Blockchain Technology - Productivity and Cost Reduction Potential

Applied Industrial Engineering

Industrial Engineering have to have monitor technology environment to spot new technologies that have productivity improvement potential and take steps to adopt those technologies in their organization processes.

Productivity potential of new technologies are to be assessed qualitatively in early days and then quantitatively as pilot implementations and use cases take place.



2018


Often, productivity and security are seen as conflicting demands in business. But blockchain technology offers the potential to improve both. And now is the time for miners to see how it can work for them.
https://www.accenture.com/in-en/insight-highlights-natural-resources-blockchain-technology

Blockchain: what does the future hold for blockchain in Australia?
Our study explores how blockchain technology could be used across government and industry in Australia to deliver productivity benefits and drive local innovation.

Funded under the National Innovation and Science Agenda, we have delivered two reports that examine the risks and opportunities of blockchain technology in Australia.

We identified the following benefits for businesses.

Business

Since they remove the need for a third party, blockchains can reduce the number of stakeholders involved in a transaction therefore reducing cost and saving time. Blockchains can also enable better information sharing and better business processes, giving stakeholders more confidence and reducing cost and risk.
https://www.data61.csiro.au/en/Our-Work/Safety-and-Security/Secure-Systems-and-Platforms/Blockchain


Using distributed leders, many kinds of business transactions can be decentralised, eliminating the cost, complexity, and slowness of involving trusted intermediaries. Smart contracts provide new ways to automate complex, multi-party business transactions which reduce costs and increase the velocity of business.
http://www.information-age.com/just-cryptocurrency-advent-blockchain-business-123470825/


2017

Productivity In Society & The Blockchain
How and how much the blockchain can help improve productivity of our companies, governments, and society at large
Vivek Singh
Sep  2017
https://medium.com/kryptosstudio/productivity-in-society-the-blockchain-512265b87d47


2015

The Winning Blockchain Pattern For 21st Century Productivity
December 30, 2015
https://www.linkedin.com/pulse/winning-blockchain-pattern-21st-century-productivity-bob-bonomo

Strategy, Cost and Industrial Engineering - Presentation - Transcipt

Strategy, Cost and Industrial Engineering

Books referred

Strategic Management and Competitive Advantage

J.B. Barney and W.S. Hesterly

Strategy

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

Competitive Advantage

A firm has competitive advantage when it is able to create more economic value than rival firm or firms.

Economic value is the difference between the perceived benefits gained by a customer and the full economic cost the product or service.

Gaining or Increasing Competitive Advantage

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

Decreasing  the full economic cost the product or service (Cost based strategy).

Business Level Strategies

Two Generic Business Level Strategies

Cost Leadership: generate economic value by having lower costs  than competitors

Example:  Wal-Mart

Product Differentiation: generate economic value by offering a product  that customers prefer over competitors’ product

Example:  Harley-Davidson

Industrial Engineering and Cost of Products

Industrial engineering optimizes (minimizes) cost of resources to produce the products and services at the designed level of quality.

Industrial engineering uses rationalization  to identify wastes and eliminates them from products and processes.

IE and Continuous Improvement

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

IE and Cost Reduction/Process Improvement Projects

IE department periodically undertakes process improvement projects to incorporate the latest efficiency improving technologies into the processes and contributes to cost reduction.

Industrial engineering identifies engineering changes in products and processes in the system that give productivity improvement and cost reduction.

Periodic Mathematical Optimization of Costs

Thus there are opportunities to do mathematical, statistical and OR based optimization periodically.

Cost Leadership Business Strategy

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

Popular companies following cost leadership strategies

Ryanair – Air travel

Timex and Casio – watches

BIC – disposable pen and razors

Walmart - Retail

What factors or actions create cost advantage?

Economies of scale

Diseconomies of scale create cost advantage sometimes – Mass versus Lean production

Experience difference – Learning curve economies

Acquisition of low cost productive inputs

Technology advantages independent of scale

Management policies

Economies of Scale

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

are a cost advantage because competitors may  not be able to match the scale because of capital

requirements (barrier to entry).

international expansion may allow a firm to have  enough sales to justify investing in additional

capacity to capture economies of scale.

Diseconomies of Scale

are an advantage for those who do not have  diseconomies of scale

occur when firms become too large and bureaucratic

are a risk of international expansion

Learning Curve Economies

a firm gets more efficient at a process with experience

the more complicated/technical the process,  the greater the experience advantage

international expansion may propel a firm down the  experience curve because of higher volumes

Differential Low-Cost Access to Productive Inputs

may result from:

history—being in the right place at the right time

being first into a market—esp. foreign markets

locking up a source—buying all of its output

Technology Independent of Scale

may allow small firms to become cost competitive

advantage typically accrues to the ‘owner’ of the  technology—may or may not be the ones who actually  use the technology

size of the advantage depends both on how valuable  and protectable the technology is

Industrial engineering department plays a key role in this.

Policy Choices

firms get to choose how they will serve the market

we’ll offer level of quality that is inexpensive to  produce

firms can make policy choices that give people  incentives to reduce cost at every opportunity 

Organization: Having staff consultants who decrease costs on a continuous basis using IE methods.

Cost Leadership & Competitive Advantage

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

Valuable

Rare

Costly to Imitate

Organized (Implemented Appropriately)

Updated 2018 - May 2018

First published 22 September 2013

Technology and Productivity - Role of Industrial Engineering

2016

Organisation of Markets
Authors: Jan De Loecker (Princeton), Allan Collard-Wexler (Duke University)

The productivity impact of new technology: evidence from the US steel industry

The introduction of new production processes can have dramatic effects on aggregate productivity within an industry.


When we evaluate the impact of a drastic technological change on aggregate productivity growth, we control for other potential drivers of productivity growth, including international competition, geography, and firm-level factors such as organization and management.

http://microeconomicinsights.org/productivity-impact-new-technology-evidence-us-steel-industry/

2000

LINKAGES BETWEEN TECHNOLOGICAL CHANGE AND PRODUCTIVITY GROWTH
By Steven Globerman
Western Washington University
Occasional Paper Number 23
 May 2000
https://www.ic.gc.ca/eic/site/eas-aes.nsf/vwapj/op23e.pdf/$file/op23e.pdf


1998

The Effect Of Technology Use On Productivity Growth

Robert H. Mcguckin , Mary L. Streitwieser  & Mark Doms
Journal - Economics of Innovation and New Technology
Volume 7, 1998 - Issue 1
Pages 1-26
https://www.tandfonline.com/doi/abs/10.1080/10438599800000026

We find that establishments that use advanced technologies exhibit higher productivity. This relationship is observed in both 1988 and 1993 even after accounting for other important factors associated with productivity: size, age, capital intensity, labor skill mix, and other controls for plant characteristics such as industry and region.


The Impact Of Technology Adoption On Firm Productivity
Myung Joong Kwon  & Paul Stoneman
Economics of Innovation and New Technology
Volume 3, 1995 - Issue 3-4, Pages 219-234
https://www.tandfonline.com/doi/abs/10.1080/10438599500000004

Three versions of the model relating productivity and technology adoption with varying degrees of endogeneity are developed and then tested upon a data set relating to the adoption of five different process technologies by 217 firms in the UK engineering industry over the period 1981–1990. All the results indicate that technology adoption has a positive impact on output and productivity.


1982

Tweeddale J.W - Technology and Productivity

Tweeddale J.W. (1982) Productivity Enhancement: An Approach to Managing Beneficial Change in a Military-Industrial Work Setting. In: Mensch G., Niehaus R.J. (eds) Work, Organizations, and Technological Change. NATO Conference Series (II Systems Science), vol 11. Springer, Boston, MA
https://books.google.co.in/books?id=wt_iBwAAQBAJ  Page 259



Created in 1978, as a reflection of growing management concern,
The Navy's Productivity Program was created in 1978 as management identified productivity enhancement as a key performance area, The program establishes the framework for improvement.
A network of productivity principals has been established in higher echelon Navy and Marine Corps commands with a Director of Productivity Management located in the Navy Secretariat.


The Navy Productivity Program, as presently structured, explores three major areas of opportunity. These are technological advancement, organizational development and process management.

TECHNOLOGY

Productivity improvements derive from changes in production methods, materials and machinery which "in turn stem from the accumulation of scientific and technological knowledge. The technology factor has been credited with at least 40 percent of the growth in productivity over the past five decades of domestic industrial experience.

The thoughtful integration of  productivity-beneficial technology to the Navy's industrial base represents a critical dimension of the Productivity Enhancement Program. This process requires enhancement of the capacity of the organization to accommodate innovation and to handle uncertainty.


To create a climate which encourages technological venture and innovation, a number of funding mechanisms have been introduced.


Cost of Ownership Reduction Investment (COORI) Program

Established as a part of the Navy's FY-82 budget planning, this program creates a funding base to support high payback capital investment opportunities. Candidate projects are placed in competition
by operating managers during budget planning (approximately two years before budget approval).

Fast Payback Program

The Fast Payback Program is designed to create a funding mechanism through which managers can fund high payback projects with short lead time provided the projects satisfy the following criteria:
1. The project costs less than $300,000 ($100,000 non-NIF).
2. The project has a payback of less than three years (two years non-NIF).

Funds are made available to support the Fast Payback Program through two funding mechanisms. These are:

Naval Industrial Fund NIF. Naval Shipyards, Air Rework
Facilities NARFs, Public Works Centers (PWCs) are among many of the Navy's industrial organizations which are NIF funded. Under this funding concept, "earnings" are credited to an industrially funded activity by charging fleet customers for goods and services

Procurement Funds - A productivity fund is created in procurement funds to take care of non-NIF activities.

Manufacturing Technology Program

This program explores the application of emerging technology (1) to reduce procurement and life cycle costs and (2) to increase productivity of existing assets.

Office of the Secreatary of Defense (OSD) Sponsored Productivity Enhancing Capital Investment (PECI) Program

1. Min investment $1 million.
2. At least 50 percent of the ROI has to come from Labor savings.
3. Payback period - max 4 years.
4. IRR - min 10%

The above is a good description of project schemes for encouraging project that promise productivity improvement.



Updated  15 May 2018, 28 November 2017

Pilot Plant Industrial Engineering and Productivity Improvement

Industrial Engineers have to improve productivity in all engineering processes of all branches of engineering.

Pilot Plant Industrial Engineering for Productivity Improvement

Industrial has to work with product designers and do cost reduction and productivity improvement of new products at the design stage. They have to work with process developers to ensure the most productivity process at that stage. They need to work with pilot plant designers and developers to see that capital equipment decisions are rational and optimal. Then they have to observe the pilot plant processes and operator methods and motions to improve productivity based on actual work in the pilot plant. Industrial engineering done during the design, development, installation and operation of pilot plants can be termed pilot plant industrial engineering and it will be a very valuable service to industrial organizations and development of industry offered by industrial engineering discipline and profession.

Importance of Pilot and Demonstration Plants for Large Production Facilities
12 February 2018Mandar Deshmukh
http://indovance.com/knowledge-center/mechanical/importance-of-pilot-and-demonstration-plants-for-large-production-facilities/

Process Engineering for Scale-Up of Specialty Chemicals

 Xerox Research Centre of Canada (XRCC)

Scale-up of  chemicals encompasses various design methods through which a small lab process (typically at a gram scale) is enlarged to a large-scale process. The main objectives of scale-up activity at the Xerox Research Centre of Canada (XRCC) are:
 i) preparation of large quantities (typically 1000x lab scale) of materials having the same or similar chemical and physical properties of the material made at the small scale, and
ii) delivery of a manufacturing-ready process.

A reduction in unit manufacturing cost and improved quality are usually required and achieved on scale-up. Potential environmental and safety issues are adequately addressed at the engineering bench, before the process is scaled-up to the Pilot Plant. Process engineering plays a vital role in assuring an economical, robust, safe and environmentally friendly process for scale-up to manufacturing.

https://xrcc.external.xerox.com/white-papers/process-engineering-for-scale-up-of-specialty-chemicals.html


LGC Process and System Engineering

LGC briefly
A joint research unit…

The LGC is a chemical engineering research centre located in Toulouse
It is a joint research unit (UMR5503) bringing together:

The National Centre of Scientific Research (CNRS),
The Institut National Polytechnique (INP)
and the Université Paul Sabatier (UPS)
…and organised into 6 research departments …

One of them is Process and System Engineering


Home > Research at LGC > PSE - Process and System Engineering

Area of action
Methodology
- Development and integration of generic models and concepts for the prediction of process or system performance
- Experimental validation phase for systems that physically exist.
- Improvement of the efficiency of numerical processes to solve problems by a large range of linear and discrete variables linked by non-linear equations that can present combinatorial properties.
http://www.lgc.cnrs.fr/spip.php?article622

Chief Productivity Officer - Value Addition of the Organizational Role and Position

1985

The chief productivity officer
William A. Ruch  William B. Werther Jr.
National Productivity Review, Autumn (Fall) 1985 https://doi.org/10.1002/npr.4040040407
https://onlinelibrary.wiley.com/doi/pdf/10.1002/npr.4040040407

2010
David Toh, Chief Productivity Officer at Singapore Manufacturers' Federation, 2010 to 2012
https://www.fore-consulting.com/about
David Toh  is Principal Consultant at Fore Consulting in 2018

2012
CHIEF PRODUCTIVITY OFFICER AT P&G IS (PROBABLY) GOOD NEWS
Oct 26, 2012
As it declared  big ambitions in productivity improvement (cutting $10bn from costs and $1bn from marketing spending) P&G is a fascinating case study to follow.
https://blog.idcomms.com/chief-productivity-officer-at-pg-is-probably-good-news

2014
Patrick P.Poljan worked as Chief Productivity Officer at SABIC Innovative Plastics
https://ww2.frost.com/news/press-releases/dells-vp-global-supply-chain-operations-elected-manufacturing-leadership-board-governors/

2015

CEO should become the chief productivity officer. - Ngiam Tong Dow, Retired high-powered civil servant, Singapore
https://mothership.sg/2015/07/6-things-ho-kwon-ping-ngiam-tong-dow-beh-swan-gin-said-about-spores-next-50-years-that-you-mostly-agree-with/


2016
Cloud computing is not just transforming how we get work done, it’s transforming the role of the CIO. In fact, that CIOs may want to begin 2016 by updating their LinkedIn profiles to include a new business title that reflects their primary responsibility: “Chief Productivity Officer.”
https://cloudtweaks.com/2016/01/trends-cio-chief-productivity-officer/

Introducing the Chief Productivity Officer
https://www.mis-asia.com/resource/applications/big-data/introducing-the-chief-productivity-officer/

Say hello to the 'chief productivity officer'
https://www.digitalnewsasia.com/hello-chief-producvity-officer

What might future jobs look like?
Chief Productivity Officer: Using big data, these professionals will help companies become more productive while focusing their energy on the most impactful areas.
https://codakid.com/5-ways-to-prepare-your-child-for-jobs-that-dont-exist-yet/


2018
6 Reasons Your Company Needs a Chief Productivity Officer
Readily available technology can vastly increase productivity but to realize the potential you might have to make it somebody's job.
https://www.entrepreneur.com/article/308423

How Diageo’s Productivity Officer plans to save £500m by 2019
Brian Franz, Chief Productivity Officer (CPO) at Diageo, discussesd the transition from CIO to CPO.
He became Chief Productivity Officer (CPO) at Diageo in August 2015 and is using his many years of experience as a blue-chip CIO to drive true business change at the beverages company.
https://www.hottopics.ht/26824/diageo-chief-productivity-officer-on-expanding-business-strategy-through-data-and-tech/

Your IT Manager is now your Chief Productivity Officer
https://highfive.com/blog/traditional-it-is-dead-your-it-manager-is-now-your-chief-productivity-officer/

Philippe Cochet, VP & Chief Productivity Officer, General Electric (GE)
https://www.crunchbase.com/person/philippe-cochet
https://www.linkedin.com/in/philippe-cochet-72148118


WHY YOUR BUSINESS NEEDS A CHIEF PRODUCTIVITY OFFICER: 5 REASONS EXPLAINED
https://www.dexlabanalytics.com/blog/why-your-business-needs-a-chief-productivity-officer-5-reasons-explained


HCM Strategist - Chief Productivity Officer
Going forward, perhaps we should advocate for a title change as the HR practitioner role becomes an increasingly strategic function – an ad-hoc combination of Chief Culture Officer, Chief Talent Architect, and Chief Productivity Officer mashed into a new role I call “HCM Strategist.”
https://www.adp.com/solutions/large-business/insights/research-and-thought-leadership/article.aspx?id=54A7CE6C-4A0C-4A3B-BC53-55429C10FA3B


HR’s new role could be as the Chief Productivity Officer - Josh Bersin at HRD18
http://www.kingfishercoaching.com/hrd18-hrs-essential-role-in-the-new-world-of-work-josh-bersin/

PATRICE WILLIAMS
SVP Research & Development, Chief Productivity Officer

When it comes to meeting deadlines and maintaining the highest standards of quality with large projects, Thermal Systems relies on Patrice Williams. Our systems have to meet our customers expectations, and be installed in a way that keeps the price affordable. This takes incredible planning and attention to detail. Patrice focuses her time on meeting equally with our customers and our installation team.
http://thermalsystems.com/leadership/

Modern Hand Tools and Power Tools - Productivity Potential

Excel Assembly Solutions for Power Tools

https://www.excelairtool.com


2018


Rivet Tools

Automatic Rivit feeders for more productivity and higher safety
6 November 2017
http://www.metalworkingworldmagazine.com/__trashed-2/


Rivet Gun
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Riveting in Practice
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Method Study - Adaptation by Toyota Production System

Denis R. Towill, (2010) "Industrial engineering the Toyota Production System", Journal of Management History, Vol. 16 Issue: 3, pp.327-345, https://doi.org/10.1108/17511341011051234

Above paper by Towill describes how method study was adapted and used by Toyota executives in developing the globally accaimed World Class Manufacturing Model, Toyota Production System.


 The paper confirms there is a continuing role for well established method study techniques to be adapted to face new challenges, and output as “contemporary” industrial engineering.

 The paper supports the view that effective and efficient product delivery is best driven via sound industrial engineering expertise operating within an active learning organisation.

 Ohno remarked that Knowledge (and above all practice) in the use of the method study based waste elimination techniques should be a pre‐requisite skill for employees at all levels. This is a sometimes “hidden” secret of TPS, but dates back to Lillian Gilbreth in 1914.


 TPS has evolved over an extended period of time to achieve continuous material flow. There has been no single procedure or technical breakthrough. Much of the detail would have been familiar to the Gilbreths. However the scenario of the current TPS enterprise would be new to the Gilbreths. Similarly the various ways in which the systems approach has been successfully implemented throughout the organisation would appear strange.

The purpose of this paper is to examine the manifold linkages connecting the Toyota Production System (TPS) back to the Gilbreths and others, and to determine how these have contributed to enterprise‐wide best practice.

Description of the Japanese Management Association (JMA) personal handshake route originated by Frank Gilbreth in which experiences were handed down in lecture note format by successive generations of industrial engineers is given in the paper. The internationally recognised “softer” approach to teaching and coaching due to Lillian Gilbreth is then discussed. Finally the Gilbreth MOI2 Process Chart is examined.


https://www.emeraldinsight.com/doi/abs/10.1108/17511341011051234



Toyota Production System
A production system which is steeped in the philosophy of "the complete elimination of all waste" imbuing all aspects of production in pursuit of the most efficient methods.

Source:

http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/
Accessed on 5 May 2018

Toyota Motor Corporation's vehicle production system has been established based on many years of continuous improvements, with the objective of "making the vehicles ordered by customers in the quickest and most efficient way, in order to deliver the vehicles as quickly as possible."

The Toyota Production System (TPS) was established based on two concepts:

The first is called "jidoka" (which can be loosely translated as "automation with a human touch") which means that when a problem occurs, the equipment stops immediately, preventing defective products from being produced;

The second is the concept of "Just-in-Time," in which each process produces only what is needed by the next process in a continuous flow.

Based on the basic philosophies of jidoka and Just-in-Time, the TPS can efficiently and quickly produce vehicles of sound quality, one at a time, that fully satisfy customer requirements.

Jidoka

Human Touch of the Machine

— Highlighting/visualization of problems —
-Quality must be built in during the manufacturing process!-

If equipment malfunction or a defective part is discovered, the affected machine automatically stops, and operators cease production and correct the problem.

For the Just-in-Time system to function, all of the parts that are made and supplied must meet predetermined quality standards. This is achieved through jidoka.

Jidoka means that a machine safely stops when the normal processing is completed. It also means that, should a quality / equipment problem arise, the machine detects the problem on its own and stops, preventing defective products from being produced. As a result, only products satisfying quality standards will be passed on to the following processes on the production line.

Since a machine automatically stops when processing is completed or when a problem arises and is communicated via the "andon" (problem display board), operators can confidently continue performing work at another machine, as well as easily identify the problem's cause to prevent its recurrence. This means that each operator can be in charge of many machines, resulting in higher productivity, while continuous improvements lead to greater processing capacity.

Just-in-Time

Make only when needed

— Productivity improvement —
- Making only "what is needed, when it is needed, and in the amount needed!"

Producing quality products efficiently through the complete elimination of waste, inconsistencies, and unreasonable requirements on the production line.

In order to deliver a vehicle ordered by a customer as quickly as possible, the vehicle is efficiently built within the shortest possible period of time by adhering to the following:

When a vehicle order is received, a production instruction must be issued to the beginning of the vehicle production line as soon as possible.

The assembly line must be stocked with required number of all needed parts so that any type of ordered vehicle can be assembled.

The assembly line must replace the parts used by retrieving the same number of parts from the parts-producing process (the preceding process).

The preceding process must be stocked with small numbers of all types of parts and produce only the numbers of parts that were retrieved by an operator from the next process.