PRINCIPLES OF INDUSTRIAL ENGINEERING
Book published in 1911
THE ORIGIN OF THE INDUSTRIAL SYSTEM
Book published in 1911
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 of the rise and enor- mous expansion of the manufacturing system. This phenomenon of the evolution of a new applied science is like those that have been 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 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 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 its own, by which new practitioners can be trained, by which certainty, safety 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 direc- tion, 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 di- rects is this: Money is converted into raw materials and labor; raw materials and labor are converted into finished product or services of some kind; finished product, or serv-ice, 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, or, in other words, in the operations of purchase, manufacture, sale, and the administration connected with each.
Now the starting level (that is, the cost of raw materials and labor) and the final level (the price obtainable for fin- ished product) these two levels are generally fixed by com-petition 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 delivered at the bus bars, varies not only with the volume passing from level to level, but with the efficiency of the conversions between these levels. In the hydroelectric power-plant, the conversion losses are hydraulic, mechanical and electrical. In any industrial enterprise the conversion losses are commercial, manufacturing, administrative. It is with the efficiency of these latter conversions that industrial engineering is concerned.
The industrial engineer may have in his organization staff many mechanical engineers superintending special depart-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-cient and economical production. He is concerned not only with the direction of the great sources of power in nature, but with the direction of these forces as exerted by ma-chinery, working upon materials, and operated by men. It is the inclusion of the economic and the human elements es-pecially that differentiates industrial engineering from the 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 management of men and the definition and direction of policies 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 is analytical we might almost call it passive to distinguish 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 in a form that increases our useful working knowledge of the industry with which we have to deal. To this province of industrial engineering belong the collection and tabula-tion 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 are normal. To this sort of work Harrington Emerson ap-plies 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 in-telligently, as an assayer can separate and weigh the metal in an ore. To this province belong also such matters as systematic inquiry into the means and methods used for re-ceiving, handling, and issuing materials, routing and trans-porting these materials in process of manufacture, the gen-eral 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 total result are often made surprisingly and effectively manifest. It is wonderful how much new knowledge a man 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 trans-lated immediately into visible lines instead of being put into the indirect and rather unimpressive form of long descriptions or tabular columns of figures.
The great purpose and value, indeed, of these analytical 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 rem-edies 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, creative and synthetic phase, goes on from this point and 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 manufacture; the correction of inefficiencies, whether of power, 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 propor-tioned to output makes the individual employee more pro-
The exercise of these functions, whether analytical or creative, by the industrial engineer or the fficiency engineer, requires that he shall have technical knowledge and scientific training, but in somewhat different form from the equipment of the mechanical engineer and somewhat differently
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.
It deals with materials, but not so much with their mechanical 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 efficiency 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 in progress and visualizing the result so that the manager 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 their most effective work.
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 m 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, the electrical engineer, the mining engineer, 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, continuously and everlastingly true of works management. It is much easier to conceive of the civil engineer or the mechanical engineer being retained to carry out some piece of work in which scientific accuracy is demanded regardless of 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 con-stantly harder and harder, the question of equivalency be-,tween 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 the $75 cost with some actual item of material, labor, or expense. Nevertheless, the industrial engineer must constantly 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 machine 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 industrial engineer is to determine with the utmost possible 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.