1 CHAPTER

1.1 INTRODUCTION

Introduction to Industrial Management

Industrial Management deals with the development, improvement, implementation and evaluation of integrated systems of people, money, knowledge, information, equipment, energy, materials and/or processes. It also deals with designing new product prototypes more efficiently. It incorporates the principle and methods of engineering analysis and synthesis with the mathematical, physical and social sciences together to specify, predict, and evaluate the results of systems or processes. The industrial management modes of thinking will be valuable in the challenging strategy and positioning work of the organizations of the future and in creating optimal conditions for success. A perspective built on systems thinking is ideally suited for the type of planning and analysis required as organizations work to enhance positioning and strategy and creating positive internal conditions in the ever changing markets. How does managerial work support the overall positioning and strategies of the organization? What are the cause-and-effect linkages between managerial work and filling the treasure chest? How is managerial work connected to other efforts in the organization, and how can it strengthen the connection and create synergies where they dont currently exist? What is full potential performance and how is managerial work moving the organization toward that goal?, are some questions that are help to understand the connections between work and organizational attainment. The principles of industrial management are not only universally applicable across industries, but across all operations in government, commerce, services, or industry. The theoretical basis of industrial engineering is a science of operations, and to use this science in most applications one must simultaneously consider at least three criteria: (1) quality, (2) timeliness, and (3) cost. The goal of industrial engineering is to ensure that goods and services are being produced or provided at the right quality at the right time at the right cost. From a business perspective the practice of industrial engineering must culminate in successful application. This requirement typically dictates that a practicing industrial engineer effectively use soft

INDUSTRIAL MANAGEMENT

as well as hard science. In the final analysis, the industrial engineers job is to make both new and existing operations perform well. The preponderance of traditional industrial management techniques deal with physical entities (e.g., equipment, buildings, and tools) as well as informational entities (e.g., time, space) for an operation, employing what can be thought of as hard science. However, management related factors in the workplace that determine the motivation level of an employee to perform his or her assigned duties well, or actively participate in operational improvement over time, represent the soft science of industrial management. In recent years, there has been a growing awareness of the importance of this soft science component of industrial management. Not only must the motivation of individual workers be attained through effective management efforts, but the motivation of work groups as well. Individual workers rarely work alone; they typically respond to a social need to fit in as a member of a work group.

1.2 CONCEPT OF INDUSTRIAL MANAGEMENT

Industrial management term applied to highly organize modern methods of carrying on industrial, especially manufacturing and operations. Industrial management is a process of planning, organizing, directing, controlling and managing the activities of any industry. It combines and transforms various resources used in the system and subsystem of the organization into value added product in a controlled manner. Industrial management includes following for the effective management. Industrial Engineering and Management aims to uncover and solve organizational issues by attempting to establish a desirable allocation of management resources through the use of technologies. In an area where reactions to continuous changes are needed, the field of Industrial Engineering and Management utilizes technology on technology, including a variety of management technologies and history and philosophy of science and technology. As shown in fig. 1.1, the industrial engineering and management view, approach, domain and methodology. It involves the environment which includes man, materials, money and information. The environment with physical and mathematical sciences, humanities and engineering creates an approach for the industrial management and engineering. Broadly the industrial management concept includes the planning, controlling and organizing the system. Planning is the a ctivity that establishes a course of action and guide future decision-making. In this the person defines the objectives for the operations subsystem of the organization and the policies and procedures for achieving the desired

INTRO ODUCTION T INDUSTR TO RIAL MANAG GEMENT

Activities tha assure the actual perfo A at ormance in accordance wi ith planne performanc known as th controlling To ensure th the plans f ed ce he g. hat for the operations subsy ystems are ac ccomplished, t operations manager mu the s ust exercis control by measuring actual outpu and comp se y uts paring them to planne operations management. Controlling costs, quality and schedul ed y, les are the important fu e unctions here.

Fig. 1.1 Organizing ar the activitie that establi re es ishes a structu of tasks an ure nd authority. The man nagers establi ish a structur of roles an the flow of re nd inform mation within t operations subsystem. T the s They determin the activiti ne ies require to achieve the goals an assign auth ed e nd hority and re esponsibility f for carryin them out. ng

1.3 EVOLUTIO OF IND ON DUSTRIAL MANAGE L EMENT

Industrial man nagement has been recogni s ized as an imp portant factor in any co ountrys econ nomic growth from last tw centuries. The industri h wo ial manag gement began in eighteenth century when Adam Smith recognized t n h the econom benefits o specialization of labor. H recommen ded breaking of mic of He

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objecti ives. This sta ge includes c clarifying the role and focu of operatio us ons in the organization s overall str ategy. It also involves pro o oduct plannin ng, facility designing an using the c y nd conversion pro ocess.

INDUSTRIAL MANAGEMENT to specialized tasks in efficient. In the early Smiths theories and 1930, many techniques

jobs down into subtasks and recognizes workers which they would become highly skilled and twentieth century, F.W. Taylor implemented developed scientific management. From then till were developed prevailing the traditional view.

The evaluation of management from early ages is summarized in table Date 1776 1799 1832 Contribution Specialization of labour in manufacturing Interchangeable parts, cost accounting Division of labour by skill; assignment of jobs by skill; basics of time study 1900 Scientific management time study and work study developed; dividing planning and doing of work 1900 1901 Motion of study of jobs Scheduling techniques for employees, machines jobs in manufacturing 1931 Statistical inference applied to product quality: quality control charts 1947 1950 1960 Linear programming Mathematical programming, onlinear and stochastic process Organizational behaviour: continued study of people at work G.B. Dantzig, Williams & others A. Charnes, W.W. Cooper L. Cummings, L. Porter W.A. Shewart Frank B. Gilbreth Henry L. Gantt Frederick W. Taylor Contributor Adam Smith Eli Whitney and others Charles Babbage

INTRODUCTION TO INDUSTRIAL MANAGEMENT 1970 Integrating operations into overall strategy and policy, Computer applications to manufacturing, Scheduling and control, Material Requirement Planning (MRP) 1980 Quality and productivity applications from Japan: robotics, CAD-CAM W.E. Deming and J. Juran. W. Skinner J. Orlicky and G.Wright

Japan introduced the JIT (just in time) concept for the inventory management. Now a days all industries uses automation, CAD/CAM, CIM, MRP, SCM & TQM. These are the industrial management techniques used in managing all phases of industry.

The Rise of Factories:

Before the Industrial Revolution, people worked with hand tools, manufacturing articles in their own homes or in small shops. In the third quarter of the 18 th century steam power was applied to machinery, and people and machines were brought together under one roof in factories, where the manufacturing process could be supervised. This was the beginning of shop management. In the next hundred years factories grew rapidly in size, in degree of mechanization, and in complexity of operation. The growth, however, was accompanied by much waste and inefficiency. In the developed countries many engineers, spurred by the increased competition of the post-Civil War era, began to seek ways of improving plant efficiency. 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 Steel Company, who in the 1880s undertook a series of studies to determine whether workers used unnecessary motions and hence too much time in performing operations at a machine. Each operation required turning out an article or part was analyzed and studied minutely, and superfluous motions were eliminated. Records 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.

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INDUSTRIAL MANAGEMENT

Industrial Management of the Machine:

Industrial management also involves studying the performance of machines as well as people. Specialists are employed to keep machines in good working condition and to ensure the quality of their production. The flow of materials through the plant is supervised to ensure that neither workers nor machines are idle. Constant inspection is made to keep output up to standard. Charts are used for recording the accomplishment of both workers and machines and for comparing them with established standards. Careful 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 Industrial Management

The principles of scientific management have been gradually extended to every department of industry, including office work, financing, and marketing. Soon after 1910 American firms established the first personnel departments, and eventually some of the larger companies took the lead in creating environments conducive to worker efficiency. Safety 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. Over 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. During the 1980s and 1990s, however, cutbacks and downsizing in many American businesses substantially reduced many of these benefits. Some 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 job security and a guaranteed annual wage.

Modern Trends of Ind4ustrial Management:

Modern technological devices, particularly in the areas of computers, electronics, thermodynamics, and mechanics, have made automatic and semiautomatic machines a reality. The development of such automation is bringing about a second industrial revolution and is causing

INTRODUCTION TO INDUSTRIAL MANAGEMENT

vast changes in commerce as well as the way work is organized. Such technological changes and the need to improve productivity and quality of products in traditional factory systems also changed industrial management practices. In the 1960s Swedish automobile companies discovered that they could improve productivity with a system of group assembly. In a contrast to older manufacturing techniques where a worker was responsible for assembling only one part of the car, group assembly gave a group of workers the responsibility for assembling an entire car. The system was also applied in Japan, where managers developed a number of other innovative systems to lower costs and improve the quality of products. One Japanese innovation, known as quality circles, allowed workers to offer management suggestions on how to make production more efficient and to solve problems. Workers were also given the right to stop the assembly line if something went wrong, a sharp departure from U.S. factories. By carefully controlling the manufacturing process, Japanese managers were able to cut waste, improve productivity, and reduce inventory, thus significantly reducing costs and improving quality. By the early 1980s, Japanese companies, which had once been criticized for producing for producing low-quality goods, had established a reputation for efficiently producing high-quality, high-tech products. In the 1980s and early 90s many U.S. companies looked to increase their competitiveness by adapting Japanese methods for improving manufacturing quality.

1.4 APPLICATION OF INDUSTRIAL MANAGEMENT

Applications of industrial management are summarized in the following departments of industry: 1. Managing and arranging the location of facilities 2. Design of Plant layouts 3. Management t of material handling systems 4. Supply chain management. 5. Production and Planning control 6. Quality control & Total quality management 7. Inventory & Materials management 8. Maintenance management 9. Operations management 10. Labor management

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INDUSTRIAL MANAGEMENT

1.5 SCOPE OF INDUSTRIAL MANAGEMENT

As far as the scope of industrial management is concerned it is applicable in all segments of industry as well as in daily life. As in daily life, we plan our activities; we coordinate available resources and control our activities to achieve certain goals in the most economic way. In the same way any organization must follow the Principles of Management for its survival and growth and to be economically viable. These management principles are applicable to all activities in industry also. Reading and learning Industrial Management will enable one to be capable of solving the problems of the organization, may be in a Production Shop, Hospital, Departmental shop, an Educational Institution or even a coffee shop. The problems a manager faces in various organizations are more or less similar to that of Production department but smaller in magnitude. Hence the knowledge of Industrial Management will help anybody managing business activities, tackle the problems encountered. For example: The Industrial Management consists of Planning in various segments of industry in all the departments, e.g. Production, Inspection & quality, Procurement, Store management, management of activities in assembly line etc. In production department the management includes selection of materials, planning of processes, Routing, Scheduling and controlling the activities etc., Take the example of an Educational Institution. Here too, selection of raw materials i.e. students & faculty, Planning of the Courses, imparting instructions to the students and conduct of the examination, smooth flow of transfer of knowledge and information. The education institution has to continue the process of evaluation and upgradation, so that it is able to impart more relevant and meaningful knowledge to its product i.e. students trained by the institute. Principles of management are helpful in achieving these objectives most efficiently and economically. Similarly, these principles are equally applicable to the service providing organizations so that these are able to provide best of services at minimal cost, most effectively and efficiently. Scope of Industrial Management encompasses all industrial and human activities.

1.6 BENEFITS DERIVED FROM EFFICIENT INDUSTRIAL MANAGEMENT

The efficient Industrial Management will give benefits to the various sections of the society. They are: (i) Consumer benefits from improved industrial Productivity, increased use value in the product. Products are available to

INTRODUCTION TO INDUSTRIAL MANAGEMENT

(ii) Investors: They get increased security for their investments, adequate market returns, and creditability and good image in the society. (iii) Employee gets adequate Wages, Job security, improved working conditions and increased Personal and Job satisfaction. (iv) Suppliers: Will get confidence in management and their bills can be realized without any delay. (v) Community: community enjoys Benefits from economic and social stability. (vi) The Nation will achieve prospects and security because of increased Productivity and healthy industrial atmosphere.

QUESTIONS 1. 2. 3. 4. 5. What do you understand by term industrial management? Give the concept of industrial management. Write short notes of Evolution of industrial management Focus on scope of Industrial management. Give the applications of industrial management.

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him at right place, at right price, at right time, in desired quantity and of desired quality.