Industrial Engineering

(ME212)

UNIT 1- INDUSTRIAL ENGINEERING AND

PRODUCTIVITY
 Distribution of Marks
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LTP 3 0 0
Credit 3
3 Lecture hours per week

Internal Assessments 20%

Mid Semester 30%

End Semester 50%

References:
 S. Eilon, Elements of Production Planning and Control, 3rd Edition, Universal
Publishing Corporation, 1991.
 N.V. S. Raju, Industrial Engineering and Management, 1st Edition, Cengage
Learning, 2013.
 M. Mahajan, Industrial Engineering and Production Management, 1st Edition,
Dhanpat Rai & Co. (P) Limited, 2015.
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 SYLLABUS
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Unit 1: INDUSTRIAL ENGINEERING AND PRODUCTIVITY

➢ Introduction, history, objectives, organization structure, scope, Productivity,

factors influencing productivity, Productivity measurement, causes of low
productivity and techniques of their elimination, Introduction to advance
industrial engineering techniques.

Unit 2: WORK STUDY AND ERGONOMICS

➢ History, Scope, Objectives, Overview, Method study Objectives and

procedure, Micro motion study, Method study tools, Time study procedure,
Performance rating, Allowances, Predetermined Motion Time Systems
(PMTS), Work Sampling, Ergonomics, Work science, Design factors, Effect
of environment, Man-Machine System, Workload and Fatigues.

Unit 3: PLANT LOCATION AND LAYOUT

➢ Factors affecting location decisions, Methods of evaluating location

alternative, Layout types, Work cells, Repetitive and product oriented layout,
Computerized layout design procedure 3
 SYLLABUS
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Unit 4: FORECASTING

➢ Steps, qualitative and quantitative approaches, Monitoring and controlling

forecast, Forecasting in service sector

Unit 5: INVENTORY CONTROL

➢ Managing inventory, Inventory models for independent demand,

Probabilistic models and safety stock, Single period model, Fixed period
model

Unit 6: PRODUCTION PLANNING AND CONTROL (PPC)

➢ Production Systems, Job, Batch, Mass and Continuous production system,
Objectives of PPC, Functions of PPC

Unit 7: HUMAN RESOURCE MANAGEMENT

➢ Functions of Human Resource Manager, Training and development, Job
evaluation and Merit rating, Wage and Wage Incentives, Grievance handling,
Discipline and welfare
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 Course Outcome
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 Productivity
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➢ Productivity is the quantitative relation between what we

produce and what we use as a resource to produce them,
i.e. arithmetic ratio of amount produced (output) to the
amount of resources (input).

➢ Productivity can be expressed as:

➢ Productivity refers to the efficiency of the production

system.
➢ It is the concept that guides the management of
production system.
➢ It is an indicator of how well the factors of production
(Land, capital, labour and energy) are utilized.
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 DEFINITIONS OF PRODUCTIVITY
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1. Productivity is a function of providing more and more of

everything to more and more people with less and less
consumption of resources.
2. The volume of output attained in a given period of time in
relation to the sum of the direct and indirect efforts expended in
its production.
3. Productivity is the measure of how well the resources are
brought together in an organisation and utilised for
accomplishing a set of objectives.
4. Productivity is concerned with establishing congruency
between organizational goals with societal aspirations through
input-output relationship.
5. Productivity is the multiplier effect of efficiency and
effectiveness.

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 PRODUCTION AND PRODUCTIVITY
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➢ Production is defined as a process or procedure to

transform a set of input into output having the desired utility
and quality.

➢ Production refers to absolute output whereas

productivity is a relative term where in the output is
always expressed in terms of inputs.
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 PRODUCTION AND PRODUCTIVITY
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Productivity can be Increased

1. When production is increased without increase in

inputs.
2. The same production with decrease in inputs.
3. The rate of increase in output is more compared to rate
of increase in input.

Problem 1: A company produces 160 kg of plastic moulded parts

of acceptable quality by consuming 200 kg of raw materials for a
particular period. For the next period, the output is doubled
(320 kg) by consuming 420 kg of raw material and for the third
period, the output is increased to400 kg by consuming 400 kg of
raw material.

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 PRODUCTION AND PRODUCTIVITY
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 BENEFITS FROM PRODUCTIVITY
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 PRODUCTIVITY MEASURES
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1. Partial Productivity Measures (PPM)

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 PRODUCTIVITY MEASURES
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2. Total Productivity. Measure (TPM)
It is based on all the inputs. This model can be applied to any
manufacturing organization or service company.

Total tangible output = Value of finished goods produced +

value of partial units produced + dividends from securities +
interest + other income

Total tangible input = Value of (human + material + capital +

energy + other inputs) used.

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 PRODUCTIVITY MEASURES
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Total Factor Productivity Measure (TFP)

It is the ratio of net output to the labour and capital (factor) input.

The output of the firm as well as the inputs must be expressed in a

common measurement unit. The best way is to express them in
rupee value. To compare productivity, indices arebe adjusted to the
base year, and must be stated in terms of base year rupee value.

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ADVANTAGES AND LIMITATIONS OF PRODUCTIVITY MEASURES
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 Course Outcome
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Problem 2: The following information regarding the output

produced and inputs consumed for a particular time period for a
particular company given below:
Output = Rs 10,000.
Human input = Rs 3,000.
Material input = Rs 2000.
Capital input = Rs 3000.
Energy input = Rs 1000.
Other misc. input = Rs 500.
The values are in terms of base year rupee value. Compute various
productivity indices

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 Productivity Index
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 Productivity Index
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Productivity Index measures is the ratio of present productivity to base

period productivity.

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 FACTORS INFLUENCING PRODUCTIVITY
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Controllable Factors (Internal Factors)

1. Product factor: In terms of productivity means the extent to which the product meets
output requirements product is judged by its usefulness. The cost benefit factor of a
product can be enhanced by increasing the benefit at the same cost or by reducing cost for
the same benefit.

2. Plant and equipment: These play a prominent role in enhancing the productivity. The
increased availability of the plant through proper maintenance and reduction of idle
time increases the productivity. Productivity can be increased by paying proper attention
to utilisation, age, modernisation, cost, investments etc.

3. Technology: Innovative and latest technology improves productivity to a greater extent.

Automation and information technology helps to achieve improvements in material
handling, storage, communication system and quality control. The various aspects of
technology factors to be considered are:
(i) Size and capacity of the plant,
(ii) Timely supply and quality of inputs,
(iii) Production planning and control,
(iv) Repairs and maintenance,
(v) Waste reduction, and
(vi) Efficient material handling system. 19
 FACTORS INFLUENCING PRODUCTIVITY
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4. Material and energy: Efforts to reduce materials and energy consumption brings about
considerable improvement in productivity.
1. Selection of quality material and right material.
2. Control of wastage and scrap.
3. Effective stock control.
4. Development of sources of supply.
5. Optimum energy utilisation and energy savings.

5. Human factors: Productivity is basically dependent upon human competence and

skill. Ability to work effectively is governed by various factors such as education, training,
experience aptitude etc., of the employees. Motivation of employees will influence
productivity.

6. Work methods: Improving the ways in which the work is done (methods) improves
productivity, work study and industrial engineering techniques and training are the areas
which improve the work methods, which in term enhances the productivity.

7. Management style: This influence the organizational design, communication in

organization, policy and procedures. A flexible and dynamic management style is a better
approach to achieve higher productivity.
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 Productivity Improvement Techniques
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(B) UN-CONTROLLABLE (OR EXTERNAL) FACTORS
1. Structural adjustments: Structural adjustments include both economic and social
changes. Economic changes that influence significantly are:
(a) Shift in employment from agriculture to manufacturing industry,
(b) Import of technology, and
(c) Industrial competitiveness.
Social changes such as women’s participation in the labour force, education, cultural
values, attitudes are some of the factors that play a significant role in the improvement of
productivity.

2. Natural resources: Manpower, land and raw materials are vital to the productivity
improvement.

3. Government and infrastructure: Government policies and programmes are significant

to productivity practices of government agencies, transport and communication power,
fiscal policies (interest rates, taxes) influence productivity to the greater extent.

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 Productivity Improvement Techniques
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(A) TECHNOLOGY BASED

1. Computer Aided Design (CAD), Computer Aided Manufacturing (CAM), and
Computer Integrated Manufacturing Systems (CIMS):

Computer-aided design is a way to digitally create 2D drawings and 3D

models of real-world products—before they're ever manufactured. CAD refers
to design of products, processes or systems with the help of computers. The impact of
CAD on human productivity is significant for the advantages of CAD are:
(a) Speed of evaluation of alternative designs,
(b) Minimization of risk of functioning, and
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(c) Error reduction.
 Productivity Improvement Techniques
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2. Computer Aided Manufacturing (CAM) is the use of software and computer-

controlled machinery to automate a manufacturing process.
(a) Production Planning and Control
(b) Capacity Requirements Planning (CRP), Manufacturing Resources Planning (MRP II)
and Materials Requirement Planning (MRP)
(c) Automated Inspection.

3. Computer integrated manufacturing: CIM combines various technologies like

computer-aided design (CAD) and computer-aided manufacturing (CAM) to
provide an error-free manufacturing process that reduces manual labor and
automates repetitive tasks.
1. Robotics
2. Laser technology
3. Modern maintenance techniques
4. Energy technology
5. Flexible Manufacturing System (FMS)

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 Productivity Improvement Techniques
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(B) EMPLOYEE BASED

1. Financial and non-financial incentives at individual and group level.
2. Employee promotion.
3. Job design, job enlargement, job enrichment and job rotation.
4. Worker participation in decision-making
5. Quality Circles (QC), Small Group Activities (SGA)
6. Personal development

C) MATERAL BASED
1. Material planning and control
2. Purchasing, logistics
3. Material storage and retrieval
4. Source selection and procurement of quality material
5. Waste elimination.

D) PROCESS BASED
1. Methods engineering and work simplification
2. Job design evaluation, job safety
3. Human factors engineering

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 Productivity Improvement Techniques
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(E) PRODUCT BASED
1. Value analysis and value engineering
2. Product diversification
3. Standardisation and simplification
4. Reliability engineering
5. Product mix and promotion.

(F) TASK BASED

1. Management style
2. Communication in the organization
3. Work culture
4. Motivation
5. Promotion group activity

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 Production System
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Production is defined as “the step-by-step conversion of one form of material into

another form through chemical or mechanical process to create or enhance the utility
of the product to the user.” Thus production is a value addition process. At each stage
of processing, there will be value addition.

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 Production System
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 Production System
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JOB SHOP PRODUCTION
Job shop production are characterized by manufacturing of one or few quantity of
products designed and produced as per the specification of customers within prefixed time
and cost.
1. High variety of products and low volume.
2. Use of general purpose machines and facilities.
3. Highly skilled operators who can take up each job as a challenge because of uniqueness.
4. Large inventory of materials, tools, parts.
5. Detailed planning is essential for sequencing the requirements of each product, capacities
for each work centre and order priorities.

Batch Production
Batch production is a method of manufacturing where identical or similar items are
produced together for different sized production runs.
1. When there is shorter production runs.
2. When plant and machinery are flexible.
3. When plant and machinery set up is used for the production of item in a batch and
change of set up is required for processing the next batch.
4. When manufacturing lead time and cost are lower as compared to job order production.
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 Production System
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MASS PRODUCTION
Mass production is the manufacturing of the same standardized product lines
for a prolonged period of time.
1. Standardization of product and process sequence.
2. Dedicated special purpose machines having higher production capacities and
output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and without any back
tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.

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 Production System
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CONTINUOUS PRODUCTION
Production facilities are arranged as per the sequence of production operations from
the first operations to the finished product. The items are made to flow through the
sequence of operations through material handling devices such as conveyors, transfer
devices, etc.

1. Dedicated plant and equipment with zero flexibility.

2. Material handling is fully automated.
3. Process follows a predetermined sequence of operations.
4. Component materials cannot be readily identified with final product.
5. Planning and scheduling is a routine action.

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 Organization Structure
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An organization, is an entity—such as a company, an institution, or an
association—comprising one or more people and having a
particular purpose.

Organizational structure (OS) is the systematic arrangement of human

resources in an organization so as to achieve common business objectives.
It outlines the roles and responsibilities of every member of the
organization so that work and information flow seamlessly, ensuring the
smooth functioning of an organization.

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 Organization Structure
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1. Hierarchical org structure
This is a type of centralized organizational structure. There is a hierarchy of workers
with leaders at the top, the workers below, and supervisors placed in between to
get the work done. It is more of a linear OS where the delegation of power
emanates from the top management.

Pros
•Better defines levels of authority and
responsibility
•Shows whom each person reports to or whom
to talk to about specific projects
•Motivates employees with clear career paths
and chances for promotion
•Gives each employee a specialty
•Creates camaraderie between employees
within the same department
Cons
•Can slow down innovation Can cause
employees to act in interest of the
department instead of the company as a
whole
•Can make lower-level employees feel like
they have less ownership and can’t express
their ideas for the company 32
 Organization Structure
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2. Horizontal or Flat org structure

No one commands or controls the employees. Instead, decisions are made at every
level of management. Therefore, it is usually used in small companies with few
employees or new startups. However, with time and business growth, some form
of hierarchy creeps into the organization; otherwise, it may cause chaos and
inefficiency in the organization.

Pros
•Gives employees more responsibility
•Fosters more open communication
•Improves coordination and speed of
implementing new ideas
Cons
•Can create confusion since employees do not
have a clear supervisor to report to
•Can produce employees with more
generalized skills and knowledge
•Can be difficult to maintain once the company
grows beyond start-up status 33
 Organization Structure
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3. Functional org structure
The functional organizational structure creates a fixed set of departments based on
certain functions like HR, accounts, marketing, etc. It segregates the workforce
based on the requirements of each department.

Pros
•Allows employees to focus on their role
Cons
•Encourages specialization
•Can create silos within an organization
•Help teams and departments feel self-
•Hampers interdepartmental
determined
communication
•Is easily scalable in any sized company 34
 Organization Structure
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4. Divisional
This type of organizational structure comes into play when a firm has grown
exponentially to become a giant in its sector. In divisional organizational
structures, a company’s divisions have control over their own resources,
essentially operating like their own company within the larger organization.

Pros
•Helps large companies stay flexible
•Allows for a quicker response to industry
changes or customer needs
•Promotes independence, autonomy, and a
customized approach
Cons
•Can easily lead to duplicate resources
•Can mean insufficient communication
between the headquarters and its divisions
•Can result in a company competing with itself
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