28-10-2016, 10:13 AM
1461830649-IndustrialManagement.pdf (Size: 1.46 MB / Downloads: 35)
University Syllabus:
–Introduction:
• Concept, Development, application and
scope of Industrial Management.
–Productivity:
• Definition, measurement, productivity
index, types of production system,
Industrial Ownership.
Concept of Industrial Management
• Application of Management theories & concepts
are now all pervasive and all encompassing.
• With Best engineering skills and knowledge,
professional cannot just sustain since any
operational issues require application of
management techniques.
• Any engineer by profession is also a manager, as
engineers also qualify in the classical test of
managerial roles, interpersonal roles, and
informational roles and decisional role.
Industrial Management
• Industrial management, as a branch of
engineering facilitates creation of
management systems and integrates the same
with people and their activities to
productively utilize the resources.
• The subject emphasizes studying the
performance of machines and so also the
people.
• Industrial management, therefore, in the
structured approach to manage the
operational activities of an organization.
Scientific Management Approach
• Taylor emphasized following points to achieve
organizational efficiency
– Develop scientific way of performing jobs.
– Train and develop workers to perform the job.
– Establish harmonious relation between
management and workers.
• Taylor suggested two important practices:
– Piece rate incentive system.
– Time and motion study.
Piece rate system rewards the workers who produce the maximum
output.
Time study helps in determination of time required, recording analyzing
and synthesizing the time elements of each operation.
Motion study on the other hand involves study of movements in doing
jobs in parts and eliminates wasteful movements and retains only
necessary movements. It makes a job simpler, easier and better.
Time and Motion Study concepts were developed by F.W.Taylor in
association with Frank and Lillian Gilberth.
Gilberth conducted research on motion studies. They had classified 17
basic hand motions like search, select, position, hold etc. They called this
therbligs . Their approach helps to analyse the exact elements of a
workers’ hand movement.
Henry Gantt worked with Taylor. His contributions are introduction of task
and bonus plan, and Gantt chart. As per his incentive plan worker gets
daily wage even if he does not complete his job, but gets bonus if the jobs
is completed in less than normal time.
Gantt chart is used for production control indicating progress of
production in terms of time.
Drawback of Scientific Management
Approach
• Scientific Management principles revolve
around operational level problems do not
focus on managerial issues essential for
managing organization.
• This theory also ignores the human desire for
job satisfaction.
Administrative Theory
• Administrative Theory another part of classical school of
thought focuses on principles to coordinate the internal
activities of the organization. Henry Fayol classified business
operations into 6 activities.
– Technical : Activities relating to production and manufacturing.
– Commercial : Activities relating to buying selling and exchange.
– Financial : Activities ensuring optimal use of capital.
– Security : Activities to ensure protection to employees and
property.
– Accounting : Activities concern with costs, profits, liabilities, balance
sheet.
– Managerial: It is functional approach to management. i.e. planning,
organizing, directing, coordinating
and controlling.
Bureaucratic Theory
• Max Waber had advocated the necessity of a
formal organizational structure with set rules
and regulations. Weber’s concept is intended
to remove ambiguity, inefficiencies, and
patronage.
Limitations of Classical School of
Thought
• Management principles are not universally
applicable in today’s complex business
situation.
• Classical school of thought ignored
organizational behaviour (leadership,
motivation informal relation) only
concentrated on productivity.
Neo Classical School of Thought
• This school of thought lays emphasis on human elements in an
organization.
• Max Parker Follett recognized the significance of human elements,
attributed greater significance to the functioning of groups in workplace.
• Elton Mayo father of Human Relations Approach, conducted the study to
evaluate the attitudes and psychological reactions of workers in on the
job situations.
• Maslow’s focus was on importance of human needs driving force for
motivation.
• McGregor has made assumption about people categorizing them as under
– Theory X People are by nature lazy, have little ambition, dislike
work, avoid responsibility.
– Theory Y People are more positive , innovative, creative and do not
dislike work. Chris Argyris’s contributions are maturity –immaturity
theory, integration of individual and organizational goals.
Modern Approaches
• These approaches are classified as
I. Quantitative School of thought.
II. System Theory Approach.
III. The Contingency Theory.
Quantitative School of Thought
• Different branches of quantitative approaches are
Management Science, Operations Management, MIS.
• Management science approach or operations research
approach is used in production, scheduling human
resource planning, inventory management etc.
• Operations management is primarily concerned with
production management and related management.
• MIS approach focuses on design and implementation
of information system for management uses. It
converts raw data into information inputs to be used
by management for decision making.
System Theory Approach
• It considers organization as a whole because
of interdependent nature of activities
requiring organization to interact with
external environment factors.
Contingency Theory Approach
• This Approach discards the concept of
universality in management principles and
determines managerial decisions considering
situational factors.
• Contingency theory and System theory together
are classified as integrative school of
management thought because these two
theories integrate the classical, behavioral and
quantitative theories and uses only the best of
each approach in a given situation.
APPLICATION & SCOPE OF
INDUSTRIAL MANAGEMENT
• Initially the scope & application of industrial
management was restricted to manufacturing
industry. Later on it spread to non- manufacturing
activities such as construction & transportation,
farm and air- line operations and maintenance,
public utilities govt. & military operations.
• In an industry besides the production, other
departments utilizing industrial management
concepts are Marketing, Finance, Purchasing,
Industrial relations etc.
PRODUCTIVITY
Concept and Definition
• Productivity may be defined as the ratio between
output and input.
• Output means the amount produced or the
number of items produced and inputs are the
various resources employed, e.g, land, building,
equipment and machinery, materials, labours,
etc.
• According to Peter Drucker, “Productivity means a
balance between all factors of production that
will give the maximum output with smallest
efforts.
• ILO defines productivity as the ratio of aggregate
output to aggregate input.
Factors Affecting Productivity
• Factors affecting National Productivity
– Human Resources
– Technology and Capital Investment
– Government Regulation
• Factors affecting Productivity in
Manufacturing and Services Sectors
– Product and System Design
– Machinery and Equipment
– Skill and Effectiveness of the Worker
– Production Volume
Measurement of Productivity
• The basic objectives of productivity
measurement are:
– To study performance of a system over
time.
– To have relative comparison of different
systems for a given level; and
– To compare the actual productivity of the
system with its planned productivity.
• The most common way is to express both
outputs and the inputs in monetary terms.
• If the outputs and inputs for the period for
which productivity is measure, are expressed
in rupees, then
– Aggregate output = Gross sales= G(say); and
– Aggregate input= Cost= C (say)
Kinds of Productivity Measurement
1. Land Productivity: The productivity of land
and building is said to have increased if the
output of goods and services within that area
is increased.
2. Material Productivity: The productivity of the
materials becomes key factor in economic
production / operation.
Raw material productivity can be increased
by:
–Proper choice of design;
–Better handling of materials and
reduction of rejection;
–Recycling and reuse of materials.
–Searching alternative cheaper material.
Labour productivity can be increased by:
– Providing training to use best method of
production.
– Constantly motivating the workers by providing
financial and non-financial incentives
– Keeping high morale of the employees.
– Improving working condition on the plant.
Example: A worker was assembling 10 pieces of mobile
sets per hour and the same worker, by improved
methods of the work is able to produce 13 pieces of
mobile sets. The productivity is improved by 30%.
4. Machine Productivity
• Output can be measured in total quantity
produced and machine can be measured in total
machine hours required to produce that output.
Intermittent System
• In this system, the goods are manufactured
specially to fulfill orders made by customers
rather than for stock.
• Here the flow of material is intermittent.
• Intermittent production systems are those
where the production facilities are flexible
enough to handle a wide variety of products
and sizes.
Chief characteristics of intermittent
system are:
1. Most products are produced in small quantities.
2. Machines and equipment are laid out by process.
3. Workloads are generally unbalanced.
4. Highly skilled operators are required for efficient
use of machines and equipment.
5. In-process inventory is large.
6. Flexible to suit production varieties.
Job- Production or Project Type
Production
• In this system the goods are produced to definite
customer’s orders.
• There is no assurance of continuous demand for
specific items and the manufacturing depends on
the receipt of orders from customers.