•INDUSTRIAL ENGINEERING AND MANAGEMENT UNIT-1

UNIT-I DEFINITION OF INDUSTRIAL ENGINEERING

“Industrial engineering ​is a branch of engineering which deals with the optimization of complex
processes or systems which concerned with the ​D​evelopment, ​I​mprovement, ​I​mplementation and
E​valuation of integrated systems of people,machines, money, materials, as well as the mathematical,
physical and social sciences together with the principles and methods of engineering design to specify,
predict, and evaluate the results to be obtained from such systems or processes.”

Applications of Industrial Engineering

● Artificial Intelligence

● Consumer Product Design

● Engineering Economy and Cost Estimation

● Ergonomics in Job and Work Design

● Healthcare Systems Engineering

● Defense and Homeland Security

● Traditional and Alternative Energy Management

● Information Systems

● Materials Handling
● Performance Analysis and Simulation

● Production Systems Design, Planning and Control

● Productivity and Business Strategies

● Technology Management and Transfer

● Total Quality Management and Quality Technology

● Work Measurement and Methods Engineering

● Technology Interface Design (hardware and software)

Role of Industrial Engineer

● Apply statistical methods and perform mathematical calculations to determine manufacturing processes, staff
requirements, and production standards.

● Coordinate quality control objectives and activities to resolve production problems, maximize product
reliability, and minimize cost.

● Draft and design layout of equipment, materials, and workspace to illustrate maximum
efficiency, using drafting tools and computer.
● Review production schedules, engineering specifications, orders, and related information
to obtain knowledge of manufacturing methods, procedures, and activities.

● Communicate with management and user personnel to develop production and design standards.

● Estimate production cost and effect of product design changes for management review, action,
and control.

● Formulate sampling procedures and designs and develop forms and instructions for
recording, evaluating, and reporting quality and reliability data.

● Record or oversee recording of information to ensure currency of engineering drawings

and documentation of production problems.

● Study operations sequence, material flow, functional statements, organization charts, and project
information to determine worker functions and responsibilities.

● Direct workers engaged in product measurement, inspection, and testing activities to ensure
quality control and reliability.

● Recommend methods for improving utilization of personnel, material, and utilities.

● Complete production reports, purchase orders, and material, tool, and equipment lists.
 
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•INDUSTRIAL ENGINEERING AND MANAGEMENT UNIT-1

Quantitative tools of IE

The main aims of tools are to improve the productivity of the organization by optimum utilization
of organizations resources: men, materials, and machines.

The major tools used in industrial engineering

are: ​∙​ Production planning and control.

• Inventory control.

• Job evaluation.

• Facilitates planning and material handling.

• System analysis.

• Linear programming.

• Simulation.
• Network analysis (PERT, CPM).

• Queuing models.

• Assignment.

• Sequencing and transportation models.

• Games theory and dynamic programming

• Group technology.

• Quality control.

• MRP-JIT-ISO-TQM. etc.

Concept of Management:

Introduction to Management​: When human being started group activities for the attainment of same
common ​objectives whenever a group is formed and a group activity is organized to achieve certain common
objectives management is needed to direct, co-ordinate and integrate the individual activities of a group and
secure teams work to accomplish organizational objectives. The objectives of all business are attained by
utilizing the scare resources like men, materials, machines, money etc. ​(4M‟s)

In process of management, a manage uses human skills, material resources and scientific methods to perform all
the activities leading to the achievement of goods.

Definition​: “Management is knowing exactly what you want men to do and then seeing that they do it the best
and cheapest ways”. ​- F.W.Taylor

“Management is defined as the creation and maintenance of an internal environment in an enterprise where
individuals working together in groups, can perform efficiently and effectively towards the attainment of
group goals”. ​-​ ​Koontz and O‟Donell

NATURE OF MANAGEMENT​: The study and application of management techniques in managing the
affairs​ ​of the organization have changed its nature over the period of time.

Multidisciplinary: ​Management is basically multidisciplinary. This implies that, although management has been
developed as a separate discipline, it draws knowledge and concepts from various disciplines. It draws freely
ideas and concepts from such disciplines as psychology, sociology, anthropology, economics, ecology,
statistics, operations research, etc. Management integrates

the ideas and concepts taken from these disciplines and present newer concepts which can be put into practice
for managing the organization.

Dynamic nature of principle: B ​ ased on integration and supported by practical evidences, anagement has
formed certain principles. However, these principles are flexible in nature and change with the changes in
the environment in which an organization exists.

Relative, not absolute principles: ​Management principle are relative, not absolute, and they should be applied
according to the need of the organization. Each organization may be different from others. The difference
may exist because of time, place, socio-cultural factors, etc.

Management Science or Art: ​There is a controversy whether management is science or

​ anagement is both a science and art.
art.However,​ m

Management as profession: ​Management has been regarded as profession by many while many have suggested
that it has not achieved the status of a profession.
 
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•INDUSTRIAL ENGINEERING AND MANAGEMENT UNIT-1

FUNCTIONS OF MANAGEMENT​:

PLANNING: ​Involves selecting the objectives and actions to achieves them planning stage involves ​decision making
and choosing future courses of action from the various alternatives

ORGANIZING: ​Role of each person in any organization is fixed. The concept of role is who will be ​doing what
should be known, to achieve organizational targets efficiently. It is intended that all the tasks necessary to achieve
targets are assigned to people who can do the best.

STAFFING: ​Staffing function includes keeping the various organizational position fixed. This activity
is ​done by identifying work force requirements, keeping the records of the performance of people
working with the organization. So that suitable people can be prompted and at the same time people
performing not up to the mark could be send for training. If all the above activities are taking place in
nice way in any organization, it will give rise minimum work force turnover.

DIRECTING: ​Directing means influencing people, so that they will contribute to the organization ​targets directing
involves motivation, leadership styles and proper communication.

CONTROLLING: ​It is the process of comparing the plans with the results. If there is deviation attain ​taken to be bridge
the gap between plan and actual results.

COORDINATING: ​The essence of management is the achievement of coordination among people ​coordination is a
complex process following the principles by which organization activity can be

accomplished. Coordinative is possible only if all the personnel working in the organization accept
the target of the organization. This target must be clearly defined and „sold‟ to everyone concerned.

EVOLUTION OF MANAGEMENT THEORY​: Good management intends to achieve an objective with

the ​least use of man, machine, money and material and at the same time maximum satisfaction of the
participants.

F.W.Taylor‟s Scientific Management

About ​Motivation....​People often say that motivation doesn't last. Well, neither does bathing - that's why we recommend
it daily. - Zig Ziglar

Fredrick Winslow Taylor (March 20, 1856 – March 21, 1915)

• One of the first contributors to Motivation Theory, who formulated the Scientific Principles of Management
with which he sought to improve industrial efficiency.

• He suggested that workers are primarily motivated by ​pay​, and probably just pay alone.

• He also propagated that the workers should be closely supervised and controlled to ensure maximum
productivity from the workers.

• Ford ​adopted these principles and designed his assembly line. This eventually led to the inception of concepts
like​ ​mass production and economies of scale

The Scientific Principles of Management by F.W.TAYLOR

 • I – ​Science, not Rule of Thumb

Taylor mentioned that the rule of thumb should be replaced by scientific knowledge.

While rule of thumb emphasizes mere estimation, scientific method denotes precision in determining any aspect of work.
This should be done with the help of careful scientific investigation.

• II – ​Harmony, not discord

Taylor emphasized that harmony rather than discord should be obtained in group action.Harmony means that a group
should work as a unit and contribute to the maximum. Within it there should be mutual give and take situation and
proper understanding.

 
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•INDUSTRIAL ENGINEERING AND MANAGEMENT UNIT-1

• III - ​Cooperation, not individualism

Scientific management requires that parts of industrial body co-operate with each other, scientific management is based on
mutual confidence, co-operation and goodwill. It requires a complete mental revolution on the part of both workers and
management.

• IV - ​The Development of each man to his greatest efficiency and prosperity

In order to maximize production all possible efforts are made to increase the efficiency of
workers. Workers are selected according to the nature of work. It includes

a) scientific training b)scientific

allotment of work

a) implementation of incentive wage plan above all,

b) development of workers to the fullest extent for themselves and also for the companies highest prosperity.

• V ​-​ ​Separate​ ​Planning​ ​from​ ​Execution​.

"In almost all the mechanic arts the science which underlies each act of each workman is so great and amounts to so much that the
workman who is best suited to actually doing the work is incapable of fully understanding this science.."

To apply this solution, Taylor created planning departments, staffed them with engineers, and gave them the responsibility to:
1. Develop scientific methods for doing work.

2. Establish goals for productivity.

3. Establish systems of rewards for meeting the goals.

4. Train the personnel in how to use the methods and thereby meet the goals.

• VI - ​Most strongly propagated​ ​Incentive Wage System

Taylor for the first time advocated an incentive wage system in the form of differential piece wages instead of time wages.
Under differential piece system two wage rates are prescribed, i.e. one lower and the other higher. Those who are unable to
perform standard work within standard time are paid wages at lower rate per unit.
On the contrary, those who attain standard or even more within the standard time are paid wages at higher rate per
unit.

• This brings us to the ​criticism of Taylor‟s philosophy. ​Harry Mintzberg, a Management Theorist suggests
– ​“an obsession with efficiency allows measureable benefits to overshadow less quantifiable social benefits
completely, and social values get left behind.”

• Also among Taylor‟s more favourable scientific principles are – Standardisation of tools and techniques,
Scientific recruitment of labour, Scientific allotment of tasks.

14 PRINCIPLES OF MANAGEMENT – ​HENRI FAYOL

Management Principles developed by ​Henri Fayol:

1. DIVISION OF WORK​: Work should be divided among individuals and groups to ensure that effort and attention are
focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of
the organization.

2. AUTHORITY​: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right ​to
give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated
with authority. Whoever assumes authority also assumes responsibility.

3. DISCIPLINE​: A successful organization requires the common effort of workers. Penalties should be applied judiciously to
encourage this common effort.

4. UNITY OF COMMAND​: Workers should receive orders from only one manager.

5. UNITY OF DIRECTION​: The entire organization should be moving towards a common objective in a common direction.

6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS​: The interests of one person
should not take priority over the interests of the organization as a whole.

7. REMUNERATION​: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and
success of the business, should be considered in determining a worker‟s rate of pay.

 
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•INDUSTRIAL ENGINEERING AND MANAGEMENT UNIT-1

1. CENTRALIZATION​: Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is
increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific
organization in which the manager is working.

2. SCALAR CHAIN​: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line
supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line
supervisor the least. Lower level managers should always keep upper level managers informed of their work activities.
The existence of a scalar chain and adherence to it are necessary if the organization is to be successful.

3. ORDER: ​For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be
treated as equally as possible.

4. EQUITY​: All employees should be treated as equally as possible.

5. STABILITY OF TENURE OF PERSONNEL​: Retaining productive employees should always be a high priority of
management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring
new workers.

6. INITIATIVE​: Management should take steps to encourage worker initiative, which is defined as new or additional work
activity undertaken through self direction.

7. ESPIRIT DE CORPS​: Management should encourage harmony and general good feelings among employees.
 1 – ​Division of Work

We know that TATA Group is an umbrella that covers various business industries. Considering this, it only makes sense to
divide work by allocating it to different employees, thereby enabling them to build up experience and continuously
increase and improve their skills. This leads to increased productivity and ultimately higher profits.

For instance​,​ ​Tata Beverage Group​ ​recruits for the following areas :-

Plantation Management Brand Marketing

Information
Finance Technology
Sales and Distribution

2 – ​Authority

Authority, as defined by Fayol, is the right to give orders and the power to exact obedience. Tata Group realizes
that MNCs decision making and conflict resolution follow a straight line. It believes that if decisions are held up
due to conflicting viewpoints, the issue is expected to speedily traverse up the line for a resolution. Sometimes
there is no empowerment.

For instance ​- An employee of a ​Tata Beverage Group ​is entrusted with confidential/insider information. He shall
not use or proliferate information that is not available to the investing public. By doing this, the company provides
authority to its employees of holding such information. At the same time, responsibility is exacted by the
employees that this information will remain confidential throughout their term with the company. Such insider
information might include - Raising of finances, Restructuring plans., Asset revaluations, Financial information
such as profits, earnings and dividends etc.

3- Discipline

Goes without mentioning, successful organization requires the common effort of workers, even if judicious use of penalties
are required to exact this effort.

Tata has drafted its own ​„Code of Conduct‟​ to guide the behavior of its employees. Highlights of this Code of Conduct :-

“Every employee of a Tata company, including full-time directors and the chief executive, shall exhibit culturally
appropriate deportment in the countries they operate in, and deal on behalf of the company with professionalism, honesty
and integrity, while conforming to high moral and ethical standards.

Every employee of a Tata company shall preserve the human rights of every individual and the community, and shall strive to honour
commitments.

 
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•INDUSTRIAL ENGINEERING AND MANAGEMENT UNIT-1

Every employee shall be responsible for the implementation of and compliance with the Code in his / her
environment. Failure to adhere to the Code could attract severe consequences, including ​termination of
employment.​ ” –​ [​ Penalty]

​
​14- Espirit De Corps
Tata Sponge Iron Ltd. o​ ffers its employees the following to encourage and promote team spirit.
A work culture which stimulates innovation, team work & freedom to excel.

Reward & Growth that is performance-driven.

 Most contemporary perks & other amenities.

Continuous training and development opportunities at all levels.

……>>>
13- Initiative

To instill and encourage initiative in employees, Tata Group has come up with „Tata Innovation Day‟, also known as ​‘Tata

Innovista’ i​ n 2010. On this day, following awards are given to innovation teams that come up with the best innovations​ ​–

14 PRINCIPLES OF MANAGEMENT – HENRI FAYOL

1 – ​Division of Work 6 Subordination of 10 Order

Individual Interest to
2 – ​Authority General Interests 11 Equity
Stability of Tenure
3 Discipline 7 Remuneration 12 of
Personnel
4 Unity of Command 8 Centralization and
5 Unity of Direction Decentralization 13 Initiative

9 Scalar Chain 14 Espirit De Corps

F.W.Taylor‟s Scientific
Management
• I – ​Science, not Rule of Thumb • ​IV -​ ​The Development of each man to his greatest
efficiency and prosperity
• II – ​Harmony, not discord

• V ​-​ ​Separate Planning from Execution​.

• III - ​Cooperation, not individualism

• VI - ​Most strongly propagated​ ​Incentive Wage Syste

DOUGLAS MCGREGOR THEORY​: ​He divides leadership is two styles labeled theory “X” and theory “Y”.
The traditional styles of leadership and controls stated in theory „X‟ by McGregor, is exercised to anagers on
the basis of his assumptions about human beings. These assumptions as laid down or observed

by McGregor for theory „X‟ are

Theory “X”:
1. An average human being does not like to work and he tries to avoid it as far as possible.
2. He avoids accepting responsible and challenging tasks, has no ambition but wants security above all.

3. Because of this, the employees are to be forced, concerned and threatened with punishments to make
them put their best efforts.

These people would not work sincerely and honestly under democratic conditions.

However the above assumptions re not based on research finding. The autocratic style basically presumes that
workers are generally lazy, avoid work and shrink responsibilities. It is believed that workers are more
interested in money and security based on these assumptions the leadership styles developed, insists on tighter
control and supervision.
 
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Theory of “Y”:
It focuses a totally different set of assumptions about the employees:
1. Some employees consider work as natural as play or rest.
2. These employees are capable of directing and controlling performance on their own
3. They are much committed to the objectives of the organization
4. Higher rewards make these employees more committed to organization.
5. Given an opportunity they not only accept responsibility but also look for opportunities to out perform others.
6. Most of them highly imaginative, creative and display ingenuity in handling organizational issues.

Elton Mayo​: Elton Mayo generally recognized as father of human relations approach Mayo led the team which
conducted the study psychological reaction of workers in on-the job situations Mayo concluded that work
arrangements in addition to meeting the objective requirements of production must at the same time satisfy the
employees subjective requirement of social satisfaction at his work place.

MASLOW‟S THEORY( Hierarchy of Needs Theory) :

Maslow‟s level of hierarchy about human relations and behavioral science approach, his assumptions are based
mainly on theory of „Human Needs‟, he has defined five level of hierarchy of needs starting from the
biological need and then coming to more intangible ones .
1. Physical needs like food, clothes and shelter
2. Safety needs freedom from fear of insecurity

3. Social needs include a sense of being accepted

in the society or environment one finds himself in.
4. Ego needs include feeling of important and recognition

5. Self actualization needs include need or desire

for personal fulfillment of individual potential and
activity.

 
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System Approach to Management​: Modern approaches to understand management is the systems approach.
Here the organization is viewed as a system. Every department is considered as a sub-system, it is also possible
that every department can be viewed as a system and every section in the

department can be viewed as a sub-system, system approach helps to study the basic feature and functions of
the organization its minutest details.

The collection of interrelated parts called as sub-system which constitutes one whole unit. System
approach facilitates the study of each of these parts in detail to have a close understanding of the whole
system.

Ex​: Every part of the study such as the eyes, brain, and heart can also be viewed as a sub-system, a study of each
of the parts of the body in necessary to understand the whole body.

HERZBERG‟S TWO-FACTORS THEORY​: Maslow‟s theory has been modified by Herzberg and he
called ​in two-factors theory of motivation. According to him the first group of needs are such things are such
things as company policy and administration, supervision, working conditions, interpersonal relations, salary,
status, job security and personal life.

“Herzberg called these factors as „dissatisfiers‟ and not motivators, by this he means their presence or
existence does not motivate in the sense of yielding satisfaction, but their absence would result in dissatisfaction.

These are also referred to as „hygiene‟ factors.

In the second group are the „satisfiers‟ in the sense that they are motivators, which are related to „Job content‟.
He included the factors of achievement, recognition, challenge work, advancement and growth in the job.
He says that their presence will yield feelings of satisfactory or no satisfaction, but not dissatisfaction.

Maintenance factors or dissatisfier Motivational factor or satisfier

Job context Job content
Company policy and Administration Achievement
Quality of supervision Recognition
Relations with supervision Advancement
Relations with subordinates Possibility of growth
Pay Responsibility