INDUSTRIAL MANAGEMENT (Key Points)

Unit-I
Introduction & Concept: Industria (dexterity & resourcefulness) + Management (PODC), IM is the branch of engineering that
deals with the creation & management of systems that integrates people, material & energy in productive ways. It involves
management of production, human resource, finance, marketing etc.
Inputs (Man, Material, Machine, Method & Money)ProcessOutput(product, service, information)
Development of IM: Industrial revolution (rise of factories) Classical Management Theory (Scientific management, Therblig
Analysis)  Classical Administrative School (14 principles of Management, Weber’s Bureaucracy)  Neo-Classical School of
thought (Hawthorne studies) & Modern Approaches (Quantitative, Systems & Contingency Approach)
Application: product design, plant layout & material handling, Work study, Production forecasting, PPC, inventory control, quality
control, production control, motivation
Scope: 1) Activities related to industrial system designing (plant layout and product designing)
2) Activities related to analysis & Control (Production Planning, Production Control, quality control, coordination among
departments, Inventory Control, dependent services)
Productivity: Ratio of output to input, Efficiency of production system, Productivity (Ratio) Vs. Production (output),
Productivity (= Output / Input) Vs. Profitability (=Profit / Investment)
Measurement: 1.Partial productivity {labour or capital or material productivity=Output/ labour or capital or material Input} 2. Total
factor productivity=Net output/ (labour+capital input)33. Total productivity =Total tangible (measureable) output/total tangible input
Productivity index=current year productivity/base year productivity, Deflator= current year price/base year price
It needs product identification, accounting & work measurement information
Types of production system: 1-flow/continuous a-Mass (electronics), b- Process (analytical-crude oil decomposition & synthetic-
soap & cement formation), c-assembly Lines(automobile, USA) 2-Intermittent a-job/project(ship building) b- batch (medicines)
Industrial Ownership: Types: 1-Private sector: a-Individual ownership(eg-Retail shop) b-Partnership (2-20 members, Indian
partnership Act-1932, eg- SSI, Wholesaler, transporter) c-Joint Hindu family business (Dayabhaga- w.bengal Mitakashara-only
male, Karta, eg- Tata & Sons) d- Joint stock company-company Act 1956 {Pvt.Ltd: 2-50 members eg- Balaji Telefilms Pvt. Ltd. &
Public Ltd:7-∞ members eg- Reliance Industries) 2- Co-operative sector: common interests, 10-∞ members, cooperative society
act-1912 (producer, consumer, housing, credit etc. eg- Amul) 3. Public sector: (Run by central & state enterprises) a-Govt.
Departments( eg-Railways, defence) b-Public Corporation- (eg-LIC) c- Govt. Companies(eg-BHEL) Others: Joint Sector (govt.
& Pvt. Sector= 51:49 eg- Maruti Udhyog)
Unit-II
Management Function: forecasting, planning, organizing, staffing, directing (leadership, communication, motivation, supervision),
coordinating, controlling, decision making (or, POSDCORB)
Principles of SM: 1) Science, not Rule of Thumb 2) Harmony, not Discord 3) Cooperation, not Individualism 4) Maximum, not
Restricted Output 5) Scientific Selection, Training and Development of Workers (Development of workers to their greatest efficiency
and prosperity) 6) Equal Division of Responsibility between Management and Workers Techniques: 1) Scientific Task Setting 2) Work
Study (methods, motion, time & fatigue study) 3) separation of planning from doing 4) Standardisation 5) Scientific Selection and
Training 6) Differential piece Rate Plans 7) Functional Foremanship
Principles of Management: Division of work, authority & responsibility, discipline, unity of command, unity of direction,
subordination of individual to general interest, remuneration, centralization of authority, scalar chain, order, equity of treatment,
stability, initiative, Esprit de Corps
Social Responsibilities of Management (CSR): The activities that a business conducts over and above the statutory requirements of
a business for the benefit and welfare of the society 4 types of business obligation: Discretionary, Ethical, Legal & Economic
Obligation Social Responsibility towards Different Groups: Towards Shareholders, Employees, Consumers, Society,
Competitors, Government and Suppliers/Creditors
Human Resource Management: HRM is an art of managing people at work in such a manner that they give their best to the
organisation for achieving its set goals. It is the process of procuring, developing and maintaining competent human resources in the
organisation so that the goals of an organisation are achieved in an effective and efficient manner.
Nature: A part of Management Discipline, Universal Existence, Concerned with People, Action oriented, Directed towards
Achievement of Objectives, Integrating Mechanism, Development Oriented, Continuous Process, Comprehensive Function
Importance: Organisation Significance, Social Significance & Professional Significance
Functions: (1) Managerial Functions: Planning, Organising, Staffing, Directing/Leading, Controlling (2) Operative Functions:
Procurement, Development, Compensation, Maintenance
Unit-III
Work study: study of method & measurement to simplify activities to improve productivity process: define, record, examine,
develop, measure, maintain Techniques (Types) of work study: 1) Method study (Work simplification): develop easier method by
eliminating useless motions after critical examination of existing method Process: job selection, data collection & recording,
analysis, develop best method, install & measure, maintenance
Techniques of Method Study: 1-Process chart: symbols- O D Type: a-Flow, b-Outline & c-Two handed process
charts 2-Flow diagram, 3-String diagram & 4-Travel charts (2)Work measurement: Process of establishing work content
by determining time in standard condition Techniques-direct time study, synthesis method, analytical estimating, PMTS, work
sampling Types of Work Measurement: a- Time study (stop watch method): 1. Selection of task to be timed, 2.
Standardize the Method of Working, 3. Select the operator for study, 4. Record the details, 5. Break the task into element, 6.
Determine number of cycles to be measured (Averaging), 7. Measure the time of each element using stop watch, 8. Determine
standard rating, 9. Calculate the Normal time (Normal Time = Observed time x Rating), 10. Determine the allowance, 11. Determine
the standard time (Standard Time = Normal Time + Allowances)
Allowances: The extra time figures which are to be added to the basic time of an operation to account for personnel desires, delays,
fatigue of operators. Types: PFD allowance (Personal needs, Fatigue, and unavoidable Delays), Relaxation Allowance,
Contingency Allowances, Special Allowances, Policy Allowances
Normal & Standard Times Calculations: 1. Observed Time (Cycle Time): Cycle Time = Machine Time + Material Handling Time
2. Basic Time (Normal Time): Basic Time (Normal Time) = Observed Time X Rating Factor
3. Standard Time: Standard Time = Basic Time + Allowances Time
b- Motion study- method to eliminate useless motions. Process: select job, data collection, examine data, develop improved
method, organize inputs for new method, install, training & control. Techniques of Motion study: THERBLIG Analysis (by
Gilbreth, 18 basic motion) & Micromotion study( high speed movie camera, 1 TMU=0.0006 Minutes) Production Planning &
Control (PPC) process- Estimating, Routing, Scheduling, Loading, Dispatching, Follow Up, Inspection, Corrective Action
Work Sampling: It is a technique of determining the percentage occurrences of a certain activity (a group of processes, machines, or
workers) with the help of statistical sampling and random observations. Procedure: 1. Define the Problem, 2. Obtain the
approval, 3. Determine the desired accuracy, 4. State the confidence level, 5. Make a preliminary estimate of the percentage
occurrence, 6. Design the study & observations form, 7. Make the observations and record the data, 8. Summarize the data at the end
of the each day, 9. Check the accuracy, 10. Prepare the report
Inventory control: Managing proper level of stock at all steps of production process. Process- process of ordering, inventory storing
procedure& process of issue of material Inventory: stock of goods Classification (types): (Basis: nature) direct material inventory
(production, in-process & finished) & Indirect material inventory (MRO & consumables) {Basis: Use}(Transaction, Speculative,
Anticipation, Buffer, Cycle inventory) Levels of Inventory- 1. Reorder level=(max. usage or consumption rate) x (max lead time or
re-order period or delivery time) 2. Maximum Level= reorder level+ EOQ-(min usage x min lead time) 3.Minimum level=
Reorder level-(avg. usage x avg. lead time) 4. Avg. Level= (max+min level)/2 5. Danger Level=avg. usage x max lead time in
emergency, (It is generally 2 days of normal consumption.) Inventory cost- purchase, ordering, carrying (direct & indirect), stock-
out, warehousing, damage & exchange rate differential cost IC techniques- ABC(always better control 10,20,70), SDE(scarce,
difficult, easy to obtain), VED (vital, essential, desirable), HML(High, medium, low), FSN(fast, slow, non-moving), SOS(seasonal,
off-seasonal), XYZ analysis Inventory Control Systems- Q type (fixed quantity) and P type (fixed period)
Inventory Control models: Static & Dynamic 1.Probabilistic 2.Deterministic models (demand & lead time can be determined),
EOQ models: 1.Basic EOQ: deliveries are made at once [ACC=QC/2, AOC=DS/Q, TSC=ACC+AOC, Q2=2DS/C, Avg Inv.
Level=Q/2], 2. EOQ for lots: deliveries with constant rate ( p>d)[ACC=QC(p-d)/2p, AOC=DS/Q, TSC=ACC+AOC, Q2=2DS(p)/C(p-
d), Avg. Inv. Level=Q(p-d) /2(p)] 3. EOQ with Quantity discount: Annual acquisition cost=(D)ac, TMC=TSC+(D)ac
Supply chain management: Network of suppliers, producers, and distributors to procure, transform & sell goods to consumers.
Process view-cycle & push/pull view Value chain- Timely flow of goods, cash, information in supply chain, Porter model of value
chain (primary and supporting activities). Just in time-Japan, Toyota, philosophy to elimination of 7 wastes (overproduction,
waiting, transportation, process, stock, motion, defective products) Kanban system- Japan, card system, self-regulatory & paperless
system of scheduling & controlling of shop-floor
Unit-IV
Quality control: Quality-fitness for purpose control- correcting gap b/w actual & standard performance Quality Control is the
process of checking products to ensure quality standards & specifications Process- Design production system, Fix standard, control,
inspection Process control-procedure to evaluate, maintain & improve quality standards SQC(Statistical Quality Control):
controlling quality by statistical methods. Control charts-Graphical presentation of quality related information that detects variation
in processing Control charts for variables: x̄ Chart: x̿̿=∑x̿/n, UCL= x̿̿+A2R̿, LCL= x̿̿-A2R̿ R Chart: R̿=∑R/n, UCL= D4R̿,
LCL=D3R̿ Control chart for Attributes: p chart:- p̿=central line= total defective piece/total inspected piece, UCL= p̿+3√p̿(1- p̿)/n,
LCL= p̿-3√p̿(1- p̿)/n np-chart: p̿=∑d/nK, central line= np̿, UCL= np̿+3√np̿(1- p̿), LCL= p̿-3√np̿(1- p̿) C-chart: C̿(central line)=Total
defects in all the items / total inspected items, UCL= C̿+3√ C̿, LCL= C̿-3√ C̿
Sampling (Acceptance sampling): Process of checking quality by picking few items randomly out of whole lot / Population. Types:
Single sampling-if x<C, lot is accepted Only one sample to accept and reject lot, Double- if C1<x<C2, take next sample, If
K1+K2≤C2(accept lot) Multiple Sampling – several samples till conclusion Sequential sampling-increase sample size one by one
till sizable defects are found. TQM (Total Quality Management)-Philosophy to make faster, flexible, focused & friendly
organization, focuses process improvement & customer need, A system to manage quality in production economically to satisfy
customer TQM Models: Transition, integrated & operational TQM model ISO: international organization for
standardization, set of quality management standards, ISO 9000(fundamentals of quality management system), 9001(requirement,
design ),9002(installation),9003(inspection),9004(measurement) Quality Circle: group of 6-8 employees that meet regularly to
discuss work related problems, Six sigma-Bill Smith (motorola) , process variability must be small up to 6 standard deviations from
the mean. 99.99966% defect free product Benchmarking- comparing with industry leader, Types- Strategic, performance,
process, functional, internal, external & international

Unit-V
Project: It is a temporary endeavor, having a defined beginning and end, undertaken to meet unique goals in given time and budget.
Types: (Based on Ownership) Public Projects, Private Projects & Public Private Partnership
Project life cycle Stages: Project Initiation Stage, Project Planning Stage, Project Execution Stage & Project Closure stage
Project management: It is the discipline of planning, organizing, securing and managing resources to bring about the successful
completion of specific project goals and objectives.
The project network: It is the tool used for planning, scheduling, and monitoring project progress. It provides the project schedule
by identifying dependencies, sequencing, and timing of activities. The two approaches used to develop project networks are known as
Activity-On-Node(AON) and Activity-On-Arrow (AOA).
CPM (Critical Path Method) was developed by DuPont Company and applied first to the construction projects
Total Float (TFij) = LF - EF (or LS - ES) where ES = Early Start, EF = Early Finish, LS = Late Start, and LF = Late Finish
Free Float = ES of next activity – EF of given activity
PERT stands for Project Evaluation and Review Technique and developed during 1950’s.The technique was developed and used in
conjunction with the planning and designing of the Polaris missile project.
TE = (O + 4T + P) / 6, Standard Deviation (SD) = (P - O) / 6, where, SD = Standard Deviation, TE = Expected Time
Project Crashing: It refers to a particular variety of project schedule compression which is performed for the purposes of decreasing
total period of time. Cost slope = (crash cost-normal cost)/ (normal duration crash duration)
Resource Leveling: It is a project management technique used to examine unbalanced use of resources (usually people or equipment)
over time, and for resolving over-allocations or conflicts. Resource Allocation Resource allocation is used to assign the available
resources in an economic way.

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(SEC- EN-1, EN-2, IT-1 & IT-2) VIKAS ROSHAN