Value Engineering Example - Silver Brazing Changed to Copper Brazing

http://www.weldguru.com/silver-brazing.html

http://www.weldguru.com/copper-brazing.html


Example - 2013

The substitution was done in the case of fuel tank manufacture of a motor cycle

http://www.msruas.ac.in/pdf_files/sastechJournals/May2013/7.pdf

Total Cost Industrial Engineering - An Illustration

Total cost industrial engineering is determining  cost reduction target at the total cost level of the organization and achieving the target by using industrial engineering methods and techniques in various departments of the organization. Total productivity management is the name under which it is promoted.

The illustration is based on  Top-down Production Management: A Recent Trend in the Japanese Productivity-enhancement Movement by W. Mark Fruin and Masao Nakamura, published in
MANAGERIAL AND DECISION ECONOMICS, VOL. 18, 131–139 (1997)

TOTAL PRODUCTIVITY MANAGEMENT (TPM): A TOP-DOWN APPROACH TO MANAGING PRODUCTIVITY

STEPS

Step 1. Corporate goal setting for cost reduction.  Set  company-wide numerical goals and targets.

Step 2. Top-down explosion process. Explode the corporate-level goals and targets systematically into actions by specific departments (or by specific product lines) and select numerical goals and targets for individual departments (or specific product lines). Repeat Step 2 until goals and targets are selected or assigned to all layers of relevant organizational units and individuals with the responsibility for cost reduction (industrial engineers in engineering departments).

Step 3. Implementation and assessment.  Compare the corporate performance and departmental performances  with the originally set goals. Take control actions in the current year. Incorporate changes in the planning system for the next year.



The strategic planning decided that it is necessary to achieve a 15% reduction in the unit estimated production cost taking into consideration the improvements in the product planned in order to give a 10% reduction in the existing price. This means that the current production cost (200000 yen) must be reduced by  35000 yen. The composition of the unit production cost is: labor 30% (60000 yen), raw materi als 60% (120000)  and overhead 10% (20000).

After initial analysis by cost reduction - industrial engineering top level team,  it was decided that the cost-reduction target, 35000 yen, will be allocated between labor and raw materials as labor 14000 yen, and raw materials 21000 yen.

Labor Cost Reduction - Further Assignment

The labor cost reduction target is to be assigned to five workshops:  molding, machine, welding, assembly and inspection workshops.  Discussions of the top level CR-IE team with the shop level CR-IE team lead to the following cost reduction targets at the shop level: molding 840 yen,  machinery 4194 yen, molding 840 yen, welding 2285 yen, assembly 6000 yen, and inspection workshop 660 yen.

Assembly level cost reduction target further break up. 

 The assembly workshop has eight assembly lines A-H.   Lines B, C and E employ large labor hours, consist of similar job tasks and an improvement in one can be implemented on the lines.
(f) The numerical target for cost reduction for the assembly workshop is 6000 yen. The cost target was converted into 1676 hours reduction target. Lines B, C and E are operational 95% of the time and hence our labor input reduction effort has to be from reduction of assembly time. The opportunity to get savings from downtime is limited.

Assembly Line Level Effort

22 jobs are done on these assembly line with six stations. Each station is given 0.15 minute. The  total utilized labor time for all the stations is only 0.53 minutes.  Hence effort was made to reduce the station time or cycle time to 0.09 minutes. The output from the lines have gone up by 40% due to this productivity improvement initiative and the assembly workshop met its cost reduction target.


The simplified description shows how a corporate level cost reduction target is converted into shop level and assembly line level or work centre level cost reduction targets. The top level CR-IE team, department level CR-IE team and shop level CR-IE team interact with fix shop level cost reduction targets. The industrial engineer, in engineering departments joins with engineering managers, supervisors and operators of the shop to engage in productivity improvement project. They get the needed help from higher level CR-IE team members to complete the project.
ˆ
The implementation of a top-down TPM program requires substantial inputs of a bottom-up persons of the shop. Without cooperation from the shopfloor no meaningful numerical targets could be derived and hence an effective implementation of any target would not be possible.
The main characteristics of TPM is that it deals with corporatewide goals. Another is that it deals with specific numerical targets for cost reduction.


Bottom-up approaches to productivity improvement are important for continuous improvement but may only provide sub-optimal solutions from the firm’s perspective when a corporate-wide optimal solution is required. TPM has been found to be effective for overall optimization and hence for improving firms’ overall profitability in a planned way over the typical sales and profit planning periods.


Related Article

Productivity Management

http://nraoiekc.blogspot.com/2016/11/productivity-management.html

Management as a Variable in Productivity - Research - Literature Review

http://www.nber.org/reporter/2008number4/bloom.html

http://www.mckinsey.com/global-themes/china/why-management-matters-for-productivity

Hundred Years of Industrial Engineering and Improvement of Productivity - Link to Article

http://www.timesascent.com/event/Hundred-Years-of-Industrial-Engineering-and-Improvement-of-Productivity/47

The principles of scientific management and the advocacy for staff specialists to help managers implement scientific management gave birth to the discipline of ‘Industrial Engineering'. Charles Buxton Going authored the first textbook on industrial engineering.


Principles of Scientific Management:

The operators have to be selected scientifically and then trained in standard methods. 

There has to be cooperation between men and managers so as to insure all of the work being done is in accordance with the principles of the science which has been developed. 

There has to be an almost equal division of the work and the responsibility between the management and the workmen. 

The management takes over all work for which they are better fitted than the workmen, while in the past almost all of the work and the greater part of the responsibility of operations were thrown upon the men.

Article by Narayana Rao K.V.S.S. (Author of this blog)


Principles of Industrial Engineering

To be added.

Updated  20 November 2016, 3 Feb 2012

Total Productivity Management - A Different Perspective - Suito Kiyoshi

The purpose of "Total Productivity Management" is to improve the competitiveness of products and services in price/cost and customer responsiveness, thereby increasing the profitability, market share, and return on investment in human, material, capital, and technology resources.


Methodology
1. Mission Statement Development

2. Productivity Analysis

• Total Productivity and Break-Even   Point of Total Productivity
• Human Productivity
• Materials Productivity
• Fixed Capital Productivity
• Working Capital Productivity
• Energy Productivity
• Other Expense Productivity
An analysis will be made of the impact of these productivities on profits.

3. Management Goals Development

4. Productivity Goal Development

5. Fishbone Analysis and Action Plans Development
Using the Fishbone Analysis, action plans will be developed for each of the management goals.

5. PQT Training
This training entails an 8-step approach for problem-solving to improve productivity, quality, and customer responsiveness. It also teaches skills in supervision, planning, organizing, motivating, delegating, controlling, and communicating.

6. Assessment of Productivity Goal Achievement
To assess the progress toward the achievement of the productivity goals. Personnel from accounting and management information systems will be taught how to use it.

7. TPG
To provide consistent motivation to achieve the corporate mission, the "Total Productivity Gainsharing" formula will be applied. The management will be guided to consider different options.

Suito, Kiyoshi. (1998). Total productivity management.  Work Study, 47(4), 117-127.

http://www.mgtii.com/Engineering_Management_Miami_FL.html

Paper containing full example of the above model
Resource Use, Waste, and Total Productivity Management in Saudi Arabia Hotel Industry
Rami H. Alamoudi
Department of Industrial Engineering
King Abdulaziz University, Jeddah, Saudi Arabia

International Journal of Basic & Applied Sciences IJBAS Vol: 9 No: 10, Pp. 43-54

http://www.ijens.org/94210-8383%20IJBAS-IJENS.pdf


20 Nov 2016, 6 August 2013

Determinants of Productivity - Syverson - 2011

Paper: What Determines Productivity?
Chad Syverson
Journal of Economic Literature 2011, 49:2, 326–365
Can be accessed from Syverson's personal website

Economists have shown that large and persistent differences in productivity levels across businesses are ubiquitous. This finding has shaped research agendas in a number of fields, including (but not limited to) macroeconomics, industrial organization, labor, and trade. This paper surveys and evaluates recent empirical work addressing the question of why businesses differ in their measured productivity levels. The causes are manifold, and differ depending on the particular setting. They include elements sourced in production ractices—and therefore over which producers have some direct control, at least in theory—as well as from producers’ external operating environments. After evaluating the current state of knowledge, the papers  lays out the major questions that research in the area should address going forward.

Research questions for further research

1 What Is the Importance of Demand?

2 What Is the Role of (or Hope for) Government Policies That Encourage Productivity Growth?

3 Which Productivity Drivers Matter Most?

4 What Factors Determine Whether Selection or Within-Producer Growth Is More Important in a Market/Sector/

Industry?

5 What Is the Role of Misallocation as a Source of Variation in Emerging Economies?

6 What Is the Importance of Higher Variance in Productivity Outcomes?

7 Can We Predict Innovation Based on Market Conditions?

8 The Nature of Intangible Capital

9 Management Versus Managers

10 A Plea for Data

This research is further  continued by other scholars

http://www.mckinsey.com/global-themes/china/why-management-matters-for-productivity

http://www.nber.org/reporter/2008number4/bloom.html

Updated  20 November 2016,  6 August 2013

Productivity Management - An Activity of Industrial Engineers - List of Articles

Productivity Management is an important component of industrial engineering

Industrial engineering department has the responsibility to manage productivity in the organization. It may undertake this responsibility as a staff department like accounting department. IE department measures productivity, identifies the reasons for low productivity and high costs, determines the processes and operations, products to be studied using IE methods to improve productivity of them and submits the recommendations to line managers. On the approval of line managers, IE participates in installation projects and training projects and then measures the new productivity. A well functioning IE department is responsible for continuous improvement in productivity. Competitors come into the market with more productivity methods and products and every existing company has to pay attention to productivity to remain in the market and protect its market share in the presence of new competitors. IEs help companies to maintain their competitive position.

IEs have to plan productivity improvement, organize for productivity improvement, acquire resources for undertaking productivity improvement projects, execute productivity improvement projects and control productivity improvement. They have to use all functions of management (process of management) to manage the productivity of a concern as staff assistants to managers at various levels.


Review of Total Productivity Management

Management and Industrial Engineering

Driving Change One Project at a Time

Total Industrial Engineering and Work Simplification

Role of Top Management in Implementing Scientific Management - F.W. Taylor

Productivity Measurement

Accounting Analysis of Productivity Projects and Programmes - Bibliography

Total Cost Industrial Engineering - Industrial Engineering of Enterprise Cost

Productivity Management - Books

Productivity Planning

Productivity Accounting - 2015 - Emili Grifell-Tatjé, C. A. Knox Lovell - Book Information

Cross-Functional Productivity Improvement - Ronald Blank - 2012 - Book Information

Strategic Total Productivity Optimization

Total Productivity Management - A Different Perspective

Determinants of Productivity - Syverson - 2011

Train Operators in High Productivity One by One and Then in Small Batches - F.W. Taylor

Learning Curve - Experience Curve - Bibliography

Total Cost Industrial Engineering - Bibliography

Total Cost Management and Total Cost Industrial Engineering


Suggestions Schemes that work - AME article

Work Simplification by Alan Mogensen

Updated  20 Nov 2016, 12 August 2016, 23 July 2016

Leadership and Productivity

2-14
How Leaders Can Improve Productivity and Profits Simultaneously
http://quickbase.intuit.com/blog/how-leaders-can-improve-productivity-and-profits-simultaneously


Leadership's Impact on Productivity and Engagement
November 2013 -  Gordon Tredgold
https://www.td.org/Publications/Blogs/Management-Blog/2013/11/Leaderships-Impact-on-Productivity-and-Engagement



April 2010

Leadership and its Impact on Productivity
Singapore Productivity Association

Prime Minister Lee Hsien Loong, in his keynote address at SNEF 30th Anniversary CEO and Employers Summit in July 2010, highlighted that “a huge part of the responsibility for improving productivity falls on employers and business leaders”. He emphasised the point advocated by F.W. Taylor that leadership has to take interest, study existing processes and develop new processes to upgrade productivity for businesses.

While management is “getting things done through others”, leadership involves “getting others to want to do things”.

Leadership at Various Levels in Organisations

Self

The first step is leading one’s self. Leaders who can lead themselves meaning who can convince themselves about the utility of a particular action for himself and the organisation,  and possess  the core leadership skills  to lead others would enjoy a high degree of success in leading others in the long run. This calls for an understanding and awareness of strengths and weaknesses, clarity of personal vision, and ability to be creative and curious, understanding others that come in contact with him or have a stake in his activities and a sense of one’s personal brand of leadership.

Self-Team

Middle managers play a critical role in communicating and explaining the organizations programmes to members their teams. It is critical for middle managers to know how to influence others through communication, relationship building and management of tasks entrusted to them.

Team

In the case of senior leaders, who are leading fulld departments,  the  perspective must be
to engage and generate passion in others. Creating a vision for success and aligning all members of the team to that vision is required. It requires an understanding of team leadership and organization dynamics. The senior leaders have to create an environment which maximises the abilities of all team members. Leading for success in the team environment requires a great deal of grace, patience, focus and finesse.


Business Unit
Leaders who operate at this level are responsible and therefore measured by tangible results, which they must produce at the business unit level. It demands leaders who could align efforts of various function with the unit-level business objectives. Leaders at this level must be able to measure performance, improve business processes, create an environment which fosters accountability. They also have to empower functional heads, so that they are proactive, focussed and successful.

Organisation

Leaders operating at the organisation perspective are usually concerned with the strategic direction, enhancing value to the customer, increasing competitive advantage and developing competencies and capabilities for future,   They require the skills and capacity to position themselves and their teams to maximise value today and in the future. These leaders have to monitor the changing marketplace and are react in time to ensure  the long-term viability and effectiveness of the organisation and, business units.


Leaders Drive Productivity:  Are you building a High Performance Environment?
Successfactors article
https://www.successfactors.com/static/docs/SFResearch_LeadershipDriveProductivity.pdf


Updated 20 Nov 2016,  13 August 2016