off approach: the Hay Group job evaluation method is designed to evolve with your business. As a result, several Hay Group clients have used the method successfully to help with job design, talent development and performance management for over 25 years.
Job Evaluation (1952])
Authors: Pigage, Leo Charles; Tucker, John Lawson
Job Evaluation Methods, 1946 (Preface only)
Charles W. Lytle, Professor of Industrial Engineering, New York University,
ISOS; A Job Evaluation System to Implement Comparable Worth Intangible Capital, 2008


Original knol - job-evaluation-purpose-consultants/ 2utb2lsm2k7a/ 32

Computer Graphics Workstation Ergonomics

For Computer Artists

Tuesday, March 20, 2012

Shigeo Shingo - Famous Industrial Engineer of Japan

_______________ _______________

TPS - Toyota Industrial Engineering - The Story

TPS - the ancestors

Sakichi Toyoda - Toyoda Loom Works -  invented an automatic power loom, Jikoda (autonomous automation), 5 Whys

Kiichiro Toyoda - dreamed of branching into automobiles, started in 1933.
Frustrated by difficulties in engine casting, begins process study.
1936 - creates Kaizen improvement teams
Resigned 1948 due to poor sales.

Department of War TWI program -
1950 - Deming visits Japan. at request of Japanese Union of Scientists and Engineers, June-August 1950, trains 100s of engineers, managers and scholars in statistical process control and quality.

JUSE - > Genichi Taguchi - consults with Toyota

In 1957 cousin Eiji Toyoda takes over. Visits Ford. Implements Ford mass production standards.

Frederick Taylor's PSM -> Shigeo Shingo

Toyota Production System

Many folks may think that Japan achieved market dominance through robots, or being workaholics. Not so.

Taiichii Ohno - graduated from Nagoya Technical High School, joined Toyota in 1943 -
Shigeo Shingo - late 50s to 60s - consulting with Toyota
Eiji Toyoda..
Started in 1948 - based on work of Deming

muri - inconsistency
mura - overburden
muda - waste

design out mura - be able to meet required results smoothly - Tai Chi
decrease muri - increase flexibility without stress - Yoga
eliminate muda - eliminate waste - Shaolin Kung-Fu
Perfection is achieved, not when there is nothing left to add, but when there is nothing left to remove. - Saint-Exupery

Unable to eliminate bottlenecks in production
EOQ - Economic Lot Size - calculation of best use of line, production must be high enough to meet demand for different models

different model = different parts, different dies, different procedures, different tools

high downtime for line changeover = high economic lot size
high economic lot size = high stock  of parts inventory
high stock of inventory = investment of $$$, land costs in Japan are expensive, high cost for big warranty
lesser diversity of models

First - rework factory and models to make use of standard parts, tools, and processes.

Next goal is SMED
biggest component of changeover is die exchange
examine process -
die weighs many tons
use crane to remove old and install new
requires minute measurement to put into place
done by hand and by eye
tested by making test stampings, wasting time and resources
process took 12 hours to 3 days

invest in precision measurement devices
record necessary measurements for each die
install according to measurements rather than by hand and eye - changeover to 90 minutes

FRS - fixed repeating schedule
die changes in standard sequence
scheduling tool changeovers as the new product moved through factory
scheduling use of cranes

SMED achieved
Single Minute Exchange of Die
<10 minutes to change die.
EOQ = 1 vehicle.
Just in time manufacturing

intangible benefits
stockless production
reduction of process footprint = free floor space
productivity increased
ability to changeover more
elimination of defects
improved quality of each product
improved quality from
increased safety due to simpler setup
simplified housekeeping
lower expense of setup
operator preferred = better worker satisfaction
lower skill requirements
elimination of waste
goods are not lost due to deterioration in inventory
new attitudes on work process among staff

TPS by Ken Harris k/ken-harris/tps/ 6p1yn013rxws/2

Posted under creative commons 3.0 attribution license

Human Effort Engineering

Human Effort Engineering - The Concept and Techniques

Human effort engineering is a term used in describing and defining industrial engineering by Narayana Rao.

Industrial Engineering can be described adequately by three components.

1. Human Effort Engineering

2. Systems Efficiency Engineering

3. Systems Design, Installation and Improvement Management



Human effort engineering is a term used in describing and defining industrial engineering by Narayana Rao.
The definition of industrial engineering given by Narayana Rao is:
“Industrial Engineering is Human Effort Engineering. It is an engineering discipline that deals with the design of human effort in all occupations: agricultural, manufacturing and service. The objectives of Industrial Engineering are optimization of productivity of work-systems and occupational comfort, health, safety and income of persons involved.” According to this definition the two focus areas of industrial engineering are human effort engineering and systems efficiency/productivity engineering.

Narayana Rao, K.V.S.S., “Definition of Industrial Engineering: Suggested Modification.” Udyog Pragati. October-December 2006. p. 1-4.

Components of Industrial Engineering

Industrial Engineering can be described adequately by three components.
1. Human Effort Engineering
2. Systems Efficiency Engineering
3. Systems Design,  Installation and Improvement Management
In the area of systems design, industrial engineering activities of human effort engineering and systems efficiency engineering are speciality engineering areas. As industrial engineering has a good involvement in the systems design through two important areas and also as industrial engineering is output conscious and profit (value) conscious, IE department can take up the management of systems design activities of an organization. The official definition of IE of IIE provides scope for all these activities by stating that IE is concerned with system design, installation and improvement. It does not emphatically says that IEs design systems. They do number of activities related to systems design especially where multiple resources are involved and in that role human factor definitely demands that IEs are involved in the systems design to eliminate waste related the utilization of human resources.

Marvin Mundel - Industrial Engineer

Different Kinds of Changes

To improve a work method (work system), innovations or changes are necessary in any one of the five areas that affect its performance.
They are:
1. Human activity: The hand and body motions or the perceptive or cognitive activity or their sequence may be changed to ease or improve the task.
2. Workstation (tools, workplace layout, or equipment): The design of any single workstation or the equipment used for any part of the task may be modified.
3. Process or work sequence: The order or condition in which the various work stations receive the in-process output may require change or the number of work stations may be modified.
4. Output design: The product design or the form of goods sold or the material sent out or the nature of the completed service may be changed in order to facilitate the attainment of the objectives of improvement.
5. Inputs: The incoming supplies of raw materials or parts may be changed with respect to the form, condition, specification, or timing of the arrival to allow the desired improvements to be made.
From the list of possible changes, innovations in human activity and work station fall in the domain of human effort engineering
Marvin Mundel, Motion and Time Study, Sixth Edition, Prentice Hall, 1985,Pp.36-37.

Basic Orders of Work Units

8th Order WU : Results - What is achieved due to the outputs (7th order WU)
(work-unit )
7th Order WU: Gross output
6th Order WU: Different product groups/ total output
5th Order WU: One End Product/output
4th Order WU: Intermediate product
3rd Order WU: Task - Individual or group
2nd Order WU: Element
1st Order WU: Motion
Analysis at 1st, 2nd and 3rd order work units is human effort engineering
Marvin Mundel, Motion and Time Study, Sixth Edition, Prentice Hall, 1985,Pp.96-99.

Human Effort Engineering - Areas of Design and Installation

Interface Device Design: Jigs and Fixtures
Motion Design: Motion Study
Posture Design
Comfort Design: fatigue analysis
Safety Design: Safety Aids
Occupational Hazard Analysis Certification
Work Measurement
Operator Training
Incentive scheme design

Time Study, Motion Study, and Methods Study

Time study was proposed by F.W. Taylor and as conceptualized by Taylor and it includes methods study and motion study in itself. Frank Gilbreth proposed motion study, but he did use the term methods also in his writings. Gilbreth recognized the contribution of Taylor in proposing in his time study, the study of work at element level. People credit Maynard in developing the concept of method study, to end the differences between followers of Taylor and Gilbreth over time study and motion study.
But as things stand today, we can separate the three. Method study is a study of various operations and their sequence. Methods efficiency design is an evaluation of method proposed by functional designers using method study approach. Each operation is to be performed by an individual man or man-machine system or in some cases by a group of men. Lifting of heavy furniture is an example wherein a group has to carry out an operation. Each operation requires motion design. Data for motion design comes from earlier motion studies and some study conducted as a part of the current motion design. Work measurement is carried out for each operation in an approved method. Work measurement can be carried out using predetermined motion time systems or time studies or work sampling methods as appropriate.

Taylor - A Pioneer in Human Effort Engineering

Henry Towne, Past President of A.S.M.E. in foreword to Shop Management, A Paper of F.W. Taylor, First published in 1910.
The substitution of machinery for unaided human labor was the great industrial achievement of the nineteenth century. The new achievement to which Dr. Taylor points the way consists in elevating human labor itself to a higher plane of efficiency and of earning power.
We are proud of the fact that the United States had led all other nations in the development of labor-saving machinery in almost every field of industry. Dr. Taylor has shown us methods whereby we can duplicate this ahievement by vastly increasing the efficiency of human labor, and of accomplishing thereby a large increase in the wage-earning capacity of the workman, and a still larger decrease in the labor cost of his product.
The Editor of the book Scientific Management, jointly published by Harper & Row, New York and John Weatherhill, Inc., Tokyo, 1911
"The Principles of Scientific Management," is simply an argument for Mr. Taylor's Philosophy of Human Labor, - an outline of the fundamental principles on which it rests.

Gilbreth Founder of Motion Study

Motion study : a method for increasing the efficiency of the workman (1911)
Applied motion study; a collection of papers on the efficient method to industrial preparedness (1917)
Fatigue study; the elimination of humanity's greatest unnecessary waste, a first step in motion study (1919)
Watch Original Movies Made by Gilbreth

Related knols



Related Articles and Papers

Estimating The Physical Effort of Human Poses, Yinpeng Chen, Hari Sundaram and Jodi James,
Arts, Media and Engineering, Arizona State University, Tempe, AZ, 85281
A Unique Learning System for Engineering: Technology of the Human Body!
Stephanie Farrell, Jennifer Kadlowec, Anthony Marchese, John Schmalzel, and Shreekanth Mandayam
Rowan University, Glassboro, NJ 08028
Therblig Analysis
Interesting Paper
Matching TRIZ engineering parameters to human factors issues in
DENIS A. COELHO, Department of Electromechanical Engineering
University of Beira Interior, Calçada Fonte do Lameiro, PORTUGAL
Abstract: - An overview of the development of the TRIZ problem solving approach is provided in the first part
of this paper. Having emerged in Russia in 1946, the Theory of Inventive Problem Solving Technique (TRIZ)
has been commonly used in the USA and Europe in the last few decades. TRIZ, as a method, has been used
successfully to solve problems such as many of those typically arising during the process of product
development, as reviewed in the second part of the paper. While the TRIZ method is also considered fit to
address human factors problems in manufacturing, straightforward application would benefit from a resource
gathering supporting knowledge and techniques. In the third part, analysis of previous work leads to suggest that new TRIZ method users might benefit from specific guidance in the interpretation of the engineering parameters in the contradiction matrix, considering human factors problems in manufacturing. A tentative correspondence is proposed in the fourth part between human factors issues in manufacturing and the engineering parameters in the matrix. The paper concludes emphasizing the need to further extract and categorize human factors and ergonomics principles and understand and analyze them under the light of the 40 inventive principles of TRIZ.
Key-Words: - Industrial engineering, Inventive principles,
  Original knol - Knol number 792

Fundamentals of Industrial Engineering

Review of the Chapter 1.5 Fundamentals of Industrial Engineering in Maynard's Handbook of Industrial Enginering, 5th Edition. List of all chapters of the book is available in:
This chapter was written by Philip E. Hicks.

Efficient production system design and efficiency improvement of production systems is the aim of industrial engineering. This fact is brought out by Hicks in the following statement.
A production system is essentially the sum of its individual operations. Therefore, it follows that if one wants a production system to be efficient then its individual operations must be efficient. Working from a bottom-up micro perspective, one approach is to simply review all individual operations to make them the best they can be.  One reason such an approach offers considerable opportunity for improvement today is that it has been often overlooked while the search for the single “silver bullet” macro solution occurs in the front office or the boardroom. In many firms today individual workstation cycle times can be reduced by one-third to one-half of their present average cycle times by implementing a short list of modest improvements in these workstations.

Hicks has given following areas as fundamental areas of industrial engineering

Methods Engineering
Work Measurement
Facilities Planning and Design
Material Handling

Inventory Control
Quality Control

Team Based
Continuous Improvement

According to me operations management is not any more an area reserved for industrial engineering. Operations management has evolved as an independent subject area within the discipline of business management and industrial management. Operations control is a sub-area within operations management.

Industrial engineering has to focus on two areas as its specialty – Human effort engineering and System efficiency engineering. By inserting the term efficiency and writing the first area as OPERATIONS EFFICIENY ANALYSIS AND DESIGN will be make it more clear to the practitioners as well as users the role of industrial engineers. Work measurement is an exclusive area of industrial engineering and we need to recognize that in methods engineering once again functional engineering of the method belongs to production engineers and only human effort and efficiency engineering are the areas of industrial engineering. Ergonomics is the science used by industrial engineering in human effort engineering.

A book by Hicks

1. Hicks, Philip E., Industrial Engineering and Management:A New Perspective, McGraw-Hill, New York, 1994. (book)
Original knol - 2utb2lsm2k7a/ 1116

Friday, March 16, 2012


There is an industrial revolution. There is an internet revolution called knowledge revolution. Some business men are talking of ecological revolution. The economy that that brings about this revolution and also the result of this revolution is termed as eco-economy.
The new economy will be much more like an econosystem than the old.
The industrial eonomy provided to the people an abundance of manufactured goods. It extracted fossil fuels for energy both coal and petroleum and raw materials to provide variety of goods. The new economic system will also bring a revolutionary change. The new core resource for this revolution is the knowledge. It does not use more material resources but will use knowledge resources.
The knowledge resource will make the present products smarter and also will produce smarter products. Making a product smarter in the eco-economy is explained as making existing products that use lesser resources to manufacture as well as to operate. Smarter products provide the currently used services in a whole new way and save material resources. The two ways of using knowledge are termed as eco-efficieny and eco-effiectiveness. Eco-efficiency is making existing products smarter. Eco-effectiveness is creating totally new products that are environmental friendly.
Every company has to change itself to participate in eco-economy. There is a scope for some race ahead and derive more benefit from this change in economy.
It keeps happening all the times. The existing company may be slow in joining the ecological innovation due to fear that these innovations cannibalize their existing products. But then new ventures come up and take the leadership.
Dr. William K. Shireman, The Eco-Economy: Enhancing Productivity and Environmental Performance,
in Greening Supply Chiain, APO, 2001
Original knol - 2utb2lsm2k7a/ 1973

Environmental Value Engineering


Environmental Value Engineering - The Concept

The knol Eco-Economy describes some of the features of eco-economy. Eco-efficiency was explained as making existing products smarter. Making existing products do their function or provide their service, but design and fabricate them in such a way that environmental impact due to them in minimized. This immediately leads to the concept of environmental value engineering. Value engineering was a technique proposed by L.D. Miles to reduce the cost of a product while maintaining the existing functional utility. Hence it was cost value engineering. Similar idea can be applied to existing products from environmental value.
Wilfred H. Roudebush, presented the concept of Environmental Value Engineering  at the 2001 Greening of the Campus Conference at Ball State University and explained it in an American Society of Engineering Education Conference in 2003.
Accodring to Roundebush, environmental value engineering evaluates the environmental contribution and impact of built environment alternatives in units of solar EMERGY during the alternative's life cycle.
EMERGY is defined by Roundebush as all the available energy that was used in the work of making a product, including environmental impacts relating to inputs of: environment, fuel energy, goods, and services (labor). EMERGY is expressed in standard units of energy called solar emjoules (SEJ).
The methodology incorporates 10 life cycle phases of man-made products.
A. natural resource formation,
B. natural resource exploration and extraction,
C. material production,
D. design,
E. component production,
F. fabrication/construction,
G. use,
H. demolition,
I. natural resource recycling, and
J. disposal.
One more reference in this context is is a PhD dissertation related to energy use and has some application to EVE.
Abdulaziz S. Al-Yousefi, in his paper The Synergy between Value Engineering and Sustainable Construction,    examined the application of value engineering in the context of sustainability.
There is a good amount of foundation work done on topic. We need to find more references in online as well as prinit publications.

Comparison Between Asphalt and Concrete Pavements

In traditional life cycle cost analysis, the emphasis is costs of different pavement alternatives throughout their design lifetimes. When concrete and asphalt systems are compared, the asphalt pavement alternative was usually selected because a concrete system is more expensive to construct and maintain. The  life cycle assessment strategies are being developed that account for factors such as resource depletion, human health effects, and environmental impact in product selection. Environmental value engineering, employs a systems approach methodology to more accurately compare the input requirements and related environmental impacts of pavement alternatives.When concrete and asphalt highway pavement systems are compared using this revised life cycle analysis approach under EVE concrete proves to be superior. In fact, it was shown in an example presented  that based on a normalized unit of comparison, concrete is approximately 47.6% more efficient overall than asphalt.


Odum, H.T., Arding, J. (1991). Emergy Analysis of Shrimp Mariculture in Ecuador.
Narragansett, RI: Coastal Resources Center, University of Rhode Island.
122 page report
Emergy Evaluation by H.T. Odium, 1998
Promise and Problems of Emergy Analysis
Jorge L. Hau and Bhavik R. Bakshi
A Presentation on comparson of Emergy and Exergy - 2008

Related Knols


Environmental Value Engineering: An assessment methodology to compare the environmental impact of built environment alternative by Wilfred Roubebush
Environmental Value Engineering (EVE) Environmental Life Cycle Assessment of Concrete and Asphalt Highway Pavement Systems
by Wilfred H. Roudebush
Papers and Articles
Morledge, R., Smith, A, & Kashiwagi, D. T. (2006). Building Procurement. Oxford, UK: RISC Research/Blackwell Publishing.
Roudebush, W. H. (2003). Environmental value engineering: An environmental life cycle assessment methodology for comparing built environment alternatives. Proceedings of the 2003 American Society for Engineering Education Conference. Nashville, TN. June 22-25, 2003.
Roudebush, W. H. (1999). Environmental value engineering assessment of concrete and asphalt pavement.
Proceedings of the 78th Annual Meeting of the Transportation Research Board. Washington, DC: Transportation Research Board. January 10-14, 1999.
Roudebush, W. H. (1998). Environmental Value Engineering (EVE):A green building performance assessment methodology. Conference Proceedings Green Building Challenge '98: An International Conference on the Performance Assessment of buildings. (pp. 173-178). Vancouver, BC, Canada: Natural Resources Canada. October 26-28, 1998.
Graham, P. (1997). Methods for assessing the sustainability of construction and development activity. Unpublished master's thesis, Royal Melbourne Institute of Technology, Melbourne, Australia.
Roudebush, W. H. (1994). Using Environmental Value Engineering (EVE) to Assess the Environmental Impact of Built Environment Waste. Proceedings of the First International Conference on Sustainable Construction, International Council for Building Research (CIB) Task Group 16: Construction and Waste (pp. 317-323). Tampa, Florida. November 6-9, 1994.
Kibert, C. J., Roudebush, W. H., & Waller, L. D. (1992). Evaluating the Environmental Impacts of Construction Using the EVE Methodology. Proceedings of International Council for Building Research (CIB)'92 World Building Congress. Montreal, Canada. May 18-22, 1992.
Original Knol - environmental-value-engineering - Knol Number 1974

Wednesday, March 14, 2012

Cost Management in Paper and Pulp Industries


Target Cost Exercise in Paper Plant

Shank & Fisher (1999) gave an example of application of  target costing in the case of Montclair Paper Mill  abd showed how the target costing principle could be applied even at a later stage of the product life cycle. The situation of Montclair Mill was gloomy. The mill was making $700 loss per every ton of paper sold. The management believed that the standard cost of $2900 per ton was thought to be based on a solid analysis and was taken for granted.

The target costing gave a target of $1162 per ton, which equals a 60% cost reduction. The management accepted the challenge, and after rigorous analysis, four major reductions were accomplished:

   1.       Fiber cost: 60% cost reduction.
   2.       Paper machine cost: Yield from 47% -> 75%.
   3.       Dye costs: material savings of $250 per ton incorporated in the yield improvement at the paper machine resulted in an amazing $769 reduction per ton.
   4.       Conversion costs: Based on benchmarking, a reduction from $303 to $150 was challenged with the risk of possible outsourcing. During 18 moths, the cost dropped to $240, and the continuous improvement seemed to gain even more.

Together, these produced the desired level of costing and a dramatic turnaround in the mind set. (Shank & Fisher 1999.)


Ergonomics Cost Benefits Case Study in a Paper Manufacturing Company

Dan MacLeod,
Anita Morris, Ergonomics Coordinator, Crane & Co., Dalton, Massachusetts.

Original publication: Proceedings of the Human Factors and Ergonomics Society, September, 1996.

Total investments in ergonomics over a five-year period is estimated at about $2.5 dollars, including cost of new machinery and equipment. Total benefits over the same five-year period are estimated at $3.5 million, based primarily on workers compensation cost savings plus improvements in productivity. Thus, the Return on Investment (ROI) for this ergonomics program is approximately 40%.


Energy Cost Reduction in Paper Manufacturing


Bearings Reconditioning Cost Reduction

Waster Water Utilization - Cost Savings in a Paper Plant

Total savings due to the intensive water reuse modifications completed by the company are estimated at $112,000 per year. Avoidance of transportation/handling costs and landfill fees by diverting wastewater sludge to the production process resulted in cost savings of $72,000 per year.


With its new "fiber loading" process, Voith Sulzer, Inc., is greatly improving the efficiency of paper production and recycling. Fiber loading produces precipitated calcium carbonate (PCC) filler in the pulp recycling process at costs below conventional means.;jsessionid=025ADAEBC2C445B85DD1EA2364FE8ADB?purl=/751069-LA3c7Q/webviewable/

Reports on Paper Manufacturing Plants

Deloitee 4 page Note on Paper Industry - 2009

Productivity and performance improvement in paper mills: Procedural framework of actual implementations
John Fogelholm, DSc (Tech.), PhD, Frank Bescherer, MSc
Performance Improvement
Volume 45 Issue 10, Pages 15 - 20, Published Online: 1 Nov 2006

Rupesh Kumar Pati, Assistant Professor, Indian Institute of Management Kozhikode
Kozhikode – 673 570 (

Vertical Gap Analysis And Labor Productivity Benchmarks on Asia Paper Manufacturing

Two of the most comprehensive studies to date on vertical gap analysis and labor productivity benchmarks for Asia Paper Manufacturing (SEO: 02310).

The methodologist for this unique study is Philip Parker, Eli Lilly Chair Professor of Innovation, Business and Society at INSEAD (Fontainebleau, France and Singapore).  The goal of the reports is to assist consultants, financial managers, strategic planners, and corporate officers in gauging certain indicators of Asia Paper Manufacturing's financial and human resource structure.

The report has benchmarked Asia Paper Manufacturing against competing firms in the Paperboard Containers and Boxes Manufacturing industry worldwide going beyond traditional methods of company benchmarking. The results are two specialized reports: (1) global financial benchmarks using common-size statement ratios (vertical analysis), and (2) labor productivity and utilization measures collected across borders.

Furnish Design and Cost Optimization
KSH Consulting

New Manufacturing Process for Tissue Paper Reduces Energy Use While Increasing Use of Recovered Office Papers


Production Information System in a Paper Plant



Cost Management Software

The EPS Cost Management Suite is designed for the pulp and paper industry with numerous functions and features developed for its specific cost management needs. The EPS Cost Management Suite has three modules; EPS Real-Time Costing, EPS Product Cost Management, and EPS Transportation Cost Management.

The EPS Real-Time Costing module empowers paper machine operators  by providing machine operators and production managers with immediate feedback on how their decisions impact the cost of the paper reels being produced.

EPS Real-Time Costing can be implemented as a stand-alone module or in conjunction with one or both of the other two modules in the EPS Cost Management Suite.

EPS Real-Time Costing can be implemented in just four to eight weeks per paper machine, providing payback as quickly as one to three months.

The EPS Product Cost Management module has pulp and paper industry specific functionality for:

    * Recipe and grade specification management
    * Standard grade costing
    * Actual grade costing
    * Short-term cost and consumption forecasting based on block schedules
    * Long-term cost and consumption forecasting based on sales forecasts

EPS Product Cost Management supports pulp and paper companies to harmonize its cost management process to ensure that costs can be compared across mills. The module also improves the accuracy, timeliness and increases the level of detail in the grade costing to better support production planning, financial forecasting, and product sourcing decisions. Significant time and resource savings during the monthly closing process and during the yearly budgeting process can be expected after implementing this module.

The EPS Transportation Cost Management module helps transportation and supply chain managers to gain control of the transportation costs. The module makes it possible to budget freight costs, monitor the effects of transportation decisions, and track cost variances.

EPS Transportation Cost Management is based on an innovative accounting concept developed specifically for the needs of pulp and paper companies. The module responds to pulp and paper companies needs for systematic cost planning and control to combat etc. escalating fuel costs.

EPS Transportation Cost Management administers the mix of factors that drive supply chain planning and control decisions, and it provides precise measurements of how specific components of the transportation cost mix affect the overall budget and forecast.

To effectively control transportation costs, EPS Transportation Cost Management examines key cost drivers including: destination mix, source paper mills and warehouses, transportation routes, modes of transport, carriers, freight rate, fuel surcharges, and exchange rates, among others.

EPS Transportation Cost Management helps pulp and paper companies to identify and explain factors that are at variance with expected levels as a first step to reduce transportation spending and increase effectiveness.

TIPS Cost Management Suite to improve the profitability of the pulp, paper, board and tissue industries

TietoEnator Forest Trade Press Release 20 October 2005

During the last years, the paper industry has become more global, with paper companies supplying their customers from production facilities worldwide. At the same time, the industry has become even more commoditized.  Together, these two factors have created a focus on cost competitiveness and a need to accurately understand production costs and customer profitability. TietoEnator Forest is responding to this challenge by launching the TIPS Cost Management Suite. The suite is a complementary part of TietoEnator Integrated Paper Solution (TIPS), a comprehensive business and manufacturing execution solution for the pulp, paper, board and tissue industries. The TIPS Cost Management Suite is provided to TietoEnator’s customers in cooperation with Enterprise Performance Solutions (EPS) – a provider of the next generation cost management solutions.

The TIPS Cost Management Suite contains modules for corporate level profitability analysis, mill level product cost management, and process level real-time costing.  Some of the benefits include the ability to compare production costs across multiple locations for improved sourcing decisions, support for accurate profitability analysis and understanding of what makes products, customers and regions profitable. Furthermore, users are empowered to make operational decisions in real-time, resulting in improved productivity.;93;16080;164;20685;20692
Original Knol - 2utb2lsm2k7a/ 2373