September 20, 2019

Supply Chain Management - Subject Update

Globally Popular Content

Supply Chain Management - Online Book 

Supply Chain Management - Revision Notes of All Chapters Based on Chopra and Meindl's Book


Trends in Supply Chain Design and Management: Technologies and Methodologies

Hosang Jung, Fengshan Frank Chen, Bongju Jeong
Springer Science & Business Media, 17-Jul-2007 - Business & Economics - 451 pages

With the rapid development of information and network technologies and market requirements, new challenges in supply chain design and management have emerged. Notably, there are four new technologies which can affect traditional supply chain management: Radio Frequency Identification (RFID) technology; mobile transaction technology; information handling and storage technology; and multi-agent technology. These new technologies enable global companies to change their ways of thinking about supply chain management in order to cope with the changing environment. In line with this rapid development of technologies are new challenging methodologies: sustainable supply chain management, advanced supply chain planning, available-to-promise (ATP) system and lean supply chain design and management.

Trends in Supply Chain Design and Management: Technologies and Methodologies is a collection of chapters from active researchers and practitioners which describe new trends in supply chain design and management with emphasis on technologies and methodologies. Each chapter contains guidelines detailing the real-world application(s) of the presented technologies and methodologies.

By reading Trends in Supply Chain Design and Management: Technologies and Methodologies, researchers will gain an insight into the evolving trends in supply chain design and management and practitioners will learn about the practical applications of the technologies and methodologies discussed. This book could also be used as a reference handbook by lecturers and postgraduate students in advanced supply chain design and management.
Number of supply chain management faculty of IE departments contributed to this volume.

London UK, 14th June - Siemens Digital Industries Software announced today the immediate availability of Siemens Opcenter™ software, a cohesive portfolio of software solutions for manufacturing operations management (MOM).

Siemens Opcenter integrates MOM capabilities including advanced planning and scheduling, manufacturing execution, quality management, manufacturing intelligence and performance, and formulation, specification and laboratory management. The new portfolio combines products including Camstar™ software, SIMATIC IT® suite, Preactor, R&D Suite and QMS Professional into a single portfolio that unifies these widely recognised products and leverages synergies between them. A fully web-based, modern, consistent, adaptive and comfortable user interface implemented throughout the Siemens Opcenter portfolio offers a situationally adapted user experience and facilitates the implementation of new capabilities and additional components while reducing training efforts.

IBM Launches Supply Chain Anomaly Detection Tool
By PYMNTS Posted on May 15, 2019

Top Companies for Supply Chain Excellence 2018

Zero-Based Productivity Management of Supply Chain - McKinsey Way Supply Chain Industrial Engineering

Supply Chain Industrial Engineering - Online Book (2013-2019)


Automation in supply chains

Where I see Procurement in 2025
June 26, 2018
Mark Perera
CEO of Old St Labs / Founder of Procurement Leaders

A road map for digitizing source-to-pay
By Kalit Jain and Ed Woodcock
April 2017

IBM Procurement's New Chapter: Innovation ebook!_Emptoris%20and%20Watson%20OM%20team.pdf

August 2017

10 ways big data is revolutionising supply chain management

March 2016

Procurement Trends in India - ISM - India - 2016 Survey

Smart Supply Chains - IBM Paper

Adoption ABC Costing

Supply Chain Cost Cutting  - 2007

M2M Model and Supply Chains

About Access Sup Chain Software

May 2015

Supply Chain Engineering - Activity Based Cost Management

April 2015

Supply Chain Management - Coordination - Updated

March 2015

Selection of Supplier in a Two Stage Supply Chain - An Integer Linear Programming Approach
A. John Rajan, K. Ganesh, and K.N. Balan

Uploaded by A. John Rajan

Cost-effective supply chains: Optimizing product development through integrated design and sourcing

PWC Sup Chain survey results

Efficient Transportation Logistics Can Reduce Other Supply Chain Costs

January 2015

Top 25 Supply Chains of 2014

25 Nestle

Innovative Methods in Logistics and Supply Chain Management

August 2014 book - Collected articles. Appx 500 pages
You can download the full book from

IRMS|360 Enterprise Supply Chain Management Software

irms|360 Enterprise is designed to optimize efficiency at every level of the distribution supply chain. End-to-end visibility of products, people and process helps your organization achieve an unprecedented level of accountability. Higher visibility leads to absolute efficiency, improving customer satisfaction and increasing profits.

With off-the-shelf integration to industry leading manufacturing (MRP), enterprise (ERP), customer relationship management (CRM) solutions, irms|360 Enterprise is a cloud-based solution that can be delivered over the web as Software-as-a-Service (SaaS) or can be delivered as an on-premise solution.

Best and All Time Best Supply Chain Management Books

- Clockspeed: Winning Industry Control in the Age of Temporary Advantage by Charles H. Fine

- Designing and Managing the Supply Chain by David Simchi-Levi, Philip Kaminsky and Edith Simchi-Levi

- Essentials of Supply Chain Management by Michael H. Hugos

- Logistics and Supply Chain Management by Martin Christopher

- Logistics Management and Strategy: Competing through the Supply Chain   by Alan Harrison and Remko Van Hoek

- Purchasing and Supply Chain Management by Robert Monczka, Robert Handfield, Larry Giunipero and James Patterson

- Purchasing and Supply Chain Management: Analysis, Strategy, Planning and Practice by Arjan J. Van Weele

- Strategic Supply Chain Management: The Five Core Disciplines for Top Performance by Shoshanah Cohen and Joseph Roussel

- Supply Chain Logistics Management by Donald Bowersox, David Closs and M. Bixby Cooper

- Supply Chain Management, Strategy, Planning and Operation by Sunil Chopra and Peter Meindl

- The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage  by Yossi Sheffi

Supply Chain Management  Subject Update - 2014

Updated on 22 September 2019, 10 June 2019, 17 May 2019,  1 May 2019,  28 June 2017,  22 August 2017,  8 March 2016, 8 Dec 2015

Operations Research - An Efficiency Improvement Tool for Industrial Engineers

In the IE journals and magazines we need to read articles and papers that point out how IEs are able to come out with solutions to data development challenges of OR models.

Operations Research methods are characterized as efficiency improvement techniques by many scholars.

1. From efficiency measurement to efficiency improvement: The choice of a relevant benchmark, Eduardo González, and Antonio Álvarez, European Journal of Operational Research, Volume 133, Issue 3, 16 September 2001, Pages 512-520

2. Measuring Efficiency in Primary Health Care Centres in Saudi Arabia, ASMA M. A. BAHURMOZ,

3. Improving Transportation Efficiency at the Nanzan Educational Complexeral Motors

4. Operations Research: The Productivity Engine: How to create unassailable productivity gains in your business, Lew Pringle, OR/MS Today, June 2000

Lew Pringle wrote:

"Operations research, as a field, is all about the creation and management of Productivity Gain. In fact, in a very real sense, productivity gain is virtually the sole purpose of OR. It's what we do. To raise the question of improvement in an organization's productivity without taking full advantage of all that OR offers would be analogous to pursuing a required improvement in one's health while ignoring the entire medical community. The realm of operations research is Productivity Gain.

OR people, in turn, are identifiable by: 1. our focus on productivity, and 2. the way we find, identify and come to describe, understand, appreciate and represent a problem. Operations research people are problem-conceptualizers. Our "solutions," in this sense, can (and should) be seen as flowing naturally and easily from the unique way in which we have visualized the problems/opportunities in the first place. We operate on such traditional quantities as profit, cost, efficiency and other practical, measurable items. Our goal, ordinarily, is to achieve higher and higher levels of performance. We are the people whose job it is to create productivity. We are, in fact, the productivity engine of an organization."

5. Productivity Improvement through Operational Research
G. W. Sears
Journal of the Royal Statistical Society. Series A (General) Vol. 126, No. 2 (1963), pp. 267-269

6. The Necessity of Implementation of Operations Research for Managers for Decision-Making and Productivity Increase in Production
M. K. Amoli, S. M. T. Hosseini, M. Salehi, "The Necessity of Implementation of Operations Research for Managers for Decision-Making and Productivity Increase in Production", Advanced Materials Research, Vols. 488-489, pp. 1651-1656, 2012


Synergy Between Industrial Engineering and Operations Research

Industrial engineering is developed by engineers working in engineering departments of business companies engaged in manufacture using machines and metals. No doubt construction which is the earliest engineering activity also contributed in the development of industrial engineering as Frank Gilbreth was from construction sector. Operations Research as a discipline is identified with persons from science background working in the area of military operations. Industrial engineering and Departments of Mathematics and Statistics embraced the discipline of operations research in a big way. What is the synergy between industrial engineering and operations research?

Industrial engineering is system efficiency improvement. It examines proposed ways of doing work and improve them. Operations research has number of efficiency improvement tools. Operations researchers developed various standard models and have the ability to develop custom models that improve the efficiency of operations. Linear programming models, transportation, and assignment can be cited as examples using which the operations of an organization can be evaluated for efficiency of resource use subject to the constraints and optimal or efficient solutions can be found. Hence industrial engineers have to be the first group among various corporate organizations to recognize and implement OR models in the business organizations. This opportunity was correctly identified by the industrial engineering profession and OR was adopted as an important technique in the arsenal of industrial engineering.

What is the Contribution of IE to OR?

Industrial engineers could have promoted the practical utilization of OR by proving data in the form the OR models require. In systems engineering, there is mention of this step. From the synthesized design for a system design problem, various models are to be developed to evaluate the proposed design. To use OR models, various types of data are required and industrial engineers have the advantage of developing the required data. Why IEs have the advantage? Industrial engineers have the advantage because they have a strong attachment to measurement in one of their core subjects work measurement. Industrial engineers also are given inputs in understanding the financial and cost accounting data. Thus they are in the unique position to develop and provide the data that OR models required and come out the most efficient solutions and help the operating managers in implementing the solutions. But this does not seem to have happened in big scale.

The reason for the lack of popularity for OR in many organizations is the lack of this viewpoint in IEs. IEs have to use OR models as efficiency improvement avenues. To use OR models they have to develop the required data from the operations of the organization. They have to interact with the accounting departments meaningfully and acquire the required accounting data and statements. They have to develop engineering data and then use appropriate OR models. In the IE journals and magazines we need to read articles and papers that point out how IEs are able to come out with solutions to data development challenges of OR models.

Engineering Optimization

In engineering design as well as in process planning, optimization is now used. Industrial engineers have to optimize their engineering redesigns and also check whether the current engineering solutions are optimized or not? Thus the industrial engineering optimization focus area is concerned with optimization problems of product design and process design. Industrial engineering is also concerned with planning of jobs and flow of material quantities in processes.


Problem Areas for Applying Operations Research

Loading machine centers for maximum utilization of equipment.
Controlling raw materials nd in-process inventories.
Planning the minimum production costs schedules through the sequencing and allocation of men and machines.
Minimizing waiting times between opeartions
Determining the true incremental benefits of adding new production equipment.
Scheduling direct labour.
Determining the most favourable preventive maintenance plans.
Assigning individuals to specific jobs
Specifying least-cost shipment patterns in multiplant multivendor purchasing situations.
Locating warehouses so as to minimize freight and production costs.
Allocating advertising budget in the most efficient manner.

"Opeartions Research", Chaper 9-3 in Industrial Engineering Handbook, H.B.Maynard (Ed.) 2nd Edition


OR Case Studies Discussed in Chapter 11.2 of Maynard's Industrial Engineering Handbook, 5th Edition


Leachman, R. C., R. F. Benson, C. Liu and D. J. Raar, "IMPReSS: An Automated Production-Planning and Delivery-Quotation System at Harris Corporation - Semiconductor Sector," Interfaces, 26:1, pp. 6-37, 1996.
Rigby, B., L. S. Lasdon and A. D. Waren, "The Evolution of Texaco's Blending Systems: From OMEGA to StarBlend," Interfaces, 25:5, pp. 64-83, 1995.
Flanders, S. W. and W. J. Davis, "Scheduling a Flexible Manufacturing System with Tooling Constraints: An Actual Case Study," Interfaces, 25:2, pp. 42-54, 1995.
Subramanian, R., R. P. Scheff, Jr., J. D. Quillinan, D. S. Wiper and R. E. Marsten, "Coldstart: Fleet Assignment at Delta Air Lines,", Interfaces, 24:1, pp. 104-120, 1994.
Kotha, S. K., M. P. Barnum and D. A. Bowen, "KeyCorp Service Excellence Management System," Interfaces, 26:1, pp. 54-74, 1996.

Recent Case Study Papers

Energy Cost Optimization in a Water Supply System Case Study
Daniel F. Moreira and Helena M. Ramos
Journal of Energy
Volume 2013 (2013), Article ID 620698, 9 pages

Cost Minimizing Coal Logistics for Power Plants Considering Transportation Constraints
Ahmet Yucekaya
Industrial Engineering Department, Kadir Has University, istanbul, Turkey
Journal of Traffic and Logistics Engineering, Vol, 1, No. 2 June 2013

Related Knols

Knol Handbook of Industrial Engineering (Year 2010 Version)
By Narayana Rao K.V.S.S.



OR Models - Good brief description of Linear programming, Network Flow Programming, Integer programming, Nonlinear programming, Dynamic programming, Stochastic programming and Simulation etc.

The Periodic Vehicle Routing Problem: A Case Study

A Review of Integrated Analysis of Production-Distribution Systems, 1995

Optimization of Container Process at Multimodal Container Terminals, Phd Thesis, 2008, Andy Wong

Operations Research Models for Railway Rolling Stock Planning, Ph.d thesis, (2006), Gabor Maroti

IFORS 2002 Conference Proceedings - Abstracts only 285 page file


Recent papers about OR models and applications

The costs of poor data quality
Summary of Anders Haug, Frederik Zachariassen, Dennis van Liempd, "The costs of poor data quality", Journal of Industrial Engineering and Management, 2011 – 4(2): 168-193 – Online ISSN: 2013-0953 Print ISSN: 2013-8423

Updated 23 July 2013
Posted in the blog 14 December 2011
Article originally posted at

Industrial Engineering Knowledge Revision Plan - One Year Plan

January - February - March - April - May - June

July - August - September - October - November - December

Updated  21 September 2019,  27 August 2016,  15 July 2016, 13 July 2016,  23 July 2013

September 18, 2019

Industry 4.0: Managing The Digital Transformation - 2018 - Book Information - Alp Ustundag - Emre Cevikcan

Industry 4.0: Managing The Digital Transformation

Alp Ustundag, Emre Cevikcan
Springer, 2018 Technology & Engineering - 286 pages

There are trends that are transforming manufacturing industry to the next generation, namely Industry 4.0, which is based on the integration of information and communication technologies and industrial technology.

This book provides a comprehensive guide to Industry 4.0 applications, not only introducing implementation aspects but also proposing a conceptual framework with respect to the design principles. In addition, it discusses the effects of Industry 4.0, which are reflected in new business models and workforce transformation. The book then examines the key technological advances that form the pillars of Industry 4.0 and explores their potential technical and economic benefits using examples of real-world applications. The changing dynamics of global production, such as more complex and automated processes, high-level competitiveness and emerging technologies, have paved the way for a new generation of goods, products and services. Moreover, manufacturers are increasingly realizing the value of the data that their processes and products generate. 

The book provides a conceptual framework and roadmap for decision-makers for this transformation

Table of contents (16 chapters)
A Conceptual Framework for Industry 4.0

Pages 3-23
Salkin, Ceren (et al.)

Smart and Connected Product Business Models

Pages 25-41
Cevik Onar, Sezi (et al.)

Lean Production Systems for Industry 4.0

Pages 43-59
Satoglu, Sule (et al.)

Maturity and Readiness Model for Industry 4.0 Strategy

Pages 61-94
Akdil, Kartal Yagiz (et al.)

Technology Roadmap for Industry 4.0

Pages 95-103
Sarvari, Peiman Alipour (et al.)

Project Portfolio Selection for the Digital Transformation Era

Pages 105-121
Isikli, Erkan (et al.)

Talent Development for Industry 4.0

Pages 123-136
Karacay, Gaye

The Changing Role of Engineering Education in Industry 4.0 Era

Pages 137-151
Cevik Onar, Sezi (et al.)

Data Analytics in Manufacturing

Pages 155-172
Sami Sivri, M. (et al.)

Internet of Things and New Value Proposition

Pages 173-185
Karacay, Gaye (et al.)

Advances in Robotics in the Era of Industry 4.0

Pages 187-200
Bayram, Barış (et al.)

The Role of Augmented Reality in the Age of Industry 4.0

Pages 201-215
Esengün, Mustafa (et al.)

Additive Manufacturing Technologies and Applications

Pages 217-234
Beyca, Omer Faruk (et al.)

Advances in Virtual Factory Research and Applications

Pages 235-249
Bal, Alperen (et al.)

Digital Traceability Through Production Value Chain

Pages 251-265
Budak, Aysenur (et al.)

Overview of Cyber Security in the Industry 4.0 Era

Pages 267-284
Ervural, Beyzanur Cayir (et al.)

Related Conatent

The smart factory

Responsive, adaptive, connected manufacturing
31 August 2017
Rick Burke, Adam Mussomeli, Stephen Laaper
Deloitte Insights

September 17, 2019

Maintenance Management Strategies

Selection of Correct Equipment Maintenance Management Strategy Selection.
It makes a  Difference

Maintenance is a risk management practice used to maximise production and minimise loss and waste. 

Selecting a successful maintenance strategy requires a good knowledge of equipment failure behaviour and maintenance management practices. First you have to know e why equipment fails, how equipment fails and when equipment fails. Then you require knowledge of  maintenance management practices to select the right mix of maintenance strategies to extend and maximise its service and performance.

"To master a thing you must know it thoroughly.  When you speak to experts it is clear that they are intimate and absorbed with their speciality.  When you understand a thing fully, when you know how it will behave under all circumstances, when you introduce a change and know its impact and effect, then you have mastery over the thing."

Maintenance strategy can be mastered.  Strategic maintenance decision making involves selecting the right care and repair methodologies that maximise equipment life and performance for the least cost to the user.  The first step in successful maintenance management strategy choice, is knowledge of  equipment failure mode and process or event.  When you know the equipment’s weaknesses and strengths you can care for it properly and get maximum service from it at least cost.

Good article:
Mike Sondalini, Managing Director, Lifetime Reliability Solutions HQ

Interesting article/book chapter
Profit Contribution Mapping
Mike Sondalini

For More reading

Youthful Organization

Maintaining Youth of the Organization and Preventing Old Age

“Like people and plants, organizations have a life cycle. They have a green and supple youth, a time of flourishing strength, and a gnarled old age. But organizations differ from people and plants in that their cycle isn't even approximately predictable.  An organization may go from youth to old age in two or three decades, or it may last for centuries."  John W. Gardner in 1965 October Issue of  Harper's.

So keeping an  organization youthful is a top management challenge.

Comparing an organization to an animal in biological terms is useful. But as we see now-a-days, the average productive age of humans has increased and some individuals are running marathon at age 71 at almost with the same time that they recorded at the age of 21, organization can maintain their strength and energy for many many years. There are certain organizations who completed 100 years of their existence and still going strong. Of course there are many examples of company closures and mergers who far outnumber the 100 year old organizations. That is why maintaining a youthful organization that can research the market, develop new products, produce them, sell them and service them with the same vigor as it was doing in its earlier years.

Actively hiring young employees periodically is way for maintaining the youthful organization. The company must be ready to train young people for front line operating jobs, supervisory positions and manager level positions.

One example is,  Starbucks  engaging its supply chain in partnership with LeadersUp, a new workforce intermediary, to increase the hiring of  youth. LeadersUp  offers multiple services: identifying barriers to youth employment across the supply chain, designing employer-led interventions (training, on-the-job mentoring, and organization redesign to create career pathways for opportunity youth), and measuring the return on investment of youth hiring activities.

Crises in a Developing Organization
by Gordon L. LippittWarren H. Schmidt
Harvard Business Review, NOVEMBER 1967

Life Cycle Models of the Organization

The Greiner Model - Larry E. Greiner

Cameron and Whetton Model

Ainsworth - Land Model

Noel Tichy's Model

Source: Designing Effective Organizations: Traditional and Transformational Views
David K. Banner, T. Elaine Gagné
SAGE, 1995 - Business & Economics - 480 pages

This book on organization theory adopts a distinctive stance. In contrast to the traditional rational approach, it develops a transformational perspective which focuses on the organizational world as a projection of each organizational member's consciousness. While covering all the basic topics of organization theory, the author's approach reflects today's changing management paradigms.

The Effective Organization: Forces and Forms

Magazine: Winter 1991 January 15, 1991
Henry Mintzberg

This article builds a framework and proposes that the effective organization has to solve a jigsaw puzzle with LEGO pieces. The organizations experience forces and it has to redesign itself to survive and prosper under the action of these forces. It is a powerful framework by which to diagnose and deal with the problems organizations face according to the author..

First is the force for direction
Next is the force for efficiency,
Across from the force for efficiency is that for proficiency
Below efficiency is the force for concentration
At the bottom right is the force for innovation
Finally, two forces called catalytic: cooperation and competition.

Forms or Configurations

The entrepreneurial form - direction
The machine form - efficiency,
The professional form - proficiency
The adbocracy form -  concentration
The diversified form - innovation
Ideological and the political forms

Experience shows that the dominant force sometimes dominates to the point of undermining all the others. For example, the quest for efficiency in a machine organization can almost totally suppress the capacity for innovation, while in an adhocracy the need for some modicum of efficiency often gets suppressed. This phenomenon is termed contamination

Each configuration is capable of driving itself out of control. That is to say, each contains the seeds of its own destruction.

Truly effective organizations do not exist in pure form. What keeps a configuration effective is not only the dominance of a single force but also the constraining effects of other forces. This is termed containment.

Combination is a mixture of pureforms.

The authors said in a sample of 123 companies, in just over half the cases—sixty-six, the students felt that a single form fitted best. Twenty-five entrepreneurial, thirteen machine, eleven diversified, nine adhocracy, and eight professional organizations were observed. The rest were termed  combinations—seventeen different ones in all. Diversified machines were the most common (nine), followed by innovative professionals (eight), entrepreneurial professionals (six), and entrepreneurial machines (five).7

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

To Know More About A to Z Blogging Challenge

September 16, 2019

Industrial Engineering - Introduction

Industrial Engineering in Toyota Motors – Production System (TPS)



Industrial Engineering - Introduction

There is a difference between industrial engineering and engineering management. Now both these programs are run by IE departments only in USA. IE is better described as engineering in response to industry data, economic theories, social science theories, and management requirements etc. Engineering has to be core of industrial engineering. It is done in response to industry generated data. Basic engineering is driven by scientific and technical development. Industrial engineering is response to industry data that is generated in using basic engineering output.  Cost data and human factor related data are two important data which find a significant role in industrial engineering. Work measurement and productivity measurement were developed within industrial engineering as useful measurements in industrial engineering design. Industrial engineering is very valuable. That is what Taiichi Ohno and Shigeo Shingo proved in Toyota after a period of IE successes in USA. Japanese practitioners of IE made significant contributions to industrial engineering.

Innovation is the daily activity of industrial engineers. They have to come out with redesigns and convince their colleagues as well as top managers to use them.  Ideas are to be identified or created  and their economic value has to be demonstrated. Solutions are to be implemented and customer satisfaction has to be ensured.

Industrial Engineering - Definitions

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) [1].

“Industrial engineering is the engineering approach applied to all factors, including the human factor, involved in the production and distribution of products or services.” (Maynard, 1953) [2]

“Industrial engineering is the design of situations for the useful coordination of men, materials and machines in order to achieve desired results in an optimum manner. The unique characteristics of Industrial Engineering center about the consideration of the human factor as it is related to the technical aspects of a situation, and the integration of all factors that influence the overall situation.” (Lehrer, 1954) [3]

“Industrial engineering is concerned with the design, improvement, and installation of integrated systems of men, materials, and equipment. It draws upon specialized knowledge and skill in the mathematical, physical, and social sciences together with the principles and methods of engineering analysis and design, to specify, predict, and evaluate the results to be obtained from such systems.” (AIIE, 1955). [4]

"Industrial engineering may be defined as the art of utilizing scientific principles, psychological data, and physiological information for designing, improving, and integrating industrial, management, and human operating procedures." (Nadler, 1955) [5]

“Industrial engineering is that branch of engineering knowledge and practice which

1. Analyzes, measures, and improves the method of performing the tasks assigned to individuals,

2. Designs and installs better systems of integrating tasks assigned to a group,

3. Specifies, predicts, and evaluates the results obtained.

It does so by applying to materials, equipment and work specialized knowledge and skill in the mathematical and physical sciences and the principles and methods of engineering analysis and design. Since, however, work has to be carried out by people; engineering knowledge needs to be supplemented by knowledge derived from the biological and social sciences.” (Lyndall Urwick, 1963) [6]

"Industrial engineering is concerned with the design, improvement and installation of integrated systems of people, materials, information, equipment and energy. It draws upon specialized knowledge and skill in the mathematical, physical, and social sciences together with the principles and methods of engineering analysis and design, to specify, predict, and evaluate the results to be obtained from such systems." [7]

"Industrial engineering is an art for creating the most efficient system composed of people, matters, energy, and information, by which a specific goal in industrial, economic, or social activities will be achieved within predetermined probabilities and accuracy. The system may be for a small single work station, a group, a section, a department, an institution or for a whole business enterprise. It may be also be of a regional, national, international, or inter-planetary scope."(Sawada, 1977) [8]

“Industrial Engineering is Human Effort Engineering. It is an engineering discipline that deals with the design of human effort 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, 2006) [9]

"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) [10]

Total Industrial Engineering is "a system of methods where the performance of labor is maximized by reducing Muri (unnatural operation), Mura (irregular operation) and Muda (non-value added operation), and then separating labor from machinery through the use of sensor techniques." (Yamashina)

( Source:

"Industrial Engineering is Human Effort Engineering and System Efficiency Engineering. It is an engineering-based management staff-service 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, 2011) [Added to this knol (blog post) on 14.9.2011]


1. Going, Charles Buxton, Principles of Industrial Engineering, McGraw-Hill Book Company, New York, 1911, Pages 1,2,3

2. Maynard, H.B., “Industrial Engineering”, Encyclopedia Americana, Americana Corporation, Vol. 15, 1953

3. Lehrer, Robert N., “The Nature of Industrial Engineering,” The Journal of Industrial Engineering, vol.5, No.1, January 1954, Page 4

4. Maynard, H.B., Handbook of Industrial Engineering, 2nd Edition, McGraw Hill, New York, 1963.

5. Nadler, Gerald, Motion and Time Study", McGraw-Hill Book Company, Inc., New York, 1955

6. Urwick, Lyndall, F., “Development of Industrial Engineering”, Chapter 1 in Handbook of Industrial Engineering, H.B. Maynard (Ed.), 2nd Edition, McGraw Hill, New York, 1963.


8. Sawada, P.N., "A Concept of Industrial Engineering," International Journal of Production Research, Vol 15, No. 6, 1977, Pp. 511-22.
9. Narayana Rao, K.V.S.S., “Definition of Industrial Engineering: Suggested Modification.” Udyog Pragati, October-December 2006, Pp. 1-4.
10. Narayana Rao K.V.S.S., Industrial Engineering

Industrial Engineering and Supporting Science

Industrial engineering is based on science. It is based scientific theories developed by examining the work of machines and men in practical applications in delivering outputs using engineering processes.

Productivity Science - Principle of Industrial Engineering

Develop a science for each element of a man - machine system's work related to efficiency and productivity.

The productivity science developed is the foundation for industrial engineering in productivity engineering and productivity management phases.

Industrial Engineering is a Management Function

Industrial engineering (IE) discipline emerged out of the involvement of engineers in management of engineering departments. It is management function. Henry Towne in a 1886 paper, presented in ASME called for learning of economics, management, cost accounting and cost reduction by engineers. Frederick Taylor identified the short coming in the shop management that engineers really do not understand how operators are using machines or hand tools. It is not proper management of manufacturing activity. Taylor came with the theory that managers have to know how work is to be done by operators and must have the capability to train them. Managers have to specify standard operating procedures. Taylor used time study as the tool to identify the best practices or methods being used by operators at that point in time and based on them developed standard operating procedures that improved productivity. Along with it, Taylor developed theory of various work methods, conducted experiments and came out with improvements in man-machine system productivity. Gilbreth came with a different approach of developing micro motions used by operators to carry any activity. He developed optimal methods by removing certain non-value adding micro motions and specifying more optimal micro motions. Harrington Emerson, developed principles of efficiency for manufacturing organizations.

Within the management functions its present focus of industrial engineering is on the design of work done by operators and improvement of efficiency of systems and processes.

In certain companies, IE department was made a part of management services department which was appropriate. Management accounting, Management controls, Management audit, Industrial engineering and some more such similar functions can be organized under management services departments. Such a departmentation clearly recognizes that these sections or functions are functions of management assisting management in planning, organizing and directing resources.


Explanation for the Words "Industrial" and "Engineering" in Industrial Engineering

Difference between Pure Engineering and  Industrial Engineering

Pure Engineering creates  technical products.

Industrial Engineering is engaged in evaluation and improvement of the technical product created by the pure engineers so that at the price offered by the customers to buy a specified quantity of production, profit is made by the firm through resource use minimization and through further iterations profit is further increased.

That is why Taiichi Ohno termed it Profit engineering
Target costing developed in Japan best explains the role of industrial engineering.

IE techniques are primarily used for improving technical processes and managerial processes of technical processes (planning, organizing, resourcing, executing and controlling of technical tasks and processes) for increasing productivity. All IE pioneers worked in engineering concerns. They improved technical processes as well as managerial methods and processes used to manage technical processes.

F.W. Taylor improved metal cutting, machines, and management of machine shop through his functional management scheme.

Gilbreth improved bricklaying process by making changes in techniques. Then he proceeded to make fatigue studies to decide the speed at which workers can function and also time.

As an augmented activity, IE is applied to business processes and managerial activities related to business processes.

The emphasis on engineering tasks is the engineering component of industrial engineering. Emphasis on making products profitable is the explanation for the term "industrial". Technical products are made commercial products or industrial products by IEs by reducing their costs below the prices quoted by potential consumers and still further reducing the costs by eliminating wastes so that profit is maximized through increase in sales (due to lower prices) as well as reduction in unit costs.

The basis for reduction of costs is better explained by value engineering. A potential customer quotes a price for a new product by the services it provides to him and by comparison to the prices that he is paying for current equipment that he is using. So for reducing the costs of a proposed product to bring it in line with customer's quote, industrial engineers have to study the architecture of the current products being used by potential customers. They need to get ideas for redesigning the proposed product by understanding how the required functions are being provided by the existing products being currently used at a lower cost. In investigating the product, the processes being used for producing them also come into investigation.

Productivity Engineering - Principle of Industrial Engineering

Industrial engineering is concerned with redesign of engineering systems with a view to improve their productivity. Industrial engineers analyze productivity of each  resource used in engineering systems and redesign as necessary to improve productivity.

It has to be ensured that the increase in productivity due to the use of low-cost materials, processes and increasing speed of machines and men, should not lead to any decrease in quality of the output.

1908 – The industrial engineering department at Penn State is founded by Hugo Diemer, a pioneer in the field. Diemer coined the term “industrial engineering” in 1900 to describe the fusion of engineering and business disciplines. Diemer is named the first head of the department.

The fusion created by Taylor, Gilbreth, Emerson, Diemer and Going is the efficiency improvement of engineering systems to make projects viable and prosperous.

Functions and Focus Areas of Industrial Engineering

Functions and focus areas are discussed in the following article and the lists are shown in pictures..

Functions and Focus Areas of Industrial Engineering

What is Industrial Engineering?



Narayana Rao

Principles of Industrial Engineering - Taylor - Narayana Rao

Presentation by Narayana Rao on 23 May 2017 at IISE 2017 Annual Conference - Pittsburgh

Professor Narayana Rao developed Principles of Industrial Engineering in July 2016 and presented them in two conferences. The detailed set of principles were presented in the 2017 IISE Annual Conference held in Pittsburgh, USA. The paper is included in the proceedings of the conference.

Narayana Rao

Basic Principles of Industrial Engineering - Narayana Rao

1. Develop science for each element of a man - machine system's work related to efficiency and productivity.
2. Engineer methods, processes and operations to use the laws related to the work of machines, man, materials and other resources.
3. Select or assign workmen based on predefined aptitudes for various types of man - machine work.
4. Train workmen, supervisors, and engineers in the new methods.
5. Incorporate suggestions of operators, supervisors and engineers in the methods redesign on a continuous basis.
6. Plan and manage productivity at system level.

(Principles developed by Narayana Rao based on principles of scientific management by F.W. Taylor on 4 July 2016.)

Detailed List of Principles - Presented at IISE 2017 Annual Conference at Pittsburgh on 23 May 2017.

1. Productivity science
2. Productivity engineering
3. Ind Engineering is applicable to all branches of engineering
4. Principles of machine utilization economy to be developed for all resources used in engineering systems.
5. Industrial engineering optimization
6. Industrial engineering economics
7. Implementation team membership and leadership
8. Human effort engineering for increasing productivity
9. Principles of motion economy to be used in all IE studies in the area of human effort engineering
10. Operator comfort and health are to be taken care of.
11. Work measurement
12. Selection of operators
13. Training of operators, supervisors and engineers
14. Productivity training and education to all
15. Employee involvement in continuous improvement of processes and products for productivity improvement.
16. Productivity incentives
17. Hearty cooperation
18. Productivity Management
19. System level focus for productivity
20. Productivity measurement
21. Cost measurement

More Detailed Articles on Industrial Engineering

Taylor's Industrial Engineering

Taylor's Industrial Engineering in New Framework - Narayana Rao

Industrial Engineering in Various Functions of a Business/Industrial Organization

Industrial engineering is primarily applied in engineering departments of organizations.  But as productivity is a relevant issues in other departments, application of industrial engineering is available in other departments also.

Product Design Industrial Engineering

Maintenance System Industrial Engineering - Online Book

Information Systems Industrial Engineering - Online Book

Financial System Industrial Engineering - Online Book

Marketing System Industrial Engineering - Online Book

Supply Chain Industrial Engineering - Online Book

Manufacturing System Industrial Engineering - Online Book

Total Cost Industrial Engineering - Industrial Engineering of Enterprise Cost

Quality System Industrial Engineering

Logistical Systems Industrial Engineering (Truck, Rail, Air and Ship Transport related Industrial Engineering) (Suggested B. Venkateswara Rao, FaceBook)

Attributes of Industrial Engineering 

Research Possibilities are there in relation to them.
Think of a sentence that links industrial engineering with each term.

#Activity #adjustment #advantage  #Adoption  #Agreement  #Aptitude #Arrangement
#Best #Big  #Better  #Bound #Benchmarking
#Comfort #care #communication #cooperation  #clear #concept #cost #costreduction #costing #costcontrol #Casestudy #Creativity
#Decision  #Development #Distribution  #Design #Decrease #Dance #Danger #Dream #Dignity #Demonstration #Desire
#Engine #Engineering #Employee #Employment #Effectiveness  #Efficiency  #Engagement #Excitement  #Excellence #Eager #eagerness #Extreme #Extrovert #Extroversion #Extension #Existence #Extra #Estimate
#Fatigue #Forecasting #Finance #Fitness  #Future
#Goal #Game  #Going  #Gain #Guess
#Hope #Heat #Harness #Hard #
#Increase  #Involve #Insure #Improve #Improvement

June First Week - IE Knowledge Revision

Updated 1 June 2019, 25 May 2019,   4 June 2017,  27 May 2016,  16 Dec 2011

September 15, 2019

Principles of Management – Koontz and O’Donnell

April 2017

By studying and writing on Principles of Management, I became the original author of Principles of Industrial Engineering, a Management Subject with foundation in engineering.

Basic and Detailed Principles of Industrial Engineering


Principles of Management Revision Article Series

Planning, Organizing, Staffing, Leading and Controlling - Functions of Management.
Harold Koontz and Cyril O’Donnell, in their book, Principles of Management: An Analysis of Managerial Functions, clearly described the principles to be used in performing various functions of management.

Harold Koontz and Cyril O’Donnell, in their book,  Principles of Management: An Analysis of Managerial Functions, clearly described the principles to be used in performing various functions of management.

Managers have to set in a procedure to revise these principles periodically so that they can recollect the relevant principles when performing the managerial tasks and explicitly consider the relevance and application of these principles in their practice.

Many of us use them implicitly. But a professionally educated and trained manager must use them explicitly. He has to ensure that these principles are applied and if any exceptional situation is there, managers should ignore the principles consciously and be clear in their mind they chose not to use them due to the exceptional nature of the situation.


The need for Principles of Management

To Increase Efficiency
To Crystallize the Nature of Management
To Improve Research
To Attain Social Goals

Video - Principles of Management - Koontz and O'Donnell - Quick Review



Principles of Planning

Related to Purpose and nature

Principle of contribution to objectives
          Every plan has to contribute positively toward the accomplishment of enterprise objectives.

Principle of efficiency of plans
          Efficiency is measured by the contribution of the plan to objectives of the enterprise minus the costs and unsought for consequences in formulating and implementing the plan.

Principle of primacy of planning
          Planning is the primary prerequisite for all other functions of management. Every action of the manager follows a planning step.

Principles Applicable to Structure of plans

Principle of planning premises
          If more people in an organization use common and consistent planning premises, the enterprise planning will be more coordinated.

Principle of policy framework
          If more policies, appropriate to the organization, are expressed in clear terms and form and if managers understand them, the plans of the enterprise will be more consistent.

Principle of timing
          If plans are structured to provide a network of derivatives plans in sequence, there will be more effectiveness in attainment of enterprise objectives.

Principles Applicable to Process of Planning

Principle of alternatives
          Select the plan which is the most effective and the most efficient to the attainment of a desired goal.

Principle of limiting factor
          Consider limiting factor in generating alternatives and selection from alternatives.

The commitment Principle
          Planning can cover a period over which commitment of resources can be clearly visualized.

The flexibility Principle
          Building flexibility in planning is beneficial, but cost of building flexibility needs to be evaluated against the benefits.

The Principle of navigational change
          Manager needs to periodically check events of the plan and redraw plans to maintain the move toward a desired goal.

Principle of competitive strategies
          In a competitive arena, it is important to choose plans in the light of what competitor will or will not do and navigate based on what competitors are doing or not doing.

Principles of Organizing

Principles in Relation to Purpose

Principle of unity of objectives
          An organization structure is effective if it as a whole, and every part of it, make possible accomplishment of individuals in contributing toward the attainment of enterprise objectives.

Principle of efficiency
          An organization or organization structure is efficient if it is structured to make possible accomplishment of enterprise objectives by people with minimum unsought consequences or costs.

Principles  Related to the Cause of Organizing

Span of management Principle
          There is a limit at each managerial position on the number of persons an individual can effectively manage. But this number is not a fixed number and it will vary in accordance with underlying variables of the situation.

Principles in Developing the Structure of Organization

The scalar Principle

          The more clear the line of authority from the ultimate authority for management in an enterprise (CEO)  to every subordinate position, the more effective will be decision making and organization communication at various levels in the organization.

Principle of delegation

          Authority is a tool for managing to contribute to enterprise objectives. Hence authority delegated to an individual manager should be adequate to assure his ability to accomplish results expected of him.

Principle of responsibility

          The responsibility of the subordinate to his superior for authority received by delegation is absolute, and no superior can escape responsibility for the activities of his subordinate to whom he in turn has delegated authority.

Principle of parity of authority and responsibility
The responsibility exacted for actions taken under authority delegated cannot be greater than that implied by the authority delegated, nor should it be less.

Principle of unity of command
          The more completely an individual has a reporting relationship to a single superior, the less the problem of conflict in instructions and the greater the feeling of personal responsibility.
The authority level Principle
          Maintenance of authority delegation requires that decisions within the authority competence of an individual manager be made by him and not be referred upward in the organization.

Principles in Departmentizing Activities

Principle of division of work

        The better an organization structure reflects a classification of the tasks and activities required for achievement of objectives and assists their coordination through creating a system of interrelated roles; and the more these roles are designed to fit the capabilities and motivations of people available to fill them, the more effective and efficient an organization structure will be.

Principle of functional definition

        The more a position or a department has clear definition of results expected, activities to be undertaken, organization authority delegated, and authority and informational relationships with other positions, the more adequately individual responsible can contribute toward accomplishing enterprise objectives.

Principle of separation

        If an activity is designed to be a check on the activities of another department, the individual charged with such activity cannot adequately discharge his responsibility if he reports to the department who activity he is expected to evaluate.

Principles in the Process of organizing

Principle of balance

    the application of principles or techniques must be balanced in the light of the over-all effectiveness of the structure in meeting enterprise objectives.

Principle of flexibility
    The task of managers is to provide for attaining objectives in the face of changing environments. The more provisions are made for building organization flexibility, the more adequately organization structure can fulfill its purpose.

Principle of leadership facilitation
    The more an organization structure an authority delegations within it make possible for various managers to design and maintain an environment for performance, the more it will facilitate leadership abilities of managers.

Staffing Principles

Related to the Purpose of Staffing

Principle of staffing objectives


    The positions provided by the organization structure must be staffed with personnel able and willing to carry out the assigned functions.

Principle of staffing

    The quality of management personnel can be ensured through proper definition of the job and its appraisal in terms of human requirements, evaluation of candidates and incumbents, and appropriate training.

The process of staffing

Principle of job definition

    Specifications for the job rest on organization requirements and on provision for incentives to induce effective and efficient performance of the tasks involved.

Principle of managerial appraisal

    Performance must be appraised against the management action required by superiors and against the standard of adherence in practice to managerial principles.

Principle of open competition in promotion

    Managers should be selected from among the best available candidates for the job, whether they are inside or outside the enterprise.

Principle of management development
    The objective of management development is to strengthen existing managers. The most effective means of developing managers is to have the task performed primarily by a manager's superior.

Principle of universal development
    The enterprise can tolerate only those managers who are interested in their continuous development.

Principles of Directing

Related to the Purpose of Directing

Principle of harmony of objectives
    Effective directing depends on the extent to which individual objectives in cooperative activity are harmonized with group objectives.

Principles  Applicable to Process of directing

Principle of unity of command
    The more completely an individual has a reporting relationship to a single superior, the less the problem of conflict in instructions and the greater the feeling of personal responsibility for results.

Principle of direct supervision
    Effective direction requires that management supplement objective methods of supervision with direct personal contact.

Principle of supervisory techniques
    Since people, tasks, and organizational environment vary, techniques of supervision will be most effective if appropriately varied.

Principles of Delegation

Principle of functional delegation
    The more a position or department has clear definitions of results expected, activities to be undertaken, organization authority delegated, and authority and informational relationships with other positions, the more adequately individuals responsible can contribute toward accomplishing enterprise objectives.

Principle of delegation by results expected
    The authority delegated to an individual managers should be adequate to assure his ability to accomplish the results expected of him.

Principle of absoluteness of responsibility
    No superior can escape, through delegation, responsibility for the activities of subordinates, for it is he who delegated authority and assigned duties.

Principle of parity of authority and responsibility
    The authority delegated has to be consistent with the responsibility assigned to a subordinate.

Principles of Control

Related to the purpose of control

Principle of assurance of objective
    The task of control is to assure accomplishment of objectives by detecting potential or actual deviation from plans early enough to permit effective corrective action.

Principle of efficiency of controls
    The more control approaches and techniques detect and illuminate the causes of potential or actual deviations from plans with the minimum of costs or other unsought consequences, the more efficient these controls will be.

Principle of control responsibility
    The primary responsibility for the exercise of control rests in the manager charged with the execution of plans.

Principle of direct control
    The higher the quality of managers and their subordinates, the less will be the need for indirect controls.
(The principle may termed as principle of reduced controls. A superior can spend less time in control activities if he has more higher quality managers and their subordinates in his department.)

Principles related to Structure of control

Principle of reflection of plans
    The more controls are designed to deal with and reflect the specific nature and structure of plans, the more effective they will serve the interests of the enterprises and its managers.

Principle of organizational suitability
The more controls are designed to reflect the place in the organization structure where responsibility for action lies, the more they will facilitate correction of deviation of events from plans.

Principle of individuality of controls
    Controls have to be consistent with the position, operational responsibility, competence, and needs of the individuals who have to interpret the control measures and exercise control. 

Process of control

Principle of standards
    Effective control requires objective, accurate, and suitable controls.

Principle of critical-point control
    Effective control requires attention to those factors critical to appraising performance against an individual plan.

The exception Principle
    The more a manager concentrates his control on exceptions, the more efficient will be the results of this control.

Principle of flexibility of controls
    If controls are to remain effective despite failure or unforeseen changes in plans, flexibility is required in the design of controls.

Principle of action
Principle of Action
    Control is justified only if indicated or experienced deviations from plans are corrected through appropriate planning, organizing, staffing and directing.


Harold Koontz and Cyril O’Donnell, Principles of Management: An Analysis of Managerial Functions,  4th Ed., McGraw-Hill, New York, 1968

Harold Koontz and Cyril O’Donnell, Principles of Management: An Analysis of Managerial Functions, 2nd  Ed., McGraw-Hill, New York, 1959


Material Organization and Resourcing

Fayol included both material organization and people organization in organizing function. But he developed in his book only people organization. Koontz also elaborated people organization only. There is need for principles of material organization and also as a follow up principles of resourcing.

Principles of Material Organization

Resourcing - A Function of Management

Lean Leadership Principles  -  Lean Management according to Narayana Rao K.V.S.S. -
Lean management gives importance to both effectiveness and efficiency. Lean Managers simultaneously take care of customer satisfaction and productivity/ cost reduction responsibilities. Hence in a theoretical sense, no new principles are required. Koontz and O'Donnell stressed efficiency in number of principles.

Principle of efficiency of plans
          Efficiency is measured by the contribution of the plan to objectives of the enterprise minus the costs and unsought for consequences in formulating and implementing the plan.

Principle of efficiency of organization

          An organization or organization structure is efficient if it is structured to make possible accomplishment of enterprise objectives by people with minimum unsought consequences or costs.

Principle of efficiency of controls
    The more control approaches and techniques detect and illuminate the causes of potential or actual deviations from plans with the minimum of costs or other unsought consequences, the more efficient these controls will be.

But still in management practice, efficiency was neglected by managers in trying to achieve sales, markets share or higher production quantity or meeting deadlines. Toyota became a glorious example of a company which has given efficiency due importance in management. It involved line managers in efficiency improvement through process improvement for cost reduction and it has taken the necessary staff help as recommended by F.W. Taylor and Harrington Emerson at their time. Hence, lean leadership principles are necessary now to explicitly state some more principles that force managers to focus on efficiency issues also adequately.

14 Principles of Management - Henri Fayol
Principles of Management - Revision Articles - Based on Koontz and O'Donnells Book updated by Weirich and Kannice

Updated  2018 - 25 January,
8 April 2017,  12 March 2015 7.3.2014, 25.12.2013
Last updated 12.12.2011 (First posted to the blog from Knol)

Revision of chapters of principles of management is in January Revision Plan