Industrial Engineering & Management

UNIT-I

INDUSTRIAL ENGINEERING & MANAGEMENT

Industrial engineering is a branch of engineering which deals with the optimization of

complex process, systems, or organizations. Industrial engineers work to eliminate waste of
time, money, materials, person-hours, machine time, energy and other resources that do not
generate value.

According to the institute of industrial and systems engineers, they create engineering
processes and systems that improve quality and productivity.

The American Institute of Industrial Engineers (A.I.I.E) has defined the special field of
Industrial Engineering as –

“Industrial engineering (I.E) is concerned with the design, improvement and

installation of integrated systems of people, materials, equipments and energy. It draws upon
specialized knowledge and skills 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”.

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Role Of An Industrial Engineer In An Industry

 Advisor/consultant - available to others for interpretation of data.

 Advocate/activist – promote actively a process or approach.
 Analyst – separate a whole in to parts and examine them to explain insight and
characteristics.

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 Boundary spanner – bridge the information/interest gap between industrial

engineering and us.
 Motivator – provide stimulus and skill availability to a group or individual.
 Decision make – select a preference from many alternatives.
 Expert – provide a high level of knowledge, skills and experience in a
specialized field.
 Coordinator/ Integrator.
 Innovator/Inventor – seek to produce a creative or advanced technology.
 Measurer – obtain data and facts about existing conditions.
 Project manager – operate, supervise and evaluate projects.
 Trainer/educator – In the skill and knowledge of industrial engineering.
 Data gatherer.
 Negotiator.

MANAGEMENT

Management is the dynamic, life giving element in every business. As Peter drucker
has observed without management our resources of production remain resources and never
become production. By bringing together the four factors of production (viz.,, men, money,
material and machine) management enables society to get better and increased the supply of
goods.

Management has become a part and parcel in everyday life, be it at home, office,
factory, government, or in any other organization where a group of human beings assemble
for a common purpose. Management principles come in to play through their various facets
like management of time, resources, personnel, material, machine, finance, planning,
priorities, policies and practice.

Management is a systematic way of doing all activities in any field of human efforts.
It is about keeping oneself engaged in interactive relationship with other human beings in the
course of performing one’s duty. Its task is to make people capable of joint performance, to
make their weakness irrelevant. So says the management guru Peter Drucker.

Koontz defines management in a very simple form when he states that :

“Management is the art of getting things done through and with the people in formally
organized groups”.

MC Farland defines management in more elaborate form. According to him,

“Management is defined for conceptual, theoretical and analytical purposes as that process by
which managers create, direct, maintain, and operate purposive organization through
systematic, co-ordinated co-operative human effort”.

“art of getting things done through people”

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This definition calls attention to the fundamental difference between a manager and
other personnel of an organization. Manager is one who contributes to the organization’s
goals indirectly by directing the efforts of others not by performing the tasks himself. On the
other hand, a person who is not a manager makes his contribution to the organization’s goals
directly by performing the task himself.

Some times, however, a person in an organization may play both these roles
simultaneously.

For example, a sales manager is performing a managerial role when he is directing his sales
force to meet the organization’s goals, but when he himself is contacting a large customer and
negotiating a deal, he is performing a non-managerial role. In the former role, he is directing
the efforts of others and is contributing to the organization’s goals indirectly; in the later role,
he directly utilizing his skills as a sales-man to meet the organization’s objectives.

NATURE OF MANAGEMENT

1. Universal in Nature: Management is universal in nature i.e. it exists everywhere

in universe wherever there is a human activity. The basic principles
of management can be applied any where whether they are business or non-business
organization.
2. Purposeful: Management is always aimed at achieving organizational goals and
purposes. The success of management is measured by the extent to which the desired
objectives are attained. In both economic and non-economic enterprises, the tasks of
management are directed towards effectiveness (i.e., attainment of organizational
goals) and efficiency (i.e., goal attainment with economy of resource use).
3. Social process: Management essentially involves managing people organized in work
groups. It includes retaining, Developing and motivating people at work, as well as
taking care of their satisfaction as social beings. All these interpersonal relations and
interactions makes the management as asocial process.
4. Multidisciplinary: Management is basically multidisciplinary.
Though management has developed as a separate discipline it draws knowledge and
concepts of various other streams like sociology, psychology, economics, statistics
etc. Management links ideas and concepts of all these disciplines and uses them for
good-self of the organization.
5. Continuous process: Management is a dynamic and an on-going process. The cycle
of management continues to operate so long as there is organised action for the
achievement of group goals.
6. Intangible: Management is intangible. It is an unseen force. Its presence can be felt
everywhere by the results of its effort which comes in the form of orderliness,
adequate work output, satisfactory working climate, employees satisfaction etc.
7. Management is an art: Management is considered as art as both requires skills,
knowledge, experience and creativity for achievement of desired results.

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8. Management is Science. Management is considered as science. Science tells about

the causes and effects ofapplications and is based on some specific principles and
procedures. Management also uses some principles and specific methods. These are
formed by continuous observations.
9. Management is a group activity. Management is a vital part of group activity. As
no individual can satisfy all his needs himself, he unites with his co-workers and work
together as an organized group to achieve what he can not achieve individually.
10. System of authority: Authority is power to get the work done by others and compel
them to work systematically. Management can not perform in absence of authority.
Authority and responsibility depends upon position of manager in organization.

PRINCIPLES OF MANAGEMENT

The 14 Management Principles from Henri Fayol (1841-1925) are:

1. Division of Work. Specialization allows the individual to build up experience,

And to continuously improve his skills. Thereby he can be more productive.
2. Authority. The right to issue commands, along with which must go the balanced
responsibility for its function.
3. Discipline. Employees must obey, but this is two-sided: employees will only obey
orders if management play their part by providing good leadership.
4. Unity of Command. Each worker should have only one boss with no other
conflicting lines of command.
5. Unity of Direction. People engaged in the same kind of activities must have the
same objectives in a single plan. This is essential to ensure unity and coordination
in the enterprise. Unity of command does not exist without unity of direction but
does not necessarily flows from it.
6. Subordination of individual interest (to the general interest). Management must
see that the goals of the firms are always paramount.
7. Remuneration. Payment is an important motivator although by analyzing a
number of possibilities, Fayol points out that there is no such thing as a perfect
system.
8. Centralization (or Decentralization). This is a matter of degree depending on the
condition of the business and the quality of its personnel.
9. Scalar chain (Line of Authority). A hierarchy is necessary for unity of direction.
But lateral communication is also fundamental, as long as superiors know that
such communication is taking place. Scalar chain refers to the number of levels in
the hierarchy from the ultimate authority to the lowest level in the organization. It
should not be over-stretched and consist of too-many levels.
10. Order. Both material order and social order are necessary. The former minimizes
lost time and useless handling of materials. The latter is achieved through
organization and selection.
11. Equity. In running a business a ‘combination of kindliness and justice’ is needed.
Treating employees well is important to achieve equity.
12. Stability of Tenure of Personnel. Employees work better if job security and

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career progress are assured to them. An insecure tenure and a high rate of
employee turnover will affect the organization adversely.
13. Initiative. Allowing all personnel to show their initiative in some way is a source
of strength for the organization. Even though it may well involve a sacrifice of
‘personal vanity’ on the part of many managers.
14. Team Spirit (Esprit de Corps). Management must foster the morale of its
employees. He further suggests that: “real talent is needed to coordinate effort,
encourage keenness, use each person’s abilities, and reward each one’s merit
without arousing possible jealousies and disturbing harmonious relations.”

Functions of management (or) process of management :

The elements of management process are known as functions of management. The

general approach of studying management is to treat it as a process. The term process refers
to an identifiable flow of information through interrelated stages of analysis directed towards
achievement of an objective.

Management process suggests that all the managers in the organization perform
certain functions to get the things done by others.

planning

Controlling Organising

Directing Staffing

Planning :- planning is conscious determination of future course of action to achieve the

desired results. This includes what one wants to achieve, when to achieve, and how to
achieve. Therefore, planning includes determination of objectives, setting rules and
procedures, determining projects, setting policies & strategies, budgeting etc. all these
determine what an organization wants to do and how it can be done.

Organizing :- It is the process of dividing work into convenient tasks or duties, grouping of
such duties in the form of positions, grouping of various positions into departments and
sections, assigning duties to individual positions, and delegating authority to each position so
that the work is carried out as planned.

Staffing :- Staffing involves filling the various positions created by the organization process.
It includes preparing inventory of personnel available and identifying gap between man
power required and available; identifying the sources from where people will be selected,
selecting people, training and developing them, fixing financial compensation.

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Directing :- When people are available in the organization, they must know what they are
expected to do in the organization. Superior managers fulfill this requirement by
communicating to subordinates about their expected behavior. In the process of directing his
subordinates, a manager takes active steps to ensure that employees accomplish their tasks
according to the established plans.

Controlling :- Controlling involves identification of actual results, comparison of actual

results with the expected results as set by planning process, identification of deviation
between the two, if any, and taking of corrective action, so that actual results match with
expected results. It brings to light all the bottlenecks in work performance & operates a
straight pointer to the needs of the situation.

SCIENTIFIC MANAGEMENT BY TAYLOR

Fredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) commonly known as ’Father
of Scientific Management’ started his career as an operator and rose to the position of chief
engineer. He conducted various experiments during this process which forms the basis of
scientific management. It implies application of scientific principles for studying &
identifying management problems.

According to Taylor, “Scientific Management is an art of knowing exactly what you want
your men to do and seeing that they do it in the best and cheapest way”. In Taylors view, if a
work is analyzed scientifically it will be possible to find one best way to do it.

Hence scientific management is a thoughtful, organized, dual approach towards the job of
management against hit or miss or Rule of Thumb.

According to Drucker, “The cost of scientific management is the organized study of work, the
analysis of work into simplest element & systematic management of worker’s performance of
each element”.

Taylor’s Principles of Scientific Management

(1) Science, Not Rule of Thumb:

This principle says that we should not get stuck in a set routine with the old techniques of
doing work, rather we should be constantly experimenting to develop new techniques which
make the work much simpler, easier and quicker.

(2) Harmony, Not Discord:

As per this principle, such an atmosphere should be created in the organisation that labour
(the major factor of production) and management consider each other indispensable.
Taylor has referred to such a situation as a ‘Mental Revolution’. Taylor firmly believed that
the occurrence of a mental revolution would end all conflicts between the two parties and
would be beneficial to both of them.

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(3) Cooperation, Not Individualism:

According to this principle, all the activities done by different people must be carried on with
a spirit of mutual cooperation. Taylor has suggested that the manager and the workers should
jointly determine standards. This increases involvement and thus, in turn, increases
responsibility. In this way we can expect miraculous results.

(4) Development of Each and Every Person to His / Her Greatest Efficiency and
Prosperity:

According to this principle, the efficiency of each and every person should be taken care of
right from his selection. A proper arrangement of everybody’s training should be made.
It should also be taken care that each individual should be allotted work according to his
ability and interest. Such a caring attitude would create a sense of enthusiasm among the
employees and a feeling of belongingness too.

DOUGLAS MCGREGOR'S THEORY X & THEORY Y

The eminent psychologist Douglas McGregor has given his theory of motivation
called Theory X and Theory Y. He first presented his theory in a classic article titled 'The
Human Side of Enterprise'. He treated traditional approach to management as 'Theory X' and
the professional approach to management as 'Theory Y'. His theory refers to two sets
of employees based on the perception of human nature. Here, theory X and theory Y are two
sets of assumptions about the nature of employees. His theory is based on human behavior.

Theory X.
Theory X is based on traditional assumptions about people (employees). Here, the
conventional approach of management is used as a base. It suggests the following features of
an average human being/employee (assumptions about human nature):

Assumptions of Theory X.
1. The average human being is inherently lazy by nature and desires to work as little as
possible. He dislikes the work and will like to avoid it, if he can.
2. He avoids accepting responsibility and prefers to be led or directed by some other.
3. He is self-centered and indifferent to organizational needs.
4. He has little ambition, dislikes responsibility, prefers to be led but wants security.
5. He is not very intelligent and lacks creativity in solving organizational problems.
6. He by nature resists to change of any type.

Theory Y.
Theory Y is based on modern or progressive or professional approach. Here, the
assumptions about people i.e. employees are quite different.

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Assumptions of Theory Y.
Work is as natural as play, provided the work environment is favorable. Work may act as a
source of satisfaction or punishment. An average man is not really against doing work.

1. People can be self-directed and creative at work if they are motivated properly.
2. Self-control on the part of people is useful for achieving organizational goal. External
control and threats of punishment alone do not bring out efforts towards organizational
objectives.
3. People have capacity to exercise imagination and creativity.
4. People are not by nature passive or resistant to organizational needs. They have become so
as a result of experience in organisations.
5. An average human being learns under proper conditions. He is also willing to accept
responsibility.
6. The intellectual capacity of an average human being is utilised partially under the
conditions of modern industrial life.

UNIT-II
PLANT LOCATION
Plant location refers to the choice of region and the selection of a particular site for
setting up a business or factory. But the choice is made only after considering cost and
benefits of different alternative sites. It is a strategic decision that cannot be changed once
taken. If at all changed only at considerable loss, the location should be selected as per its
own requirements and circumstances. Each individual plant is a case in itself. Businessman
should try to make an attempt for optimum or ideal location.

Factors affecting the plant location

Decisions regarding selecting a location need a balance of several factors. These are
divided into primary factors and secondary factors; here both the factors can influence the
business in the long run.

Primary factors
Availability of raw materials :- Availability of raw materials is the most important factor in
plant location decisions. Usually, manufacturing units where there is the conversion of raw
materials into finished goods is the main task then such organizations should be located in a
place where the raw materials availability is maximum and cheap.
Nearness to the market :-Nearness of market for the finished goods not only reduces the
transportation costs, but it can render quick services to the customers. If the plant is located
far away from the markets then the chances of spoiling and breakage become high during
transport. If the industry is nearer to the market then it can grasp the market share by offering
quick services.

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Availability of labor :- Another most important factor which influences the plant location
decisions is the availability of labor. The combination of the adequate number of labor with
suitable skills and reasonable labor wages can highly benefit the firm. However, labor-
intensive firms should select the plant location which is nearer to the source of manpower.

Transport facilities :- In order to bring the raw materials to the firm or to carrying the
finished goods to the market, transport facilities are very important. Depending on the size of
the finished goods or raw materials a suitable transportation is necessary such as roads, water,
rail, and air. Here the transportation costs highly increase the cost of production, such
organizations can not complete with the rival firms. Here the point considered is
transportation costs must be kept low.

Availability of fuel and power :- Unavailability of fuel and power is the major drawback in
selecting a location for firms. Fuel and power are necessary for all most all the manufacturing
units, so locating firms nearer to the coal beds and power industries can highly reduce the
wastage of efforts, money and time due to the unavailability of fuel and power.

Availability of water :- Depending on the nature of the plant firms should give importance
to the locations where water is available.
For example, power plants where use water to produce power should be located near the
water bodies.

Secondary factors

Suitability of climate :- Climate is really an influencing factor for industries such as

agriculture, leather, and textile, etc. For such industries extreme humid or dry conditions are
not suitable for plant location. Climate can affect the labor efficiency and productivity.
Government policies :- While selecting a location for the plant, it is very important to know
the local existed Government policies such as licensing policies, institutional finance,
Government subsidies, Government benefits associated with establishing a unit in the urban
areas or rural areas, etc.

Availability of finance :-Finance is the most important factor for the smooth running of any
business; it should not be far away from the plant location. However, in the case of decisions
regarding plant location, it is the secondary important factor because financial needs can be
fulfilled easily if the firm is running smoothly. But it should be located nearer to the areas to
get the working capital and other financial needs easily.

Competition between states :- In order to attract the investment and large scale industries
various states offer subsidies, benefits, and sales tax exemptions to the new units. However,
the incentives may not be big but it can help the firms during its startup stages.

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Availability of facilities :- Availability of basic facilities such as schools, hospitals, housing

and recreation clubs, etc can motivate the workers to stick to the jobs. On the other hand,
these facilities must be provided by the organization, but here most of the employees give
preference to work in the locations where all these benefits/facilities are available outside
also. So while selecting plant location, organizations must give preference to the location
where it is suitable for providing other facilities also.

Disposal of waste :-Disposal of waste is a major problem particularly for industries such as
chemical, sugar, and leather, etc. So that the selected plant location should have provision for
the disposal of waste.

PLANT LAYOUT

Definition:
Plant layout refers to the arrangement of physical facilities such as machines,
equipment, tools, furniture etc. in such a manner so as to have quickest flow of material at the
lowest cost and with the least amount of handling in processing the product from the receipt
of raw material to the delivery of the final product.

Objectives of good Plant Layout:

A well designed plant layout is one that can be beneficial in achieving the following
objectives:
 Proper and efficient utilization of available floor space
 Transportation of work from one point to another point without any delay
 Proper utilization of production capacity.
 Reduce material handling costs
 Utilize labour efficiently
 Reduce accidents
 Provide for volume and product flexibility
 Provide ease of supervision and control
 Provide for employee safety and health
 Allow easy maintenance of machines and plant.
 Improve productivity

TYPES OF LAYOUT:

There are mainly four types of plant layout:

(a) Product or line layout
(b) Process or functional layout
(c) Fixed position or location layout
(d) Combined or group layout

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PRODUCT OR LINE LAYOUT:

In this type of layout the machines and equipments are arranged in one line depending upon
the sequence of operations required for the product. It is also called as line layout. The
material moves to another machine sequentially without any backtracking or deviation i.e the
output of one machine becomes input of the next machine. It requires a very little material
handling.
It is used for mass production of standardized products.

WORK STATION 1 WORK STATION 2 WORK STATION 3 WORK STATION 4

Advantages of Product layout:

• Low cost of material handling, due to straight and short route and absence of backtracking
• Smooth and continuous operations
• Continuous flow of work
• Lesser inventory and work in progress
• Optimum use of floor space
• Simple and effective inspection of work and simplified production control
• Lower manufacturing cost per unit

Disadvantages of Product layout:

 Higher initial capital investment in special purpose machine (SPM)
 High overhead charges
 Breakdown of one machine will disturb the production process.
 Lesser flexibility of physical resources.

PROCESS LAYOUT:
In this type of layout the machines of a similar type are arranged together at one place. This
type of layout is used for batch production. It is preferred when the product is not
standardized and the quantity produced is very small.

Department Department Department

Department Department Department

Advantages of Process layout:

 Lower initial capital investment is required.
 There is high degree of machine utilization, as a machine is not blocked for a single
product
 The overhead costs are relatively low
 Breakdown of one machine does not disturb the production process.
 Supervision can be more effective and specialized.

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 Greater flexibility of resources.

Disadvantages of Process layout:

 Material handling costs are high due to backtracking
 More skilled labour is required resulting in higher cost.
 Work in progress inventory is high needing greater storage space
 More frequent inspection is needed which results in costly supervision

COMBINED LAYOUT:

• A combination of process & product layout is known as combined layout.

• Manufacturing concerns where several products are produced in repeated

FIXED POSITION OR LOCATION LAYOUT:

Fixed position layout involves the movement of manpower and machines to the product
which remains stationary. The movement of men and machines is advisable as the cost of
moving them would be lesser. This type of layout is preferred where the size of the job is
bulky and heavy. Example of such type of layout is locomotives, ships, boilers, generators,
wagon building, aircraft manufacturing, etc.

RAW
MATERIAL

MACHINES & FINISHED

EQUIPMENT AIR CRAFT ASSEMBLY PRODUCT

LABOUR

Advantages of Fixed position layout:

 The investment on layout is very small.
 The layout is flexible as change in job design and operation sequence can be easily
incorporated.
 Adjustments can be made to meet shortage of materials or absence of workers by
changing the sequence of operations.

Disadvantages of Fixed position layout:

 As the production period being very long so the capital investment is very high.
 Very large space is required for storage of material and equipment near the product.
 As several operations are often carried out simultaneously so there is possibility of
confusion and conflicts among different workgroups.

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MAINTENANCE MANAGEMENT
The term ‘maintenance’ means to keep the equipment in operational condition or repair it to
its operational mode. Main objective of the maintenance is to have increased availability of
production systems, with increased safety and optimized cost. Maintenance management
involves managing the functions of maintenance. Maintaining equipment in the field has been
a challenging task since the beginning of industrial revolution. Since then, a significant of
progress has been made to maintain equipment effectively in the field. As the engineering
equipment becomes sophisticated and expensive to produce and maintain, maintenance
management has to face even more challenging situations to maintain effectively such
equipments in industrial environment. This brief lecture on maintenance management
includes maintenance strategies, functions of maintenance department, maintenance
organization and elements of maintenance management.

MAINTENANCE STRATEGIES OR OPTIONS

A maintenance strategy or option means a scheme for maintenance, i.e. an elaborate and
systematic plan of maintenance action. Following are the maintenance strategies [1] that are
commonly applied in the plants.

 Breakdown Maintenance or Operate to Failure or Unplanned Maintenance

 Preventive or Scheduled Maintenance
 Predictive or Condition Based Maintenance
 Opportunity Maintenance
 Design out Maintenance

The equipment under breakdown maintenance is allowed to run until it breaks down and then
repairing it and putting back to operation. This strategy is suitable for equipments that are not
critical and have spare capacity or redundancy available. In preventive or scheduled
Maintenance, maintenance actions such as inspection, lubrication, cleaning, adjustment and
replacement are undertaken at fixed intervals of numbers of hours or Kilometers. An effective
PM program does help in avoidance of accidents. Condition monitoring (CM) detects and
diagnoses faults and it helps in planned maintenance based on equipment condition. This
condition based maintenance strategy or predictive maintenance is preferred for critical
systems and for such systems breakdown maintenance is to be avoided. A number of CM
techniques such as vibration, temperature, oil analysis, etc. have been developed, which guide
the users in planned maintenance [2]. In opportunity maintenance, timing of maintenance is
determined by the procedure adopted for some other item in the same unit or plant. In design
out maintenance, the aim is to minimize the effect of failures and in fact eliminates the cause
of maintenance. Although it is an engineering design problem, yet it is often a responsibility
of maintenance department. This is opted for items of high maintenance cost that are due to
poor maintenance, poor design or poor design outside design specifications. It may be
mentioned that a best maintenance strategy for each item should be selected by considering
its maintenance characteristics, cost and safety.

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In addition to the above, new strategies concepts such as Proactive Maintenance, Reliability
Centred Maintenance (RCM), Total Productive Maintenance (TPM), etc. have recently been
evolved to look it from different perspectives and this has helped in developing effective
maintenance. In proactive maintenance, the aim is identify what can go wrong, i.e. by
monitoring of parameters that can cause failures. In RCM, the type of maintenance is chosen
with reliability of the system in consideration, i.e. system functions, failures relating to those
functions and effects of the dominant functional system failures. This strategy in the
beginning was applied to critical systems such as aircrafts, nuclear and space applications. At
present, this is being extended to critical systems in the plant. TPM, a Japanese concept,
involves total participation of all concerned. The aim is to have overall effectiveness of the
equipment with participation of all concerned using productive maintenance system.

FUNTIONS OF A MAINTENANCE DEPARTMENT

Following are the major functions of a maintenance department [3-4]:

 Maintenance of installed equipment and facilities

 Installations of new equipment and facilities
 PM tasks – Inspection and lubrication of existing equipment
 CM tasks – monitoring of faults and failures using appropriate techniques
 Modifications of already installed equipment and facilities
 Management of inventory
 Supervision of manpower
 Keeping records

MAINTENANCE ORGANIZATION

It concerns in achieving an optimum balance between plant availability and maintenance

resource utilization. The two organization structures that are common are: Centralized and
Decentralized. A decentralized structure would probably experience a lower utilization than
centralized one but would be able to respond quickly to breakdowns and would achieve
higher plant availability. In practice, one may have a mix of these two. A maintenance
organization can be considered as being made up three necessary and interdependent
components.

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