1. Industrial Engineering
A Definition

2. What is Industrial Engineering?
 Industrial engineering is a branch of engineering which deals with the optimization of complex processes or
systems. Industrial engineers work to eliminate waste of time, money, materials, man-hours, machine time,
energy and other resources that do not generate value. According to the Institute of Industrial Engineers,
they figure out how to do things better. They engineer processes and systems that improve quality and
productivity.[1]
 Industrial engineers are the only engineering professionals trained specifically to be productivity and quality
improvement specialists. As they work to improve processes on a technical point of view, but also to
optimise the efficiency and profitability of businesses, many practitioners say that an industrial engineering
education offers the best of both worlds: an education in both engineering and business. According to the
Georgia Institute of Technology, nearly one in ten of its industrial engineer graduates rise to the top of their
respective organizations in positions such as CEOs, presidents or CFOs.[2]
 Industrial engineering is concerned with the development, improvement, and implementation of integrated
systems of people, money, knowledge, information, equipment, energy, materials, analysis and synthesis, as
well as the mathematical, physical and social sciences together with the principles and methods of
engineering design to specify, predict, and evaluate the results to be obtained from such systems or
processes.[3] While industrial engineering is a traditional and longstanding engineering discipline subject to
(and eligible for) professional engineering licensure in most jurisdictions, its underlying concepts overlap
considerably with certain business-oriented disciplines such as operations management.
 Depending on the sub-specialties involved, industrial engineering may also be known as, or overlap with,
operations management, management science, operations research, systems engineering, management

3. Overview
While originally applied to manufacturing, the use of "industrial" in "industrial engineering" can be somewhat
misleading, since it has grown to encompass any methodical or quantitative approach to optimizing how a
process, system, or organization operates. Some engineering universities and educational agencies around the
world have changed the term "industrial" to broader terms such as "production" or "systems", leading to the
typical extensions noted above. In fact, the primary U.S. professional organization for Industrial Engineers,
the Institute of Industrial Engineers (IIE) has been considering changing its name to something broader (such as
the Institute of Industrial & Systems Engineers), although the latest vote among membership deemed this
unnecessary for the time being.
 The various topics concerning industrial engineers include:
 accounting: the measurement, processing and communication of financial information about economic
entities
 operations research, also known as management science: discipline that deals with the application of
advanced analytical methods to help make better decisions
 operations management: an area of management concerned with overseeing, designing, and controlling the
process of production and redesigning business operations in the production of goods or services.
 project management: is the process and activity of planning, organizing, motivating, and controlling
resources, procedures and protocols to achieve specific goals in scientific or daily problems.
 job design: the specification of contents, methods and relationship of jobs in order to satisfy technological
and organizational requirements as well as the social and personal requirements of the job holder.

4. Overview
 management engineering: a specialized form of management that is concerned with the application of
engineering principles to business practice
 supply chain management: the management of the flow of goods. It includes the movement and storage of
raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
 process engineering: design, operation, control, and optimization of chemical, physical, and biological
processes.
 systems engineering: an interdisciplinary field of engineering that focuses on how to design and manage
complex engineering systems over their life cycles.
 ergonomics: the practice of designing products, systems or processes to take proper account of the
interaction between them and the people that use them.
 safety engineering: an engineering discipline which assures that engineered systems provide acceptable
levels of safety.
 cost engineering: practice devoted to the management of project cost, involving such activities as cost- and
control- estimating, which is cost control and cost forecasting, investment appraisal, and risk analysis.
 value engineering: a systematic method to improve the "value" of goods or products and services by using an
examination of function.
 quality engineering: a way of preventing mistakes or defects in manufactured products and avoiding
problems when delivering solutions or services to customers.

5. Overview
 Industrial plant configuration: sizing of necessary infrastructure used in support and maintenance of
a given facility.
 facility management: an interdisciplinary field devoted to the coordination of space, infrastructure,
people and organization
 engineering design process: formulation of a plan to help an engineer build a product with a
specified performance goal.
 logistics: the management of the flow of goods between the point of origin and the point of
consumption in order to meet some requirements, of customers or corporations.
 Traditionally, a major aspect of industrial engineering was planning the layouts of factories and
designing assembly lines and other manufacturing paradigms. And now, in so-called lean
manufacturing systems, industrial engineers work to eliminate wastes of time, money, materials,
energy, and other resources.
 Examples of where industrial engineering might be used include flow process charting, process
mapping, designing an assembly workstation, strategizing for various operational logistics,
consulting as an efficiency expert, developing a new financial algorithm or loan system for a bank,
streamlining operation and emergency room location or usage in a hospital, planning complex
distribution schemes for materials or products (referred to as supply-chain management), and
shortening lines (or queues) at a bank, hospital, or a theme park.
 Modern industrial engineers typically use predetermined motion time system, computer
simulation (especially discrete event simulation), along with extensive mathematical tools for
modelling, such as mathematical optimization and queue theory, and computational methods for
system analysis, evaluation, and optimization.

6. Organisational structuring

7. Approaches to organisational change
Emergent
Change
Planned
change
The process
of change
Implementation
of change
Logical
incrementalism,
evolution, need,
commitment &
shared models
Multi layered, complex
strategic decisions;
messy management;
strategic choice,
political models
Context & environ't:
implementation over
time, loops, general
directions, culture &
response to events.
Programme of
methods, reducing
resistance thru.
participation)
1 2
43
Jarvis – adapted from
Wilson (1992):

8. Organisational structure
 more than an organisation chart
 essential & relatively unchanging - basics
 'official' features comprising definitions, functional groupings, roles &
relationships, coordinating & regulative controls … that manifest the
organisation as an entity designed to achieve specific aims & outcomes.
 …..a 'solution' or 'aggregate of solutions' evolved over time from choices
aimed at providing order & organisation to an enterprise or institution.
 …..from grand design to patchwork quilt

9. The rational-legal organisation
(bureaucracy)
Focus on mission & objectives
Direction & stewardship
Hierarchy
Delegation of roles,
responsibilities,
authority &
accountability
Appointment on merit to office.
Competence & commitment
Impersonality and segregation
Max Weber
Rationality in
decision making
Functional specialisation
Policies, Procedures
Ethics of efficiency &
economy
Control over risk

10. Organisation (Classical) Principles
 Unity of command: one boss
 Scalar chain: clear line of authority
 Span of control: boss-subordinate ratio
 Staff and line: must not undermine line
 Division of work: specialisation for efficiency
 Responsibility = Authority: effective delegation & balance of
centralised decision making
 Discipline: conformity to legitimate rules and norms.
 Subordination of individual interest to general
 Initiative: to be encouraged at all levels
 Equity: fair dealings, kindness and justice, rewards
 Stability of tenure
 Esprit de corps
Henri Fayol 1916
14 principles
See also
 Parker Follet 1926
 Urwick 1947
 Brech 1965

11. Structural deficiencies
 Disorderliness, weak coordination
 Inconsistent and arbitrary operation
 Insufficient delegation/clarity
 Slow decision making
 Conflict and division
 Innovative weakness and neglect of direct/change
 Redundancy and capacity gaps
 Creeping inefficiencies
 Membership and morale problems

12. Structural Elements - Formalisation &
Standardisation
 Size, complexity and growth
 Coordination burden
 Goals of efficiency and economy
 Desire for
 Certainty and consistency
 Flexibility, initiative and
creativity
 Renewal
Mintzberg 1979
Mutual adjustment
Direct supervision
Three Standardisations
Work processes
Skills/competencies
Results

13. Methodological Issues
 Levels of Analysis – world, block, nation, industry, firm,
function, group, individual, chain etc
 Disciplinary frameworks: economic, sociological,
psychological, political
 Metaphorical images of organisation
 Analytical description
 Normative underpinnings
 Analytical and predictive explanation
 Solutions (prescriptions) to be implemented
 Social interpretation (phenomenological)
Purposes?
 Understanding
 neutral prediction
 action
 power/influence

14. Disciplinary perspectives
Psychological
 Decision analysis and decision
making
 Behavioural (groups, individuals)
 Cognitive (knowing, learning)
Sociological
 Structural-functionalism
 Social Action/Interpretive
 Radical (Marxists & post Marxist)
 Post modernism (discourse)
Economic
 Market forces
 Economic efficiency
 Monopoly
 Planned economy
Political
 Unitary/pluralism
 Democracy
 Power inequality
 Managerialism
 Anti-organisational

15. Methodological Issues
"All theories of organisation and management are based on implicit images or
metaphors that persuade us to see, understand, and imagine situations in partial
ways. Metaphors create insight. But they also distort. They have strengths. But
they also have limitations. In creating ways of seeing, they create ways of not
seeing. Hence there can be no single theory or metaphor that gives an all-
purpose point of view. There can be no 'correct theory' for structuring everything
we do."
Gareth Morgan, Images of Organisation

16. Morgan - metaphors for thinking about
organisations
No "one correct way" to define and view an organisation
1. goal-seeking machine with interchangeable parts
2. biological organism that continually adapts to change
3. central brain that can respond to, and predict, change
4. centring on a set of shared values and beliefs,
5. centring on power and conflict, as a means whereby individuals achieve their own
aspirations or mutual self-interest,
6. centring on norms of behaviour, so that the organisation is likened to a psychic prison
7. flux and transformation
8. instrument of domination
Images of Organisation 1986

17. Prescriptions: Goal-setting &
Organisation Structuring
 Mission
 Strategy - plans, programmes, positions, ploys
 Objectives - short term statements of results
 Inputs, processes, outputs (results) - systems perspective
 Assumptions of control via cascading objectives
 For Integrating organisational and individual goals
 Resource allocations & zero-based budgeting
 Management by objectives - top-down, bottom-up, atomism/cascade
 Key result areas
 Critical success factors
 Standards of performance
 Monitoring and evaluation
 Conflicting objectives
 sub-optimisation
 goal turnover, displacement and immunisation
Chapter 15 Allinson
Quality management
Business process reengineering

18. Prescriptions: Changing structure,
function and hierarchy
 Functional specialisation into manageable, 'logical' sub-systems
 Task, expertise, accountability structure
 Operating mechanisms: Policies, procedures (SOPs), rules &
expectations to guide behaviour. Comms & control lines. Planning,
budgets & budgetary control. Performance management & staff
appraisal, training, monitoring & reporting.
 Delegation: Responsibility & tasks defined in programmes/jobs. Clear
authority & decision points.
 Neo-views?
 Stick to the knitting, focus on core competencies
 Empowerment. Team development & semi-autonomous groups
 Task forces & out-sourcing, supplier partnerships
 Network organisation

19. Prescriptions: Towards Planned
structures. How is it done?
 SWOT, STEEPLE
 Analysis of situation e.g. benchmarking
 Operational research investigations – define specific problems
 Method study & work measurement to
 identify efficiencies & savings
 redefine functions & roles
 establish tasks & assign to groupings & roles
 decide methods, work processes & arrangements
 design work points & people-machine relationships
 determine work standards, targets
 monitoring, control & feedback/reporting arrangements
 Acquire, brief & train staff. Establish norms
 Decide reward & employment rules
 Anticipate problems & developments
 Implementation: pilot, modular, big-bang
 Supervise, check and follow-up
• Manager initiation
• Productivity
improvement team
• Kaizen/CQI

20. Productivity improvement (Sci. Mgt.
tradition)
 techniques to examine work - what is done & how
 systematic analysis of elements, factors, resources & relationships affecting
efficiency & effectiveness
 investigate work situation, identify weaknesses – where/why is poor
performance happening?
 emphasis on data gathering + rational analysis
 narrow assumptions about objectivity of efficiency criteria & direct
 deterministic relationships between effort & incentives
 worker as a resource/machine – ergonomics, HCI: improve operating methods
thru:
 Equipment, layout of operations
 supply & materials handling,
 work organisation, effectiveness of planning and so on.
 empowerment - neo scientific management
 select & train – competencies
 reward measured performance using PRP

21. Methods study SREDIM
 analysis of ways of doing work (method)
 common-sense heuristics
1. select the task to study
2. record the facts about the task
3. examine these
4. develop a new method
5. install/implement it
6. maintain it
Today's
business systems analysis
business process reengineering

22. SREDIM - stages of a method study
 select tasks to study
on basis of delays, capacity,
queues, idle-time, bottlenecks,
quality problems, high cost,
control difficulties. Agree
focus/scope with senior mgt.
Explain to staff & re-assure
 record the facts
by observation, interview or
experiencing the job. Record
e.g. using process charts, charts
of movement, supply chains etc.
 Purpose: What is being done?
Why? What else could be done?
What should be done?
 Place: Where is it being done?
Why there? Where else could it be
done? Where should it be done?
 Sequence: When is it being done?
Why then? When else could it be
done? When should it be done?
 Person: Who does it? Why them?
Who else could do it? Who should
do it?
 Means: How is it done? Why that
way? How else can it be done?
How should it be done?
Examine with PPSPM questions

23. Rudyard Kipling
I keep six honest serving men,
They taught me all I knew,
Their names are What and Why
and How
and Where and When and Who

24. develop new methods requires - 2
 requires technical know-how
 foresight of possibilities e.g. effects of removing a stage or re-allocating
to another process/person.
 knowledge of new methods/equipment: tech. feasibility, reliability, £
 system charting to "see" the new system & evaluate it.
 improvement teams to brainstorm ideas on fine-tuning + implementation
 try reverse engineering or value analysis
 a empowered, participative workplace culture. People are ingenious.
 time for experimentation, testing and working thru. the detail.
 acknowledgement of learning curve
Improvement projects (BPR by another name).

25. develop new methods requires - 2
 seeing effect on job composition and staff earnings opportunities
 install/implement new methods
 once agreed & costed
 staff consultation, briefing and & training
 goodwill requires sensitivity, planning & resourcing.
 detailed project plan & budget.
 cut-over – pilot, phased?
 reduce risk and offer time for learning & dissemination of experience.
 If big-bang then need complete certainty that going to work.
 maintain it – new method needs
 new sequences of operator action & different perspectives.
 team member commitment
 update process specifications & documentation
 hit squad for teething troubles
 formal review of new method/performance.

26. Mechanistic-Organismic - Burns and
Stalker 1961Technological & market factors & organisation structure
 Mechanistic
 Stable environment
 Functionally differentiated tasks, precise roles and responsibilities, hierarchical,
expertise & direction from the top, prestige internally & locally
 Procedure-oriented
 Organismic
 dynamic, turbulent environment
 Fluid redefinition of tasks, precise roles etc.
 Individual know-how focus. Lateral coordination. Distributed, empowered,
decisions - locus of expertise
 Flatter, goal-oriented

27. Mintzberg - Organisation Types and
Change
Simple Structure
 Fluid working and report relationships. Small mgt hierarchy. Few functional
specialists. Multiskilled roles. CEO entrepreneurial vision, intuitive risk-taker.
Machine Bureaucracy (MB)
 Stable environment - airline, consumer goods, hotel chain. Large, well-oiled
integrated, regulated systems. Decentralised operations with well-defined
authorities & monitoring. Incremental change > new radical strategy.
Divisionalised Form
 semi-autonomous units. Product or market focus. MB derivative for conglomerate
or "federation". Parental appointments, MbO, HQ meetings, corporate values
Professional Bureaucracy
 Professionals + support staff e.g. collegiate, doctor or solicitor partnership. Some
MB & adhocracy (e.g. finance systems).
Adhocracy
 organismic, "task culture", team focus. Smaller, fluid, often temporary. Controlled
by appointment, MbO/R, budgets etc. May run counter to MB regulation.
Mintzberg H & Quinn J, 1988 The Strategy Process, Prentice

28. Organisational Forms
 Fixed form bureaucracy
 Centralised, decentralisation - SBUs, profit & cost centres
 Franchise-based organisation
 Loose, collaborative network
 Bureaucracy with cross-dept. teams & task groups
 Matrix, project centred
 Core-periphery firm (functional & numeric flexibility)
 Core primary, functional, flexible staff
 Periphery - short-term, part-time
 Servicing - sub-contractors, agencies, outsourcing
 Belief in empowerment + lean, flat, flexible structures
 Formal partner networks
 Distributed and virtual organisations

29. Structural Elements - Configuration and
Grouping
 Functional
 Process
 Product--service
 Market or customer
 Geographic
 Matrix
Vertical
Span of control
Flat/Tall

30. Horizontal Structuring
Functional Organisation
Marketing
Director
Operations
Director
Director
of R&D
Finance
Director
Personnel
Director
MD or CEO
 Division & specialisation by function
 Grouping by expertise concentrates know-how, coordination
 But can lead to compartmentalisation, separated communication &
vested interests (sub-optimisation)

31. Horizontal Structuring - by Process
Head of
Quality Services
Divisional
Manager
Engine Ops
Divisional
Manager
Bodyshop Ops
Divisional
Manager
Transmissions Ops
Divisional
Manager
Assembly Ops
Operations
Director
 Grouping by process-orientation
 Benefits & problems like functional
 'Process' may have local functional
expertise of its own (duplication). Accounting
Services
Manager
Head of
Housekeeping
Front Desk
Manager
Food & Bev
Manager
Conferences
Manager
Club
Manager
Hotel
Manager
Products and services
cost or profit centre

32. Horizontal Structuring - by market, customer or
region
Head of
Euro-Marketing
Manager
UK & Eire
Manager
Benelux
Manager
France
Manager
North Africa
European
Director
 Customer focus and local PEST knowledge
 Local functional expertise & central
 Regional loyalties?
 The global corporation? Quality
Services
Manager
Distribution
Centres Mgr
Long Haul UK
Manager
Overseas
Haulage Mgr
Couriers
Manager
Logistics
Manager
cost or profit centre

33. Matrix organisation
A
A
A
Operations Mgr
Gleneagles
B
B
Operations Mgr
Basildon
E
C
C
Marketing &
Contracts Mgr
G
F
D
Research&
Design Mgr
The Board
Project
Manager
Project X
Project Y
Project Z
 horizontal, product grouping on top of functional structure
 Project members are subordinates of function or geographic managers but
'assigned to project (two bosses - dual loyalty?)
 'B' has projects on the go. E is 'seconded' (home location?)
 Team decision making focus (distributed team coordination)?
 Project budget - cost and profit centre

34.  From late 60s - job enrichment, flexibility &
empowerment e.g. Herzberg & Volvo
 team at a work station - a “cell” - manage own activities,
roles & methods
 multi-skilling, job rotation & QA by by team itself.
 re-engineer how technology is implemented.
 adapt technology to people - not viz.
 Form cells (workstations) where work can stop & operators
(team) can do a series of tasks
 “Team” emphasis - group problem-solving supported by
specialists & management when needed.
Job re-design & group/cell technology