July 25, 2017

Leading and Managing Company Transformation

Transformation is  drastic change in the strategy and derived processes. How can you get the affirmative consent of the associates and do the change effectively. Certain problems are expected, but how do you recognize them early and solve them before they become major stumbling blocks for the transformation effort.

BCG has prepared a guidance book for you and sharing it with you through free download. Download it, read it and benefit from it.



Related Videos

Transformation of Organizations

5 ways to lead in an era of constant change

Jim Hemerling

Jim Hemerling is a senior partner and managing director in the firm’s San Francisco office. He is a leader of the People & Organization and Transformation practices and a BCG Fellow.



An imperative to transform
Lars Faeste
Lars F├Žste is a senior partner and managing director in the Copenhagen office of The Boston Consulting Group and the global leader of the Transformation practice.

Managers have to be paranoid.
Constantly question yourself - Is this good enough? Can I do more?



July 24, 2017


SAP IBP is the next generation technology enabler for supply chain planning.
It is developed on HANA and cloud platforms.
It supercedes SAP's MRP, ERP and APS

The key functional modules are:
IBP Demand
IBP Inventory
IBP Supply
IBP Control


Overview of SAP IBP



Building a Roadmap to Adopt SAP Integrated Business Planning (IBP)

Develop a Framework for a Modern and Fully Mature Supply Chain
How SAP Integrated Business Planning Fits as a Final Piece to the Puzzle
by Sylvain Faure, North America Supply Chain Solution Lead, HCL Technologies
October 26, 2015

About SAP Hana

SAP HANA Geo-Spatial Features

Gitacloud SAP IBP Workshop Information



SAP IBP workshop is a four day virtual event, conducted across two weekends. It is split into three parts:


Business Context: Maturity Models, S&OP evolution into IBP (why is IBP needed?)
IBP Business Processes & Key Capabilities
SAP IBP Platform Overview
Overview of SAP IBP Solutions (Demand, Inventory, Supply & Response, S&OP, Control Tower)

SAP IBP Model Configuration: mock implementation - build an IBP S&OP model from scratch against specific requirements
Model Activation, Data Load
Advanced Topics:
Statistical Forecasting / Demand Planning
Rough Cut Supply Planning
Planning Area Maintenance
Attribute Transformations
Planning Operators
Security & User Administration concepts

SAP IBP Implementation Considerations: Industry specific use cases, SAP IBP Model Design Best Practices, Implementation Methodology
Case Study: See how raw business requirements and data files from a customer are turned into a working prototype
Certification Exam



25 July 2017

Updated  26 July 2017,  17 June 2017, 5 June 2017

July 22, 2017

Application of Artificial Intelligence Based Agents, BBots and Systems in Business - 2017 State of Affairs

Application of Artificial Intelligence Based Agents, BBots and Systems in Business - 2017 State of Affairs

July 2017

Business bots (BBots) are now being used in businesses. Chatbots are the popular bots in this category. Chatbots are able to understand speech and reply in pronounced words and people are happy to have dialogue with them.

ERIK BRYNJOLFSSON & ANDREW MCAFEE authored an article "THE BUSINESS OF ARTIFICIAL INTELLIGENCE: What it can — and cannot — do for your organization" in HBR of July 2017 and explained the potential of artificial intelligence in business applications. There are good number of applications at this movement. But still their business and revenue impact is limited. The potential is very high. But business reimagination is needed to come out with a business concept using the AI that will have a significant revenue and business impact.

Important points made in the article

The term artificial intelligence was coined in 1955 by John McCarthy, a math professor at Dartmouth and he organized a  conference on the topic in 1956.

Up to the present time, the biggest advances have been made in two broad areas: perception and cognition. In the former category, voice recognition and image recognition are developed to become practical applications in Siri, Alexa, and Google Assistant. The driverless car uses image recognition in real life high risk practical application.

In the area of cognition  and problem solving, machines are beating human players in games like chess, poker and Go. Google’s DeepMind team has used ML systems to solve optimization problem and improve the cooling efficiency at data centers by more than 15%, after optimization efforts  by human experts.

Uniqueness of Machine Learning
Machine learning represents a fundamentally different approach to creating software. It does not use explicitly specified rules. Instead, the machine learns from examples. The learning when guided by successful answers is the most fruitful at the moment. Hence, most of the successes occurred in supervised learning systems, in which the machine is given lots of examples of the correct answer to a particular problem accompanied with lot of input data.

Another category of learning problems is emerging, reinforcement learning systems. In reinforcement learning systems the programmer specifies the current state of the system and the goal, lists allowable actions, and describes constraints. The system has to combine, the allowable actions, and the outcomes subject to constraints and  figure out how to get as close to the goal as possible.

Designing and implementing new combinations of technologies, human skills, and capital assets to meet customers’ needs requires large-scale creativity and planning. This is the task of entrepreneurs or  business managers employed to think like entrepreneurs. So the age of machine learning provides at the present moment, great rewarding opportunities entrepreneurs or  business managers.

Risks of employing machine learning systems include,  the machines' hidden biases, derived not from any intent of the designer but from the data provided to train the system.

The authors conclude that in their  view, artificial intelligence, especially machine learning, is the most important general-purpose technology of the present our era. The innovations developed using the new technology will be direct applications as well as complementary innovations.

If entrepreneurs and managers aren’t doing many experiments in the area of machine learning, they aren’t doing using their time devoted to strategic planning properly. Over the next decade, entrepreneurs and managers who understand and use AI effectively and efficiently will replace those who don’t.

If you are an entrepreneur or a business process/model manager register for a course of machine learning immediately if you have not done yet.



Andrew Ng: Artificial Intelligence is the New Electricity
Stanford Graduate School of Business



Davos WEF 2017 Panel Discussion on Artificial Intelligence

Published on 17 Jan 2017
As business opportunities for artificial intelligence multiply, how can industry leaders design the principles and technical standards into their products that benefit society as a whole?

- Ron Gutman, Founder and Chief Executive Officer, HealthTap, USA
- Joichi Ito, Director, Media Lab, Massachusetts Institute of Technology, USA
- Satya Nadella, Chief Executive Officer, Microsoft Corporation, USA
- Ginni Rometty, Chairman, President and Chief Executive Officer, IBM Corporation, USA

Moderated by
- Robert F. Smith, Chairman and Chief Executive Officer, Vista Equity Partners, USA



Davos WEF 2016 Panel Discussion on The State of Artificial Intelligence

How close are technologies to simulating or overtaking human intelligence and what are the implications for industry and society?

-Matthew Grob, Executive Vice-President and Chief Technology Officer, Qualcomm, USA.
-Andrew Moore, Dean, School of Computer Science, Carnegie Mellon University, USA.
-Stuart Russell, Professor of Computer Science, University of California, Berkeley, USA.
-Ya-Qin Zhang, President, Baidu.com, People's Republic of China.

Moderated by Connyoung Jennifer Moon, Chief Anchor and Editor-in-Chief, Arirang TV & Radio, Republic of Korea.





MIT Open courseware Lectures 2010 - Playlist


July 16, 2017

Value Engineering - Introduction

Product Industrial Engineering

We can use the term 'Product Industrial Engineering' to described the efficiency improvement carried out by industrial engineers in the product designs.

Product Design Efficiency Engineering - Component of Industrial Engineering

Value Analysis and Value Engineering - Miles Way (L.D. Miles)

Value engineering has for its purpose the efficient identification and elimination of unnecessary cost. First article on the topic was written by L.D. Miles in 1949. Link available in this article.

What is Value Engineering?

Value engineering has for its purpose the efficient identification of unnecessary cost, i.e., cost which provides neither quality nor use nor life nor appearance nor customer features. It focuses the attention of engineering, manufacturing, and purchasing on one objective – equivalent performance for lower cost. It results in the orderly utilization of low cost alternative materials, low cost alternative processes including new processes, and abilities of specialized suppliers to procure items at lower costs.
Lawrence D. Miles is the pioneer of this technique. He wrote the book - Techniques of Value Analysis and Engineering - in 1961. His designation at that time was Manager, Value Service, General Electric Company. He published the first article on value analysis in 1949 in American Machinist.

Functional design is not tampered:
Inherent in the philosophy of value engineering is the full retention for the customer of the usefulness and esteem features of the product. Miles argued emphatically right at the beginning of his book, “Techniques of Value Analysis and Engineering” that identifying and removing unnecessary cost, and thus improving the value, must be done without reducing in the slightest degree quality, safety, life, reliability, dependability, and the features and attractiveness that the customer wants.

What is Value?

Miles described  four types of value.

1. Use value: The properties and qualities which accomplish a use, work, or service.
2. Esteem value: The properties, features, or attractiveness which cause us to want to own it.
3. Cost value: The sum of labor, material, and various other costs required to produce it.
4. Exchange value: Its properties or qualities which enable us to exchange it for something else we want.

Even though Miles did not describe it that way, I feel value analysis or engineering is concerned with cost value without in anyway decreasing the use value, esteem value and exchange value

Value Analysis Techniques

Miles provided 13 ideas as value analysis techniques.
  1. Avoid generalities
  2. Get all available costs
  3. Use information from the best source
  4. Blast create and refine
  5. Use real creativity
  6. Identify and overcome roadblocks
  7. Use industry experts to extend specialized knowledge
  8. Get a dollar sign on key tolerances
  9. Utilize vendors’ available functional products
  10. Utilize and pay for vendors’ skills and knowledge
  11. Utilize specialty processes
  12. Utilize applicable standards
  13. Use the criterion, “would I spend my money this way?”
The list can be reorganized in this way to show their role in value engineering

At the start of the value engineering exercise some people will object to the project with some general statements.
    1. Avoid generalities  - Don't accept general statements. Try to find out the real objection and confirm whether it is a valid objection.

        Information Phase

        During information phase get information relevant to the product under evaluation
          2. Get all available costs
          3. Use information from the best source
          4. Get a dollar sign on key tolerances - Part of analysis, but it can be treated as information phase as routine information collection activity.

          Searching for low cost alternative materials, standard products and processes. 
          To reduce product through design changes, low cost alternative materials, components and production processes are to be identified.
            5. Utilize vendors’ available functional products
              6. Utilize specialty processes
                7. Utilize applicable standards

                After searching and identifying low cost alternatives which may be of use in redesign, redesign will start.
                  8. Use the criterion, “would I spend my money this way?”  - This idea refers to certain components that are having high costs. This gives rise to the feeling money is being wasted and forces the VE team to look for alternatives in more focused manner.
                    9. Blast,  create and refine - Blasting the current design by identifying a possible low cost alternative. Create is technically showing that the new alternative is a feasible. Refine is commercial design of the new alternative to go into the product

                    10. Use industry experts to extend specialized knowledge - The value engineering team has to approach industry experts to use new materials and new processes appropriately. 

                    11. Utilize and pay for vendors’ skills and knowledge - Vendors who can offer new process capabilities must be supported for developing the solution needed by the VE team.
                      12. Use real creativity - Creativity is required to identify the solution to the value engineering problem. A value engineer knows the function that he has to provide and he must be able to pick the relevant material, component or process from the collection of the information that he has gathered.

                      During presentation of the solution, a value engineer is likely to face objections. He must be prepared for these objections and answer them so that objection is answered adequately and the questioner is satisfied that the new solution is a suitable redesign.
                        13. Identify and overcome roadblocks

                        More detailed description of techniques

                        The Right Way to use the Techniques
                        Choose appropriate techniques to value engineer the specific product.

                        Arrange the techniques in best order for the particular job.

                        Use each technique imaginatively and effectively.

                        Use the techniques iteratively until useful information is developed to the extent that direction for decision and action is available.

                        To use the techniques an analyst requires special knowledge.
                        Value engineer is not a functional designer. He will have access to functional designers as needed in his value work. Hence his knowledge is not specialized to particular areas like mechanical engineering, electrical engineering, automobile engineering, or aerospace engineering. Knowledge required for high-grade value work is extremely broad.
                        The specialized knowledge required in value improvement work consists of information on materials, processes, functional products, sources of functional knowledge, approaches to function performance, and practical ideas for economical function performance.
                        It is important that the value engineer’s library of special knowledge contains a comprehensive volume of trade knowledge backed by efficient means for a quick recall of needed information. Value engineer also needs well-organized references to a maximum number of persons of special skills that may be consulted in connection with each problem.
                        Value engineers need develop a database having the association between properties of materials and costs apart from material and its cost. Similarly a database that shows the relationship between the properties of products produced by various processes and the cost of each process, including the material used is also valuable.

                        This topic will be discussed in more detail in a separate article 'Knowledge Required for Value Engineering'.

                        Job Plan for Value Engineering
                        Phase 1. Orientation: Understand the customers’ needs and wants. Understand the functions performed by the product and the contribution of each part and each feature of the part and the complete product to the functions to be performed by the product.
                        Value engineer has to make sure that he does not diminish the contribution of the product to the customers' needs and wants.
                        Phase 2. Information: Collection of information on quantities, vendors, drawings, materials, manufacturing methods, and costs.
                        Techniques to be used:

                        Get all available costs
                        Get a dollar sign on key tolerances

                        Phase 3. Speculation: Using all the techniques of value analysis to come out with alternative low cost materials and methods to produce components and the product. Creativity is to be employed here. Value engineer has to involve experts from various disciplines to help with ideas.
                        Techniques to be used:

                        Blast, create and refine

                        For each function to be performed by a product or a component, find alternative products, materials or processes that serve the function to a great extent but at a less cost. These alternative ideas do not satisfy the specified or required function completely but they do to a significant extent. Identify they function they perform and the cost involved,

                        During the blast activity use these techniques.
                        Utilize vendors’ available functional products

                      1. Utilize and pay for vendors’ skills and knowledge
                      2. Utilize specialty processes
                      3. Utilize applicable standards
                      4. Use the criterion, “would I spend my money this way?”

                      5. All the five techniques have the potential to suggest lower cost alternatives


                        In create phase, the technique of "Use real creativity" needs to be employed to come out with ways by which the low cost alternatives identified during the blast stage can be modified to accomplish the specified function to a much greater extent with pertinent increase in cost. During this stage also the improvement in function and the increase in cost are to be clearly identified.


                        In this step, much more creativity is used and also the techniques "Use industry experts to extend specialized knowledge" and  "Utilize and pay for vendors’ skills and knowledge" are used to refine the ideas developed during the create step to come out with a refined alternative that fully accomplishes the specified function at a lower cost. During refine step, some more functionality is added as well as some additional cost.

                        Phase 4. Analysis:  Technical and cost analysis of the alternative proposed.

                        The techniques to keep in mind and use during this stage are:

                        Avoid generalities

                        Use information from the best source

                        Identify and overcome roadblocks

                        Phase 5. Program planning: Approach the specialists to further refine the selected alternatives. Inform the specialists the accepted suggestions and give mandate to them to take steps to implement the suggestions.
                        Phase 6. Program execution: Pursue regularly the specialists and vendors to get their inputs on various tasks assigned to them. The output of this phase is a detailed design, successful trail  pilot  run of a manufacturing process or  a confirmed estimate from a vendor for supplying a component, material or sub assembly.
                        Phase 7. Status summary and conclusion. The results of the value engineering study are to be presented to decision makers. The reports needs to have a summary sheet as well as the full supporting documentation.  The value engineering project is concluded when the product is manufactured and distributed at the lowered cost as per the value engineering study.

                        Special Knowledge Required

                        In practically all fields, the operator used special tools and special or field specific knowledge. Value analysis and engineering is no exception.

                        Reach of knowlege: For value analysis, the knowledge required is extremely broad.
                        Nature of knowledge: Information on materials, processes,  and functional products.
                        Form and Constitution of Knowledge Fund: Handbooks, catalogues, charts, price lists, product and process descriptions, tables etc.
                        Listing of specialized Competence: Value analysis requires consulting specialists and specialized sources. So a list of consultants as well as special publication is required for various materials, processes and components.

                        Qualifications and Training for Value Analysts and Engineers

                        Qualifications: Logic, creativity, ability to make rapid searches, recall, ability to quickly sort out useful information,  synthesis of solutions, selection of promising alternatives.

                        Knowledge: Understanding of the properties of materials, and of manufacturing processes, their potentialities, and their limitations.

                        Traits required: Imagination, initiative, self-organization, cooperative attitude,
                        Attitude: belief in the importance of value

                        Training: Three weeks class room followed by six months of practical work.
                        Another round of three weeks class room followed six months of practical work
                        Another round of three weeks.

                        For further study:

                        First article by L.D. Miles in 1949  http://minds.wisconsin.edu/handle/1793/3948 download the file 35.5 pdf from this page.

                        Lawrence D. Miles, Techniques of Value Analysis and Engineering, McGraw-Hill Book Company, New York 1961.

                        Note on Value Engineering

                        Especially gives Juran's and Clawson's comments on value engineering

                        Value Engineering - NPC, Chennai (77 page Document. Available online)
                        History of Value Engineering

                        1.17 minutes


                        Related Knols

                        Related Web Pages

                        Value Engineering
                        VALUE ENGINEERING MANUAL 
                        International society of Value Engineering
                        SAVE International - Value Engineering, Value Analysis, Value ...
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                        Value Engineering - Design - FHWA
                        SAP Value Engineering Module
                        SAP Business Process Expert Community - Value Engineering
                        Whitehouse Circular on Value Engineering

                        Circular No. A-131 -- Value Engineering
                        Value Engineerig Web Portal
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                        Value engineering programs and studies at Wisconsin-Madison by Snodgras
                         Value Engineering of Highways - Procedure Manual
                         Value World Issues
                        October 1996

                        Value Engineering -  Case Studies



                        Originally posted at
                        http://knol.google.com/k/value-engineering-introduction# - Knol Number 4

                        Industrial Engineering Knowledge Revision Plan - One Year Plan

                        January - February - March - April - May - June

                        Updated  17 July 2017,   27 June 2015
                        First Published on blog  15 December 2011

                        July 14, 2017

                        Manufacturing Policy - Review and Modification

                        Business strategy changes and manufacturing policy and strategy have to change. Wickham Skinner advocated the concept of focused factory. Focused factories reflect the business strategy of the organization. So when business strategy changes what happens to the focused factory. It can change and it has to change, asserts Prof. Wickham Skinner in a recent paper published in the journal, Production and Operations Management (October 2015). The paper describes the experience of  Hewlett Packard's plant for computer servers in Germany. It successfully changed its focus in line with the change in environment and the consequent business strategy.

                        Hendrik Brumme, Daniel Simonovich, Wickham Skinner, and Luk Van Wassenhove present new ideas and understandings about review and modification of focused production operations developed from insights derived from an historical analysis of the evolution of Hewlett-Packard’s (HP) award winning plant for computer servers in Germany. The plant was restructured from an innovation factory to an operational excellence factory and  then  to a solutions factory. The brings out the right timing of focus changes and discusses the critical structural and infrastructural changes required during the focus transitions as well as cross-functional coordination and leadership challenge. The production and related operations constitute a system and even as a focused factory or production system, it can adapt to disruptive change.  The article also lists out seven myths regarding focused factories and rebuts them.

                        The content is the paper is also reflected in this Knowledge @ Insead post.

                        July 9, 2017

                        Quality Management Principles and Actions

                        ISO Quality Management Principles

                         “ Quality management principles (QMP) ” are a set of fundamental beliefs, norms, rules and values that are accepted as true and can be used as a basis for quality management.

                        The seven quality management principles are :

                        QMP1 – Customer focus
                        QMP2– Leadership
                        QMP3 – Engagement of people
                        QMP4 – Process approach
                        QMP5– Improvement
                        QMP6 – Evidence-based decision making
                        QMP7 – Relationship management

                        QMP1 – Customer focus

                        The primary focus of quality management is to meet customer requirements and to strive
                        to exceed customer expectations.

                        Actions to be taken
                        •  Recognize customers: Recognize direct and indirect customers as those who receive value from the organization.
                        •  Research the needs and expecations of the customers (current and potential): Understand customers’ current and future needs and expectations.
                        •  Organizations objectives have to reflect customer needs: Link the organization’s objectives to customer needs and expectations.
                        •  Wide dissemination of customer requirements in the organization: Communicate customer needs and expectations throughout the organization.
                        •  Utilize customer needs understanding in developing products and services: Plan, design, develop, produce, deliver and support goods and services to meet customer needs and expectations.
                        •  Measure post purchase and use customer satisfaction: Measure and monitor customer satisfaction
                        and take appropriate actions.
                        •  Utilize customer feedback: Determine and take actions on interested parties’ needs and expectations that can affect customer satisfaction.
                        •  Maintain relations with customers: Actively manage relationships with customers
                        to achieve sustained success.

                        Customer focus is a part of market orientation.

                        QMP2– Leadership

                        Leaders at all levels establish unity of purpose and direction and create conditions in which people are engaged in achieving the organization’s quality objectives.

                        Managers at all levels have to create conditions in the work areas and the organization under them the conditions conducive to practice of quality principles.

                        Actions to be taken

                        • Communicate the organization’s mission, vision, strategy, policies and processes throughout
                        the organization. In the context of quality, quality policy and processes are to be communicated.
                        • Create and sustain shared values, fairness and ethical models for behaviour at all levels
                        of the organization. Quality must be a value in the organization.
                        • Establish a culture of trust and integrity. When any person in the organization provides an output to a customer, the quality is checked and confirmed by that person or he checks whether some other designated person has checked the item from quality angle. Self inspection by an operator is also valid quality check.
                        • Encourage an organization-wide commitment to quality.
                        • Ensure that leaders at all levels are positive examples to people in the organization. Every person in the organization follows the quality policy and processes.
                        • Provide people with the required resources, training and authority to act with accountability. The people are to be educated and trained in the quality processes and necessary tools are to be provided to them. Adequate authority is to be given to them to correct any item if a defect is found at any time.
                        • Inspire, encourage and recognize people’s contribution. People are economic people as well as social people. Positive social messages through verbal and body language, small rewards and awards will keep up the spirit of the people to engage in the activities of the organization energetically and happily.

                        Source: ISO Quality Management Principles

                        WHAT IS ISO 9001?

                        ISO 9001 is an internationally recognized Quality Management System standard published by ISO (International Organization for Standardization). A Quality Management System, as described in the current ISO 9001 Standard, helps an organization to implement streamlined processes and improve operational efficiency  based on the Quality Management principles.


                        Deming’s 14 Principles or Commandments for Total Quality Management

                        Create constancy of purpose for improving products and services.
                        Adopt the new philosophy.
                        Cease dependence on inspection to achieve quality.
                        End the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier.
                        Improve constantly and forever every process for planning, production and service.
                        Institute training on the job.
                        Adopt and institute leadership.
                        Drive out fear.
                        Break down barriers between staff areas.
                        Eliminate slogans, exhortations and targets for the workforce.
                        Eliminate numerical quotas for the workforce and numerical goals for management.
                        Remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system.
                        Institute a vigorous program of education and self-improvement for everyone.
                        Put everybody in the company to work accomplishing the transformation.

                        The list of 14 commandments is basis for  total quality management philosophy and thus is the foundation for TQM and its successor, quality management systems.

                        Juran’s 10 steps for Quality management and Quality improvement 

                        Build awareness of opportunity to improve.
                        Set-goals for improvement.
                        Organize to reach goals.
                        Provide training
                        Carryout projects to solve problems.
                        Report progress.
                        Give recognition.
                        Communicate results.
                        Keep score.
                        Maintain momentum by making annual improvement part of the regular systems and processes of the company.

                        Phil Crosby's Prnciples

                        The definition of quality is conformance to requirements (requirements meaning both the product and the customer's requirements)
                        The system of quality is prevention
                        The performance standard is zero defects (relative to requirements)
                        The measurement of quality is the price of nonconformance
                        The principle of "doing it right the first time" (DIRFT).

                        Total Quality Management: Focus on Six Sigma - Review Notes

                        Top Management Challenges

                        This article is part of #AtoZChallenge 2017 for Blogging Posts. My Theme for the Challenge is Top Management Challenges - Full List of Articles  http://nraomtr.blogspot.com/2016/12/a-to-z-2017-blogging-challenge-top.html

                        Updated 11 July 2017, 20 April 2017

                        July 8, 2017

                        Business and Management Innovations - 2017

                        July 2017

                        Walmart is building giant towers to solve the most annoying thing about online ordering

                        Siemens inaugurates showcase digitalized factory in India

                        An inside look at 10 real-world digital transformations
                        CIOs at StubHub, HD Supply, JetBlue and other leading organizations are spearheading digital initiatives to drive business growth. Here’s a look at their evolving digital transformations.

                        July 7, 2017

                        Facilities Planning and Organizing

                        PPT of Salah R. Agha, Professor Industrial Engineering, Islamic University of Gaza on Facilities Planning and Materials Handling

                        Indicates role of IEs.

                        Facilities Planning

                        James A. Tompkins, John A. White, Yavuz A. Bozer, J. M .A. Tanchoco
                        John Wiley & Sons, 19-Jan-2010 - Technology & Engineering - 864 pages

                        When it comes to facilities planning, engineers turn to this book to explore the most current practices. The new edition continues to guide them through each step in the planning process. The updated material includes more discussions on economics, the supply chain, and ports of entry. It takes a more global perspective while incorporating new case studies to show how the information is applied in the field. Many of the chapters have been streamlined as well to focus on the most relevant topics. All of this will help engineers approach facilities planning with creativity and precision.


                        Organization Behavior – History of Development of The Discipline

                        Organization Behavior Article Series

                        The academic field of organizational behavior has been around for at least the past thirty to forty years (Luthans, 2005). This statement motivated me to trace the development of ‘Organizational Behavior’ as a subject in this article.


                        The academic field of organizational behavior has been around for at least the past thirty to forty years (Luthans, 2005). This statement motivated me to trace the development of ‘Organizational Behavior’ as a subject in this article.

                        Classical Theory of Organization

                        The following questions were important in organizing work.

                        How should work be divided by departments and by individuals?
                        How much authority should be given to the incumbent of each position?
                        What should his duties be?
                        What mean of coordination should be provided?

                        Both managers and writers on management had in the past tried to discover principles to answer the questions and the quest is continuing now also.

                        Fayol’s analysis of management and principles that he stated regarding organization became the basis for many writers to develop their thinking on this issue. The most commonly stated principles from this approach are expressed as OSCAR: Objectives, specialization, coordination, authority, and responsibility (Dale, 1965). This thinking of this group of writers who followed and developed Fayol’s thoughts is termed as classical theory of the organization.

                        The criticism of the classical theory includes the opinion that it is too mechanistic. The theory seems to assume that top management only needs to know what is to be done or what it wants to be done. It will arrange for an organization in which all roles are exactly dovetailed. It will issue the necessary orders down through the chain of command, and hold each person accountable for the performance. Each person is spurred into appropriate action by the hope or reward and fear or penalties. Classical school expressed the belief that, if these steps are followed, the organization will function harmoniously and effectively. No doubt, they laid stress on the principle of esprit de corps, but its implication was not explored.

                        Behavioral Theory – Organization Behavior

                        The criticism of classical theory as too mechanistic results in a new theory of organization that emphasized that organizations are made up of human beings and orders and policies will be subject to reinterpretation in the light of psychological “set” of those who transmit them or carry them out as well as the social environment. The people in the organization are motivated by many forces beside those taken into account by the classicists and employees of an organization are often seeking goals different from those expressed in the organization manual. Theory developed in the field of organization design and management based on behavioral variables of human beings in the subject of organization behavior. Chester Barnard was probably the first of the behavioral theorists of organization (Dale, 1965).

                        Chester Barnard

                        Barnard stressed the influence of psychological and social factors on organization effectiveness and emphasized that the economic motive, on which business organization depends for incentive, is only of those that influence human beings, even when they are part of organizations as employees after signing a contract. 

                        Chester Barnard’s book, The Functions of the Executive was published in 1938(Barnard, 1938).

                        Herbert A. Simon

                        Barnard’s theories were further developed by Herbert A. Simon in his book Administrative Behavior (Simon, 1957).

                        E. White Bakke

                        Bakke pointed out that the individual in organization hopes to use the organization to further his own goals, while the organization attempts to use the individual to further its goals. In the process of working, the organization to some degree remakes the individual and the individual to some degree remakes the organization (Bakke, 1953).

                        Bakke put forward the concepts of personalizing process and fusion process in organizations. The attempt to make the formal organization a mean of accomplishing the personal goals of its employees is the “personalizing process” and the fusion or integration of the personalizing process and the “socializing process” of the organization is “fusion process.”

                        Likert’s Motivational Approach

                        Behavioral theorists take a motivational approach to the company structure and management. They are concerned with the ways in which the goals of individuals and those of the organization can be made to fuse, or at least coincide to some extent. But Rensis Likert has christened a special approach as motivational approach. He said,

                        “ …management will make full use of the potential capacities of its human resources only when each person in an organization is a member of one or more well knit, effectively functioning work groups that have high skills of interaction and higher performance goals.”

                        Early Books in Organization Behavior

                        Bennis, Warren G. (1966), Changing Organizations, McGraw-Hill, New York.

                        Filley, Alan C., and Robert J. House (1969), Managerial Process and Organizational Behavior, Scott, Foresman and Company.

                        Luthans, Fred (1973), Organizational Behavior, McGraw-Hill, New York.



                        Barnard, Chester, The Functions of the Executive, 1938

                        Luthans, Fred, Organizational Behavior, Tenth Edition, McGraw-Hill, 2005

                        Simon, Herbert A., Administrative Behavior, 1957


                        The Historical Roots of Organizational Behavior Management in the Private Sector The 1950s-1980s
                        Alyce M. Dickinson PhD Western Michigan University , USA
                        Journal of Organizational Behavior Management 

                        Volume 20, 2001 - Issue 3-4, pp. 9-58.

                        Article originally posted in


                        July 6, 2017

                        International Trade Theory and Issues

                        International trade is going on for ages. There are conventional reasons for the existence for trade among kingdoms or nations.

                        Conventional Sources of international trade:

                        1. Diversity in conditions of production

                        Tropical reagions are suitable for certain products and temperate regions are suitable for certain other products.

                        2. Decreasing costs due to scale

                        Due economies of scale, a country which has taken lead in production of a product can increase scale of production and reduce costs further. Thus other countries may buy that product from this country lower cost of production.

                        3. Differences in tastes

                        The people of a country may have taste for a product and for the shortfall in the availability of their country may import from another country.

                        Unconventional Reason: The principle of comparative advantage

                        Each country will specialize in the production and export of those goods that it can produce at relatively low cost. This principle is unconventional because, this proposition brings out the idea that even though one country is absolutely more productive or efficient in all the items compared to another country, it is better off by exporting items in which it has relatively higher productivity advantage and importing products in which it has relatively lower advantage.

                        This makes trade between a developed and developing country possible.

                        The principle was first explained by David Ricardo.

                        Illustration: USA is a unit of food costs 1 hour of labor and a unit of clothing costs 2 hours of labor.
                        In Europe, one unit of food costs 3 hours of labor and a unit of clothing costs 4 hours of labor.
                        This means that  1 unit of food is equal to 0.5 units of cloth in USA.
                        1 unit of food is equal to 3/4 units of cloth in Europe.
                        Cloth is exported to USA and food is bought with it till relative prices are equal. Let us say relative price become equal at 2/3. It means in USA 1 unit of food buy 2/3 units of cloth. In Europe also one unit of food is equal to 2/3 times of cloth.

                        In the situation of after trade, the USA persons have to spend only 2 and half hours to get 1 unit of food and one unit of cloth. Earlier, before trade he has to spend 1 hour for food and two hours for cloth. So he is better of.

                        Similarly the European needs to spend only 6 and 2/3 hours for 1 unit of food and 1 unit of cloth instead of 7 hours. So he is also better of.

                        Absolute and Comparative Advantage



                        Paul Samuelson and William D. Nordhaus, Economics, 13th Edition, McGraw-Hill, 1989

                        Updated 8 July 2017,  23.12.2012, 11 December 2011

                        Exchange Rates: Markets Regulation and International Financial System

                        International trade is beneficial as it increases real wages. This idea is based on the benefits of trading based on comparative advantage. But payments in international trade are based on two different currecies. A person in USA has to pay a British seller pounds to buy goods. It means a US person has to first buy pounds using his dollars. The number of dollars a US citizen has to pay for each pound is the exchange rate for pound expressed in terms of dollar.

                        On 24.12.2012, one pound requires 1.62 dollars. Any US person who wants pounds has to buy pounds at this exchange rate.

                        How are there rates (exchange rates) determined?

                        For foreign exchange also there are markets like there are markets for various commodities. The markets operate on the basis of demand and supply for a currency. The demand for British pounds with respect to dollars come from the people who want to buy  British goods, services and assets. Supply of pounds come from British people who want to buy US goods, services and assets. The equilibrium price for the currency is at the intersection of these two curves at any point in time.

                        Changes in Demand Curve

                        The demand for British pounds from US citizens can change due to various reasons. Like, if there is better substitute produced locally in US itself, the demand for British item may go down and consequently, the demand for British pound will go down. The demand curve will shift to the left and exchange rate for Pound will go down.

                        The balance of supply and demand for foreign exchange determines the foreign exchange rate of a currency. It can fluctuate day by day and period by period.

                        When a country's foreign exchange rate has declined relative to that of another country, we say that the domestic currency has depreciated while the foreign currency has appreciated.

                        Government try to regulate exchange rates. When a country's official exchange rate (or policy rate) is lowered we say that the currency has undergone a devaluation.

                        Three major exchange rate systems are the gold standard, pure floating exchanged rates and managed floating exchange rates.


                        Paul Samuelson and William D. Nordhaus, Economics, 13th Edition, McGraw-Hill, 1989

                        Introduction to Exchange Rates and Forex Markets


                        Jason Welker

                        Updated 8 July 2017, 11 December 2011

                        July 3, 2017

                        Improve Strengths and Become Extraordinary Leader

                        Remember, if you really want to make a difference within your organization, it's your strengths that will lead the way. Give them the attention they deserve. - Scott K. Edinger, a consultant, author, adviser and speaker, of Edinger Consulting Group, Inc. is a recognized expert on leadership.

                        16 leadership behaviors

                        Displays honesty and Integrity
                        Exhibits technical/professional expertise
                        Solves problems and analyzes issues

                        Practices self-development
                        Focuses on results
                        Establishes stretch goals
                        Takes initiative

                        Communicates powerfully and broadly
                        Inspires and motivates others to high performance
                        Builds relationships
                        Develops others

                        Collaborates and fosters teamwork
                        Develops strategic perspective
                        Champions change
                        Connects the group to the outside world

                        Develop 5 behaviors to outstanding level and you will be in 91 percentile of leaders.

                        Zenger Folkman


                        Jim Clemmer


                        Resourcing - A Function of Management

                        A Manager's Job is to get results through people and other resources. Hence acquiring all resources (including human resources) is a function of management. - Narayana Rao

                        The article was first published on Knol in 2010.

                        Koontz and O'Donnell outlined Planning, Organizing, Staffing, Directing and Controlling as the five functions of management and explained the process of management of these five functions.

                        In the place of staffing, using the word resourcing, could be a better description of management function at the current stage.

                        A plan to achieve something (objective) is to be  converted into an organizational plan that has resources,  facilities and people. The manager has to acquire these resources to set up the organization to implement his plan. Acquisition of human resources is staffing. But normally in modern business, the manager has to acquire money resources or finance. Then, using capital and finance, he has to  acquire land, buildings, machinery, materials and various other services. Then comes directing and resource allocation (execution).

                        During control phase, replanning takes place, reorganization can take place, resource adjustment (resource acquisition or disposal) may take place, and redirecting may take place to achieve the goals set forth for a period.

                        Planning involves choosing a direction and an intermediate destination. It has to be a profitable and a useful endeavor. In the process of planning cost benefit analysis is done.  Organizing follows and the means by which one reaches the chosen destination is defined during this activity of management.

                        Organizing is a process of

                        • determining, grouping and structuring activities
                        • creating roles for individuals for effective performance at work
                        • allocating necessary authority (over resources) and responsibility for results for each role
                        • determining detailed procedures and systems for different problem areas such as coordination, communication, decision-making, motivation, conflict resolution and so on.

                        The resources required to achieve a goal are to be identified during the organizing step of management. How many operators are required and how many supervisors are required is a function of technology employed in the organization and this decision has to be taken during the process of organization. Resourcing follows the organizing phase in the acquiring of the resources planned in the organizing phase. Organizing this way is just the planning stage. Resourcing is the stage during which all resources planned in the organizing stage are acquired by the manager.

                        Resource Planning 

                        Resource planning is an economic decision and entrepreneurs have to use it. It is discussed adequately in economics.

                        Choice of Inputs by the Firm

                        Every firm or entrepreneur has to decide how much of each input it should employ: how much labor, capital, land, energy, various materials and services.

                        The fundamental assumption that economists make in this context is that of cost minimization. Firms are expected to choose their combination of inputs so as to minimize the total cost of production.

                        Least-cost Rule: To produce a given level of output at the least cost, a firm will hire factors until is has equalized the marginal product per dollar spent on each factor of production. This implies that

                        Marginal product of labor/price of labor  = Marginal Product of Capital Equipment/Price of capital equipment = ...

                        Thus the firm will choose a factor combination or resource combination that minimizes the total cost of production.  (Source: http://nraomtr.blogspot.com/2011/12/economic-theory-of-production-and.html  )


                        Recognition of Role of Resources in Management Process by Various Authors of Principles of Management or Management Process Books

                        Ernest Dale

                        Goals and Resources

                        Once objectives have been set,the planners must decide how far they can proceed toward them in view of the resources available, which include the money on hand, the money that sales will bring, and the funds that may be obtained by borrowing or selling equities. The decision to borrow or sell new stock will, of course, be part of the planning process and will depend on the return expected on the investment.

                        Finally, the planners must decide on the allocation of the funds to the various company activities and the way in which these funds will be used to generate greater income in the form of sales.  The volume of sales is, in fact, the key factor in all corporate planning.

                        Ernest Dale, Graduale School of Business, University of Virginia, Management: Theory and Practice, McGraw-Hill Book Company, New York, 1965, p.352, Chapter 22. Planning and Forecasting.

                        An interesting entry in Wikipedia - Resource Management

                        In organizational studies, resource management is the efficient and effective deployment for an organization's resources when they are needed. Such resources may include financial resources, inventory, human skills, production resources, or information technology (IT). In the realm of project management, processes, techniques and philosophies as to the best approach for allocating resources have been developed. These include discussions on functional vs. cross-functional resource allocation as well as processes espoused by organizations like the Project Management Institute (PMI) through their Project Management Body of Knowledge (PMBOK) methodology to project management. Resource management is a key element to activity resource estimating and project human resource management. Both are essential components of a comprehensive project management plan to execute and monitor a project successfully
                        Resourcing and Resouce Planning Departments
                        Office of Resource Planning, Universit of Regina

                        A new concept being developed as enterprise architecting clearly brings out the need for organizing material and human organizations and provides a process for developing the both organization. From this organization output, resource requirements will be clearly specified and during the resourcing function, manager has to acquire the resources specified in the organization structure.

                        Harvard Business Essentials on Resource

                        In the book, Coaching and Mentoring: How to Develop Top Talent and Achieve Stronger Performance, published by Harvard Business School Publishing Corporation, in 2004

                        Page 2

                        A Manager's Job is to get results through people and other resources.

                        Industrial Engineering

                        Resourcing and resource allocation is Manager's job. Resource efficiency (using resources efficiently) is the concern of Industrial engineers

                        PPT of Salah R. Agha, Professor Industrial Engineering, Islamic University of Gaza on Facilities Planning and Materials Handling

                        Indicates role of IEs.

                        Facilities Planning

                        James A. Tompkins, John A. White, Yavuz A. Bozer, J. M .A. Tanchoco
                        John Wiley & Sons, 19-Jan-2010 - Technology & Engineering - 864 pages

                        When it comes to facilities planning, engineers turn to this book to explore the most current practices. The new edition continues to guide them through each step in the planning process. The updated material includes more discussions on economics, the supply chain, and ports of entry. It takes a more global perspective while incorporating new case studies to show how the information is applied in the field. Many of the chapters have been streamlined as well to focus on the most relevant topics. All of this will help engineers approach facilities planning with creativity and precision.


                        Related topics

                        The Nature and Purpose of Planning
                        The Nature of Organizing
                        Resourcing - A Function of Management
                        Leading - Introduction
                        Planning and Execution - Theory and Practice
                        The System and Process of Controlling

                        Updated  3 July 2017,   26 July 2016,  1 Feb 2016, 17 Sep 2015, 25 Feb 2014
                        Updated 17.3.2012
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                        Details of the Knol

                        Resourcing - A Function of Management

                        Narayana Rao

                        All Rights Reserved

                        Version 14

                        Last edited: 02 Mar 2010

                        Exported: 26 Nov 2011

                        Original Knol Number 2345