Introduction to industrial engineering

• American Institute of Industrial Engineers (AIIE) defines

Industrial Engineering as follows:
• Industrial Engineering is concerned with the design,
improvement and installation of integrated system of men,
materials and equipment. It draws upon specialized knowledge
and skills in the mathematical, physical 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
• The prime objective of industrial engineering is to increase the
productivity by eliminating waste and non-value adding
(unproductive) operations and improving the effective
utilization of resources
 Evolution of modern concepts in industrial
engineering
• History of industrial engineering dates back to industrial revolution and it has
passed through various phases to reach the present advanced and developed
stage.
• Frederick Taylor is named as father of scientific management and Industrial
Engineering
• Adam Smith's concept of division of labour through his book "The Wealth of
Nations “ in 1776 is important as it influenced the factory system
• Period between 1882-1912 was the critical in the history of industrial
engineering.
• The important works during this period are:
1. Factory system and owner - engineer and manager concept.
2. Equal work, equal pay and incentive schemes.
3. Scheduling and Gantt charts.
4. Engineers started taking interest in cost control and accounting.
• The modern industrial engineering techniques had their origin during
the period between 1940 to 1946. Predetermined time standards
(PMTS), value analysis and system analysis are few prominent one’s.
They were expanded, refined and applied in subsequent years.
Operation Research technique has brought a revolution and changed
and expanded the scope of industrial engineering activities.
• The computers have added a new dimension to the industrial
engineering activities.
Present State of Industrial Engineering

Industrial engineering has not remained restricted to manufacturing activities but

has extended its services to service industries also. The development of
techniques such as:
1.Value Engineering
2. Operation Research
3. Critical Path Method (CPM) & PERT
4. Human Engineering (Ergonomics)
5. Systems Analysis
6. Advances in Information Technology and Computer Packages
7. Mathematical and Statistical Tools
FUNCTIONS OF AN INDUSTRIAL ENGINEER
1. Developing the simplest work methods and establishing
one best way of doing the work. (Standard Method)
2. Establishing the performance standards as per the
standard methods. (Standard Time)
3. To develop a sound wage and incentive schemes.
4. To aid in the development and designing of a sound
inventory control, determination of economic lot size
and reducing work-in-process for each stage of
production.
4 To assist and aid in preparing a detailed job description, and job
specification for each job and to evaluate them.
5 Development of cost reduction and cost control programmes,
and to establish standard costing system.
6 Sound selection of site and developing a systematic layout for
the smooth flow of work without any interruptions.
7 Development of standard training programmes for various
levels of organization for effective implementation of various
improvement programmes.
 Field of application of industrial engineering
PLACE OF INDUSTRIAL ENGINEERING IN AN ORGANISATION
There is no hard and fast rule governing the place of industrial
engineering in an organisation. The factors that influence its position
in the organisation are:
1. The number of direct employees.
2. Scope of industrial engineering activities.
3. .Complexity of manufacturing organisation
INDUSTRIAL ENGINEERING IN SERVICE SECTOR
The various service industries are:
1. Industrial Engineering in Health Services: A number of developments
in health industry have resulted in a much wider acceptance and use of
industrial engineers in hospitals, with a trend towards cooperative
programmes in which group of hospitals share industrial engineering
services. The advances in information technology and use of
optimisation techniques are helpful to achieve the expected service
levels in health care industries by optimum utilisation of resources.
2. Industrial Engineering in Government Organisations: The range of
activities encompassed by government is as extensive as the industrial
engineering techniques themselves. Personnel activities, plant or office
location problems, organization and methods are so complex because of
the integrated nature of government and their solution requires not only
the application of normal industrial engineering techniques but an
extremely broad-based new techniques.
3. Industrial Engineering in Banking: Banking is a large-scale business, dealing with the production and
delivery of vital services throughout the economy. The computer, as a tool of industrial engineering is
making a major impact on banking.
The role of industrial engineering is:
(i) Training- Training to make the employees technically competent to carry out the ·increasingly
specialised tend in bank operations.
(ii) Use of Operation Research - Now with a changing trend, technically competent engineers are making
a head way in applying OR techniques in banking.
(iii) Cost System - There is a need for engineers with conceptual awareness of interfacing amongst the
various bank management functions. Engineers with ability to bring together the related functions of the
bank in actual or simulated mode to present the management an objective appraisal of individual
contribution of each unit. A well designed cost system provides the basis for such an evaluation.
(iv) Information Systems - Reports generated by information system require skilled and thoughtful
design. The format and presentation of the data should be simple and should motivate the reader to action.
Thus a competent industrial engineer is able to design the information system to integrate various banking
activities.

4. The Other Areas of Application of Industrial Engineering- Public utilities such as the companies which
supply essential commodities such as water, gas, electricity, telephone services
 Product design
Organizations are required to design the new products for the
following reasons;
• To be in business for a long time believing the fact that business
is a long lasting institution
• To satisfy unfulfilled needs of the customer
• Company's existing product line becomes saturated and the sales
are on the decline.
• To enter into new prospective businesses through diversification
(related or unrelated)
• Too much competition in the existing product line
• The profit margin is on the decline
• The entire process of need identification to physical
manufacture of products involves three major phases or
functions: marketing, product development and manufacturing
DESIGN FUNCTION
 OBJECTIVES OF DESIGN

• The objective of product design is to create goods or services

with excellent functional utility and sales appeal at an acceptable
cost and within a reasonable time.
REQUIREMENTS/OBJECTIVES OF A GOOD PRODUCT
DESIGN
• Satisfy the customer needs.
• Easy to store
• Profitable
• Should provide all functional • Competitive price.
requirements. • Easy to manufacture
• Extra feature
• Reliable • Easy to assemble
• Quality • Variety-options for the customer.
• Environmental friendly • Possibility of add-on features.
• Safety
• Easy to handle
• Availability of spare parts
• Aesthetics
 Design Levels/types of design
• As in any field of human activity, there are different degrees of
difficulty. In design, these stages are adaptive design,
developed design, and new design.
 Adaptive design
• There are branches of manufacturing in which development has
practically ceased, so that there is hardly anything left for the
designer to do except make minor modifications, usually in the
dimensions of the product
• In the great majority of instances, the designer’s work will be
concerned with the adaptation of existing designs
• Design activity of this kind demands no special knowledge or skill,
and the problems presented are easily solved by a designer with
ordinary technical training.
• Eg: washing machine, elevator
 Development design
• Considerably more scientific training and design ability are
needed for development design.
• The designer starts from an existing design, but the final
outcome may differ markedly from the initial product.
• Examples of this development could be from a manual
gearbox in a car to an automatic one and from the traditional
tube-based television to the modern plasma and LCD versions
 New design
• Only a small number of designs are new designs.
• This is possibly the most difficult level in that generating a new
concept involves mastering all the previous skills in addition to
creativity and imagination, insight, and foresight.
• Examples of this are the design of the first automobile,
airplane, or even the wheel (a long time ago).
 STAGES IN PRODUCT DESIGN
• Conception
• Acceptance
• Execution
• Translation
• Pre-production
 1. CONCEPTION
• In this stage, after incorporating the user requirements, the draft
specifications for the product are laid down.
• On design specification, the following information should be
furnished:
• Performance requirements
• Appearance or supplying requirements.
• Estimated quantity which will be sold.
• Maximum price within which the product should be offered
• Probable date of introduction of the product into the market
 2. ACCEPTANCE
• This is a stage, where the design activity of the product begins
after the feasibility analysis
• Calculations of the product is accepted in this stage.
 3. EXECUTION
• Based on general design considerations, a model is
prepared as per the acceptance of specification in stage
2.
 4. TRANSLATION
• At this stage, the production engineering department is
involved in design work.
• The manufacturing feasibility is tested at this stage.
• The final manufacturing drawings are also prepared in this
stage
 5. Pre production
• Before starting the production on commercial basis, it is
recommended to carry out a pilot run under production
conditions.
• The pre-production run will ensure the quality and reliability
of the product as per the specifications
 PROTOTYPING:
• A prototype is an original model that serves as a basis for future
models.
• Prototyping consists of building a prototype of the product
• For example, a new aircraft design would first be tested as a scale
model in a wind tunnel.
• Wind tunnel tests would generate information to be used in
constructing a full-size prototype of the aircraft.
• Test pilots then fly the prototype extensively under real conditions.
• Only after testing under all expected and unusual operating
conditions are the prototypes brought into full production.
• This is not just a model but a full fledged product made as per
the design.
• They are tested in the same operating environments in which
they‟re expected to function as final products.
• At times, prototyping is done for some parts of a design to
check certain requirements.
• Prototyping is done using the materials specified so that their
performance is also taken into account
 Need of a prototype:

• Cost and time effective

• Feedback is obtained quickly so that product issues are
resolved earlier in time.
• Betterproduct is built after testing and modifications based
on the results of testing.
• The decision to build a prototype depends on a number of
things, including:
– the size and type of the design space,
– the costs of building a prototype,
– the ease of building that prototype,
– the role that a full-size prototype might play in ensuring the
widespread acceptance of a new design,
– the number of copies of the final design that are expected to be
made or built
 TESTING AND EVALUATION
• Before the product is introduced it is to be tested fully for all
the designed function.
• Testing and evaluation ensures whether the product will work
or does it require refinement.
• To identify potential faults
• Other requirements that are taken into account in the design
are to be evaluated (safety, environmental issues, etc.)
 REASONS FOR TESTING AND EVALUATING THE
PROTOTYPE
• Testing and evaluation allows the Client or customer to view the
prototype and give their opinions.
• Safety issues are identified by narrow testing and evaluation.
• The prototype can be tested against any relevant regulations and
legislation.
• The prototype is evaluated in order to allow the production cost to
be assessed and finalized.
• Component Failure is often identified during the testing process.
This may mean that a component has to be redesigned and not the
end product.
 PRODUCTION
• When the prototype is designed, manufactured and tested
successfully the next stage is product manufacturing
• The production manager must plan and control the process of
production so that it moves smoothly at the required level of
output while meeting cost and quality objectives.
• The time limit for production and the quantities needed at
different points of time are also decided
• The production level might need to be adjusted from time
to time to address fluctuating demands and changes in a
companies market share
• Successful transformation of design into a saleable product is a
challenge to the organization.
• This needs a close coordination of production and design
department.
• The concept of DESIGN FOR PRODUCTION is the current trend.
 HUMAN FACTORS IN DESIGN -
ERGONOMICS
• The word "Ergonomics" originated from two Greek words
"ergon," meaning work, and "nomos“ meaning “law."
• How well the design fits the human user.
• It deals with the user interactions with the product and
making sure that it is easy to use and maintain
• The aims of ergonomics are, therefore, to enhance functional
effectiveness while maintaining or improving human welfare.
• It is concerned with designing and improving the workplace,
workstation, tools, equipment, etc.
• To limit fatigue, discomfort and injuries, while efficiently
achieving personal and organizational goals.
• A successful ergonomics program utilizes the skills of many
disciplines, including engineering, psychology, medical, safety,
management, etc.
Two goals:
• Enhance performance and thus productivity
• Prevent fatigue and injury
 OBJECTIVES OF ERGONOMICS
• Improve human well-being and overall system- performance
by optimizing the integration of man and machine.
• Obtain maximum satisfaction for the worker by taking care the
factors governing the physical and mental fatigue.
• Attempts to minimize the risk of injury, illness, and errors
without compromising productivity.
 ADVANTAGES OF ERGONOMICS
• Higher productivity
• Less fatigue and more comfort to the worker
• Better design of the machine
• Increased safety.
• Reduced labour turnover
• Better integration of man-machine system
 Principles of product design
• In product design, the principles of design play a crucial role in
creating products that are not only visually appealing but also
functional and user-friendly. While some principles are similar
to those used in other design disciplines, there are specific
considerations and aspects that are particularly relevant to
product design
• Functionality: The primary purpose of any product is to serve a function
or solve a problem. The design should prioritize functionality, ensuring
that the product is easy to use, efficient, and meets the needs of the
users.
• User-Centered Design: Products should be designed with the end-users
in mind. Understanding user needs, preferences, and behaviors is
essential in creating products that resonate with the target audience.
• Simplicity: Simplicity in design is crucial for enhancing usability and user
experience. A simple and intuitive product design reduces cognitive load
and makes the product more accessible to a broader range of users.
• Form and Aesthetics: While functionality is vital, the visual appeal of a
product is also significant. Attractive product design can create a positive
emotional response in users and contribute to brand perception.
• Ergonomics: Ergonomics focuses on designing products to fit the physical
and cognitive abilities of users. A well-designed ergonomic product is
comfortable and easy to interact with, reducing the risk of user fatigue or
injury.
• Material Selection: Choosing appropriate materials is essential for both
the functionality and aesthetics of a product. Materials should align with
the product's purpose, durability, and manufacturing requirements.
• Manufacturability: Product designers must consider how easily a design
can be manufactured at scale. The design should be cost-effective, and
the production process should be feasible and efficient.
• Environmental Sustainability: With increasing awareness of
environmental issues, product designers should consider the
environmental impact of their designs. Sustainable materials,
manufacturing processes, and end-of-life considerations are essential
factors to address.
• Brand Identity: Product design should align with the brand's identity and
values. Consistency in design across a product line reinforces brand
recognition and fosters customer loyalty.
• Safety and Compliance: Products must meet safety standards and
regulatory requirements to ensure consumer safety and avoid legal
issues.
 PRODUCT LIFE-CYCLE
• The product once introduced into the market will undergo
definite phases
• The demand for a product generally tends to follow a
predictable pattern called product life cycle (PLC)
 Introduction stage
• This stage marks the introduction of the product into the market.
• It may be an entirely new product in the market or old product to
the new market.
• The demand is low as customers do not know much about the
product.
• So the organisations have to invest heavily in advertisement to make
the product familiar to the customer.
• The volume of sales will be low and if proper care is not taken, the
chances of product failures are high.
 Growth
• Once the product passes through the introduction stage, the
sales starts increasing because of the acceptability of the
product by the customer.
• The sales growth rate is high because of limited or no
competition
 Maturity (Saturation)
• The sales growth reaches a point above which it will not grow.
• This is due to the market share taken by the competitor's
products.
• Thus, the sales will be maintained for some period.
 Decline
• The competitors will enter the market with better product
features, advanced technology and reduced prices.
• This is a threat to the very existence of product and sales start
declining. If proper 'care like addition of special features,
design changes are not incorporated there comes a time when
the products are to be taken back from the market
 STANDARDISATION
• Standardisation is a tool for variety reduction-"Standardisation is
a process of defining and applying the conditions necessary to
ensure that given range of requirements can normally be met
with a minimum of variety and in a reproducible and economic
manner on the basis of the best current techniques
• The other two words associated with standardisation are:
– Simplification-"a process of reducing types of products within a definite
range".
– Specialisation-" a process where in particular. firms concentrate on the
manufacture of the limited number of product types".
• The three S are usually linked together and develop a logical
sequence.
 Objectives of Standardisation
• 1. Interchangeability of parts, components, etc.
• 2. Keeping the variety minimum.
• 3. Helps to achieve a better control due to reduced variety
 Advantages
• 1. Reduction of waste and obsolescence.·
• 2. Reduction in inventory.
• 3. Reduced effort in book keeping and accounting.
• 4. Standardisation reduces the price because of economy of
scale.
• 5. Ease in procurement because of availability.
• 6. Reduction in maintenance and repair costs.
 simplification
• Simplification is a point of disagreement between the production
and marketing departments.
• Production department is in favour of minimum of variety as it
reduces the number of set ups and, hence, utilisation of production
facilities is increased and can be able to produce the component at
the reduced cost compared to more variety.
• Marketing advocates that the higher variety helps them to sell more
as it helps them to meet the needs of the larger customer groups.
• Thus, a balance is struck between the two in order to arrive at the
optimum variety of types of products to be manufactured.
The advantages of simplification (minimum variety)
are:
• 1. Reduce inventories of materials and component parts.
• 2. Reduced investments in plant and machinery.
• 3. Reduced space requirements of storage.
• 4. Ease of planning and control.
• 5. Reduction in selling price.
• 6. Simplification of inspection and control.
 disadvantages
• 1. Not able to meet the needs of wide range of customer
preferences.
• 2. Possibility of loosing orders to competitors.
• 3. Creates a constant source of conflict between marketing and
production
 DIVERSIFICATION
• Diversification is a growth strategy that involves entering
into a new market or industry that your business does not
currently operate in or creating new products or services,
which your business does not currently offer
• Advantages of product diversification include:
• i) Increase in customer base;
• ii) Improvement in the effectiveness of the organization;
• iii) Improves the standards of living of the society.
• Disadvantages include:
• i) Production process becomes quite complex and expensive;
• ii) Size and variety of items in the inventory increases;
• iii) Workers of different types of skill and expertise is required
 CONCURRENT ENGINEERING
• To achieve a smoother transition from product design to
production, and to decrease product development time, many
companies are using simultaneous development, of concurrent
engineering.
• In its narrowest sense, concurrent engineering means bringing
design and manufacturing engineering people together early in
the design phase to simultaneously develop the product and
the processes for creating the product.
• More recently, this concept has been enlarged to include
manufacturing personnel (e.g., materials specialists) and
marketing and purchasing personnel in loosely integrated,
cross-functional teams.
 Cond..
• In addition, the views of suppliers and customers are frequently
sought. The purpose, of course, is to achieve product designs that
reflect customer wants as well as manufacturing capabilities.
• Traditionally, designers developed a new product without any input
from manufacturing, and then turned over the design to
manufacturing, which would then have to develop a process for
making the new product. This "over-the-wall" approach created
tremendous challenges for manufacturing, generating numerous
conflicts and greatly increasing the time needed to successfully
produce a new product. It also contributed to the "us versus them"
mentality
 advantages of concurrent engineering
• Manufacturing personnel are able to identify production capabilities
and capacities. Very often, they have some latitude in design in terms of
selecting suitable materials and processes. Knowledge of production
capabilities can help in the selection process. In addition, cost and
quality considerations can be greatly influenced by design, and conflicts
during production can be greatly reduced.
• Early opportunities for design or procurement of critical tooling, some
of which might have long lead times. This can result in a major
shortening of the product development process, which could be a key
competitive advantage.
 Cond..
• Early consideration of the technical feasibility of a particular
design or a portion of a design. Again, this can avoid serious
problems during production.
• The emphasis can be on problem resolution instead of conflict
resolution. However, a number of potential difficulties exist in
this co-development approach:
 C-V-P ANALYSIS
• Cost-Volume-Profit Analysis
• Such analysis explores the relationship existing amongst costs,
revenue and resulting profit.
• It aims at measuring variation of cost with profit.
• Takes into account:
• The total costs (fixed and variable)
• The total sales revenues
• Desired profits with regard to the sales volume
 Use of CVP analysis
• CVP analysis could be helpful in the following situations:
• Budget planning: in determining the sales volume required to
make a profit
• To make decisions regarding pricing and sales volume
• Determining the sales mix of different products, in what
proportions each of the products can be sold
 ASSUMPTIONS OF CVP(Break even) ANALYSIS
• Expenses can be classified as either variable or fixed.
• CVP relationships are linear over a wide range of production
and sales.
• Sales prices, unit variable cost, and total fixed expenses will
not vary within the relevant period.
• Volume is the only cost driver.
• The sales mix remains unchanged during the period.
 CVP ANALYSIS - FIXED COST
• These are the costs which incurred for a period and which
within certain output and turnover limits, tend to be
unaffected by fluctuations in the levels of activity (Output or
turnover).
• For example: Rent, insurance of factory building etc. remain
the same for different levels of production
FIXED COST GRAPH
 CVP ANALYSIS - VARIABLE COST
• These costs tend to vary with the volume of
activity(production).
• Any increase in activity results in an increase in the variable
cost and vice versa.
• For example: Cost of direct labour, direct material, etc.
VARIABLE COST GRAPH
BREAK-EVEN ANALYSIS (CVP ANALYSIS)
 BREAK-EVEN ANALYSIS
• Break-even analysis establishes the relationship among the factors
affecting profit.
• It indicates at what level of production cost and revenue are in
equilibrium.
• It is a simple method of presenting to management the effect of
changes in volume on profit.
• The detailed analysis of break-even data will help the management
to understand the effect of alternative decisions that convert costs
from variable to fixed.
• It is a powerful tool in evaluating alternative course of action
• A manufacturing firm incurs a fixed cost of Z 18000. The
variable costs accounts Z 8 per unit and selling price is Z 13.
Find the number of pieces to be produced to break-even.?