MANAGEMENT THEORY REVIEW - Articles on Management Subjects for Knowledge Revision and Updating by Management Executives ---by Dr. Narayana Rao, Professor (Retd.), NITIE - IIM Mumbai --- 4.55+ MILLION Page Views--- Global Top Blog for Management Theory---Management for Effectiveness, Efficiency and Excellence.
October 21, 2017
October 20, 2017
Scope and Definition of Manufacturing - Production Management
Manufacturing creates man-made goods from various materials. The goods, more specifically called finished goods are created through manufacturing processes. Modern manufacturing employs machines to produce goods. Manufacturing management plans, organizes, acquires resources required for manufacture, allocates those resources to various departments, directs and controls manufacturing activity.The aims of manufacturing management are producing goods according to the specifications of the customer or of the product design department if it is made to stock product developed by the company, in amounts and by the schedule demanded at minimum cost. Manufacturing is carried out in factories or manufacturing plants. A manufacturing plant and the various activities carried out in it can also be described as a manufacturing system. Modern manufacturing systems have machines, methods, men, material, motive power, money and management essential components of the system. In terms of assets used in accounting terminology, we can say manufacturing system has both long term assets (fixed assets) and current assets (short term assets).
Manufacturing management involves plans and decisions regarding long term assets and short term assets, manufacturing methods and manpower.
We can say the long term decisions are in the areas of design, installation and improvement of specified products, manufacturing processes to produce those products, equipment for production, transportation, inspection etc., industrial buildings, location of the plant, layout of the plant. recruitment of permanent manpower and training to develop them into skilled operators in the processes employed by the organization etc. Manufacturing management has to be effective and efficient. Effectiveness refers to producing what customers want in quantities according to the delivery time requested. Efficiency refers to the cost dimension and wastes that occur in manufacturing systems if special attention is not paid to eliminate them. Industrial engineering is a specialized discipline providing efficiency improvement service at design, installation and improvement stages of manufacture.
The short term decisions of manufacturing are related production quantities in year, quarter, month etc., inventories, temporary increases or reductions in manpower, overtime decisions to take care of sudden increases in demand, or some exigencies, short term cost budgets, and other incidental day to day activities. Production planning and control, inventory planning and control, cost control, quality control, maintenance planning and control etc. are some of the well known short term manufacturing management areas that are well developed as independent subjects in manufacturing management degree curriculums. Similarly, new product development, process planning, facilities planning, manufacturing strategy, industrial engineering etc. are well developed subjects dealing with long term aspects of manufacturing management. Industrial engineering became a degree level curriculum as number of methods were developed in this area providing a scope for specially educated and trained professionals in this discipline. Value engineering, Methods Efficiency Engineering, Motion Study, Work Measurement, Ergonomics, Operations Research, Engineering Economics, Applied Statistics, Six Sigma, SMED, Poka Yoke Design etc. are full subjects in industrial engineering curriculums apart from the basic engineering knowledge in various engineering branches, knowledge of business processes and managerial processes.
Manufacturing managers at various levels are responsible for both effectiveness and efficiency. But they can employ industrial engineers in their department either on full time basis or on assignment basis from their organization industrial engineering department or on consultancy basis from outside industrial engineering organizations.
Elwood S. Buffa, well known author of Modern Production Management first published in 1961 included the following topics to introduce the scope of production management.
Long Term Decision Areas
Production processes
Automation and Use of Computers (Presently CAD-CAM or CIM)
Design of Jobs and Work Methods
Design of The Working Environment
Production Design of Products and Process Planning
Plant Location
Layout of Physical Facilities
Short Term Decision Areas
Inventory and Production Control
Maintenance
Control of Quality
Production Standards and Work Measurement
Wages and Labor Costs
Control and Improvement of Production Costs.
It is important to state that managerial skills are classified as business conceptual skills, people related skills and technical skills. So manufacturing managers need to have the knowledge to conceive a business opportunity to their department assets and people, knowledge to manage people related to the supply chain that starts from suppliers of materials and ends with the customer, and technical skills in various methods involved in the manufacturing establishment to plan them, organized them, acquire resources, allocate resources, and direct and control the activities.
References
Elwood S. Buffa, Modern Production Management, John Wiley and Sons, New York, 1961.
Related Article
Manufacturing Management - Introduction
Planned Revision of Operations Management/Production Management Book Chapters - March Month
Advances in Production Management Systems. Initiatives for a Sustainable World: IFIP WG 5.7 International Conference, APMS 2016, Iguassu Falls, Brazil, September 3-7, 2016, Revised Selected Papers
Irenilza Nääs, Oduvaldo Vendrametto, João Mendes Reis, Rodrigo Franco Gonçalves, Márcia Terra Silva, Gregor von Cieminski, Dimitris Kiritsis
Springer, 15-Mar-2017 - Computers - 962 pages
This book constitutes the refereed post-conference proceedings of the International IFIP WG 5.7 Conference on Advances in Production Management Systems, APMS 2016, held in Iguassu Falls, Brazil, in September 2016.
The 117 revised full papers were carefully reviewed and selected from 164 submissions. They are organized in the following topical sections: computational intelligence in production management; intelligent manufacturing systems; knowledge-based PLM; modelling of business and operational processes; virtual, digital and smart factory; flexible, sustainable supply chains; large-scale supply chains; sustainable manufacturing; quality in production management; collaborative systems; innovation and collaborative networks; agrifood supply chains; production economics; lean manufacturing; cyber-physical technology deployments in smart manufacturing systems; smart manufacturing system characterization; knowledge management in production systems; service-oriented architecture for smart manufacturing systems; advances in cleaner production; sustainable production management; and operations management in engineer-to-order manufacturing.
https://books.google.co.in/books?id=khBhDgAAQBAJ
Updated 22 October 2017, 17 March 2017
Related Article
Manufacturing Management - Introduction
Planned Revision of Operations Management/Production Management Book Chapters - March Month
Advances in Production Management Systems. Initiatives for a Sustainable World: IFIP WG 5.7 International Conference, APMS 2016, Iguassu Falls, Brazil, September 3-7, 2016, Revised Selected Papers
Irenilza Nääs, Oduvaldo Vendrametto, João Mendes Reis, Rodrigo Franco Gonçalves, Márcia Terra Silva, Gregor von Cieminski, Dimitris Kiritsis
Springer, 15-Mar-2017 - Computers - 962 pages
This book constitutes the refereed post-conference proceedings of the International IFIP WG 5.7 Conference on Advances in Production Management Systems, APMS 2016, held in Iguassu Falls, Brazil, in September 2016.
The 117 revised full papers were carefully reviewed and selected from 164 submissions. They are organized in the following topical sections: computational intelligence in production management; intelligent manufacturing systems; knowledge-based PLM; modelling of business and operational processes; virtual, digital and smart factory; flexible, sustainable supply chains; large-scale supply chains; sustainable manufacturing; quality in production management; collaborative systems; innovation and collaborative networks; agrifood supply chains; production economics; lean manufacturing; cyber-physical technology deployments in smart manufacturing systems; smart manufacturing system characterization; knowledge management in production systems; service-oriented architecture for smart manufacturing systems; advances in cleaner production; sustainable production management; and operations management in engineer-to-order manufacturing.
https://books.google.co.in/books?id=khBhDgAAQBAJ
Updated 22 October 2017, 17 March 2017
October 5, 2017
Business Logistics - An Introduction
Logistics – Introduction
A dictionary definition of logistics is “the branch of military science having to do with procuring, maintaining, and transporting material, personnel, and facilities.”
The definition promulgated by the Council of Logistics Management (CLM), is: “Logistics is the process of planning, implementing, and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.”
Ballou explained that in the context of manufacturing it appears from the definition that the logistician is concerned with flow of goods to and from his firm. But the responsibility extends to the flow of components and goods through the production process as well. But the logistician may not deal with detailed production processes, machine scheduling, quality control etc. in the production process. Also the manufacturing logistics definition excludes maintenance which is a part of military logistics.
The mission of logistics in a business firm is to get the right goods or services to the right place, at the right time, and in the desired condition, while making the greatest contribution to the firm. Value in logistics is a combination of time, place and cost.
Logistics is about creating value – value for customers, value for suppliers and value for the firm’s stakeholders.
The Activities of Logistics Function
- Customer Service
- Demand Forecasting
- Distribution Communications
- Inventory Control
- Material handling
- Order Processing
- Part and Service Support
- Plant and Warehouse Site Selection
- Purchasing
- Packaging
- Return Goods Handling
- Salvage and Scarp Disposal
- Traffic and Transportation
- Warehousing and Storage
Case for Organizing a Separate Logistics Department
Both marketing and production have recognized the importance of logistical activities. According to Philip Kotler, “Marketing management is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges with target groups that satisfy individual and organizational objectives.”
Therefore distribution of goods is identified as an important activity in marketing. Ballou quotes, McClain and Thomas, who stated that operations management has the responsibility for the production and delivery of physical goods and services. Hence delivery of goods at destinations required by the customer or the sales department is recognized as a part of operations management function.
But Ballou argued that both marketing and production have more important core activities to perform and hence logistic activities may not get adequate attention. According to him marketing may be given the job of creating possession value and production may be given the job of creating form value. A separate logistics department would be concerned with providing time and place value. Ballou recognized the interface problems that arise as more departments are created and hence stresses the need for coordination.
Objectives of Business Logistics Function
The logistics function has to earn the highest possible return on investment over time as far as internal objective is concerned. But to achieve this internal objective it has to first achieve external objectives. It has to earn revenue and minimize costs.
Therefore a logistics system has to be designed and operated considering its impact on revenue contribution that comes through the quality of customer service provided and cost of logistics facilities, system and operation.
Costs of logistics function include capital costs are operating costs. Wages, public warehousing (rented warehouses or warehouse space) expenses, public transport expenses, financial expenses related to inventory investment, other administrative expenses are examples of operating costs. Capital costs are one time costs, own warehouse, own trucks are examples of capital costs.
The financial objective of the logistics function can be expressed as “Maximize over the time the ratio of the annual revenue (due to the customer level provided) less the operating costs of the logistics system to the annualized investment in the logistic system.”
Time value of money may be considered and the objective can be expressed in net present value (NPV) terms or internal rate of return (IRR) terms.
Study of Logistics
Study of logistics can focus on management process and the skills needed to perform the activities involved. Management process can be briefly described as planning, organizing and controlling. The three important domain areas of logistics are facilities location, inventory levels and mix, and transport facilities. Logistics function is concerned with providing service levels to customers and managing costs appropriately for the company. All decision making requires information. Study of logistics includes principles and practices related to the above issues. Some of the issues are discussed in detail in specialized texts related to those areas and a logistician has to examine them now in the context of logistics.
References
The Handbook of Logistics and Distribution Management: Understanding the Supply Chain
Alan Rushton, Phil Croucher, Peter Baker
Kogan Page Publishers, 03-Jan-2017 - Business & Economics - 912 pages
The definitive guide to supply chain philosophy, strategy AND the practicalities of logistics and distribution. The Handbook of Logistics and Distribution Management is a step-by-step guide to setting up and managing supply chains to add maximum value to the organisations they serve. Benefiting from the author team's years of practical field-based experience in some of the most challenging environments across the world from developed economies to third world countries and war zones, this is a book that will enthuse students and be an invaluable desk reference throughout the careers of practitioners.
Packed with worked examples and real-world data The Handbook of Logistics and Distribution Management offers complete coverage on all the key aspects of distribution, logistics and supply chain planning and management with clear and straightforward explanations. This is not a compilation of work drawn from a disparate collection of research papers and miscellaneous projects but a logical and complete holistic view of how supply chains fit together including the detailed, nitty gritty of the distribution and logistics.
Globalisation, increased competition and new technologies have all changed the landscape in which supply chains operate. This fully revised 6th edition of The Handbook of Logistics and Distribution Management provides solutions to the key challenges. With new material on international freight forwarding, environmental best practice, cool chain, intermodal shipping and outsourcing and a new, detailed index of contents this is the ultimate study/reference companion.
https://books.google.co.in/books?id=g_vTDQAAQBAJ
Ronald H. Ballou, Business Logistics Management, Fourth Edition, Prentice Hall Int. Inc., USA, 1999.
Joh O. McClain and L. Joseph Thomas, Operations Management: Production of Goods and Services, Second Edition, Prentice Hall, USA, 1985.
http://www.bms.co.in/elements-of-logistics-management-notes/
http://knol.google.com/k/narayana-rao/business-logistics-an-introduction/ 2utb2lsm2k7a/ 1384
Updated 6 October 2017, 30 May 2012
October 4, 2017
October - Management Knowledge Revision
October (Information Technology and Management Information Systems, Logistics - Warehousing and Transport)
October 1 to 5
Principles of Information Systems - Ralph M. Stair and George W. Reynolds
http://nraomtr.blogspot.com/2015/10/principles-of-information-systems-ralph.html
An Introduction to Information Systems
2.
Foundations of Information Sytems
http://www.comp.polyu.edu.hk/~csajaykr/introduction.pdf
E-Business
http://www.comp.polyu.edu.hk/~csajaykr/E_Business.pdf
3.
Competitive advantage with information systems
http://www.comp.polyu.edu.hk/~csajaykr/CA.pdf
IT Infrastructure
http://www.comp.polyu.edu.hk/~csajaykr/ITI.pdf
4.
Communication and Networking
http://www.comp.polyu.edu.hk/~csajaykr/CN.pdf
Improving decision making and managing knowledge
http://www.comp.polyu.edu.hk/~csajaykr/IDM.pdf
5.
Enterprise Applications
http://www.comp.polyu.edu.hk/~csajaykr/EAP.pdf
Economics of Information Technology - Hal Varian
people.ischool.berkeley.edu/~hal/Papers/mattioli/mattioli.pdf
October 8 - 12
Logistics - Warehousing and Transport
October 15 - 19
October 22 - 26
October 23 - 29
Industrial Engineers support Engineers and Managers in Efficiency Improvement of Products, Processes and Systems
One Year MBA Knowledge Revision Plan
January - February - March - April - May - June
July - August - September - October - November - December
Updated 6 October 2017, 6 June 2014
September 18, 2017
10 - 15 - 20 - 25 Activities and Skills for Success as Manager at All Levels
4P Model of Management
I developed 4P Model of Management. Managers have to undertake Four major activities.
Providing Value - They have to identify opportunities to add value to potential consumers, communicate value to them and exchange value with them.
Purchase Inputs - Managers have to purchase inputs to provide value.
Process Inputs and Convert them into Valuable Outputs
People Relations - Business is for People, Business is by People and Business is with People
The 4Ps fall into Business Skills, Process Skills and People Skills.
Detailed article
http://nraomtr.blogspot.com/2015/05/4-ps-of-management-4-essential-tasks-in.html
You can see how various authors only prescribe these skills in their articles.
Peter Economy - 10 things that super successful leaders do.
It was published in the Corporate Dossier of Economic Times (22 May 2015). Peter Economy was the author.
The 10 things listed were:
1. Acknowledge
2. Motivate
3. Be Decisive
4. Communicate
5. Trust
6. Be Confident
7. Develop
8. Direct
9. Partner
10. Be Honest and Transparent.
Jack Zenger and Joseph Folkman wrote in article in HBR Blogs.
The Skills Leaders Need at Every Level
The list given by them
Inspires and Motivates others
Displays High Integrity and Honesty
Solves Problems and Analyzes Issues
Drives for Results
Communicates Powerfully and Prolifically
Collaborates and Promotes and Teamwork
Builds Relationships
Displays Professional or Technical Expertise
Develops Others
Takes Initiative
Innovates
Champions Change
Connects the Group to the Outside World
Establishes Stretch Goals
Practices Self Development.
https://hbr.org/2014/07/the-skills-leaders-need-at-every-level
Updated 19 September 2017, 21 May 2015
4 Ps of Management - 4 Essential Tasks in Business Management - Production or Service Businesses
Principles of Management Revision/Review Articles - List
Providing Value to Customers
They are classified by some management scholars as conceptual skills (business conceptual skills), technical skills (process skills) and people skills.
This blog,"Management Theory Review" provides you knowledge in all the essential activities through subjects - Principles of Management, Marketing Management, Supply Chain Management, Operations Management, Industrial Engineering and Organizational Behavior.
In the blog, chapter summaries of chapters from world famous textbooks are provided. Additionally, important developments and articles of each subject are provided as subject updates of the year. Readers comments are invited as suggestion, feedback, questions etc. for improving the content to make it more useful to the readers to utilize the ideas in practice and increase production and profits for the organization and the society. Management as a profession must increase pleasure of the society and reduce pain of the society. Management as a profession has social purpose. But we need to fulfill organizational purpose and purposes of individuals working for the organization to fulfill the social purpose.
Business is done by people, Business is done for the people , Business is done with the people.
People dimension is important for business.
But there is no business if someone cannot find a business opportunity. Marketing is important. Providing value to people is marketing and sales.
If unfulfilled demand for a category is found, there have to be sources of inputs and a process to convert inputs into useful products. Supply chain and production process are important.
Industrial engineering is profit engineering. Industrial engineers analyze systems and make them more productive and profitable. Industrial engineering is concerned with 2Ps - Productivity and Profits
An effective and efficient business organization or an industrial organization is created by managers or entrepreneur managers using multiple skills. Acquire the knowledge, use the procedures under guidance for some time and become proficient in them. Have a successful managerial career.
Principles of Industrial Engineering
________________
________________
Download full Paper - https://www.xcdsystem.com/iise/abstract/File7673/UploadFinalPaper_2569.pdf
Updated 19 September 2017, 17 May 2015
Provide value - Procure inputs - Process inputs (Produce outputs) - People focus
Providing Value to Customers
Purchasing or Procuring Input Resources
Processing the Inputs into Outputs
People Relations
Every business manager has to do these four essential tasks.
Every MBA must learn these four tasks.They are classified by some management scholars as conceptual skills (business conceptual skills), technical skills (process skills) and people skills.
This blog,"Management Theory Review" provides you knowledge in all the essential activities through subjects - Principles of Management, Marketing Management, Supply Chain Management, Operations Management, Industrial Engineering and Organizational Behavior.
In the blog, chapter summaries of chapters from world famous textbooks are provided. Additionally, important developments and articles of each subject are provided as subject updates of the year. Readers comments are invited as suggestion, feedback, questions etc. for improving the content to make it more useful to the readers to utilize the ideas in practice and increase production and profits for the organization and the society. Management as a profession must increase pleasure of the society and reduce pain of the society. Management as a profession has social purpose. But we need to fulfill organizational purpose and purposes of individuals working for the organization to fulfill the social purpose.
Business is done by people, Business is done for the people , Business is done with the people.
People dimension is important for business.
But there is no business if someone cannot find a business opportunity. Marketing is important. Providing value to people is marketing and sales.
If unfulfilled demand for a category is found, there have to be sources of inputs and a process to convert inputs into useful products. Supply chain and production process are important.
2Ps of Industrial engineering - Productivity and Profits
Industrial engineering is profit engineering. Industrial engineers analyze systems and make them more productive and profitable. Industrial engineering is concerned with 2Ps - Productivity and Profits
An effective and efficient business organization or an industrial organization is created by managers or entrepreneur managers using multiple skills. Acquire the knowledge, use the procedures under guidance for some time and become proficient in them. Have a successful managerial career.
Principles of Industrial Engineering
________________
________________
Download full Paper - https://www.xcdsystem.com/iise/abstract/File7673/UploadFinalPaper_2569.pdf
Updated 19 September 2017, 17 May 2015
September 11, 2017
Lean Management - Management for Value and Productivity Enhancement
Lean Management for Productivity Enhancement
Presentation at Tata Steel
Dr. K.V.S.S. Narayana Rao, Professor , NITIE, Mumbai
Industrial Engineering Knowledge Center
http://www.nraoiekc.blogspot.com
____________________
____________________
Lean Managers simultaneously take care of customer satisfaction and productivity/ cost reduction responsibilities.
Hence lean management leads to more productivity in the organization.
It is appropriate that NPC came out with the theme “Lean Management for Productivity Enhancement”
"The core idea of the lean management system is to maximize customer value while minimizing waste." (7.3.2014)
http://www.winnipegfreepress.com/local/the-dean-of-lean-248954871.html
Soldier and Commander
Commander is a manager.
He may be a very good soldier himself.
Management is a lot more than being an expert doer.
But managers require the technical skills of a function they are managing.
Organizing
Resourcing (Acquiring various resources including human resources known as staffing)
Directing (Executing describes the management steps at this stage better)
Controlling
Effectiveness is achievement of objectives.
Efficiency is effectiveness combined with minimum consumption of resources.
No effectiveness - no efficiency.
Effectiveness first, efficiency next.
Development of science of using machines and men in productive work is the theme of his management thought – scientific management
Taylor was responsible for development of industrial engineering discipline.
He gave 14 principles of management and explained management process.
He appreciated Taylor’s thought and advocated its wide adoption.
He stressed importance of effectiveness and efficiency in his first chapter. Also included some principles of efficiency in his list.
Koontz – Definition of Management
Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.
Koontz on Productivity
In a real sense, this book (Management) is about the improvement of productivity.
But still, efficiency got neglected on a holistic basis in his book.
Industrial engineering is not mentioned in the book
They created tables showing differences between them.
Managers became isolated from the efficiency dimension.
Managers must also have efficiency/productivity improvement skills
The Toyota Motors’ managers are to be given credit for this development.
Industrial engineering was given a Buddhist religious dimension in the slogan-
Eliminate muda, mura, muri
Kiichiro Toyoda – Toyota Motors Founder
Kiichiro Toyoda was sure of the quality of his car.
But he was worried about its price.
He said unless its cost was reduced and price was reduced Toyota motors will not survive.
Effectiveness is there but Efficiency is the need.
So according to Kiichiro Toyoda, effectiveness was there.
Japanese customer is happy with the car.
But efficiency is not there.
Cost of production is high and hence price is high.
Manager’s Focus on Productivity/Efficiency
Therefore Kiichiro Toyoda’s focus shifted to productivity.
More and more managers were asked to focus on productivity.
Productivity in other words is cost reduction
Taichi Ohno
Taichi Ohno is a production manager.
Started concentrating on cost reduction.
Used Industrial Engineering.
Toyota Style Industrial Engineering.
Industrial engineering is profit making engineering (Ohno).
The other engineering is market-establishing and fulfilling engineering.
Industrial Engineering is Human Effort Engineering and System Efficiency Engineering.
Inventory seemed to him an excess resource.
He told his managers, that they have to think of JIT systems or low inventory systems.
Thus Kiichiro Toyoda is the man who first advocated JIT.
Increase worker productivity
Use more automatic machines
Make a worker attend more machines.
Make machines intelligent. No defective unit production
Kaizen
The change must be good.
The change must be profitable.
Do proper economic analysis.
Importance of Engineering Economic Analysis.
Low “lot size” inventory requires lower setup times.
Reduce setup times.
SMED
Shigeo Shingo, now a famous industrial engineer, helped Ohno.
Setup times for big presses were reduced to 3 minutes from earlier 2 to 4 or even 8 hours.
Low Safety Stocks
Systems have to be reliable and production should not result in defective parts.
Involve people in process quality improvement - TQM
Machines should not breakdown.
Improve maintenance and involve production workers also in machine upkeep
OEE
Emphasize on high availability of machines for production.
Do preventive and planned maintenance.
Condition monitoring employed for planned maintenance.
Maintenance for high available production time.
Total productive maintenance.
Low Inventory
Only a day’s inventory as buffer
Between components and assembly section only a days maximum consumption of each item is kept (as an illustration).
Components are made in small batches as per the use on that day.
Communication by Kanban.
Low inventory systems are lean systems
It is a system that uses less resources than mass production systems based on traditional inventory principles.
Hence lean systems produce products at lower costs vs. high inventory systems.
Lean managers use all management principles and techniques along with all the industrial engineering tools and also tools specially developed in Toyota Production System and its further development as Lean Enterprise System (Womack and Jones, The Machine that changed the World)
Is Lean Applicable to Steel Plants?
Yes.
Tata Steel is itself following some lean practices.
Its managers are talking of lean at least since 2001. May be lean movement started some time before.
Recent Publications
2003 Phd thesis on application of lean in a steel plant.
Lean supply chain practices in steel plants
Value stream mapping and reduction of production lead time in steel plants.
Optimizing inplant supply chain(PPC) using Lean.
Process and Operation Analysis (Method Study )
Standardization of Processes and Working Conditions
Motion Study and Principles of Motion Economy (5S)
Standardization of the Process
Time Study and Time Standards
Optimization and Operations Research
Statistical Methods to Control Variation
Engineering Economics
Ergonomics
Simulation
A Different IE Tool Classification
Product Design Efficiency Engineering
Process Efficiency. Engg.
Human Effort Eff. Engg.
Efficiency Engg. Of Various Resources
Process Efficiency Engineering - Classification
Technical Processes
Business Processes
Managerial Processes
Just in Time Supply
Kanban Communication System - Change in Production Planning and Control Procedure
Special Focus on Seven Wastes
Zero Defect Movement
Total Quality Control (Inspection by production persons only - no additional inspector) Total Productive Maintenance (Involving production operators significantly in preventive maintenance) Aggressive Kaizen (Team leaders responsible for monthly improvement in processes)
Visual Communication (Standard Work Sheets, Daily Targets and Production, and Problems)
Value Stream Mapping to identify and remove obstructions to flow
SMED (Application of methods study to setup time reduction)
U-shape layouts
Poka Yoke
Leveled production or production smoothing
Mixed model assembly or flexible production facilities
Supplier process improvement
Supply chain cost reduction led by Assembler.
Seven Waste Model – Waste and Elimination Principle or Technique
Waste of overproduction - One cannot produce without a production Kanban
Waste of time on hand (waiting) - Multiple machines to an operator, all producing as per tact time.
Waste in transportation - Machines in line or flow placed close together
Waste of processing itself - Standardized Methods
Waste of stock on hand - JIT system
Waste of movement (of workers) - Machine layout changes
Waste of making defective products - Problem solving approach to produce zero defects. 5 Why’s?-Poka Yoke
Hope Management Professors, Managers, Executives, Supervisors and Operators learn the new development in management – Lean Management.
High Customer Satisfaction and High Productivity (No tradeoff).
Hope Industrial Engineers become Lean System IEs and Support Managers at all levels.
Thank You
Additional reading:
http://nraoiekc.blogspot.in/2014/02/lean-management.html
http://nraoiekc.blogspot.in/2013/10/lean-systems-industrial-engineering.html
Industrial Engineering - Foundation of Toyota Production System Chapter 1 to 3 of the book - Presentation
Toyota Production System Industrial Engineering - Shigeo Shingo Chapters 4 to 10
Introducing and Implementing the Toyota Production System - Shiego Shingo Chapter 11 of the book
Presentation was done on 14 February 2014 at Tata Steel, Jamshedpur, Steelenium Hall
A McKinsey Article - Next Frontiers for Lean - Feb 2014 - Ewan Duncan and Ron Ritter
The further development in lean has to provide more scientific insight into how product and service attributes contribute to customer value; what matters most for improving classic lean variables, such as lead time, cost, quality, responsiveness, flexibility, and reliability; and new opportunities for cross-functional problem solving to eliminate anything that strays from customer-defined value.
http://www.mckinsey.com/business-functions/operations/our-insights/next-frontiers-for-lean
________________
January - February - March - April - May - June
Presentation at Tata Steel
Dr. K.V.S.S. Narayana Rao, Professor , NITIE, Mumbai
Industrial Engineering Knowledge Center
http://www.nraoiekc.blogspot.com
____________________
____________________
Lean Management
Lean management gives importance to both effectiveness and efficiency.Lean Managers simultaneously take care of customer satisfaction and productivity/ cost reduction responsibilities.
Hence lean management leads to more productivity in the organization.
It is appropriate that NPC came out with the theme “Lean Management for Productivity Enhancement”
"The core idea of the lean management system is to maximize customer value while minimizing waste." (7.3.2014)
http://www.winnipegfreepress.com/local/the-dean-of-lean-248954871.html
Management
Management is achieving objectives prescribed by owners/superiors, set by the manager himself and set in collaboration with the team members, together with the team with the resources provided to the team or acquired by the manager/team.Soldier and Commander
Commander is a manager.
He may be a very good soldier himself.
Management is a lot more than being an expert doer.
But managers require the technical skills of a function they are managing.
Management Process
PlanningOrganizing
Resourcing (Acquiring various resources including human resources known as staffing)
Directing (Executing describes the management steps at this stage better)
Controlling
Effectiveness and Efficiency
Managers have to be effective and efficient.Effectiveness is achievement of objectives.
Efficiency is effectiveness combined with minimum consumption of resources.
No effectiveness - no efficiency.
Effectiveness first, efficiency next.
Scientific Management
F.W. Taylor advocated scientific management that highlighted the importance of efficiency in production shops.Development of science of using machines and men in productive work is the theme of his management thought – scientific management
Taylor was responsible for development of industrial engineering discipline.
Principles of Management – Fayol
Management as a subject to be taught was advocated by Henri Fayol.He gave 14 principles of management and explained management process.
He appreciated Taylor’s thought and advocated its wide adoption.
Principles of Management – Koontz
Koontz extended the 14 principles of management to around 30 and embedded them in the five functions.He stressed importance of effectiveness and efficiency in his first chapter. Also included some principles of efficiency in his list.
Koontz – Definition of Management
Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.
Koontz on Productivity
In a real sense, this book (Management) is about the improvement of productivity.
But still, efficiency got neglected on a holistic basis in his book.
Industrial engineering is not mentioned in the book
Effectiveness and Efficiency as opposing ideas – An Error in Management Thought
Certain management authors positioned effectiveness and efficiency as opposing concepts.They created tables showing differences between them.
Managers became isolated from the efficiency dimension.
Lean Management
Lean management philosophy brings efficiency back into the management discipline as a major component.Managers must also have efficiency/productivity improvement skills
The Toyota Motors’ managers are to be given credit for this development.
Developments in Japan
Japanese executives captured the spirit of scientific management and industrial engineering almost from its birth in USA.Industrial engineering was given a Buddhist religious dimension in the slogan-
Eliminate muda, mura, muri
Kiichiro Toyoda – Toyota Motors Founder
Kiichiro Toyoda was sure of the quality of his car.
But he was worried about its price.
He said unless its cost was reduced and price was reduced Toyota motors will not survive.
Effectiveness is there but Efficiency is the need.
So according to Kiichiro Toyoda, effectiveness was there.
Japanese customer is happy with the car.
But efficiency is not there.
Cost of production is high and hence price is high.
Manager’s Focus on Productivity/Efficiency
Therefore Kiichiro Toyoda’s focus shifted to productivity.
More and more managers were asked to focus on productivity.
Productivity in other words is cost reduction
Taichi Ohno
Taichi Ohno is a production manager.
Started concentrating on cost reduction.
Used Industrial Engineering.
Toyota Style Industrial Engineering.
Industrial Engineering
Industrial engineering is reducing cost of a product and increasing profit by increasing sales due to low prices.Industrial engineering is profit making engineering (Ohno).
The other engineering is market-establishing and fulfilling engineering.
Industrial Engineering – Definition or Explanation by Narayana Rao K.V.S.S.
Industrial Engineering is Human Effort Engineering and System Efficiency Engineering.
JIT Systems - Lean Management
Kiichiro Toyoda looked around his production-distribution system for eliminating muda (excess resources).Inventory seemed to him an excess resource.
He told his managers, that they have to think of JIT systems or low inventory systems.
Thus Kiichiro Toyoda is the man who first advocated JIT.
Taichi Ohno – JIT, IE and Productivity Activities
Reduce inventory – Create flow production.Increase worker productivity
Use more automatic machines
Make a worker attend more machines.
Make machines intelligent. No defective unit production
Kaizen
The change must be good.
The change must be profitable.
Do proper economic analysis.
Importance of Engineering Economic Analysis.
Low “lot size” inventory requires lower setup times.
Reduce setup times.
SMED
Shigeo Shingo, now a famous industrial engineer, helped Ohno.
Setup times for big presses were reduced to 3 minutes from earlier 2 to 4 or even 8 hours.
Low Safety Stocks
Systems have to be reliable and production should not result in defective parts.
Involve people in process quality improvement - TQM
Machines should not breakdown.
Improve maintenance and involve production workers also in machine upkeep
OEE
Emphasize on high availability of machines for production.
Do preventive and planned maintenance.
Condition monitoring employed for planned maintenance.
Maintenance for high available production time.
Total productive maintenance.
Low Inventory
Only a day’s inventory as buffer
Between components and assembly section only a days maximum consumption of each item is kept (as an illustration).
Components are made in small batches as per the use on that day.
Communication by Kanban.
Low inventory systems are lean systems
What is a lean system?
A system that satisfies customer requirements with a very low level of inventory.It is a system that uses less resources than mass production systems based on traditional inventory principles.
Hence lean systems produce products at lower costs vs. high inventory systems.
Lean Manager
Lean managers use all management principles and techniques along with all the industrial engineering tools and also tools specially developed in Toyota Production System and its further development as Lean Enterprise System (Womack and Jones, The Machine that changed the World)
Is Lean Applicable to Steel Plants?
Yes.
Tata Steel is itself following some lean practices.
Its managers are talking of lean at least since 2001. May be lean movement started some time before.
Recent Publications
2003 Phd thesis on application of lean in a steel plant.
Lean supply chain practices in steel plants
Value stream mapping and reduction of production lead time in steel plants.
Optimizing inplant supply chain(PPC) using Lean.
Traditional Industrial Engineering Tools Applied in Lean Systems
Value engineeringProcess and Operation Analysis (Method Study )
Standardization of Processes and Working Conditions
Motion Study and Principles of Motion Economy (5S)
Standardization of the Process
Time Study and Time Standards
Optimization and Operations Research
Statistical Methods to Control Variation
Engineering Economics
Ergonomics
Simulation
A Different IE Tool Classification
Product Design Efficiency Engineering
Process Efficiency. Engg.
Human Effort Eff. Engg.
Efficiency Engg. Of Various Resources
Process Efficiency Engineering - Classification
Technical Processes
Business Processes
Managerial Processes
New Ideas and Tools in Lean Systems
Just in Time Production - Change in Inventory Control PracticesJust in Time Supply
Kanban Communication System - Change in Production Planning and Control Procedure
Special Focus on Seven Wastes
Zero Defect Movement
Total Quality Control (Inspection by production persons only - no additional inspector) Total Productive Maintenance (Involving production operators significantly in preventive maintenance) Aggressive Kaizen (Team leaders responsible for monthly improvement in processes)
Visual Communication (Standard Work Sheets, Daily Targets and Production, and Problems)
Value Stream Mapping to identify and remove obstructions to flow
SMED (Application of methods study to setup time reduction)
U-shape layouts
Poka Yoke
Leveled production or production smoothing
Mixed model assembly or flexible production facilities
Supplier process improvement
Supply chain cost reduction led by Assembler.
Seven Waste Model – Waste and Elimination Principle or Technique
Waste of overproduction - One cannot produce without a production Kanban
Waste of time on hand (waiting) - Multiple machines to an operator, all producing as per tact time.
Waste in transportation - Machines in line or flow placed close together
Waste of processing itself - Standardized Methods
Waste of stock on hand - JIT system
Waste of movement (of workers) - Machine layout changes
Waste of making defective products - Problem solving approach to produce zero defects. 5 Why’s?-Poka Yoke
Let us Hope
Hope Management Professors, Managers, Executives, Supervisors and Operators learn the new development in management – Lean Management.
High Customer Satisfaction and High Productivity (No tradeoff).
Hope Industrial Engineers become Lean System IEs and Support Managers at all levels.
Thank You
Additional reading:
http://nraoiekc.blogspot.in/2014/02/lean-management.html
http://nraoiekc.blogspot.in/2013/10/lean-systems-industrial-engineering.html
Toyota Production System - IE Point of View - Shigeo Shingo
Industrial Engineering - Foundation of Toyota Production System Chapter 1 to 3 of the book - Presentation
Toyota Production System Industrial Engineering - Shigeo Shingo Chapters 4 to 10
Introducing and Implementing the Toyota Production System - Shiego Shingo Chapter 11 of the book
Presentation was done on 14 February 2014 at Tata Steel, Jamshedpur, Steelenium Hall
A McKinsey Article - Next Frontiers for Lean - Feb 2014 - Ewan Duncan and Ron Ritter
The further development in lean has to provide more scientific insight into how product and service attributes contribute to customer value; what matters most for improving classic lean variables, such as lead time, cost, quality, responsiveness, flexibility, and reliability; and new opportunities for cross-functional problem solving to eliminate anything that strays from customer-defined value.
http://www.mckinsey.com/business-functions/operations/our-insights/next-frontiers-for-lean
Principles of Industrial Engineering - Presented by Dr. K.V.S.S. Narayana Rao in the 2017 Annual Conference of IISE
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Industrial Engineering Knowledge Revision Plan - One Year Plan
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