This work is licensed under the Creative Commons Attribution-ShareAlike 4.

0
International License. To view a copy of this license, visit
http://creativecommons.org/licenses/by-sa/4.0/.

Introduction to Industrial Engineering

By Jane M. Fraser
Chapter 1
What is Industrial Engineering?

The following examples illustrate what industrial engineers do.

 A manufacturer of corporate jets opened a new facility to manufacture tail sections.
An industrial engineer (IE) laid out the new facility, including deciding where
material would be delivered, where each machine used in the manufacturing
process would be located, how work would flow through the facility, and where
finished sections would be shipped from the facility.
 A large air chiller has a compressor that is housed in a steel cylinder. The cylinder
was being made by bending and welding two pieces of steel. An IE redesigned the
cylinder and the manufacturing process so that the cylinder is now made by bending
and welding one piece of steel. The manufacturing process takes less time and the
cylinder is stronger.
 An IE at a hospital worked with a team to redesign the process for cleaning an
operating room and preparing it for the next operation. The time between
scheduled operations was reduced from 45 to 20 minutes. More operations can be
scheduled in each operating room each day.
 A plant that assembles lawnmowers found that bolt holes on parts were not always
lining up properly. An IE gathered and analyzed data to determine the source of the
problem. The IE found that parts from a particular supplier were not meeting the
tolerances that had been specified. The IE worked with the supplier to improve their
production process so that the tolerances were met in the future.
 An IE found that the number of back injuries in an automobile assembly plant was
increasing. The IE analyzed the safety reports on such injuries from the last year and
found that the increase was occurring in the engine assembly area; further
investigation showed that a redesign of the engine had made the engine assembly
awkward. The IE worked with the assembly workers to redesign the assembly task,
including the purchase of a new hoist. The IE monitored the safety reports over the
next three months and found that the rate of back injuries had declined.

These examples illustrate different features of this definition of industrial engineering:

The design or improvement of a system of people, machines, information, and
money to achieve some goal with efficiency, quality, and safety.
Certain words are show in bold face in the definition:
 Design - Some industrial engineering tasks involve the creation of a new facility,
process, or system.
 Improvement - Most industrial engineering tasks involve the improvement of an
existing facility, process, or system.

1
  System - Most engineers design physical objects, but most IEs design systems.
Systems include physical components, but also include processes, rules, and people.
Components of a system have to work together. Material and information flow
between the components of a system. A change to one part of system may affect
other parts of the system.
 People - Among all types of engineers, IEs think the most about people.
 Machines - An IE must select the appropriate machines - including computers.
 Information - Data can be used for immediate decision making but ca also be
analyzed to make improvements to the system.
 Money - An IE must weigh costs and savings now against costs and savings in the
future.
 Goal - Every designed system exists for some purpose. The IE must think about
different ways to accomplish that goal and select the best way.
 Efficiency - Whatever the goal of the system, the IE usually seeks to have the system
achieve that goal quickly and with the least use of resources.
 Quality - The IE’s organization always has a customer and the organization must
deliver goods and services to the customer with the quality that the customer wants.
 Safety - IEs have to make sure that the system is designed so that people can and
will work safely.

IEs are sometimes called efficiency engineers, but some think that effectiveness engineer is
more accurate. What is the difference between being efficient and being effective?
 An efficient process doesn't waste any time or resources.
 An effective process produces a desired effect or contributes to a desired goal.
Two words in our definition of industrial engineering (efficiency and goal) relate to these
two aspects of an IE’s job. A process can be effective but not efficient if the process could be
done as effectively but in less time or with fewer resources; for example, the time to
produce a product might be reduced without any loss of customer satisfaction with the
product. A process can be efficient but not effective; for example, a department that
efficiently produces reports that no one uses is not effective.

The words in bold face in the definition also indicate areas that an IE must learn about. An
IE must know how to answer questions like these:
 Design and improvement - Where should a facility be located? How should all the
components be laid out physically? What operating procedures should be used?
 System - How should the tasks be allocated among different parts of the system?
How should material and information flow among the different components of a
system?
 People - What are people good at? What types of tasks should not be assigned to
people? How can jobs be designed so that people can do their jobs quickly, safely,
and well?
 Machines - What types of machines are available to do different tasks, including the
movement and storage of material and information?
 Information - How can data be used to determine how well the system is
functioning?

2
  Money - How can we trade off costs and savings that occur at different times, maybe
over a number of years?
 Goal - What is the goal of this system? What are the different ways a system could
achieve that goal?
 Efficiency - How can we produce products and services with the least amount of
time and resources?
 Quality - How can we make sure that the system is consistently producing goods
and services that meet customer needs?
 Safety - How can we keep people from making mistakes? How can we protect
people from hazards in the work place?

After you have read this book, you should have:

 An understanding of the types of work IEs do in different types of organizations.
 The ability to explain to others what IEs do,
 The ability to market yourself as an IE,
 An overview of the topics in a BSIE curriculum,
 An understanding of the context in which IEs work, including global and societal
issues,
 A commitment to professional and ethical behavior now and in the future, and
 Improved professional skills, especially oral and written communication skills and
teamwork skills.

This course will not turn you into an IE since you can’t learn all the knowledge and skills
that an IE needs in just one semester, but it will start you on your way to becoming an IE.
You will have the Big Picture of industrial engineering, so that the ideas you learn in later
courses fit together.

This book has three major sections:

 Preliminaries. This chapter, Chapter 1, begins to get you thinking about what IEs do.
Chapter 2 introduces you to the big ideas you will hear throughout the book. In
Chapter 3, we will spend a little time thinking about teaching and learning so that
you and I have some idea about how each of us learns best.
 IE Tasks. Chapter 4 discusses organizations, the roles of the people who work in
organizations, and the role of an IE in organizations. Chapter 5 describes some
frameworks and processes that IEs use (1) to design or improve a physical
production system and (2) to design or to improve the procedures used in the
operation of that production system. Chapter 6 gives more specifics about the IE
tasks in designing or improving the production system and Chapter 7 gives more
specifics about the IE task in the operation of the production system. By the end of
Chapter 7 you will know a lot about what IEs do. In Chapter 8, you’ll think about
your career as an IE and learn about career issues such as lifelong learning and
engineering ethics.
 IE Tools. IEs use certain tools and a body of knowledge about people (Chapter 9),
mathematical methods (Chapter 10), and business (Chapter 11).

3
Finally the book has a chapter about the history and future of industrial engineering
(Chapter 12) and a reference list (Chapter 13).

I am only pretending that industrial engineering can be broken into topics and chapters.
Every topic in this book relates to every other topic, but it would be too confusing if we
tried to discuss everything at once. I have divided the material into chapters in a way that I
think will help you learn about industrial engineering. However, themes and threads tie all
the chapters together. The next chapter describes those threads.

Welcome to industrial engineering

Being an IE is very satisfying because you can create an efficient and safe workplace where
people are proud of the high quality products and services they produce. IEs improve
efficiency, which means that we help bring prosperity. IEs improve quality, which means
that we help provide good products and services. And IEs improve safety, which means that
we help protect people. You should be very proud that you plan to become an IE. According
to the bumper sticker version of industrial engineering, IEs make things better.

4
 Introduction to Industrial Engineering
By Jane M. Fraser
Chapter 2
Big ideas you will hear frequently

At times while reading this book, you may wonder exactly what you are learning and you
may not be able to point to specific new skills and knowledge you have, but I guarantee that
you will have new ideas and new ways of thinking by the time you complete this book. By
the time you finish reading this book, you will have begun to think like an IE. How does an
IE think?

One example of how an IE thinks is that when something goes wrong - a customer got the
wrong shipment, a worker was injured, a plant did not produce the quantity of product that
was planned for that day - an IE blames the system, not the people. An IE keeps asking
"why?" until the root cause is identified for a problem:
 Why did the customer receive the wrong shipment?
o Because the wrong shipping label was put on the customer’s shipment.
 Why was the wrong shipping label put on the customer’s shipment?
o Because some shipments were removed from the shipping department.
 Why were the shipments removed?
o Because the customer had made some last minute changes to the order.
 Why did the customer make some last minute changes?
o And so forth.
The IE in this example could end up identifying problems in how customer orders are
tracked, in how the sales people identify appropriate products for customers, or in when
and how shipping labels are printed and applied to shipments. The IE will probably end up
making changes to the physical system (including the information system) and to the
procedures used. Perhaps the shipping label should not be printed until the order is
actually being shipped.

The big idea from this example is that an IE blames the system, not the people. Now, that
idea may not always be true; yes, sometimes people simply make mistakes, but the IE
should always think first, second, and often about how systems can be improved so people
don’t make mistakes. An IE tries to set up systems so people do tasks right the first time every
time.

Here is a list of ideas that you will read about throughout this book and that we will bring
up repeatedly in our discussions:
 If a problem occurs, blame the system, not the people.
 Design the system so people do tasks right the first time every time.
 Design the system so people can do their work efficiently, well, and safely.
 Reduce the variation in a system, so tasks are done consistently.
 IEs are always unhappy because they are always thinking "this could be done
better."
 If it ain’t broke, it can still be improved.

5
  Small incremental improvements of a process add up, but more radical
reengineering may sometimes be needed.
 A system should help ordinary people do extraordinary work.
 Some workers hate IEs because industrial engineering can be viewed as a tool of
management to get more work out of the workers.
 How a person does a job is important in achieving efficiency, quality, and safety.
 The process for doing a task makes a big difference in how efficiently, well, and
safely the task is done.
 Achieve quality in goods and services by having good processes, not by inspecting
goods and services to fix problems after they have occurred.
 While most engineers design physical objects, industrial engineers design systems.
A system includes physical objects, but also includes rules and procedures that
aren't physical.
 The ideas of IE have been around for decades, but the ideas get repackaged and
resold periodically: some examples are TQM, CQI, re-engineering, the Toyota
system, lean manufacturing, and Six Sigma.
 IEs can work for any organization because IEs improve processes and systems.
 Every organization must scan the environment for change and must think about its
place in the global economy.
 The customer is not always right, but the customer comes first.
 All products and services involve both products and services.
 A team of people using good team processes will produce better work than any one
of the individuals could have.
 Happy workers are good workers.
 Decisions should be based on facts, logic, and analysis, not on hunches.
 People can usually grasp information better, especially data, if it is displayed
visually.
 Document what you do.
 Don’t use information technology to computerize an inefficient process; make the
process more efficient first.
 An IE must engage in lifelong learning. You must keep up with new technologies,
new software, and new ideas.
None of the above statements is true all the time. You don’t want to stick blindly to any one
of these statements all the time. But most of the time, the above ideas are good ways for an
IE to think.

It is about you

One big, final idea that you will see throughout this book is that industrial engineering is
about you, in two ways. First, the ideas of industrial engineering can be applied to your
own life, and second, you need to make sure that you use good processes for doing
industrial engineering. As an IE you work on improving the system of the organization for
which you work; as an individual, you work on improving the system that is you.
Many students have read and have recommended very strongly The Seven Habits of Highly
Effective People, by Stephen Covey. Those seven habits are:
1. Be proactive.
6
 2. Begin with the end in mind.
3. Put first things first.
4. Think win/win.
5. Seek first to understand, then to be understood.
6. Synergize.
7. Sharpen the saw.

In Chapter 8 (IE Careers), I’ll give you more details on each of these points. Together, the
seven habits help you apply IE ideas to make yourself an effective person.
As an IE, you do your work in a context: the people you work with closely, the organization
that employs you, the area where the organization is located, the state where you live, the
country where you live, and, of course, the world. The systems approach, which I’ll explain
in Chapter 5, urges you to think about putting the process you are studying into a larger
context so you won’t make a change that improves the process but that does damage to the
larger system. I like the phrase “think globally, act locally.”

IEs, more than other engineers, think about the people in the system. Engineering ethics,
which I’ll present in Chapter 8, starts with the rule “Engineers shall hold paramount the
safety, health, and welfare of the public in the performance of their professional duties.”
Throughout this book, I’ll urge you to consider your own behavior and your effect on
systems at different levels and especially your effect on people.

For example, as a woman in a male dominated field, I have decided to use inclusive
language; I avoid using the word “he” for an engineer. I don’t want my language behavior to
cause any student to have doubts about becoming an engineer.

You’ll have many issues to think about throughout this book. One of the biggest issues
involves your choices about who you are.

7
 Introduction to Industrial Engineering
By Jane M. Fraser
Chapter 4
Organizations
This chapter will help us answer an important question: What is the mission of an IE, in
other words, why does an IE exist? We will answer that question by considering the
following questions:
 4.1 What is an organization? Why does an organization exist?
The purpose of an organization is called its mission. An organization should have a
clear mission, a clear vision, and strong values.
 4.2 What do people do in an organization?
An organization has directors, managers, workers, and support staff.
 4.3 Who does an organization serve?
An organization serves its customers.
 4.4 Who does the work in an organization?
The workers do the actual work.
 4.5 What role does an IE play in an organization?
The IE designs or improves a system of people, machines, information, and money
to achieve some goal with efficiency, quality, and safety. The IE is usually a manager
or a member of the support staff.

4.1 What is an organization?

Covey says “Begin with the end in mind” and all organizations should do that. An
organization should have a mission statement, that is, a clear, succinct statement of why it
exists.

Collins and Porras suggest this approach to defining mission, or what they call purpose:
An effective way to get at purpose is to pose the question "Why not just shut this
organization down, cash out, and sell off the assets?" and to push for an answer that would
be equally valid both now and one hundred years into the future. (page 78)

Consider these examples:

 “The mission of the Environmental Protection Agency is to protect human health
and the environment.” (Source)
 “Building healthier lives, free of cardiovascular diseases and stroke.” (Source)
 “The FTC’s Bureau of Competition enforces the nation's antitrust laws, which form
the foundation of our free market economy. The antitrust laws promote the
interests of consumers; they support unfettered markets and result in lower prices
and more choices.” (Source)
 “NFI’s mission is to improve the well-being of children by increasing the proportion
of children growing up with involved, responsible, and committed fathers.”
(National Fatherhood Initiative, Source)
 “The mission of the Office of the United Nations High Commissioner for Human
Rights (OHCHR) is to work for the protection of all human rights for all people; to

17
 help empower people to realize their rights; and to assist those responsible for
upholding such rights in ensuring that they are implemented.” (Source)
 “The mission of the [Illinois] Department of Corrections is to protect the public from
criminal offenders through a system of incarceration and supervision which
securely segregates offenders from society, assures offenders of their constitutional
rights and maintains programs to enhance the success of offenders' reentry into
society.” (Source)
 “Google’s mission is to organize the world’s information and make it universally
accessible and useful.” (Source)
 “I work to help plastic surgery patients become bold in their quest, informed in their
choices, and responsible in their decisions.” (Susan Gail Enterprises, Inc., Source)
 “EVRAZ North America is a leading steel manufacturer that produces flat, long and
tubular products.” (Source)
 “The mission of Parkview is to provide quality healthcare services and education to
improve the health of the people we serve.” (Source)
 “To develop, manufacture and supply scanning components, spindles, optics and
Electro Optic modules, while maintaining high quality standards with exceptional
customer service.” (Lincoln Laser, Source)
 “LDM sells, manufactures and develops copper alloy rods and billets. It is our aim to
achieve worldwide success in our specific niche markets. The organisation
distinguishes itself through a high customer-orientation and service level, and drive
for continuous improvement.” (Source)

The following list gives attributes of a good mission statement:

1. It should state the purpose for which the organization exists.
2. It should have a narrow focus.
3. It should be clear.
4. It should get to the point.
5. It should be realistic, feasible, and achievable.
6. It should be a succinct one sentence with few adjectives and adverbs.
7. It should provide guidance for leadership and employees.
8. It should let prospective employees know what the company is like.
9. It should be unique to that organization.

Consider again the examples given above. Most of these are well written. Some are a little
wordy, some are more than one sentence, and some incorporate elements of vision and
values statements, which we will discuss in the next sections. However, each provides a
clear statement about why the organization exists and they all provide guidance to
members of the organization about what types of activities it should undertake.

For example, if a prospective client approached LDM to ask if the company can provide lead
free copper billets, the company would respond "we can." But if a prospective client
approached them to ask for copper pipes, company would say "we don't do that." In fact,
companies often refer clients to other companies and often receive referrals back in turn. A
group of companies, in a geographical area or in an industry, often know the missions of
each company and refer clients to the appropriate company.
18
Now consider these examples of mission statements, which don't make clear what the
organization does:
 “The mission of Southwest Airlines is dedication to the highest quality of Customer
Service delivered with a sense of warmth, friendliness, individual pride, and
company spirit.” (Source)
 “Henderson Manufacturing Company is dedicated to providing high quality,
competitively priced products, on time with personalized service. Additionally, we
strive to provide a safe and rewarding work environment that recognizes individual
achievement and promotes the skills of teamwork and communication.” (Source)
 “Empower every person and every organization on the planet to achieve more.”
(Microsoft, Source)
 “The Specialty Mfg. Co. is committed to providing quality, custom solutions which
meet our customers’ unique needs. We provide a highly valued experience for our
customers and employees by making all our business partnerships enjoyable,
professional and profitable.” (Source)
If you didn't know already what these organizations do, these statements don't help much.

An organization should also have a vision statement, that is, a statement of how the
organization would like to be perceived by its customers. A mission statement gives the
reason the organization exists. The vision statement describes what the organization wants
to be. What is the destination for this organization?

Consider these examples:

 “Our vision is to be the world's most dynamic science company, creating sustainable
solutions essential to a better, safer and healthier life for people everywhere.”
(DuPont Science, Source)
 “To build the largest and most complete Amateur Radio community site on the
Internet.” (eHam.net, Source)
 “Clemson [University] will be one of the nation's top-20 public universities.”
(Source)

The Alliance for NonProfit Management provides good advice on creating a vision
statement:
A vision statement should be realistic and credible, well articulated and easily
understood, appropriate, ambitious, and responsive to change. It should orient the
group's energies and serve as a guide to action. It should be consistent with the
organization's values. In short, a vision should challenge and inspire the group to
achieve its mission.
Profitguide.com quotes Ron Robinson, president of ABARIS Consulting Inc., as saying that a
vision statement should paint “a picture of the ideal organization in the future.” It should
not look only a few years into the future.

The following list gives attributes of a good vision statement:

1. It should state what the organization aims to be in the future.
2. It should allow for growth and development.
19
 3. It should be inspiring to the employees. Now you can use the adjectives and adverbs
that didn’t belong in them mission statement.
4. It should be clear.

Finally, many organizations have a values statement. Carter McNamara says

Values represent the core priorities in the organization’s culture, including what
drives members’ priorities and how they truly act in the organization, etc.

Consider these examples:

 “Toastmasters Internationals Values
o Integrity,
o Respect
o Service
o Excellence.” (Source)
 "IBMers value:
o Dedication to every client's success
o Innovation that matters, for our company and for the world
o Trust and personal responsibility in all relationships" (Source)
 A2Z Computing Services Value Statement:
We are responsible to the communities that we represent. To provide them a
service that will enhance their online community with a professional, informative
and entertaining website.
We are responsible to the residents of the communities. To provide them a source of
information pertaining to all aspects of their community that are inkeeping with the
community's values and morals.
We are responsible to the businesses that advertise on and sponsor our pages. To do
our best to ensure the success of their advertising campaign with fair pricing and
quality design work.
We are responsible to the nonprofit and community organizations. To provide them
a method to market and support their missions via our community websites.
We are responsible to our employees. To provide them a safe work environment,
fair wages, opportunity for advancement, and equal opportunity regardless of sex,
race or religion.
We are responsible to our subcontractors. To provide them agreeable and timely
payment for services and adequate information for completion of the work ordered.
We are responsible to our suppliers. To provide them timely payment for products
or services and to demand not the impossible but to request the reasonable.
We are responsible to the banks and creditors who have loaned us money. To
submit payments timely and accurately.
We are responsible to our investors. To ensure their investment returns a
reasonable profit.
(Source)

The following list gives attributes of a good values statement:

1. It should set priorities for the organization by stating what is important.

20
 2. It should describe how members of the organization interact with each other and
with others outside the organization.
3. It should provide guidance about trade-offs.

Collins and Porras found that visionary companies have strong values.
In a visionary company, the core values need no rational or external justification.
Nor do they sway with the trends and fads of the day. Nor even do they shift in
response to changing market conditions. (page 75)

Now let's put mission, vision, and values all together. Collins and Porras found that mission,
vision, and values (or what they call ideology) was very important to their visionary
companies.
A detailed pair-by-pair analysis showed that the visionary companies have generally
been more ideologically driven and less purely profit-driven than the comparison
companies in seventeen out of eighteen pairs. ... This is one of the clearest
differences we found between the visionary and comparison companies. (page 55)
But they also noted:
The visionary companies attained their stature not so much because they made
visionary pronouncements (although they often did make such pronouncements).
Nor did they rise to greatness because they wrote one of the vision, values, purpose,
mission, or aspiration statements that have become popular in management today
(although they wrote such statements more frequently than the comparison
companies and decades before it became fashionable). Creating a statement can be a
helpful step in building a visionary company, but it is only one of thousands of steps
in a never-ending process of expressing the fundamental characteristics we
identified across the visionary companies. (pages 10-11)

Peters argues that a leader should live the vision and preach it with intensity and emotion
(Thriving on Chaos, pages 406-407). Hayes and Wheelwright found that the successful
manufacturing companies had strong philosophies. Jim Collins says the statements don't
matter as much as the alignment of the organization with the mission, vision, and values:
Studying and working closely with some of the world's most visionary organizations
has made it clear that they concentrate primarily on the process of alignment, not on
crafting the perfect "statement." Not that it is a waste of time to think through
fundamental questions like, "What are our core values? What is our fundamental
reason for existence? What do we aspire to achieve and become?" Indeed, these are
very important questions-questions that get at the "vision" of the organization.
Organizations that have mission, vision, and values statements may not call them that and
may not separate out the three parts. They often put these statements together on one web
page. Consider these examples.

[[insert examples]]

As we have seen, some mission statements just aren't very good. Also, some organizations
make the creation of mission, vision, and statements into a ponderous exercise, without
21
much purpose. I have spent time on mission, vision, and values statements for three
reasons.
1. As Covey says, “begin with the end in mind.” Collins and Porras found that the
visionary companies were more likely to focus on an ideology than were the less
successful companies.
2. The IE working for an organization needs guidance – exactly what does this
organization do and with what values? What is the goal that this organization’s
system is trying to reach? If the organization’s mission isn’t clear the IE will have a
hard time knowing what effectiveness means for that organization.
3. As I will discuss more in Chapter 8 IE Careers, you will be happier if you work for an
organization that is compatible with your mission and vision, and especially with
your values.
For some humor on the subject of mission and vision statements, try this link: Mission
statement generator.

4.2 People in an organization

An organization is created to accomplish some mission. The people in that organization
also have a vision of what they want the organization to be. Values govern how the people
in the organization will get to that vision. Who are the people who do all that?

Consider these examples:

 General Motors Corporation (GMC) has a Board of Directors with 12 members,
including the company’s Chief Executive Officer. None of the other Directors are
employees of GMC. In addition to the CEO, the company has 23 other Corporate
Officers. GMC employees about 212,000 people worldwide.
 Colorado State University-Pueblo is part of the Colorado State University System
which has a 10 member Board of Governors. CSU-Pueblo has a president, a chief
academic officer (provost), four academic Deans, Dean of the Library, a VP of
Finance and Administration, a Dean of Student Life and Development, a Director of
Intercollegiate Athletics, 17 Department chairs, about 150 faculty members, and
about 300 other staff employees.
 Krage Manufacturing, in Pueblo, CO, was founded by Sam Krage, who is the owner
and president. Krage Manufacturing employs about 25 people in manufacturing
operations and about 3 people in support (material ordering, customer service, and
programming).

These examples show that all organizations contain the following four groups of people:
1. The founder, directors, president, chief executive officer, or entrepreneur. These
people determine the mission of the organization and broadly define the types of
processes and values the organization will use in achieving that mission.
2. Managers. These people set up and monitor the processes that will be used to
achieve the organization’s mission.
3. Workers. These people actually do the work of the organization. They make the
products and they deliver the services to customers. They are sometimes called line
workers.

22
 4. Support. These people provide the goods and services the workers need that are not
part of the mission of the organization, for example, information technology,
accounting, and the cafeteria. They are sometimes called staff workers.
Even an organization with one person has these four roles. As I wrote this book, I was
acting as the director of my one person organization when I decided to take on the mission
of writing an introduction to industrial engineering and to apply for a sabbatical to do so. I
was acting as a manager when I decided to write the book on my home computer and when
I laid out my schedule, chapter by chapter. I spent most of my time acting as the worker,
writing the book. Finally, I was support staff for myself when I set up my computer, my
book cases, and my work space so that I could actually focus on the writing.

4.3 Who does an organization serve?

Any organization needs an ongoing source of revenue in order to continue to exist. The
people who provide those revenues are sometimes called:
 customers - the people who pay for and receive a product or service.
 clients - the people who pay for and receive a service, for example, clients of a bank,
insurance company, or lawyer.
 stakeholders - the people who provide the revenue even if they don’t directly
receive the product or service, for example, the parents of some university students.
I’ll use the word “customer” to cover all these situations even though the word can cause
problems. For example, you can’t say to me “the customer is always right” when you get a
problem wrong on homework. Even in a traditional selling environment, the customer is
not always right, but the customer comes first.

Not all organizations provide goods and services directly to consumers. A manufacturer of
overhead cranes sells its products to other manufacturers who use the cranes in plants that
make consumer goods. Because a clothing manufacturer sells its product through a large
department store chain, the manufacturer must consider the ultimate consumer as a
customer, but also should think about the department store chain as a customer.
Some people in an organization have internal customers:
[E]verything you do inside a company, whether it’s typing a letter, running an
engineering analysis, or attaching a bolt, affects other employees, who are really
your internal customer. The people who receive your work depend on you. If your
work is bad, they can’t do an excellent job either. ... So within any organization you
have to keep two customers in mind: the internal customer, or everyone who will be
affected by your work, and the external customer, the person who buys the final
product or service. (Petersen, pages 158-9).

Identifying the customer can sometimes be difficult. In health care, the patient receives the
service and may also be paying for it, but often payment comes from a health insurer who
may, in turn, receive money from the patient’s employer. In the university, the student or
the students’ parents pay for a portion of the cost of educating a student; all colleges and
universities also receive revenues from other sources, such as state government, federal
government, donors, alumni, and foundations. In such situations, the word “stakeholders”
indicates that several groups have a stake, or an interest, in what the organization does.

23
The organization has to focus on meeting the needs of each of these groups in order to keep
revenues flowing to the organization over the long run.

Most products also have service components that are important to customers. For example,
Bodine Electric Company provides CAD files for its products, through CAD Register, where
many other companies also provide such files. An engineer considering specifying the
purchase of a Bodine product will appreciate the convenience of being able to integrate the
CAD file into the larger file of the product being designed.

The customer comes first because customers provide the long term revenue for the
organization. Various authors have put this point in different ways.
 W. Edwards Deming said in Out of the Crisis: “Profit in business comes from repeat
customers, customers that boast about your product and service, and that bring
friends with them.” (page 141).
 Feigenbaum said in Total Quality Control that an effective quality system “provides
for continuously measuring and monitoring actual customer quality satisfaction
with the product in use ...” (page 107).
 Tom Peters said in Thriving on Chaos: “Only those who become attached to their
customers, figuratively and literally, and who move aggressively to create some new
markets -- for fast growing and mature products alike -- will survive.” (page 48)
 Denove and Powers in their book Satisfaction say: "listening to the needs of your
customers and creating advocates by striving to deliver upon those needs are
paramount to long-term profitability." (page 22*)

Quality
A key idea in attracting and keeping customers is to provide a product or service that has
high quality. The word “quality” is used for two concepts that we must distinguish:
 a set of characteristics of a product or service that customers want to purchase. For
example, people want to buy fast food because they want to buy food at a
convenient location, at a reasonable price, and in a short period of time. People want
to buy fine dining because they want a menu with a range of choices, well prepared
good, and attentive service.
 the consistent production of a product or service with a specified set of
characteristics.
An organization can lose customers by either:
 producing a product or service with a set of characteristics that consumers don’t
want, for example an expensive restaurant with a wide range of choices but where
the service is rushed and customers are not allowed to linger.
 producing a product or service with a set of characteristics that customers do want
but where the actual occurrence of those characteristics is inconsistent, for example,
a restaurant where service is sometimes good and sometimes not.
Either of these above situations can be called a “lack of quality.” The first concept has many
names:
 grade
 requirements
 specifications

24
  quality of design
This first concept of quality lets us say that a Masserati is of higher quality than a VW. Juran
points out that this concept is from the view of the customer.

The second concept also has several names:

 quality of conformance
 conformance to specifications
 quality of production.
We can talk about whether a particular VW is of high quality. Does the paint finish have any
defects? Do the doors open and close well? Juran points out that this concept is the concern
of the producer.

As an IE, especially in the first part of your career, you will be more involved with the
second meaning of quality. This book has lots about how to create a process that
consistently produces a product or service to meet requirements.

As you move up in an organization you will become more involved in the first meaning of
quality and more involved in helping the organization select a set of requirements for a
product or service that will attract and retain customers. This section focuses on the first
meaning of quality, especially the issues involved in designing a product or service to
satisfy customers.

Attracting and keeping customers

How does an organization find out what customers want? How does an organization create
goods and services that will satisfy customers into the future? The most important way to
know what the customer wants is to ask, by asking the customer directly and by collecting
and analyzing data.

The 1982 book In Search of Excellence by Peters and Waterman has some out-of-date
examples, but its chapter "Close to the Customer" talks about the way in which top
companies are obsessed with customer service, quality, and reliability. For example, they
report on their conversations with IBM's marketing vice president:
He says he wants salesmen to "act as if they were on the customer's payroll," and he
talks of putting "all IBM resources at the customer's disposal." (page 161)
Customer focused companies are also obsessed with measuring customer satisfaction.
To make sure it is in touch, IBM measures internal and external customer
satisfaction on a monthly basis. ... Employee attitude surveys are taken every ninety
days, and a check is kept on employee perceptions of the way customer service is
being maintained. (page 161)
"Obsession" seems the correct work to describe some of the stories Peters and Waterman
tell.
[Frito-Lay] will spend several hundred dollars sending a truck to restock a store
with a couple of $30 cartons of potato chips. You don't make money that way, it
would seem. But the institution is filled with tales of salesmen braving
extraordinary weather to deliver a box of potato chips or to help a store clean up
after a hurricane or accident. Letters about such acts pour into the Dallas
25
 headquarters. There are magic and symbolism about the service call that cannot be
quantified. ...[I]t is a cost analyst's dream target. You can always make a case for
saving money by cutting back a percentage point or two. But Frito management,
looking at market shares and margins, won't tamper with the zeal of the sales force
(pages 164-165).

Freddy Heineken says bluntly, "I consider a bad bottle of Heineken to be a personal
insult to me." (page 181)

Caterpillar offers customers forty-eight-hour guaranteed parts delivery service

anywhere in the world; if it can't fulfill that promise, the customer gets the part free.
That's how sure Cat is, in the first place, that its machines work. Once again, we are
looking at a degree of overachievement that in narrow economic terms would be
viewed as a mild form of lunacy; lunacy, that is, until you look at Caterpillar's
financial results. (page 171)

In fact, Peters and Waterman conclude:

[A]ccording to rational analysis, almost every one of our service-oriented institutions
does "overspend" on service, quality, and reliability. As David Ogilvy reminds us: "In
the best institutions, promises are kept no matter what the cost in agony and
overtime." (page 170)

But listening to the customer is not enough because the customer cannot always know the
best choice and cannot always know what the customer will want in the future. The
organization has to educate a customer and may even create features of a product or
service that the customer didn’t know to ask for.
Average customers don’t know what is possible if they haven’t seen or heard of it
(page 157, Petersen).
For example, customers now expect the ability to track a shipment (by UPS, FedEx, or
others) but most customers would not have known to ask for that service before it became
available. Innovation is still needed; a customer may not know of a need until seeing what
can be done.

Quality Function Deployment is a planning tool that involves identifying customer needs in
a product or service and then ensuring that each of those needs is met. Kenneth A. Crow
gives a detailed explanation of how a set of matrices are used. For example, in the product
planning matrix, a row is a customer need and a column is a feature of the product or
service. Entries show the contribution of each feature to each customer need. Value
engineering is a similar system in which functions of a product or service are identified.
Then the value to the customer of each function is compared to the cost of providing the
function.

Another tool, Kano analysis, classifies features as:

 “must have” - if the feature is not present, the customer is dissatisfied.
 “more is better” -more of that feature always produces more satisfaction.

26
  “delight” - a feature that the customer didn't expect and which increases
satisfaction.
This article by Kathy Parker gives more information on this appraoch.

Peters and Waterman also found that their excellent companies

are superb at dividing their customer base into numerous segments so they can
provide tailored products and services. (page 182)
New techniques are enabling organizations to customize products and service for different
customers. An organization may focus more on certain customers because often a small
percentage of customers provide a large percentage of revenues. For example, business
travelers are a small percentage of all the customers of an airline, but because they travel
frequently, often paying full fare, they account for a large percentage of the airline’s
revenues. Some organizations may choose to focus on a particular type of customer and
even to reject some potential customers, but they can make such choices only if they have
good data about their types of customers.

A challenge is to provide high quality service and customized products to a large number of
customers. “Mass customization” refers to the production of highly personalized products
and services with the efficiency of mass production. Information technology is usually key
to accomplishing this production process. For example, Dell allows customers to customize
any computer. The Ritz Carlton Hotels record the preferences of their customers so that
returning customers have their wants met automatically.

Software and databases allow organizations to track customers and to customize the
service or product for each customer. Customer Relationship Management (CRM) means
learning more about the organization's customers in order to provide goods and services
that better meet customer needs. An organization may think it knows who its customers
are and what their needs are, but collecting data may lead to some surprises. The
organization may discover a market segment it didn't realize existed and thus be able to
market to those customers. It may discover that some customers are using the
organization's goods or services in a way that the organization had not anticipated. Linking
a CRM database to a GIS (Geographical Information Systems) system can map the locations
of customers and help determine where to site a new customer service location. The
approach has been applied most in organizations that market directly to consumers, but it
is applicable to all organizations. Also, CRM can increase customer loyalty and lead to
higher sales. For example, online book sellers that track a customer's purchases can use its
CRM database to suggest books that this customer might like.

CRM software (such as Microsoft Dynamics CRM, Infor CRM, SAP, Salesforce.com, NetSuite
CRM+, ) has been developed to track all customer interactions, including marketing, sales,
support, account management. The software is used to log and analyze every contact that a
customer or potential customer has with the organization. Such a database can help
provide service; for example, if a customer calls with a new order, the database would
prompt the employee to ask if a previous problem has been resolved satisfactorily. The
frequent shopper cards now common at grocery stores enable the company to learn about

27
its customers in great detail. A CRM can make the company more efficient in handling
customers and thus lead to better provision of customer service.

Why is product quality and customer service so bad?

Any discussion of “the customer comes first” has to recognize that the principle may be
more honored as a principle than as truth. I am sure that you have had experiences with
organizations where it is clear that the customer did not come first. Why do organizations
claim the customer comes first, but we, as consumers, have many complaints about
products and services? I have found these possible explanations.
 We are spoiled. In fact, the goods and services we receive are very good.
 Quality is getting better but our expectations are getting higher at a faster rate.
Denove and Power make this argument in their book Satisfaction:
We measure quality across a myriad of industries and we can state
unequivocally that product quality is on the rise. (page 89)

Products from washing machines to desktop computers are being built to last
longer than ever. Improved electronics, tighter manufacturing tolerances,
and new materials such as titanium and carbon fiber all have contributed to a
longer product life cycle. Quality and defect-reducing programs such as TQM
(total quality management) and Six Sigma have set new standards for
products leaving the factory. (page 89)

What does this mean for current and future generations of customers?
Without a doubt, the answer is higher expectations. Consumers don't care
about why things last longer; they just want the product to work properly
and efficiently right out of the box and keep working that way for years to
come. (page 90)
 Goods are getting better, but service isn't. Denove and Powers argue that different
forces drive product and service quality.
Raising product quality is a function of innovation and technological
breakthroughs. But improving customer service is often more a matter of
what a company is willing to do, as opposed to product innovations that are
limited by what a company is able to do. (page 91)
Also, they point out that new service initiatives can be copied by competitors. These
authors argue that organizations should invest in improved service only where it
will make a noticeable difference in customer loyalty. For example, they describe
how Washington Mutual was the first bank to offer free checking; the increase in
market share, the slowness of the competition to follow, the half-hearted efforts of
competitors (somewhat free checking), and WaMu's other programs in customer
service gave WaMu a permanent advantage.
 You get what you pay for. If you pay fast food prices, then you can't expect the type
of service you would get in a restaurant.
 Because customers are sometimes rude, service representatives are also rude.
Perhaps we are caught in a downward spiral.
 Organizations indulge in rhetoric, but don't provide the resources and training
required to produce high quality products and services. No matter how much an
28
 employee cares, the production of high quality requires training and support. Yes, it
is annoying to be asked for one's account number again, but the employee
representative can't be blamed if the account number wasn't transferred with the
call.
 Organizations compete on price, not quality. Organizations are so concentrated on
cutting costs, that the quality of product and services has to decline.
 Quality projects are often focused on reducing costs and those savings are not
passed on to customers.
 Customer representatives are not authorized to do what it takes to make a customer
happy. John di Frances makes this argument:
If employees are not first educated to empathize with the “why” that drives
their customers’ desires, and second, if they are not empowered to instantly
take the necessary action to effect the circumstances to exceed their
customers’ expectations, then there’s little hope for improved service.
 Employees don't care. We'll talk more about that explanation when we discuss
motivation in Chapter 8. Of course the real issue is why they don't care.
 Employees have to meet a work quota of producing a certain number of items or
servicing a certain number of callers. Such quotas prevent them from concentrating
on quality. The organization may say that quality matters, but the workers know
that the schedule and the quotas matter more.
 Employees in many service positions are paid at the minimum wage and turnover is
frequent. Why should such employees care about doing a good job? Denove and
Powers tell the story of Mission Hills Bowl, a bowling center in Southern California,
which pays its employees at twice the market rate and hires people with
personality. The result is stellar customer service, loyal customers, the ability to
charge customers more, and good profits. (pages 150-153)

4.4 The customer comes second.
Think about where you work. Does anyone ever ask you how things could be
improved? Does your supervisor say he’s listening to your ideas, but he really isn’t?
Are you encouraged one day, then criticized the next? In far too many cases, the
supervisor behaves differently depending on the circumstances and how he feels
that day. Much of the time he’s friendly and considerate, perhaps even outwardly
cooperative. Then suddenly he turns on you, criticizing you and undermining your
confidence. In an uncertain environment like that, where people never know what
to expect, they quickly learn to quit sticking their necks out and retreat back into
their shells. (page 4, A Better Idea, by Donald E. Petersen and John Hillkirk).

Employees are turned off to the company through the normal operating practices of
the organization. The thoughtless, irritating, unconcerned way they are dealt with is
what does it. They feel they are pawns in the hands of uncaring functional
operations. (page 15, Quality without Tears, Philip B. Crosby).

Companies must put their people first. Yes, even before their customers. There.
Now, I’ve said it. I know it’s controversial. It makes most people nervous just to hear
it, but it works. (Rosenbluth and Peters, The Customer Comes Second, page 9)
29
In the previous section I argued that the customer comes first, but now I say “the customer
comes second.” These two statements don’t really conflict because the first one means that
employees must put the customer first, but the second one means that employees can only
put customers first if the company puts the employees first.

I borrowed this phrase “the customer comes second” from the book by that name by Hal
Rosenbluth and Diane McFerrin Peters, which describes the policies at Rosenbluth Travel, a
travel agency that focuses on corporate accounts. Rosenbluth Travel has a long, rigorous
hiring process to be sure they are hiring the right people, emphasizes finding nice people
who will provide excellent service, extensively trains new associates, listens to and reacts
to what associates say makes them unhappy, helps associates continue to learn, gives
associates the support and the freedom to provide exceptional service, and lays off workers
only as a very last resort. They summarize the approach as follows:
Every company operates on a hierarchy of concerns. Ours is the following: people,
service, profits. In that order. The company’s focus is on its people. Our people then
focus on serving our clients. Profits are the end result. (page 25)

Measuring up: Benchmarking your workplace practices quotes a Purdue study that
concluded that
organizations with high levels of employee satisfaction are more likely to have high
levels of customer satisfaction.

Hire well
Rosenbluth emphasizes the importance of hiring well. Pyramid Machine, in Somerset,
Kentucky, hires people with an attitude of humility, as described in “Humility, Inc.” from
MMS Online.
Compared to this humility, says Mr. Daniels [general manager of Pyramid], any lack
of prior machining experience is not an important consideration at all.
Collins talks about how Nucor emphasizes hiring the right people. Nucor located its steel
making factories in farming communities because of the work ethic of such people. They
pay well and use team bonuses.
The Nucor system did not aim to turn lazy people into hard workers, but to create
an environment where hardworking people would thrive and lazy workers would
either jump or get thrown right off the bus. (page 81)
Tom Peters, in Thriving on Chaos, also emphasizes recruiting people who share the values
of the company. The line people, he argues, are best able to determine who those hires
should be (pages 315-320).

Increasingly, organizations ask applicants to demonstrate their abilities in the work

situation. For example, the Pueblo Area Boys and Girls Clubs observe applicants
implementing a hands-on activity with youth in a program as a key part of the
interview and screening process. Final candidates are each given a program activity
to implement while being observed by senior staff. Sometimes youth involved in the
activity are asked their opinion of how the activity was run and what they thought of
the individual candidates. The comments are recorded and used to assist in making
a final decision about employing the candidate. This process gives the organization a
30
 better idea of how the candidate will perform on the job, as well as giving the
candidate more information about job expectations. Also, staff and youth gain a
sense of involvement and connection with the organization by participating in the
process.
Denove and Powers focus on customer satisfaction, so they studied what organizations do
in order to provide good customer service. The successful companies use hiring policies
"founded on the following key tenets:"
 They focus on personality rather than the technical skills of the potential employee
with whom their customers will spend most of their time.
 When necessary, they will pay above market average -- sometimes well above -- to
attract the absolute best candidates from which to choose.
 They attract career-minded individuals who will care about the long-term
satisfaction of their customers by making it widely known that they are a company
that believes in promotng from within.
 They search out creative employee benefits that create a more desirable working
environment. (pages 154-155)

Train well
Training of new workers is crucial. Peters says that training - and retraining - should be an
obsession, but isn’t. He cites Federal Express and Disney as having strong training
programs.
The training Federal Express gives its customer service people in Memphis and
Disney’s training of a 17-year-old would-be jungle boat drive far surpass the
training many technical firms give their machinists. (Thriving on Chaos, page 325).
He says that Nissan spent $30,000 per worker on training before opening its plant in
Smyrna, Tennessee. Peters lists these elements of a good training program: (pages 326-
328)
1. "Extensive entry-level training that focuses on exactly the skills in which you wish to
be distinctive."
2. "All employees are treated as potential career employees."
3. "Regular retraining is required."
4. "Both time and money are generously expended."
5. "On-the-job training counts too."
6. "There are no limits to the skills that can profitably be taught to everyone." Even
complicated topics like statistical process control can be taught to everyone, if the
course is taught well.
7. "Training is used to herald a commitment to a new strategic thrust."
8. "Training is emphasized at a time of crisis." In response to new technology or
competitive challenges, training helps the organization respond.
9. "All training is line-driven." The line workers help develop the training.
10. "Training is used to teach the organization's vision and values."
Will people take the training and leave? Perhaps, but why would they leave an organization
that treats them so well?

31
Support workers
Rosenbluth gives associates the support and the freedom to provide exceptional service.
According to Denove and Powers (page 135), Nordstrom department store has two rules
for employees:
1. Use your good judgment in all situations.
2. There will be no additional rules.
This freedom is not an invitation to chaos because the supervisor’s job is to help the
salesperson learn what good judgment is. Without detailed rules, Peters says (page 348),
workers concentrate on helping customers, not on trying to get around the rules about
toilet breaks.

Some organizations practice open books. According to the case for open-book management
Companies that practice open-book management teach employees how to read a balance
sheet and share critical financial information. In short, they get their front-line people to
think like owners.

Open book management gives workers the data to help them understand how their work
affects the company. Also, opening the books clearly conveys trust.

Lay off only as a last resort

Rosenbluth lays off workers only as a last resort and Peters argues for employment
guarantees.
Most trace the idea of employment security back to 1806 and the cotton mill owned
by Robert Owen in New Lanark, Scotland. Faced with an abrupt reduction in the
supply of raw materials (an American embargo), almost all millers shut down and
fired their workers. Owen stopped the machines, but kept paying full wages and
turned people to maintenance tasks during the four-month crisis.

Owen reaped the reward that is, today, the heart of the matter. His workforce was
subsequently much more amenable to managerial, organizational, and technological
changes. Constant innovation, supported by workers, led to extraordinary long-term
profitability relative to competitors. (Peters)
Peters argues that such guarantees will work only with these 3 tactics:
1. "Careful hiring (understaffing) and extensive use of
overtime/temporaries/subcontractors." Basically, the permanent work force can
handle only demand that is less than normal.
2. "Redeployment and retraining." Idle workers are moved to other jobs, are used to
perform maintenance, or are loaned to the community for service projects.
Redeployment to sales helps bring the company out of the slump and provides
workers with valuable knowledge about customer wants.
3. "Work sharing and short work weeks."
Such guarantees can’t always continue, but how the company handles the layoff may affect
its ability to recover.

4.5 The IE’s role in an organization.

Recall the four groups of people found in any organization:
32
 1. Directors,
2. Managers,
3. Workers, and
4. Support.
Where does the IE fit in?

An IE can be in any of the four groups. An IE can start a company or be among the directors
of a company, although in such a role the IE probably isn’t doing much industrial
engineering but may be using IE skills to be a good CEO.. An IE is often a manager or
supervisor of workers. IEs are only rarely group 3, the workers. The only way an IE can be
a worker, that is, the person who does the work described in the mission of the
organization, is if the mission of the organization is to do industrial engineering. Consulting
companies, such as Accenture, St. Onge, etc., hire a lot of IEs, but many more jobs are
available as CEO, manager, or staff. So most IEs are managers or support staff. I’ll talk more
about what types of jobs IEs can have in different types of organizations when we get to
Chapter 8 IE Careers.

IEs are, first, engineers. All engineers, including IEs, design, but most engineers design
physical products or physical structures, objects that you can see, while IEs design systems
and you can’t really see a system.

All engineers, even those designing an object (for example, a computer chip, a car, or a
bridge), have to think about the system in which that object will function and have to think
about the system that will make that object. Every engineer should think about DfX, which
is short hand for
 Design for Manufacturability,
 Design for Usability,
 Design for Maintainability
 Design for Reliability
 Design for Repairability
 Design for Recylclability
 Design for Maintainability
Thus, all engineers are concerned with systems, but IEs always think about systems.
But what exactly does an IE do? Recall the definition of industrial engineering that I gave in
Chapter 1:
The design or improvement of a system of people, machines, information, and
money to achieve some goal with efficiency, quality, and safety.
An IE designs and works continually to improve a production system, that is, a system
that produces a product or service. Although we often talk about the fact that engineers
solve problems, when an IE solves a problem, the IE also makes a change to the system so
that problem never occurs again. If an IE is solving problems all the time (for example, the
order for a particular client is late and the IE expedites the order), something is wrong. The
IE should be working on the system, not putting out fires.

The next chapter will give you much more specific information on how an IE designs and
improves a production system.
33
 Introduction to Industrial Engineering
By Jane M. Fraser
Chapter 5
The IE Approach
How does an IE improve efficiency, quality, and safety?

In this chapter I’ll explain PDCA and DMAIC, two acronyms that explain the steps an IE
uses, and the tools used in these steps. I’ll also explain five frameworks that will give you a
larger view: systems thinking, lean operations, Deming’s 14 points, Six Sigma, and
sustainability. These five frameworks will help you understand how to do the steps of
PDCA or DMAIC within an organization. They help us think about
1. the organization as a system,
2. the goals of the organization,
3. the people in the organization,
4. the essential goal of reducing variability, and
5. the organization’s ongoing viability.
Finally, I’ll talk about fads. The tasks and frameworks for IE get repackaged and resold very
regularly. Should we care? Should we do something about this situation?

This chapter has the following sections:

 5.1 PDCA or DMAIC
 5.2 Systems thinking
 5.3 Lean operations
 5.4 Deming's 14 points
 5.5 Six Sigma
 5.6 Sustainability
 5.7 Fads
 5.8 The two parts of a production system
For each of the approaches in sections 5.1 through 5.6, I will also explain the tools an IE
uses in that approach.

5.1 PDCA or DMAIC

How does an IE create a process to reliably produce a product or service with specified
requirements? While the definition of industrial engineering says “the design or
improvement” of a system, most IEs are involved mostly in improvement. The IE approach
is to continually improve the system.

Collins and Porras found a focus on continuous improvement in the companies they
studied:
Visionary companies focus primarily on beating themselves. Success and beating
competitors comes to the visionary companies not so much as the end goal, but as a
residual result of relentlessly asking the question 'How can we improve ourselves to
do better tomorrow than we did today?' And they have asked this question day in
and day out – as a disciplined way of life – in some cases for over 150 years. No

34
 matter how much they achieve – no matter how far in front of their competitors
they pull – they never think they've done 'good enough.' (page 10)

Improving the whole system at once is hard, so the IE focuses on a particular process in the
production system. Harrington (page 9) provides a good definition of process:
Any activity or group of activities that takes an input, adds value to it, and provides
an output to an internal or external customer.

Plan-Do-Check-Act (PDCA) and Define-Measure-Analyze-Improve-Control (DMAIC) are two

acronyms indicating the steps an IE does to improve a process in a production system.

PDCA
PDCA stands for Plan, Do, Check, and Act. The steps were developed by Shewhart and
popularized by Deming; they are sometimes called the Shewhart Cycle.
 Plan - Ask and answer the following questions. What data do we have to help us plan
improvements? What part of the organization should we work on next? Where do
we have the biggest problems? Where do we think we can make the biggest
improvement? What improvements could we make? What experiments could we do
to get us data to evaluate proposed improvements? How would we analyze those
data?
 Do - Carry out the planned experiments to test the various proposed improvements.
 Check - Observe the effects of the experiments. Analyze the data from the
experiments. Decide which improvements, if any, should be implemented.
 Act - Reflect on what was learned. Implement the improvements that have been
shown to be effective, or repeat the cycle focusing on specific improvements that
show promise but need more refinement.
When you are done with PDCA, you do it again. Or, in other words, you are never done
because you must practice continuous quality improvements. This web page has a good
summary of the steps.

DMAIC
DMAIC stands for Define, Measure, Analyze, Improve, and Control.
 Define - Select a process for improvement. The project champion assigns a project
team and give them a project charter. Develop a preliminary process map. Use the
Voice of the Customer to determine real requirements.
 Measure - Determine the current status of the process. Determine performance
measures. Identify the gap between current status and desired status. Identify the
critical process inputs (the Xs) and critical process outputs (the Ys). Develop a
detailed process map. Determine possible root causes for the problems.
 Analyze - Evaluate the contributions of various possible root causes. The emphasis
is on rigorous analysis of data.
 Improve - Test possible improvements through designed experiments. Develop an
implementation plan for the ones that are shown to best meet the project objectives.
 Control - The project champion carries out the implementation plan. Sustain the
improvement by training workers and by implementing control charts. As with
PDCA, when you are done DMAIC, you do it again.
35
Process Redesign to Reduce Cycle Time, by D. Bandyopadhyay, describes an example.

PCDA, DMAIC, and other versions all have in common these important features:
 Make sure you are solving an important problem.
 Use a team to generate ideas because a group of people can generate more ideas
than any one individual.
 Use facts, experiments, and data for decision making.
 Continuously improve quality.
PDCA and DMAIC are very similar, but have some differences. Since it is sometimes called
the Shewhart Cycle, PDCA emphasizes more the need to repeat the steps, while DMAIC adds
the Control step lacking in PDCA.

In some ways, PDCA and DMAIC are organized common sense, but the fact that the steps
enforce organization is good. Others have developed similar steps. For example, Juran's
"Universal Sequence for Breakthrough" (page 16-2) is similar to PDCA and DMAIC but is
more explicit about how a quality improvement project must fit into an organization:
 Prove the need for a program,
 Identify the major projects using a Pareto diagram,
 Secure management approval,
 Organize for improvement by designating those who will steer the investigation
(including generating theories to be tested, giving authority to perform analysis and
tests, and acting on the new knowledge) and those who will conduct the detailed
analysis to discover the cause of defects,
 Diagnose to discover causes and remedies,
 Overcome cultural resistance to technological change,
 Make remedies effective, and
 Provide controls to hold the gains.

The tools for PDCA and DMAIC

Both PDCA and DMAIC use these tools:
 Teams
 Documentation
 Process flow diagram or flowchart
 Documentation
 Check sheet
 Histogram
 Pareto chart
 Brainstorming and Nominal Group Technique
 Defect concentration chart
 Cause and effect diagram or fishbone diagram
 The five whys and root cause analysis
 Box plots
 Scatter diagram
 Regression analysis
 Design of experiments and analysis of variance
 Control charts

36
I have listed the tools in roughly the order in which an IE is likely to use them. I’ll give an
example and explain each now.

Teams. Continuous improvement of a process requires the involvement of everyone who

works on that process. A team is usually created to focus on a particular problem or a
particular process, but may include people who work in the processes that provide input or
receive the output from the process being studied. For example, a team to improve the
process of moving patients from the Emergency Department to a hospital room should
include people who move the patients, but should also include people who work in the
Emergency Department as well as people who work in the hospital. Team members may
need training in some of the tools described below and support from staff people for data
analysis.

Documentation. According to Robitaille (page 65):

“If the documents aren’t correct, the system will always have problems.”
One of the first steps of a team in analyzing a problem should be to determine whether a
process is actually being implemented the way the documentation says it should be.
Differences may require adjusting the process or the documentation. The team should also
document its work, including data collection and analysis, and conclusions reached. Finally,
when the team completes its work, it should be sure that the recommended changes are
reflected in the documentation of the process, materials used for training new workers, and
so forth. Documents form the long lasting memory for the organization.

Process flow diagram or flowchart. A flowchart is a visual representation of the steps

involved in the process being studied. If a product is being manufactured, the flowchart
shows the operations done by different workers on that product. If a service is being
produced, the flowchart shows the steps performed by different workers for that customer.
Usually a flowchart should follow the product or the customer. One acronym to help you
include all the relevant parts of each process on a flowchart is SIPOC: for each process,
make sure you include the suppliers, the inputs, the process, the outputs, and the
customers.

The flow chart below, from Parkview Hospital, shows the flow of patients from the
Emergency Department to the Hospital. The chart was used to study the components of the
time to transfer patients, so the chart also includes information about the average time
patients spend at each step.

37
The flow chart below shows the courses in the BSIE program; it was created using the
program Visio.

38
Check sheet. An important type of documentation is to routinely record all exceptions and
problems. Each instance of a problem may seem to be isolated, but analysis of such data
may turn up problems that should be studied and fixed. A check sheet is a simple chart
allowing workers to put a check mark next to the type of problem that has occurred, or to
39
 The stops
IN
record by hand a problem that does not fit into the types listed. An example of a checksheet
used to record the reason for telephone interruptions is shown here. The Quality Training
Portal has another example at the web page Tally Sheet.

Histogram. Categorical data such as data recorded in a check sheet can be displayed in a
histogram. The relative number of different types of problems is easier to see in such a
visual display. The following histogram shows the reasons why a patient was not able to
moved from the Emergency Department to a hospital bed. The Quality Training Portal has
example at the web page Histograms.

Pareto chart. A Pareto chart is a special type of histogram in which the categories are listed
from most frequent to less frequent. The following Pareto chart shows the data from the
previous histogram. The Quality Training Portal has another example at the web page
Pareto Analysis.

The following Pareto chart from Parkview Hospital shows the causes for a delay in moving
a patient from the Emergency Department to a hospital bed.

Putting the items in order by frequency means that the biggest cause is listed first; that
cause is usually the one that should be focused on first. If you can fix the biggest causes,
then you will have eliminated a large proportion of the defects.

The Pareto principle (named after economist Vilfredo Pareto, but generalized by J. M.
Juran) is also sometimes called the 80-20 principle. Juran wrote (page 2-16):
40
 Managers are well aware that the numerous situations and problems they face are
unequal in importance. In marketing, 20% of the customers (the 'key' customers)
account for over 80% of the sales. In purchasing, a few percent of the purchase
orders account for the bulk of the dollars of purchase. In personnel relations, a few
percent of the employees account for most of the absenteeism. in inventory control,
a few percent of the catalog items account for most of the dollar inventory. In cost
analysis, roughly 20% of the parts contain 80% of the factory costs; the basic
function of a product accounts for 80% of the cost, while the secondary functions
account for only 20% of the cost. In quality control, the bulk of the field failures,
downtime, shop scrap, rework, sorting, and other quality costs are traceable to a
vital few field failure modes, shop defects, products, components, proceses, vendors,
designs, etc.

The Parkview chart had 9 causes; 20% of 9 is 1.8 or about 2. The largest 2 causes (Bed and
Report) account for only 56.7% of the problems, so we can see that the Pareto rule doesn't
always hold. It is, however, often a useful guideline.

Juran points out that quality improvement projects should be selected by the use of Pareto
analysis, that is, the IE should focus first on the most frequent errors.
It is these projects which contain the bulk of the opportunity for improvement in
failure rates, quality costs, downtime, process yields, etc. (Juran, page 2-17)

Defect concentration chart. Sometimes defects or other problems can be recorded or

displayed according to location. For example, breakdowns of machines can be displayed on
a map of a factory to determine if the breakdowns are occurring in a particular area.
Defects in welds on a product can be displayed on a diagram of the product to see if the
weld defects are concentrated in a particular part of the product. The Quality Training
Portal has an example at the web page Concentration Diagrams. As I'll discuss in Chapter
10, visual displays of data often help people reach conclusions more quickly.

Brainstorming and Nominal Group Technique. Usually everyone on the team has ideas about
why the problem is occurring. However, a good process should be used to develop a list of
possible causes to avoid the team from focusing too early on just a few causes. Team
brainstorming usually works best with these steps:
1. Clear statement of the problem or issue for which ideas are being generated. For
example, generate possible causes why customers sometimes receive shipments
that are missing items.
2. Silent generation of ideas by each individual, writing on paper.
3. Round robin collection of ideas, recorded on a board or flip chart visible to all. Each
person gives one idea during each round, and can “pass” during any round. During
this step, ideas are not evaluated. The more ideas and the more different the ideas,
the better. After a round in which all pass, some time should be allowed for all to
think a bit more. The facilitator should be sure to encourage everyone to volunteer
all the items generated during the silent generation. Sometimes people are hesitant
to volunteer ideas that differ from what others have said, but one of the values of
working in a team is the generation of different types of ideas.
41
 4. Clarification and combination of ideas. Often some ideas are similar in concept, but
different in wording. The team works together to clarify and combine ideas. Ideas
should not be overly combined; if the person who volunteered an idea wants to keep
an idea separate, the team should usually defer to that person.
5. Prioritization among the ideas. This step is not always appropriate. If the team is
brainstorming causes for a problem, data, not voting, should usually be used to
determine which causes are more important. If the team is brainstorming ideas for
next steps for the improvement, prioritization is needed. If there are 10 or few
items, each team member can rank order the items (from 10 for the highest priority
to 1 for the lowest) and the sum is used to prioritize. If there are more items, voting
can be used to first reduce the list. For example, each person is given a number of
votes equal to half the number of items. Each person allocates votes; votes can be
allocated all to one item (expressing a strong preference), or allocated among items.
Sometimes colored dots or colored pens are used, so the team’s preferences are
visible and can be discussed.

Cause and effect diagram or fishbone diagram. Often causes can be grouped into overall
categories such as people, equipment, methods, and materials. The figure below includes
those labels on what are called the major bones of the fishbone, with more specific ideas
categorized under those labels. Smaller lines can be included as needed.

The five whys and root cause analysis. According to Robitaille (page 1).
Root cause analysis (RCA) is an in-depth investigation into the cause or causes of an
identified problem, a customer complaint, a nonconformance, the nonfulfillment of a
requirement, or an undesirable condition.
The goals are
1. to determine why the situation occurred, tracing back in time through previous
steps in the process, and
2. to prevent the situation from occurring again.
The goal is not to blame a person, but to fix the system. One approach is to continue to ask
"why" at least five times, as we did in chapter 2 in the example about an incorrect shipping
label. That situation could be solved superficially by telling the workers “don’t put the
wrong shipping label on a customer’s shipment,” and that solution may last an hour, a day,
or a week, but unless the reasons for the wrong labels are identified and fixed, wrong labels
will happen again.

Box plots. Box plots are useful for the visual display of variability in data. For example, data
were collected on the number of damaged shipments for first and second shift for 3 weeks
(15 data points for each shift).

First shift Second shift

8 6
6 5
5 5

42
 8 5
6 4
7 5
3 6
5 6
5 3
3 6
7 2
3 6
6 8
2 4
9 4
Comparing the average number of defects, we might conclude that because the first shift
has a higher average number of damaged packages (5.53 versus 5.00 for the second shift),
the workers on that shift are doing something to cause more damage; the analyst might
focus on determining what is different between how those shift works. However, that
conclusion would not be correct, as shown by the diagram below, with a box plot for each
shift.

43
The top edge of each box is the 75th percentile of the data for that shift (75% of the time
the number of defects for that shift was below that number), the middle is the median
(50% of the time the number of defects for that shift was below that number), and the
bottom is the 25th percentile (25% of the time the number of defects for that shift was
below that number). The lines extend out to the largest and smallest value for each shift.
This box plot shows that while the medians differ (as did the averages), the data have
considerable overlap and the difference in shifts probably do not account for the damages.
Thus, the analyst would know that defects are probably being caused by some reason that
occurs on both shifts. This plot used only two box plots for the two shifts, but more box
plots can be compared in one chart.

Scatter diagram. A scatter diagram (or X-Y plot) shows how one variable affects another.
Perhaps heavier boxes are receiving more damage. The plot below shows the damage rate
(that is the fraction of packages that are damaged) as a function of weight (to the nearest
half pound). This plot gives some support to the argument that the damage is related to
weight.

Regression analysis. A scatter diagram shows the effect of only one variable on the variable
we are studying. More sophisticated analysis allows for more independent or explanatory
variables. With more variables, plots cannot be used, but the mathematical techniques of
regression analysis can indicate which variables are most important in explaining the
variation in the dependent variable, that is, the variable being studied.

Design of experiments and analysis of variance. After careful analysis of data, a team may
have some good ideas about why the problem is occurring and may have some good ideas
about how to fix the problem. A carefully designed experiment can test these ideas. The
analysis of variance (ANOVA) is a mathematical technique (like regression analysis) for
determining which variables have the most effect on the variable being studie.

Control charts. Key measurements of a process should be monitored to make sure that the
process is functioning within the required limits. The design and use of control charts
requires mathematical analysis to distinguish natural variation in the system from clear
indications that the process has changed. I'll show you more about control charts in
Chapter 10.

5.2 Systems thinking

The educational system in the US has these parts:
 Preschool and kindergarten,
 Elementary schools - grades 1-6,
 Middle schools - grades 7-8,
 High schools - grades 9-12, and
 Higher education, including 2-year community colleges, and 4-year colleges and
universities.
We call this list of parts a “system” because the parts interact with each other to achieve
overall goals, such as an educated population. The parts may interact through cause and
effect or through the exchange of information or material. We can think of the input and
44
output of the overall system, and we can also think about the input and output of each part;
for example, some of the students who graduate from middle school (an output) go on to
high school (an input). We can also think of the parts as being processes in the educational
system.

Feigenbaum defines a system as:

“a group or work pattern of interacting human and machine activities, directed by
information, which operate on and/or direct material, information, energy, and/or
humans to achieve a common specific purpose or objective.” (page 92)
Clearly this definition relates closely to industrial engineering and explains why some
industrial engineering departments are called industrial and systems engineering.
However, systems engineering is also used sometimes in a more limited meaning, to refer
to designing a computer and information system.

When we define a system we implicitly draw a line around some parts to include those
parts and to exclude others. For example, the educational system includes the schools, but
not the roads students travel on to get to school or the organizations that employ students
after they graduate. Generally, looking at a larger system is more accurate but harder. We
can understand some aspects of the educational system without considering these other
parts, but some aspects require looking at the larger system. We can still examine the
educational system if we remember to include in our study its interactions with its
environment, such as the transportation system and the employment system.
For the IE, the systems approach is important because it reminds us to consider the
environment surrounding the system we are studying and to move the boundaries outward
as much as possible so that we consider a problem in its larger context.

Some systems have feedback. A thermostat is an example of a system in which negative

feedback helps the system maintain a set temperature; the feedback is called "negative"
because an increase in temperature leads to a decrease in heating. The educational system
doesn’t tend to have a lot of feedback and that may hamper improvement of the system.
Have you ever been asked by your high school to give feedback on how well your education
prepared you for college or for work?

The operation of a system that has evolved without conscious design or a system that has
been designed piece by piece almost always can be improved. Analysis means to take a
system apart in order to understand how the parts work; systems thinking stresses
synthesis, that is, understanding how the parts work together and how the system works as
a whole. Understanding how each part of the educational system works is not enough for a
good understanding and certainly not enough for making recommendations for improving
the educational system; better recommendations would come from understanding how the
parts of the system work together also.

A system has the property that a change to one part can have effects, sometimes surprising
effects, on other parts. A state might require that students entering state-funded four year
universities meet certain standards (for example, knowledge of a foreign language). The
effects of such a change might be good for the universities, but the effects on the high
45
schools must also be considered; they might, for example, have to provide more language
classes. Improving one part of system may have good or bad consequences on another part
of the system. Using antibiotics to cure diseases has had the consequence of creating
bacteria that are immune to some antibiotics; within the system of individual patient and
doctor, having the patient take antibiotics makes sense, but in the larger system, we might
want to be more cautious about their use.

A system may have emergent properties, that is, properties of the whole that are not the
property of any part. For example, living systems are alive, but one can’t isolate that
property in any part of the system; it is a property of the entire system.
Turner et al. (page 38) classify systems these ways:
 Natural (for example, a river) or man-made (for example, a bridge),
 Static (for example, a bridge) or dynamic (for example, the U.S. economy),
 Physical (for example, a factory) or abstract (for example, the architect’s drawing of
the factory), and
 Open (interacting with its environment) or closed (interacting very little with its
environment)

Certain types of systems with feedback occur frequently in organizations and in society. If
you learn to recognize them, you can learn what actions to take. William Braun describes
10 system archetypes:
 Limits to Growth (aka Limits to Success)
 Shifting the Burden
 Eroding Goals
 Escalation
 Success to the Successful
 Tragedy of the Commons
 Fixes that Fail
 Growth and Underinvestment
 Accidental Adversaries
 Attractiveness Principle
This web page has a summary of the above models.

In this book The Fifth Discipline, Peter Senge argues that organizations must become
learning organizations by building knowledge of four disciplines: personal mastery, mental
models, shared vision, and team learning. The "fifth discipline" is systems thinking, and he
gives these laws of complex systems:
1. "Today's problems comes from yesterday's 'solutions.'" Solutions can have
unintended and undesired effects.
2. "The harder you push, the harder the system pushed back." "Compensating
feedback" may keep a system in the state it started.
3. "Behavior grows better before it grows worse." Actions that make short term
improvement may cause long term disaster.
4. "The easy way out usually leads back in." Easy and obvious solutions would have
been done already if they would have worked. Hard work is needed to find the real
solution.
46
 5. "The cure can be worse than the disease." Some easy solutions become addictive.
6. "Faster is slower." Any organization has an optimal rate of growth.
7. "Cause and effect are not closely related in time and space."
8. "Small changes can produce big results - but the areas of highest leverage are often
the least obvious."
9. "You can have your cake and eat it too - but not at once." For example, an
improvement in quality pays off eventually in improved profits.
10. "Dividing an elephant in half does not produce two small elephants." Some problems
must be solved by improving the whole system.
11. "There is no blame." "You and the cause of your problems are part of a single
system."
While most engineers design physical objects (cars, bridges, and so forth), IEs design and
improve production systems. A production system is a system that produces goods or
services for customers. IEs have to think about how a production system works as a system
by using the types of ideas I've just described.

The history of engineering often emphasizes the design of objects, but Thomas P. Hughes
argues that the important inventors in the 20th century were actually builders of systems,
not just inventors of objects. Hughes wrote:
“To associate modern technology with individual machines and devices is to
overlook deeper currents of modern technology that gathered strength and
direction during the half-century after Thomas Edison established his invention
factory at Menlo Park. ... Large systems -- energy, production, communication, and
transportation -- compose the essence of modern technology.” (pages 184-185)’
Hughes argues that Edison was concerned with the electric system not just the lightbulb.
Hughes gives this quote from Edison’s papers:
It was not only necessary that the lamps should give light and the dynamos generate
current, but the lamps must be adapted to the current of the dynamos, and the
dynamos must be constructed to give the character of current required by the
lamps, and likewise all parts of the system must be constructed with reference to all
other parts, since, in one sense, all the parts form one machine, and the connections
between the parts being electrical instead of mechanical. Like any other machine the
failure of one part to cooperate properly with the other part disorganizes the whole
and renders it inoperative for the purpose intended.

The problem then that I undertook to solve was stated generally, the production of
the multifarious apparatus, methods, and devices, each adapted for use with every
other, and all forming a comprehensive system. (Hughes page 73)
Hughes argues that, like Edison, Ford was a system builder, a builder of a production
system:
[From 1910 to 1913] Ford and a few like-visioned mechanics and self-educated
engineers created at his Highland Park plant a system of mass production unlike any
the world had even seen. They established a finely directed, controlled, and steady
flow of energy and materials on a scale then unprecedented. (Hughes, page 203).

47
5.3 Lean operations
The word “lean” means skinny or having no fat. Lean operations have no waste.
Taiichi Ohno described seven types of muda, or waste: (Womack and Jones, 309-310)
 “overproduction ahead of demand” - products that are produced before they are
needed to meet consumer demand have to be stored (storage costs money) and
represent the investment of money that could have been used elsewhere.
 “waiting for the next processing step” - products that complete a process and then
have to wait to be processed again require storage and represent invested money.
 “unnecessary transport of materials” - the movement of products into and out of
storage, or the movement of products over long distances in a plant because the
layout is poor wastes time and wastes money in transport and in the purchase of
transporting devices.
 “overprocessing of parts due to poor tool and product design,” including any
processing that does not add value from the customer’s point of view.
 “inventories more than the absolute minimum” - excess inventory represents money
that could be invested elsewhere and thus represents waste.
 “unnecessary movement by employees during the course of their work” - a poor
layout wastes time.
 “production of defective parts.” - defective products or defectives services will have
to be reworked or redone and may lose customers who will go elsewhere.
Gnanam cites Alukul for another waste: “not fully using people’s mental and creative skills.”

The framework of lean operations focuses on the concepts of value, value stream, flow, pull,
and perfection (Womack and Jones, page 8) in order to reduce all of these types of waste.
Value is defined by the customer. An organization must have a clear definition of value as
perceived by the customer. Time and money spent on features of a product or a service that
the customer does not perceive have value are wasted time and money. Knowing what the
customer values requires becoming close to the customer and constantly solicitly feedback.
In lean operations, a process flow diagram (which I discussed earlier) is called a value
stream map. The diagram is similar, but the reason for creating the diagram is to identify
 activities that “create value as perceived by the customer,”
 activities that “create no value but are currently required by the product
development, order filling, or production systems ... and so can’t be eliminated just
yet,” and
 activities “which don’t create value as perceived by the customer ... and so can be
eliminated immediately” (Womack and Jones, page 38).
After those last activities are eliminated, the IE focuses on reducing the non value adding
steps. The value stream mapping also identifies the time actually spent in adding value and
time the product spends in storage or transport. Time in storage or transport is waste and
should be eliminated.

Picture-Perfect Manufacturing, from MMS Online, describes how Stremel Manufacturing, in

Minneapolis, Minnesota, used current state maps and future state maps to make sure that
waste-reduction initiatives “improve the overall flow rather than merely optimize
individual steps.”
48
In continuous flow, a product never waits but flows continuously through the
manufacturing system, thus eliminating time in storage and in transport. Batches and
queues should be eliminated. If products move through the production systems in batches,
then the first item in a batch must wait until the last item in a batch is completed before it
moves to the next processing time; batches mean product spends time waiting, and that
time is waste. The presence of queues mean that a product was completed at a previous
processing step before the next step was ready for more input. Since the final step of the
production process is shipping the product to customers, product should be produced at
the rate that meets the market demand. The principle can be applied in the production of
services also.

One barrier to flow and one reason for using batches is the time necessary to switch the
production facility from producing one kind of product to producing another. Setup
Reduction: At the Heart of Lean Manufacturing, from MMS Online, describes how Richards
Industries, a manufacturer of specialty valves in Cincinnati, Ohio, reduced its setup times
from an average of 50 minutes to 27 minutes. This reduction enabled them to reduce the
typical batch size from 200 to about 20 to 30.

Flow can be improved by eliminating bottlenecks as shown by the following example from
World War II.
An operations research worker during his first day of assignment to a new field
command noticed that there was considerable delay caused by the soldiers having
to wait in line to wash and rinse their mess kits after eating. There were four tubs,
two for washing and two for rinsing. The operations research worker noticed that
on the average it took three times as long for the soldier to wash his kit as it did for
him to rinse it. He suggested that, instead of there being two tubs for washing and
two for rinsing, there should be three tubs for washing and one for rinsing. This
change was made, and the line of waiting soldiers did not merely diminish in size;
on most days no waiting line ever formed. (page 3, Morse and Kimball)
A bottleneck is the narrowest part of a bottle and limits the flow in or out of the bottle. In
the original situation with only two tubs for washing, the lines in front of those tubs would
have been long, indicating that the wash tubs were the bottleneck, that is, the place in the
production process with the least capacity. If washing took three minutes and rinsing took
one minute, two wash tubs can serve 40 soldiers per hour while two rinse tubs can serve
120 soldiers per hour. With the new configuration, three wash tubs can serve 60 soldiers
per hour, the same service rate as one rinse tub.

Bottlenecks can be identified by looking for places where WIP (Work in Progress) piles up
and create queues. The processing rate at a bottleneck can be increased by reducing the
time to process one item or by adding more processing capability. As a bottleneck’s rate is
improved, WIP in front of the bottleneck will disappear, but another bottleneck may now
appear.

Pull. In a lean system, no product or service is produced until a customer asks for it, that is,
product is pulled not pushed through the system. Some product must be maintained in
sales places to meet immediate demand, but reduction in lead time through improvements
49
such as daily deliveries reduces the amount of stock kept on hand and allows more variety
in stock.

Lean systems constantly seek perfection. An organization should not compete against its
competitors. If benchmarking shows the company is doing better than its competitors, it
should not relax. “To hell with your competitors; compete against perfection by identifying
all activities that are muda and eliminating them” (Womack and Jones, page 40).

Lean operations use the following tools, in addition to the tools listed earlier:
 The five Ss - sort, set in order, shine, standardize, and sustain. Sort and throw out
tools that are not being used. Rearrange the work place so it is orderly. Keep
everything clean. Establish standard policies. Maintain these activities. This Shop
Really Shines ... And Sorts, Simplifies, Standardizes and Sustains, from MMS Online
describes the application of 5S at Merritt Toll Company, in Kilgore, Texas. The
company found that the implementation of 5S was a “lean enabler” because the
visual aspect of 5S allowed them to see the next steps to take, literally and
figuratively. The “visual workplace” is a phrase that captures the benefits of 5S:
workers can use visual cues to do their work. For example, Parkview’s Emergency
Department uses color codes as visual clues. A Tracker Board keeps everyone up-to-
date on the status of each patient. The ED has three zones and each is color coded.
Also, in the trauma room, supplies for head, chest, and abdomen are color coded.
The Braslow tape is a measuring stick that can be laid next to a child to make a quick
estimate of the dosage based on the child's height; each region of the stick has a
color code corresponding to the drawer with appropriate dosages of each
commonly used drug. The Quality Training Portal has a lot more information about
the 5Ss at the web page What You Need to Know About 5S's.
 Kaizen - the Japanese word meaning continuous improvement. Make small and
continuous improvements because they add up to large improvement.
 SMED - single minute exchange of die. In order to reduce batch sizes, the
manufacturing system must be able to switch quickly from making one product to
making another.
 TPM - total preventative maintenance or total productive maintenance. Workers
should be involved in maintaining all equipment at peak performance throughout
the lifetime of the equipment. I'll say more about TPM in Chapter 6.
 Poka yoke - mistake proofing. The workplace should be designed so workers cannot
make mistakes. For example, a three-pronged electric plug cannot be inserted
incorrectly. John R. Grout of Berry College has listed many examples of mistake
proofing here.
The Quality Training Portal has a lot more information about error proofing at the
web page What You Need to Know About Mistake-Proofing (Poka Yoke). Harrington
(page 150) gives some examples applicable to office work:
o use a phone that does not have a disconnect button so you cannot mistakenly
disconnect a phone call;
o mail letters in envelopes with plastic windows so the address does not have
to be retyped, perhaps introducing errors, and so that the correct letter goes
to the recipient;
50
  Takt time. The time to produce a product should be based on the demand from that
product and then the whole flow should be designed around that time. Takt time
sets the pace that is needed to meet customer demand.
 Kanban. A card or other visual signal is used to trigger production in the pull system.
Steelcase: Learning How to Implement Customer-Focused, Enterprise Wide Lean describes
the improvements made in one company.

The Quality Training Portal has a lot more information about lean manufacturing at the
web page What You Need to Know About Lean Manufacturing.

5.4 Deming’s 14 points,

W. Edwards Deming (1900-1993) applied statistical process control during World War II to
help the US mobilize its war time production. After the war, Deming tried to get US
companies to continue to use these ideas, but he found little response. US Manufacturers
were facing soaring demand from consumers after the war, and felt little need to think
about efficiency and quality. In 1950 JUSE (the Union of Japanese Scientists and Engineers),
on the other hand, invited Deming to Japan to help apply the Japanese apply these ideas in
the rebuilding of Japanese production.

Japan credits Deming for playing a major role in the success of Japanese manufacturing
products, especially in Japanese improvements in quality and efficiency. The most
prestigious award for quality improvement awarded in Japan (by JUSE) is called the
Deming Prize.

Several anecdotes illustrate what Deming was like.

 He composed an easily sung version of the Star Spangled Banner .
 When asked how he wanted to be remembered, he said “I probably won’t even be
remembered,” but added “Well, maybe ... as someone who tried to keep America
from committing suicide.”
 Deming’s first lectures in Japan in 1950 were transcribed and made into a book by
JUSE. He donated the royalties to JUSE.

In 1980, NBC aired a documentary titled “If Japan Can ... Why Can’t We?” that described
Japanese progress in efficiency and quality in the automobile and electronics industries,
and that also explained why the Japanese credited Deming with much of their success. As
Deming said, his phone rang off the hook. I'll talk more about the history of Japan, Deming,
and US companies in Chapter 12.

What did Deming teach the Japanese? In his book Out of the Crisis, published in 1986:
Deming summarized his teaching in the following 14 points,
1. Create constancy of purpose towards improvement of product and service, with the
aim to become competitive, stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management
must awaken to the challenge, must learn their responsibilities, and take on
leadership for a change.

51
 3. Cease dependence on inspection to achieve quality. Eliminate the need for
inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead minimize
total cost. Move toward a single supplier for any one item, on a long-term
relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve
quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines
and gadgets to do a better job. Supervision of management is in need of overhaul, as
well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company.
9. Break down barriers between departments. People in research, design, sales, and
production must work as a team, to foresee problems of production and in that may
be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero
defects and new levels of productivity. Such exhortations only create adversarial
relationships, as the bulk of the causes of low quality and low productivity belong to
the system and thus lie beyond the power of the work force.
11. a. Eliminate works standards (quotas) on the factory floor. Substitute leadership.
b. Eliminate management by objective. Eliminate management by numbers,
numerical goals. Substitute leadership.
12. a. Remove barriers that rob the hourly worker of his right to pride of workmanship
the responsibility of supervisors must be changed from sheer numbers to quality.
b. Remove barriers that rob people in management and in engineering of their right
to pride of workmanship. This means, inter alia, abolishment of the annual or merit
rating and of management by objective.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The
transformation is everybody’s job.
Deming often lamented that some managers liked some of his points, but rejected others.
Deming said his 14 points were not a menu from which a manager could choose.

More than the other frameworks in this chapter, Deming’s principles are about people.
Regarding “drive out fear,” Deming elaborated:
No one can put his best performance unless he feels secure. Se comes from the Latin,
meaning without, cure means fear or care. Secure means without fear, not afraid to
express ideas, not afraid to ask questions. Fear takes on many faces. A common
denominator of fear in any form, anywhere, is loss from impaired performance and
padded figures. (Out of the Crisis, page 59)
In point 10, Deming says that the primary cause of poor work is not lack of effort by
workers.
Eliminate targets, slogans, exhortations, posters, for the work force that urge them
to increase productivity. ‘Your work is your self-portrait. Would you sign it?' No –
not when you give me defective canvas to work with, paint not suited to the job,

52
 brushes worn out, so that I can not call it my work. Posters and slogans like these
never helped anyone to do a better job. (Out of the Crisis, page 65)
Deming was famous for insisting on measurements, but he also thought numbers should
not be used to judge workers.
Goals are necessary for you and for me, but numerical goals set for other people,
without a road map to reach the goal, have effects opposite to the effects sought.
(Out of the Crisis, page 69)
Deming emphasized repeatedly the need to remove barriers that prevent good work.
Give the work force a chance to work with pride, and the 3 per cent that apparently
don't care will erode itself by peer pressure. (Out of the Crisis, page 85)
He said that the annual rating of individuals should be eliminated.
The day is here when anyone deprived of a raise or of any privilege through misuse
of figures for performance (as by ranking the people in a group) may with justice file
a grievance. (Out of the Crisis, page 118)

Deming is often quoted as saying "Measure, measure, measure," but he stressed using that
feedback to improve the process, not to judge the performance of employees. Denove and
Power describe the work of J.D. Power and Associates in performing customer satisfaction
surveys for many companies. Denove and Power stress that companies that listen to the
voice of the customer from these surveys (and other input) are more profitable, but they
lament that some companies use the surveys to judge particular stores, particularly to
incentivize the managers of stores by making their salaries dependent on the customer
satisfaction score. They point out the natural effect of such a strategy: employees in the
stores will seek to manipulate the customer satisfaction ratings, even to the extent of
begging customers to give good reviews.
By focusing corporate attention on customer satifaction scores, did we somehow let
a very powerful genie out of the bottle? As we've said many times throughout this
book, our goals is to emphasize some crucial truths: listening to the needs of your
customers and creating advocates by striving to deliver upon those needs are
paramount to long-term profitability. We never meant for companies to take their
eyes off these basic truths by focusing their attention exclusively on the scorecard.
(page 228)
The lesson here is that no single quantitative measure, or even a group of such measures,
can replace good judgment.

Fundamentally, Deming believed in people.

People require in their careers, more than money, ever-broadening opportunities to
add something to society, materially and otherwise. (Out of the Crisis, page 85)

People stay home or look around for another job when they can not take pride in
their work. Absenteeism and mobility are largely creations of poor supervision and
poor management. (page 121)

While I have focused on Deming’s 14 points, other quality gurus have made similar points.
For example, in Quality without Tears, Philip B. Crosby lists 21 points under five headings
that make up the Crosby Quality Vaccine: Integrity, Systems, Communications, Operations,
53
and Policies. These features must be present to have a quality organization. Point C under
Communications is:
Each person in the company can, with very little effort, identify error, waste,
opportunity, or any other concern to top management quickly -- and receive an
immediate answer. (pages 7-8).
Like Deming, Crosby blames management for a lack of quality; he cites as the most
important symptom of a troubled organization:
Management denies that it is the cause of the problem. (page 5)
Feigenbaum points out the high costs of poor quality, which he breaks into costs of
prevention (management, training, etc.), costs of appraisal (incoming inspection,
calibration, maintenance, testing), costs of internal failure (scrap and rework), and costs of
external failure (warranty expenses and customer services) (page 115). He also says (page
77)
Quality must be designed and built into a product; it can not be exhorted or
inspected into it.
According to Feigenbaum, a Total Quality System is achieved by considering
both how well each person, each machine, and each organization component works
individually and how they all work together. (page 85)
Feigenbaum lists 12 points that describe an effective quality system (pages 107-108). Point
7 says that the system
makes quality motivation a continuous process of quality goals, quality
measurements, and an attitude of quality-mindedness beginning with general
management.

5.5 Six Sigma

Consider the following three targets, showing where arrows hit a target when shot by three
different archers.
Target 1

In Target 1, all the holes are in the center, showing that the first archer has consistently put
the arrows where they should be.
Target 2

54
Target 2 shows a tight cluster of arrow holes, but that cluster is not in the center. The
second archer is being consistent, but the archer’s aim is off.
Target 3

On Target 3, the holes are scattered around the center, but with a large amount of
dispersion. The third archer must be using different methods each time.

Target 1 represents desired performance. How can we get the second and third archers to
achieve that desired performance? The second archer needs only to readjust the aim and
the tight cluster of arrow holes will be in the desired location. However, what can we tell
the third archer to do? The third archer needs to focus first on being consistent. That archer
must be shooting the arrow differently each time. Achieving consistency will be hard work
requiring looking at every part of the process the archer is using.

Six Sigma emphasizes using data and quantitative analysis to reduce variability. If the
variability in a process can be reduced, then the process can be centered to produce items
with the required specifications.

55
Six Sigma aims to achieve a six sigma performance target (only 3.4 defects out of a million
opportunities) for product and service characteristics that are critical to quality, that is, the
characteristics that matter most to customers (Harry and Schroeder, page 13).

A six sigma level of defects is a dramatic improvement over the defect rate of the average
company, which is 3.5 to 4 sigma. Harry and Schroeder point out that 1500 square feet of
wall-to-wall carpet cleaned to a three sigma level would still have about four square feet of
uncleaned carpet, while a six sigma level would mean the uncleaned area would be the size
of a pinhead (Harry and Schroeder, pages 14-15). The resulting quality saves money for the
company by reducing the need for rework. As a customer, you are likely to call back the
three sigma carpet cleaners and make them redo the work correctly (at their cost), but you
won’t call back the six sigma cleaners. The six sigma organization has dramatically reduced
the cost for rework.

Production processes need to be consistent in efficiency, quality and safety. Six Sigma seeks
to reduce the variability in the time and resources used to perform a task, the
measurements concerning a product or service that indicate value for the customer, and
the processes that ensure safety. Every task is done right the first time. Because defects are
reduced, costs are reduced: costs for rework, repair, handling customer complaints, and
warranties. In fact, Phil Crosby argues that quality is free because increased quality
decreases costs so much.

How does Six Sigma achieve this increase in consistency? The DMAIC steps that you have
already read about came from Six Sigma. Six Sigma really is another version of industrial
engineering, involving the same steps to achieve continuous improvement.

Six Sigma uses the following tools, in addition to the tools listed earlier:
 Benchmarking. An organization should use data to determine where its products
and processes stand in relation to competitors and to amount of improvement in
specific areas that is necessary to have the organization outperform its competitors.
(Harry and Schroeder, page 61).
 Process capability analysis. Recall the picture below, showing the targets shot at by
three archers. Let's assume that all the holes created by the first archer lie within a
circle of diameter of 18 mm and that the center of the target is a circle of diameter
20 mm. If this archer aims in the center, his process is capable of shooting all the
arrows into the target's center. The same is true for the second archer. However, the
holes from the arrows shot by the third archer lie within a larger circle; let's say it is
a circle of diameter 66 mm. The fact that 66 mm is greater than 20 mm indicates
that the process used by the third archer is not capable of putting all the arrows in
the center of the target, even when the archer's aim is at the center. Process
capability analysis involves determining the variability in a measurement produced
by a process and comparing that variability to the range allowed in that
measurement. If the actual variability is greater than the allowed variability, the
process is not capable of producing the measurement desired and the process needs
improvement, that is, the variability in the process must be reduced.

56
  PFMEA - Potential Failure Mode Effect Analysis. In PFMEA, a part of the production
system is analyzed to consider all the possible ways in which failure can occur. Each
possible mode of failure is rated for the seriousness of the effect on the production
system, the frequency of occurrence, and the ability to detect and repair the failure.
You can see scales for each of these at The Quality Training Portal (Generic Severity
Rating Scale, Generic Occurrence Rating Scale, and Generic Detection Ranking Scale).
Each potential failure is then assigned a Risk Priority Number (RPN), calculated as
severity rating x occurrence rating x detection rating, and the failures with highest
RPM values are targeted for reduction. The FEMA Info Centre has a lot more
information. A fault tree analysis is similar, but uses a visual display of the sequence
of events that can be caused by a failure. The Quality Training Portal has an example
of a fault tree at the web page Fault-Tree Analysis.

5.6 Sustainability
The Brundtland Commission (also called the World Commission on Environment and
Development) defined sustainable development as
development that meets the needs of the present, without compromising the ability
of future generations to meet their own needs.

Recycling is an important part of sustainability. For example, consumers can buy carpet
made from nylon fiber recycled from old carpet. When the consumer wants to dispose of
carpet made from Nylon 6, manufacturers will take back the old carpet and recycle it into
new carpet. But the collection, analysis, and reuse of old carpet has presented challenges.
For example, the old carpet must be analyzed in order to determine its content and to plan
its reuse. The carpet industry and government are working together through Carpet
America Recovery Efforts (CARE) to prevent used carpet from being sent to landfills.
Initiatives include designing ways to economically collect used carpet, developing new
products, and finding markets for the new products.

The benefits of recycling have been long known, but the reverse logistics of collecting items
for remanufacturing is daunting. In 1981 Brown wrote (page 191):
The energy required to recycle aluminum is only 4 percent of that required to
produce it from bauxite, the original raw material, while the energy to recycle
copper is only a tenth that used to produce the original material. For steel produced
entirely from scrap, the saving amounts to some 47 percent. Recycling newsprint
saves 23 percent of the energy embodied in the product and also reduces the
pressure on forests: a ton of recycled newsprint saves a ton of wood, a dozen trees.
Recycling glass containers saves 8 percent, but returnable glass containers, of
course, save far more energy.

The EPA gave the following recycling rates for 2013 for the US.
 Lead-acid batteries: 99.0 percent,
 Steel cans, 79.6 percent,
 Newspapers/mechanical papers: 67.0 percent,
 Yard trimmings: 60.2 percent,
 Aluminum beer and soda cans: 55.1 percent,

57
  Tires: 40.5 percent,
 Selected consumer electronics, 40.4 percent,
 Glass containers: 34.0 percent,
 PET bottles and jars: 31.3 percent, and
 HDPE natural (white translucent) bottles: 28.2 percent.
“Mechanical papers include directories, newspaper inserts, and some advertisement and direct
mail printing.”

Electronic waste (computers, cell phones, and so forth) is an increasing problem because of
the toxic chemicals in such equipment: fire retardant, cadmium, mercury, and lead.
Recycling is difficult because of the need to collect waste from consumers (at curbside or at
drop off centers), the need to sort waste (for example, sorting glass containers by color and
removing contaminants such as metal caps), and the need for companies to have a steady
source of supply of high quality waste material.

The same supply chain that delivers a company's product to consumers can, to some
extent, be used to return that product. The phrase "reverse logistics" refers to the return of
goods for refund, repair, and recycling. UPS, for example, offers to help companies with
Asset Recovery and Recycling Management. Reverse Logistics Provides Green Benefits
describes how Coors, Dell, and other companies are recovering and reusing material from
consumers.

Sustainability involves more than recycling. Hawken (page 12) states that production
processes that use nonrenewable resources, that require excessive amount of energy, or
that generate waste are not sustainable.

All engineers have a role to play in achieving sustainability. Some aspects of sustainability
relate more to civil engineering - building design - or mechanical engineering - product
design. IEs have a large role to play in designing sustainable practices because we focus on
the reduction of waste and because we recognize that optimizing a part of system may
cause suboptimization of the entire system. The concepts of life cycle analysis and systems
analysis that underlie sustainability clearly relate to industrial engineering and industrial
engineers should be leading in this new field.

In "Life" is Our Ultimate Customer: From Lean to Sustainability, Gary Langenwalter points
out that
Only six percent of materials actually end up in products
and that
Short-term financial returns always trump longer-term issues such as caring for the
environment and social well being until the long term suddenly becomes short term
- like Hurricane Katrina.
Langenwalter discusses the reasons to aim for sustainability and the way that lean
manufacturing methods apply. The green@work magazine reports on efforts by companies
to move toward sustainability. Companies work together through the United States
Business Council for Sustainable Development. CERES “is a national network of investment
funds, environmental organizations and other public interest groups working to advance
58
environmental stewardship on the part of businesses.” Its “mission is to move businesses,
capital, and markets to advance lasting prosperity by valuing the health of the planet and
its people.”

Some engineering societies have added sustainability to their codes of ethics. In November
1996, the ASCE (American Society for Civil Engineering) amended the first Fundamental
Canon of its code of ethics to read:
Engineers shall hold paramount the safety, health and welfare of the public and shall
strive to comply with the principles of sustainable development in the performance
of their professional duties.
The ASCE gave this definition of sustainable development:
“Sustainable development” is the challenge of meeting human needs for natural
resources, industrial products, energy, food, transportation, shelter, and effective
waste management while conserving and protecting environmental quality and the
natural resource base essential for future development.
The code of the NSPE (National Society of Professional Engineers) includes the statement
Engineers are encouraged to adhere to the principles of sustainable development in
order to protect the environment for future generations.
The Institute of Engineers in India, The Institution of Professional Engineers New Zealand,
The World Federation of Engineering Organisations, and The Japan Society of Civil
Engineers, among others, have statements about sustainability in their codes of ethics. The
code of ethics of the Institute of Industrial Engineers does not include any statement about
sustainability.

Some universities have created centers on topics related to sustainability.

 Carnegie Mellon's Center for Sustainable Excellence seeks to teach engineering
students about concepts that support sustainability, such as life-cycle assessment
and industrial ecology. They are developing a database of educational material.
 Michigan Tech's Sustainable Futures Institute offers a 15-credit Graduate certificate
in Sustainability.
 The University of Michigan's Center for Sustainable Systems has research projects in
modeling of energy flows, life cycle design, building design, renewable energy, and
renewable materials. The Center offers a 15-credit Graduate Certificate Program in
Industrial Ecology.
 The Engineering Design Institute at Philadelphia University "is an interdisciplinary
research center focusing on green materials, sustainable design and community
outreach."
 Colorado State University-Pueblo offers a minor in sustainability; the minor is
housed in the Department of Engineering.
This list is just a small sample of the education and research opportunities in sustainability
in engineering. The Board of Directors of the ASEE (American Society for Engineering
Education) adopted a statement in 1999 including this sentence:
ASEE believes that engineering graduates must be prepared by their education to
use sustainable engineering techniques in the practice of their profession and to
take leadership roles in facilitating sustainable development in their communities.

59
In 2012, Pueblo government developed a sustainability plan, which is being implemented.

Increasingly, sustainability is part of how engineers work.

5.7 Fads
Since the mid 1980s, the phrase Total Quality Management (TQM) has been used to
describe the application of Deming's ideas for improving quality, especially including
managerial commitment to quality, empowered teams, and statistical methods. The phrase
Continuous Quality Improvement (CQI) describes the same concepts but the term allows the
application of the ideas where the word "management" might meet resistance, for example,
in education. The term CQI is also widely used in healthcare.

A flexible manufacturing system can easily change from making one mix of products to a
different mix of products. An FMS allows quick response to changes in the market. Such
systems usually involve small batch sizes, extensive use of automation, a centralized
computer controlling all work flow, and ease in reconfiguring and adding machines. The
concept was popular from the mid 1980s through the mid 1990s.

Agile manufacturing stresses that manufacturers cannot control the market place and must
be able to move quickly to respond to changes. Companies must be able to develop and
produce products quickly and each product may have a very short life cycle. The concepts
were first developed in the early 1990s at the Iacocca Institute and Lehigh University. Key
concepts include rapid prototyping, a loose conglomeration of many small companies that
reform into new alliances for new products, and the use of information technology to share
information.

The 1993 book Reengineering the Corporation by Michael Hammer and James Champy
describes methods for
the fundamental rethinking and radical redesign of business processes to achieve
dramatic improvements in critical, contemporary measures of performance, such as
cost, quality, service, and speed. (page 32).
The approach, called Business Process Improvement, involves the use of teams to improve
processes, a focus on the customer’s perception of the process, empowering workers to
make decisions that keep customers happy, and placing the steps in a process in a natural
order.

World Class Manufacturing involves being the best manufacturer of a product as compared
to any organization anywhere in the world. This goal is achieved by using ideas from lean
manfuacturing, Japanese methods for improving quality, and benchmarking to identify and
adopt the best practices from other companies.

This description of management labels could go on for more pages, but you probably feel
like you are reading the same ideas over and over again. This list illustrates the fact that
industrial engineering ideas get regularly repackaged and resold under a new name.
Certainly there are differences among these concepts. For example, some focus more on
manufacturing, while some are applicable to any organization producing goods or services.
60
Some ideas have stronger roots in engineering and others have stronger roots in business.
The emphasis in each new repackaging is slightly different and old concepts and methods
are given new names, but you can often clearly see the good IE concepts under all the new
packaging.

For example, can you guess which approach is being described by this quote?
It is a business process that allows companies to drastically improve their bottom
line by designing and monitoring everyday business activities in ways that minimize
waste and resources while increasing customer satisfaction. (Harry and Schroeder,
page vii)
They are describing Six Sigma, although I am sure some practitioners of lean operations
would claim this description as well. Indeed, another fad is Lean Six Sigma.

The list of concepts I have focused on in this chapter includes some new packaging that
may not survive much longer (lean operations and Six Sigma), although I believe that
systems thinking and Deming’s 14 points have already shown that they have lasting power.
I also believe that sustainability will not fade.

Should we care that our ideas are repackaged (often by business school professors) and
resold? We should, of course, recognize that the new packaging usually means a new book
which usually contains a not thinly veiled advertisement for the consulting services of the
authors.
To date, every company that has implemented Six Sigma under our guidance has
seen profit margins grow ... Companies ranging from AlliedSignal to DuPont
Chemical have come to us because despite improvements they made in quality, their
profit margins were stagnating, if not shrinking. (Harry and Schroeder, page 1)
Books selling new fads almost always tell you that you need professional help to adopt the
new approach.

We might be annoyed by the rhetoric and even more annoyed by the jobs that go to
adherents of the latest fad rather than to industrial engineers, but I think we should,
overall, be pleased by the new fads because every new fad brings more people in contact
with the fundamental ideas of IE. Different organizations are still using language left over
from different fads, and as an IE you may need to adapt how you sell IE within your
organization depending on which fad they have embraced, but you can still sell and use the
fundamental concepts and approaches of IE, whatever they are called.

5.8 The two parts of a production system

Every production system has two parts:
1. Long lasting, physical assets, including facilities, production equipment, information
technology, and equipment for material handling and storage.
2. Procedures to train workers, schedule work, to do work, to perform maintenance, to
order inventory, and to track work.
Here are some examples.
A steel plant has:
1. Furnaces, ladles, molds, and equipment for chemical analysis.
61
 2. Procedures to follow in making steel, including how much scrap steel and other
material, what temperatures, and what molds are to be used for each job that is
done.
A hospital has:
1. X-ray and other diagnostic machines, rooms for patients, operating rooms, and
information systems.
2. Procedures for checking patients in and out, for scheduling operations, and for
tracking patient information.
A fast food restaurant has
1. A building, equipment used to make the meals, and places for people to eat.
2. A menu, opening hours, and procedures workers follow to greet customers, to take
orders, and to prepare and deliver meals to customers.

One way to understand the distinction between the two parts is to imagine that you visit an
organization when no one is working. You can observe the first part, the physical assets,
but you cannot observe the second part, the procedures for how the work is done.
Analogously, in a computer system, the first part is the hardware and the second part is the
software.

The distinction between these two parts of the production system is not perfect, but it is
useful and it is a traditional way to describe the tasks of an industrial engineer.
Changing the first part of a production system, the physical assets, usually takes a lot of
time. When we build a building, we generally intend to use the building for a long time. We
can remodel the inside of the building at some cost, but altering the size or shape of a
building is a major project.

Changes to the second part of a production system, the procedures, can usually be done
more quickly. Changing job responsibilities of workers or making a change to training
procedures requires thought, work, and time, but can be done much more quickly than
changing a building.

Industrial engineering education is often broken into courses that study these two parts of
the production system. Most programs include a course focused on facility location and
layout and a course focused on operations planning and control. I have followed that
approach. The next two chapters describe the tasks industrial engineers do regarding these
two parts of the production system. Chapter 5 focuses on the physical assets of an
organization and Chapter 6 focuses on the procedures for using those assets.

62
 Introduction to Industrial Engineering
By Jane M. Fraser
Chapter 8
IE Careers

This chapter has these sections:

 8.1 Employment Ask yourself:
o In what type of industry do I want to work?
o For what type of organization do I want to work?
o Where do I want to work?
What type of IE job do I want?
o Should I start my own business?
 8.2 Education and lifelong learning Ask yourself:
o Should I become a Professional Engineer?
o Should I pursue higher education?
o Should I seek certifications?
o What professional organizations should I join?
o How will I keep up to date with new ideas in IE?
 8.3 Ethics Ask yourself:
o What situation might arise in my professional career that would have ethical
aspects?
o How will I recognize such situations?
o How will I know what to do in such situations?

8.1 Employment
The following people are all graduates of CSU-Pueblo with a BSIE degree.
 When Jorgen Salo graduated with his BS, he went to work for DeBourgh
Manufacturing Company in La Junta, Colorado, a manufacturer of school lockers. He
is now president of the company.
 Megan New is an Environmental, Health and Safety Manager with Vestas.
 Joey Talbott works in Pueblo as a water quality engineer for the State of Colorado.
 Veronica Garcia is an Industrial Engineering Manager with Nestlé.
 Eric Samora is a Supply Chain Manager at Fiberguide Industries.
These job titles illustrate the different career paths that graduates with a BSIE degree can
take. Many university students have already made important professional and personal
decisions, but you will probably need to make other important decisions when you finish
your degree.

All career advice always urges you to plan: ask yourself questions about your goals, think
hard about the answers, and then plan your career so you can achieve your goals. Such
advice is excellent (I will give you such advice in more detail in this section) and many
people follow such advice - to some degree. However, many happy and successful people
will readily tell you that chance and luck played a large role. I like the word "serendipity"
which means a happy and unexpected find that occurs when you are looking for something
else.

95
When I graduated with a BA in math I decided to go for my Master's degree to have a more
readily marketable degree and because my professors said I should. I looked at math
programs, but decided I wanted to apply my math. I was accepted into the Department of
Industrial Engineering and Operations Research at the University of California at Berkeley -
and they actually offered to pay me to go to graduate school - so I accepted. I also liked to
idea of moving from New Jersey to California. I got my Master's degree in one year and
started my PhD program, again because my professors seemed to think I was good, but I
kept telling myself I really didn't intend to finish the program. But I did finish it, and when I
did, I had one made one clear career decision: I did not want to be a professor.

Because I was part of a two-career couple I ended up at Purdue University, in West

Lafayette, Indiana, but because I didn't want to be a professor, I took a research job at the
university. After a while the Department of Industrial Engineering asked me to teach a
course, so I did, and I was good at teaching and loved it. In 1980, I ended up as a professor,
and I moved to Ohio State in 1986 and then to Colorado State University - Pueblo in 1998.
I love being a professor.

One lesson I would like you to get from that story is for you to be prepared for serendipity.
If another path to your career goals or to your career happiness appears, be sure that you
have your eyes open enough to see it and your mind open enough to consider it. Another
lesson is for you to accept and seek out mentors who will offer you good opportunities. My
first department chair (Ferdinand Leimkuhler at Purdue) suggested I teach a course in
engineering economy and then later a course in decision analysis. I had never had a course
in either but ended up making those areas my specialty areas for teaching and research
For me, the most important part of my career happiness has been to be in an organization
where the professional contributions I wanted to make match the organization's mission.
For example, my move in 1998 to CSU-Pueblo was motivated by my desire to be at a
university where teaching is primary, research is expected, and service is valued.

My story is not unique. A former colleague of mine told me once about having been ill when
in graduate school. He was told that he had not long to live, a pronouncement that turned
out to be wrong. He said this experience had changed his attitude and after that he viewed
every event as a wonderful bonus. His career, like mine, involved taking advantage of
opportunities that arrived by serendipity.

However, taking advantage of serendipity doesn't mean you just take what comes. Consider
the usual advice that I cited earlier: ask yourself questions about your goals, think hard
about the answers, and then plan your career so you can achieve your goals. I add to that
advice: be prepared to take advantage of the good opportunities that arrive by serendipity.
As some have put it, when opportunity knocks, make sure you that answer the door.

Consider these questions:

 In what type of industry do I want to work?
 For what type of organization do I want to work?
 Where do I want to work?
 What type of IE job do I want?

96
  How much travel do I want to do?
 How much does money matter to me?
 How much does work matter to me as compared to family and leisure activities?
You may want to consider these questions in a different order. For example, you may want
to decide where to live first and then consider the other questions. However, deciding, for
example, to work in Pueblo obviously limits your choices about for what organization you
will work. Also, you may want to consider the answers of your partner to these questions.
Locating two good jobs in one area is called the "two body problem" and may require
sacrifices by both partners. Sometimes the members of a couple alternate the sacrifices.
One may, for example, provide primary support while the other attends graduate school,
and then they reverse roles.

Your answers to these questions will certainly change over time. Many people find travel
exciting when they are early in their careers, but then want to travel less if they have
children.

Most IEs work in manufacturing, but you should consider other fields. The NAICS system is
used to classify establishments according to their primary industrial activity. We can use
these codes to consider how industrial engineering can be used in many fields.

At the highest level of aggregation, NAICS lists these type of establishments:

 Agriculture, Forestry, Fishing and Hunting
 Mining
 Utilities
 Construction
 Manufacturing
 Wholesale Trade
 Retail Trade
 Transportation and Warehousing
 Information
 Finance and Insurance
 Real Estate and Rental and Leasing
 Professional, Scientific, and Technical Services
 Management of Companies and Enterprises
 Administrative and Support and Waste Management and Remediation Services
 Educational Services
 Health Care and Social Assistance
 Arts, Entertainment, and Recreation
 Accommodation and Food Services
 Other Services (except Public Administration)
 Public Administration

This web page from the US Census Bureau has a complete listing and I suggest you spend
some time looking at that list. Did you ever think about working for an organization in Doll,
Toy, and Game Manufacturing or a Limousine Service or Motion Picture and Video
Industries? Think big and think broadly before you make decisions.
97
You also should give some thought to the type of organization you might work for.
 Publicly held corporation,
 Privately held corporation,
 Federal, state, or local government agency,
 Not for profit organization, or
 Charitable organization.
Most IEs work for publicly traded for profit corporations. Almost all the big companies you
can think of fall into this category: for example, IBM, Ford, Intel, and Dell. "Publicly traded"
means anyone can buy a share of the ownership of the company on a stock exchange.
Some large companies are privately owned (or closely held); they do not have shares
available for purchase by the public. Every year Forbes magazine compiles a list of the
largest privately held companies. The list includes Bechtel, Enterprise Rent-A-Car, Toys "R"
Us, Hallmark Cards, and Mervyns.

Some companies are family owned; even if they may be publicly traded, members of one
family own a great deal of the shares. This list of the world’s largest family businesses
shows. Sam Walton's descendants own 50.9% of the shares of Wal-Mart. Ford family
members own about 40% of the voting stock of Ford Motor Company. Other family owned
businesses are not publicly traded: Cargill, Koch Industries, and Mars are examples. If you
work for a family owned business, especially a small one, you must consider the question of
how high you can rise in the firm if you are not a family member. The Asplundh Tree
Service was founded in 1928; in 2010 third generation family member Scott Asplundh
became the company’s CEO.

Some companies have some workers who are unionized while others do not. According to
the US Bureau of Labor Statistics, in 2014, 11.1% of wage and salary workers were
members of unions, but the percent unionized varies by type of employment. In local
government, 41.9 % of workers are unionized, a category that includes teachers, fire
fighters, and police officers. In transportation and utilities, 19.6% of workers are unionized,
but finance has only 1.3 % unionized.

Some companies are big, as measured by revenues or number of employees. IBM has
almost $100 billion in annual revenue and employs close to 380,000 people, Hewlett
Packard has revenue of over $57 billion (about 65% of it generated outside the US) with
about 302,000 employees, and Proctor and Gamble has over $83 billion in annual revenue
and employs about 118,000 people.

Most businesses are small. According to the Small Business Administration, small
businesses (that is, businesses with fewer than 500 employees)
 Represent 99.7 percent of all employer firms.
 Employ about half of all private sector employees.
 Pay 43 percent of total U.S. private payroll.
 Have generated 65 percent of net new jobs annually over the past 17 years.
 Create more than half of nonfarm private gross domestic product (GDP)
 Hire 43 percent of high tech workers (scientists, engineers, computer programmers,
and others).
98
  Are 52 percent home-based and 2 percent franchises.
 Made up 97.5 percent of all identified exporters and produced 31 percent of export
value in FY 2008.
 Produce 16.5 times more patents per employee than large patenting firms

A large company may have many IEs, and therefore any one IE can probably specialize
more. In a small company, the IE will be called on to do many aspects of industrial
engineering; in fact, the IE may find that he or she is an engineer first and an industrial
engineer as time allows.

Some establishments are subsidiaries or divisions of larger companies. The Schlage plant in
Colorado Springs, which manufactures lock sets, is a subsidiary of IRCO (formerly Ingersoll
Rand). IRCO also makes golf cars, refrigeration equipment, construction equipment, and
other products. Trane is also owned by IRCO. The former Goodrich plant in Pueblo is now
owned by UTC Aerospace Systems.

Many businesses have international connections. For example, General Motors, with
headquarters in Detroit, Michigan, manufactures cars in 33 countries, including China,
where it has seven joint ventures and two wholly owned enterprises, and employs more
than 20,000 people. Bosch, headquartered in Germany, employs 290,000 people most of
them outside Germany. "The Bosch Group comprises Robert Bosch GmbH and its roughly
440 subsidiary and regional companies in some 60 countries. Including its sales and
service partners,"

The CSU-Pueblo Library has a helpful list of sources for business research and many of
these sources will help you determine important facts about an organization you are
considering working for.

You might want to start your own business, if not now, maybe eventually. The Small
Business Administration has information on starting, financing, and managing a new
business. In Pueblo, the Small Business Development Center provides individual help, as
well as seminars and workshops. VentureWell, formerly the National Collegiate Inventors
and Innovators Alliance (NCIIA), states “We believe it is no longer enough for engineers to
leave school with a purely technical education.”

You should find out all that you can about the mission, vision, and values of an organization
before you join it. Read the organization's written material, but also ask those who work
there what values drive the company. Collins and Porras argue that visionary companies
have especially strong cultures, and you better fit in with that culture:
Only those who 'fit' extremely well with the core ideology and demanding standards
of a visionary company will find it a great place to work. If you go to work at a
visionary company, you will either fit and flourish – probably couldn't be happier –
or you will likely be expunged like a virus. It's binary. There's no middle ground. It's
almost cult-like. Visionary companies are so clear about what they stand for and
what they're trying to achieve that they simply don't have room for those unwilling
or unable to fit their exacting standards. (page 8).
99
Explaining IE
The good news is that almost whatever your answers to these questions about where you
would like to work, you, as an IE, will have knowledge and skills that can be applied in that
type of job. The bad news is that you may need to sell your IE skills and knowledge and you
may even need to create your own job.

Even if you want to find a job in a well established field where industrial engineering
clearly applies, say in medical care in a hospital, many providers in that field may not be
familiar with industrial engineering. Industrial engineering is simply less well known than
other types of engineering. Everyone knows, or thinks they know, what an electrical
engineer does. Everyone knows that a mechanical engineer designs objects like cars,
machines, and tools - designing objects is what everyone thinks all engineers do. Chemical
engineering and civil engineering are also well known. Many engineering fields have names
that are very descriptive of what they do; examples are environmental engineering,
agricultural engineering, and aeronautical engineering.

Industrial engineering, on the other hand, isn’t very well known, and the phrase “industrial
engineering” isn’t very descriptive of what we do, since IEs can work in organization that
wouldn’t be called “industry.”

This lack of name recognition leads to two tasks for you.

1. You need to be able to explain what IE is - to your family, to acquaintances, but
especially to prospective employers.
2. You need to know how to find good IE jobs that aren’t labeled IE.
You need to have a short explanation of IE that you can give quickly, easily and
persuasively. That explanation may be more or less detailed and more or less technical
depending on who you are talking with and how interested they actually are. Remember
that most people grasp concepts better if you give an example. The example could be about
your job as an IE or about how an IE might help with some household task, such as making
dinner.

The Institute of Industrial Engineers (IIE) gives the following definition of IE:
Industrial Engineering is concerned with the design, improvement, and installation
of integrated systems of people, material, information, equipment, 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.
IIE also held a competition for the best bumper sticker explanation of IE and the winner
was "Industrial Engineers make things better."

Those definitions are good but you didn’t create any of them. You probably won’t be able to
deliver someone else’s definition reliably and persuasively, so you should create your own
definition. Think about examples and analogies you might use and try them out on people.
Some ways to start include:
 “Industrial engineers think hard about a task before doing the task. For example, …”

100
  “Industrial engineers design the work place so people can do their jobs well. For
example, …”
 "An industrial engineer designs a system so people and machines can accomplish
some goal. For example …”
Notice that each of the above definitions gets to an example very quickly. You can even turn
that around and start your explanation with an example:
 "Here’s an example. A team at a hospital looked at the task of cleaning up and
preparing an operating room for the next operation and they found they could
reduce the time and could schedule more operations in the room each day. This
example shows that IEs help people be more efficient in their work.”
When I was explaining to a nursing home administrator what a graduate student and I
proposed to do to help the nursing home improve its storage and inventory of supplies, she
said "oh, you are like the closet organizers on the Home Channel." I thought that was a
great comparison.

Selling IE
You also need to be able to explain to a company what you, as an IE, can do for them. Some
companies know what IEs can do and hire industrial engineers, using that label. For
example, this job ad from Jamak Fabrication was listed on monster.com:
Jamak is seeking an Industrial Engineer to work with our production departments.
The Industrial Engineer works in the production departments of Jamak. In their role
he/she will plan and oversee layout of equipment, conducts studies in operations to
maximize work flow and spatial utilization, ensures facility efficiency and workplace
safety, studies and records time, motion, methods, and speed to improve efficiency
and establish a standard production rate in performance of maintenance,
production, clerical and other worker operations. This position reports to the VP of
Operations.
Specific Responsibilities:
 Complete work measurement analysis by identifying bottlenecks and idle
resources to improve resource utilization.
 Identify sustainable Production improvements in quality, consistency,
ergonomics, and costs of operations through the use of scientific tools.
 Interface with manufacturing and engineering to coordinate the implementation
of new or improved manufacturing processes.
 Participate in cross-functional teams to eliminate non-value-added activities.
Develop manufacturing process flows.
 Developing short and long term layout and workstation.
 Assist in preparing training guides and deployment documentation.
Minimum Qualifications:
 Bachelor of Science in Industrial Engineering (BSIE) required, with a focus in
process improvement / lean manufacturing. MSIE preferred, but not required.
 5 to 10 years industrial engineering experience required. Automotive/Heavy
Industry experience is preferred.
 Demonstrated competency in the following areas: AutoCAD; System layout
planning and development; Problem Solving; Ergonomics; Methods engineering

101
  Excellent written and verbal communications skills, strong analytical skills, and
demonstrated ability in fostering teamwork and creating a positive, productive
work environment.
 Must be able to work in a Team environment and have proven team leading
skills.
 Experienced with disciplined problem solving techniques.
 Must be articulate and display a professional appearance
 Good communication skills and the ability to express ideas and concepts with
confidence both verbally and in writing.
 Good working knowledge of Microsoft Office applications/databases including
Access and Microsoft Project.
 Must be an experienced user of AutoCAD and statistical software such as SAS or
MiniTab. Experience with simulation and optimization software products such
as Arena, AutoMOD, and /or CPLEX will be beneficial.
This job ad perfectly describes an industrial engineer, by job title, by job responsibilities,
and by qualifications. After gaining some work experience, you will be qualified to apply for
jobs like this one.

Other companies hire industrial engineers, but under different labels, such as:
 Manufacturing engineer
 Quality engineer
 Reliability engineer
 Production engineer
This job, with GE, is not labeled as an Industrial Engineer, but asks for someone with an
Industrial Engineering degree:
Global Supply Chain Planning Leader, with GE Healthcare, in Waukesha, WI.
A key position in the GE Healthcare Global Parts Asset Management team.
Responsibilities include service parts supply chain planning with goals centered
including inventory optimization and parts availability for $300M service inventory in
84 warehouses globally. Responsible for lean and efficient planning through strategic
improvements in forecasting, procurement, and deployment. Must have strong problem
solving and matrix management skills to lead and coordinate with regional planning
leaders in other poles. Specific responsibilities include:
 Ensure effective service parts planning through state of the art planning system
 Lead projects delivering increased fill rates, optimized inventory, and enhanced
planner productivity
 Drive solutions for supply chain planning issues by working cross-functionally
throughout the organization
 Achieve global GPRS Parts Delivery and Inventory targets through optimized
planning solutions
 Ownership of key planning metrics
Qualifications
 BS in Industrial Engineering, Operations Research or related field
 3 to 5 years experience in Operations/Supply Chain Management
 Ability to interact with senior levels of management

102
  Global mindset, ability to work with global teams
 Strong quantitative and analytical skills
 Demonstrated cross-functional leadership skills
 Excellent communication skills
Desired
 MBA/MS
 Six Sigma Black Belt Certified
 Experience with Xelus planning tool
 Experience with Oracle order management
Flow International Corporation advertised on Monster.com for a Supplier Quality Engineer:
The Supplier Quality Engineer will develop and maintain a supplier quality system
to support the principles of an Advanced Lean Manufacturing system. This position
will have an emphasis on external supply chain components that support internal
manufacturing processes, including supplier performance, development, and
monitoring. Responsibilities include establishing and managing teams for the
implementation of the Advanced Lean Manufacturing system; developing the
Supplier Quality program in support of Advanced Lean Manufacturing system;
maintaining Quality system components for the Quality department that meets ISO
9001 requirements; ensuring that proper communication occurs within teams and
among all associates, suppliers, and customers who are affected by each process;
establishing key metrics and ensuring that all data preparation, collection and
reporting of project progress occurs; establishing and managing schedules for
project implementation; accomplish projects on time, on budget, on target (achieve
expected results), and properly communicate throughout Flow.

The ideal candidate will have a Bachelor degree in Engineering or related area with
a minimum of (3) three years manufacturing and supervisory experience; extensive
knowledge of ISO9001 supplier quality and components of the system; highly
developed level of interpersonal skills to work effectively with others, solicit input,
motivate associates, and elicit work output; ability to work independently on
projects and with external suppliers; excellent verbal and written communication
skills; ability for innovative/creative thinking; intermediate level experience with
Windows, Word, Excel and Access and the ability to quickly develop a
comprehensive knowledge of FLOW products. Previous project management
experience a plus.
This job is not called Industrial Engineer and does not mention the words Industrial
Engineering, but the description matches the knowledge base of the industrial engineer
(lean manufacturing, supply chain management, and quality). After gaining some work
experience, you will be qualified to apply for jobs like this one -- and you should apply for
jobs like this even if the job isn't labeled as an industrial engineering job.

Unfortunately, other companies and even some industries just don’t know what IEs can do.
The chemical industry tends to hire chemical engineers to do everything. For example, this
job ad, posted on Monster.com by Air Products, asks for a Production Engineer, describes
industrial engineering responsibilities, but requires a degree in Chemical Engineering

103
 Air Products and Chemicals, Inc. (NYSE:APD), a Fortune 500 manufacturer of
industrial gases and chemicals, has an immediate opening for an experienced
Production Engineer at its facility in Dallas, TX.
The Production Engineer is responsible to:
 Participate in the implementation of comprehensive Process Control Systems
including SPC/SQC program across multiple facilities.
 Lead and/or participate in activities associated with root cause investigation
of out of control situations resulting from SPC/SQC systems.
 Work with suppliers as necessary to drive improvement efforts throughout
the Value Chain.
 Lead Continuous Improvement events.
 Ensure best practice identification and transfer among various
manufacturing facilities.
Qualifications:
 Bachelors degree in Chemical Engineering
 3-5 years of Production or Quality experience in the chemical, electronics, or
related industries
 Strong leadership and communication skills, ability to work within a team
environment
 Must have the ability to work effectively with engineering, lab personnel, line
personnel, and management
 Working knowledge of statistical techniques (SPC, SQC, DOE)
 Root Cause Investigation experience
 Working knowledge of the ISO 9001:2000 Standard
 Continuous improvement techniques a plus
While a chemical engineer might learn about SPC (Statistical Process Control), SQC
(Statistical Quality Control), DOE (Design of Experiments), Root Cause Investigation, and
ISO on the job, these topics would not have been covered in the education of that engineer.
An Industrial Engineer would have learned about these as part of their education; I believe
the company should be advertising for an Industrial Engineer. Should you apply for a job
like this? I doubt it, since the job explicitly asks for a Bachelors degree in Chemical
Engineering.

I believe a job ad like this one reflects the belief by some companies that the people who
know the core function of the company (for example, chemistry at a chemical company)
also know everything else about how to run the company. The industrial engineer would
not know as much about the chemical processes as a chemical engineer, but would be much
better prepared to take on the job described above.

8.2 Education and lifelong learning

As I mentioned in Chapter 2, many students have read and have recommended very
strongly The Seven Habits of Highly Effective People, by Stephen Covey. Those seven habits
are:
1. Be proactive.
2. Begin with the end in mind.
3. Put first things first.
104
 4. Think win/win.
5. Seek first to understand, then to be understood.
6. Synergize.
7. Sharpen the saw.
"Sharpen the saw" reminds you to continually refresh and add to your knowledge and
skills."

To practice as a physician in the United States, a person must earn an undergraduate

degree, earn a graduate medical degree, pass the United States Medical Licensing
Examination, and be approved by the state licensing board where the physician will
practice. In most states and for most specialties, physicians are required to complete a
minimum number of credits in continuing medical education each year to maintain a
license. To practice as an attorney in the United States, a person must earn an
undergraduate degree, earn a graduate law degree, pass a bar exam, and be licensed by the
jurisdiction in which the lawyer will practice. In most states, attorneys are required to
complete a minimum number of credits in continuing legal education each year to maintain
a license.

Engineering, like medicine and the law, is considered a profession, but to practice as an
engineer in the United States a person needs only to earn an undergraduate degree and
need not be licensed. However, to be a principal in an engineering firm (for example, if you
want to open your own firm as an engineer) or to approve engineering plans and drawings,
you must be a licensed professional engineer (PE). Among all the types of engineering,
licensure is most important for civil engineers, and probably least important for industrial
engineers. As with physicians and attorneys, becoming licensed requires passing exams
and being licensed by a state. Thirty states require continuing engineering education to
remain licensed; Colorado does not. If you become a licensed PE in one state, most other
states will have a process by which you can also be licensed in that state.

In Colorado, the Board of Licensure for Professional Engineers and Land Surveyors
controls the licensure of engineers. In most states (including Colorado) the steps to
becoming a licensed Professional Engineer are:
1. While a senior in an ABET accredited engineering program, pass the Fundamentals
of Engineering (FE) exam. You are then an Engineer in Training (EIT).
2. Graduate from an ABET accredited engineering program.
3. Have 8 years of "progressive engineering experience of which education is a part."
4. Pass the Principles and Practice exam.
The FE and PE exams are administered by the National Council of Examiners for
Engineering and Surveying (NCEES).
The FE is a computer-based exam that is administered year-round in testing windows
at NCEES-approved Pearson VUE test centers.

The FE contains 110 multiple-choice questions. The exam appointment time is 6 hours
long, which includes a nondisclosure agreement, tutorial (8 minutes), the exam (5 hours
and 20 minutes), and a scheduled break (25 minutes).

105
The Industrial Engineering exam covers the following topics:
1. Mathematics 6–9 questions
A. Analytic geometry
B. Calculus
C. Matrix operations
D. Vector analysis
E. Linear algebra
2. Engineering Sciences 5–8
A. Work, energy, and power
B. Material properties and selection
C. Charge, energy, current, voltage, and power
3. Ethics and Professional Practice 5–8
A. Codes of ethics and licensure
B. Agreements and contracts
C. Professional, ethical, and legal responsibility
D. Public protection and regulatory issues
4. Engineering Economics 10–15
A. Discounted cash flows (PW, EAC, FW, IRR, amortization)
B. Types and breakdown of costs (e.g., fixed, variable, direct and indirect labor)
C. Cost analyses (e.g., benefit-cost, breakeven, minimum cost, overhead)
D. Accounting (financial statements and overhead cost allocation)
E. Cost estimation
F. Depreciation and taxes
G. Capital budgeting
5. Probability and Statistics 10–15
A. Combinatorics (e.g., combinations, permutations)
B. Probability distributions (e.g., normal, binomial, empirical)
C. Conditional probabilities
D. Sampling distributions, sample sizes, and statistics (e.g., central tendency,
dispersion)
E. Estimation (e.g., point, confidence intervals)
F. Hypothesis testing
G. Regression (linear, multiple)
H. System reliability (e.g., single components, parallel and series systems)
I. Design of experiments (e.g., ANOVA, factorial designs)
6. Modeling and Computations 8–12
A. Algorithm and logic development (e.g., flow charts, pseudocode)
B. Databases (e.g., types, information content, relational)
C. Decision theory (e.g., uncertainty, risk, utility, decision trees)
D. Optimization modeling (e.g., decision variables, objective functions, and
constraints)
E. Linear programming (e.g., formulation, primal, dual, graphical solutions)
F. Mathematical programming (e.g., network, integer, dynamic, transportation,
assignment)
G. Stochastic models (e.g., queuing, Markov, reliability)
H. Simulation
106
7. Industrial Management 8–12
A. Principles (e.g., planning, organizing, motivational theory)
B. Tools of management (e.g., MBO, reengineering, organizational structure)
C. Project management (e.g., scheduling, PERT, CPM)
D. Productivity measures
8. Manufacturing, Production, and Service Systems 8–12
A. Manufacturing processes
B. Manufacturing systems (e.g., cellular, group technology, flexible)
C. Process design (e.g., resources, equipment selection, line balancing)
D. Inventory analysis (e.g., EOQ, safety stock)
E. Forecasting
F. Scheduling (e.g., sequencing, cycle time, material control)
G. Aggregate planning
H. Production planning (e.g., JIT, MRP, ERP)
I. Lean enterprises
J. Automation concepts (e.g., robotics, CIM)
K. Sustainable manufacturing (e.g., energy efficiency, waste reduction)
L. Value engineering
9. Facilities and Logistics 8–12
A. Flow measurements and analysis (e.g., from/to charts, flow planning)
B. Layouts (e.g., types, distance metrics, planning, evaluation)
C. Location analysis (e.g., single- and multiple-facility location, warehouses)
D. Process capacity analysis (e.g., number of machines and people, trade-offs)
E. Material handling capacity analysis
F. Supply chain management and design
10. Human Factors, Ergonomics, and Safety 8–12
A. Hazard identification and risk assessment
B. Environmental stress assessment (e.g., noise, vibrations, heat)
C. Industrial hygiene
D. Design for usability (e.g., tasks, tools, displays, controls, user interfaces)
E. Anthropometry
F. Biomechanics
G. Cumulative trauma disorders (e.g., low back injuries, carpal tunnel syndrome)
H. Systems safety
I. Cognitive engineering (e.g., information processing, situation awareness, human
error, mental models)
11. Work Design 8–12
A. Methods analysis (e.g., charting, workstation design, motion economy)
B. Time study (e.g., time standards, allowances)
C. Predetermined time standard systems (e.g., MOST, MTM)
D. Work sampling
E. Learning curves
12. Quality 8–12
A. Six sigma
B. Management and planning tools (e.g., fishbone, Pareto, QFD, TQM)
C. Control charts
107
 D. Process capability and specifications
E. Sampling plans
F. Design of experiments for quality improvement
G. Reliability engineering
13. Systems Engineering 8–12
A. Requirements analysis
B. System design
C. Human systems integration
D. Functional analysis and allocation
E. Configuration management
F. Risk management
G. Verification and assurance
H. System life-cycle engineering

The exam is hard because a great deal of material is covered and you have a limited time to
answer a lot of questions. If you can answer more than half the questions correctly, you
have a good chance of passing, so use your time wisely to focus first on the questions you
know you can answer and then on the ones that you think you can answer; if you have extra
time, then try the questions you don't think you can answer. The exam is closed book, but
you are allowed to use the Supplied Reference Handbook. You should become familiar with
this Handbook before the exam because you may be able to answer quite a few questions
by knowing where to find the necessary formulas in the Handbook. In fact, the Handbook is
a good summary for you to use while you take many engineering courses. A searchable
online version of the Handbook is available while you take the test. You are allowed to
bring into the room and use only a calculator from a limited list of calculators.

Some of our graduates have obtained jobs because they were able to list “Engineer in
Training” on their resumes. Many employers respect the accomplishment represented by
that label and want to hire people with the knowledge, drive, and concentration required to
pass the FE.

The Principles and Practice Exam in Industrial Engineering is an all day exam, with two 4-
hour sessions. The test is open book and the examinee is responsible for bringing any
material that will be needed. There are 40 multiple choice sections in each half of the exam.

Joining and participating in professional organizations can help you stay current in
industrial engineering. You can join these organizations as a student at a much reduced
rate. For IEs, the following organizations are helpful:
 The Institute of Industrial Engineers (IIE). The dues are $37 for a student, $77 for
your first year after graduation, and then $154 per year. You will receive the
monthly magazine Industrial Engineer.
 The Society of Manufacturing Engineers (SME). Student membership is $20 per year
and includes the monthly magazine Manufacturing Engineering. Professional
membership is $138 per year.

108
  The American Society for Quality (ASQ). Student membership is $29 per year and
includes online access to the monthly magazine Quality Progress. Full membership
is $159.
 The National Society of Professional Engineers (NSPE). The free student
membership is available to any full-time student in an ABET accredited program
and includes eligibility to apply for scholarships. Due are $220 per year.

While the organizations listed above are open and helpful to students, our students and
graduates often join and participate in the following organizations, which are open to all
students and are very oriented to students:
 The Society of Mexican American Engineers and Scientists (MAES) "was founded in
1974 to increase the number of Mexican Americans and other Hispanics in the
technical and scientific fields."
 The Society of Women Engineers (SWE) seeks to "Stimulate women to achieve full
potential in careers as engineers and leaders, expand the image of the engineering
profession as a positive force in improving the quality of life, [and] demonstrate the
value of diversity." You receive the SWE Magazine.
 The National Society of Black Engineers (NSBE) was founded in 1975 "to increase
the number of culturally responsible Black engineers who excel academically,
succeed professionally and positively impact the community." You receive the NSBE
Magazine.
Each of the organizations in these two lists has a useful web site, publishes a magazine or
other publications, holds an annual conference, and has groups, based on interest or
geography, where you can interact with other members.

8.3 Ethics
Engineers shall hold paramount the safety, health, and welfare of the public in the
performance of their professional duties. (IIE code of ethics)

Enslave yourself to the chart and compass – gain the freedom of the seas. Old sailor’s
proverb Source

On April 20, 1914, seventeen people including 10 children all under the age of 10 died in a
fire in Ludlow, Colorado. They had been living in a tent city near a coal mining camp owned
by Colorado Fuel & Iron (CF&I). Workers at the mines had been on strike since the previous
September over low wages and poor working conditions and, when they were evicted from
company housing, had moved with their families to land leased by the union. The strike
was the culmination of two decades of effort to unionize Colorado miners; the UMWA
(United Mine Workers of America) was determined that this strike would lead to
recognition in Colorado and the mine owners were equally set against any union.

CF&I was not obeying state laws that required that miners not be paid in scrip (paper good
only for purchases at the company owned store), that representatives of the workers could
monitor the weighing process that determined their pay, and that miners be paid for “dead
work” (work, such as installing roof braces, that did not directly produce coal).

109
The Colorado National Guard and private detectives hired by CF&I had been used by the
company to attempt to break the strike, including the use of threats, harassment, and
violence. The striking miners also engaged in violence against strike breakers.

On April 20, a gun battle erupted between the company men and workers in the tent city.
"The question of who discharged the first bullet is now unanswerable" (McGovern and
Guttridge, page 215), nor is it known how the fire started, but the National Guard's
investigation concluded that
men and soldiers swarmed into the colony and deliberately assisted the
conflagration by spreading the fire from tent to tent ... . Beyond a doubt it was seen
to, intentionally, that the fire should destroy the whole of the colony. (as quoted in
McGovern and Guttridge, page 224).
Women and children hiding in a pit underneath a tent suffocated and died. (pages 235-236)
The strike and the deaths were major national news. The union called the incident the
“Ludlow Massacre” and used it as a rallying point to push for better working conditions. In
1989, the United Mine Workers of America (UMWA) erected a monument at the site and
excavations are uncovering more details about the people who lived there.

The point of this story is that the conditions of work have been the subject of conflict
between employers and workers for a long time; both sides have shown themselves to be
willing to mistreat human beings, lie, kill, and die over these issues. The story of the Ludlow
Massacre is very relevant to IEs because we design the work place and we are often
responsible for the conditions under which people work.

The simple positions of employers and workers are clear: workers demand improvements
in safety, pay, work hours, and other work conditions and some employers resist. The
reality is, of course, much more complicated than that simplistic summary. The trend is
clear: working conditions in this country have improved tremendously through the efforts
of employers, workers, government, unions, and private organizations. But as I write these
sentences in the first half of 2006, 31 coal miners have already died in accidents in the
United States this year.

You are not, as an IE, going to face the ethical dilemma of whether to carry out an order to
set fire to a tent city where adults and children live. You will, however, face other ethical
dilemmas during your career and you should prepare yourself by considering:
1. the types of dilemmas you might face,
2. guidelines that others have developed to help engineers decide what is right and
what is wrong in ethical dilemmas, and
3. what choices you will make and how you will behave if you face an ethical dilemma.

Some engineering disasters have received a great deal of attention and have lessons for
engineers. While most of the following disasters relate better to civil and mechanical
engineering, they hold lessons for IEs. The source is given for each summary.
 On November 7, 1940, a bridge across the Tacoma Narrows in Puget Sound
collapsed. It had only been open to traffic since July of that year. Because the bridge,
nicknamed Galloping Gertie, had been observed to twist in the wind even as
110
 construction was being completed, attempts had been made to stabilize it with
additional tie-down wires. Plans for wind deflectors came too late. Only one life was
lost in the collapse, a paralyzed black spaniel named Tubby, who bit the finger of an
engineering professor attempting to rescue the dog from the car abandoned by its
owner. The flexibility of the bridge design was innovative and its collapse caused
engineers to rediscover forgotten knowledge about the role of wind in causing
vertical movement of bridges, not just lateral deflection. A new bridge completed in
1950 still stands. Another, parallel bridge was completed in 2007 to reduce
congestion.
 Early in the morning of March 28, 1979, a partial meltdown occurred in Unit 2 at the
Three Mile Island nuclear electric generating plant near Harrisburg Pennsylvania.
The unit had first generated electricity on December 31, 1978. The Nuclear
Regulatory Commission's fact sheet on the incident states: "The accident was caused
by a combination of personnel error, design deficiencies, and component failures.”
However, the instruments available to those monitoring the plant did not indicate
directly the level of coolant in the core, which had gotten dangerously low. "Instead,
the operators judged the level of water in the core by the level in the pressurizer,
and since it was high, they assumed that the core was properly covered with
coolant.” No one was injured or died and “comprehensive investigations and
assessments by several well-respected organizations have concluded that in spite of
serious damage to the reactor, most of the radiation was contained and that the
actual release had negligible effects on the physical health of individuals or the
environment.” (NRC fact sheet)
 On July 17, 1981, in the high-rise lobby of the one-year-old Hyatt Regency Hotel in
Kansas City, Missouri, the connections of steel rods supporting lower skywalks to
upper skywalks failed during a public event and 65 tons of skywalk and the people
on them fell onto the crowds of people below. A total of 114 people died. An
investigation determined that the original design, which suspended each level of
skywalk from the ceiling of the lobby, had been changed during construction to a
design which suspended the lower skywalks from the upper skywalks. The “result
was that [the] fourth-level walkway had to bear weight of [the] second-level
walkway suspended below” (page 305, Chiles). In November 1984 two engineers
were found guilty of “gross negligence, misconduct and unprofessional conduct in
the practice of engineering.” Both lost their licenses to practice engineering in the
state of Missouri (and later, Texas) but are still practicing engineering in other
states. According to the TAMU website, "Official findings of the failure investigation
conducted by the National Bureau of Standards, U.S. Department of Commerce
[included the statement] ‘Even if the now-notorious design shift in the hanger rod
details had not been made, the entire design of all three walkways, including the one
which did not collapse, was a significant violation of the Kansas City Building Code.’”
 On January 28, 1986, the space shuttle Challenger exploded about a minute after
launch, killing all seven astronauts on board. O-rings, designed to seal the solid
rocket boosters, failed and allowed hot combustion gases to leak and to ignite the
external fuel tanks. “The failure of the O-ring was attributed to several factors,
including faulty design of the solid rocket boosters, insufficient low temperature

111
 testing of the O-ring material and the joints that the O-ring sealed, and lack of
communication between different levels of NASA management” (Source)
 On February 1, 2003, the Columbia space shuttle burned up during re-entry into the
earth's atmosphere, 16 minutes before the shuttle's scheduled landing. Seven
astronauts were killed. Just over a minute after its launch on January 16, a piece of
foam had broken loose from the Shuttle, striking and damaging the shuttle. The
resulting gap allowed superheated air to enter during re-entry and cause damage
leading to the shuttle's breakup. The official investigating board concluded:
Cultural traits and organizational practices detrimental to safety were allowed to
develop, including: reliance on past success as a substitute for sound engineering
practices (such as testing to understand why systems were not performing in
accordance with requirements); organizational barriers that prevented effective
communication of critical safety information and stifled professional differences of
opinion; lack of integrated management across program elements; and the evolution
of an informal chain of command and decision-making processes that operated
outside the organization's rules. (Source)
 On September 11, 2001, two commercial airlines with almost fully loaded fuel tanks
were piloted by hijackers into the twin World Trade Towers in New York City. The
resulting fire consumed some fireproofing on the main structural steel supports and
both Towers collapsed. According to a History.com time line, the North Tower stood
for 102 minutes and the South for 56 minutes. Some engineers believe the towers, if
designed and built correctly, should not have collapsed. A total of 2,826 lives were
lost including those on the planes, those working in the Towers and unable to
evacuate in time, and fire fighters and rescue workers who had entered the
buildings to assist. (Source)
 In August 2005, New Orleans levees ruptured in the storm surges caused by
Hurricane Katrina in August 2005. The disaster was blamed on poor design of the
levees, poor construction of the levees, failure to require levees designed to
withstand a storm surge of the magnitude that occurred, and long term destruction
of wetlands that had, in the past, absorbed the energy of storm surges before they
reached the city. The upgraded system is meant to withstand 100-year storm surge
events.

These disasters, and others discussed in the book Inviting Disaster by James R. Chiles,
generally involve the design of physical objects, both large objects designed by civil
engineers and smaller objects designed by mechanical engineers. We can learn from these
examples, but since IEs are not as involved in such design, they face different types of
ethical dilemmas. In particular, IEs are more involved directly with effects on people.
IEs face four types of ethical dilemmas:
1. ethical dilemmas involving business practices,
2. ethical dilemmas involving conflicts between management and workers,
3. ethical dilemmas involving conflict between management and consumers, and
4. ethical dilemmas involving conflict between management and society as a whole.

The first type includes dilemmas that are not particular to engineering, but can be faced by
an employee at any organization. Examples include:
112
  The company must engage in bribery to obtain a contract, perhaps in another
country.
 You experience or observe prejudice such as racism and sexism in the work place.
 You observe a coworker behave unethically, perhaps stealing from the company.
 Your friend works for a competitor and you wonder what you are allowed to
discuss.
 You wonder what type of email is appropriate using your work email account.
 You try to give credit to a co-worker, but that person refuses to allow you to do so.
 Your boss tells a lie in front of you.
 You believe that a supplier to your company has lied about their product.
 You have made a mistake and you are fearful that if you confess you will be fired.
Most of these situations will almost certainly be covered by policies, usually written
policies, in your organization. Your initial employment briefing or documents should
indicate to you, for example, what should and should not be included in email. If I have
doubts about sending an email I am composing, I picture the email as the headline story in
tomorrow’s paper. If your organization does not provide you with such guidance, ask.
The second type of ethical dilemmas include conflicts between management and workers.

IEs are often in the middle of examples like these:

 The organization does not have appropriate safety rules or equipment to protect
workers.
 The organization chooses a production process that poses a safety risk to workers.
 A worker deliberately slows down for a time study.
 Worker pay is low and turnover is causing problems with quality or safety.
 Your supervisor asks you to ignore a serious problem that you have uncovered and
that you want to work on.
 Someone asks you to fire an employee who has complained about a problem that
you think merits attention.
 The company seeks to cut pay or cut the workforce even thought you believe profits
are high and the pay and size of the workforce are sustainable.
 Pressure to keep to a schedule in implementing a project is causing problems in
quality or safety.
These are indeed difficult dilemmas since, in some of the examples, you may be trying to
replace management judgment with your own. While not everyone would agree with your
judgment that the management’s decisions are unethical, you may decide that you don’t
want to be part of such an organization. The most important piece of advice I can give you
about your future career is that you should have a healthy ready reserve of money (say 6
months salary) so you can walk away from a job. As I will discuss below, I don’t advise that
you make such decisions frequently or lightly, but you will feel much better if you know
that your finances would allow you to walk away if the situation just gets unbearable.

Other ethical dilemmas involve a conflict between management and customers: Someone
asks to you lie to a customer about the product’s capabilities or the manufacturing process
used to make it.
 A significant change affecting the quality of the product is made without telling
customers.
113
Finally, some ethical dilemmas involve a conflict between the company and society at large.
 The organization makes a product that is profitable but is bad for people or the
environment.
 The organization fails to dispose of industrial waste in a method that is appropriate.

Some of the above dilemmas may represent evidence that your values conflict with the
values of your organization. Some of the examples relate to organizational justice.
Employees’ perception of how fairly the organization treats its employs has been shown to
relate to job satisfaction and job performance.

Ethical guidelines
The most important fact to keep in mind when you face an ethical dilemma is that you are
not alone.
 People, including engineers, have faced these dilemmas before and there are
sources of advice for you. Use your professional guidelines and your professional
organizations.
 Other employees in your organization, including other engineers, may share your
concerns. Use your colleagues in your organization.
 Friends and family members may have faced similar situations. Use your personal
support network.
The IIE Code of Ethics (indeed the code of ethics for every engineering profession) starts
with the statement that is quoted at the head of this section: “Engineers shall hold
paramount the safety, health, and welfare of the public in the performance of their
professional duties.”

Roger Boisjoly, one of the engineers involved in the Challenger disaster made the following
points:
 The data the engineers had on the O-rings didn’t cover temperatures as low as what
were forecast for the morning of the launch. Mr. Boisjoly’s point is that extrapolating
beyond the end of the data points is very different from interpolating between data
points.
 Mr. Boisjoly’s boss’s boss said to Mr. Boisjoly’s boss “Take off your engineering hat
and put on your management hat.” While the request is valid, once Mr. Boisjoly put
on his management hat, he should not have made an engineering judgment. Mr.
Boisjoly’s point is that if you, an engineer, increasingly become a manager, you need
to rely on your engineers for engineering judgment, not on your own engineering
judgment.
 The immediate personal consequences to Mr. Boisjoly’s health and his career were
awful, but he would take the same actions today.
 “We were initially successful in stopping that launch.” A group of colleagues
standing together can have an effect.
 The engineers were usually required to prove it was safe to launch; in this case, the
requirement was turned around. The engineers had to prove it was not safe to
launch.
 Mr. Boisjoly’s asks himself: would I allow my family members to use this product?

114
  He mentioned his mother as an influence.
 Mr. Boisjoly recommends picking your fights. Stay to fight another day.
The source for these points is a 1993 video distributed by Carnegie Mellon Center for the
Advancement of Applied Ethics in the series Ethical Issues in Professional Life.

The Code of Ethics requires an engineer to "hold paramount the safety, health, and welfare
of the public" but were the astronauts actually "the public"? The answer isn't clear but
some observers believe the astronauts should have been involved more in the decision
making process. However, teacher Christa McAuliffe certainly did not have the engineering
expertise to evaluate the arguments.

Whether you are a licensed Professional Engineer or not, you are obligated by the
professional code of ethics. The National Society of Professional Engineers (NSPE)
publishes a model code of ethics and the Institute of Industrial Engineers (IIE) has adopted
this version. The Code can help you think through ethical situations and the Rules of
Practice (see NSPE version) provide more guidance. For example, the Rules of Practice
include this statement:
Engineers shall disclose all known or potential conflicts of interest that could
influence or appear to influence their judgment or the quality of their services.
Because all engineers are bound by the Code, it can protect an engineer from pressure and
allows engineers to stand together. “A code is a solution to a coordination problem”
(Michael Davis, page 2), that is, it helps coordinate the actions of engineers in ethical
dilemmas, without the engineers even have to talk with each other. It makes the
engineering profession like a union, but a union to serve the public, not themselves (page
3). Thus, one engineer can count on the support of another engineer.

Students in this class have recommended these guidelines for ethical behavior for IEs:
 Don’t accept bribes
 Don’t be late.
 Don’t tell lies
 Just because you can, doesn’t mean you should.
 If you notice a problem, speak up.
 Focus on customers.
 As an employer, treat employees fairly, and, as an employee, treat your employer
fairly.
 Do your job right the first time.
 Do your job promptly.
 Have money in the bank.
 Build professional trust with co-workers.
 Pick your fights.
 Consider how your action would look on the front page of the paper tomorrow.
 Consider what you would you do if your mother or father were watching.
 Drive out fear.

Goetsch (1999, page 525) suggests 5 guidelines, each phrased here as a question:

115
  The morning-after test: How would you feel about your decision tomorrow
morning?
 The front-page test: How would you feel about seeing your decision on the front
page of your hometown newspaper?
 The mirror test: How would you feel when looking yourself in the mirror after this
decision?
 The role reversal test: How would you feel if you were the person affected by this
decision?
 The common sense test: What do your common sense and your insticts tell you to
do?

Harris et al. in their book Engineering Ethics recommend an approach based on paradigms
and line drawing. For example, if faced with a situation that may or may not be bribery, the
engineer should consider features that describe bribery (for example, a large gift, received
before a decision it is meant to influence) as compared to features that are clearly not
bribery (a very small gift, received after a decision). The engineer can decide, for each
feature, where the current situation lies on the line between bribery and not bribery. A case
with many features near the bribery end of the line is clearly wrong.

At Colorado State University-Pueblo, graduating engineers are invited to be inducted into

The Order of the Engineer, at a ceremony using this pledge:
I am an Engineer, in my profession I take deep pride. To it I owe solemn obligations.

Since the Stone Age, human progress has been spurred by the engineering genius.
Engineers have made usable Nature’s vast resources of material and energy for
Humanity's benefit. Engineers have vitalized and turned to practical use the
principles of science and the means of technology. Were it not for this heritage of
accumulated experience, my efforts would be feeble.

As an Engineer, I pledge to practice integrity and fair dealing, tolerance and respect,
and to uphold devotion to the standards and the dignity of my profession, conscious
always that my skill carries with it the obligation to serve humanity by making the
best use of Earth’s precious wealth.

As an Engineer I shall participate in none but honest enterprises. When needed, my

skill and knowledge shall be given without reservation for the public good. In the
performance of duty and in fidelity to my profession, I shall give the utmost.

According to their web page,

The Order is not a membership organization; there are never any meetings to attend
or dues to pay. Instead, the Order does foster a unity of purpose and the honoring of
one’s pledge lifelong.
Those who have been inducted into the Order wear a stainless steel ring on the fifth finger
of the writing hand. Inductees are encouraged to wear the ring and to display the signed
Obligation certificate as visible reminders of the publicly accepted Obligation as a contract
with themselves.
116
117
 Introduction to Industrial Engineering
By Jane M. Fraser
Chapter 9
People

“[M]ost of us -- including a good many people in industrial production itself -- fail to

understand that modern production, and especially modern mass production, is not
based on raw materials or gadgets but on principles of organization -- organization
not of machines but of human beings, i.e., on social organization” (page 31, Peter F.
Drucker, The Concept of the Corporation, 1983).

Among all the engineering specialties, industrial engineering focuses the most on people.
Because we design and improve production systems involving people and machines, we
need to think about what people and machines can and can’t do quickly, well, and safely. On
some tasks, people are clearly better than machines (for example, helping customers) while
on other tasks, machines are clearly better than people (for example, lifting very heavy
objects). Many production tasks require a combination of people and machines. The goal is
to design a system of people and machines that can do the work with efficiency, quality,
and safety.

This chapter is divided into five sections, but, as usual, the areas overlap.
 9.1 Teamwork
 9.2 Physical ergonomics
The physical requirements of the work a person does, for example, lifting heavy
objects, can affect efficiency, quality, and safety.
 9.3 Safety and the work environment
The physical environment in which the person works, for example, slippery floors or
low lighting, can affect efficiency, quality, and safety.
 9.4 Cognitive ergonomics
The mental requirements of the work a person does, for example, remembering a
complicated procedure, can affect efficiency, quality, and safety.
 9.5 Work methods and standards
The methods a person uses to perform a job, such as the order of doing each
component of a task, can affect efficiency, quality, and safety.
 9.6 Motivation
The attitude of the person doing a job, as affected by the organization and by
external influences, can affect efficiency, quality, and safety.
Poor conditions in any of these aspects can have harmful short term or long term effects on
people such as:
 fatigue,
 acute injury such as a cut,
 chronic injury such as back pain,
 confusion,
 lack of attentiveness,

118
  wasted motions,
 poor customer service,
 poor quality of produced goods,
 absenteeism, and
 worker turnover.
Goetsch (page 145) defines ergonomics as “the science of conforming the workplace and all
of its elements to the worker." Sections 9.1, 9.2, and 9.3 include topics in ergonomics or
human factors. Some IE graduates choose to specialize in this area, often including
graduate work.

9.1 Teamwork
Working in teams
All engineering work is done in teams because every project needs input and help from
other people. You may be in charge of some projects and, at the same time, you may be
supporting projects headed by others. You must learn to be a good leader and a good
follower.

Team Charter and Team Guidelines

A Team Charter usually includes:
 Team name.
 A statement of the team’s mission,
 A statement of the work the team will do,
 A list of members and contact information,
 The name of the team sponsor - who is the person in authority to whom the team
will report?
 The resources the team will use, and
 The period during which the team will exist.
Team Guidelines list the rules for the operation of the team. Such rules might include:
 Listen. Seek clarification.
 No put-downs.
 Disagree with respect.
 Be on time.
 Be prepared.
The Team Charter and Team Guidelines should be short.
Read each of these pages; each has guidance on team charters and team guidelines:
 Team Charter by Kenneth Crow, DRM Associates.
 Team Groundrules by Kenneth Crow, DRM Associates.

Teamwork skills
Companies who hire engineers expect the people to hire to have the technical skills the
company needs, but companies also want engineers who can work well with others. To
function well on a team, you should be able to:
 Do the assigned work before the team meeting.
 Be physically and mentally present for team meetings.
 Stay on task; don’t digress.
 Participate. Volunteer your knowledge and ideas.

119
  Give valid input on the topic or task.
 Recognize your own strengths and weaknesses; use your strengths, compensate for
and try to reduce your weaknesses.
 Recognize and build on the strengths of your teammates.
 Identify shortcomings and help your team members strengthen their weak points.
 Recognize and adapt to cultural differences among team members and among
teams.
 Accept and provide positive feedback.
 Accept and provide negative feedback in a constructive way.
 Communicate well, including listening well.
 Listen and check that you understand. Seek clarification.
 Don’t dominate the discussion.
 Be quiet when appropriate, and speak when appropriate.
 Help team members become a team.
 Help your team develop team norms.
 Deal with problems in your team.
 Resolve conflicts within your team and between your team and others.
 Mediate a dispute.
 Avoid group think.
 Change your mind when appropriate and hold firm when appropriate.
 Follow the rules set forth in the team charter.
 Be respectful and professional to members of your team and to others.

Robitaille (page 31) says:

"The four most important elements of productive team building are:
 Respect
 Objectivity
 Creativity
 Open-mindedness."
She stresses the importance of language for establishing each of these."
How we say things is often as important as what we are saying.

Avoid groupthink
"Groupthink" (a term coined by Irving Janis in 1971) refers to the behavior of a group when
individuals in the group overemphasize group cohesion and avoid raising information or
opinions that differ from the group's. Read this brief description, including Remedies for
Groupthink.

Being in a group is never an excuse for not doing your individual work. In your
employment as an engineer, you will do a lot of work in groups, but you will also do a lot of
work at your desk, thinking and working hard.

9.2 Physical ergonomics

People who perform repetitive hand tasks can experience pain, tingling, and numbness
called Carpal Tunnel Syndrome (CTS). According to NIOSH

120
 Research conducted by the National Institute for Occupational Safety and Health
(NIOSH) indicates that job tasks involving highly repetitive manual acts, or
necessitating wrist bending or other stressful wrist postures, are connected with
incidents of CTS or related problems. The use of vibrating tools also may contribute
to CTS. Moreover, it is apparent that this hazard is not confined to a single industry
or job but occurs in many occupations especially those in the manufacturing sector.
Indeed, jobs involving cutting, small parts assembly, finishing, sewing, and cleaning
seem predominantly associated with the syndrome. The factor common in these
jobs is the repetitive use of small hand tools.
Methods to prevent CTS include designing tools so that the wrist is held correctly,
designing the work layout so wrists are not stressed, scheduling work breaks for workers
in jobs with potential hazard, and rotating such work among several workers. The Mayo
Clinic provides advice to workers such as:
Reduce your force and relax your grip. Most people use more force than needed to
perform many tasks involving the hands. If your work involves a cash register, for
instance, hit the keys softly. For prolonged handwriting, use a big pen with an
oversized, soft grip adapter and free-flowing ink. This way you won't have to grip
the pen tightly or press as hard on the paper.
CTS is an example of a Repetitive Stress Injury (RSI), meaning an injury not caused by one
incident, but by a repetitive activity. Often the cause of such injuries is difficult to
determine since workers may be involved in different types of activities. The even broader
class of such injuries is called musculoskeletal disorders (MSDs). Even if conditions do not
threaten workers with short-term or long term injury, conditions can reduce efficiency and
quality through fatigue.

IEs must be aware of and prevent situations where work methods can cause harm to
workers. Besides being the right thing to do, such prevention can save the organization
money and can reduce the liability exposure of the organization. The Centers for Disease
Control and Prevention lists many resources for various types of MSDs in various
industries.

Researchers in physical ergonomics often rely on physics to understand the effects of work
on human bodies. Specialists in this area often have to know anatomy and physiology. Lab
studies of people doing a task may monitor the person’s physiological condition (for
example, heart rate and oxygen uptake) in order to determine the exact effects of different
work on humans.

The IE may redesign jobs to reduce the need to stand, provide better chairs for workers,
provide better hand tools for workers, and reduce the need for workers to lift heavy
objects. Ergonomics stresses adapting the workplace to the worker. Such adaptions must
be individual. Work stations that allow adjustments can help; for example, tables and chairs
that can be raised or lowered, or a work station that accommodates left-handed and right-
handed workers.

121
OSHA provides short case studies describing how job redesign has reduced ergonomic
issues. Advanced Filtration Systems Inc. redesigned an inspection process to reduce the
number of cases of CTS.

9.3 Safety and work environment

The workplace can be a dangerous location. According to the Bureau of Labor Statistics
4,585 workers died from work related causes in the US in 20013, as shown in the following
table.
Event or exposure Number of fatalities
Transportation incidents 1,865
Contact with objects and equipment 721
Falls, slips, trips 724
Violence and other injuries by persons or animals 773
Exposure to harmful substances or environments 335
Fires and explosions 149

The following table shows the occurrence in 2013 of nonfatal injuries involving days away
from work:
Number of
Injury or illness
cases
Sprains, strains, tears 426,950
Soreness, pain 202,620
Cuts, lacerations, punctures 98,680
Bruises, contusions 94,960
Multiple traumatic injuries 32,610
Heat (thermal) burns 15,890
Carpal tunnel syndrome 7,630
Amputations 6,480

The workplace can be a dangerous location, but the safety hazards can be reduced. The IE
designs the workplace so that danger is reduced from the use of tools, machines, and
materials in the production process.

For example, operation of a punch press often requires that two buttons, away from the
punch location itself, be pressed simultaneously with the worker’s left and right hands. If
the worker's hands are pressing those buttons, the hands cannot be under the press, so
cannot be injured.

Various tools that we have discussed already help an IE think systematically about what
can go wrong: FMEA and fault tree analysis help the IE trace through how errors or faults

122
can lead to accidents. Any accident in an organization should be carefully analyzed to
determine the cause. The system should be changed to eliminate or reduce the change of
that type of accident occurring.

An IE’s instinct should be to design the system so that safety, efficiency, and quality occur
naturally. If an injury occurs, an IE’s first thought should be to blame the system. For
example, lockout and tagout procedures are meant to protect maintenance and repair
workers from the accidental start up of equipment. However, workers must obey such
safety rules. The IE may be in charge of safety training programs for workers, which should
include the reasons for certain rules. Many organizations have a one strike policy; any
violation of a safety rule leads to immediate dismissal. While such a policy may seem
extreme, it conveys clearly to workers the organization’s dedication to safety.
Apart from the safety of the worker, the worker also exists in an environment and the IE
must consider effects on the comfort of the worker of:
 vibration,
 heat and cold,
 humidity,
 noise,
 air quality, and
 lighting.
For example, this article describes the possible effects of prolonged exposure to vibration.

The web site of the Occupational Health and Safety Administration (OSHA) has information
about different types of issues in safety. For example, this OSHA page points to resources
relevant to hazards from cotton dust. The IE also has to know about the particular issues in
the industry for which he or she works. For example, this OSHA page discusses safety and
health issues for hospital workers.

Goetsch (1999) states that the field of occupational safety has expanded from concern with
injury-causing conditions to include concern with disease-causing conditions. The safety
manager is now the safety and health manager. For example, Goetsch mentions worker
stress as a health concern, but also a potential safety concern if the stressed worker is less
safety conscious (page 1). Similarly, NIOSH points to shift work and long work hours as
safety and health potential issues:
According to 2001 data from the Bureau of Labor Statistics, almost 15 million
Americans work evening shift, night shift, rotating shifts, or other employer
arranged irregular schedules. The International Labour Office in 2003 reports that
working hours in the United States exceed Japan and most of western Europe. Both
shift work and long work hours have been associated with health and safety risks.

Some companies have introduced programs to promote good health, for example, smoking
cessation programs, safe driving programs, and exercise programs, at least partly to reduce
health insurance premiums the company pays for workers. Some companies have gone as
far as forbidding their workers to smoke off the job, but such programs have been
controversial.

123
9.4 Cognitive engineering
At least some of the events at Three Mile Island (recall our discussion in Chapter 8) can be
attributed to difficulties workers had in figuring out what was going on in the reactor. One
problem is that the workers’ normal job largely consists of monitoring a smoothly running
reactor (yes, picture Homer Simpson). Such a job is boring and can quickly lead to lack of
vigilance. When a problem occurs, the person is “out of the loop” because the computer
controls have been running the plant. The workers must spend time figuring out what has
happened. A second problem at Three Mile Island was that the design of the control room
at that reactor did not convey crucial information to the workers, particularly the level of
coolant in the reactor; they had to infer that level from other indicators.

Cognitive engineering builds on knowledge from psychology about human abilities in

memory, perception, reasoning, and attention to design tasks that a human can do with
efficiency, quality, and safety. Again, the focus is on adapting the workplace to the human. A
human who must remember certain tasks in a specific order can be given a checklist. A
human who has to perceive a change in an array of displays can be aided by a computer
that detects the changes and alerts the human (for example, cockpit alarms for loss of
altitude). A human who has to do a complicated set of reasoning can be supported by a
computer system (for example, an immunohematologist who must interpret blood tests to
identify antibodies in a patient’s blood). A person who must pay attention to several
sources of information can share the task with computers and with other humans.
A balance must be achieved between understimulating the human, leading to boredom, and
overstimulating the human, leading to stress. Both can lead to losses in efficiency, quality,
and safety. Generally, the human performs better when the worker clearly has control of
the environment, including work pace. Shifting control to the computer can lead to
boredom, stress, inattentiveness, and overreliance on the computer.

The design of controls, including computer hardware and software, to support human tasks
requires careful analysis of usability, which is affected by screen layout, task sequence, and
many other factors. NASA's Human Systems Integration Division
advances human-centered design and operations of complex aerospace systems
through analysis, experimentation, and modeling of human performance and
human-automation interaction to make dramatic improvements in safety, efficiency,
and mission success.
This FAA analysis of an airliner accident in 1993, in which 2 people were killed, shows the
interplay of the design of the controls, the training of the pilot, and the behavior of
passengers.
Flight 583 was level at 33,000 feet when the leading edge slats deployed
inadvertently. The autopilot disconnected and the captain was manually controlling
the airplane when it progressed through several violent pitch oscillations and lost
5,000 feet. ...
The National Transportation Safety Board determine that the probable cause of this
accident was the inadequate design of the flap/slat actuation handle by the Douglas
Aircraft Company that allowed the handle to be easily and inadvertently dislodged
from the up/ret [retracted] position, thereby causing extension of the leading edge
slats during cruise flight. The captain's attempt to recover from the slat extension,
124
 given the reduced longitudinal stability and the associated light control force
characteristics of the MD-11 in cruise flight, led to several violent pitch oscillations.
Contributing to the violence of the pitch oscillations was the lack of specific MD-11
pilot training in recovery from high altitude upsets, and the influence of the stall
warning system on the captain's control responses. Contributing to the severity of
the injuries was the lack of seat restraint usage by the occupants.
The root cause of that accident was identified as poor design of a handle.

Learning
Learning a task involves cognitive and physical improvement. Increased familiarly with the
task and improved dexterity lead to a reduction in the time to do a job. Various learning
curve equations are used to describe empirical relationships about what improvement can
be expected from learning.

The Wright learning curve is described by a percent L such that a doubling of the
cumulative number of units produced leads to a (100-L)% reduction in the cumulative
average production time. For example, with an 80% Wright curve, if the first unit takes 100
minutes, then the first 2 units will take an average of 80 minutes, the first 4 units will take
an average of 64 minutes, and so forth. It can be shown that the Wright curve must have an
exponential equation, where a and b are constants.
Y = aXb
Y = the cumulative average time (or cost) per unit.
The learning curve can be used to estimate production times for new parts, based on the
planned production quantity.

9.5 Work methods and work standards

I have stressed that an organization is a system; an IE who looks at a part of the system
must be sure to consider how that part fits into the overall system. The analysis and
improvement of a work station and the methods used by an individual worker requires the
IE to focus on a small part of the production system, but such analysis and improvement
can provide tremendous gains in the efficiency, safety, and quality of the organization’s
output.

In this type of analysis, the IE looks at exactly how each individual worker handles work
and performs the assigned tasks, including the worker's body movements and movements
of each hand. The goal is to improve efficiency, quality, and safety by determining the best
way to do the task.

When the IE focuses on one or a few work stations and on one or a few individuals, very
sensitive issues arise. Some plants have a tradition of sending a new IE out to the shop floor
with a stop watch. Many workers will see such an approach as a threat and the new IE may
be faced with a near revolt. Also, experienced workers may not take kindly to a new college
graduate’s well meaning suggestions for improvement.

Deming stressed “measure, measure, measure” but he also stressed that measurement
should be used to improve the system, not to evaluate an individual's performance. The IE
125
can work with a team of production workers to measure differences among workers with
the goal of identifying and spreading best practices. For example, Parkview Hospital
measures the time that elapses from when a patient in the emergency room is assigned a
bed in the hospital to when that patient is actually in the new room; this time is called the
“move time.” Analysis of the average move time for different nurses showed that two
nurses were achieving significantly lower averages. Discussion among the nurses
uncovered that the nurses with shorter average move time were anticipating which
patients would be moved soon and initiating some of the required process before the start
of the move time; they were efficiently overlapping tasks. The result is that the patient is
settled into the hospital room more quickly. Allowing nurses to develop better practices
and share them with each other can only occur in an atmosphere without competition.

Work sampling can be used to determine existing work methods. Observations are taken at
fixed or random intervals. A small device that beeps is often used to prompt the worker or
the observer to record the activity being done by the worker at that time. The resulting
data can be used to determine the proportion of time being spent in each type of work. As
described in this article about mine safety practices, work sampling can be used to
determine if workers are following recommended practices. Video taping can also be used.

More sophisticated IE methods can uncover small inefficiencies in repetitive work and
small improvements add up. The same type of visualization tools that helped map the
entire production system can also be used to map tasks. For example, a worker assembling
a lock will use both hands; a chart showing the actions of left and right hands may uncover
times when one hand is idle and tasks could be redesigned. Such changes in the work
procedure might also require a change in the layout of the work station.

While some latitude can be allowed in how workers do tasks, specified work methods are
necessary for training new workers, for ensuring that products and services are of high
quality, for enabling the identification of sources of problems when quality issues arise, and
for ensuring safety.

IEs are often involved in setting work standards. A work standard is a statement of the how
long a worker working at a reasonable pace over a work day should expect to take to
complete a well defined job using a specified work method. Work standards are needed for
several reasons:
 To support planning. Scheduling, staffing, line balancing, work flow analysis, and
simulation models all rely on knowledge of how long different tasks take to perform.
 To estimate costs. Computation of the profit for each product or service requires
adding up the time spent by each worker on each task to produce that product or
service.
 To evaluate and improve productivity. The example involving the Parkview Hospital
nurses show that measurement supports identification of best practices. It also
supports the determination of whether changes to methods have led to
improvements.
 To set worker pay. Some companies use work standards to devise incentive pay
schemes.
126
Two methods can be used to determine work standards:
 Actual measurement of workers.
 Standard data.
Because the time for even an experienced worker to do the same task will vary from time
to time, actual measurement involves measuring several workers several times. Such
measurement usually also involves measuring the elements of the task, especially
distinguishing portions of the task paced by the human and portions with time determined
by a machine. An element should have an easily determined start and finish, should take an
amount of time that can be conveniently measured, and should contain movements that
make up a unified sequence. Sophisticated hand held devices can be used for such
measurement, with data then being downloaded to a PC. For example, UmtPlus and
WorkStudy3.0+ allow a laptop or other device to be used to collect data. Over time, the
company may build up a database of the standard times for different tasks.

Actual measurement is time consuming, so some organizations use predetermined motion

time systems. Again, the work is broken into elements, such as a grasp, movement, or
placement. Depending on the details of the grasp (for example, the size of the item), the
movement (for example, the distance the item is moved), and the placement (for example,
how accurately must the item be placed), the IE can use a database to determine how long
the element should take. The times for each element can be added up to determine the
“normal time” for a job. A work standard must also include allowances for rest time,
personal time, unavoidable delay, and so forth. This web page describes predetermined
time systems in more detail and gives an example chart showing movements of left and
right hands in a task.

This case study describes how Maynard worked with Cardinal Health Care Systems to
determine the time savings that clients of Cardinal could expect from purchasing Cardinal's
prepackaged kits of supplies needed for specific surgical procedures. These kits eliminate
the need for the hospital staff to gather the supplies.

9.6 Motivation and leadership

The second great lesson of the war [after mass production] was that it is really not
true that the worker is happy and contented if he gets nothing out of his work
except the pay check, or that he is not interested in his work and in his product. On
the contrary, he yearns for a chance to know and to understand as much as possible
about his work, his product, his plant, and his job. Plant management was forced to
use its imagination to establish a relationship between the war worker and his
product, not out of humanitarian reasons but for the sake of greater efficiency. The
result of such attempts was everywhere an increase in efficiency and productivity,
as well as in worker morale and satisfaction. (Drucker, page 157).

Achieving the goals of an organization is easier if each member of the organization wants to
achieve and tries hard to achieve the goals of the organization. A similar statement can be
made about each member of the organization trying hard to achieve efficiency, quality, and
safety. The IE who works in a line position (as plant manager, for example) plays a large
role in motivating workers. The IE who works in a staff position is less directly responsible
127
for the motivation of workers, but still will need to consider how to motivate workers to do
their best. Leadership is linked with motivation; leaders motivate others to strive to do
their best.

The starting point for any discussion of motivation in organizations is the 1960 book The
Human Side of Work by Douglas McGregor, who described two theories of motivation,
Theory X and Theory Y. This web page has an excellent summary of the two theories.
"Essentially, Theory X assumes that people work only for money and security" while
Theory Y assumes that people work for "the higher-level needs of esteem and self-
actualization." A typical Theory X approach to motivation is incentive pay, especially
piecework rates in which an individual worker's pay is based on that worker's output.
Inspection is used to ensure quality. A Theory X leader uses command and control.
Deming's 14 points demonstrate a Theory Y approach to leadership. His point 12a states:
Remove barriers that rob the hourly worker of his right to pride of workmanship
The Theory Y leader makes sure that workers have clear instructions, good tools, and the
support they need to do their jobs well.

Theory X and Theory Y are convenient summaries, but no worker and no leader are
probably completely described by either theory. Motivation is clearly a difficult subject.
Some industrial engineering programs require students to take a course in psychology, at
least partly to have better understanding of motivation.

Students in my class have sometimes summarized our discussions on motivation by saying

"happy workers are good workers." Obviously, that summary is simplistic, but has some
truth. Many organizations have found that treating workers well results in positive impact
on profits.

For example, keeping wages low may seem to be an obvious way to keep costs low, but
many companies do not realize that turnover caused by low pay or poor treatment of
workers is very costly. Godfrey (Quality Digest, March 2004) described the findings of a
group of his students who analyzed checkout times at a local grocery store.
The root cause for long lines became obvious when the data were analyzed. Clerks
new to the cash registers took far longer than those with more experience.
Throughput could actually improve using fewer registers and clerks. However, the
store’s high turnover of clerks meant that most registers were staffed with
inexperienced employees. The reason for the high turnover was also easy to
discover -- low wages. The math was simple: Increase wages, lower turnover, reduce
staff and increase profits. It seem so obvious. But the store manager was
unimpressed by the numbers. His supervisors were more concerned with keeping
salaries low, so he was, too: improving profitability by raising wages wasn’t
important to them.
Susan Heathfield cited the Wall Street Journal for this information:
Gallup found 19 percent of 1,000 people interviewed "actively disengaged" at work.
These workers complain that they don't have the tools they need to do their jobs.
They don't know what is expected of them. Their bosses don't listen to them. Based
on these interviews and survey data from its consulting practice, Gallup says
128
 actively disengaged workers cost employers $292 billion to $355 billion a year.
Furthermore, Gallup concluded that disengaged workers miss more days of work
and are less loyal to employers.

Widely accepted motivational programs may need to be carefully examined. McManus

(Sept 2003) gives reasons not to use four traditional approaches to motivation: suggestion
systems, employee of the month awards, performance appraisal systems, and sales
commissions. Instead, he recommends a “well deployed annual planning process that
involves all employees to some degree,” regular recognition of “every employee who meets
or exceeds performance standards,” “personal development plans”, and “profit sharing as a
compensation approach.”

Parkview Hospital in Pueblo was one of the first hospitals in the country to implement
ideas from quality, especially Deming's 14 points. Deming's point 12b calls for abolishing
the annual or merit review and Parkview has done that, replacing the annual review with
the APOP, which stands for Annual Piece of Paper. I think that the crucial discussion point
in that document is:
Discuss barriers to effectiveness of work and with job satisfaction.

I believe that the fundamental facts of motivation are:

 Most people want to contribute to a successful organization.
 People work because they need money, but for most people, if pay levels are
perceived as fair, money is not a motivator.
 Most people are motivated to do their best over the long run by internal motivation.
External rewards work in the short term, but undermine long term commitment.
 Most people will feel that their contribution is valued, will feel that they are part of a
team, and will feel that their hard work will be rewarded only if those statements
are repeatedly demonstrated to be actually true.
 There are bad hires.
Motivation is clearly a difficult subject. I think you should, over your career, spend quite a
bit of time thinking about your own motivation and the motivation of people who work
with you.

129