CH.

2 MANAGEMENT AND
PRODUCTIVITY IN
ENGINEERING:

Modern Trends in Manufacturing

CONTENTS
 Definition of Engineering, Management and Management
Engineering, Industrial Engineering and Productivity,
Necessity of Facts and Work Measurement
 Productivity, Purpose of Productivity Improvement,
Engineering Approach for Productivity, Three Levels of
Improvement, Points of Successful Productivity,
Relationship of Methods, Performance, and Utilization to
Standard Time.

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 ENGINEERING MANAGEMENT

 Engineer Management is concerned with the design, installation,

and improvement of integrated systems of people, material,
information, equipment, and energy by drawing upon specialized
knowledge and skills in the mathematical, physical, and social
sciences, together with the principles and methods of engineering
analysis and design to specify, predict, and evaluate the results to
be obtained from such systems
OR
 Engineering Management deals with Scientific discipline, which
designs, implements and/or develops models, processes and
systems by taking into account the engineering relationships
between the management tasks of planning, organizing, leading
and controlling and the human element in production, research,
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marketing, finance and other services.
ENGINEERING MANAGEMENT-
ELEMENTS
 Engineering management is the fusion of business and
engineering principles.
 By having knowledge of economics and management
engineers can forecast or can predict the utility, advantages,
disadvantages of the product, also get to know the scope of
the product and it's contribution in growth.
 Specialized form of management that is concerned with the
application of engineering principles to business practice.
 Career that brings together the technological problem-solving
savvy of engineering and the organizational, administrative,
and planning abilities of management in order to oversee
complex enterprises from conception to completion.
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ENGINEERING MANAGEMENT
 Engineering Management Domain

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ENGINEERING MANAGEMENT
 Example areas of engineering management area are:
 • Product development
 • Manufacturing
 • Construction
 • Design engineering
 • Industrial engineering
 • Technology
 • Production……….

 Successful engineering managers typically require training and experience in

business and engineering to:
 • Operating effectiveness and efficiency
 • Problem solving and operations improvement

 Managers within the field of engineering are trained to understand Human

resource management, finances, industrial psychology, quality control, operations 6
research and environmental management.
ENGINEERING MANAGEMENT

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 Management is getting things through others , Management needs:
 Objective

 Resources,

 Methods,

 Organization setting,

 People

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FUNCTION OF MANAGER
 Planning
 Organizing

 Directing

 Controlling

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 Planning

 Manager should have objective in mind

• Planning help manager to do the right things
 • Well planning needs the following
 • Defining objectives,
 • Deciding what/when/how/who

 What is to be done,
 When it is to be done,

 How it is to be done,

 Who is to do it,

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 Organizing
• Gathering and allocating resources,
• Coordinating the work of the organization,
• Deliberate creation a configuration that
defines the followings:
 How authority is structured,
 How communication flows,

 How tasks are accomplished

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 Directing
• Redirecting human behavior to achieve objectives
 • Motivating others to produce,
 • Influencing subordinates

 Controlling
• Keeping things on track,
 • Steering performance towards desired goal,
 • Coordinating monitoring and adjusting performance

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 Managerial skills

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CONTRAST BETWEEN AMERICAN AND
JAPANESE ORGANIZATIONS

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DIFFERENCE BETWEEN BOSS &
LEADER

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MANAGEMENT AND MANAGEMENT ENGINEERING
-APPROACH

 Management engineering for productivity improvement

can be taught with the goal of remarkable improvement
of corporate performance. The following points are
important to know before applying the approaches.

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1. MANAGEMENT SHOULD ALWAYS
INCLUDE MEASUREMENT
 What measurement of productivity is useful?
 Results of productivity should be billed as OP or consumed
resources as IP.
 Numerical results include: produced sales value, number of
pieces, size of square measure, weight, etc.
 It is desirable that OP is not affected by materials, for example.
Sales value is not a reasonable OP measurement for the
production division because it varies by products mix within
sales results. Products mix itself is not always managed well in
the production Division, and this is why. The comparison
between past and present is also an important measure.
 This means that the number of pieces, size of square measure,
and weight are not sufficient measures for productivity. After all, 18
these items do not indicate effort; they are given factors.
 So, what measure is reasonable?
 Universal OP is measured by man-hours;

 for example, allowed man-hours based on produced OP whether

processing of expensive gold or cheap iron materials.
 How many man-hours of production are consumed? This question
points to the necessity of time standard because it is an effective
measure for OP. It is called engineered time standard.
 Applying predetermined time standards (PTS), such as methods-
time measurement (MTM), and work-factor (WF), are practical
techniques for measuring OP.
 The denominator of consumed man-hours then becomes simple. It
is not easy to get such a number when comparing outside
companies, but it is effective in measuring internal corporate 19
productivity.
 To discuss or consider productivity without reasonable
measure is like navigation without compasses.
 Management is measuring results and taking proper
actions to meet targets. So, as an equation, Management
= measurement + control.

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2. HOW MUCH PRODUCTIVITY
IMPROVEMENT IS EXPECTED?
 According to results in manufacturing, required productivity
improvement is more than 10% per year and more than 15% is
recommended if the company wants a dominant level of productivity.
 The best world-class manufacturers marked more than 15%
productivity improvement and in maintaining a level of advanced
competitiveness on productivity.
 It means 2× of productivity improvement for 4 years. Two or three
percent or more improvement in a year is possible without a special,
aggressive effort for productivity improvement.
 Workers’ efforts change naturally over time. As stated in the case
studies, some examples of companies that organized inner project
activity in productivity marked more than 300% within 3 years.
Projects with strong leadership that organized special staff (full-time
base and consultants) for the initiatives that used a systematic 21
approach and advanced technology tended to do the best.
 Looking at the statistics, Taichi Sakaiya insists that
Japanese manufacturers are not in a good position
currently among world competition due to three parallel
policies among Japanese top management: budget
restrictions, lack of awareness of previous year’s results
and lack of insight about competitors. Additionally, there
is no policy that challenges management to strive for
absolute best practice as their target. Objectivity and a
theoretical background in a measuring system of
productivity are absolutely necessary.

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3. METHODS IMPROVEMENT BASED ON
ENGINEERING APPROACH
 Work simplification only concerns waste; improvement, however, is not as basic
as work simplification. Some types of improvement implement steps aimed at
copying others’ successful examples such as Kaizen and Toyota production sys-
tem (TPS). They simply copy others’ success though they never catch up and
overtake the originals that they followed for many years. Enter innovation, which
means searching out ideas that nobody found before, then setting a corporate
target for productivity around these new ideas or strategies. According to authors
Curtis R. Carlson and William Wilmot in their book, Innovation: The Five
Disciplines for Creating What Customers Want, the general definition of
innovation is: “Innovations require a synthesis of many ideas to succeed,
including the new Products or services, enabling technologies or capabilities,
barriers to entry from competitors, a compelling business model, and essential
partnerships” (Carlson and Wilmot 2006). Innovation can’t happen when
creating ideas based on current working methods; i.e., improvement cannot be
heightened with the new ideas using old practices. The approach of searching for
something better yet with the same ways never allows the company to reach the
world competitive level of productivity. Note a simple example of manufacturing 23
process innovation: the calculator.
 The product used to be assembly work with bolts and
nuts, but today, it is produced in the process industry
without bolts and nuts. This is a success case of products
and process innovation. There will be critics of this
statement, but you an’t ever find solutions for real higher
level of productivity when you do Kaizen or an approach
similar to kaizen. That is to say, productivity strategy
should change from focusing on the past to reaching for
a reasonable, higher target that embodies the future,
using different practices that zone in on both
productivity and profitability.
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