Industrial Engineering - The Concept - Developed by Going in 1911

Lesson 31 of  Industrial Engineering ONLINE Course

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.

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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.
Prof. Hugo Diemer - Taylor's Industrial Engineering

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  17 June 2020,  16 July 2017, 15 July 2016

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