Course

Year

: D0342 Seminar Industry

: September 2013

Industrial engineering and

system engineering in
organization

Source
HANDBOOK OF INDUSTRIAL ENGINEERING
Technology and Operations Management, Chapter 1
Third Edition
Edited by
GAVRIEL SALVENDY
Purdue University

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Industrial engineering and system

engineering in organization
Industrial engineering is concerned with the design,
improvement and installation of integrated systems of
people, materials, information, equipment and energy. It
draws upon specialized knowledge and skill 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 be
obtained from such systems.
(According to IIE official definition)
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 Figure 1 is Industrial & System Engineering ISE as

academic program.
Core engineering in four basic areas: human factors
engineering, manufacturing systems engineering,
operations research, and management systems
engineering.
Basic knowledge are : statistics, psychology,
mathematics, information sciences, accounting, and
economics.

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Baldrige Criteria for Performance Excellence

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Baldrige Criteria for Performance Excellence

(1) leadership;
(2) strategic planning;
(3) customer and market focus;
(4) information and analysis;
(5) human resource focus;
(6) process management; and
(7) business results (overarchingcustomer- and marketfocused strategy and action plans)

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Implication of ISE
1. First, each and every initiative undertaken must be causally
linked to business results. Example in retail business : (1)
optimize market share, (2) increase customer percent spend,
and (3) length of relationship or customer loyalty.
2. Second, contribution in terms of the profit ratio, example :
reduce the inputs (the denominator) of the profit ratio by
driving costs down and increasing efficiency
3. Third, self improvement, deploy improvement cycles that are
thought strategically, comprehensive in scope, and well
integrated, example implement system thinking
4. Fourth, in the next several decades ISEs must think
enterprise, think total systems, and be connected to the
enterprise improvement cycle.
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Improvement cycle
Strategy, how the organization plans to deploy its offering and
execute on its position. Strategy ensures that the customer
takes up the offering. Strategy is fleshed out in the
improvement cycle
Successfully executing strategy and policy throughout the
organization involves what is called policy deployment.
Improvement cycles become aligned as a result of the deployment
processes and practices. Example : three-level meetings.
Periodically, leaders and managers and employees from three
levels of the business gather for an all-hands meeting to share
progress and performance on key initiatives or performance
improvement objectives (PIOs)

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Improvement Cycle

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Improvement Cycle Process

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Future ISE
Areas of operations improvement :
1. Systems and process improvement (specifically,
business process reengineering)
a. First, systems thinking is required to do BPR
b. Second, many of the sub steps in the process (see
Figure 3) require ISEs specific knowledge and skills
2. Effective Measurement systems, ISE will design,
implementation, and maintenance of comprehensive
and very visible measurement systems.
a. Balanced scorecard : Time, quality ,vector of
performance indicators: efficiency, effectiveness,
productivity, financial performance, quality of work life,
customer satisfaction, and innovation

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Summarize
ISE is playing a key role in strategy and positioning,
planning, change leadership and management, culture,
measurement, learning, reengineering, and
infrastructure.
Support from senior leader CEO/VP who champion the
ISE contribution
Business Partner Relationship Management,
relationships among employees, internal business
partners, stockholders and stakeholders, customers, and
suppliers/vendors be effectively managed

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Thank you

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