Industrial Engineering Mod 1

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ME 404
INDUSTRIAL ENGINEERING
SEMESTER 8
MODULE 1
Dept. of Mechanical Engg, RSET 1
Syllabus
• Module I (7 hours- 15% Marks)
• Introduction to Industrial Engineering - Evolution of modern Concepts in Industrial
Engineering, Functions of Industrial Engineering, Field of application of Industrial
Engineering
• Product Development and research- Design function - Objectives of design, -
Manufacturing vs purchase- Economic aspects- C-V-P analysis – simple problems,
Development of designs- prototype, production and testing, Human factors in design
• Value Engineering
• Module II (7 hours-15% Marks)
• Plant layout and Material handling- principles of material handling, Types of material
handling equipments, Selection and application.
• Preventive and breakdown maintenance, Replacement policy, Methods of replacement
analysis, Method of providing for depreciation
• Determination of economic life - Simple problems
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Syllabus……
• Module III (7 hours- 15 % Marks)
• Methods engineering: Analysis of work methods using different types of process
chart and flow diagrams, Critical examination- Micro motion study and therbligs,
Principles of motion economy –
• Work measurement -Performance rating - Determination of allowances and
standard time.
• Job evaluation and merit rating - Objectives and principles of job evaluation, Wages
and Incentives - Primary wage systems, Wage incentive plans.
• Module IV (7 hours – 15% Marks)
• Industrial relations- Psychological attitudes to work and working conditions -
fatigue- Methods of eliminating fatigue- Effect of Communication in Industry
• Industrial safety-personal protective devices- causes and effects of industrial
disputes- Collective bargaining- Trade union -Workers participation in management.
Syllabus……
• Module V (7 hours – 20% Marks)
• Production planning and control, Importance of planning - job, batch and mass production
• Introduction and need for a new product, product life cycle.
• Functions of production control - Routing , Scheduling, dispatching and follow up; Gantt
charts.
• Inventory Control, Inventory models -Determination of EOQ and reorder level simple
problems, Selective inventory control techniques.
• Module VI (7 hours – 20% Marks)
• Quality control and Inspection- Destructive and non-destructive testing methods
• Process capability- Statistical quality control , causes of variation in quality; control charts
for X and R.
• Reliability - causes of failures; Bath tub curve, System reliability; Life testing
• Introduction to concepts of, TQM, ISO, Six Sigma and Quality circles (Brief description only).
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Course outcomes (CO’s)

The students will be able to
i. Know various tools and techniques in industrial Engineering.
ii. Develop work procedure applying the principles of work
study.
iii. Apply inventory control techniques in materials
management.
iv. Formulate replacement and purchase decisions and arrive at
conclusions
Introduction
Industrial engineering can be defined as
A profession in which a knowledge of mathematical and natural sciences
gained by study, experience and practice is applied with judgment to develop the
ways to utilize economically the materials and other natural resources and forces of
nature for the benefit of mankind.
American Institute of Industrial Engineers (AIIE) has defined Industrial Engineering as
‘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
1. increase the productivity by eliminating waste and non-value adding (unproductive)
operations
2. improving the effective utilization of resources.
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Evolution of Concepts in IE
• The evolution of industrial engineering is considered to start with the
industrial revolution
• Began in England during the mid-eighteenth century, occupied the
eighteenth and nineteenth centuries.
• From Britain the industrial revolution spread gradually throughout Europe
and to the United States
• A primary aspect of the industrial revolution is that machine power
replaced human and animal power.
• During the late nineteenth century, the momentum for the development
of industrial engineering was primarily provided by engineers/managers in
the United States.
Concepts in IE - Contributors
• Fredrick Winslow Taylor is most often considered as the father of industrial
engineering; also considered to be the father of scientific management because
he was a pioneer in improving methods and establishing the incentive system for
workers
• Organization of work by management
• Worker selection & Training
• Additional compensation for those individuals that could meet the standard as
developed by the company through his methods (Incentive System)
• Frank Bunker Gilbreth and his wife Dr. Lillian M. Gilbreth -Understanding fatigue,
skill development, motion studies, as well as time studies.
• Harrington Emerson, an American Engineer devoted his attention to efficiency in
industry. According to him, ‘efficiency means that the right thing is done in the right
manner, by the right man, at the right place, in the right time".
•
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Concepts in IE - Contributors
• Henri Fayol - influential contributors to modern concepts of management.
Henri Fayol’s 14 Principles of Management
1. Division of Work
2. Authority
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual Interests to the General Interest
7. Remuneration8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure of Personnel
13. Initiative
14. Esprit de corps (can be achieved through unity of command)
Evolution of Concepts in IE
• The modern industrial engineering techniques had their origin during the period between
1940 and 1946. The development of the techniques as listed below took place during that
time.
• Value engineering
• Operations research
• Ergonomics or human engineering
• System analysis
• Advances in IT and computer packages
• Mathematical and statistical tools etc.
• Industrial engineering contributing towards:

• Increasing productivity and efficiency
• Quality of work-life
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Function of IE
• Importance of industrial engineering - to meet the demand of material goods
at a competitive price. Major functions are:
1. Methods study – a systematic technique of observing, recording with
certain scientific tools and critically evaluating and examining the present
methods of doing a job or task, so as to develop improved, simpler, cheaper
and more effective methods. Method study is aimed at developing the
simplest work methods and establishing the one best way of doing work
(STANDARD METHOD).
The scope of method study includes all types of work processes,
working environment, tools and equipment to perform the job.
2. Performing motion study – breaking a job down to its fundamental work
elements. (17 funda. motions)
3. Performing time study – to establish standard time
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Function of IE
4. Production planning and control – related functions involve capacity
planning, production scheduling and shop loading, inventory control,
material requirement planning, material movement, etc.
5. Human resources -Human resource is that branch of industrial engineering
that deals with the labor requirements. The activities includes job
description and classification, wage and salary survey and payment
structure, incentive plans and payment, manpower analysis, etc.
6. Statistical Quality Control (SQC) –The activities in this group include
process control, correlation and regression analysis, control charts, testing
of hypothesis, etc. In general, this field requires extensive use of
mathematics, and statistics.
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Function of IE
7. Quality – The quality of the material can affect all parts of the system. Poor
quality material often introduces excessive amounts of rework into each of
the processes. A typical job for an IE would be to work with the quality
department to set up a Quality Management system (QMS).
8. Design of Inventory Control - Since inventory is capital that cannot be
converted until finished and purchased by a consumer, it should be kept to
a minimal. Industrial engineers designs inventory and determine the
economic lot size for production.
9. Developing standard training programmes – This function involves
developing standard training programmes for various levels in the
organization.
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Function of IE
10. Facilities planning and materials handling – Sound selection of site and
developing an optimal layout is necessary for the smooth flow of work. It is
the duty of the industrial engineer to systematically plan and execute an
optimal layout of machineries so that materials movement can be carried
out eliminating unnecessary movements.
11. Value analysis – Value analysis ensures that no unnecessary costs are built
into the product and it tries to provide the required functions at the
minimum cost. Hence helps to enhance the worth of the product.
12. Job evaluation – A technique used to determine the relative worth of jobs
of the organization to aid in matching jobs and personnel and to evolve
sound wage policy.
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Application of IE
• Industrial engineering - engineering approach to the detailed analysis of the
use and cost of the resources of an organization.
• The main resources are men, money, materials, equipment and machinery.
• It is a valuable tool of management, that can be applied anywhere.
• The dynamic nature of modern industrial engineering serve all levels of
managements in problem solving and is applicable in almost every kind of
organization viz., banks, hospitals, government at all levels, transportation,
construction, ware-housing, manufacturing, etc.
• It can be used with success wherever work is done or plant is operated, not
only in production shops but also in offices, stores, laboratories and service
industries such as wholesale and retail distribution centre and restaurants
and on farms.
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Application of IE……..
• Thus, industrial engineering covers a broad cross section of business, industry
and institution.
• It is a means of raising the productivity of a plant by the reorganization of
work, a method which normally involves little or no capital expenditure on
facilities and equipments.
Focus areas of application:
1. Project Management
2. Manufacturing, Production & Distribution
3. Supply Chain Management
4. Productivity, Methods and Process Engineering
5. Quality Measurement & Improvement
6. Ergonomics
7. Financial Engineering
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Product Design and Development

• Product - any marketable thing with some utility in it, produced either by
manual labour or through series of automated processes
• Product design & development – specialized activity which may result in

creation of new products or modification in the product/production process
to produce the same product.
OR
• The transformation of an idea, needs or requirements by consumers/the
market into a product that satisfies these needs
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Product Design and Development ….

DESIGN FUNCTION:
A major characteristic of a design is its function.
Products are designed to meet these functions.
Functions are the behaviours that are expected from the design.
• Functions or sets of functions may be derived or generated from customer
needs.
• The design engineering has to establish which functions have to be
performed before we can specify how well they must be performed.
• In engineering design, functions can be classified into two categories, viz.,
basic functions and secondary functions.
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• Basic function - the primary purpose(s) for which the item or service is
designed when it is operated in its normally prescribed manner. A product or
service may have more than one basic function.
• Secondary functions – ones that support the basic function and, hence, are
sometimes referred to as ‘support functions’. They result from a specific
design approach to achieve the basic function.
Sub-classified as:
• Required secondary functions – Those secondary functions that are needed for the
basic function to be accomplished
E.g. Cooling in an LCD projector.
• Unwanted secondary functions – Undesired functions related to either basic or
secondary functions
E.g. Generation of heat, noise, etc., by the LCD projector.
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• Objectives of product design & Dev.
• Overall objective - profit generation in the long run.
• Satisfy customer requirements and maximizes the value for the customer at
minimum cost and time. The product or service should also be able to meet
primary needs and desire of the customer. This may not require development
of new product, but enhancement to existing product or service.
• Achieve the desired product quality and quantity.
• Ensure easy usage with minimum possible fatigue (ergonomics).
• To ensure safety of user (minimum noise, vibration and other hazards)
• To ensure manufacturability.
• Allow for easy and low cost repair/replacement/maintainability
(by use of standardization and simplification principles)
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Conception
• Product Design & Dev. Procedure: (STAGES)
Product design process generally follows the following sequence.
1. Conception Stage Acceptance
• Idea Generation – most important. (imitation, adaptation,
inventions etc.)
• Idea are screened
• Carry out target market analysis, competition analysis Execution
• Functions are identified and draft product specifications and

product concept is made
2. Acceptance Stage
Translation
• New product viability is analyzed in terms of marketing,
product characteristics (function satisfaction), production and
economic aspects.
• Based on analysis, the draft specifications is accepted, rejected Pre-production
or modified.
Stages in product design
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3. Execution
• In this stage, a working model (a prototype) as per the accepted specification is
made.
• Additional information related to product performance and full product design
parameters generated from testing of the model.
4. Translation
• All relevant information such as material specifications, drawings, manufacturing
data and tooling requirements are finalized and final product design is made
5. Pre-production
• Summarize all details of the manufacturing process
• Carry out a pilot test conducted under real production conditions, in order to
identify any further faults or problems.
• Outcome - all products, materials, equipment, and labor specifications should be
summarized and finally approved prior to commencement of the actual
manufacturing process
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Requirements for a Good Product Design
1. Customer Requirements
• Meet customer requirement in terms of quality, performance, durability, reliability etc.
2. Functional Aspects
• Optimal performance of primary function(s) Customer Functional Operational
requirements aspects aspects
• Secondary functions come in next
3. Operational aspects Product design
• Should be easy to handle and operate for customer
Aesthetic
4. Reliability Reliability Manufacturability
aspect
• Reliability means dependability on a product. Factors influencing product design
• Consumers prefer to purchase and use often those products which perform their main
function or task optimally for a longer period without any annoying malfunctions,
breakdowns or failures Dept. of Mechanical Engg, RSET 23
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Requirements for a Good Product Design
5. Manufacturability
• The product must be designed in such a way that it can be produced in large quantities
with ease at a minimum production cost
• Must not be very complex, and it must not require costly machines to produce the
product
6. Aesthetic aspects
• ‘external look good’ aspect of the product
• Help the selling function of the product by attracting the customers and creating the
first impression about the product
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Break Even Analysis

• Important technique used to study the relationship between the total costs,
total revenue and total profits and losses over the whole range of output
• A break-even analysis indicates the level of output/sales at which, total
costs and total revenues are equal – called BREAK EVEN POINT (BEP)
• At BEP, stage of no profit and no loss
• BEP indicates no. of units of products to be sold after which profits are
generated.
• Cost of Production:
a) Fixed Cost: those costs that remain constant irrespective of the changes
in the volume of production
b) Variable Cost: costs that vary with the level of production
TOTAL COST (per unit) = Fixed Cost (per unit) + Variable Cost (per unit)
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Break Even Analysis….

BREAK-EVEN CHART
Cost and Revenue
ue
ven
e
lR
ta
To fit
P ro
st
o t al Co
BEP T
Variable Cost
Total Fixed Cost
ss
Lo Fixed Cost
Production/Sales volume
Breakeven chart
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Break Even Analysis…….

Let,
F = Fixed costs, which are independent on quantity produced,
v = Variable cost per unit,
s = Selling price per unit and
Q = Quantity (volume of output)
Total Costs (TC ) = Fixed Cost  Variable Cost  ( F  v  Q )
Sales Revenue (SR ) = Selling price per unit × Quantity  s  Q
At BEP,
Total Cost (TC) = Sales Revenue (SR).
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Break Even Analysis…….

F  v  Q  s  Q
F  Q ( s  v)
F
 Break Even Point in units , Q  units
(s  v)
NOTE:
 No. of units sold  Selling price of an unit    F +  v  No.of units sold  =Profit/Loss
• Margin of safety is how much output or sales level can fall before a business
reaches its breakeven point
Margin of safety in units  Excess of sales in units  BEP
• High margin of safety – beneficial generally
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Break Even Analysis……. (Problem)

1. 1 The financial details of a company are as below. Variable cost
per unit is Rs.30, Selling price per unit is Rs.40, Fixed expenses are
Rs.1,00,000. Calculate
a) The break-even units
b) Margin of safety considering the actual sales as 15000 units
c) The selling price per unit, if BEP is brought down to 8000 units.
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Break Even Point - Sales

• BEP IN TERMS OF SALES:
Profit = Sales Revenue – Total Cost
Also,
Total Cost = Fixed Cost + Total Variable Costs
Hence,
PROFIT (P) = {SALES REVENUE (SR) – TOTAL VARIABLE COST (TC)} – FIXED COST (F)
P = Contribution Margin – F
Hence,
Contribution Margin = P + F
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Break Even Point – Sales….

• Contribution Margin is defined as the difference between sales and

variable costs (Portion of SR that is not consumed by Variable Cost so
contributes to coverage of fixed costs)
• When calculated for a single unit, it is called unit contribution margin
Contribution Margin = Sales revenue – Total variable costs

Unit Contribution Margin = Selling price per unit(s) – Variable cost per unit (v)
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P/V Ratio (Profit to Volume Ratio):
• P/V ratio or contribution margin ratio is the ratio of contribution margin
to sales revenue.
• Contribution margin can be thought of as the fraction of sales that
contributes to the offset of fixed costs
Selling price per unit  Variable cost per unit

P / V ratio 
Selling price per unit
Sales revenue  Total variable costs

Sales revenue
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• BEP sales - when contribution margin = fixed cost
Calculated using:
BEP Sales = BEP Vol * selling price/unit (s)
F
 Break Even Point Sales  s
(s  v)
Fixed cost
BEPSales 
P / V ratio
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• To calculate the level of sales required to earn a particular level of profit
(targeted income)
Fixed cost  Desired profit
Required sales 
P / V Ratio
• Margin of Safety: (Sales)
Margin of safety = Actual sales – BEP Sales
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Cost-Volume-Profit (C-V-P) analysis

• Concerned with the effect of change in variable costs, volume and selling
price on profits (fixed costs as unchangeable)
• Techniques/Calculations used in CVP Analysis
1. Break Even Analysis
2. Contribution margin/contribution margin ratio calculation
• Objectives/Use:
a. Determination of optimum selling price
b. Profit Planning (profit forecasting)
c. Decide on alternate courses of action – make or buy; continue or shutdown
d. New product decisions
e. Planning cash requirements
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Cost-Volume-Profit (C-V-P) analysis

Profit-volume chart
• Profit (or loss) is plotted on y-axis,
• Units of quantity (sales volume) is
plotted on x-axis. Profit BEP
• The maximum loss occurs at zero O

output level and is equal to total fixed Loss
Quantity
(Sales volume)
costs
• A horizontal line is drawn on the chart
to separate profit from loss Total fixed
expenses
• Breakeven point is where this line cuts Profit volume chart
the horizontal axis
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Cost-Volume-Profit (C-V-P) analysis (PROBLEMS)

2.1 A firm incurs fixed cost of Rs.8000 and variable cost of Rs.20000 and its
total sales receipt is Rs.30000. Determine the break-even point.
2.2 Thejus Associates has the following details. Fixed cost = Rs.2000000,
Variable cost per unit = Rs.100 Selling price per unit = Rs.200. Find the
following. a) The break-even sales quantity, b) The break-even sales. c) If
the actual production quantity is 60000. Find, c) Contribution; and d)
Margin of safety.
2.3 Consider the following data of a company for the year 2018. Sales =
Rs.1,20,000, Fixed cost = Rs.25000, Variable cost = Rs.45,000. Find a)
Contribution, b) Profit, c) Breakeven point of sales and d) Margin of safety.
2.4 A product is sold at a price of Rs.120 per unit and its variable cost is
Rs.80 per unit. The fixed expenses of the business are Rs.8000 per year. Find
(1) BEP in Rs. and units, (2) profits made when sales are 240 units, (3) Sales
to be made to earn a net profit of Rs.5000 for the year.
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Manufacture or Purchase decisions

Act of making a strategic choice between
• Producing an item internally (in-house) or
• Buying it externally (from an outside supplier) - OUTSOURCING
• The make and buy decisions are based on several important factors
involving both economic factors and non-economic factors.
• These factors are labour, materials, production facilities, machines and
capital, etc.
• Break Even Analysis is one of the methods which are used to make this
decision
Make when it is cheaper than buy

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Manufacture or Purchase decisions…….
Cost
b uy
t to
s
l co
a
T ot
e
to mak
BEP t al cost Variable
To cost
Total fixed cost
Buy Fixed
Make decision
decision cost
Quantity
Breakeven chart
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Manufacture or Purchase decisions…….

Factors influencing make or buy decision
1. Volume of production – In most of the cases, if the volume of production
is high, it is economical to make the product.
2. Cost analysis – Cost analysis refers to the determination of costs to make
an item as well as to buy the item. A lower fixed cost favors the decision
to make and higher fixed cost, the buy decision.
3. Availability of manpower – Availability of skilled and competent
manpower favors make decision.
4. Product quality – Quality products could be made in one's own factory
by having better control of overall manufacturing practices.
5. Patents – Legal restrictions may prevent a company from making certain
parts.
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Manufacture or Purchase decisions (Problems)

3.1 A Television company wants to decide whether to manufacture color
picture tubes or purchase them from suppliers. The price of picture tube is
Rs. 2000 to purchase from supplier. If the company will manufacture it, then
following costs will be required. Fixed cost will be Rs.12 lakhs and variable
cost will be Rs.1000 per picture tube. Give the make or buy decision to
Board of Directors of the company for the following cases.
a. The average sales of TV sets in a year are around 1000.
b. Sales are likely to be increased to 2000 by reducing the price of TV sets by 10 %.
3.2 Demand for a component is at the rate of 6000 per year and this
demand is going to continue for next years. The company has two options. It
can get the component manufactured from outside or it can manufacture in
house. It costs the company Rs.2.8 per unit to buy the component. The in-
house manufacture will incur a fixed cost to the extent of Rs.10000 and
variable cost of Rs.1.5 per unit. Give the decision rule for make or buy.
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Prototype
• Model of a system or component built for the purpose of
demonstrating/assessing performance and functionality
• Built according to early specification and design
NEED FOR PROTOTYPES & ITS TESTING:
• Help correct designs at early stages (before actual production)
• Help develop procedures for manufacture
• Help detect errors in interpreting engineering drawings
• Demonstrate products to customers to get feedbacks
Rapid prototyping
Helps develop a model of the part/system that the customer wants
relatively quicker than conventional methods.
Widely used in the automotive, aerospace, medical, and consumer
products industries
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Prototypes……
Rapid prototyping
Rapid prototyping takes virtual designs from Computer Aided Design
(CAD) software (MODEL), transforms them into thin, virtual, horizontal
cross-sections (TESSALATION) and then creates each cross-section in
physical space, one after the next (LAYER BY LAYER DEPOSTION) until the
model is finished.
It generally involves Additive manufacturing techniques.
E.g.: FDM, SLS etc.
LIMITATIONS
• Generally used on materials like plastics. Metal and alloys material
deposition techniques still developing
• Machines are generally very expensive
• Poor Surface finish and dimensional accuracy
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VALUE ENGINEERING (VE)

• Origin of VE, during WW II
• Lawrence Delos Miles of the General Electric Company (GE), USA
developed the concept – aimed at lowering cost without affecting the
utility and quality
• This programme called Value Analysis by Miles was implemented in GEC in
1947
• US Navy Bureau of Ships adopted this concept to cost reduction in the
design process and called it Value Engineering (in 1954)
• Value Engineering (VE) is the process of improving the value of a product
at every stage of the product life cycle
• A product or service is generally considered to have good value if it has the
appropriate performance and cost
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VALUE ENGINEERING (VE)…..

Types of Value:
a. Cost value – Total cost of material, labour and other elements of cost that have
to be incurred to produce an item/provide a service. It gives the basic worth of
the product or service. Other types of values are added to it to get its full
value.
b. Use/Function value – Equal to the value of the functions performed.
Therefore, it is the price paid by the buyer (buyer's view) or the cost incurred
by the manufacturer (manufacturer's view) in order to ensure that the product
performs its intended functions efficiently. The use value is the fundamental
form of economic value. An item without use value can have neither exchange
value nor esteem value.
c. Esteem value – It involves the qualities and appearance of a product which
attract people and create a desire in them to possess the product. Therefore,
esteem value is the price paid by the buyer or the cost incurred by the
manufacturer beyond the use value.
d. Exchange value – It is the measure of all the properties, qualities and features
of the product which make the product possible of being traded for another
product or for money. Exchange value refers to the extent that the additional
amount paid guarantees the resale or exchange at any point of time.
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The performance of a product is the measure of its functional features and
properties that make it suitable for a specific purpose
Desired performance at the least cost must be achieved by selecting
appropriate materials and manufacturing operations
There are many factors which contribute towards the value like durability,
reliability, aesthetics, timeliness, etc.
Value 
 Performance  Other requirements 
Cost
VALUE ENGINEERING is a “creative approach to ensure that functions of a

product or service are provided at minimum overall cost without sacrificing
quality and reliability”
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VE works by relating various elements of product worth to their
corresponding elements of cost
Value engineering is applicable to all areas of economic activity; products,
services, systems and procedures in production, operation, purchase, design,
packing, material handling and distribution departments.
Objectives of value engineering
1. The main objective of value engineering is not just cost reduction, but to
improve its value by reducing cost.
2. Value analysis also considers time – a product may be of value if it is
available at a certain point of time.
3. Increase profit.
4. Ensure standardization.
5. Use cheaper and better materials.
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Applications of value engineering (Used under the following scenarios)
• Introduction of new products
• Reduction in sales
• Price reduction by competitors
• Increase in cost
• Consumer complaints on product performance
Advantages:
• Improved product quality
• Promotes standardization leading to reduction of costs
• Prevents over design or promotes simplification of design
• Better satisfaction of customer needs
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PHASES OF VALUE ENGINEERING (or Value Engineering Job Plan)
1. General Phase – task force organized, selecting areas of effort, assigning specific
tasks to each member of the team and inspiring them for coordinated effort.
2. Information Phase – gain understanding of problem and obtain relevant data
including costs
3. Function Phase – value engg. team defines the function (which makes product
work or sell) of item under study, classifies them. Helps identify necessary and
unnecessary function and establish relationship b/w function & cost.
4. Creation Phase – Create ideas for alternative ways of accomplish essential
function at lower cost. (Brian storming, mind mapping etc. are used)
5. Evaluation Phase – Generated ideas are evaluated to select most promising ideas
and is subject to preliminary screening
6. Investigation Phase – Partial Ideas are refined and developed into work plan
7. Recommendation and follow-up phase – Alternative plan selected is presented as
a Value Engineering Change Plan (VECP) to management for final approval and
implementation. Dept. of Mechanical Engg, RSET 49
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VALUE ANALYSIS
Value Analysis
• Approach to improving value of product/process by understanding the constituent
components and their associated costs.
• It is applied to existing products (REMEDIAL PROCESS)
• It eliminates unnecessary cost
• Worked out with experience and knowledge
VALUE ENGG Vs. VALUE ANALYSIS

a) Value Engg. – applied at design stage; Value Analysis – applied to existing Pdt.
b) Value Engg. – preventive process; Value Analysis – Remedial Process
c) Value Engg. – requires specific technical knowledge; Value analysis – knowledge
and experience.
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ERGONOMICS
• Derived form Greek words; Ergon – work, Enomos – laws
• Ergonomics – laws of work
• Also called ‘Human Engineering’ or ‘Human Factors Engineering’
• Studies effect of work system on workers and aims to fit the work to men to
increase worker efficiency, comfort and satisfaction
Objectives: A) IMPROVED PRODUCTIVITY B) BETTER WORKER LIFE QUALITY
Defined as:
“Branch concerned with designing and improving the workplace,
workstation, tools, equipment, job design, psychological environment and
procedures of work in order to limit fatigue, discomfort and injuries, while
efficiently achieving personal and organizational goals”
Various disciplines involved in Ergonomics are:
a) Engineering b) Physiology c) Anatomy d) Psychology e) Industrial Hygiene
51
ERGONOMICS
• MAN-MACHINE SYSTEM (closed loop system)
• Fundamental concept of ergonomics is the system
• Man-Machine system - combination of one or more human beings interacting
with one or more machines to bring about some desired output, from given input.
• Are of 3 types:
• Manual System
• Consist of hand tools and other aids, used by a human operator
• Power source – operators physical energy
• Mechanical System
• Semi-automatic in nature (use of machine tools)
• Power provided to machines and operator merely controls the machines by using
controlling devices
• Automated system
• Fully automated - performs all functions without human intervention.
• Human intervention only for – installation, programming & re-programming and
maintenance.
52
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19-02-2020
ERGONOMICS
• MAN-MACHINE SYSTEM
Man Machine
Sensory
Functions DISPLAY
Input
Training Data Processing
& & Decision
Making
Experience Output
CONTROL
Manipulative
Function
Environment
53
ERGONOMICS
• WORKPLACE DESIGN
• Should keep worker/operator in mind
• Should ensure comfortable posture to worker, where he can see everything he
needs and use controls easily
• Improper workplace design – fatigue, stress, injuries, reduction in quality and
output etc.
• Dimension of working surface – such that operator can access tools/jobs
without excess stress
• Dimensions of the working envelope – 3D space in which the operator can
comfortably work (helps in locating various controls)
• Workplace height – Correct working height for the job (manual – below
elbow level; work that requires close observation - closer to eye)
• Selection of chairs – proper selection of chair and foot rests is important
54
27

Industrial Engineering Mod 1

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19-02-2020

Dept. of Mechanical Engg, RSET 1

Course outcomes (CO’s)

Dept. of Mechanical Engg, RSET 5

Dept. of Mechanical Engg, RSET 7

• Industrial engineering contributing towards:

Dept. of Mechanical Engg, RSET 12

Dept. of Mechanical Engg, RSET 13

Dept. of Mechanical Engg, RSET 14

Product Design and Development

• Product design & development – specialized activity which may result in

Dept. of Mechanical Engg, RSET 17

Product Design and Development ….

Dept. of Mechanical Engg, RSET 18

Product Design and Development ….

Product Design and Development ….

Product Design and Development ….

• Functions are identified and draft product specifications and

Product Design and Development ….

Product Design and Development ….

Product Design and Development ….

Dept. of Mechanical Engg, RSET 24

Break Even Analysis

Break Even Analysis….

Break Even Analysis…….

Break Even Analysis…….

Break Even Analysis……. (Problem)

Dept. of Mechanical Engg, RSET 29

Break Even Point - Sales

Dept. of Mechanical Engg, RSET 30

Break Even Point – Sales….

• Contribution Margin is defined as the difference between sales and

• When calculated for a single unit, it is called unit contribution margin

Contribution Margin = Sales revenue – Total variable costs

Dept. of Mechanical Engg, RSET 31

Break Even Point – Sales….

Selling price per unit  Variable cost per unit

Break Even Point – Sales….

• BEP sales - when contribution margin = fixed cost

Dept. of Mechanical Engg, RSET 33

Break Even Point – Sales….

• Margin of Safety: (Sales)

Margin of safety = Actual sales – BEP Sales

Dept. of Mechanical Engg, RSET 34

Cost-Volume-Profit (C-V-P) analysis

Cost-Volume-Profit (C-V-P) analysis

• The maximum loss occurs at zero O

Cost-Volume-Profit (C-V-P) analysis (PROBLEMS)

Manufacture or Purchase decisions

Make when it is cheaper than buy

Manufacture or Purchase decisions…….

Dept. of Mechanical Engg, RSET 39

Manufacture or Purchase decisions…….

Dept. of Mechanical Engg, RSET 40

Manufacture or Purchase decisions (Problems)

VALUE ENGINEERING (VE)

VALUE ENGINEERING (VE)…..

VALUE ENGINEERING (VE)…..

VALUE ENGINEERING is a “creative approach to ensure that functions of a

VALUE ENGINEERING (VE)…..

VALUE ENGINEERING (VE)…..

VALUE ENGINEERING (VE)…..

VALUE ENGG Vs. VALUE ANALYSIS