April 6, 2015

Efficiency Improvement - Need and Role of Industrial Engineering

Definition of Management by Koontz and O'Donnell

Weihrich and Koontz defined Management and explained it as follows in the tenth edition of their book Management: A Global Perspective (p.4).

"Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims." This definition needs to be expanded:

1. As managers, people carry out the managerial functions of planning, organizing, staffing, leading, and controlling.
2. Management applies to any kind of organization.
3. It applies to managers at all organizational levels.
4. The aim of all managers is the same: to create a surplus.
5. Managing is concerned with productivity; this implies effectiveness and efficiency.

Definition of Management by Narayana Rao K.V,S.S.

Management of an organization is the process of establishing objectives and goals of the organization periodically, designing the work system and the organization structure, and maintaining an environment in which individuals, working together in groups, accomplish their aims and objectives and goals of the organization effectively and efficiently (Narayana Rao). (3rd December 2008, Version 1 of this article)
The above definition was a modification of the definition given by Koontz and O'Donnell.

The definition implies the following.

(i) Management is a process.
(ii) Management applies to every kind of organization, government, profit making, or nonprofit making.
(iii) It applies to managers at all levels in the organization.
(iv) Management is concerned with effectiveness and efficiency.  Effectiveness is producing the product or service the customer wants in business context with the required functional benefits and product attributes at the price he is willing to pay. Efficiency is minimization of resources to produce the saleable output.

Definition of Industrial Engineering by C.B. Going

Industrial engineering directs the efficient conduct of manufacturing, construction, transportation, or even commercial enterprises of any undertaking, indeed in which human labor is directed to accomplishing any kind of work . Industrial engineering has drawn upon mechanical engineering, upon economics, sociology, psychology, philosophy, accountancy, to fuse from these older sciences a distinct body of science of its own . It is the inclusion of the economic and the human elements especially that differentiates industrial engineering from the older established branches of the profession (Going, 1911)

Definition of Industrial Engineering by Narayana Rao K.V.S.S.

Industrial Engineering is System Efficiency Engineering and Human Effort Engineering

"Industrial Engineering is Human Effort Engineering and System Efficiency Engineering. It is an engineering discipline that deals with the design of human effort and system efficiency in all occupations: agricultural, manufacturing and service. The objectives of Industrial Engineering are optimization of productivity of work-systems and occupational comfort, health, safety and income of persons involved."(Narayana Rao, 2009)

Management is accomplishing tasks efficiently. Hence efficiency improvement is part of management process. Industrial engineering is efficient conduct of manufacturing, construction or transportation.  As part of activities carried out by an engineer, industrial engineering adds economics and human factor. An industrial engineer has to understand the economics of demand that tells him why a particular price is quoted by a customer. He has to understand production economics to design a production system that gives the lowest cost while at the same time providing items that customer wants and willing to pay the quoted price. Design of production system is first of all a technical exercise. Industrial engineer must be capable of technical decision making. As a division of labor, the specialist engineer in any branch of engineering comes out with a satisfactory technical solution and industrial engineer does an economic analysis by searching for and creating more alternatives. Thus an industrial engineer finds lower cost alternatives and reduces the cost of products. It is found that cost reduction keeps on occurring on a continuous basis as more and more knowledge is gained by all the employees of the company. Hence industrial engineer becomes a focal point to collect all the cost reduction ideas and incorporate them into the production processes and product designs and thus reduce costs. Reduction in cost can be passed to certain extent to the consumers and this increases the demand for the product further. Society gets benefited as more people enjoy the services of more products. Industrial engineers contribute to social welfare by making production systems efficient and efficient.

Industrial Engineering Knowledge Revision Plan - One Year Plan

January - February - March - April - May - June

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