Sunday, September 29, 2013

Assignments - Industrial Engineering - Section B Students - NITIE - PGDIE 42 - 2013-14

1. Learning Curve and Productivity Improvement Through Employee Participation.

2. Supply Chain Cost Reduction through Industrial Engineering Tools

3. Industrial Engineering Support for Materials Management.


Business/Managerial/Administrative Process Efficiency Improvement (Special Focus on IT Hard and Software)

1. Business Process Efficiency Improvement in Manufacturing Planning and Control Processes.
2. Business Process Efficiency Improvement in Marketing Processes
3. Business Process Efficiency Improvement in Financial Accounting Processes
4. Business Process Efficiency Improvement in Cost Accounting Processes
5. Business Process Efficiency Improvement in Materials Management Processes
6. Business Process Efficiency Improvement in Distribution and Logistics Processes
7. Business Process Efficiency Improvement in Human Resource Management Processes
8. Business Process Efficiency Improvement in Product Design Processes




* Design for Manufacture and Assembly and Cost Reduction(Ch 13.2 in Maynard)

* World-Class Manufacturing--An Industrial Engineering View (Ch 13.7 in Maynard)


Lean Enterprise

1. Lean Supply Chain Management
2. Lean Manufacturing
3. Lean Materials and Components Supply Systems
4. Lean Retailing and Distribution Systems
5. Lean New Product Development
6. Lean Marketing
7. Lean Warehousing
8. Lean Maintenance
9. Lean Construction
10. Lean Office



New Technologies

1. New Technology and Equipment -  Machine Tools
2. New Technology and Equipment - Construction Machinery
3. New Technology and Equipment – Chemical Engineering
4. New Technology and Equipment – Electrical Engineering
5. New Technology and Equipment – Biotechnology
6. New Technology and Equipment – Electronics Devices and Computer Components
7. New Technology and Equipment -  Robots
8. New Business Software
9. New Technology and Equipment – Transport Facilities
10. New Technology and Equipment – Information Technology



Technology Efficiency Engineering

Industrial Engineering in Ship Building
Industrial Engineering in Bicycle Industry
Industrial Engineering in House Construction
Industrial Engineering in Electricity Companies
Industrial Engineering in Irrigation Projects
Industrial Engineering in Railways
Industrial Engineering in Road Transport Organizations
Industrial Engineering in Pharmaceuticals
Industrial Engineering in Biscuits
Industrial Engineering in Chocolate Industry
Industrial Engineering in Textile spinning companies
Industrial Engineering in Tyre Companies
Industrial Engineering in Watch Making
Industrial Engineering in Jewellery Industry
Industrial Engineering in Computer Manufacture
Industrial Engineering in Mobile Manufacture
Industrial Engineering in Electric Motors/Generators
Industrial Engineering in Electronics Component and Equipment Manufacture
Industrial Engineering in TV Manufacturing
Industrial Engineering in Biotech Companies
Industrial Engineering in Nnanotech Companies







 Operations Research Models

OR Models in Manufacturing
OR Models in Marketing
OR Models in Materials Management
OR Models in Distribution and Logistics
OR Models in Supply Chain Design
Optimization of Databases
OR Models in IT Systems
OR Models in Electricity Generation and Distribution Systems

Assignments - Industrial Engineering - Section A Students - NITIE - PGDIE 42 - 2013-14

1.1: The Evolution of Industrial Engineering.

1.2: The Definitions of Industrial Engineering – Critical appraisal

2: Total Productivity Management.

Engineering Economics

 3.1: Engineering Economy- Analytical Methods

 3.2: Data Collection and Estimating for Engineering Economy

Human Effort Engineering

 4.1: Motion Study – Principles of Economy

 4.2: Motion Study – Two Handed Process Chart

4.3; Fatigue Analysis and Reduction

Work Measurement

 5.1: Stop Watch Study (Include recent digital tools for Time Study)

 5.2: Work Sampling for Time Standards and Work Measurement

 5.3: PMTS Systems – MOST

 5.4: Work Measurement in Automated Processes (Look in Maynard Handbook first).


Manufacturing Process Improvement

6.1: Process Analysis and ECRS Method

 6.2: Operation Analysis

 6.3: Continuous Improvement (Kaizen using Employee Involvement)

 6.4: Setup Time Reduction.

Ergonomics




7.1: Importance of Ergonomics in Industrial Organizations and Industrial Engineering

7.2 Ergonomic Principles

7.3: Designing, Implementing, and Justifying an Ergonomics Program.


Compensation Issues


 8.1: Job Evaluation and Primary Wage/Salary Determination

8.2: Performance-Based Compensation: Designing Incentives for Operators to Drive Performance.

 8.3:  Performance-Based Compensation: Designing Incentives for Executives and CEOs to Drive Performance.


Facilities and Equipment

9.1: Facilities Layout and Design and Process

9.2: Layout Efficiency Improvements and Computer Software

9.3 Equipment Selection and Replacement – Engineering Economics

9.4: Improving OEE

9.5 U-Type Layout - Benefits



Planning and Scheduling Systems.

10.1: Optimization of Aggregate Planning

10.2: Optimization of Inventory in Manufacturing Systems.

10.3 Optimization of Scheduling

10.4: Supporting Lean Flow Production Strategies through planning and control.

10.5: Just-in-Time and Kanban Scheduling.

Section XI: Statistics and Operations Research, and Optimization.

11.1: Linear Programming Models and Cost Minimization

11.2 Tranportation and Assignment Models and Cost Minimization

11.3 Nonlinear programming models and Cost Minimization

11.4 Simulation for and Cost Minimization

11.5 New optimization techniques and Cost Minimization

Value Engineering

12.1 Introduction and Benefits

12.2 L.D. Miles Techniques

12.3 FAST

12.4 Value Engineering Case Studies

12.5 Value engineering in civil engineering and construction

Statistics
13.1 Statistical Process Control and Cost Minimization
13.2 Statistical Quality Control and Cost Minimization
13.3 Application Statistics in Work Sampling and Cost Minimization
13.4 Six Sigma Methods and and Cost Minimization
13.5 Lean Six Sigma Methods and Cost Minimization


Technology Efficiency Engineering

14.1 Industrial Engineering in Steel Plants
14.1 Industrial Engineering in Cement Plants
14.1 Industrial Engineering in Fertiliser Plants
14.1 Industrial Engineering in Car Manufacturing
14.1 Industrial Engineering in Aluminium Smelter Plant
14.1 Industrial Engineering in Paints Manufacturing
14.1 Industrial Engineering in Garment Manufacturing


Send Mail to kvssnrao55 @ gmail.cokm

KVSSNRAO's Handbook of Industrial Engineering - 2014 Edition


Will be Published Shortly Online

1.1: The Evolution of Industrial Engineering.

1.2: The Definitions of Industrial Engineering – Critical appraisal

2: Total Productivity Management.

Engineering Economics

 3.1: Engineering Economy- Analytical Methods

 3.2: Data Collection and Estimating for Engineering Economy

Human Effort Engineering

 4.1: Motion Study – Principles of Economy

 4.2: Motion Study – Two Handed Process Chart

4.3; Fatigue Analysis and Reduction

Work Measurement

 5.1: Stop Watch Study (Include recent digital tools for Time Study)

 5.2: Work Sampling for Time Standards and Work Measurement

 5.3: PMTS Systems – MOST

 5.4: Work Measurement in Automated Processes (Look in Maynard Handbook first).


Manufacturing Process Improvement

6.1: Process Analysis and ECRS Method

 6.2: Operation Analysis

 6.3: Continuous Improvement (Kaizen using Employee Involvement)

 6.4: Setup Time Reduction.

Ergonomics




7.1: Importance of Ergonomics in Industrial Organizations and Industrial Engineering

7.2 Ergonomic Principles

7.3: Designing, Implementing, and Justifying an Ergonomics Program.


Compensation Issues


 8.1: Job Evaluation and Primary Wage/Salary Determination

8.2: Performance-Based Compensation: Designing Incentives for Operators to Drive Performance.

 8.3:  Performance-Based Compensation: Designing Incentives for Executives and CEOs to Drive Performance.


Facilities and Equipment

9.1: Facilities Layout and Design and Process

9.2: Layout Efficiency Improvements and Computer Software

9.3 Equipment Selection and Replacement – Engineering Economics

9.4: Improving OEE

9.5 U-Type Layout - Benefits



Planning and Scheduling Systems.

10.1: Optimization of Aggregate Planning

10.2: Optimization of Inventory in Manufacturing Systems.

10.3 Optimization of Scheduling

10.4: Supporting Lean Flow Production Strategies through planning and control.

10.5: Just-in-Time and Kanban Scheduling.

Section XI: Statistics and Operations Research, and Optimization.

11.1: Linear Programming Models and Cost Minimization

11.2 Tranportation and Assignment Models and Cost Minimization

11.3 Nonlinear programming models and Cost Minimization

11.4 Simulation for and Cost Minimization

11.5 New optimization techniques and Cost Minimization

Value Engineering

12.1 Introduction and Benefits

12.2 L.D. Miles Techniques

12.3 FAST

12.4 Value Engineering Case Studies

12.5 Value engineering in civil engineering and construction

Statistics
13.1 Statistical Process Control and Cost Minimization
13.2 Statistical Quality Control and Cost Minimization
13.3 Application Statistics in Work Sampling and Cost Minimization
13.4 Six Sigma Methods and and Cost Minimization
13.5 Lean Six Sigma Methods and Cost Minimization


Technology Efficiency Engineering

14.1 Industrial Engineering in Steel Plants
14.1 Industrial Engineering in Cement Plants
14.1 Industrial Engineering in Fertiliser Plants
14.1 Industrial Engineering in Car Manufacturing
14.1 Industrial Engineering in Aluminium Smelter Plant
14.1 Industrial Engineering in Paints Manufacturing
14.1 Industrial Engineering in Garment Manufacturing


1. Learning Curve and Productivity Improvement Through Employee Participation.

2. Supply Chain Cost Reduction through Industrial Engineering Tools

3. Industrial Engineering Support for Materials Management.


Business/Managerial/Administrative Process Efficiency Improvement (Special Focus on IT Hard and Software)

1. Business Process Efficiency Improvement in Manufacturing Planning and Control Processes.
2. Business Process Efficiency Improvement in Marketing Processes
3. Business Process Efficiency Improvement in Financial Accounting Processes
4. Business Process Efficiency Improvement in Cost Accounting Processes
5. Business Process Efficiency Improvement in Materials Management Processes
6. Business Process Efficiency Improvement in Distribution and Logistics Processes
7. Business Process Efficiency Improvement in Human Resource Management Processes
8. Business Process Efficiency Improvement in Product Design Processes




* Design for Manufacture and Assembly and Cost Reduction(Ch 13.2 in Maynard)

* World-Class Manufacturing--An Industrial Engineering View (Ch 13.7 in Maynard)


Lean Enterprise

1. Lean Supply Chain Management
2. Lean Manufacturing
3. Lean Materials and Components Supply Systems
4. Lean Retailing and Distribution Systems
5. Lean New Product Development
6. Lean Marketing
7. Lean Warehousing
8. Lean Maintenance
9. Lean Construction
10. Lean Office



New Technologies

1. New Technology and Equipment -  Machine Tools
2. New Technology and Equipment - Construction Machinery
3. New Technology and Equipment – Chemical Engineering
4. New Technology and Equipment – Electrical Engineering
5. New Technology and Equipment – Biotechnology
6. New Technology and Equipment – Electronics Devices and Computer Components
7. New Technology and Equipment -  Robots
8. New Business Software
9. New Technology and Equipment – Transport Facilities
10. New Technology and Equipment – Information Technology



Technology Efficiency Engineering

Industrial Engineering in Ship Building
Industrial Engineering in Bicycle Industry
Industrial Engineering in House Construction
Industrial Engineering in Electricity Companies
Industrial Engineering in Irrigation Projects
Industrial Engineering in Railways
Industrial Engineering in Road Transport Organizations
Industrial Engineering in Pharmaceuticals
Industrial Engineering in Biscuits
Industrial Engineering in Chocolate Industry
Industrial Engineering in Textile spinning companies
Industrial Engineering in Tyre Companies
Industrial Engineering in Watch Making
Industrial Engineering in Jewellery Industry
Industrial Engineering in Computer Manufacture
Industrial Engineering in Mobile Manufacture
Industrial Engineering in Electric Motors/Generators
Industrial Engineering in Electronics Component and Equipment Manufacture
Industrial Engineering in TV Manufacturing
Industrial Engineering in Biotech Companies
Industrial Engineering in Nnanotech Companies







 Operations Research Models

OR Models in Manufacturing
OR Models in Marketing
OR Models in Materials Management
OR Models in Distribution and Logistics
OR Models in Supply Chain Design
Optimization of Databases
OR Models in IT Systems
OR Models in Electricity Generation and Distribution Systems



Sunday, September 22, 2013

Strategy, Cost and Industrial Engineering - Presentation - Transcipt

Strategy, Cost and Industrial Engineering

Books referred

Strategic Management and Competitive Advantage

J.B. Barney and W.S. Hesterly


Strategy

Decisions that assure that a firm has products or services that have a profitable demand for a long period of time

Competitive Advantage

A firm has competitive advantage when it is able to create more economic value than rival firm or firms.
Economic value is the difference between the perceived benefits gained by a customer and the full economic cost the product or service.



Gaining or Increasing Competitive Advantage

Increasing the perceived benefits gained by a customer (Differentiating the product or service by providing more benefit – Product/service improvement based strategy)
Decreasing  the full economic cost the product or service (Cost based strategy).

Business Level Strategies

Two Generic Business Level Strategies

Cost Leadership:
generate economic value by having lower costs
than competitors
Example:  Wal-Mart
Product Differentiation
generate economic value by offering a product
that customers prefer over competitors’ product
Example:  Harley-Davidson

Industrial Engineering and Cost of Products

Industrial engineering optimizes (minimizes) cost of resources to produce the products and services at the designed level of quality.
Industrial engineering uses rationalization  to identify wastes and eliminates them from products and processes.

IE and Continuous Improvement

IE encourages all the employees to contribute ideas to reduces costs in various microlevel elements and tasks that help in continuous reduction of cost elements.

IE and Cost Reduction/Process Improvement Projects
IE department periodically undertakes process improvement projects to incorporate the latest efficiency improving technologies into the processes and contributes to cost reduction.

Periodic Mathematical Optimization of Costs
Thus there are opportunities to do mathematical, statistical and OR based optimization periodically.

Cost Leadership Business Strategy
A firm that chooses a cost leadership business strategy focuses on gaining advantages by reducing its cost to below those of all its competitors

Popular companies following cost leadership strategies
Ryanair – Air travel
Timex and Casio – watches
BIC – disposable pen and razors
Walmart - Retail



What factors or actions create cost advantage

Economies of scale
Diseconomies of scale create cost advantage sometimes – Mass versus Lean production
Experience difference – Learning curve economies
Acquisition of low cost productive inputs
Technology advantages independent of scale
Management policies

Economies of Scale

average cost per unit falls as quantity increases
-until the minimum efficient scale is reached

are a cost advantage because competitors may
not be able to match the scale because of capital
requirements (barrier to entry)
international expansion may allow a firm to have
enough sales to justify investing in additional
capacity to capture economies of scale
Diseconomies of Scale
are an advantage for those who do not have
diseconomies of scale
occur when firms become too large and bureaucratic
are a risk of international expansion


Learning Curve Economies
a firm gets more efficient at a process with experience
the more complicated/technical the process,
the greater the experience advantage
international expansion may propel a firm down the
experience curve because of higher volumes

Differential Low-Cost Access to Productive Inputs
may result from:
history—being in the right place at the right time
being first into a market—esp. foreign markets
locking up a source—buying all of its output

Technology Independent of Scale
may allow small firms to become cost competitive
advantage typically accrues to the ‘owner’ of the
technology—may or may not be the ones who actually
use the technology
size of the advantage depends both on how valuable
and protectable the technology is
Industrial engineering department plays a key role in this.


Policy Choices
firms get to choose how they will serve the market
we’ll offer level of quality that is inexpensive to
produce
firms can make policy choices that give people 
incentives to reduce cost at every opportunity 
Organization: Having staff consultants who decrease 
costs on a continuous basis using IE methods.

Cost Leadership & Competitive Advantage

A source of cost advantage will lead to if it is competitive advantage if that source is:

Valuable
Rare
Costly to Imitate
Organized (Implemented Appropriately)





Wednesday, September 18, 2013

Chapter - Process/Actvity Improvement - Method Study - 2013 Edition


Process Improvement Sections


Process Analysis - ECRS Method

Operation Analysis

Motion Study

Method Study - Case Studies

Pre-Motion Study Process Analysis

Bibliography

Presentation of Radheya Machining Limited on improving gear machining process to reduce defects and reduce cost. 2012 Presentation
http://conclave.qci.org.in/pres/Radheya%20Machining%20Ltd.pdf


Productivity improvement by Jubilant Industries-2012
http://conclave.qci.org.in/pres/Jubilant.pdf

Improving productivity by modifying storage procedures
http://www.ijarset.org/papers_Vol_1_Iss_1/Rakesh_Kumar_Malviya_paper_240-31201.pdf

Forces Causing Pressure for the Reduction of Cost

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 sys-
tem. 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
afterward, as they were under the older order. If you con-
tract to buy something which is not yet in existence a
bridge, a house, a suit of clothes, or what not the bar-
gain is largely a matter of estimate, often, indeed, a matter
of guess work, on both sides. You have to strike a mental bal-
ance 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 car-
ried out at all. The buyer never can tell with absolute cer-
tainty whether or not he got the best value for his money;
he can only compare the thing which has been made with what
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 en-
gines 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, Westinghouse 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
the ability to reduce costs become fundamental. Competi-
tion has therefore been in one way a tremendous force for
economy in manufacturing. And yet, by a paradox, in an-
other 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 1 .

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
secured among producer, consumer, and employee. Effi-
ciency is a concept as much finer than competition as crea-
tion, conservation, is finer than warfare. It is a philos-
ophy 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 wis-
dom; if we 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
inefficient and develop the efficient, thus producing a nation
of men good, wise and industrious, thus giving to God what
is His, to Caesar what is his, and to the individual what is
his. The attainable standard becomes very high, the at-
tainment 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 best."

Efficiency, then, and in consequence industrial engineer-
ing, 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; we
shall see particularly something that it is of the utmost im-
portance for us to understand, and that is that it did not
originate in technical advances alone, and it has never de-
pended 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.


Industrial Progress Needs Wise co-ordination and balance between technical, commercial, and human considerations - Going Industrial Engineering

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
practical achievement must always be interwoven with the
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
had been perfected to a point of practical service.

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-
ways had something near the quality and quantity of en-
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
success depends upon commercial opportunity. There must
be a potential market. Bessemer steel could not have found
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-
mercial factor. There must be a potential market; but it
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
shown us that in many cases there is no such thing as a fixed
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, tech-
nical success, is closely interlocked with industrial or eco-
nomic 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 re-
warded, would have been burned at the stake as a magi-
cian. This would not have been because the extraordinary
character of the achievement was unrecognized, but because
its nature was misinterpreted. That particular form of ex-
pressing intellectual dissent has gone out of date. We are
much more civilized now, and nineteenth- or twentieth-cen-
tury 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 us-
ually 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 com-
mercial economy. We might call this the psychological lag
the time necessary for the growth of human faith suf-
ficient to energize an industrial movement. In the case of
the electric railway, or the motor vehicle, for example, this
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,
this psychological or human element is of immense, even
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-
trial activities go badly wrong in their philosophy, and get
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 advance-
ment, 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 condi-
tions, and he must never allow himself to ignore human na-
ture.

Aggregation, Specialisation and Standardization in Industrial Organizations - Going Industrial Engineering - Chapter 2

CHAPTER II

REFLEX INFLUENCES OF THE INDUSTRIAL SYSTEM

IN the foregoing broad sketch of the rise of the industrial
system and of the influences controlling its development,
much stress is laid on the non-mechanical factors, because
when we consider manufacturing as a province of engineer-
ing we are prone to think first, oftenest, and most of the
technical aspects. They need no added emphasis. It is ex-
pedient rather to keep deliberately in view the other com-
ponents of the new applied science of industrial manage-
ment. But having made emphatic recognition and ac-
knowledgment of the economic and psychologic factors in
the movement, we may return to pay just tribute to the power
and effect of the great discoveries and inventions that in-
augurated the manufacturing system. The distinguishing
characteristic of this system was the introduction of me-
chanical power and machinery in place of hand labor. In-
crease in complexity of industrial organization was thereby
very much accelerated, and great changes were worked from
which have followed many of the difficulties and also many
of the advantages of manufacturing conditions to-day.

For
this replacement of the old handicrafts by power and ma-
chinery gave impulse to three great swiftly moving tenden-
cies: aggregation, or progressive increase in size of the
industrial unit; standardization, or the execution of work by
fixed patterns ; and specialization, or limitation of the work
of each individual to the repetition of some small element of
an entire process.



Each of them has far-reaching effects, not
only in the conduct of industry, but upon the social and po-
litical order. Let us consider them separately.


Aggregation

Aggregation is the coalescence of capital, of machinery, of
operatives, into larger and larger bodies under one central-
ized direction. Large bodies of workers had indeed been
assembled in the past for works of construction witness
the Pyramids but the occasion was unusual. Handi-
crafts induced distribution rather than concentration. But
when invention had given the world power-driven machines,
it became frequent, then customary, then inevitable (because
economical) to group them according to the largest number
that could be conveniently operated by some source of prime
energy the older water-power or the newer steam-engine.
In either case the result was the assembly in one establish-
ment of a body of workers, larger or smaller, according to
the mechanical and market conditions. In fact, the power-
plant became the principal material factor determining the
size of the industrial unit.

Before the mechanical prime-mover and the power-driven
machines were put into service, in the days when the hand
or the foot of the workman furnished all the motive power
necessary, the industrial unit was the single workman. He
was motive power, transmission gearing, and often driven
machine, all in himself, and he needed no factory building
other than the house in which he lived. This was the age of
domestic industries. It exists to-day to some extent, side by
side with the large manufacturing plant and in the midst of
this factory era. Familiar examples are the Scotch weavers,
the German toy makers, Swiss watch makers, and in many
large cities a certain proportion of the garment workers.

It would seem as if these domestic industries should af-
ford the most nearly ideal conditions for the welfare of
the worker, and should offer least opportunity for the evils
of the manufacturing system. But this supposition does
not seem always to be well supported by examination of the
facts. You may remember that Barrie does not draw a
very happy picture of the condition of the Scotch weavers,




and we do not have to go far to find that the lot of the
garment worker who carries on his work in his own home
is in many respects miserable. The concentration of
workers into factories, it is true, caused many evils; but the
very fact that the communities of workers were so large and
the conditions were so difficult to conceal, of itself operated
powerfully to bring about a correction of the evils. How-
ever, taking the whole range of industrial operations, and
the occupations dependent upon them, one of the first and
greatest of the changes occasioned by the new order was
this change of concentration or aggregation. It caused a
concentration of manufacturing enterprise in regions where
fuel was abundant and good. It caused aggregation of
capital to finance the larger and more extensive plants which
became necessary when costly engines and machinery be-
came part of the requisite equipment. It caused aggrega-
tion of workers in the buildings where work must be carried
on, and in the districts available for residence in the vicinity
of these works. The same principle extended its influence
into the field of transportation, which became focalized at
the great manufacturing centers and developed along cer-
tain lies connecting these.

This tendency to aggregation, be it noted, exists naturally
as the outcome of merely mechanical or physical conditions,
and even in this direction the things that set it in operation
continued to act in such a way as to cause permanence and
acceleration of the movement. Broadly speaking, the big
factory has some advantage over the little one. Its wants
are larger, its purchases greater, and hence its custom is
worth more to sellers of materials and it is likely to get its
supplies a little cheaper. Its fixed expenses for manage-
ment, superintendence, and administration generally, are
perhaps no greater absolutely than those of the small factory,
and almost certainly are less per unit of product. Its in-
fluence, prestige, and control of trade connections are likely




to be greater. It can frequently afford to hire better talent.
It may be in position to use waste or by-products advanta-
geously,, which, in smaller quantities, can not be recovered
except at expense greater than the saving. It is often in
position, if wisely administered, to undersell its small com-
petitor, and still deliver an equal or a better product.

This is not universally and unlimitedly true. There may
be, and there often are, critical points at which the large
manufacturer is at a disadvantage compared to the small
one. But the tendency is for the big to grow bigger, and
the strong to grow stronger, at some expense to the small
and weak. This is true of the pickerel in the pond and of
the tree in the woods. Given even equal brains in the
management, it is true of the industrial corporation; and
of course it is often, if not usually, true that the big con-
cern attracts or can attract to its service the best brains in
the market. I am still speaking of what we might term
wholly physical tendencies. But here again the physical
tendency becomes closely intertwined with another tendency,
which is at last partly psychological the tendency to as-
sociation. Whenever two or three are gathered together in
one place, with a common thought or sympathy, somebody
with the spirit of the organizer always turns up and starts
a society, or a brotherhood, or a lodge, or an order of sons
or daughters of something, and soon we have nobles and
princes, exalted and most worshipful grand masters, secrets,
grips, passwords, and a constitution, by-laws and ritual.
We find this everywhere, even when the common bond has
to be artificially created. It was absolutely inevitable
where great interests, vital to the well-being of the parties
in question, were at stake. Here we had a vast industrial
civilization growing up legislative bodies, transportation
companies, manufacturers and employees, all taking some-
what diverse views as to what was right and proper, and
all striving more or less selfishly to gain as much and to



yield as little as possible. It was absolutely inevitable that
the units in each and every one of these parties should draw
together, not only through the absorption of the lesser by
the greater, but in a co-operative effort to secure, by col-
lective bargaining, for themselves and their own interests,
the greatest advantage possible. So, as a logical outcome,
we have not only railway consolidation, but trunk-line
pools, presidents' agreements, and traffic associations among
the railways. On the part of employers, we have manu-
facturers' associations, syndicates, cartels and trusts. On
the part of workmen we have trade unions, labor organi-
zations and federations. In general, these things are in-
evitable, and they will persist. They are part of ttye
evolution of the time, and they can not be abolished by
legislation nor crushed by opposing organizations. I do
not mean for a moment that they have been or are yet
wholly beneficent far from it. Trusts, when they be-
came great enough, have proved ruthless in crushing com-
petitors, and soulless in wringing profits from helpless
customers. Labor unions have committed crimes of violence
that shock humanity. Railroads have cared for neither
law nor gospel in their autocratic pursuit of their own way.
But these are not the healthy, but the unhealthy, phe-
nomena of growth and change the abuses which seem to
be always incident to a changing era. They pass and dis-
appear with progress in the general mastery of understand-
ing as to what is best for society at large under the new
conditions. They are abated, not by arresting the whole
development, and perhaps not as much as is generally
thought by legislative enactment, but rather by a general
change in the temper of the world, which makes the evil
proceedings unthinkable and the position of the evil-doer
intolerable. The world has seen again and again these out-
breaks of destructive activity on the part of unscrupulous
men, who are partly quicker than others to see selfish op-




portunities in a new condition of affairs, and partly nearer
to the beasts of prey in their lack of conscience in seizing
whatever their skill enables them to grasp and their strength
enables them to hold.

In the days when the greatest prowess the world knew
was military, it was the " man on horseback " who waded
through blood to power and fortune; but it would be in-
conceivable that we should have another Napoleon to-day.
The rise of commerce and traffic over-seas, with or without
the opportunity afforded by almost continual wars and
that very elastic institution known as " letters of marque,"
saw the development of piracy to the rank almost of a gentle-
man's occupation ; but piracy has disappeared from the earth,
or rather from the ocean. The first great era of railroad
building in this country brought with it our now notorious
generation of millionaire railroad wreckers; but I think we
all must admit that the railroad world has purged itself
pretty thoroughly of that disease, or at least that our great
lines now are generally administered with honesty and faith-
ful regard for the interests of the security holders.

It is not to be denied that the hanging of pirates and
the jailing of dishonest railroad presidents has its effect in
stimulating a change of sentiment; but the great cause, after
all, is the altered public opinion which makes the hanging
or the jailing possible. To borrow a simile from bacter-
iology, these poisons that germinate in the body politic,
and seem sometimes to be increasing to fatal proportions,
appear also to develop their own anti-toxins by which they
are finally checked and destroyed. The world no longer
lives in fear of an Alexander or a Napoleon, but its confi-
dence is not based upon abolition of the military system
which gained Napoleon his opportunity. We still have
standing armies far more powerful than those with which
Napoleon conducted his campaigns, but in general they in-
spire in the minds of the Nation feelings of comfort, security,



and protection. I have a good deal of faith that the great
captains of industry will soon learn a lesson from the past
and the present which will make them as little a menace
to the country's good as the captains of war now are. I
think we shall eventually see that it is not a control of 25
per cent or 50 per cent of the output that makes a trust
good or bad, but only its fairness towards consumer and
employee, and the health and soundness of its economic
policy. I think we shall find that trust managers will in-
creasingly appreciate (as some of them do already) that
their own best interests are served when they share to the
largest consistent extent, with customers and employees, and
through them with the public, those advantages in manu-
facturing which vast organized facilities give; and I think
labor will realize (as some of its advanced leaders already
do) that its own cause will be best furthered when it aids
all sound measures and plans for increasing the efficiency of
the workman, and when it seeks to exact, not as much as
force can extort, right or wrong, but just what is reasonable
and equitable.

This may sound like a description of the millennium ; but
the curve of progress made in the last few decades tends
clearly in the direction I have tried to describe. There is
indeed yet a long way to go. But reason and common-
sense are growing more powerful year by year, and the more
enlightened common-sense becomes, the more it will see that
we must let those with whom we deal prosper, if we are to
prosper ourselves.

At all events, the great corporations and the great labor
unions are here, largely as the result of the great manu-
facturing plant. I do not pretend to speak ex cathedra,
but it seems to be as futile for a manufacturer or an as-
sociation of manufacturers to attempt to " smash the union,"
as it is for a politician or a legislature to propose to " bust
the trusts." They appear to be permanent institutions




or at least as permanent as most of our other economic in-
stitutions and while of course their excesses must be
curbed and many of their purposes must be enlightened,
they are a necessary part of the age, and we must deal with
them as wisely and as thoughtfully as we can, but with
conviction that they are here to stay, and that whether we
like it or not, they must be dealt with. Aggregation is a
functional necessity, indeed an organic part, of the industrial
and manufacturing system.


Specialization

Specialization, the second great tendency, is the separation
of work into elementary or fractional parts which are dis-
tributed to different operatives. The workman no longer
produces, or even reproduces, a complete article, but only
performs over and over some one of the series of operations
necessary to the production of that article. This is the
natural outgrowth of the replacement of the journeyman
or mechanic by the machine tender. Take the case of the
weaving industry as an illustration. In its primitive form,
the one workman or workwoman proceeded first to card
wool or flax or cotton, until there was enough to spin the
yarn; then he spun yarn until he had enough to make the
rug or bolt of cloth or what not he had in view; then he
threaded the warp through the harness of his loom, and
worked at the weaving until the job was finished. Probably
he was dyer and finisher, also, when necessary. You can
see this whole process carried on to-day in the log cabins
of North Carolina, the farm-houses of Nova Scotia, or
the hogans of the Navajo reservation.

But as soon as the industry is taken away from hand
workers and given to machines, the operations of carding,
spinning and weaving are split up between at least three
and probably more than three different pieces of apparatus,
which means three or more different sets of operators, each
familiar with but one special stage of the process of cloth
making. There are at least three persons doing in the



aggregate what one did originally, each seeing but one-
third of the process completed under his hands. But the
total output will probably be much more than three times as
large, even though the power loom weaves no faster than
the hand loom or the spinning frame spins no faster than
the hand wheel. This is because the time of changing
from one sort of work to another is saved, and each operator
becomes much more rapid and efficient by the constant con-
tact with and repetition of his limited function. When-
ever enough work is assembled in one establishment to allow
this sort of segregation of functions, an economic gain is
experienced. Thus, in a manufacturing machine-shop, in-
stead of allowing the operative to perform one operation
after another until he has finished a given article, we
keep him, say upon one machine tool only lathe, planer,
drill press or whatever it may be with the double object
of saving, first, the time of changing from one part of the
floor to another, and, second, of cultivating a higher degree
of facility within the limited range. Next, we may go
a step further, and instead of allowing our machinist to do
all the miscellaneous work on a boring mill, for example,
we keep him busy on boring nothing but one size of cylinder.
We may even go further yet, and confine him to rough boring,
moving the pieces afterwards to another specialist, who
takes the finishing cut. If our production of standard sizes
is large enough, we may keep him continuously at work rough
boring only one size of cylinder. In certain lines of manu-
facture, for which America has become famous, this speciali-
zation has been pushed to remarkable extremes* In the
making of shoes, for example, some . operatives may spend
a life time doing nothing but sewing a single seam in the
uppers.


Standardization


Standardization is the third great tendency in manufac-
turing, resulting from aggregation and going hand in hand
with specialization. It is the reduction of work to fixed




patterns, which are more and more compiled by the oper-
ations of the machine, so that skill of creation is more and
more centred in a small force of designers and the ordinary
workman becomes more and more a mere reproducer. It
naturally follows specialization. If you give a man a single
job or one stage of a job to do over and over, the logical
and necessary thing is to give him at the same time a
pattern or standard to which every repetition of his job
shall exactly correspond. Take the case of making shoes.
The old-fashioned journeyman shoemaker takes the lines of
his customer's foot, builds up a last with patches here, and
slices off parings there, models and measures and cuts and
fits, and never makes two pairs of shoes exactly alike. The
machine-made-shoe factory classifies all human feet into
some dozen or two of stock sizes, reduces these to fixed
patterns by which the leather is cut, sub-divides the sewing
and other operations among an army of operators, each
of whom does but one thing, few of whom ever see the
finished shoe, and none of whom sees the foot that is to
wear it; and among the standard sizes turned out (every
pair of each size exactly like every other pair of that size)
somewhere between i A and 13 EE, each member of the
human race is supposed to find a shoe he or she can wear.
Standardization is reduction to type, and this reduction
to type this making everything of any given kind exactly
like every other thing of that same kind may be pushed
to any degree of completeness. It may go so far that it
comprehends the entire machine, as, for example, the loco-
motive, the dynamo, the typewriter, or the watch. Every
part of any one of these machines may be made so exactly
like the corresponding part of every other machine of the
same kind, that perfect interchangeability is secured. This
standard for the regular product has been set and substan-
tially attained by many American manufacturers, notably
in the lighter and finer mechanical lines such as the manu-

facture of firearms, sewing machines, cash registers, and
watches. The parts going to make up any one of these
mechanisms are made separately by different workmen, none
of whom may see the complete device, or have any chance
to fit the piece he is making to the other pieces with which
it is to work. The part is turned out to standard pattern,
perhaps on automatic and semi-automatic machines, con-
trolled in its every dimension by limit gauges, and is made
repetitively in dozens, hundreds, or thousands; yet when as-
sembled with the scores or hundreds of other parts which
go to make up the complete anatomy of the finished ma-
chine, it slides into its place and performs its appointed
duty probably without needing even the touch of a file in
the hands of the fitter.

In other cases where such absolute identity of reproduc-
tion is not possible, standardization may go part way.
Perhaps one standard bed-plate may serve for several sizes
of machines or engines. Sizes of shafting, or dimensions and
tapers of bolts and other details or accessories, may often
and advantageously be simplified by the adoption of one
or a few standard types. Again, standardization may be
applied to the operations by which a certain piece of work
is performed, or the time in which it is to be done, the work-
man being provided with a schedule of instructions and be-
ing expected to follow them implicitly. The idea every-
where is to concentrate the thought and skill upon the
production of the best possible type, and then to make the
reduplication of that type a purely mechanical process.
The production of the original type, whether this original
is a machine or a method of working, involves very expen-
sive study and the employment of very expensive talent.
But the process of reduplication can generally be performed
by very cheap labor; and this labor, through the constant
repetition of a limited number of movements, often attains
an almost incredible degree of rapidity. Under the old


methods of hand manufacture, every unit of product was
practically an original. It was built up piece by piece, al-
most wholly on the principle of " cut and fit and try again,"
and every good workman had to be a skilled artisan, to a
greater or less extent a designer, often an artist, and an
engineer. Under the modern method, the unusual and
extraordinary skill of a small body of designers is made
permanently effective in the tools and process, and the work
of the journeyman is little more than mere muscular effort.
Of course, this movement has characterized manufacturing
everywhere to a greater or less extent; but in American
practice it has been applied- through a wider range and has
been carried farther than it has abroad, not only in mechan-
ical but also in structural engineering work.

" Mass Production " is a term often used to describe the
method of wholesale manufacture resulting from speciali-
zation and standardization. It has to a great extent re-
placed the practice of building things singly to fill each
individual order, just as the shoe factory has replaced the
old-time cobbler. All sorts of things from carpet tacks up
to machine tools, dynamos, steam engines, locomotives, even
battleships, are manufactured in quantity, in standard pat-
terns and sizes, and are placed upon the general market
for . each customer to pick out the pattern and size that
meets his particular need. It is clear that in saving of
cost of manufacture and in saving of time to the buyer the
system offers great advantages, and that it also carries an
advantage in that the interchangeability of parts character-
izing standard apparatus greatly facilitates replacements and
repairs. Three important commercial advantages, there-
fore, are inherent in the system; these are quality for price,
promptness of delivery, and convenience of renewal or re-
pair.

These great tendencies aggregation, standardization
and specialization are all interlocked. It was only when

a large number of operatives had been collected, working
side by side on the same product, that it became possible
as well as desirable to bring this product to a fixed pattern,
so that they might all work alike. And it was only when
this had been done that the parts of the work could be
separated, that is, specialized, so that in a spectacle factory,
for example, instead of every man making complete pairs
of spectacles, one lot of men might do nothing but grind
lenses, another group might do nothing but polish them,
another group might cut them to shape, another group
grind the edges, another group make the frames, and still
another group fit the finished lenses into the finished frames. 1
The men in each group, working over and over at their
limited job, can do it much faster and better than the
original all-around man did. The complete process is thus
cheapened, because each part of it has been cheapened; the
product can be sold at a lower price and thus find larger
markets; the increased demand at the lower price in turn
makes it necessary to employ more men. The manufactur-
ing organization thus proceeds to a larger growth; aggre-
gation receives a new impetus ; and so the cycle turns around
again and again upon itself with increasing speed and force.
--------------------------------

Unfavorable Results of Aggregation, Specialisation and Standardization - Industrial Engineering Remedies

Although the immediate effect is industrial expansion at
an increasing rate of increase, there are certain further re-
sults that are not favorable.

The first unfavorable result is the disappearance of the
generally trained all-around skilled artisan. There is little
opportunity under the present industrial system for a boy
to learn a trade as every apprentice learned his trade in
former years. Factory or shop conditions do not permit
it, and the wage inducements are against it. A machine
tender on a special job can acquire in a few months, or
even weeks, enough skill in his limited routine to earn larger

1 This is, of course, only an illustration. The making of spectacles is
specialized to an immensely greater degree than this.


wages than the apprentice can hope to get in three years,
and the ordinary beginner does not and perhaps can not
look beyond this fact.

The second unfavorable effect is that although general
standardization (that is, standardization of such things as
weights and measures, screw threads, sizes of wire, sections
of steel rails or structural shapes) is wholly desirable,
private standardization (or standardization of each manu-
facturer's special product) leads to inflexibility and re-
sistance to desirable change and improvement. Every-
thing about the whole establishment drawings, patterns,
special machinery, processes, operations, materials having
once been standardized and installed for the standard
product, can be changed and adapted to a different product
only at considerable expense and trouble. It is a matter
of common complaint that our American manufacturers
very often oppose a tacit or even a stubborn resistance to
advancement; that they buy up and pigeon-hole patents for
improvements in their field; that they seek to control a
market by masterful salesmanship, by combinations to
regulate products and prices, rather than by progressive
betterments of output. It is asserted by authorities of the
highest credibility that we are losing, indeed have lost, our
mechanical supremacy, largely through over-standardization,
over-adherence to standard products lost it to Continental
manufacturers whose less complete standardization left
them more elasticity, both of equipment and of mind, and
enabled them to follow improvement after improvement,
until in excellence of product, and especially in efficiency of
product, they have left us far behind.

It would not be right to leave unmodified the impression
that the disadvantages or the dangers just suggested are
sufficient to overbalance or perhaps even to balance the
benefits to industry and to the public which have come so
far through standardization and specialization in manu-


facturing. The low cost of the product which has thus
been secured has put it within the reach of large classes
of buyers who would otherwise have been unable to pur-
chase. The volume of manufactures, many of which in
turn become the basis of other manufactures, has not only
filled the world's stores with necessities, conveniences, luxu-
ries, and tools of livelihood, but has made it possible to
provide profitable occupation for the increase of the throng-
ing nations who are filling up the once-abundant acres of the
earth. Specialization, also, has furnished well-paid posi-
tions in vast numbers for a class of ability which could not
have commanded skilled wages and which, if it were not
for this opening, would have had to be content with the
smaller pay of common labor. As against these great
economic and social advantages, the drawbacks I referred
to are perhaps small. Still, the dangers do exist, and they
may increase if they are not recognized and met. It is part
of the problem of the industrial engineer of the present and
of the future to find preventive measures against the in-
flexibility the ossification which threatens us when we
become over-standardized, and against the dreadful narrow-
ing of functions and the deadly monotony of occupation
which comes to us when our work is over-specialized.

We need, then, some countercheck that may be balanced
against specialization and standardization, so that we may
enjoy their economic advantages without incurring evils that
lie beyond. This countercheck it is part of the industrial
engineer's function to provide.


The answer appears in the
doctrines of that first apostle of scientific management,
Frederick W. Taylor in the gospels also according to
Harrington Emerson and H. L. Gantt, and other leaders of
advanced thought in this field. It is, in part, the exaltation
of specialization its investment with a new dignity, with
depth in place of breadth, making fwtensiveness instead of
#tensiveness, the goal of desirability; and with this, the

recognition of a standard as something which itself must
continually advance as something which is a living evo-
lution and not a rigid crystallization.

But we must not follow this thought further, as we have
to consider another condition springing from aggregation
as well as from specialization and standardization, and in-
volving that most intensely interesting and important of all
the problems of industrial engineering the relation be-
tween employer and workman. This is the exchange of
the workman's independent individuality for membership in
a class. Under the old order the village blacksmith was
a character, a landmark, a figure in local history and a
theme in literature. Under the new order, the counter-
part of this iron worker in a modern smithshop probably
tends a forge press or works as one of the gang, and passes
unnoticed to and from his work and into and out of his
employer's service, filling a job designated by a number,
and perhaps not even known by his own name.

And now we come to a very important point. When a
plant employs thousands, and even a department employs
hundreds, it is only by infrequent and improbable chance
that a superintendent or manager can observe any individual
difference among his many employees. Very rarely is any
attempt made even to keep records by which individual per-
formance can be studied and compared, if the supervising
official should be anxious to make such comparison. The
man of superior efficiency, even though he may do two
or three times as well as the inferior workman beside him,
has little chance of recognition and practically no chance
of reward proportioned to his worth. His position is fixed,
his wage is fixed, by his class and occupation. As Mr.
Gantt has pointed out, it is inevitable that under such con-
ditions the exertions of the more energetic man should be
turned to the attempt to raise the class rate. It is inevitable
that the efficient man should say: " I can't make any more

money by laying more brick a day than Smith or Brown or
Jones; but if I get Smith and Brown and Jones and all the
boys to join in a demand for higher wages for bricklayers,
we can get them."

A direct result of the submergence of the individual in a
class is the elevation of the class into the attitude of an
individual in its demand for recognition. But the class
demands larger pay, not as the equivalent of larger work,
but as a tribute to larger power. As a rule, the amount of
work done by each man tends downward to the level of the
least efficient; while the wages secured by the class through
collective bargaining tend upward toward the maximum that
can be grasped and held by the power of the union. This
is immensely unsatisfactory to the employer, but it is the
logical consequence of conditions that the employer not
the employee has created.

One more great difficulty confronting the industrial
engineer in the administration of the manufacturing sys-
tem is the material counterpart of this impersonalizing of
the man. It is the disindividualizing of the work, or, to
use the more familiar language of the shop, of the job.
As the practice of specialization already referred to divides
all operations among different workmen and departments,
the manufacture of any single thing, whether this thing
is a locomotive or a watch or a bridge or a ton of copper
or a pair of shoes or a train mile, starts in many different
places by the apparently independent acts of many different
men. Further, each of these separate acts, which is going
to be co-ordinated with other acts so as to produce some
completed article, each of these separate acts is not a sole
individual act, but is one of a series of repeated identical
acts performed by the workmen. I hope I make this point
clear. Each unit of product is built up out of manifold
dements gathered from the work of many men. The work
of each man is divided and subdivided among many units

of product. The lines of movement between the many
workmen on the one hand, and the many units of product
on the other hand, are an enormously complex interlace-
ment. The industrial engineer must control the orderly
guidance of this interlacement; he must see not only that the
elementary producers do their work and do it efficiently,
but that the elements thus produced are kept in the right
balance and proportion and are combined to form the right
product at the right place and at the right time. In every
direction, then, the spaces, forces, institutions of industry
have far outgrown the limits of the man. It seems as
though the world of manufacturing were no longer one of
persons, but of classes, departments, systems. And yet, in
all human affairs the originating and guiding power is the
individual brain. Nothing can take its place. However
complex the order, it must rest upon a systematic support
of human intelligences and wills. And the method of co-
ordination by which many minds and hands carry on one
of the vast industrial enterprises of the day is organization.
Its fundamental principles and methods will be taken up
in the following chapter.

Efficiency and Principles of Organization - Going Industrial Organization - Chapter 3

CHAPTER III
PRINCIPLES OF INDUSTRIAL ORGANIZATION

WE have seen so far that the introduction of power and
machinery first inaugurated the manufacturing era,
and next gave rise to certain tendencies and policies in manu-
facturing. The most important of these were growth in
size of the manufacturing plant, and development of manu-
facture on a wholesale scale; and in connection with this
the re-apportionment of duties among the artisans employed,
so that it has become general for each to do only some
limited special part of the whole process of manufacture,
and to do this by repetitive reproduction of a fixed pattern.
While this has vastly reduced costs of production and
facilitated manufacture per se, it is evident that from the
works-management point of view it introduces very serious
problems. One is merely quantitative; the great size of a
modern factory makes it impossible for the manager to
oversee it all in person. Another is the division of opera-
tions among different workmen or departments. Each
single thing manufactured starts, or may start, in as many
different places as it has parts, each part again being not
an individual but one of a lot of like parts; and such a
lot of identical parts, though they start off together through
the shop, may- later on be divided and sub-divided and di-
verge to various finished products if they happen to be
standard to more than one pattern. The workman actually
engaged on the job has no idea of the destination of his
work and no responsibility beyond finishing his own indi-
vidual job to the standard pattern and quality, and perhaps
within some standard time.



Take a pocket knife for illustration. It has a blade of a
certain size and shape, which probably is used not only in
the one pattern of knife we happen to be considering, but
also in some two-bladed and some four-bladed knives made
by the same factory. It has certain German silver pieces,
probably drop-forged, possibly not made by the knife manu-
facturer at all, but bought in quantity from some other
maker. It has some bone or pearl pieces, still more prob-
ably purchased from an outside manufacturer and used in
a number of different styles of knife, sold at various prices.
It has certain steel springs, and thin brass plates, and a
number of rivets. All these parts in hundreds and thou-
sands are passing through the factory, and being assembled
into knives just like the one we happen to take as an ex-
ample, andJnto other knives of more or less varying design,
in a continuous stream year in and year out. Each indi-
vidual workman, as, for example, the man grinding the
blade, sees no more than his own job. But if the factory
is to succeed, John Smith's order for one dozen knives like
the one we have, to be shipped to Topeka, Kansas, must go
forward at a specified time, and must be billed to him at
a price that pays a fair profit, and still is low enough to
meet competition from other knife factories.

The manufacture of a knife is a comparatively simple in-
stance. In the case of some mechanical products such as
typewriters and automobiles, for example, there are hun-
dreds and thousands of separate pieces to be routed through
the factory, worked upon, and finally assembled into a unit
of product. The paths of the several parts are something
like the paths of letters in the mail; a myriad of units from
scattered sources are gathered into larger streams, travel
together so long as their paths can be economically united,
and then diverge again in new groupings to various indi-
vidual destinations. It is utterly impossible for any one
person to follow each transaction, and yet a positive and





sure result must be secured. And this is the function of
organization. System must do what the individual can not
accomplish.

It looks like an impossibly intricate problem; and yet if
we look again at the illustration used just above the Post-
Office we see that a fixed organization and fixed systems
of collection, transportation, and distribution produce a re-
sult in exact accordance with our plan and desire, and with
almost infinite variety and elasticity in meeting that plan
and desire. This is an illustration only not a close par-
allel; for in manufacturing we have the added condition
that each item handled is or may be worked upon and
changed during its movement through the factory, and
in all industry all operations and processes must be con-
ducted with strict regard to economy and efficiency. We
have not an unlimited Government appropriation behind
us, and we have the neighbor across the way competing with
us and by close bidding forcing prices down so that we
have to consider even small fractions of a cent. Still, the
illustration helps us to see what organization and system do
accomplish.

Organization is fundamentally a practical plan for sub-
dividing the conduct of any undertaking into parts, each
small enough to be handled by an individual, by a method
that enables all to work together.


The efficiency of organi-
zation depends on the wisdom and skill with which this di-
vision is made the success secured not only in selecting
efficient individuals, but in arranging that each may work
at his best efficiency, and all work may keep balance and
harmony in achieving the desired result.

Line, Functional and Line-Staff Organizations- Efficiency Implications - Going Industrial Engineering





There are two great principles in organization commonly
known as line and staff, or, to use the terms preferred by
some industrial engineers, " military " 1 and " functional."

1 The use of the term " military " in this sense is misleading. Military
organization has long comprehended both line and staff. Indeed, as the

Line organization is essentially simple, mathematical
subdivision. An army under a major-general is divided into
brigades under brigadier-generals; each brigade is divided
into regiments, under their colonels, and each regiment into
battalions under lieutenant-colonels or majors; each bat-
talion is divided into companies under captains; each com-
pany is again subdivided under its lieutenants, and so on
down to the corporal with his squad. Promotion is step
by step upward; the private may hope to be made a corporal,
a sergeant, a lieutenant, a captain, a major, a colonel, a
general. The lines of authority and responsibility run con-
tinuously through the whole body from top to bottom, as
the veins of the leaf gather to the stalk, and many leaf-
stalks to the twig, and many twigs to the branch, and many
branches to the trunk; and veins and stalk and twig and
branch and trunk have practically similar duties to perform
in the life and growth of the tree.

Staff organization is a division according to functions
division by which one military department does all the
engineering work for the whole army, another supplies all
clothing, or rations, etc. It is the division by which the
roots absorb moisture and salts from the earth, the leaf
cells make chlorophyll, the sap carries the products of these
laboratories to the cell-building processes of the tree. Staff
functions are co-ordinate and co-operative, but they do not
stand to one another in any order of ascending and descend-
ing scale. The captain, simply as captain, ranks and com-
mands the lieutenant; that is a line relation. But the en-
gineer, as engineer, does not command the quarter-master;
the quarter-master does not rank and command the surgeon;
the leaf does not rank the root; that is a staff relation.
On the other hand, the captain is primarily responsible only

oldest of the " noble professions," the military long since discovered and
applied many of the principles lately reannounced by investigators of
" scientific management."




for his own company; each branch of the tree supports only
its own twigs and each twig its own leaves. That, again,
is line organization. The scope of the individual is limited
in area, but unlimited in responsibility within that area.
But the engineer builds a bridge for the entire army
general, colonels, captains, and privates; each root and leaf
contributes its share to the life of the entire tree. That is
staff organization. The responsibility of the individual is
unlimited in area, but limited to one function throughout
that area.

The functions of staff and line are, therefore, not an-
tagonistic; they are not alternative and rival systems of
organization, between which we may choose and say we
will adopt this or that and refuse the other. Line organi-
zation is. essential to discipline and essential to the con-
tinuous existence of the whole body. If the general re-
tires there must be a colonel to succeed him; if the captain
is killed in action, the lieutenant must take command of the
company, or the men are scattered and lost. Staff organi-
zation is essential to efficiency, each branch of it in its own
particular function. If the commissary fails and there is
no food for the troops, the engineer can not make up for the
deficiency by vigorously building bridges. Each staff must
have a line organization within itself for discipline and
continuity; but every complete organization must embody
the principles of both line and staff if we are to secure the
best results, the staff supplying expert functional guidance,
applied through the line's direct control.

In manufacturing and industrial operations generally there
is no lack of development of line organization, but there
is too often a very meagre appreciation of the valuable re-
sults attainable by far-reaching applications of the staff
principle.

This is generally characteristic of modern in-
dustrial concerns, and it is here that we are likely to dis-
cover weakness when the attainment of high efficiency is

desired.


Under line organization, the foreman is supposed
to decide every question for the men under his particular
control employment or discharge, wages, jobs, diffi-
culties with materials, difficulties with tools, difficulties with
processes, difficulties with other employees. If the ques-
tion is too big for the foreman he goes to the superintendent,
and if it is too much for the superintendent he puts it to the
general manager, and it may finally go to the board of
directors. The assumption under-lying is akin to the sup-
position that the corporal must be a better shot than the
private, and the sergeant than the corporal, and the lieuten-
ant than the sergeant, and so on up to the general in com-
mand.


It is one of the very strong features of what has
lately been called " scientific management," that in its study
of operations, its preparation of instructions, and its formu-
lation of schedules, it introduces staff co-operation to a yet
larger extent through the work of expert instructors. We
need a much fuller recognition of this principle, not as the
occasional or unusual accompaniment of the introduction
of a new system, but as an organic part of our regular sys-
tem. We need to incorporate the staff idea into our settled
industrial policy, so that expert direction as to relations
with employees, as to equipment and its maintenance, as to
materials, as to methods and conditions, as to performance,
shall operate throughout our works not in series but in
parallel, and shall be available at every point, to every man,
in every job, at every time.

The average foreman is not could not be able for
all this. He is rarely strong in even one of the three parts
into which Mr. Gantt divides the labor problem finding
out what is the proper day's task for a man suited to the
work, finding out what is the compensation needed to in-
duce the man to do that work, and planning so that the man
can do the work continuously and efficiently.

These are
the things that control the result of all our industrial ven-


tures. After we have laid our plans and bought and in-
stalled our machines and assembled our forces and organized
our whole complicated establishment, with its investment
of money and hopes and expectations, the result depends
very largely on the efficiency of the individual workman.
The cultivation of high efficiency is a matter of vast im-
portance not merely to the invested capital, but to the eco-
nomic and social future of the country.


It has been left
in the past very largely to the foreman, and because he did
not know and could not know the conditions that produce
inefficiency, and the means of cultivating efficiency, the out-
put of the average worker (in the estimate of very careful
students of the question) is not one-third of what it should
be and can be without any increased tax on the body or
brain of the operative. Here is an opportunity for the
conservation of human resources which comes nearer
home even than the conservation of coal or of water
powers.

The defect of the average, usual, old-line organization
is that, in the desperate speed of industrial expansion, it has
tried to meet the onslaught of conditions, the mere quanti-
tative problem of expansion, by throwing itself into the only
form with which humanity (as the heritage of centuries of
fighting) is intimately familiar the military form. The
ordinary philosophy of management is (to borrow a defini-
tion from Harrington Emerson) " autocratic authority at the
top delegated authority and imposed responsibility all
down the line, and anarchy everywhere." Just as in em-
ergencies each man below turns to the man above, so in
ordinary routine the order is reversed. The president " puts
it up " to the general manager, the general manager "puts
it up " to the superintendent, the superintendent " puts it
up " to the foreman, the foreman " puts it up " to the work-
man. The work is finally done by, and the efficiency of
actual execution is usually dependent upon, the man of lowest


capacity, of least knowledge, of least possible breadth of
vision, of least power to control conditions that is, the
actual workman. His only source of all help and instruc-
tion is usually but one step higher in knowledge or in power,
and that is a job boss or foreman.

The entire ideal of industrial-engineering organization,
of " scientific management," as it has lately been called, is
diametrically different. It is the study of the plans for
executing the work and of the ultimate operations of the
work itself by the highest expert skill obtainable ; the defini-
tion of the best means for. doing the work by the most
competent specialist obtainable; the reduction of these re-
sults to standard definitions and standard instructions; the
provision of the best apparatus for doing the work, and its
maintenance in the best condition, again by specialized
skill; the careful training of the workmen by competent
instructors to do the job in the best way with these best
appliances, and in the minimum of time; lastly, the provision
of some incentive sufficient to secure the workman's co-
operation, to make him willing to do the work in the way
and in the time that have been studied out. This incentive
may be a day wage, a piece rate, a differential piece rate,
a bonus, a premium, or a purely sentimental reward " an
imaginary value," as Dr. Junge calls it. These wage
methods are not fundamental institutions in themselves, as
they are sometimes mistakenly supposed to be. They are,
or should be, only the last step in a far broader philosophy
of production. Scientific management, then, involves these
three great steps : First, analysis or the accurate estima-
tion of productive elements and preventable wastes; second,
standardization of attainable maxima of performance, and
establishment of conditions by which the men may practi-
cally reach these maxima ; third, and last, devising an incen-
tive by which the interest of the employee is visibly and
convincingly advanced, parallel with the interest of the em-

ployer, as the workman approaches and reaches or even sur-
passes the standards set.

To sum up in three words: The elements of scientific
management are analysis, standardization, incentive.

The difference between it and ordinary management is
that it provides for these things, while ordinary manage-
ment provides only for the transmission of orders and
maintenance of discipline, with little or no instruction or
assistance to the workers.

To put it in still another way: by co-ordinating the two
elementary ideals of management line, for permanence,
authority, discipline; staff, for development of high func-
tional efficiency "scientific management" 1 restores, both
to the job and the man, the identity the individualism
which under ordinary management is lost by a policy of
wholesale dealings and mass relations.

At the present time two leading schools of scientific
management seem to be forming, characteristically asso-
ciated with the names of F. W. Taylor and Harrington
Emerson. It is hardly fair to the subject or to the reader
to attempt to point out in a brief paragraph their distinctive
doctrines, for each requires and has been given by its chief
sponsor an exposition reaching the dimensions of a fair
sized book. 2 As an introduction or an incentive to further
study, however, the following summary is offered:

The Taylor system displaces ordinary management by
the introduction of a highly specific, distinctly defined

1 The term " scientific management " is used with some reluctance be-
cause of its general current employment in a restricted and specialized
sense. Scientific management means only the application of scientific
principles and methods to the work of management. The sciences in-
volved may be, and are, several. Scientific management can not be re-
duced to a formalized and formulated system, although a systematic
scheme of management may be based on scientific principles.

2 See "Shop Management," by F. W. Taylor; Trans. Am. Soc. M. E.
June, 1903. No. 1003. See also " Efficiency as a Basis for Operation and
Wages," Harrington Emerson ; The Engineering Magazine.




" functional force." The performance of work is first di-
vided into two phases planning and execution. Each of
these phases is separated into four major functions. The
four functional representatives in the planning department
are " the order of work clerk," " the instruction card man,"
" the time and cost clerk," and " the shop disciplinarian."
The four functional representatives in the active work of
the shop are " the gang boss," " the speed boss," " the in-
spector," and " the repair boss." There may be one or
many representatives of each function, depending upon the
frequency with which their function necessarily brings them
in contact with the men; but within any one function, the
workman looks to the particular boss of that function for
his orders and assistance. The workman takes orders from
eight different bosses instead of from one only as under the
ordinary system of management. The details of the sys-
tem are also highly specific, as, for example, that all work,
tools, and equipment parts are symbolized, the performance
of every operation is charted, all instructions are written,
etc. The salient feature, however, is that the old line
organization is discarded, and eight functional lines are
put in its place.

Emerson leaves the old line intact, but supplements it
with an expert staff, who bring to bear highly specialized
knowledge and skill upon the various elements of operation
that are susceptible to improvement. These might be, for
example, such matters as the economical burning of fuel, the
custody and issue of materials, the cutting of metals, the
care of machinery and equipment; these are random illustra-
tions only. The staff organization would be specialists in
the subjects of largest influence upon economy of operation,
but their knowledge would be applied, not by direct orders
to the workmen, but by guidance, instruction, suggestion,
counsel, to the regular line officials. Emerson's faith is
not in methods, but in principles of efficiency and their pur-
suit by a line-directed and staff-guided organization, adapted
to the circumstances and conditions of any given operation.
These principles of efficiency are: Ideals; Common-Sense
and Judgment; Competent Counsel; Discipline; the Fair
Deal; Reliable, Immediate and Accurate Records; Plan-
ning and Dispatching; Standards and Schedules; Standard-
ized Conditions; Standardized Operations; Written Stand-
ard-Practice Instructions; and Efficiency Reward. 1

In the acceptance of fundamental ideas and foundational
data there is no important difference between the two
schools. In methods of practice there is a very wide dif-
ference, the latter being much the more elastic. One of the
first precepts of the Taylor school is that no half-measures
are possible. The system must be adopted in its entirety or
let entirely alone. From Emerson's doctrine of efficiency,
on the other hand, follows the deduction that betterment
may proceed by almost infinite gradations, depending on the
willingness and thoroughness with which the principles of
efficiency are accepted and applied.

In the early sections of this chapter organization and
system were spoken of as being effective in controlling large
operations that are beyond the grasp of the individual.
System is the method by which organization works to se-
cure desired results and to maintain control of every item
of work in hand at all times.

"The Twelve Principles of Efficiency;" The Engineering Magazine.
June, 1910, et seq.