Monday, July 31, 2017

THE TRAINING OF INDUSTRIAL ENGINEERS - Hollis Godfrey - 1913


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JOURNAL OF POLITICAL ECONOMY, 1913  - Paper

THE TRAINING OF INDUSTRIAL ENGINEERS 


Modified Excerpts from the paper

Little by little, as the engineering student goes forward in education and practice,  he begins to see that the possession of certain powers enables him to conquer hesitant men and recalcitrant machines,
and also problems which involve both men and machines simultaneously. And the powers which enable him to do these things are science and engineering (convertising science into useful devices and processes). His thinking helps him in this.

I assume that no course in the industrial engineering steam would be begun before the end of the Sophomore year in college. The man who reaches the Junior year of college or technical school
must have had some training in science and mathematics or he would not be eligible to enter the industrial engineering course. He must have acquired some common-sense and scientific attitude
on his way, and the knowledge of science and common-sense so gained should be sufficient to enable him to recognize that in electing scientific management he is deliberately electing to follow a long and arduous road. The problem before us, then, when we discuss the work of men electing industrial engineering courses, is taking men with some common-sense and some knowledge of science and raising what they have to the highest possible power.

How, then, can the industrial engineer become a scientist, attain the scientific attitude of mind ?

By welding the scientific work of the classroom with the shop-work of the factory; by making the laboratory hours, hours that are spent with wage-earners striving for their daily wage. Laboratory and classroom hours alike must be filled with reality rather than with pure theory or with theory quite unrelated to the practical world.

The student must first of all, get in touch with the shop. And I insist that he can do that nowhere save in actual operating shops among men who are working for their daily wage. No shop practice in the school will produce a like result. Shop-sense is one of the most valuable possessions of the industrial
engineer. That sense comes only through actual shop practice. Once possessed it means that the man has thereafter the freedom of the shop.

To attain the desirable ends of knowledge of science and posses-sion of common-sense I propose that any course in the science of management shall consist of classroom work as outlined below and
of laboratory work carried on in actual operating shops. That means that manufacturers who are broad-minded enough to be willing to assist the college, and instructors broad-minded enough
to recognize the limitations of industry must co-operate in giving the laboratory instruction in shop practice to the students. I believe both groups of men exist and I feel that through their combined efforts the student should have an opportunity to spend the summers of his Sophomore and Junior years in actual shop practice, while three afternoons a week during the scholastic year should see him working in the shop.

What underlying thought must be before the men who make the courses ?

The industrial engineer is dealing in all cases with both men and machines. He must study "man" in his relation to his industrial environ-ment — not any single class of men, but all the men engaged in
industry. He must study "machines," not alone in their relation to their product, but also in relation to the human beings who operate them. It is his task to bring the best that modern science has to the aid and well-being of man.

It is in the development of his pupil's studies of men that the wise teacher of scientific management will work most steadfastly in correlating the allied courses, mentioned later, in psychology
and physiology, in economics and sociology, with the courses in the science of management, and with the work of living men and whir-ring machines.

The industrial engineer must recognize the presence of many factors in a problem. He must solve equations of not only two unknown quantities, but of a dozen unknown quantities, so to speak. And
the correlation of his courses in class with each other and with life will do much in the way of enabling him to do so.



When should the work begin, and how much of the student's time should it occupy ?

Direct work in industrial engineering and scientific management should begin either at the
end of two years or of four years in college. The direct and allied special classroom courses should occupy one full year of collegiate training, divided between two years' work, making a half-year's
work in scientific management during both the Junior and Senior years. The shopwork should occupy two summer vacations and three afternoons a week during each of the two years.

What courses should be offered ?

A dominant course in the science of management running through two years, allied with courses in economics, sociology, psychology, physiology, hygiene and sanitation, theory and practice
of accounting. All these should be in addition to the student's more direct work in science, mathematics, engineering, English, and foreign languages, which occupy the time of three out of the four collegiate years — if the courses are made undergraduate ones.

What should be the content of the scientific management courses given during the four half-years that comprise the Junior and Senior years of most colleges and technical schools ?

The first half-year should be devoted to a general view of four picked industries — in order that the student may see industry more or less as a whole — and to the study of the principles of
scientific management. The laboratory work for this course should consist of the broad outlined study of four plants from the time of the receipt of the first inquiry from the prospective customer to the final entry of the payment for the bill and the calculation of the cost. The classroom work for this course should be devoted to a thorough grounding in the basic principles of organization,
and to study of the principles of scientific management.

It is most essential that the student should obtain at the very start a clear realization of the difference between system and science. It is most essential also that he should come to understand that,
while certain problems solved for one industry may be solved for all industry, such general solutions cannot be presumed upon. He should know that every new business will contain new problems,
which must be solved by the use of all the knowledge of the past plus all the imaginative genius he can hope to possess. That is to say, the student must learn that a mechanism used successfully
in one place cannot be bodily transported to another with hope of instant success. By the end of the first half-year each individual taking the course should have come to realize that he is studying
the principles of a science which are applicable to every case, not memorizing a set of rules or inheriting a stock of recipes. The study of four actual operating plants will aid him greatly in this
realization.

The second half-year should be devoted in the classroom to a detailed study of the planning-room and the processes involved in getting work into the shop, of stores, routing, specifications, etc. —
planning in general, in a word. The laboratory work should consist of actual planning-room experience in the shop.

It is entirely true that there is a question as to whether planning-room experience should follow or precede shop training. It may, therefore, be a question whether planning should be put in this
course. It is my own belief that the student will master his shop theory better the third half-year from the fact that he has discovered the basic reasons of the work in the planning-room. It should be
noted, moreover, in this connection that I have assumed that the student has had a summer's experience in actual shop practice as a prerequisite of the course, and that he has had a half year of
general preliminary study.

The third half-year should be devoted to a detailed study of work in the shop (especially of the teaching work of the functional foreman), of inspection, and of task work. All of this except the
study of task work should be done in actual plants. The task work should be done on fellow-students in the shops of the school. No untrained man should ever be put on actual task-setting.

The third half-year offers a great opportunity to impress upon the student the importance of the teaching function of his work. The whole theory of functional foremanship is a theory of educa-
tion and a great part of the time of an industrial engineer must be spent in teaching the men with whom he is working. Adequate powers of expression are by no means common among our recent
graduates. The teacher of scientific management can never forget that the work of his pupils must show in the life-work of the men with whom they are dealing. The bridge-builder leaves a physical
monument largely untouched by the later thought of men. The industrial builder must educate in such a way that his work will go progressively forward in the minds of men. That is true education,
and education is true only when it obtains adequate expression.

The fourth half-year should be devoted to studies in bringing all the best that science offers to the aid of industry — to work in costs, to work in the determining of policies by studies of sales,
purchasing, and the like, and to the co-ordination of the work of the three half-years already outlined.

The course of the fourth half-year should be broad enough to give the student some concept that great movements of trade exist and that they are factors which he must meet and use. The world
is fairly well provided with men who can look after a few details.

It is very poorly provided with men who can care for great constructive work. One of the greatest industrial leaders of our time said to me the other day: "The greater the affairs of a corporation, the
smaller the number of men who can deal with them. It seems to be a true inverse proportion. There are ten men who can think in a hundred thousand dollars, to one who can think in a million,
and ten who can think in a million to one who can think in ten millions."

I should hardly expect any course to give an undergraduate a great grasp of comprehensive plans. There is, however, no reason why we should hitch our wagon to the lowest of the stars when we
can find higher ones within our reach.

In the foregoing resume of a course in the science of management I have made no reference to many subjects I should have been glad to consider, to reports and theses, to methods and policies. Considerations of brevity forbade. I must turn again to my catechism and end with three brief questions and three brief answers.

What should the allied courses teach ?

The relation of man to industry and to his general environment.

What should the college courses in English teach ?

The power of expression.

What should the work in scientific management teach ?

That scientific management is a change of mental attitude (mental attitude, now, as always, the most powerful force among men) which makes employer and employee pull together instead of apart, which brings all that is best in science to the aid of every man in industry, and which, by its substitution of exact knowledge for the chaos of guess work and ignorance, makes progressively for
justice and for the coming of the "new industrial day."

Hollis Godfrey

West Medford, Mass.


I am happy I covered some these issues in my principles of industrial engineering.
Principles of Industrial Engineering

Video Presentation
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A SYMPOSIUM ON SCIENTIFIC MANAGEMENT AND EFFICIENCY IN COLLEGE


ADMINISTRATION

COMPRISING AMONG OTHERS

THE PAPERS PRESENTED AT THE EFFICIENCY SESSION

OF THE TWENTIETH ANNUAL CONVENTION OF THE

SOCIETY FOR THE PROMOTION OF ENGINEERING

EDUCATION, HELD AT BOSTON, MASS.,

JUNE 26-29, 1912


OFFICE OF THE SECRETARY ITHACA, N. Y.

TABLE OF CONTENTS.


INTRODUCTION. " Frank. B. Gilbreth


EDUCATIONAL DEMANDS OF MODERN PROGRESS. " Harrington Emerson. 



PRACTICE VERSUS THEORY IN THE SCIENCE OP MANAGEMENT. " F. A. Parklmrst


32 32 37

EDUCATION AND EFFICIENT LIVING. " Meyer Bloomfield

THE ENGINEER AS A MANAGER. " H. L. Gantt


THE MEN WHO SUCCEED IN SCIENTIFIC MANAGEMENT. " H. K. Hathaway

THE PLACE OF THE COLLEGE IN COLLECTING AND CONSERVING THE DATA OF SCIENTIFIC MANAGEMENT. " Wilfred Lewis

AN AUXILIARY TO COLLEGES IN THE TRAINING OF SCIENTIFIC MANAGERS." E. T. Kent

TEACHING SCIENTIFIC MANAGEMENT IN ENGINEERING SCHOOLS." R. B. Wolf

THE TEACHING OF SCIENTIFIC MANAGEMENT IN ENGINEERING SCHOOLS." Hollis Godfrey 


TEACHING THE PRINCIPLES OF SCIENTIFIC MANAGEMENT. " 

Walter Rautenstrauch

82 TEACHING SCIENTIFIC MANAGEMENT IN THE TECHNICAL SCHOOLS.

H. F. J. Porter 94

A BROADENED VIEW OF EFFICIENCY IN ENGINEERING INSTRUCTION.

L. J. Johnson 108

ABSENCES FROM CLASSES ONE MEASURE OF INEFFICIENCY."
F. P.McKibben

112 118

THE PROBLEM OF EFFICIENCY IN TEACHING. " W. A. Hillebrand ....


THE ADMINISTRATION OF COLLEGE SHOP LABORATORIES. " W. F. M. Goss

129 133 139 145

SETTING TASKS FOR COLLEGE MEN. " S. E. Thompson

DEPARTMENTAL ORGANIZATION AND EFFICIENCY. " Hugo Diemer

ACADEMIC EFFICIENCY." William Kent

OPERATING ENGINEERING SCHOOLS UNDER SCIENTIFIC MANAGEMENT. " H. Wade Hibbard

161 182

EFFICIENCY IN ENGINEERING EDUCATION. " G. H. Shepard

THE APPLICATION OF SCIENTIFIC MANAGEMENT TO THE OPERATION

OF COLLEGES. " S. E. Whitaker

205 217

SCIENTIFIC MANAGEMENT IN THE COLLEGES. " E. F. Palmer iii





http://www.forgottenbooks.com/readbook_text/A_Symposium_on_Scientific_Management_and_Efficiency_in_College_1000331586/1

updated  18 June 2017, 15 August 2015

Thursday, July 27, 2017

Prohibition Policy in Bihar


There is an editorial in today's Economic Times (27 July 2017)  http://blogs.economictimes.indiatimes.com/et-editorials/90300/

Editorial in 27 July 2017 TheEconomic Times

BJP the gainer, as Nitish Kumar recalibrates
July 26, 2017, 11:42 PM IST ET Edit in ET Editorials | India, politics | ET

The last sentence

In all this, Kumar has demonstrated that he is one of India’s most ruthless — and flexible — politicians. We would urge Kumar to show similar flexibility and scrap, or at the very least partially reverse, his prohibition policy, which can only be enforced by using the coercive power of the state and a concomitant violation of civil liberties.

Should Nitish Kumar scrap prohibition policy as suggested by the Editor of Economic Times?


After prohibition, Bihar aims for dowry-free villages

Political analysts believe that after successfully imposing prohibition on liquor in Bihar, chief minister Nitish Kumar is now raising the bar in an attempt to emerge as a social reformer.
Updated: Jul 16, 2017
Reena Sopam, Hindustan Times, Patna
http://www.hindustantimes.com/india-news/after-prohibition-bihar-aims-to-have-dowry-free-villages-to-rope-in-mukhiyas-religious-leaders-in-campaign/story-StjGXRGNjrnGNsZ9c7KFuL.html



Prohibition in Bihar: Supreme Court extends deadline for liquor disposal till 31 July
29 May
http://www.firstpost.com/india/prohibition-in-bihar-supreme-court-extends-deadline-for-liquor-disposal-till-31-july-3493679.html


Why prohibition has worked in Bihar?

D. N. Sahaya | New Delhi
April 28, 2017
The writer is ex-Governor, Chattisgarh and Tripura and former chairman, A. N. Sinha Institute of Social Studies, Patna.
http://www.thestatesman.com/opinion/why-prohibition-has-worked-in-bihar-1493329920.html

Tough Implementation of Prohibition in Bihar

The Bihar model of prohibition seems to have taken off with a bang, with around 44,000 people put behind bars and over 10 lakh litres of liquor seized, during its one-year of enforcement since April 1, 2016.
1 April 2017
http://www.dnaindia.com/india/report-bihar-walks-a-tough-line-in-first-year-of-total-prohibition-2377348

Somebody is unhappy that media is not writing against prohibition and its strict implementation.
Bihar’s liquor war: Prisoners of prohibition and the conspiracy of silence
By opinionbihar March 9, 2017
http://www.opindia.com/2017/03/bihars-liquor-war-prisoners-of-prohibition-and-the-conspiracy-of-silence/

PM asks people of Bihar to support the prohibition policy

PATNA, JANUARY 05, 2017
http://www.thehindu.com/news/national/Modi-says-cheers-to-Nitish%E2%80%99s-liquor-ban/article16992313.ece

PM Modi praises Nitish Kumar for ‘remarkable ability’ over prohibition policy in Bihar
Prime Minister Narendra Modi on Thursday praised Bihar chief minister Nitish Kumar over his controversial move to ban liquor in the state despite objections from all quarters, calling it a “courageous step”.
Jan 05, 2017
HT Correspondent
Hindustan Times, Patna
http://www.hindustantimes.com/india-news/pm-narendra-modi-praises-nitish-kumar-for-his-prohibition-policy-in-bihar/story-2EFiHIYKYGCkXD8JW0rU0K.html


PM urged to put ban on sale of alcohol across the country.

Bihar CM, while addressing his recent anti-liquor campaigns in different states especially Uttar Pradesh and Jharkhand, urged the PM to put ban on sale of alcohol across the country.
A former governor of Assam and Tamil Nadu, Bhishma Narain Singh, who hails from BJP-ruled Jharkhand, supported Nitish Kumar and requested the Prime Minister Narendra Modi to announce complete ban on alcohol and tobacco across the country on the occasion of International Yoga Day on June 21.
Jun 20, 2016
http://timesofindia.indiatimes.com/india/Nitish-Kumar-asks-Narendra-Modi-to-ban-alcohol-across-country/articleshow/52838603.cms


The Bihar Prohibition And Excise Act, 2016
http://nyaaya.in/law/858/the-bihar-prohibition-and-excise-act-2016/


National consensus on prohibition sought
Dec 25, 2001
Chennai: Ambedkar People's Movement (APM) president and former Chennai mayor Vai Balasundaram on tuesday appealed to the centre and state governments to evolve a national consensus on implementation of prohibition in the country.
http://timesofindia.indiatimes.com/city/National-consensus-on-prohibition-sought/articleshow/1035208499.cms?

Monday, July 24, 2017

The Complete Business Process Handbook - Book Information





The Complete Business Process Handbook: Body of Knowledge from Process Modeling to BPM, Volume 1


Mark von Rosing, Henrik von Scheel, August-Wilhelm Scheer
Morgan Kaufmann, 06-Dec-2014 - Business & Economics - 776 pages


The Complete Business Process Handbook is the most comprehensive body of knowledge on business processes with revealing new research. Written as a practical guide for Executives, Practitioners, Managers and Students by the authorities that have shaped the way we think and work with process today. It stands out as a masterpiece, being part of the BPM bachelor and master degree curriculum at universities around the world, with revealing academic research and insight from the leaders in the market.

This book provides everything you need to know about the processes and frameworks, methods, and approaches to implement BPM. Through real-world examples, best practices, LEADing practices and advice from experts, readers will understand how BPM works and how to best use it to their advantage. Cases from industry leaders and innovators show how early adopters of LEADing Practices improved their businesses by using BPM technology and methodology. As the first of three volumes, this book represents the most comprehensive body of knowledge published on business process. Following closely behind, the second volume uniquely bridges theory with how BPM is applied today with the most extensive information on extended BPM. The third volume will explore award winning real-life examples of leading business process practices and how it can be replaced to your advantage.

Learn what Business Process is and how to get started
Comprehensive historical process evolution
In-depth look at the Process Anatomy, Semantics and Ontology
Find out how to link Strategy to Operation with value driven BPM
Uncover how to establish a way of Thinking, Working, Modelling and Implementation
Explore comprehensive Frameworks, Methods and Approaches
How to build BPM competencies and establish a Center of Excellence
Discover how to apply Social BPM, Sustainable and Evidence based BPM
Learn how Value & Performance Measurement and Management
Learn how to roll-out and deploy process
Explore how to enable Process Owners, Roles and Knowledge Workers
Discover how to Process and Application Modelling
Uncover Process Lifecycle, Maturity, Alignment and Continuous Improvement
Practical continuous improvement with the way of Governance
Future BPM trends that will affect business
Explore the BPM Body of Knowledge


https://books.google.co.in/books?id=RT7LAwAAQBAJ

Sunday, July 23, 2017

Design for Assembly (DFA)

Design for Manufacturing






Basic DFA Guidelines




Minimise part count by incorporating multiple functions into single parts
Modularise multiple parts into single subassemblies
Assemble in open space, not in confined spaces; never bury important components
Make parts such that it is easy to identify how they should be oriented for insertion
Prefer self-locating parts
Standardise to reduce part variety
Maximise part symmetry
Design in geometric or weight polar properties if nonsymmetric
Eliminate tangly parts
Color code parts that are different but shaped similarly
Prevent nesting of parts; prefer stacked assemblies
Provide orienting features on nonsymmetries
Design the mating features for easy insertion
Provide alignment features
Insert new parts into an assembly from above
Eliminate re-orientation of both parts and assemblies
Eliminate fasteners
Place fasteners away from obstructions; design in fastener access
Deep channels should be sufficiently wide to provide access to fastening tools; eliminate channels if possible
Provide flats for uniform fastening and fastening ease
Ensure sufficient space between fasteners and other features for a fastening tool
Prefer easily handled parts

http://deed.ryerson.ca/~fil/t/dfmdfa.html

http://homepages.cae.wisc.edu/~me349/lecture_notes/me349_dfa_lecture_notes.pdf




Case Studies

http://www.dfma.com/resources/studies.htm

Motorola University Teaches Smarter, Faster Product Designs - Laptop DFA
http://www.dfma.com/news/motorola.htm


Boothroyd and Dewhurst’s DFA Software Drives Cost Savings for Motorola's DS9208 Scanner
Presented by: Chris Foley
At the International Forum on Design For Manufacture and Assembly
June 13-15, 2011, Providence, Rhode Island, USA
http://www.dfma.com/resources/motorola.htm

Simplifying Veterinary Device Relieves Maturing Product Symptoms
DFMA guides IDEXX subassembly redesign, radically reducing parts, weight, assembly time, and cost
http://www.dfma.com/resources/idexx.htm


DESIGN FOR ASSEMBLY: A CRITICAL METHODOLOGY FOR PRODUCT
REENGINEERING AND NEW PRODUCT DEVELOPMENT
MOHAN V . TATIKONDA, CFPIM
Kenan-Flagler Business School, University of North Carolina, Chapel Hill, NC 27599
PRODUCTION AND INVENTORY MANAGEMENT JOURNAL-First Quarter, 1994


http://nptel.ac.in/courses/112101005/20


Videos of Boothroyd Dewhurst Inc.

DFMA Q&A - Design for Assembly
____________________

https://www.youtube.com/watch?v=tJz0HseRHVA
____________________

Assembly of IBM Proprinter, Design for Assembly
____________________

____________________
Boothroyd Dewhurst Inc.

Product Design Efficiency Engineering - Component of Industrial Engineering


Updated 25 July 2017,  13 August 2016, 27 June 2016

Friday, July 21, 2017

Value Engineering in Construction - Structures, Roads, Bridges



Value Engineering of Gachsaran Underpass Project in Iran
Paper of 2013
european-science.com/eojnss/article/download/1926/pdf




Value Engineering in EPA funded Projects - 1990 guideline

1990 Document link

Value Engineering in EPA funded Projects - Case Studies and Formats 1976

Link to the document in EPA site

_____________________________________________________________

Value Engineering in Buildings, Highways, Utility Plants
Laws and Regulations in USA
In 1970 the United States Congress recommended using VE on federal-aid highway projects. More recent federal regulations and technical advisories as well as Federal Highway Administration (FHWA) policy and guidance require and support VE, including:
  • The National Highway Systems (NHS) Act of 1995 included a VE mandate directing the U.S. Secretary of Transportation to develop a program requiring state departments of transportation to conduct a VE analysis for projects on the NHS costing $25 million or more.
  • In 1997, 23 CFR Part 627—Value Engineering introduced the requirement that VE be applied to all federal -aid highway projects on the NHS with a value of $25 million or more ($20 million on Major Bridge projects).
  • Title 23 USC § 106(e) and (g), as amended.
  • FHWA’s Federal-Aid Policy Guide September 8, 1998, Transmittal 24.
  • The American Association of State Highway and Transportation Officials’ (AASHTO’s) 2001 publication AASHTO Guidelines for Value Engineering, 2nd Edition.
_____________________________________________________________
Value Engineering Consultants
The design of tunnels and underground structures depends to a large extent on the type of ground conditions and construction methodology to be adopted. SMEC has experience in evaluating complex projects, and determine a cost effective method for the construction of the project. The methodology allows for temporary construction access and includes programming and relative costings.
Original knol - http://knol.google.com/k/narayana-rao/value-engineering-in-construction/ 2utb2lsm2k7a/ 1975


Updated  22 July 2017,  16 March 2012

30+ Ways for Better IE - 2. Maintain the Dignity of Persons in the Work Systems



There is an article in the January 99 issue of IIE Solutions "30 ways to be a better IE."

By: Gaboury, Jane; Cary, Cliff; Nolan, Richard J. IIE Solutions. Jan 99, Vol. 31 Issue 1, p28. 8p

So what IE's have done individually or professionally to implement the ideas discovered through a survey of 10,000 IIE members?


Maintain the Dignity of Persons in the Work Systems

The pioneers of industrial engineering were criticized for writing certain crude sentences regarding operators. Even though Taylor was very clear in his goal making every body develop himself to the highest potential level and earn good income, he is described as a person who depicted operators in a bad way.

Industrial engineers have to make special efforts to see that the dignity of any whose work they are analyzing from point of view productivity is not affected. They have to make the point an important part of the policy document that they carry to do productivity studies. 

Please write your opinions on this issue. Please read the original article.




What is Industrial Engineering?

You can understand through its principles

Principles of Industrial Engineering - Taylor - Narayana Rao

________________


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Wednesday, July 19, 2017

30+ Ways for Better IE - 1. Go to the Shopfloor



There is an article in the January 99 issue of IIE Solutions "30 ways to be a better IE."

By: Gaboury, Jane; Cary, Cliff; Nolan, Richard J. IIE Solutions. Jan 99, Vol. 31 Issue 1, p28. 8p

So what IE's have done individually or professionally to implement the ideas discovered through a survey of 10,000 IIE members?

Why go into the shopfloor?

What is the purpose of industrial engineering?

One answer is to provide more production with the same resources so that society enjoys more of the goods that it feels valuable and useful. So an industrial engineer must feel thrilled when he sees a smooth flow of "material to product" conversion chain. It is through a thoughtful observation that he identifies the productivity opportunities presently not visible to him in the process or the chain.

They write that Taiihi Ohno used to tell new engineers to stand in circle and observe the production process around to identify waste. Going to the shopfloor has to be an activity like going to the library in old days. Probably, the management of IE function has to make it compulsory for IEs to visit the shopfloor for certain number of hours each day or week and make a report on such visits. It can be called a production study report. So the visit can be  to a particular section which is involved in a specific process. Industrial engineer reports on the process as he has observed and gives his comments on whether standard process is being followed. Whether planned productivity is achieved or not and various shortcomings in the production system if any. He can comment on productivity improvement opportunities spotted by him if there are any.

Please write your opinions on this issue. Please read the original article.




What is Industrial Engineering?

You can understand through its principles

Principles of Industrial Engineering - Taylor - Narayana Rao
________________

________________

Tuesday, July 18, 2017

Twelve Principles of Process Improvement - Kiyoshi Suzaki



1. Organize the work place
Only keep what is required in the work place. Have a designated place for every thing. Time should not be wasted in searching for things. The time to complete a work will be minimum when the work place is organized.

2. Develop quick setups for machines.
Use SMED methodology and develop quick setup times for each machine. Lot sizes can be made small and unnecessary cost incurred in maintaining inventories is saved by the company. Inventory has no function when setup costs are very low.

3. Eliminate transportation loss
Treat transportation as a waste. Place machines as close as possible and reduce transportation. This does not mean the work place has to be cramped. Do rational decision making.

4. Develop fixtures with one touch placement and automatic ejection
Minimize time of loading and unloading work pieces in fixtures or machines.

5. Introduce multiprocess handling
Train operators in handling machines that perform different processes and utilize them to handle multiple processes which are in sequence or closeby.

6. Synchronize processes
Don't install machines with unequal production rates. Create production lines having machines with similar production rates.

7. Use transfer lot size of one
Let operators hand over one piece across

8. Introduce Jidoka concept.
Make machine intelligent to stop automatically if there is a problem.

9. Introduce Poka Yoke and Statistical Quality Control
Poka Yoke will alert operators in case an error is committed and operators rectify. SQC allows operators to recognize the problem in the machine setup as early as possible with least cost.

10. Eliminate machine troubles
Once machine indicates a problem, use collective knowledge to eliminate the problem as fast as possible and also do root cause analysis and eliminate the problem at the root level.

11. Determine Cycle Time and Take steps to reduce it.

12. Standardize work procedures
Standardize means plan and create written procedure which is followed by everybody using doing that task. In continuous improvement paradigm, the procedure is improved. But it is also captured in the written practice and then only implemented.

New Manufacturing Challenge: Techniques for Continuous Improvement
By Kiyoshi Suzaki
https://books.google.co.in/books?id=6EHtJE8NHD0C&pg=PA70#v=onepage&q&f=false

Process Industrial Engineering - Article Index



Process Industrial Engineering - Process Efficiency Improvement


Process Industrial Engineering - Introduction

First Week

1. The Function of Methods Efficiency Engineering
2. Approach to Operation Analysis as a Step in Methods Efficiency Engineering

3. Scope and Limitations of Methods Efficiency Engineering
    Operation Analysis Sheet

    Using the Operation Analysis Sheet
    Analysis of Purpose of Operation

    Analysis of All Operations of a Process as a Step of Each Operation Analysis
    Analysis of Tolerances and Inspection Standards

    Analysis of Material in Operation Analysis
    Tool Related Operation Analysis


Second Week

    Material Handling Analysis in Operations
    Operation Analysis of Setups

    Operation Analysis - Man and Machine Activity Charts
    Operation Analysis - Plant Layout Analysis

    Operation Analysis - Analysis of Working Conditions and Method
    Operation Analysis - Common Possibilities for Operation Improvement

    Operation Analysis - Check List
    Method Study

   Principles of Methods Efficiency Engineering
   Method Study - Information Collection and Recording - Chapter Contents


Third Week

Process Analysis - Questions/Check List
Installing Proposed Methods

Eliminate, Combine, Rearrange, Simplify - ECRS Method - Barnes
Inspection Methods Efficiency Engineering

Systems Installation - Installing Proposed Methods
Plant Layout Analysis

Industrial Engineering of Flow Production Lines - Thought Before Taiichi Ohno and Shigeo Shingo
Manufacturing System Losses Idenfied in TPM Literature

Fourth Week

Industrial Engineering - Foundation of Toyota Production System
Toyota Production System Industrial Engineering - Shigeo Shingo

Introducing and Implementing the Toyota Production System - Shiego Shingo



Front Line Kaizen for Product and Process Industrial Engineering


Research on Improvement of Plant Layout based on Process Analysis
https://books.google.co.in/books?id=o2YiBgAAQBAJ&pg=PA253#v=onepage&q&f=false










One Year Industrial Engineering Knowledge Revision Plan

January - February - March - April - May - June

July - August - September - October - November - December



Updated 19 July 2017, 10 April 2017

Saturday, July 15, 2017

21st Century Design of Work - Knowledge Work and Muscle Work - Brain and Bran



All people say 20th century work design was influenced and guided by F.W. Taylor. Taylor did not actually say and encourage division of work into extremely small elements. What Taylor advocated was estimation of time required to do work by first studying elements of work and then using those times to estimate the completion time of a piece. The division of work into extremely small elements and advocating to make work as simple as possible so that anybody can be trained to do work in 3 days was the work of Ford Assembly line designers. But the various persons who wanted to criticize Taylor ascribed to him whatever they wanted to highlight. Taylor died in 1915. There is no body to defend him and critics had a field day.

Now what are the scientific theories, engineering guidelines and management guidelines to support work design during this 21st Century. I want to spend some time, contact some persons and to compile this note in detail.

But today I came across an article in published in McKinsey Quarterly.

Preparing for a new era of work
By Susan Lund, James Manyika, and Sree Ramaswamy
McKinsey Quarterly
November 2012
http://www.mckinsey.com/business-functions/organization/our-insights/preparing-for-a-new-era-of-work

The authors highlighted three issues.


1. Break jobs down

Nearly all high-skill interaction jobs include tasks that can be hived off to allow the best-paid workers to focus on the most value-creating activities. Even traditional corporate line positions are also splintering.

2. Go virtual

Employers first began ramping up their use of remote-work arrangements in the 1990s, in part to retain the services of mothers who preferred not to commute or who wanted to work part time.

3. Make work more flexible

By breaking some jobs into components and using technology to virtualize others, employers can engage labor far more efficiently. There is a spectrum of possible work arrangements. Ttraditional full-time workers in the office, part-time or temporary workers, and contingent, remote workers who can help meet spikes in demand, all options are available and companies can become flexible by making appropriate work design and human resource or services allocation or acquisition process designs.

Breaking managerial work is the recommendation and main point of Taylor.  So 21st Century trend noticed and advocated by McKinsey expert is to focus on knowledge work to divide it further into more skilled and less skilled jobs.

Making work virtual has progressed a lot and employees these days in USA are able to work from home whenever they want. Flexible work is also coming into place and many persons are writing about an economy where lot more services will be cloud based and more people are engaged to provide services that are virtual and flexible.

Friday, July 14, 2017

Industrial Engineering - The Concept - Developed by Going in 1911


What is industrial engineering?


Industrial engineering is the applied 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. It is only just emerging from the formative period. Its elements have been proposed 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 enormous expansion of the manufacturing system.

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 provides guidelines or direction to the work of operatives, using the equipment provided by the engineer, machinery builder, and architect.

The cycle of operations which the industrial engineer directs starts with money which is converted into raw materials and labor; raw materials and labor are converted into finished product or services of some kind; finished product, or service, is converted back into money. The difference between the first money and the last money is (in a very broad sense) the gross profit of the operation. The starting level (that is, the cost of raw materials and labor) and the final level (the price obtainable for finished product) these two levels are generally fixed by competition and market conditions. Profit of the operating cycle varies with the volume passing from level, to level. Higher volumes lead to greater profits. But with the efficiency of the conversions between these levels also determines the profits. In the case of a hydroelectric power-plant, there are conversion losses like  hydraulic, mechanical  and electrical. In industrial enterprises the conversion losses are in commercial, manufacturing, administrative and human operations. It is with the efficiency of these latter conversions that industrial engineering is concerned.

The central purpose of  industrial engineer  is efficient 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 machinery, working upon materials, and operated by men. It is the inclusion of the economic and the human elements especially 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.

-----------------------------------------------



Basic Principles of Industrial Engineering
developed by Dr. K.V.S.S. Narayana Rao in 2016
1. Develop science for each element of a man - machine system's work related to efficiency and productivity.
2. Engineer methods, processes and operations to use the laws related to the work of machines, man, materials and other resources.
3. Select or assign workmen based on predefined aptitudes for various types of man - machine work.
4. Train workmen, supervisors, and engineers in the new methods, install various modifications related to  the machines that include productivity improvement devices and ensure that  the expected productivity is realized.
5. Incorporate suggestions of operators, supervisors and engineers in the methods redesign on a continuous basis.
6. Plan and manage productivity at system level.
(The principles were developed on 4 June 2016 (During Birthday break of 2016 - 30 June 2016 to 7 July 2016).

The principles were developed by Narayana Rao based on principles of scientific management by F.W. Taylor)

Video - Presentation - Taylor - Narayana Rao Principles of Industrial Engineering

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Going's Concept Continued.

Two Phases of Industrial Engineering

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


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 tabulation of statistics about a business, the accurate determination and analysis of costs, and the comparison of these costs with established standards so as to determine whether or not they are normal. To this sort of work Harrington Emerson applies the term “assays," speaking of labor assays, expense assays, etc., and maintaining (with good reason) that the expert efficiency engineer can make determinations of this  sort as accurately, and compare them with standards as intelligently, as an assayer can separate and weigh the metal in an ore. To this province belong also such matters as systematic inquiry into the means and methods used for receiving, handling, and issuing materials, routing and transporting these materials in process of manufacture, the general arrangement of the plant, and the effect of this arrangement upon economy of operation. To this province belongs, also, the reduction of these data and other data to graphic form as well as summary measures, by which their influence and bearing upon total result are often made surprisingly and effectively manifest.

The purpose of the analytical function of industrial engineering is that the out helps to  visualize the operations of the business and enable IEs to pick out the weak spots and the bad spots so that the right remedies can be applied 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 active, creative and synthetic phase


The second phase of industrial engineering the active, creative and synthetic phase, goes on from this point and effects improvements in existing methods, devises new methods and processes, introduces economies, develops new ideas. It makes us do the things we are doing now 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 re-arrangement 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 proportioned to output makes the individual employee more productive.

Importance of Technincal Knowledge

The exercise of these functions, whether analytical or creative, by the industrial engineer or the efficiency 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 exercised.

Machinery, Materials, Methods and Men

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  Money. Money supplies the gauge and the limit by which the other factors are all measured and adjusted.

Return on Expenditure

It is the ever-present duty of the industrial engineer, of the efficiency engineer, to study constantly, and to study constantly harder and harder, 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 (waste) between expenditure and return exists, to find the amount of the disproportion, the causes of such disproportion, and to apply effective remedies.

Competition and Efficiency and Cost Reduction

Competition forces manufacturers to reduce costs. But  the effort toward efficiency being promoted by industrial engineering and industrial engineers is giving to rise to more competition and to more cost reduction.

Competition took on a new meaning and new activity when the things began to be made first and sold after (as they are under the new mass manufacturing systems) instead of being sold first and made afterward, as they were under the older order. When you sell things already made, like lathes or high-speed engines or dynamos, off the sales-room floor, the prospective buyer can make the most absolute and intimate comparison between the things and their prices. He can compare 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.

The new and ethically fine ideal, promoted by industrial engineering 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.

Efficiency is a concept as much finer than competition as creation, conservation, is finer than warfare. It is a philosophy an interpretation of the relations of things that may be applied not only to industry but to all life. An interesting quote by Harrington Emerson's in “Efficiency as a Basis for Operation and Wages "  is quiet apt here.  “If we could eliminate all the wastes due to evil, all men would be good; if we could eliminate all the wastes due to ignorance, all men would have the benefit of supreme wisdom; if 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 attainment itself becomes very high. . . .  Efficiency is to be attained not by individual striving, but solely by establishing, from all the accumulated and available wisdom of the world, staff-knowledge standards for each act by carrying staff standards into effect through directing line organization, through rewards for individual excellence; persuading the individual to accept staff standards, to accept line direction and control, and under this double guidance to do his own uttermost best."

Importance of Technical, Economic and Human Skills for Industrial Progress

Efficiency, then, and in consequence industrial engineering, which is the prosecution of efficiency in manufacturing, involves much more than mere technical considerations or technical knowledge. The point is very important, because true and stable industrial progress, whether for the individual, the manufacturing plant or corporation, or the nation at large, depends upon a wise co-ordination and balance between technical, commercial, and human considerations. 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 system, 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.

But the readiness of people to buy the products and services that these inventions could offer 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 for the success of a technical invention for any entrepreneur to commercialize it. 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  branches of industrial achievement have been made by man who foresaw not only technical possibilities but commercial possibilities and who undertook not only to perfect the invention but to show the world the advantage of using it. I think this was substantially the case with wireless 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 appreciate 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. The economic theory also states the same thing. There may be no demand at all for an article costing a dollar, but an almost 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.

The third factor in industrial progress is the psychological factor,  the element contributed by the mental attitude, emotions, or passions of men. I might suggest its possible importance by reminding you that there were centuries in which the inventor of the steam engine, far from being rewarded, would have been burned at the stake as a magician. This would not have been because the extraordinary character of the achievement was unrecognized, but because its nature was misinterpreted.

For any technical proof , you must add to it, second, proof of the commercial 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.

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

Success in handling men and women is one of the most important parts of the work of the industrial engineer, and it is founded on knowledge of human nature, which is psychology. Industrial engineers need to have technical skills, economic skills to understand the economic environment and economic justification for technical systems and understanding of behavioural science of men and women to make a success of his profession or career.


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

The essay was first posted on
http://knol.google.com/k/narayana-rao-k-v-s-s/what-is-industrial-engineering-going-s/2utb2lsm2k7a/4861

Updated on 16 July 2017, 15 July 2016

Related Blog Posts

What is Industrial Engineering?

Functions of Industrial Engineering

What is Industrial Engineering? Videos

Thursday, July 13, 2017

Design for Productivity

Design for productivity is  a product design approach that applies market study, value analysis, industrial design, input substitution, product simplification and part count reduction in a rigorous, innovative and systematic way to improve the relationship between product cost and selling price.

Productivity Management Services has achieved extraordinary results through the application of this method - in some cases part counts have been reduced by as much as 70%, embedded labour time halved, production facilities simplified and expensive fixtures and assembly equipment eliminated.

The objective of the design for productivity process is to achieve a superior product, in aesthetic and technical terms, to improve market performance while simultaneously reducing the resources needed to produce them.

http://www.britishproductivity.co.uk/design-for-productivity.html


Wednesday, July 12, 2017

21st Century Productivity Research and Development Agenda - Productivity Science, Engineering and Management







2015

Book Excerpt March 2015
Manufacturing growth through resource productivity
By Markus Hammer and Ken Somers

http://www.mckinsey.com/business-functions/operations/our-insights/manufacturing-growth-through-resource-productivity

Resource productivity must be among the top priorities—if not the top priority—of industrial manufacturers around the world. On the supply side, raw materials are increasingly scarce, making them more difficult and more expensive to procure. We recommend the approach for enhancing resource productivity based on five new core beliefs:

Think lean. 


In lean systems, companies analyze the value stream of a particular manufacturing process and ruthlessly cut away anything that did not clearly add value. This methodology is highly synergistic with resource productivity. Companies have to  seek and eliminate anything that leads to wasted resources, in both energy and materials.

Think limits. 


In the traditional approach to resource productivity, companies typically start with their existing process as a baseline, and then seek to make incremental improvements from there. The second of our core beliefs—think limits—flips this concept on its head. Instead of using the current process as a baseline, it calculates the theoretical limit of that process—meaning the output from an ideal version, with no mechanical or chemical losses and perfect energy utilization—and establishes that as the baseline.

Think profit per hour. 


Our third core belief—thinking in profit per hour—helps align objectives for the organization. This is critical, because different productivity initiatives often have different goals, which can conflict with one another. Production managers, for example, strive for improvements in output, while energy managers focus on reducing energy consumption. Which one takes precedence? More often than not, the managers themselves don’t know. Reconciling these issues requires a powerful new metric: profit per hour. At the highest level, profit per hour calculates an operation’s gross profit for any given period of time by subtracting overall costs, including energy and resources, from revenue. It is a real-time, operational metric that helps organizations break down silos, giving managers clear visibility into the relationships among different productivity measures.


Think holistic. 


Despite the best intentions, many companies fall short of their resource-productivity goals. Why? Success requires a thorough change-management effort. Managers must set meaningful and achievable goals, and persuade often reluctant organizations to embrace and pursue them. They must secure the buy-in of their employees as well as equip them with the skills and deploy the new management systems needed to improve the way the organization functions. McKinsey spent three years surveying some 600,000 managers, 7,000 senior executives, and leading academics to explore why some transformations fail and others succeed. The results showed that successful transformations are based on three core elements that drive one another like interlocking gears. First are technical systems, meaning the assets and equipment a company owns and the processes people perform with those assets to create value. Second is management infrastructure—the formal structures, processes, and systems that companies use to manage people and the technical systems. Third are mind-sets and behaviors, or the attitudes that drive behavior individually and collectively. Successful companies apply a comprehensive approach that encompasses all three, making them better able to implement and sustain changes to improve resource productivity.

Think circular. 


At a basic level, the global economy relies on taking raw materials out of the ground and making them into finished products, which ultimately get thrown away. It’s a very linear logic—“take, make, dispose”—yet it’s not sustainable in the long run. Instead, the fifth and final core belief is that organizations need to move beyond this linear approach and “think circular.” That is, they should treat supply chains as circles, where they can create new value by looping products, components, and materials back into the production process after they have fulfilled their utility over the product life cycle. This is a complex endeavor—it requires designing products in a new way, adopting business models that go beyond a mere one-time sale, and revamping supplier relationships.







http://www.mckinsey.com/global-themes/employment-and-growth/the-productivity-imperative
2010

http://americanmachinist.com/features/technologies-reduce-production-costs
2005

https://www.forging.org/quality-and-productivity
(year not specified)

Smart Factory of Tata Motors in Gujarat - 2010



Tata's set up a $417 million "smart factory" in the state of Gujarat that uses intelligent-automation hardware, software and services supplied by Milwaukee-based Rockwell Automation Inc.

According to Rockwell that plant in India is using the latest technology. It is  are high-tech facility  as high-tech as they are in the U.S.

Tata's technology goes beyond robotics, the craze of the 1980s. It manages every sensor, microchip and motor control. It predicts bottlenecks and breakdowns on the factory floor before they happen. It has the capacity to seamlessly order parts from its suppliers - such as seats for the Nano from the Indian subsidiary of Glendale-based Johnson Controls Inc. - the instant it receives a custom new car order from a dealer.

It is flexible, able to adjust on short notice to keep pace with consumer tastes.

The Tata plant also includes a "genealogy" feature that tracks every part in every car, allowing Tata to trace any vehicles that might carry a defective part. If there is  a recall, they'd know exactly which Nanos to recall, as opposed to the current practices of auto companies, which recall a million cars because they are unsure which cars to recall."

http://archive.jsonline.com/business/91306009.html

21st Century Theory for Productivity of Knowledge Workers



20th century saw the development of management theory for improving the productivity of factory workers, the 21st century will see the evolution of myriad better techniques for managing people who think for a living.


http://www.mckinsey.com/global-themes/employment-and-growth/the-productivity-imperative

Monday, July 10, 2017

Harrington Emerson - The Twelve Principles of Efficiency - Part 1


Commentators say that Emerson follow Taylor's teaching for some time. But while Taylor's focus was on technical processes and human effort process, Emerson shifted his attention to organizational issues. Also, Emerson had focused on production planning and control more. His discussion in despatching and schedules shows this focus of Emerson.

Twelve Principles of  Efficiency give us twelve different directions of attack on inefficiency.

1. Clearly defined ideals.
2. Common sense
3. Competent counsel
4. Discipline
5. The fair deal
6. Reliable, immediate and adequate records

(1 to 6 covered in Part 1)
7. Despatching
8. Standards and schedules
9. Standardized conditions
10. Standardized operations
11. Written standard-practice instructions
12. Efficiency-reward
(6 to 12 covered in Part 2)


Excerpts from the Book of Harrington Emerson - 12 Principles of Efficiency


The First Principle :Clearly Defined Ideals

The First Principle was “Clearly defined Ideals”.


In large organizations, number operators and managers are very often without definite conceptions and purpose for which plant is working. Worker & Foreman at the lower end of the line organization are so far from the top  managers,  who are  responsible setting the enterprise ideas (objectives and goals). Persons at lower levels are driven to create minor ideals and inspirations of their own, these being often at variance of ideals of those above them.

If all the ideals animating all the organization from top to bottom could be lined so as to pull in the same straight line, the resultant would be very powerful effort. If ideals are in diverse directions, the resultant force might be negative. These kind of conflicting ideals are very common in american plants, even among the higher officials.

For example, a handy man in a railroad repair  examined cylinders for  cracks, They were often so unimportant that they could be safely repaired by a patch, but he swelled with pride when the recommendation for new cylinder has been heeded. A patch may cost $30 and new cylinder cost $600.  When in doubt he always decided  in favor of new cylinder. Here the ideals of engineering economy  was submerged and conflicting ideal of individual aggrandizement was substituted.


VAGUE IDEALS AND PERSONAL IMPULSE

Vague Ideals and understanding

 A superintendent ordered a large automatic lathe , having no idea of economies realized. He felt that automatic lathe will do cheaper work, but in reality the material wasted cost more than normal cost by a  worker on a normal lathe.

Personal Impulse

Many American explorers have succeeded in achieving great feats due to personal impulse. However this reckless confidence in impulses, this reliance on individual initiatives, is often responsible for many failures in industrial organizations.

Ideals of the British railroad were clear-no grade, no curve, no grade crossing and good passenger terminals. These ideals cost them $375,000 /mile.

James J Hill was great American railroad executive who built up dominant railway system in 20 years. Another great railroad executive was J.W Kendrick who considered disagreement with labour as time consuming, destructive to peace and loyalty, and therefore he resolved to setup a high standard of discipline by efficiency reward.

Ideals of one company are that its customer shall be treated with absolute fairness, that its employees shall be of higher skill and better paid than neighboring competitors. Ideals of good company is to see employee prosperity, well paid, not overworked.

If  every manager of an organization formulates ideals, promotes them in plant, posts them everywhere, inoculate every employee and official with them, organization can achieve high degree of excellence.

In setting up ideals,  managers have two choices.  One course is to set up his own ideals and reject all efficiency principles that do not accord with them and other is to accept the organisation and principles of efficiency and to create ideals that are congruent with them

THE SECOND PRINCIPLE: COMMON SENSE

Managers must develop in themselves supernal common sense.


Each person  is quite sure that he possesses all the common sense needed, and this is also an important instinct,  since without it people would lack self-confidence, initiative, and they would be deficient in the ability to do, to accomplish.

But the common sense of theirs is the alert common sense of the surf rider. It is not yet, either nationally, corporately, or individually the common sense of the far-knowing captain of the ship, and what is needed is not more common sense or more alertness, but a diametrical change in the point of view. The boy must forget his surf skill for a while and go to the mountain top and learn to know the stars so that he will hold them as friends whatever sea or desert he navigates or traverses.

The American, from presidents of the United States or of great corporations down to cubs in office or shop, in spite of his natural motherwit, finds himself struggling against quick sands of tradition, whirlpools of immediate necessity, fogs of current practice, of near common sense.

The elimination of waste through the application of the efficiency principle of common sense is a more difficult task than the elimination of waste from gold-mining operations by the use of better processes. Better extraction from ores, better exploitation of mine tailings, is easily attained by the use of better methods, which do not in any way clash with the training ideals and conceptions of a progressive manager.

To apply all the principles, a manager has to learn a lot, forgetting much that he thought of value, adopting, adapting, becoming adept in new lines of thought. At the start he finds himself enmeshed in an offensive, destructive type of organization which he must use an unfamiliar common sense to modify and remake into a defensive, upbuilding type. Even if he is in a position of highest authority at the top, this is not easy as he must run counter to most of the ideals and life-long practices of an extended line of subordinates. Even if he succeeds in making his organization constructive, he must then use an unfamiliar Common sense to overcome in himself and others a long series of vague, discordant, at best opportunist and near ideals, substituting for these, not Utopian and unrealizable, but worldly-wise standards as high as the particular activity will commercially stand.

If a manager has succeeded in modifying the organization, if he has succeeded in emphasizing the governing ideal so that all may understand it and work for it, he suddenly meets new difficulties probably from both customers and government, who will make the occasion of his efforts to eliminate waste, to make better use of materials, of labor, of equipment, an excuse to demand a physical valuation of the material property as a basis on which to regulate freight rates or other charges, thus imposing a direct penalty on efficiency.

It is impossible to lay down rules or to give specific directions as to how we shall convert prejudice and ignorance from without, near common sense within, into supernal common sense.

THE THIRD PRINCIPLE: COMPETENT COUNSEL

Staff assistance in efficiency improvement has to be used by line managers.



By co-ordinating the two elementary ideals of management,    line, for permanence, authority, discipline; staff for development of high functional efficiency "scientific management" 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. CHARLES BUXTON GOING.


The best practice in any line depends today on such a vast range of experience and knowledge that no one man, even in a very limited field, can master it all. No modern captain has a pilot's license for all harbors, and the wiser the captain, the larger the vessel he commands, the more willing and anxious he is to depend on local knowledge, even if the expert be an Arab, a Malay, a Kanaka, a Maori, or an Eskimo.

In the vanishing era of elementary achievement, efficiency mattered not, but legality did; therefore long ago lawyers were consulted. Efficiency did not matter in the building of the pyramids, but engineering did; and from that time to this the engineer has been supreme in his own department.

But the railroads and industrial plants almost without exception are operating without efficiency counsel, efficiency problems of momentous import being decided off-hand by intuition. Is it to be concluded that efficiency is of minor importance?


Because they are not competently advised as to the economies in operation and maintenance that would flow from efficiency, the railroads overlook the great gain within their grasp while they pursue the much smaller gain from greater rates they may not succeed in securing.

The total annual salary and labor bill of the railroads of the United States in 1908 was $1,035,437,528. An examination of the sub-divisions shows that the average equivalent obtained is not quite 80 per cent, that a preventable waste occurred of over $200,000,000.

In contemplating this enormous waste,  we would like to see other figures from the efficiency counselor other figures of far greater practical import.

The other annual bills for operating expenses were, in 1908, $653,780,115, of which about $500,000,000 was for material. Is the efficiency of material used more than 60 per cent? Wherever it has been carefully and scientifically checked, in railroad operation, efficiency has scarcely reached 40 per cent.

 Similarly a counselor as to efficiency would not pretend to be an expert as to all efficiency, but it would be his duty to be in touch both as to men and scientific reports with all that was latest and best and make it all available for his employer whether individual or corporation.

If the corporation were large it would be the duty of the efficiency counselor to install and develop an efficiency organization, extending from top to bottom even as the accounting department extends from top to bottom. Each minor official would have his own staff of efficiency experts working directly for him, but also even as the timekeeper to a superintendent is subject to the comptroller, so also would each efficiency expert be subject to the direction of the efficiency officer above him.

The chief efficiency counselor would initially advise as to type of organization; he would ascertain what the ideals were and strive for their realization; he would represent supernal common sense ; but it is chiefly as to the standardizing of the other operative principles that his organizing ability would be applied. In most operating plants both discipline and fair deal are defective, records are neither reliable, immediate nor adequate, despatching is so elementary as scarcely to be beyond the stage of putting into the shop an order for work, there are few, if any, scientifically made work schedules, there are no standard-practice instructions, no standardized conditions, no standardized operations, and efficiency rewards are defective.

Competent counsel must permeate every efficient organization, and if competent counsel cannot be carried into operation, it is because the organization is defective, because some staff is lacking, and the staff that usually still awaits creation is the efficiency staff.



Competent counsel well deserves to be one of the Twelve Principles of Efficiency, and nowhere else is competent counsel more needed than in the application of the eleven other principles.

THE FOURTH PRINCIPLE: DISCIPLINE


Thinking and doing aren't the same. Good ideas are only seeds. They must be planted and tilled be-
fore they can produce. HERBERT KAUFMANN.


Now hundreds of trains sweep over the nearly thousand-mile stretch between Chicago and New York to a set schedule. They start on the minute, they pass each station on the minute, they arrive on the minute; if there are delays, the passengers grumble mightily and the railroads pay rebates. The institution built up on time schedules has become mightier than the man and the man is immensely benefited by the discipline of the institution.

 In the railroad towns also, there is discipline.  People had clocks in their houses and watches in their pockets ; they went to the railroad station on railroad schedule time; the coming and going of the daily trains became definite, regulating and educational events even to those who never traveled; they fell into the habit of keeping other appointments; they were beginning to learn that the institution was greater than the individual.

Discipline is the greatest regulator of conduct is the spirit of the organization.

Under the best management there are scarcely any rules and there are fewer punishments. There are standard-practice instructions so that every one may know what his part in the game is, there is definite responsibility, there are reliable, immediate and adequate records of everything of importance, there are standardized conditions and standardized operations and there are efficiency rewards.

Fine manifestations of disciplined perform ance are the four eighteen-hour trains each day between New York and Chicago. So unobtru- sive is the perfect discipline that the passenger sees no rules or orders given, he does not see the far-ahead light or semaphore signals that govern progress, he sees still less the tele- graphic messages flashed by the despatchers to the signal towers, he knows little of the dupli- cate orders issued to conductor and engineer. The discipline is that of the velvet paw armed with the sharpest claws, infraction possibly resulting in destruction of the whole train, a trans-human punishment; infraction, even if there is no immediate disaster, resulting in reprimand or dismissal.


I also noted that capital and labor in com- bination are not enough, that the essential to direct both is after all the organizer, the dis- ciplinarian; and I perceived that it was the discipline of St. Francis, the discipline of St. Dominic, the discipline of Ignatius Loyola, that made these great monastic and religious orders enduring and successful century after century.

So great is inefficiency of all kinds everywhere that the application of even this one principle of discipline has produced great re sults through military or church organizations.


 but we owe the continuance of civilization to the citizen efficiency and standard-practice engineers, en and women, heads of great institutions, govern- ments, corporations and enterprises, who design and erect the firm skeleton of discipline that maintains in place the units of individualism, lest the whole aggregation tumble to ruin at the first shock in earth or air.

Supernal discipline is inspired by a greater emotion than fear.

Discipline begins before the applicant is taken on. Nine-tenths of all the harder discipline ought to be applied to exclude undesirables, men who by reason of bad character, bad and offensive habits, destructive tendencies, laziness or other faults are unfit to become working members of a high-class organization. It is before he is admitted that the applicant should hear of the ideals of the business, of its organization, of its methods.

A few hours' investigation would determine whether an applicant for a working position were really qualified, but the few hours are rarely given.

The type for the great newspaper is set up by linotype operators. Apprenticeship is rigorously limited. Some operators can never get beyond the 2,500-em class, others with no more personal effort can set 5,000 ems. Do the em- ployers test out applicants for apprenticeships so as to be sure to secure boys who will develop into the 5,000-em class? They do not. They select applicants for any near reason ex- cept the fundamentally important one of innate fitness. It is not a question of wages, though payment is for timework, but it is a question of rapidity, of more news at a later hour, of a better utilization of an expensive machine, of lessened rent for space in fact, of greater output in less time at less cost.

In railroading, why should each conductor and engineer be compelled to secure a watch of the best grade, why should this watch be periodically inspected, yet the future conductors and engineers be recruited in the most hap- hazard fashion? There is scarcely any greater or crueler injustice to a boy or to a young man than to allow him to enter on a career for which a competent examining committee would tell him he was unfit, there being other careers for which he is better adapted.

The principles of efficiency are not vague platitudes; they are intensely practical, tested, tried out, and successful. The strong leader who employs them prevents wastes, prevents the losses caused the State and community by the cessation of labor of hundreds of thousands of men, prevents the greater misery and suffering due to the enforced idleness of heads of families.

It is not enough for the owners to have ideals; they must be transmitted to the employee, and nothing is easier, as any one who has studied the psychology of crowds knows; but it is idle to expect the average worker to rise above the spirit of the place he works in. If it is untidy, disorderly, filthy, if the accommodations for his necessities are lacking or vile saw-tooth lighting, compound condensing engines, imposing steel and concrete construction, and all the over-equipment to which in the past we have pinned our faith, will not inspire the worker.

The way to guard against trouble is to make the position desired by a superior man, to allow it to be filled only by a superior man, to maintain the position at a high level. If the owners and managers of a plant of any kind are orderly, enthusiastic, loyal to the work, punctual, courteous, decent, competent ; if they feel their obligations toward those they direct ; if they are honest, economical, diligent and sound in health, they can well demand similar qualities in all the employees. I have placed order first, believing in the spirit of the proverb that order is nature's first law and also the remark which Goethe puts into the mouth of Mephistopheles : "Make use of time, it is so fleeting, but order saves time." No man ought to be allowed to enlist who cannot start in with order, enthusiasm, loyalty, reliability, who is not courteous and decent ; no man ought to expect to stay who is not competent, a good brainworker, honest, economical and diligent. If in addition he has good health, so much the better.

No efficiency principle stands alone, each supports and strengthens all the rest, each is supported and strengthened by the other eleven. They are not as mutually interdependent as the stones of an arch, each a keystone which if removed brings about the collapse of all the others ; they are more like the stones of a dome, any one of which can be taken out, leaving a weakened, but not destroyed.



THE FIFTH PRINCIPLE: THE FAIR DEAL

Fixing Wage Rates must be fair to both Employee and Employer


Justice without discretion may do much; discretion without justice is of no avail. CICERO.

Our future officers, military and naval, are recruited using specific methods. Having been carefully selected by education tests, by physical measurements, and with some reference to moral antecedents, they are then given the fair deal. There is, therefore, owing to these elementary, obvious but insufficient precautions, a diminution in the army and navy (compared to civil and industrial organizations) of dishonesty, of boorishness, of flagrant going wrong. During good behavior they remain; their promotion is sure although slow, their position is high, they are welcome guests in society and at the most exclusive clubs.


The fair deal, based on the exclusion of the many, the selection of the few, must primarily spring from the master, not from the man, "With what measure the employer metes it shall be measured to him again, therefore all things whatsoever ye would that men should do to you, do ye even so to them." But mere kindliness of heart, mere desire to be fair, does not accomplish anything. Most boys would be better off in a severe school than under their loving, indulgent and weak mothers.



In practice it is difficult to put up a fair deal unless there are three qualities, and these are rarely found in the same person. The qualities are sympathy, imagination, and above all a sense of justice. Though the combination is rare, the difficulty is not insuperable, for many men competent to be leaders through other qualities possess one or the other of the three essentials;

In selecting human assistants such superficialities as education, as physical strength, even antecedent morality, are not as important as the inner aptitudes, proclivities, character, which after all determine the man or woman.

The empiricist in outward signs of human character has, like the Tartar, splendid powers of observation, excellent judgment, and very valuable knowledge, but may lack familiarity with the conclusions of science based on very recent investigations. The modern brain student may be deeply versed in special lines yet lack practical familiarity with everyday manifestations.

It is of the utmost importance that there are specialists, a very few, who are supplementing intuition, observation, and good judgment with physiological, psychological and anthropological research and study and are thus able to give the most important competent counsel that can be given for both the fair deal and for mutual success, through advising both employer and applicant in advance of engagement whether the latter is or can possibly be fitted for the work that must be done. In the past, employers have recklessly engaged anybody, however unfit, and have then applied the remedy of reduction of wages or of discharge. The victims of this arbitrariness both in employment and in discharge have for protection joined unions, and influenced the unions to insist that wages per hour, not performance, shall be the unit, to insist that no equitable relation shall be established between work and pay, to object therefore to any determination or record of equivalency.


 It is about wages, directly or indirectly. that most serious disputes arise.

It is for this reason that wages loom up as the most important question in industrial life today, although aptitude, therefore pleasure or success in the work undertaken, is more fundamental to individual, corporate, and national welfare. The individual is born with the instinct of self-preservation, of race-preserva- tion, of acquisition and hoarding,  We have interposed the device of wages between basic need and its satisfaction. Wages therefore acquire the importance of both, and wages are also the cushion between anarchy and civilization.


No other subject is so disturbing as wages, or requires so much of the "fair deal."  If plans for wage amelioration, successfully tried on a large scale, have been at best only experimental, they at least have interest as showing how this delicate subject was approached with the fair deal in mind.

The worker wants as high pay as he can enforce; the employer wants his output to be as cheap as that of his competitors, for if it is not he will be driven out of business. The worker cannot be expected to work for an employer for less pay than is paid under similar conditions for the same class of work by an- other employer. The wage payer cannot be asked to pay higher wages than the current rate. Because this question is a dangerous explosive, because any stray spark, concussion, or blow may set it off, it should be as far as possible standardized and nine-tenths of the opportunities for clash be eliminated.


Piece rates have offered no solution. They were tried in order to abolish status and substitute contract and individual effort. Status cannot be wholly abolished. A shop is more highly organized than a flock of sparrows or gulls. There must be regular hours, there are so many dependent sequences that individuals must conform to the general plan. A piece rate is, however, an endeavor to establish an equivalent in output for money paid.

As to this most delicate of wage questions, peace and harmony have followed the following fair-deal provisions:

1. Decimal wage rates per hour are established.

2. These decimal wage rates run as local conditions require, from $0.20 an hour down and up in full two-cent intervals, therefore $0.16, $0.18, $0.20, $0.22, $0.24, $0.26, etc., perhaps down to $0.06 and up to $0.60 or more.

3. The wage rate at which a man is engaged or retained is subject to negotiation and agreement between him and the employer.

4. Men shall not be required to work over ten hours a day without a bonus.

5. Normal hours shall be nine a day.

6. A time equivalent shall be determined for every operation.

7. No worker is under any obligation to at-tain the time equivalent. His wages do not depend on it, but on the time he is under orders.


8. Time equivalents are subject to revision either up or down as conditions change, never because of high individual skill.

9. Revision is made by competent disinter- ested specialists and both parties know why, when, where, and what revisions are made.

If all these provisions are part of the standard practice of the shop, if they are accepted when a man contracts his time, serious dis- agreements can arise only as to (3). It is inevitable that wages will from time to time rise or fall, partly because of varying cost of living, partly because of supply and demand.

Standards could, to a large extent, automatically govern promotion from one class to another on account of gain in experience, in- creased age, or meritorious record. A time ought to come when a wholesale advance or recession in basic rate could be referred to arbitrators or advisory commissions so as to minimize opportunity for disagreement.




It is conceivable that a man working 8 hours can do a full rational day's work. The same work could be done with less wear and tear in 9 hours. Would I prefer to walk 3 miles an hour for 9 hours, or to walk 3.375 miles an hour for 8 hours? I think I might prefer to walk 2.7 miles an hour for 10 hours. A normal work day of 9 hours with temporary variations in gangs between 8 and 10 hours has been found to work well. If, in balance with the shop, a ten-man gang is working 9 hours a day and one man drops out, until he returns or can be replaced the gang must either work harder, work longer, or disturb the balance of dependent work. Rather than drive harder it is more equitable to pay for the extra normal time required.

Longer hours than 10 are wholly deleterious to both worker and shop. I never knew any advantage to result from promiscuous overtime. It should always be a serious emergency resource, and the bonus should be very high to men, the loss of shop efficiency and increased cost be brought home to each official.

Like the other efficiency principles the fair deal should be standardized; it should be moulded by each of the other eleven; it should be under the particular care of a very competent staff official, aided and assisted by many specialists, character analysts, hygienists, physiologists, psychologists, bacteriologists, safety-appliance and light and heat engineers, economists, wage specialists, accountants and lawyers in short, by all the available and applicable knowledge in the world. Provided for in the organization, founded on ideals, on common-sense; developed by competent advisers, simplified by vigorous exclusion of the unfit, the unfair, it should be carried into effect through reliable, immediate and adequate records, through standard practice, definite instructions,through schedules and through all the other efficiency principles.

The fair deal is the last of the five altruistic principles, principles so fundamental that we find them applied by a she-bear to the bringing up of her cubs; principles inculcated by Old and New Testament, by every great religion.

The object of collating wise practices of administration under a few simple heads is that each may regularly survey his own task from the point of view of each one of the principles, and thus not only prevent the backsliding that ultimately results in disaster, but make forward progress so that he who started as a disciple soon becomes a master to whom we turn for competent counsel.


THE SIXTH PRINCIPLE: RELIABLE, IMMEDIATE, ADEQUATE, AND PERMANENT RECORDS

The Importance of Cost Accounting and Related Records is Brought Out in This Principle


The object of records is to increase the scope and number of warnings, to give us more information than is usually received immediately through our senses. A steam boiler with water in it, a fire under it, and all outlets closed, is more dangerous than a hot poker. There is very little to indicate the imminence of disaster. It is too hot to touch with the hand, although it is conceivable that a spot in it might be so insulated as to permit the engineer to tell by feeling whether it was becoming too warm. A thermometer would give a better record; but usually there are three recording instruments, each reliable and immediate, one of them in addition adequate. The engineer watches his pressure gauge, he watches his water-level glass, and the safety valve will pop even if he has fallen asleep. It is because of these three devices, one of which is independent of the man, that there are so few boiler explosions. All around us are many natural forms of advice, of records — the word is throughout
used in its largest sense.

The object of records is to annihilate time. It is to bring back the past, to look into the future, to annihilate space, to condense a whole rail-road system into a single line, to magnify the thousandth part of an inch to foot-rule measurement, to gauge the velocity of a distant star by the shifting of the lines in the spectroscope, to annihilate temperature by enabling us to read the millionth of degree or the 10,000-degree difference between moon and sun heat.

Records are anything that give information. Men have always felt the need of records, but they have not always known what they wanted nor how to secure them. In the great industrial plants one knows not whether to marvel most at the absence of reliable, immediate, and ac-curate records, or at the superabundance of permanent records, collected with painstaking and at great expense, but neither reliable, immediate, nor adequate. Even if the latter have all these qualities, there is often great duplication, and as a consequence we find an immense amount of accumulation of very little value, which has cost far more than it need. An ex-ample of duplication may be found in the coal records for locomotives. Expenses of operating locomotives are generally recorded per mile, but suddenly a parallel set will crop up showing miles run per ton of coal. It has not been unusual in a great corporation's records to find a great variety of monthly tabulations, and when inquiry is made it is finally unravelled that twenty years before some president wanted a certain set of records, that his successor wanted a different set, which were started in parallel, that a third and fourth incumbent added their requests, but the old tabulations continue to be made and painstaking clerks work their monotonous lives away in neat compilation that no one has looked at, much less used, for a decade.

When the tramp piled and repiled the same cord of wood first on one side of the yard, then on the other, he was working efficiently but to no purpose ; and having the soul of an artist he finally rebelled.

There are records of all kinds, many of them essential to our continued existence. There are in a much more limited way records of cost; and between the two extremes of universal records (as the swing of the earth in its sea-sons or the slow aging of every living and inanimate thing) on the one side, and cost records on the other, come records of efficiency, and these are what we particularly need in the present phase of industrial life. We have not yet learned to use to any great extent the conception of efficiency. We are interested in what eggs cost per dozen, not in the weight of each egg; we ask the price of coal per ton, but rarely know whether it contains 10,000 or 15,000 heat units per pound; we violently resist a demand for a 10 per cent increase in wages, but we tolerate a 50 per cent inefficiency in the worker. Not one in ten thousand knows even approximately the cost of food. Its price is known, but not its value, and if a curve of food values per pound should be drawn, and above each item its price, the line would look like the record of the seismograph during an earthquake, or the record of a magnetic needle during an eruption on the sun.

The whole United States was frantic in 1896 over the money question, and not one in a thousand of the gold advocates knew that owing to violent fluctuations in supply and use gold had varied in value more than any other staple, not from hour to hour, as gold bonds and gold stocks fluctuate in value on the stock exchange, but from decade to decade. One of the tasks of modern scientific management, of efficiency and standard-practice engineering —two names for the same ideals — is to convert efficiency records into cost records, since the language of costs is understood by all, the language of efficiency only by the few. It is, of course, generally true that costs will decline as efficiency increases, but this is not always so.

A jeweller may work with the same efficiency setting on one day a $2,500 diamond in a gold stickpin and the next day setting a $0.25 bit of glass in a brass pin. Costs have varied, but not efficiency. A Japanese miner may work for $0.20 a day and an Alaskan miner for $15.00 a day. Each may work with equal efficiency, but the cost is very different. On the other hand, a farmer, from the same field, planted to the same crop, plowed by the same man, team, and plow, raises increasing crops of the same grain ; but wages, land values, and the price of horse feed might also increase so that decreased cost will not always directly flow from increased efficiency.

In the refinement essential for the control of modern operations, it becomes increasingly necessary to state efficiencies even if we talk costs.

If we know in advance the standard or theoretical costs, if we know the current efficiencies, we can predetermine actual costs. What we all desire is to make the industrial machine as efficient as possible, to bring efficiencies up to 100 per cent, and when we do this actual costs will be the same as theoretical costs. We must first attack the problem theoretically. We must have standards and we must have efficiencies. When a pump or steam engine is tested, by every means we ascertain ideals ; we then compare actualities with the ideals and we ascertain efficiencies. Similarly, in the great industrial problem we set up ideals, we measure against them actual performance, and we as-certain efficiencies, and as for pumps, and for steam engines, so also do we use these efficiencies to prophesy future costs.

When actual and ideal performances are both recorded the relation in one month will generally serve to predetermine efficiencies in the next month, the relation of one year to predetermine efficiencies in the next year.

The elementary formula is, however, wholly inadequate for a real determination of efficiencies and has in fact led to most serious misconceptions and consequent mistakes.

By buying better coal, better furnace, better boiler, better engine and better service, coal consumption can be reduced to two pounds, in some instances to one.


T cannot indefinitely decrease, neither can W indefinitely increase, and experimentally we must determine what combination of TW results in minimum cost.

More than ever before would it be necessary to make motion studies and time determination and to set up standards of supply, of distribution, of use as to every item of work. If wages per hour are arbitrarily increased, the increase can be safely provided for by increased efficiency, and in no other way. If efficiency is arbitrarily increased, wages will inevitably rise, or effort will diminish.

We have again and again found that ma-chines were not in operation over half the time of a 9-hour day. When in operation they were inefficient. It is not so long ago that a locomotive-tire lathe would be run 18, even 30 hours, to turn up a single pair of tires, work that on the same machine ought not to take over 3 hours.

The machine end-efficiency in some plants is not over 4 per cent of the guaranteed capacity. Eight hours out of 24 gives a work time-efficiency of 33 per cent, not running half the time during shop hours gives a shop time-efficiency of 50 per cent; many machines exceed the requirements of the work put to them, as when a big planer is used instead of a shaper, this form of efficiency dropping often to 70 per cent ; and finally, machines are often run so slowly as to show a speed efficiency of only 3.5 per cent. When we reflect that there are other dependent sequences in the material inter-relations, in the work, and in the machine inter-relations, that there are dependent sequences between material and labor and machine, as when unnecessarily hard material lengthens the time of both man and machine, or when defective machine spoils material and wastes workers' time, or when unskilled man spoils material and injures machine — the marvel is not that industrial operations are so inefficient, but that, considering the dependent sequences, they are in each term of the sequence so high.

It is a law that it usually pays to increase quality of materials, that it usually pays to increase quality of labor, that it usually pays to increase quality of equipment, provided materials are efficiently used, labor efficiently used, equipment efficiently used. Equipment has hours about half those of labor when it ought to work as long as materials, be constantly on the job.


This relation of rate per hour to time is generally lost sight of. It is because it has been lost sight of that over-equipment is the rule in America. Materials, service and equipment are worked up to the general cost formula :

Total cost=Materials+Service+Investment charges.
Total cost= QP +TW+ T'R

Usually only the greatest of industrial man-agers realize that Q is more important than P ;
that T is more important than W, that R is more important than T', and that minimum
total cost is realized when QP is minimum, TW the minimum, and T'R the minimum.

This formula shows what records are wanted, namely, the six items of standard cost and the six or more items of corresponding efficiencies. No manager, no accountant, knows where he stands unless his records show him as to every operation :

The standard quantity of material
The efficiencies of material use

The standard price of material unit
The efficiency of price

The standard quantity of time units required
The efficiencies of time

The standard rate of wages for work of the character done
The efficiency of wage rate

The standard quantity of time for equipment
The efficiencies of time use of equipment

The standard equipment rate per hour
The efficiencies of equipment use

The formula is equally applicable to a totalized operation costing one mill, as the page of  a periodical, or to the operation of all the rail- roads of the United States as one great unit.

Records as to each detail, aggregated into records as to the whole, are one of the efficiency principles; records as to each item and every item today, records as to each and all items throughout a long period of time. He who has records of quantity and price — efficiencies of both, of every unit of material used, whether ton of rails or pint of oil ; who has records as to time and wage rate for every operation, and the efficiencies ; who has records as to time and investment charge per hour for every operation — he is in a position to apply the other practical principles and thus bring actual up to ideal. Records of this kind are simpler, cost less to keep up, than the usual industrial and cost records of great companies.

Cost accounting can be very simply and easily developed from the cost formula. The elaboration would carry us too far from the subject of records, reliable, immediate, adequate and permanent.











1. Clearly defined ideals.
2. Common sense
3. Competent counsel
4. Discipline
5. The fair deal
6. Reliable, immediate and adequate records
7. Despatching
8. Standards and schedules
9. Standardized conditions
10. Standardized operations
11. Written standard-practice instructions
12. Efficiency-reward



Updated 11 July 2017, 11 July 2016