Lecture 02 - Industrial Engineering and Production Systems

𝐈𝐄𝟏𝟏𝟑
FUNDAMENTALS OF
INDUSTRIAL ENGG.
B.Sc. Industrial Engineering and Management – 1st SEMESTER (2017)
IQTM, University of the Punjab, Lahore.

Slides by: Asim Amjad
INDUSTRIAL
ENGINEERING AND
PRODUCTION SYSTEMS
What You Will Learn?
• At the end of this lecture students should be able to learn

1. Definition and concept of industrial engineering.
2. Functional areas of industrial engineering.
3. Sample industrial engineering courses.
4. Historical development of industrial engineering.
5. Process types based on variety and volume.
6. Process types based on the point of customer order.
7. Selection of production systems.
8. Productivity
IE113 - Fund. of Ind. Engg. [email protected] 3

What is Industrial Engineering?
• Industrial Engineering?
– To engineer an industry?? No.
– To engineer an industrial product or system (efficiently and effectively): for

manufactured goods or services, originally.
– To engineer a product or system for industry, the military, government, education,

etc.
– Efficiency and Quality Engineering!!

Definition of Industrial Engineering
to
increase/maximize
determine productivity through
to design or to
the improvement development the management of
product systems for the
physical distribution
of production people, methods of
business
developandwage and
requireme
of goods and services planning and organization,
technologysalary
nts.
and to determine the
most efficient plant control administration
redesign and systems and job
tolocations.
eliminate
procedures standardization evaluation
programs
of
worker manufacturingdesign production
fatigue to develop planning and
processes control systems to
to methods for develop
management coordinate
increase/ handling and control systems activities and
to aid in ensure product
maximize transporting financial quality
efficiency materials planning and
cost analysis

In few words I would say that
Industrial Engineering is
dealing with the
optimization of systems
and processes (in given
circumstances)

What is 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 system.

Industrial Engineering Functional
Product
Work Areas Project Management
Engineering
Finance Quality
Training
- Resource Planning
- Team Facilitation - SPC/SQC - Risk Analysis
- Product Development - Make/Buy Analysis - Project Scheduling
- DOE
- Comparison of Alternatives
- Supplier Quality
Production - Cost Estimating - Course Facilitation
- Queuing Theory
Control - Six Sigma
Facilities Transportation
Factory Operations
- Job Scheduling
Inventory
- Expedite procedures - Logistics Planning
- Layout Design
- Material Handling
IE Methods - Process Flow Analysis
- Inventory Management
- Supplier Selection
- Production Simulation - Material Requirements Planning
Tooling - Theory of Constraints - Supply Chain Management
- Systems Integration
- OSHA Regulations
- Workstation Design - Safety Management
- Ergonomics - Linear Programming
- Methods Engineering -Tool Fab process
- Lean Manufacturing
- Tool Offload procedures
- Tool Repair process
IE113 - Fund. of Ind. Engg. - Tool Room procedures [email protected] 8
Diversity
• Industrial engineering is a diverse (various) discipline concerned with the design,

improvement, installation, and management of integrated systems of people,
materials, and equipment for all kinds of manufacturing and service operations.
• Industrial engineering is concerned with performance measures and standards,

research of new products and product applications, ways to improve use of scarce
(limited) resources and many other problem solving adventures.
• An Industrial Engineer may be employed in almost any type of industry, business or

institution, from retail establishments to manufacturing plants to government offices
to hospitals.

Diversity
• Because their skills can be used in almost any type of organization, and also industrial
engineers are usually distributed among industries than other engineers.
• For example, industrial engineers work in insurance companies, banks, hospitals,

retail organizations, airlines, government agencies, consulting firms, transportation,
construction, public utilities, social service, electronics, personnel, sales, facilities
design, manufacturing, processing, and warehousing.

Efficiency
• Industrial engineers determine the most effective ways for an organization to use the
basic factors of production - people, machines, materials, and energy. They are more
concerned with people and methods of business organization than engineers in other
specialties.
• To solve organizational, production, and related problems most efficiently, industrial

engineers design data processing systems and apply mathematical analysis such as
operations research.
• They also develop management control systems to help in financial planning and cost
analysis, design production planning and control systems to coordinate activities and
control product quality, and design or improve systems for the physical distribution of
goods and services.

Efficiency
• Industrial engineers conduct surveys to find plant locations with the best combination
of raw materials, and transportation.
• They also develop wage and salary administration systems and job evaluation
programs.

What Do Industrial Engineers Do?
• Install data processing, management information, wage incentive systems.
• Develop performance standards, job evaluation, and wage and salary programs.
• Research new products and product applications.
• Improve productivity through application of technology and human factors.
• Select operating processes and methods to do a task with proper tools and equipment
• Design facilities, management systems, operating procedures.
• Improve planning and allocation of limited resources.

What Do Industrial Engineers Do?
• Enhance plant environment and quality of people's working life.
• Evaluate reliability and quality performance.
• Implement office systems, procedures, and policies.
• Analyze complex business problems by operations research.
• Conduct organization studies, plant location surveys, and system effectiveness studies.
• Study potential markets for goods and services, raw material sources, labor supply,
energy resources, financing, and taxes.

Impact of Globalization on the
Industrial Engineering Profession
• Globalization and the development of the Internet have created new challenges and
pushed many organizations facing competition from all over the world into a state of
constant struggle.
• This rapidly changing environment, where product life cycles are short and global
competition is fierce, forced many organizations to search for ways to increase
competitiveness in order to survive.

• Competition can be expressed and appear in one or more of four dimensions:
– Cost,
– quality,
– time, and
– flexibility.
• Industrial engineering provides the building blocks, tools, and techniques that
organizations are using to improve their performance in these four dimensions.

/ Time

Sample Industrial Engineering
Courses
• Computer Aided Drawing and Design
– Application of computer-assisted design technology to product design, feasibility

study and production drawing.
• Product Modeling
– Life-cycle product data, geometry and form features, product information models
and modeling techniques, product modeling systems, and product data standards.

SAMPLE INDUSTRIAL
ENGINEERING COURSES
Courses
• Introduction to Industrial Engineering (IE)
– Definition of Industrial Engineering (IE); ISE’s origins, role, functions; and

contributions of the IE in industry. Professional development opportunities.
• Quality Control
– Modern concepts for managing the quality function of industry to maximize

customer satisfaction at minimum quality cost. The economics of quality, process
control, organization, quality improvement, and vendor quality.

Courses
• Engineering Economic Analysis
– Basic methods of engineering economic analysis including equivalence, value

measurement, interest relationships and decision support theory and techniques
as applied to capital projects.
• Facilities Planning and Materials
– Application of methods and work measurement principles to the design of work

stations. Integration of work stations with storage and material handling systems
to optimize productivity.

Courses
• Manufacturing Processes
– Study of interrelationships among materials, design and processing and their

impact on workplace design, productivity and process analysis.
• Introduction to Engineering Management
– Organization of engineering systems including production and service

organizations. Inputs of human skills, capital, technology, and managerial activities
to produce useful products and services.

Courses
• Industrial Information Systems
– The integration of information flows and databases with the production planning
and control systems into productive and manageable systems.
• Safety in Engineering
– Introduces occupational safety and health hazards associated with mechanical

systems, materials handling, electrical systems, and chemical processes. Illustrates
controls through engineering revision, safeguarding, and personal protective
equipment. Emphasis placed on recognition, evaluation and control of
occupational safety and health hazards.

Courses
• Human Factors Engineering
– Examination of the ways to fit jobs and objects better to the nature and capacity of
the human being. Lectures will review man’s performance capability, singly and in
groups, in interacting with his work environment. Stresses the practical
application of human factors principles.
• Methods Engineering and Work Design
– The analysis, design, and maintenance of work methods. Study of time standards,
including pre-determined time standards and statistical work sampling.

Courses
• Productivity Engineering and Management
– The improvement of productivity as a functional activity of the enterprise.

Productivity definitions, models, analysis, measurement, methodologies, and
reporting systems.
• Production Planning and Control
– Production systems, demand forecasting, capacity planning, master production

planning, material requirements planning, shop floor control, and assembly line
balancing.

Courses
• Introduction to Technology Entrepreneurship
– An introduction to theories, concepts, and practices of entrepreneurship. Students
will produce feasibility analyses, learn to develop and analyze new ventures, and
be introduced to business plans.
• Co-op Work Experience Practical
– Co-op work experience under approved industrial supervision. Written report
required at the conclusion of the work assignment.
• Systems Engineering Senior Project
– A design course that draws upon various components of the undergraduate
curriculum. The project typically contains problem definition, analysis, evaluation
and selection of alternatives. Real life applications are emphasized.
Courses
• Operations Research
– Modeling principles with emphasis on linear programming and extensions. The

simplex procedure and its application through computer software packages. The
analysis and interpretation of results in decision-making.
• Simulation Models of Industrial Systems
– Simulation methodology, design of simulation experiments, implementation of

simulation effort through computer software. Application to the solution of
industrial and service system problems.

Courses
• Total Quality Management for Engineers
– Fundamentals of TQM and its historical development. Integration of QC and

management tools, QFD, benchmarking, experimental design for scientific
management.

Industrial Engineering Composition
• Industrial Engineering at the Undergraduate Level is generally seen as a composition of four

areas.
Industrial
Engineering
Operations Production & Supply Manufacturing

Ergonomics
Research Chain Processes & Systems

HISTORICAL
DEVELOPMENT OF IEM
Historical Development of Industrial
Engineering & Management
• The evolution of industrial engineering has been defined in five different stages.
• These stages are mentioned below.
– Phase 1: Pre-Industrial Revolution Era
– Phase 2: Industrial Revolution Era
– Phase 3: Scientific Management Phase
– Phase 4: Operations Research and Quantitative Management Phase
– Phase 5: Automation and Computer-Integrated Manufacturing (Modern
Management)

Phase 1: Pre-Industrial Revolution Era
• Prior to industrial revolution in the early 1800s, there was focus on only manual
operated manufacturing activities.
• There was no factory concept; mostly, handicraft and agriculture products, etc.
were dominated in the trade.
• Three major development in this ere are:
– 1774: James Watt developed steam engine.
– 1776: Adam smith wrote The Wealth of Nations and advocate the concept of
division of labor, skill development, specialization, etc. (Smith 1776).
– 1798: concept of interchangeability of parts was developed by Whitney and was
used in manufacturing of musket (Hatfield 2013).

Phase 2: Industrial Revolution Era
• Industrial engineering emerged as a profession during the industrial revolution.
• This was due to the requirement of technically qualified and skilled people, who
were needed to plan, organize and control the manufacturing processes.
• After the industrial revolution, Taylor and Gilbreth contributed a lot to the field of
industrial engineering and later these contributions were known as the Scientific
Management.

Phase 3: Scientific Management Phase
• Following contributions, as mentioned in chronological order, form a major part of

Scientific Management:
– 1910: F.W. Taylor’s Scientific Management (Father of Scientific Management)
– 1911: Gilbreth’s (Frank B. Gilbreth and his wife Lillian Gilbreth) Motion Study
– 1913: Gantt’s Scheduling Chart
– 1917: Harris Inventor Control
– 1924: Shewart’s Statistical Process Control
– 1927 – 33: Elton Mayo’s Motivation Theory
– 1932: Babbage Wage payment and Time Study
– 1933: Barnes Work Study
Phase 4: Operations Research and
Quantitative Management Phase
• During World War II, concept of Operation Research were developed and used to
optimized the resources allocated in the war.
• During this phase, the concept of liner programming (LP) was developed by Dantiz.
• Some of the major developments observed during this phase are mentioned below:
– 1956: First NC machine was developed.
– 1961: First time Robot was used.
– 1965: Flexible automation was used.

Phase 5: Automation and Computer-
Integrated Manufacturing (Modern
Management)
• During this phase, most of the automation and computer-integrated manufacturing
concepts were implemented in the industries.
• Concepts of lean manufacturing and Just-In-Time (JIT) were developed in automobile
industries (Toyota manufacturing system).

PRODUCTION SYSTEM
P RO C E S S
Process View of an Organization
• A process is a group of related tasks that transform inputs into outputs.
Process
Inputs Outputs
Flow units Goods
(raw material, customers) Resources Labor & Capital
Resources: Labor & Capital Services
The Process View of an Organization
• VALUE–ADDED: The difference between the cost of inputs and the value or price of
outputs.

Value Addition

Value
Addition

Process
• A systematic series of actions directed to some end.
• A continuous action, operation, or series of changes taking place in a definite manner.
• The action of going forward or on.
• A series of actions that produce a change or development: the process of digestion.
• A method of doing or producing something.
• A natural phenomenon marked by gradual changes that lead toward a particular

result.

Process

So?
• IE’s are interested in processes that are

– A systematic series of actions directed to some end;
– A series of actions that produce a change or development.
• What is a “series of actions”?
• Action: Decision (or a set of decisions).
– Series: Decisions are systematically related.
– Series: Time axis.
• Can be in a manufacturing or service system.
• Can be production of a product, service or a method (design).
• Improvement of a process.
HOW TO USE PROCESS
KNOWLEDGE TO “SOLVE”
IE PROBLEMS?
1 . R I C E CO O K I N G E X A M P L E
RICE COOKING EXAMPLE
Rice Cooking Example
• Existence of Alternatives
• Actions – decisions
• Duration of frying
• Duration of boiling/ intensity of heat
• Quantity of water to use
• Cooking duration for low heat
• Duration (waiting) before serving
• Worthwhile? Catering firm? Army?
• Longer-term decisions (type of rice, stove, energy source, .....)

PROCESS TYPES IN
MANUFACTURING
BA S E D O N VA R I E T Y A N D VO LU M E
Manufacturing Process Types
• In manufacturing, process types

can be considered under five
categories of
1. project,
2. jobbing,
3. batch,
4. mass and
5. continuous.
Manufacturing Process Types

Manufacturing Process Types...
1. Project
– Processes that produce products of high variety and low volume are termed
projects.
– Project processes are used to make a one-off product to a customer specification.
– A feature of a project is that the location of the product is stationary.
• Examples
– Ships /Sub Marines
– Space Vehicles
– Civil Projects

Project
A Construction Site: An Example of a Project Process

Project…
• Features
– Take long time to complete, involve a large
investment of funds.
– Keeping the time table.
– Special type of product.
– Schedule resources.
– Extreme material flow.
– Approached with planning software.

2. Jobbing
– Processes that produce products of high variety and low volume are termed
jobbing.
– Jobbing processes are used to make a one-off (or low volume) product to a
customer specification.
– A feature of a jobbing process is that the product moves to the location of
transforming resources such as equipment.
– General purpose equipment shared between the products.
• Examples
– Purpose Built Tooling.
– Dies / Molds.
– Manufacture of Formula 1 car.
Jobbing
Injection Mold Making: An Example of a Jobbing Process

Jobbing…
Artificial Joint Making: An Example of a Jobbing Process

Jobbing…
• Features
– Responsibility for making the product is normally
given to skilled persons who decide how best to make
it.
– Same type of machines together (Functional layout).
– Workers move products depending on needed
processes.
– Special type of product, small customer order size.

3. Batch
– Processes that produce products of medium variety and medium volume are
termed batch.
– Products move to resources that are shared between batches.
– A feature of batch processes is that, because it is difficult to predict when a batch of
work will arrive at a machine, a lack of coordination can lead to many products
waiting for that machine at any one time.
• Examples
– Bakeries.
– Machine shop.
– Furniture making.
Batch
A Bakery: An Example of a Batch Process

Batch…
• Example: Injection Molding Machine

• Step # 1:
– Mold (1) to produce desired number of
items, placed into the machine.
• Step # 2:
– Mold (1) will be removed
• Step # 3:
– Mold (2) will take the place of Mold (1) for
the production of another product.

4. Mass
– Processes that produce products of high volume and low variety are termed line,
repetitive, or mass processes.
– Although there may be variants within the product design, the production process
will essentially be the same for all the products.
– Movement of the product may be automated using the conveyor system.
– Production process is broken down into a number of small, simple tasks.
– Because of the high volumes of product, it is cost effective to use specialised labour
and equipment.

– In order to ensure a smooth flow of product, the process time per unit must be
equalized at each stage of production using a technique called line balancing.
– Because of the low product variety, utilization of equipment is high.
• Examples
– Automobile industry.
– Electronics industry.

Mass…
Car Manufacturing: An Example of a Mass Process

Mass…
Electronic Equipment Manufacturing: An Example of a Mass Process

5. Continuous
– Processes that operate continually to produce a very high volume of a very
standardized product are termed continuous.
– The products produced by a continuous operation are usually a continuous flow
such as oil and gas.
– Continuous processes use a large amount of equipment specialised and dedicated
to producing a single product (such as an oil refinery for example).
– To make this large investment in dedicated equipment cost effective, continuous
processes operate 24 hours a day.

– The role of labour in the operation of the processes is mainly one of monitoring
and control of the process equipment with little contact with the product itself.
• Examples
– Oil Refinery.
– Electricity production.
– Fertilizer Plant.
– Cement Plant.

Continuous…
Oil Refinery: An Example of a Continuous Process

Continuous…
Cement Production: An Example of a Continuous Process

PROCESS TYPES IN
MANUFACTURING
BA S E D O N T H E ‘ P O I N T ’ O F C U STO M E R
ORDER
• Make-to-Stock:
– Producing in anticipation of demand. (e.g., Televisions, Mobiles, Books, Cars etc.)
– Critical operations issues: Forecasting future demand, maintaining inventory
levels.
• Make-to-Order:
– Producing to customer specifications after an order has been received. (e.g.,
furniture, dresses etc.)
– Critical operations issues: Customer customization, minimizing the time required
to complete the order.

• Assemble-to-Order (Build-to-Order):
– Adding options according to customer specifications. (e.g., Computer systems,
Industrial equipment, etc.)
– Critical operations issues: minimizing the inventory level of standard components,
minimizing the delivery time of the finished products.



Difference Between Make-to-Stock And
Make-to-Order
McDonald’s Subway
1. Make a batch of sandwiches 1. Customer orders
2. Sandwiches wait for customer orders 2. Customer waits for making of sandwich
3. Customer orders can filled immediately 3. Customer orders can be filled with delay
=> Sandwich waits for customer => Customer waits for sandwich

Story of Three Sandwiches
How many different sandwiches can be made?
Sandwich = Bread + Protein + Spread + Topping

18 6 10 20
21,600 Unique
Sandwiches!

Story of Three Sandwiches
Buy Raw Prepare Final Sell
Materials Components Assembly Product
PUSH PUSH PUSH PULL
PUSH PUSH PULL PULL
PUSH PULL PULL PULL

Difference Between Make-to-Stock And
Make-to-Order…
• Which approach is better?
• Make-to-Stock advantages include:
– Scale economies in production.
– Rapid fulfillment (short flow time for customer order).
• Make-to-Order advantages include:
– Fresh preparation (flow time for the sandwich).
– Allows for more customization (you can’t hold all versions of a sandwich in stock).
– Produce exactly in the quantity demanded.

Selection of Production Systems
• Any manufacturing system cannot be an ideal system for production of a product

considering all the factors simultaneously.
• The choice of the system depends on various factors, but basic factors that influenced
the selection of production system are specification of the final product and cost
effective production process.
• Other factors which determine the choice of the production system are:
– Effect of volume / variety.
– Capacity of the plant.
– Flexibility.
– Lead time.
– Efficiency.
PRODUCTIVITY
Productivity
• Production and productivity are two different terms having different meanings.
• Higher production does not mean higher productivity, and vice versa.
• Production is related to the activity of producing goods or services.
– It is a process converting inputs into some value-added products/ services.
• Productivity is concerned with how effectively the resources are utilized to increase
the output of production.
• Productivity may be calculated using the following formula:
𝑶𝒖𝒕𝒑𝒖𝒕
𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒗𝒊𝒕𝒚 =
𝑰𝒏𝒑𝒖𝒕

Productivity
• Input resources may be

– Land
– Material
– Machine
– Labor
• Productivity relates the efficient utilization of input resources for producing goods or
services.
• Production is a measure of the output or volume produced.

Productivity
• The emphasis of production is only on volume of production and not on how well the
inputs or resources are utilized.
• In contrast, productivity emphasizes only on the ratio of the output produced to the
inputs used.
• Productivity may be divided into two categories: partial productivity and total
productivity.

Partial Productivity
• Partial productivity is the ratio of the total output and individual input in the case of
multifactor productivity (MFP).
• This term is used to measure the productivity of an individual input such as
manpower, capital invested and energy utilized in production.
• Partial productivity is defined on the basis of the class of the input being considered.
• For example, if the labor was increased by 17 percent during the last financial years,
its effect on the increased output is represented by partial productivity.
• Similarly, partial productivity of capital, material and other inputs may be defined.

Partial Productivity
• Different forms of partial productivity.
Partial Productivity Formula
1. Labor productivity Output / Labor input
2. Material productivity Output / Material input
3. Capital productivity Output / Capital input
4. Energy productivity Output / Energy input
5. Advertising and media planning productivity Output / Advertising and media planning input
6. Other expense productivity Output / Other expense input

Total Factor Productivity (TFP)
• Total productivity is the ratio of aggregate output to the aggregate input.

• It shows the performance of a system as a whole.
• Partial productivity is used together with total productivity to take any decision for
redirecting resources.
𝐺𝑜𝑜𝑑𝑠 𝑎𝑛𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑

TFP =
𝐴𝑙𝑙 𝑖𝑛𝑝𝑢𝑡𝑠 𝑢𝑠𝑒𝑑 𝑡𝑜 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑 𝑡ℎ𝑒𝑚

Productivity Growth
Current Period Productivity – Previous Period Productivity

• Productivity Growth =
Previous Period Productivity
• For example if productivity increased from 80 to 84, the growth rate would be
84 – 80
• Productivity Growth = 𝑥 100 = 5%
80

Example 1
• A mobile phone manufacturing company is producing 44,000 mobile phones per

month by employing 200 workers in 8 hour shift.
• The company gets an additional order to supply 6000 mobile phones.
• The management has decided to employ additional workers. What will be production
and productivity levels when the number of additional workers employed is
a. 20
b. 25
c. 30

Example 1… Solution

• Present production = 44,000 mobile phones

𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 (𝑖.𝑒.,𝑜𝑢𝑡𝑝𝑢𝑡)
• Present productivity (of labor) =
𝑇𝑜𝑡𝑎𝑙 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 ℎ𝑜𝑢𝑟𝑠 (𝑖.𝑒.,𝑖𝑛𝑝𝑢𝑡)
44,000 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡𝑠
200 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 8 ℎ𝑜𝑢𝑟𝑠 (30 𝑑𝑎𝑦𝑠 𝑜𝑓 𝑚𝑜𝑛𝑡ℎ)
44,000
• Present productivity (of labor) = = 0.916 𝑚𝑜𝑏𝑖𝑙𝑒 𝑝ℎ𝑜𝑛𝑒 / man−ℎ𝑜𝑢𝑟
48,000

(a) When additional 20 workers are hired
• Production = 44,000 + 6000 = 50,000 mobile phones

𝐼𝑛𝑐𝑟𝑒𝑎𝑠𝑒𝑑 𝑡𝑜𝑡𝑎𝑙 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛
𝑇𝑜𝑡𝑎𝑙 𝑚𝑎𝑛−ℎ𝑜𝑢𝑟𝑠
50000
200+20 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 8 ℎ𝑜𝑢𝑟𝑠 (30 𝑑𝑎𝑦𝑠 𝑜𝑓 𝑚𝑜𝑛𝑡ℎ)
50,000
52,800

(b) When additional 25 workers are hired

50000
50,000
54,000

(c) When additional 30 workers are hired

50000
50,000
55,200

• In this example, it is clear that production has increased by 6000 units. Therefore,
– Increased in production = (50,000 – 44,000 / 44,000) x 100 = 13.6 percent

Example 2
• Determine the productivity for these cases:

a. Four workers installed 720 square yards of carpeting in eight hours.
b. A machine produced 70 pieces in two hours. However, two pieces were unusable.



Example 3
• ABC Industries is compiling the monthly productivity report for its Board of Directors.
• From the following data, calculate
a) labor productivity,
b) machine productivity, and
c) the multifactor productivity of dollars spent on labor, machine, materials, and energy.
• The average labor rate is $15 an hour, and the average machine usage rate is $10 an hour.
Units produced 100,000

Labor hours 10,000
Machine hours 5,000
Cost of materials $35,000
Cost of energy $15,000
Example 3
Units produced 100,000

Labor hours 10,000
Machine hours 5,000
Cost of materials $35,000
Cost of energy $15,000



Factors Influencing the Productivity
• There are various factors that influence productivity of an organization, such as

– Men, machine, materials, space, energy, time and finance.
• Men: The productivity of men depends on the following processes:
– Selection of an employee.
– The training given to employees.
– Number of personnel required for a job.
– Provision of incentives for worker.

• Machine: The productivity of machine depends on the following factors:

– Number of machine employed.
– Replacement policy for existing machines.
– Maintenance plans to avoid machine breakdown.
• Material: The following factors affect the productivity of a material:
– Right quality.
– Right quantity.
– Substitutes for the existing material.
– Inspection and quality control programs.
– Cost of material procurement and handling.
• Time: It affects the productivity in the following ways:

– Inspection time for raw material.
– Inspection time for finished products.
– Production time.
– The time required to repair and maintenance work.
• Space: Utilization of space affects the productivity in the following ways:
– Plant layout.
– The total area covered for production work.
– Location of different departments and shops.

• Energy: Use of energy affects the productivity in the following ways:

– Energy-saving schemes.
– Use of renewable energy sources.
– Use of solar energy.
• Finance: Availability and efficient use of financial facilities affects the productivity.

Reasons for Lower Productivity
• There are various reasons of poor productivity. Some of them are mentioned as
follows:
1. Poor production planning and control.
2. Low motivation of people.
3. Lack of coordination.
4. Unavailability of right tools, material and human force.
5. Poor product design.
6. Lack of standardization.
7. Poor working environment.

Reasons for Lower Productivity
8. Non-standard methods of working

9. Government rules and regulations.
10. Old age of plant and equipment.
11. Weak R & D.

How to Increase Productivity
1. More output with same input.

2. Same output with less input.
3. More out put with less input.
4. More output with more input where proportional increase in output is more than
input.

THANKS!

Lecture 02 - Industrial Engineering and Production Systems

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IQTM, University of the Punjab, Lahore.

• At the end of this lecture students should be able to learn

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– To engineer an industry?? No.

– To engineer an industrial product or system (efficiently and effectively): for

– To engineer a product or system for industry, the military, government, education,

– Efficiency and Quality Engineering!!

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• American Institute of Industrial Engineers (AIIE) defines Industrial Engineering as

• Industrial Engineering is concerned with the design, improvement and installation

• It draws upon specialized knowledge and skills in the mathematical, physical

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• Industrial engineering is a diverse (various) discipline concerned with the design,

• Industrial engineering is concerned with performance measures and standards,

• An Industrial Engineer may be employed in almost any type of industry, business or

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• For example, industrial engineers work in insurance companies, banks, hospitals,

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• To solve organizational, production, and related problems most efficiently, industrial

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• Install data processing, management information, wage incentive systems.

• Research new products and product applications.

• Improve productivity through application of technology and human factors.

• Design facilities, management systems, operating procedures.

• Improve planning and allocation of limited resources.

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• Enhance plant environment and quality of people's working life.

• Evaluate reliability and quality performance.

• Implement office systems, procedures, and policies.

• Analyze complex business problems by operations research.

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– Application of computer-assisted design technology to product design, feasibility

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– Definition of Industrial Engineering (IE); ISE’s origins, role, functions; and

– Modern concepts for managing the quality function of industry to maximize

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– Basic methods of engineering economic analysis including equivalence, value

• Facilities Planning and Materials

– Application of methods and work measurement principles to the design of work

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– Study of interrelationships among materials, design and processing and their

• Introduction to Engineering Management

– Organization of engineering systems including production and service

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– Introduces occupational safety and health hazards associated with mechanical

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• Methods Engineering and Work Design

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– The improvement of productivity as a functional activity of the enterprise.

• Production Planning and Control

– Production systems, demand forecasting, capacity planning, master production

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– Modeling principles with emphasis on linear programming and extensions. The

• Simulation Models of Industrial Systems

– Simulation methodology, design of simulation experiments, implementation of