Industrial Engineering is Human Effort Engineering and System Efficiency Engineering.
IE Knowledge: Articles, Books, Course Pages and Materials,Lecture Notes, Project Reviews, Research Papers Study Materials,YouTube Video Lectures
Material process flow plays a big role in the mining value chain. This includes analyzing impact of unscheduled events owing to mechanical breakdowns of LHDs, trucks and critical transportation
medium, queuing time, and such overheads. There are a number of other causal variables that can be analyzed for impact on production throughput on a daily/monthly basis using techniques such as Machine Learning, Continuous Pattern Matching and Statistical Predictive Model.
Big Data Analytics Platform, equipped with these models, can leverage the value, volume, velocity and variability of data, delivering several benefits across extraction, intermediate transportation and final transport to plants.
05 Dec 2014 - Mining Journal Feature
Exclusive Mining Big Data Guide now available
The first comprehensive Mining Big Data Guide, just published by Mining Journal, suggests results of a survey by MJ in the first half of 2014 was on the money: big data, and big data analytics, will be transformational for the industry over the next 5-10 years.
Scientific study for improving efficiency and productivity was advocated by F.W. Taylor in his treatise on Scientific Management. Application of scientific management in engineering branches became the discipline of industrial engineering. Efficiency improvement practice was started in other economic activities also. The public administration discipline also adopted the scientific management principles of efficiency improvement.
I would like to write more about it in some more time.
But at this moment I request readers to download and read this document on successful suggestion programs released by a working group of Federal Government, USA.
Products and processes are two important outputs of engineering. Industrial engineering (IE) is productivity improvement activity. When IE is applied to products and processes, it is termed product IE and process IE respectively.
Frank Gilbreth suggested the involvement of operators in process analysis and improvement in 1921 in an article on process charts. Hence, formal and structured involvement of operators in process improvement was started by the industrial engineering and scientific management professions in the decade of 1911 to 1920 itself. But the practice got more systematized by Alan Mogensen in 1929 with the publication of his book The Commen Sense Approach to Improvement.
Toyota started its cost reduction improvements after second world war and made the front line kaizen a best practice and fruitful. People know more about the front line kaizen of Toyota and less about the contribution of engineers and especially industrial engineers in Toyota's success.
We have to make use of available resources. Instead of lamenting on the unavailability of the IE activities of engineers in Toyota, we have to learn about the best practice of Toyota front line kaizen and try to implement in our organizations. We have to learn about industrial engineer's best practices from some other organization.
Some references about Toyota's suggestion scheme successes are given below.
The New Shop Floor Management - Kiyoshi Suzaki - Published in 1993
100 years of evolution of shop management thought
Shop floor is the place where the most fundamental, value-added activities take place, whether they are in manufacturing, services, or construction.
There are approaches for maximizing the potential of people at the shop floor. This book will explore such potential by focusing attention on the shop floor.
One of the major focuses of this book is self-management of people on the shop floor, The Japanese call shop floor managemet genba kanri. This book attempts to share new perspectives on shop floor management and provide pragmatic approaches for increasing people's self-managing capabilities.
Konosuke Matsushita said. "we make people first before making products."
Each person has self-managing or autonomous capabilities. If they are linked to the total organization, we can create a system that is more humane.
The problems on the shop floor may seem big when managers try to solve them by themselves, but when try to solve the same problem by involving everybody and their creativity, they can solve them more of them more easily.
One view of shop floor management
Improvement of people
Problem solving utilizing collective wisdom of people.
New Shop Floor Management - Empowering People for Continuous Improvement / Company Transformation
Productivity = Performance in QCDSM/ Man + Macine + Material |+ Method + Measurement
We need to figure out ways to allocate resources intelligently and have people prove their contribution to the company's progress.
Chapter 2 Developing A Customer Oriented Organization
Working on Our Mindset
Instead of self-centered thinking, we need to practice selflessness.
Chapter 3. Establishing Company within Company
The Mini-Company Concept
Every operator has a supplier - Every operator has a customer
The front line supervisor as President of a mini-company
Benefits of Mini-company concept
People develop sense of ownership
Glass Wall or Glass Window Management
Open communication throughout the company.
Shop floor has to be self explanatory so that people get feedback and self-manage. If we practice this idea, talents of people are utilized to address key concerns of the shop right then and there. If we practice good glass wall management, we will utilize the collective wisdom of people better.
Chapter 4. Involving Everybody in the Process of Continuous Improvement
Standards represent an organization's capabilities
Chapter 5. Upgrading Everybody's Skills
Skills for Self-Management
Skills related to doing and delivering with existing practices
Skills related to improvement
Skills related to self improvement
Skills related to team work
Skills related to specific tasks
Skills related to management
Chapter 6. Acquiring \problem Solving Skills
Chapter 8. Leading People for Continuous Improvement
Managers as Leaders have to consider Employees as Customers
Guiding Improvement Activities
Phrases Managers Should Not Use
Qualifications as Leaders
Changing Your Behavior as Leader - Steps Involved
Get stimuli - Read books, journals, magazines, papers - Listen to experts, bosses, colleagues, customers, suppliers - Visit other companies doing good work - Watch videos - Consult catalogues
Acquire new knowledge - Identify the new knowledge in the stimuli and think over it regarding implications to your success and the required behavior
Modify your attitude - If the new knowledge requires you to change some attitude, accept its implication and change your attitude
Change your behavior - New knowledge and change in attitude will motivate you to change your behavior. Try the new way of doing thing as an experiment. Do role plays in your mind as well as physically.
Change your Habit - Practice the new behavior so that when the event happens you can exhibit the new behavior as a habit.
1. Name board
2. Current operator(s) name(s)
3. Standard operating procedures
5. Andon switch or button to make the andon on.
6. Sample inspection place
7. Explanation of installed poka yoke
8. Machine operator self-maintenance procedure
9. Machine down time recording sheet
10. Safety checklist
11. description recent improvement (kaizens - good changes)
12. Layout of the area.
13. SPC chart
14. QC process table
15. Sample products
16. Production control board
17.Marking of the floor with place for every thing in the work center.
Chapter 11. Looking at Ourselves in the Mirror
Evaluating the Level of Shop Floor Management
The Presidential Audit
Chapter 12. Where do We Go from Here?
Ideas for Implementation
Making it Work
Questions and Answers on Implementation
Appendix 3.1 Checklist for Supervisor's Roles and Responsibilities
Management of Work
Management of Material
Management of Machines
Management of Safety
Management of Environment
Management of Improvement
Appendix 6.3 Checklist for Idea Generation
Appendix 7.4 Continuous Improvement Study Group Activities
Appendix 9.1 Supervisor's Daily, Weekly, Monthly, and Yearly Activities
IISE is the world's largest professional society dedicated solely to the support of the industrial engineering profession and individuals involved with improving quality and productivity.
Founded in 1948, IISE is an international, nonprofit association that provides leadership for the application, education, training, research, and development of industrial engineering.
ISEs figure out a better way to do things (to improve productivity and efficiency) and work in a wide array of professional areas, including management, manufacturing, logistics, health systems, retail, service.
And like the profession, ISEs are rooted in the sciences of engineering, the analysis of systems, and the management of people.
Manufacturing Cost Deployment - Manufacturing Cost Reduction System
One of the focus areas of manufacturing management and manufacturing engineering is manufacturing cost reduction. Number of improvement techniques developed in Industrial Engineering (IE), TQM, TPM, JIT etc help in reducing costs. Yamashina and Kubo (Y-K) came out with a methodology of establishing a cost reduction program for a planning period that takes into account the potential benefits for various improvement techniques and the cost or investment required for implementing those techniques.
The basis for cost reduction in this model called manufacturing cost deployment is waste elimination or loss elimination at various production facilities or work stations in the plant. The losses at various facilities are identified in the model using the concepts developed in TPM literature.
The losses at the facilities are categorized as causal losses and resultant losses. Causal losses cause losses further down the line at other facilities. Eliminating causal losses eliminate resultant losses also. So one should not make efforts to eliminate resultant losses but has to focus on causal losses.
The other point of emphasis is that the losses in the facilities have to identified with components of manufacturing cost (cost factor). This will ensure that when the loss is eliminated, there is definite reduction in manufacturing cost.
In the paper published by them in International Journal of Production Research, Y-K gave formulas for calculating each type of loss and associating the loss with the cost factor.
For each loss identified at each facility, techniques that eliminate the loss are identified if they exist and the period it takes to implement them and cost or investment required in each period to implement them are estimated. At this stage, the cost associated with improvement activity and the benefit are available.
Y-K formulated the problem as an integer programming problem, but concluded that it can't be solved analytically. They proposed an heuristic that first calculates benefit-cost ratio for each loss type and based on this ratio selects the improvement techniques to be undertaken in each sub period (for example each month in an annual plan).
Cost Deployment Tool for Technological Innovation of World Class Manufacturing
Luan Carlos Santos Silva, João Luiz Kovaleski, Silvia Gaia, Manon Garcia, Pedro Paulo de Andrade Júnior
Department of Production Engineering and Technology Transfer Research Group, Federal University of Technology—Paraná (UTFPR), Ponta Grossa, Brazil
Journal of Transportation Technologies
Vol.3 No.1(2013) http://file.scirp.org/Html/2-3500094_27019.htm
The model of Fiat Group Automobiles Production System (FAPS) is a structured set of methodologies and tools whose application spread across the enterprise through the involvement of all employees. It is based on Yamashina's WCM approach. It promises a radical improvement for the performance of the production system, optimizing all production processes and logistics with focus on the key factors: Quality, Productivity, Security and Upkeep of the equipment, and Delivery. The implementation support is done by a system of Audits and it is structured by goals whose achievement is measured by performance indicators
It has 10 pillars and two of them are directly related to cost reduction and productivity improvement. WCM advocates total industrial engineering which promises total productivity management and total cost management. Total industrial engineering involves the efforts of industrial engineers and operations managers, engineers, supervisors and operators and it also implies all methods of industrial engineering - product IE, process IE, IE optimization, IE Statistics, IE Economic Analysis, Human Effort IE, IE Measurements, Productivity Management. Total productivity management focuses on productivity of all resources used in the production - logistics or production - distribution system. Total cost management focuses on rational planned cost for the total enterprise as well as each product giving optimum unit cost for all products produced and sold by a company.
The following two pillars are directly related to Total IE, Total PMgmt, and TCM.
2) Cost Deployment—aims to identify problems that increase costs; Approves projects to decrease costs.
3) Focused Improvement—aims to develop the know how to reduce costs by using appropriate methods; Proposes projects to reduce costs.
The concept of technological innovation can be understood as the expansion of production capacity (more machines) and the increase of new products. The company may think about producing products which are being produced by other manufacturers or competitors. Innovation also includes creation of new products and improving products or processes that are currently in use to make more profits. Innovation is to produce and distribute products and services, which the company did not deliver before. Innovation is generally understood as expanding capacity installing more machines, and to install more modern machines to produce more quantity of products. Many times innovation increase in productivity and decrease in costs, which result in increase of the production and sale.
(A. Caron, “Technological Innovations in Small and Medium Industrial Enterprises in Times of Globalization: The Case of Paraná,” Thesis (Doctoral in Production Engineering), Curitiba, 2003.)
Cost Deployment allows defining improvement programs that have an impact in reducing losses, everything that can be classified as wastes or non-value added in a systematic way.
This is accomplished through:
1) The study of relations between the cost factors, the processes that generate wastes and losses in its various ways
2) The evaluation of know-how to reduce waste and losses: Is it already available with the organization or it should be acquired;
3. Making an estimate of costs and benefits of cost reduction projects and establishing a priority of projects to reduce waste and losses.
4. Monitoring of progress and results of improvement projects.
Updated 19 February 2017, 20 April 2012
Original Knol - http://knol.google.com/k/narayana-rao/manufacturing-cost-deployment/2utb2lsm2k7a/ 3364
The first step is to audit the facility’s waste stream. Audits reveal the type and amount of waste per department and opportunities for improvement. Once the composition of the waste stream is identified, companies can call waste reduction specialists to come and advise them on how to reduce waste. The company can also ask their managers and staff for suggestions on how to reduce waste. Based on the waste reduction ideas and plans, they should establish policies with goals, lines of accountability and a training plan. The employees standard operating plans have to be revised to reflect waste reduction plans. Waste reduction can be promoted as a value so that culture based behavior changes. The company can provide incentives for achieving waste reduction goals.
Some Ways to Reduce Waste in Hotels
Refillable amenity dispensers can replace soap, lotion, shampoo and conditioner bottles in hotel guestrooms. Now attractive dispensers are available and guest would appreciate the concern of the hotel to reduce waste but provide the required items in a clean manner.
Incandescent lights can be substituted by fluorescent or LED bulbs. They give good return on investment and save waste as fluorescent bulbs last five times as long as incandescents and LEDs operate 25 times longer.
Modular mattresses can be used by hotels. Only, the mattress tops can be replaced initially. Rest of the unit can be used for another five to seven years.
Hotel restaurants reduce waste by using washable table cloths and dinnerware, reusable coffee filters and by providing condiments in bulk dispensers.
There are more waste prevention opportunities for hotels such as: eliminating unrequested newspapers; asking suppliers to reduce excess packaging.
Important Points and Ideas in Shop Management - Abstracts
1. Definition of Management
The art of management has been defined, "as knowing exactly what you want men to do, and then seeing that they do it in the best and cheapest way.'"
What the workmen want from their employers beyond anything else is high wages, and what employers want from their workmen most of all is a low labor cost of manufacture.
These two conditions are not diametrically opposed to one another as would appear at first glance. On the contrary, they can be made to go together in all classes of work, without exception
This book is written mainly with the object of advocating high wages and low labor cost as the foundation of the best management, of pointing out the general principles which render it possible to maintain these conditions even under the most trying circumstances, and of indicating the various steps which the writer thinks should be taken in changing from a poor system to a better type of management.
The possibility of coupling high wages with a low labor cost rests mainly upon the enormous difference between the amount of work which a first-class man can do under favorable circumstances and the work which is actually done by the average man.
2. Difference in Production Quantity between a first class man and an average man
That there is a difference between the average and the first-class man is known to all employers, but that the first-class man can do in most cases from two to four times as much as is done by an average man is known to but few, and is fully realized only by those who have made a thorough and scientific study of the possibilities of men.
The difference in the output of first-class and average men is as little realized by the workmen as by their employers.
The second and equally interesting fact upon which the possibility of coupling high wages with low labor cost rests, is that first-class men are not only willing but glad to work at their maximum speed, providing they are paid from 30 to 100 per cent more than the average of their trade. Men will not work at their best unless assured a good liberal increase, which must be permanent.
3. Developing and Employing First Class People in an Organization
4. Confronting Soldiering - Slow Pace of Work
5. Halsey Plan - F.W. Taylor's Comments
6. Task Management
The writer has found, through an experience of thirty years, covering a large variety in manufactures, as well as in the building trades, structural and engineering work, that it is not only practicable but
comparatively easy to obtain, through a systematic and scientific time study, exact information as to how much of any given kind of work either a first-class or an average man can do in a day, and with this information as a foundation, he has over and over again seen the fact demonstrated that workmen of all classes are not only willing, but glad to give up all idea of soldiering, and devote all of their energies to turning out the maximum work possible, providing they are sure of a suitable permanent reward.
With accurate time knowledge as a basis, surprisingly large results can be obtained under any scheme of management from day work up; there is no question that even ordinary day work resting upon this foundation will give greater satisfaction than any of the systems in common use, standing as they do upon soldiering as a basis.
The writer chooses from among a large variety of trades to which these principles have been applied, the yard labor handling raw materials in the works of the Bethlehem Steel Company at South Bethlehem, Pa.,
The first step was to place an intelligent, college-educated man in charge of progress in this line. This man had not before handled this class of labor, although he understood managing workmen. He was not familiar with the methods pursued by the writer, but was soon taught the art of determining how much work a first-class man can do in a day. This was done by timing with a stop watch a first-class man while he was working fast. The best way to do this, in fact almost the only way in which the timing can be done with certainty, is to divide the man's work into its elements and time each element separately. For example, in the case of a man loading pig-iron on to a car, the elements should be: (a)
picking up the pig from the ground or pile (time in hundredths of a minute); (b) walking with it on a level (time per foot walked); (c) walking with it up an incline to car (time per foot walked); (d)
throwing the pig down (time in hundredths of a minute), or laying it on a pile (time in hundredths of a minute); (e) walking back empty to get a load (time per foot walked).
The most difficult elements to time and decide upon in this, as in most cases, are the percentage of the day required for rest, and the time to allow for accidental or unavoidable delays.
Example of 400% increase in work output
Between twelve and thirteen tons of pig-iron per man had been carried from a pile on the ground, up an inclined plank, and loaded on to a gondola car by the average pig-iron handler while working by the day.
A man was selected from persons doing this task to make the first start under the writer's system. He was trained in a new way of working as developed by Taylor and his associates and supervised. He loaded on piece work from forty-five to forty-eight tons (2,240 lbs. each) per day.
He regarded this task as an entirely fair one, and earned on an average, from the start, $1.85 per day, which was 60 per cent more than he had been paid by the day.
As the first man started on the work earned steadily $1.85 per day, this object lesson gradually wore out the opposition to the new arrangement, which ceased rather suddenly after about two months. From this time on there was no difficulty in getting plenty of good men who were anxious to start on piece work under the new method in various jobs, and the difficulty lay in making with sufficient rapidity the accurate time study of the elementary operations or "unit times" which forms the foundation of this kind of piece work.
Throughout the introduction of piece work, which was done after a thorough time study, for each new section of the work, one man only was put on each new job, until he had demonstrated that the task set was a fair one by earning an average of $1.85 per day. After a few sections of the work had been
started in this way, the complaint on the part of the better workmen was that they were not allowed to go on to piece work fast enough. It required about two years to transfer practically all of the yard labor from day to piece work. And the larger part of the transfer was made during the last six months of this time.
The study of "unit times" for the yard labor took practically the time of two trained men for two years. Throughout this time the day and piece workers were under entirely separate and distinct management. The original foremen continued to manage the day work, and day and piece workers were never allowed to work together. Gradually the day work gang was diminished and the piece workers were increased as one section of work after another was transformed from the former to the latter.
Two elements which were important to the success of this work should be noted:
First, on the morning following each day's work, each workman was given a slip of paper informing him in detail just how much work he had done the day before, and the amount he had earned. This enabled him to measure his performance against his earnings while the details were fresh in his mind. Without this there would have been great dissatisfaction among those who failed to climb up to the task asked of them, and many would have gradually fallen off in their performance.
Second, whenever it was practicable, each man's work was measured separately by itself.
What the writer wishes particularly to emphasize is that this whole system rests upon an accurate and scientific study of unit times, which is by far the most important element in scientific management. With it, greater and more permanent results can be attained even under ordinary day work or piece work than can be reached under any of the more elaborate systems without it.
For each job there is the quickest time in which it can be done by a first-class man. This time may be called the "quickest time," or the "standard time" for the job. Under all the ordinary systems, this
"quickest time" is more or less completely shrouded in mist. In most cases, however, the workman is nearer to it and sees it more clearly than the employer.
Under ordinary piece work the management watch every indication given them by the workmen as to what the "quickest time" is for each job, and endeavor continually to force the men toward this "standard time," while the workmen constantly use every effort to prevent this from being done
and to lead the management in the wrong direction. In spite of this conflict, however, the "standard time" is gradually approached.
With accurate time study as a basis, the "quickest time" for each job is at all times in plain sight of both employers and workmen, and is reached with accuracy, precision, and speed, both sides pulling hard in the same direction under the uniform simple and just agreement that whenever a first-class man works his best he will receive from 30 to 100 per cent more than the average of his trade.
7. Investment for Increasing Productivity or Efficiency
Before starting to make any changes in the organization of a company the following matters should be carefully considered: First, the importance of choosing the general type of management best suited to the particular case. Second, that in all cases money must be spent, and in many cases a great deal of money, before the changes are completed which result in lowering cost. Third, that it takes time to reach any result worth aiming at. Fourth, the importance of making changes in their proper order, and that unless the right steps are taken, and taken in their proper sequence, there is great danger from deterioration in the quality of the output and from serious troubles with the workmen, often
resulting in strikes.
It is not at all generally realized that whatever system may be used, --providing a business is complex in its nature--the building up of an efficient organization is necessarily slow and sometimes very expensive.
Almost all of the directors of manufacturing companies appreciate the economy of a thoroughly modern, up-to-date, and efficient plant, and are willing to pay for it. Very few of them, however, realize that the best organization, whatever its cost may be, is in many cases even more important than the plant; nor do they clearly realize that no kind of an efficient organization can be built up without spending money. The spending of money for good machinery appeals to them because they can see machines after they are bought; but putting money into anything so invisible, intangible, and to the average man so indefinite, as an organization seems almost like throwing it away.
8. Importance of people - organization
The writer feels that management is also destined to become more of an art, and that many of the, elements which are now believed to be outside the field of exact knowledge will soon be standardized tabulated, accepted, and used, as are now many of the elements of engineering. Management will be studied as an art and will rest upon well recognized, clearly defined, and fixed principles instead of depending upon more or less hazy ideas received from a limited observation of the few organizations with which the individual may have come in contact. There will, of course, be various successful types, and the application of the underlying principles must be modified to suit each particular case. The writer has already indicated that he thinks the first object in management is to unite high wages with a low labor cost. He believes that this object can be most easily attained by the application of the
(a) A LARGE (specified) DAILY TASK. --Each man in the establishment, high or low, should daily have a clearly defined task laid out before him. This task should not in the least degree be vague nor indefinite, but should be circumscribed carefully and completely, and should not be easy to accomplish (unless the operator works for the full allotted time with adequate speed).
(b) STANDARD CONDITIONS. --Each man's task should call for a full day's work, and at the same time the workman should be given such standardized conditions and appliances as will enable him to accomplish his task with certainty.
(c) HIGH PAY FOR SUCCESS (in completing the task). -- He should be sure of large pay when he accomplishes his task.
(d) LOSS IN CASE OF FAILURE (to complete the task). --When he fails he should be sure that sooner or later he will be the loser by it (because of low wages).
When an establishment has reached an advanced state of organization, in many cases a fifth element should be added, namely: the task should be made so difficult that it can only be accomplished by a first-class man.
They call, however, for a greater departure from the ordinary types of organization than would at first appear. In the case, for instance, of a machine shop doing miscellaneous work, in order to assign daily to each man a carefully measured task, a special planning department is required to lay out all of the work at least one day ahead. All orders must be given to the men in detail in writing; and in order to lay out the next day's work and plan the entire progress of work through the shop, daily returns must be made by the men to the planning department in writing, showing just what has been done. Before
each casting or forging arrives in the shop the exact route which it is to take from machine to machine should be laid out. An instruction card for each operation must be written out stating in detail just how each operation on every piece of work is to be done and the time required to do it, the drawing number, any special tools, jigs, or appliances required, etc. Before the four principles above referred to can be successfully applied it is also necessary in most shops to make important physical changes. All of the small details in the shop, which are usually regarded as of little importance and are left to be regulated according to the individual taste of the workman, or, at best, of the foreman, must be thoroughly and carefully standardized; such. details, for instance, as the care and tightening of the belts; the exact shape and quality of each cutting tool; the establishment of a complete tool room from which properly ground tools, as well as jigs, templates, drawings, etc., are issued under a good check system, etc.; and as a matter of importance (in fact, as the foundation of scientific management) an accurate study of unit times must be made by one or more men connected with the planning department, and each machine tool must be standardized and a table or slide rule constructed for it showing how to run it to the best advantage.
At first view the running of a planning department, together with the other innovations, would appear to involve a large amount of additional work and expense, and the most natural question would be is whether the increased efficiency of the shop more than offsets this outlay? It must be borne in mind, however, that, with the exception of the study of unit times, there is hardly a single item of work done in the planning department which is not already being done in the shop. Establishing a planning department merely concentrates the planning and much other brainwork in a few men especially fitted for their task and trained in their especial lines, instead of having it done, as heretofore, in most
cases by high priced mechanics, well fitted to work at their trades, but poorly trained for work more or less clerical in its nature.
9. Modern Engineering and Modern Shop Management
There is a close analogy between the methods of modern engineering and the new type of management. Engineering now centers in the drafting room. Similarly, modern shop management's work now centers in the planning department.
10. Task Management - Starting and Ending Times
When men are working on task work by the day they should be made to start to work at the regular starting hour. They should, however, have no regular time for leaving. As soon as the task is finished they should be allowed to go home; and, on the other hand, they should be made to stay at work until their task is done, even if it lasts into the night, no deduction being made for shorter hours nor extra pay allowed for overtime.
11. Task Work - Some More Thoughts
12. Usefulness of Gantt's system
13. Time Study by F.W. Taylor
When work is to be repeated many times, the time study should be minute and exact. Each job should be carefully subdivided into its elementary operations, and each of these unit times should receive the most thorough time study. In fixing the times for the tasks, and the piece work rates on jobs of this class, the job should be subdivided into a number of divisions, and a separate time and price assigned to each division rather than to assign a single time and price for the whole job. This should be done for several reasons, the most important of which is that the average workman, in order to maintain a rapid pace, should be given the opportunity of measuring his performance against the task set him at frequent intervals. Many men are incapable of looking very far ahead, but if they see a definite opportunity of earning so many cents by working hard for so many minutes, they will avail
themselves of it.
14. Bicycle Ball Inspection Case Study
The work consisted briefly in placing a row of small polished steel balls on the back of the left hand, in the crease between two of the fingers pressed together, and while they were rolled over and over, with the aid of a magnet held in the right hand, they were minutely examined in a strong light, and the defective balls picked out and thrown into especial boxes. Four kinds of defects were looked for--dented, soft, scratched, and fire cracked--and they were mostly minute as to be invisible to an eye not especially trained to this work. It required the closest attention and concentration. The inspection girls had worked on day work for years, ten and one-half hours per day, with a Saturday half-holiday.
The first move before in any way stimulating them toward a larger output was to insure against a falling off in quality. This was accomplished through over-inspection. Every two or three days a lot of balls was especially prepared by the foreman, who counted out a definite number of perfect balls, and added a recorded number of defective balls of each kind. The inspectors had no means of distinguishing this lot from the regular commercial lots. The results inspection of those lots were compared with the known results.
After insuring in this way against deterioration in quality, effective means were at once adopted to increase the output. Improved day work was introduced. An accurate daily record, both as to quantity and quality, was kept for each inspector. In a comparatively short time this enabled the foreman to stir the ambition of all the inspectors by increasing the wages of those who turned out a large quantity and good quality, at the same time lowering the pay of those who fell short, and discharging others who proved to be incorrigibly slow or careless. An accurate time study was made through the use of a stop watch and record blanks, to determine how fast each kind of inspection should be done. This showed that the girls spent a considerable part of their time in partial idleness, talking and half working, or in actually doing nothing.
Talking while at work was stopped by seating them far apart. The hours of work were shortened from 10 1/2 per day, first to 9 1/2, and later to 8 1/2; a Saturday half holiday being given them even with the shorter hours. Two recesses of ten minutes each were given them, in the middle of the morning and afternoon, during which they were expected to leave their seats, and were allowed to talk.
The shorter hours and improved conditions made it possible for the girls to really work steadily. Piece work was then introduced, a differential rate being paid, not for an increase in output, but for greater accuracy in the inspection; the lots inspected by the over-inspectors forming the basis for the payment of the differential. The work of each girl was measured every hour, and they were all informed whether they were keeping up with their tasks, or how far they had fallen short and an assistant was sent by the foreman to encourage those who were falling behind, and help them to catch up.
The final results of the improved system in the inspecting department were as follows:
(a) Thirty-five girls did the work formerly done by one hundred and twenty.
(b) The girls averaged from $6.50 to $9.00 per week instead of $3.50 to $4.50, as formerly.
(c) They worked only 8 1/2 hours per day, with Saturday a half-holiday, while they had formerly worked 10 1/2 hours per day.
(d) An accurate comparison of the balls which were inspected under the old system of day work with those done under piece work, with over-inspection. It was found that the accuracy of inspection under piece work was one-third greater than that under day work.
To summarize: the same ten girls did on an average each day in September, on piece work, when only working 8 1/2 hours per day, 2.42 times as much, or nearly two and one-half times as much, in a day (not per hour, the increase per hour was of course much greater) as they had done when working on day work in March with a working day of 10 1/2 hours. They earned $6.50 to $9.00 per week on piece work, while they had only earned $3.50 to $4.50 on day work. The accuracy of inspection under piece work was one-third greater than under day work.
15. Need for Functional Foremanship or Functional Organisation of Foremen
In the writer's experience, almost all shops are under-officered. The foreman has too many duties to fulfill.
His duties may be briefly enumerated in the following way. He must lay out the work for the whole shop, see that each piece of work goes in the proper order to the right machine, and that the man at the machine knows just what is to be done and how he is to do it. He must see that the work is not slighted, and that it is done fast, and all the while he must look ahead a month or so, either to provide more men to do the work or more work for the men to do. He must constantly discipline the men and readjust their wages, and in addition to this must fix piece work prices and supervise the timekeeping. Hence, Taylor advocates functional foremanship.
16. Functional Foremanship
The following is a brief description of the duties of the four types of executive functional bosses which the writer has found it profitable to use in the active work of the shop: (1) gang bosses, (2) speed bosses, (3) inspectors, and (4) repair bosses.
The gang boss has charge of the preparation of all work up to the time that the piece is set in the machine. It is his duty to see that every man under him has at all times at least one piece of work ahead at his machine, with all the jigs, templates, drawings, driving mechanism, sling chains, etc., ready to go into his machine as soon as the piece he is actually working on is done. The gang boss must show his men how to set their work in their machines in the quickest time, and see that they
do it. He is responsible for the work being accurately and quickly set, and should be not only able but willing to pitch in himself and show the men how to set the work in record time.
The speed boss must see that the proper cutting tools are used for each piece of work, that the work is properly driven, that the cuts are started in the right part of the piece, and that the best speeds and
feeds and depth of cut are used. His work begins only after the piece is in the lathe or planer, and ends when the actual machining ends. The speed boss must not only advise his men how best to do this work, but he must see that they do it in the quickest time, and that they use the speeds and feeds and depth of cut as directed on the instruction card In many cases he is called upon to demonstrate that the work can be done in the specified time by doing it himself in the presence of his men.
The inspector is responsible for the quality of the work, and both the workmen and speed bosses must see that the work is all finished to suit him. This man can, of course, do his work best if he is a master of the art of finishing work both well and quickly.
The repair boss sees that each workman keeps his machine clean, free from rust and scratches, and that he oils and treats it properly, and that all of the standards established for the care and maintenance of the machines and their accessories are rigidly maintained, such as care of belts and shifters, cleanliness of floor around machines, and orderly piling and disposition of work.
The following is an outline of the duties of the four functional bosses who are located in the planning room, and who in their various functions represent the department in its connection with the men. The first three of these send their directions to and receive their returns from the men, mainly in writing. These four representatives of the planning department are, the (1) order of work and route clerk, (2) instruction card clerk, (3) time and cost clerk, and (4) shop disciplinarian.
Order of Work and Route Clerk. After the route clerk in the planning department has laid out the exact route which each piece of work is to travel through the shop from machine to machine in order that it may be finished at the time it is needed for assembling, and the work done in the most economical way, the order of work clerk daily writes lists instructing the workmen and also all of the executive shop bosses as to the exact order in which the work is to be done by each class of machines or men, and these lists constitute the chief means for directing the workmen in this particular function.
Instruction Card Clerks. The "instruction card," as its name indicates, is the chief means employed by the planning department for instructing both the executive bosses and the men in all of the details of their work. It tells them briefly the general and detail drawing to refer to, the piece number and the cost order number to charge the work to, the special jigs, fixtures, or tools to use, where to start each cut, the exact depth of each cut, and how many cuts to take, the speed and feed to be used for each cut, and the time within which each operation must be finished. It also informs them as to the piece rate, the differential rate, or the premium to be paid for completing the task within the specified time (according to the system employed); and further, when necessary, refers them by name to the man who will give them especial directions. This instruction card is filled in by one or more members of the planning department, according to the nature and complication of the instructions, and bears the same relation to the planning room that the drawing does to the drafting room. The man who sends it into the shop and who, in case difficulties are met with in carrying out the instructions, sees that the proper man sweeps these difficulties away, is called the instruction card foreman.
Time and Cost Clerk. This man sends to the men through the "time ticket" all the information they need for recording their time and the cost of the work, and secures proper returns from them. He refers these for entry to the cost and time record clerks in the planning room.
Shop Disciplinarian. In case of insubordination or impudence, repeated failure to do their duty, lateness or unexcused absence, the shop disciplinarian takes the workman or bosses in hand and applies the proper remedy. He sees that a complete record of each man's virtues and defects is kept. This man should also have much to do with readjusting the wages of the workmen. At the very least, he should invariably be consulted before any change is made. One of his important functions should be that of peace-maker.
17. Production Planning and Control
The following are the leading functions of the planning department:
(a) The complete analysis of all orders for machines or work taken by the company.
(b) Time study for all work done by hand throughout the works, including that done in setting the work in machines, and all bench, vise work and transportation, etc.
(c) Time study for all operations done by the various machines.
(d) The balance of all materials, raw materials, stores and finished parts, and the balance of the work ahead for each class of machines and workmen.
(e) The analysis of all inquiries for new work received in the sales department and promises for time of delivery.
(f) The cost of all items manufactured with complete expense analysis and complete monthly comparative cost and expense exhibits.
(g) The pay department.
(h) The mnemonic symbol system for identification of parts and for charges.
(i) Information bureau.
(k) Maintenance of system and plant, and use of the tickler.
(l) Messenger system and post office delivery.
(m) Employment bureau.
(n) Shop disciplinarian.
(o) A mutual accident insurance association.
(p) Rush order department.
(q) Improvement of system or plant.
18. Role of Top Management in Managing Change to High Productive Shop
Before starting to make any radical changes leading toward an improvement in the system of management, it is desirable, and for ultimate success in most cases necessary, that the directors and the important owners of an enterprise shall be made to understand, at least in a general way, what is involved in the change. They should be informed of the leading objects which the new system aims at, such, for instance, as rendering mutual the interests of employer and employee through "high wages and low labor cost," the gradual selection and development of a body of first class picked workmen who will work extra hard and receive extra high wages and be dealt with individually instead of in masses.
They should thoroughly understand that this can only be accomplished through the adoption of precise and exact methods, and having each smallest detail, both as to methods and appliances, carefully selected so as to be the best of its kind. They should understand the general philosophy of the system and should see that, as a whole, the system to be introduced must be in harmony with its few leading ideas,
They should be shown that it pays to employ an especial corps to introduce a new system just as it pays to employ especial designers and workmen to build a new plant; that, while a new system is being introduced, almost twice the number of foremen are required as are needed to run it after it is in; that all of this costs money, but that, unlike a new plant, returns begin to come in almost from the start from improved methods and appliances as they are introduced, and that in most cases the new system more than pays for itself as it goes along; that time, and a great deal of time, is involved in a radical change in management, and that in the case of a large works if they are incapable of looking ahead and patiently waiting for from two to four years, they had better leave things just as they are, since a change of system involves a change in the ideas, point of view and habits of many men with strong convictions and prejudices, and that this can only be brought about slowly and chiefly through a series of object lessons, each of which takes time, and through continued reasoning; and that for this reason, after deciding to adopt a given type, the necessary steps should be taken as fast as possible, one after another, for its introduction. The directors should be convinced that an increase m the proportion of non-producers to producers means increased economy and not red tape, providing the non-producers are kept busy at their respective functions.
They should be prepared to lose some of their valuable men who cannot stand the change and also for the continued indignant protest of many of their old and trusted employees who can see nothing but extravagance in the new ways and ruin ahead.
19. Train Operators in High Productivity One by One and Then in Small Batches
Organizing for Introducing New Methods and Functional Foremenship
Before taking any steps toward changing methods the manager should realize that at no time during the introduction of the system should any broad, sweeping changes be made which seriously affect a large number of the workmen. Throughout the early stages of organization each change made should affect one workman only, and after the single man affected has become used to the new order of things, then change one man after another from the old system to the new, slowly at first, and rapidly as public opinion in the shop swings around under the influence of proper object lessons. Throughout a considerable part of the time, then, there will be two distinct systems of management in operation in the same shop; and in many cases it is desirable to have the men working under the new system managed by an entirely different set of foremen, etc., from those under the old.
The first step, after deciding upon the type of organization, should be the selection of a competent man to take charge of the introduction of the new system. The manager should keep himself free as far as possible from all active part in the introduction of the new system. While changes are going on it will require his entire energies to see that there is no falling off in the efficiency of the old system and that the quality and quantity of the output is kept up.
The respective duties of the manager and the man in charge of improvement, and the limits of the authority of the latter should be clearly defined and agreed upon, always bearing in mind that responsibility should invariably be accompanied by its corresponding measure of authority.
The worst mistake that can be made is to refer to any part of the system as being "on trial." Once a given step is decided upon to implement based on various trials, all parties must be made to understand, that now they have to implement.In making changes in system the things that are given a
"fair trial" fail, while the things that "must go," go all right.
Where to begin is a perplexing and bewildering problem. Employees are in general suspicious of change.
The first changes should be such as to allay the suspicions of the men and convince them by actual contact that the reforms are after all rather harmless and are only such as will ultimately be of benefit
to all concerned. Such improvements then as directly affect the workmen least should be started first. At the same time it must be remembered that the whole operation is of necessity so slow that the new system should be started at as many points as possible, and constantly pushed as hard as possible. In the metal working plant which we are using for purposes of illustration a start can be made at once along all of the following lines:
First. The introduction of standards (standard conditions) throughout the works and office.
Second. The scientific study of unit times on several different kinds of work.
Third. A complete analysis of the pulling, feeding power and the proper speeding of the various machine tools throughout the place with a view of making a slide rule for properly running each machine.
Fourth. The work of establishing the system of time cards by means of which ultimately all of the desired information will be conveyed from the men to the planning room.
Fifth. Overhauling the stores issuing and receiving system so as to establish a complete running balance of materials.
Sixth. Ruling and printing the various blanks that will be required for shop returns and reports, time cards, instruction cards, expense sheets, cost sheets, pay sheet, and balance records; storeroom; tickler; and maintenance of standards, system, and plant, etc.; and starting such functions of the planning room as do not directly affect the men.
If the works is a large one, the man in charge of introducing the system should appoint a special assistant in charge of each of the above functions just as an engineer designing a new plant would start a number of draftsmen to work upon the various elements of construction.
Training Functional Foremen
The most important and difficult task of the organizer will be that of selecting and training the various functional foremen who are to lead and instruct the workmen, and his success will be measured principally by his ability to mold and reach these men. They cannot be found, they must be made. They must be instructed in their new functions largely, in the beginning at least, by the organizer himself; and this instruction, to be effective, should be mainly in actually doing the work. Explanation and theory Will go a little way, but actual doing is needed to carry conviction. To illustrate: For nearly two and one-half years in the large shop of the Bethlehem Steel Company, one speed boss after another was instructed in the art of cutting metals fast on a large motor-driven lathe which was especially fitted to run at any desired speed within a very wide range. The work done in this machine was entirely connected, either with the study of cutting tools or the instruction of speed bosses. It was most interesting to see these men, principally either former gang bosses or the best workmen, gradually change from their attitude of determined and positive opposition to that in most cases of enthusiasm for, and earnest support of, the new methods. It was actually running the lathe themselves according to the new method and under the most positive and definite orders that produced the effect. The writer himself ran the lathe and instructed the first few bosses. It required from three weeks to two months for each man.
Perhaps the most important part of the gang boss's and foreman's education lies in teaching them to promptly obey orders and instructions received not only from the superintendent or some official high in the company, but from any member of the planning room whose especial function it is to direct the rest of the works in his particular line; and it may be accepted as an unquestioned fact that no gang boss is fit to direct his men until after he has learned to promptly obey instructions received from any proper source, whether he likes his instructions and the instructor or not, and even although he may be convinced that he knows a much better way of doing the work. The first step is for each man to learn to obey the laws as they exist, and next, if the laws are wrong, to have them reformed in the proper way.
20. Organizing a Small Workshop for High Productivity
In starting to organize even a comparatively small shop, containing say from 75 to 100 men, it is best to begin by training in the full number of functional foremen, one for each function, since it must be
remembered that about two out of three of those who are taught this work either leave of their own accord or prove unsatisfactory; and in addition, while both the workmen and bosses are adjusting themselves to their new duties, there are needed fully twice the number of bosses as are required to carry on the work after it is fully systematized.
21. Introducing Functional Foremanship
The first of the functional foremen to be brought into actual contact with the men should be the inspector; and the whole system of inspection, with its proper safeguards, should be in smooth and
successful operation before any steps are taken toward stimulating the men to a larger output; otherwise an increase in quantity will probably be accompanied by a falling off in quality.
Next choose for the application of the two principal functional foremen, viz., the speed boss and the gang boss.
It is of the utmost importance that the first combined application of time study, slide rules, instruction cards, functional foremanship, and a premium for a large daily task should prove a success both for the workmen and for the company, and for this reason a simple class of work should be chosen for a start. The entire efforts of the new management should be centered on one point, and continue there until unqualified success has been attained.
When once this gain has been made, a peg should be put in which shall keep it from sliding back in the least; and it is here that the task idea with a time limit for each job will be found most useful.
22. Personal Relations Between Employers and Employed
"No system of management, however good, should be applied in a wooden way. The proper personal relations should always be maintained between the employers and men; and even the prejudices of the workmen should be considered in dealing with them.
"The opportunity which each man should have of airing his mind freely, and having it out with his employers, is a safety-valve; and if the superintendents are reasonable men, and listen to and treat with respect what their men have to say, there is absolutely no reason for labor unions and strikes.
"It is not the large charities (however generous they may be) that are needed or appreciated by workmen so much as small acts of personal kindness and sympathy, which establish a bond of friendly feeling between them and their employers.
"The moral effect of this system on the men is marked. The feeling that substantial justice is being done them renders them on the whole much more manly, straightforward, and truthful. They work more cheerfully, and are more obliging to one another and their employers.
23. Don't be in a hurry - It Takes Time to Manage Change
Time is an important factor in managing the change from current productivity to high productivity. If any one expects large results in six months or a year in a very large works he is looking for the impossible. If any one expects to convert union men to a higher rate of production, coupled with high wages, in six months or a year, he is expecting next to an impossibility. But if he is patient enough to wait for two or three years, he can go among almost any set of workmen in the country and get results.
24. Best Practices in Shop Management
Taylor gives the various companies in which good practices in shop management were developed and implemented.
The remarkable system for analyzing all of the work upon new machines as the drawings arrived from the drafting-room and of directing the movement and grouping of the various parts as they progressed through the shop, which was developed and used for several years by Mr. Wm. II.
Thorne, of Wm. Sellers & Co., of Philadelphia,
The employment bureau is an interesting management practice and forms an important element of the Western Electric Company in Chicago. The complete and effective system for managing the messenger boys was introduced by Mr. Almon Emrie while he was superintendent of the Ingersoll Sargent Drill Company, of Easton, Pa. The mnemonic system of order numbers was invented by Mr. Oberlin Smith and amplified by Mr. Henry R. Towne, of The Yale & Towne Company, of Stamford, Conn.; The system of inspection was introduced by Mr. Chas. D. Rogers in the works of the American Screw Company, at Providence, R. I. The many good points in the apprentice system were developed by Mr. Vauclain, of the Baldwin Locomotive Works, of Philadelphia.
The card system of shop returns invented and introduced as a complete system by Captain Henry Metcalfe, U. S. A., in the government shops of the Frankford Arsenal. It is another distinct advance in the art of management.
Talk by Professor K.V.S.S. Narayana Rao, Programme Coordinator, PGDIE, NITIE on 5 February 2017
1. NITIE is specially set up as a national institute for academic pursuits in Industrial engineering. In industrial engineering, NITIE is number one in India, and under the leadership of Prof Karuna Jain, a doctorate in industrial engineering, efforts are being made to get global recognition.
2. NITIE's industrial engineering graduates (PGDIE) were well received by the industry and we have CEOs of various companies from the earlier batches. Currently also, NITIE's IE graduates are in demand.
3. What is the focus of industrial engineering and how is it different from other branches of engineering and management?
4. Industrial engineering is a management subject with base in engineering. It is based on "Shop Management" and "Scientific Management" of F.W. Taylor. "The Art of Metal Cutting" by F.W. Taylor is the engineering back ground for the subject. Development of science, engineering alternatives and mathematical optimization are illustrated in this work.
5. Industrial engineer is a joint executive with engineering managers of various engineering departments.
6. Every function or activity has to be effective and efficient. Industrial engineers focus on efficiency.
7. Effectiveness is customer acceptance and efficiency determines the profit made by the company.
8. Managers have to get new products designed and existing products modified to get customer acceptance. Then they have to get processes in place to produce and distribute those products.
9. Industrial engineering redesign the products and processes on a continuous basis to identify and eliminate waste, improve productivity and decrease cost.
10. What are you going to learn in the Industrial engineering programme to improve efficiency and productivity, reduce cost and increase profit? I shall outline the subject streams in the programme. Each stream may have one to five subjects depending on the number of subjects in the curriculum and also the specialisation chosen.
11. We already mentioned products and processes and they are the most important outputs of engineering activity.
12. So I first mention Product Industrial engineering and Process Industrial engineering as the two important subjects streams in Industrial engineering curriculum. Both these streams are based on engineering knowledge of various engineering branches. In these two practice areas, industrial engineers have to come out with engineering alternatives to improve productivity and reduce costs.
13. All engineering alternatives proposed by industrial engineers have to be optimized to select the best alternative as the preferred solution to the issue at hand. Hence optimization through mathematical and statistical methods will be taught in the curriculum. This can be termed Industrial Engineering Optimization.
14. Industrial engineering economics is economic analysis of Industrial engineering proposals and projects to assure that IE proposals provide adequate return on investment.
15. Human effort industrial engineering is a unique activity of IE. Engineers of other branches do not focus on human element. IEs redesign human effort to improve productivity of human resource. Along with productivity, IE is concerned with comfort of operators. Wherever industrial engineers are providing services, employees must feel very satisfied. The other point is industrial engineers have to learn to improve cooperation in the organization. IEs do not want conflict in the organizations.
16. Industrial engineering measurements of significance are work measurement, productivity measurement and cost measurement. Other measurements related to various engineering branches are anyway to be done to redesign products and processes.
17. The last area, I mention is productivity management. IEs are responsible for productivity management and they have to learn the complete management process and apply it to manage productivity.
18. Industrial engineering and productivity management provide you careers where you can contribute to tangible and measurable results in the company in the form of reduced costs and increased productivity. You can even become Joint CEO first and then CEO. They are exciting careers for effective services in the area of industrial engineering. I invite you all to compete for this education and career opportunity with all your intelligence and effort. Join us and we will form a team for the benefit of you, the society and the institute that includes faculty and administrative and service staff. My best wishes to all of you.
The presentation was made as a part of B-Cube program of NITIE.
More detailed presentation on Industrial Engineering
made as an orientation lecture in 2016 to PGDIE program
Detailed Notes on Streams in Industrial Engineering
Productivity Management - Traditional Management Function-wise Explanation
Planning for Productivity
The top management is to set productivity objectives and goals that are in line with and integrated into organisation’s long-term strategic plans. To ensure that these goals are met, key performance indicators and targets need to be identified and developed. The organisation’s productivity performance can be monitored against these targets.
Phase I – Diagnose
For any productivity intervention to be effective, management should have a thorough understanding of the organisation’s current situation. This can be done through a productivity diagnosis.
A productivity diagnosis covers a qualitative assessment of organisation’s performance in relation to the productivity levers and a quantitative assessment of organisation’s performance based on certain key indicators that are linked to the various productivity levers.
These assessments are undertaken specifically to:
Measure the gap between the current situation and the productivity goals set by the organisation in the past.
Identify organisation’s strengths and weaknesses in the area of productivity improvement.
Determine the underlying causes of the gaps (for the weak areas).
Determine areas for improvement.
Qualitative Assessment of Performance
The key levers that affect productivity can be identified.
Technology - Adoption on appropriate technology on a continuing basis
Machinery & Equipment - Selection of appropriate machinery and equipment and their replacement based on engineering economic analysis
Operators - Human effort engineering - Design manual activities incorporating motion studies, principles of motion economy and ergonomics
Demand - Reduction of price and reduction of external failure of products
Management Systems and Processes
Productivity Knowledge Management
Skills of Operators and Managers
Attitudes of Operators and Managers
These levers are areas or actions that an organisation can focus on to improve productivity significantly.
Productivity levers do not operate in silos. Improvements made to one lever require complementary actions on some other levers, for it to be effective. For example, the adoption of new technology inevitably requires the complementary actions of training of employees and redesign of work processes. Similarly, weakness in one lever is likely to have an adverse effect on other levers.
Quantitative Assessment of Performance
There are 10 common indicators used to gauge an organisation’s productivity performance:
Sales per employee
Value added-to-sales ratio
Sales per dollar of capital
Labour cost competitiveness
Labour cost per employee
Profit-to-value added ratio
Along with an analysis of organisation’s overall performance, the performance of the operational units and functions also needs to be measured.
To know how well an organisation is faring in the area productivity, a comparison the organisation’s performance against some standard has to be made. This can be done across time and space, with external entities (e.g. benchmarks and organisations within the same industry) and within the organisation (e.g. between departments for setting departmental goals) . Such comparisons provide valuable information on the organisation’s relative standing vis-à-vis competitors and the best-in-class performers.
Organisations who want to assess themselves against their competitors can use the Inter-firm Comparison (IFC) tool. Some industry organizations conduct IFC studies involve comparing productivity ratios of organisations in the same industry. Their identities are kept confidential and summary results are circulated or sold as reports to the members of the industry organization.
Phase II –
Develop Road Map
After the diagnosis is completed, a productivity road map or action plan has to be developed. The road map indicates specific activities to achieve productivity goals in a coordinated and systematic manner.
Components of Productivity Road Map
A productivity road map addresses the following:
What affects productivity?
Identify the specific actions that need to be taken in relation to the findings from the diagnosis.
Spell out the key performance indicators, targets and deliverables for the actions to be taken.
Who affects productivity?
Identify the units or individuals who will carry out the actions.
Assign responsibilities and accountabilities to the parties identified.
When are the activities to be undertaken?
Set milestones and timelines for the actions to be taken.
The actions should then be taken and monitored according to the road map.
Organizing for Productivity
Establish Productivity Management Function
Establish A Productivity Management Structure
Good management of productivity requires commitment and focus from top management. A dedicated organisational structure must be set up to facilitate the productivity improvement effort. Depending on organisation’s policy decision, needs, size and characteristics, this structure may take the form of:
a productivity management unit, headed by a Productivity Manager who reports directly to senior management; or
a cross-functional team comprising productivity coordinators appointed from the various operational units.
In engineering organizations, the best practice is to establish industrial engineering department take care of productivity management because engineering products and processes have to be improved to improve productivity.
The typical scope of work of a Productivity Manager is given under a separate topic. The scope relevant to a particular organisation can defined depending on the structure and complexity of the productivity management function in an organisation.
Staffing Productivity Department
Productivity department requires productivity coaches and study experts. The norms for productivity department personnel may have to be established. Let us say each engineering and production manager requires one industrial engineer to support him in engineering organizations.
Other Resources for Productivity Department
Productivity department may need a laboratory of its own or a work area where they can try out alternative ways of doing work.
Directing Productivity Effort
Garner Participation and Commitment
A harmonious and open corporate culture is essential to continuous productivity improvement. This can be achieved through the following:
Commitment from Top Management
Top management set the direction of an organisation. For any productivity plan to succeed, senior leadership must be fully committed to the cause. This commitment can be expressed through direct communication with employees on your productivity goals and strategies, as well as allocation of resources for productivity improvement. A senior employee could also be put in charge of the organisation’s productivity efforts.
Communication and Creation of Awareness
Employees must have a clear understanding of productivity concepts, the organisation’s productivity goals and how these goals will benefit them as well as the organisation. They then need to be armed with the right tools to improve their productivity and know how they can play a part in the productivity journey.
It is, therefore, important to set up open communication channels between departments, staff and management to facilitate exchange of ideas and information, create trust and engage employees.
Mobilisation of Employees
Employees should be involved in each stage of the productivity effort — from the setting of targets and development of initiatives, to the measurement and management of productivity performance. Their involvement helps to foster commitment and provides them with a sense of ownership.
Control of Productivity Improvement
Implement Measurement System
Importance of Productivity Measures
Productivity improvement initiatives must be complemented by a sound measurement system, which forms an integral part of an organisation’s management information system.
Productivity measures can be used to:
Evaluate the effectiveness of action plans
Set targets and formulate strategies
Account to various stakeholders – customers, investors, employees, suppliers and funding agencies
Link effort and reward for employees
Since productivity is the relationship between output and the input used to produce that output, there are various ratios you can use to measure the performance of different operational units within your organisation. By adopting an integrated approach to productivity measurement, you can learn how each of your departments affects your organisation’s overall performance.
Key management indicators at the top are broad indicators that provide management with information related to productivity and profitability. They are then broken down into activity indicators and operational indicators.
Activity indicators provide a snapshot of costs, activity levels and resource utilisation rates, which are particularly useful for middle and higher management.
Operational indicators are usually physical ratios that address the operational aspects that need to be monitored and controlled.
You should consider the following points in selecting productivity ratios:
Ratios should measure something significant.
Only elements that have an important impact on the business performance should be measured.
Ratios should be meaningful and action-oriented.
Ratios used must be relevant to the objectives and operations of your organisation.
They should explain the pattern of performance and preferably signal a course of action.
Component parts of the ratios should be reasonably related.
The numerator and the denominator should correspond with each other. For example, it would not be appropriate to relate sales with the number of employees in the human resources department as they are not directly responsible for sales.
Implement Performance Management System
Productivity measurement tells an organisation how it is performing and why, and what it should do in view of its performance. The next step is to use these measures to manage productivity performance.
Performance management covers two main areas: (a) activities to monitor performance; and (b) activities to reinforce performance and motivate employees.
Activities to Monitor Performance
Productivity Level and Growth
An organisation’s productivity performance can be monitored in terms of the productivity level measured by the various productivity ratios, or the change in productivity level over time. Productivity level represents the efficiency and effectiveness of resource utilisation achieved at a given point in time. Comparison of productivity levels must be made between similar entities. For example, the management of a restaurant chain may compare the labour productivity of outlet A against that of outlet B.
The change in productivity level over time is expressed as a percentage. It indicates dynamism and the potential for achieving higher productivity levels. An organisation with a consistently high productivity growth rate may overtake another with a negative growth rate, even if its current productivity level is lower.
Comparison of Performance
Within the organisation, comparisons can be made against its productivity goals and targets to evaluate the effectiveness of the productivity efforts; and against its past performance for trend analysis. Comparisons can also be made across different operational units and different employees for performance appraisals.
Review and Feedback Mechanism
Information on any organisation’s productivity performance is rendered useless if it does not lead to further improvements. It is therefore important to put in place a review and feedback mechanism to gather valuable information for strategic planning and training purposes. The information should be made readily available to all employees to improve the performance of the organisation or the unit that they are in.
Activities to Reinforce Performance and Motivate Employees
To sustain the productivity drive, a clear link between rewards and achievements must be established. The wealth generated by the organisation should be distributed back to those who have contributed to the production process.
Productivity incentive schemes can take different forms:
Awards can be given out to individuals or teams to encourage continuous productivity improvements.
Productivity Gain-Sharing Schemes
The value added created by the organisation is shared with employees, based on a formula agreed upon by both management and employees.
Staff Performance Appraisal Linked to Productivity Improvements
Employees’ contributions to productivity efforts are recognised in their performance appraisals. Good performers should be rewarded with higher bonuses or salary increments.
Scope of Work of a Productivity Manager
The duties of a productivity manager include planning, coordinating, controlling and monitoring of productivity programmes within an organisation. The productivity manager is also responsible for getting cooperation from all management levels to achieve the productivity goals and objectives that have been set.
Attributes of a Productivity Manager
• Well-versed in productivity concepts, frameworks and tools
• Prior knowledge or relevant experience in the organisation’s sector of work
Abilities & skills
• Good people management and negotiation skills
• Strategic view of the organisation’s productivity objectives
Key Responsibilities of a Productivity Manager
• Establish productivity management structure, responsibilities and accountabilities
• Mobilise employees to participate in the productivity drive
• Manage and facilitate actions taken to improve productivity
• Establish productivity measurement system and performance management system Establish structure, responsibilities and accountabilities
• Review current reporting structure and assess if it is suitable for productivity management accountability
• Assess need for a productivity management committee or unit within the organisation
• Establish productivity accountability at different management levels
• Decide process of setting overall productivity goals
• Educate employees on:
i. Meaning and scope of productivity, its benefits and how it can be improved and measured
ii. Role of every employee and how to adopt a positive mindset towards productivity initiatives
• Communicate to employees on:
i. Organisational objectives in productivity
ii. Organisation’s targets and overall direction and strategy to achieve its productivity objectives
• Involve employees at different levels in the productivity drive by:
i. Engaging them throughout the whole productivity journey - planning, development of measures and implementation of initiatives
ii. Showing them the impact of their efforts in improving productivity and the consequent benefits
Manage and facilitate productivity improvements
i. Assess performance in relation to the key productivity levers
ii. Identify areas for improvement and productivity levers to address
• Develop road map
i. Work out action plan to address findings from diagnosis
ii. Set targets and assign responsibilities
iii. Monitor progress of actions taken
Establish productivity measurement system and performance management system
• Identify and implement measures to track productivity performance against targets and benchmarks
• Identify and implement employee incentive schemes to motivate employees