Concepts of Industrial Management

Industrial management is the organizational process that includes strategic planning, setting; objectives, managing resources, deploying the human and financial assets needed to achieve objectives, and measuring results. Management also includes recording and storing facts and information for later use or for others within the organization. The concept of management planning involves direction, planning, adjustment, control, and cooperation. Management functions are not limited to managers and supervisors. Every member of the organization has some management and reporting functions as part of their job. Industrial management is a term

applied to highly organize modern methods of carrying on industrial, especially manufacturing, operations.
Industrial engineering is a branch of engineering that concerns the development, improvement, implementation and evaluation of integrated systems of people, money, nowledge, information, e!uipment, energy, material and process. Industrial engineering draws upon the principles and methods of engineering analysis and synthesis, as well as mathematical, physical and social sciences together with the principles and methods of engineering analysis and design to specify, predict and evaluate the results to be obtained from such systems. In lean manufacturing systems, Industrial engineers wor to eliminate wastes of time, money, materials, energy, and other resources. Industrial engineering is also nown as operations management, systems engineering, production engineering, manufacturing engineering or manufacturing systems engineering; a distinction that seems to depend on the viewpoint or motives of the user. "ecruiters or educational establishments use the names to differentiate themselves from others. In healthcare, industrial engineers are more commonly nown as management engineers, engineering management, or even health systems engineers. #here as most engineering disciplines apply s ills to very specific areas, industrial engineering is applied in virtually every industry. E$amples of where industrial engineering might be used include shortening lines %or !ueues& at a theme par , streamlining an operating room, distributing products worldwide %also referred to as 'upply (hain Management&, and manufacturing cheaper and more reliable automobiles. Industrial engineers typically use computer simulation, especially discrete event simulation, for system analysis and evaluation. The name )industrial engineer) can be misleading. #hile the term originally applied to manufacturing, it has grown to encompass services and other industries as well. 'imilar fields include *perations "esearch, Management 'cience, +inancial Engineering, 'upply (hain, Manufacturing Engineering, Engineering Management, 'ystems Engineering, Ergonomics, ,rocess Engineering, -alue Engineering and .uality Engineering. There are a number of things industrial engineers do in their wor to ma e processes more efficient, to ma e products more manufacturable and consistent in their !uality, and to increase productivity.

The Development of Industrial Management

Studies of Worker Performance

The first sustained effort in the direction of improved efficiency was made by Frederick Winslow Taylor, an assistant foreman in the Midvale teel !ompany, who in the "##$s undertook a series of studies to determine whether workers used unnecessary motions and hence too much time in performing operations at a machine. %ach operation re&uired to turn out an article or part was analyzed and studied minutely, and superfluous motions were eliminated. 'ecords were kept of the performance of workers and standards were adopted for each operation. The early studies resulted in a faster pace of work and the introduction of rest periods.
Management of the Machine

Industrial management also involves studying the performance of machines as well as people. pecialists are employed to keep machines in good working condition and to ensure the &uality of their production. The flow of materials through the plant is supervised to ensure that neither workers nor machines are idle. !onstant inspection is made to keep output up to standard. !harts are used for recording the accomplishment of both workers and machines and for comparing them with established standards. !areful accounts are kept of the cost of each operation. When a new article is to be manufactured it is given a design that will make it suitable for machine production, and each step in its manufacture is planned, including the machines and materials to be used.
Other Aspects of Management

The principles of scientific management have been gradually e(tended to every department of industry, including office work, financing, and marketing. oon after ")"$ *merican firms established the first personnel departments, and eventually some of the larger companies took the lead in creating environments conducive to worker efficiency. afety devices, better sanitation, plant cafeterias, and facilities for rest and recreation were provided, thus adding to the welfare of employees and enhancing morale. Many such improvements were made at the insistence of employee groups, especially labor unions. +ver the years, workers and their unions also sought and often won higher wages and increased benefits, including group health and life insurance and liberal retirement pensions. ,uring the ")#$s and "))$s, however, cutbacks and downsizing in many *merican businesses substantially reduced many of these benefits. ome corporations permit employees to buy stock- others make provision for employee representation on the board of directors or on the shop grievance committee. Many corporations provide special opportunities for training and promotion for workers who desire advancement, and some have made efforts to solve such difficult problems as .ob security and a guaranteed annual wage.

APPLICATIONS OF INDUSTRIAL ENGINEERING

Industrial engineering is widely used in manufacturing as well as the service sectors. Some examples are:

Sector

Few Applications of Industrial En ineerin Formulation of production plan Control of processes and products Inventory control "esign of plant layout Scheduling of machines and processes etc Construction pro$ect planning %irlines operations &ospital management 'ransportation pro(lems )ptimal use of natural resources etc

Manufacturing 1. 2. . !. #. Service 1. 2. . !. #.

'he (asic concepts of industrial engineering and operations research are widely used in financial management* mar+eting management* logistics* purchasing etc. For example* the depreciation of machine is re,uired in financial management also.

INDUSTRIAL ENGINEERING
Industrial engineering is a field* which concerns the design* improvement and installation of an integrated system of people* material* e,uipment* energy and technology. 'he %merican Institute of Industrial -ngineers .%II-/ further defines that it draws upon speciali0ed +nowledge and s+ill in the mathematical* physical and social sciences together with the principles and methods of engineering analysis and design to specify* predict and evaluate the results to (e o(tained from such systems. Industrial engineering is thus concerned with (ringing together and effective utili0ation of various resources to facilitate efficient production operation. -ffective utili0ation of resources means that input to the production1 operation system1such as people* material* information and e,uipment are used in right way so that they form an integrated com(ination to meet production2operation o($ectives. -fficient production2 operation systems are those systems which score high on norms of actual performance. It is important to note that industrial engineering is concerned not merely with the system of material* e,uipment and processes (ut also with people who interact with this system. 'he impact of people on the operating system is (oth from within and from outside. 3eople* who operate a machine* who plan the process or those* who handle material are within the operating system. 'herefore* wor+1study* ergonomics* motivation* wage1incentive plan* time and motion study* etc* are integral part of industrial engineering. In addition to the people inside the purview of production2operation system* those people* who are outside also play an important role. For example* customers* outside the production2operation system* determine the demand of the product. Customer4s demand is dependent on product design* ,uality* price1discount etc. 'herefore* industrial engineering also focuses on these aspects. 5ith changed paradigm of ,uality during recent years* the focus of '6M is now on customer1delight. Industrial engineers are now expected to wor+ on continuous improvement on product and process. FEATURES OF INDUSTRIAL ENGINEERING %nother important feature of industrial engineering is its generality. Industrial engineering is not restricted only to manufacturing activities. It includes service sectors* li+e* (an+ing* education* waste1management* health1care* transportation* distri(ution* etc. 'hus* the

scope of industrial engineering is ,uite (ig and certainly not restricted within the (oundary of industry .factory/. SCOPE OF INDUSTRIAL ENGINEERING 'he scope of industrial engineering is illustrated in the figure. It includes design and improvement of condition* design and improvement of organi0ation* design and improvement of wor+ place* method and procedure* and design and improvement in products and services.

/roductivity

Definition
Productivity is a measure of output from a production process, per unit of input. +or e$ample, labor productivity is typically measured as a ratio of output per labor/hour, an input. ,roductivity may be conceived of as a metric of the technical or engineering efficiency of production. 0s such, the emphasis is on !uantitative metrics of input, and sometimes output. ,roductivity is distinct from metrics of allocative efficiency, which ta e into account both the monetary value %price& of what is produced and the cost of inputs used, and also distinct from metrics of profitability, which address the difference between the revenues obtained from output and the e$pense associated with consumption of inputs.
The amount of output per unit of input (labor, equipment, and capital). There are many different ways of measuring productivity. For example, in a factory productivity might be measured based

on the number of hours it takes to produce a good, while in the service sector productivity might be measured based on the revenue generated by an employee divided by his her salary. !verage real output per unit of input. Labor productivity is average real output per hour of labor. The growth of labor productivity is defined as the growth of real output that is not explained by the growth of labor input alone. Total factor productivity is average real output per unit of combined labor and capital inputs. The growth of total factor productivity is defined as the growth of real output that is not explained by the growth of labor and capital. "abor productivity and total factor productivity differ in that increases in capital per worker raise labor productivity but not total factor productivity.

0ere1s my personal definition of productivity2 Productivity = Value / Time 3productivity e&uals value divided by time4 5y this definition there are two primary ways of increasing productivity2 "4 Increase the value created 64 ,ecrease the time re&uired to create that value 7ou can complicate this definition by including other factors like energy and resources, but I prefer the simplicity of time because in most cases factors like energy and resources are reducible to time anyway. Time also makes it very easy to compare different levels of productivity, such as output per hour or per day. *pparently you can make some significant gains on the time side. There are many personal productivity optimizations which, especially if you introduce them in your youth, will produce a massive net savings of time over the course of your life. !onsider your typing speed, for instance. If you invest the time to get your speed up to )$ words per minute or faster, it will be well worth the initial time investment if you happen to do a lot of typing over your lifetime, compared to allowing your speed to linger at 8$ wpm or slower year after year. The e(tra hours of practice will be nothing compared to the time you save typing emails, letters, or blog entries over the ne(t few decades. +ther time9based optimizations include improving your sleeping habits, minimizing commute time, or dropping time9wasting habits like smoking. The main limit of time9based optimizations is that the optimization process re&uires an input of time itself. It takes time to save time. o the more time you invest in optimizing time usage, the greater your initial time investment, and the greater your need for a long9term payoff to .ustify that investment. This limit creates an upper bound for any time9based optimizations you attempt, in accordance with the law of diminishing returns. The more time you invest in any optimization attempt, the lower your net return, all else being e&ual. This law of diminishing returns points us back to the value side. While we might be stuck with diminshing returns by trying to optimize the time side alone, we may notice that working to optimize the value side is less limiting and more open9ended. What is the :value; in our productivity e&uation<

=alue is a &uality you must define for yourself. 0ence, any definition of productity is relative to the definition of value. In circles where people can agree on a common definition of value, they can also agree on a common definition of productivity. 0owever, in terms of your own personal productivity, you aren1t obligated to define value the same way anyone else would. 7ou are free to adopt your own definition, such that your pursuit of greater productivity becomes a personal &uest that produces the value that matters most to you. Too often we adopt a socially conditioned definition of value, which tends to be very limiting. /erhaps we define value in terms of work output within our career, number of tasks completed, number and &uality of important pro.ects finished, etc. 7ou may not be able to verbalize it clearly, but perhaps you have a working definition of value that feels comfortable to you. 7ou can tell when you1ve had a productive day and when you haven1t based on how much value you created, in accordance with your own sense of what value means. 5ut how much conscious thought did you put into your personal definition of value< I1m going to challenge you to put a bit more thought into your definition, which will conse&uently redefine your sense of productivity. Impact First, according to your definition of value, to what e(tent is the value provided< Who receives the value< 7ourself, your boss, your coworkers, your friends, your family, your company, your customers, your team, certain investors, your community, your country, the world, your family, >od, all conscious beings, etc< What degree of value is ultimately received by each person or group< *re you providing value to one person, "$ people, "$$ people, "$$$ people, millions of people, the whole planet< 0ow much do you feel the value you provide ripples outward beyond those you provide it to directly< 0ow &uickly do those ripples dissipate< What1s your sense of the basic level of impact of your value< Is it limited or e(pansive< For e(ample, if you1re the !%+ of a Fortune 8$$ corporation or the leader of a country, you1ll have a far greater ability to provide value to large numbers of people vs. if you work as a .anitor. The more people you can influence, the greater your potential value. >reater leverage means greater potential impact. Endurance econdly, how long does the value you create endure< *n hour, a day, a week, a month, a year, a decade, a lifetime, "$$ years, "$$$ years, "$,$$$ years, until the end of time< To what e(tent does your value carry forward in time< Is it &uickly consumed and forgotten< +r does it continue to regenerate itself year after year< ,oes your value create ripples through time< The Mona Lisa is still providing value hundreds of years after its creation. 5ut other works of art do not provide any enduring value beyond the lifetime of the artist. They are &uickly abandoned and eventually replaced. Essence

Thirdly, what is the essence of the value you produce< ,o you help people survive< %ntertain them< %nlighten them< 0ow much do others value what you produce< What price would they be willing to pay for it< ,o they consider your value essential, optional, or undesirable< 0ow uni&ue is your value< *re you the only one who can provide it, or are there plenty of e&uivalent choices< The essence of value provided by a .anitor is low because it is easy to find people to do such work for little pay. The essence of value of a physicist is potentially enormous because a new theoretical concept could yield a more accurate understanding of the universe. Volume ?astly, what is the volume of value you create< 0ow much of it are you putting out in a given period of time< What is the &uantity in which you produce that value< For e(ample, /icasso was a prolific artist who created hundreds of different works over his lifetime. +ther artists had a far lower volume of output. o now we have this little formula2 Value = Impact x Endurance x Essence x Volume *nd therefore2 Productivity = Impact x Endurance x Essence x Volume / Time @ow what1s interesting here is that most of the productivity literature I1ve read focuses almost e(clusively on volume and time. 5ut those are the most limiting parts of this e&uation. 0owever, they1re also the easiest to write about. I think the most important long9term factors to consider when optimizing productivity 3whether that of an individual, corporation, country, or other entity4 are impact, endurance, and essence. *nd the most important of these three is essence. For e(ample, let1s consider the productivity of a blogger. The impact of a blogger1s value would be related to the blog1s traffic levels and overall influence among its readers. 0ow many people are reading the blog, and how much do they value what the blogger writes< To improve impact a blogger could increase traffic to the blog or improve hisAher writing skills in order to have a deeper effect on the readers. Impact can also be increased if the readers then go out and tell others about what they1ve read. Furthermore, the blogger could use the blog as a means for self9e(ploration, thereby increasing the impact of the blog on the blogger1s own life. The endurance of a blogger1s value would be the long9term effect on the blog1s readers, if any. Is the blog changing the long9term thinking and behavior patterns of its readers< ,o the readers

&uickly forget what they read on the blog, or does the information stay with them< *re the readers permanently haunted by what they1ve read< The essence of a blogger1s value depends on the topics the blogger writes about. Is the blogger writing throw9away posts to get a laugh or generate traffic, or is there a serious commitment to providing deep value< What is the nature of the blogger1s value delivery< Is it financial advice that could help a person become wealthy< ,oes it provide solutions to important problems< +r is it mostly fluff< *nd of course the volume of a blogger1s value would be the &uantity of words and posts the blogger delivers. @ow e(tend this line of thinking to your life as a whole, well beyond the boundaries of your career. What is the ultimate impact of your life< 0ow many lives are you touching< *re you a person of influence< +r do you e(ist in relative obscurity< What will be the endurance of your life1s value< Will your lifetime contributions turn out to be largely insignificant< +r will your contributions ripple on for centuries< What of your value will survive your own death< What of your value will you have the potential to retain after you die 3assuming there is an afterlife of sorts4< *nd finally, what will be the essence of your life1s value< What is the heart of your contribution< *re you here to play follow the follower< *re you in pursuit of a worthwhile destiny< When you consciously consider the value you1re providing, do you feel empty and fearful or peaceful and fulfilled< What is the meaning behind your deeds< Was that meaning consciously chosen< 7ou cannot optimize your productivity without consciously and deliberately optimizing these factors. True productivity is far more than volume A time. If you neglect the importance of impact, endurance, and essence, you doom yourself to the pursuit of spinning your wheels faster and faster and missing the whole point of life. *nd the worst part is that as you live, you will know this to be true. 7ou will sense the hollowness and emptiness in all that you do. When you consider your output in light of the boundlessness of time and space, it becomes nothing. %ssence is the single most important factor. Bntil you discover the true essence of your life, you can never really be productive. 7ou can take for granted that any task you perform will have a nonzero impact, endurance, and volume. Those factors may be very small if the task is trivial, but they1ll be greater than zero. 0owever, if the core essence of any task amounts to zero, then your total productivity is zero. If you miss the point of your life, your ultimate productivity is zero, no matter how hard you work and how well you attempt to optimize all the other factors. If you gain the whole world and lose your soul, your ultimate payoff is zero. That essence is your purpose.

This is why it1s so important to discover your life1s purpose. It doesn1t matter how long it takes. In fact, the only truly productive task you can perform before you know your purpose is to work to discover what that purpose is. The pursuit of essence is essential if you wish to have a nonzero productivity. +nce you discover your essence, you1ll find that all those other factors begin to optimize themselves very easily. %mbracing essence creates passion, and passion increases impact, endurance, and volume. /assion also makes time seem to pass more slowly. /assion provides the energy and attracts the resources to manage time more efficiently. /assion allows you to see the present moment as inherently complete and perfect instead of perceiving life as incomplete and imperfect. The discovery of essence automatically optimizes productivity as a whole. Find a person who knows and embraces their life1s purpose, and you1ll find a truly productive person. 5ut in the absence of purpose, you1ll find busy9ness, but never productivity C the volume of output created might as well be tossed on the trash heap. It will have no power to endure. /urpose is rooted in the permanent, the timeless, the unbounded. It is the essence of what is real. /urpose is conscious and alive. +utside of purpose you can work only with the temporary, the timebound, the limited C the ghost pro.ections of reality but not reality itself. 5e productive. pend your time discovering your essence, and then devote the rest of your life to working from your essence. Then you will live and work with a sense of boundless productivity because essence itself is boundless.