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What is Industrial Engineering:

(1) Discipline of utilizing and coordinating humans, machines, and materials toattain a desired output rate with the optimum utilization of energy,knowledge, money, and time. It employs certain techniques (such as floorlayouts, personnel organization, time standards, wage rates, incentive

payment plans etc.) to control the quantity and quality of goods and services produced.

(2) The branch of engineering that deals with the creation and management ofsystems that integrate people, materials and energy in productive ways.

It is concerned with the development, improvement, implementation and

evaluation of integrated systems of people, money, knowledge, information,equipment, energy, materials and/or processes

Industrial Engineering

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Industrial Engineering often now supplemented as "Industrial & Systems

Engineering" or "Industrial & Operations Engineering". Depending on the sub-speciality(ies) involved, industrial engineering may also be

known as operations management , management science , systems engineering , ormanufacturing engineering , usually depending on the viewpoint or motives of theuser. Like in health care, industrial engineers are more commonly known as healthmanagement engineers or health systems engineers .

Industrial Engineering

In general engineers are concerned with the analysis and design of systems.Like, Electrical Engineers are concerned with electrical systems, MechanicalEngineers are concerned with mechanical systems, Chemical Engineers areconcerned with chemical systems, and so forth.

Industrial Engineers are concerned with production systems .

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Production system

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Production system

i

ii

iii

iV

V

Function of production system

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Production Planning and Control1. Production Planning

2. Production Control3. Sub-function of production planning and Control

Production Planning and Control- An introduction:

Production planning is a managerial function which is mainly concerned with thefollowing important issues:1. What production facilities are required?2. How these production facilities should be laid out in the space available for

production?3. How they should be used to produce the desired products at the desired

rate of production?

Production planning is dynamic in nature and always remains in fluid stateas plans may have to be changed according to the changes incircumstances.

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Production PlanningProduction planning is usually done at the following three horizon levels:

Long Term (Capacity Planning) Medium Term (Aggregate Planning) Short Term (Operation Planning)

Long Term

Up to 5 years ahead or more It deal with strategic/business issues Reflected in process choiceMedium Term Up to 2 years ahead How can demand be met from existing facilities and resource inputsShort term Monitoring and correction of day-to-day activities versus plan

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Production Planning

Requirements of Production Planning :

It should be based on accurate data. It must be flexible.

It must satisfy a set of pre-defined objectives (economy, quality etc.). It must be simple and straight forward. It must have a reporting system, so that right information reaches at right

place and right time. It should not have any week link.

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Production Control

Production control is a mechanism to monitor the execution of the plans. It hasseveral important functions.

Making sure that production operations are started at planned places and planned time.

Observing progress of the operations and recording it properly. Analyzing the recorded data with the plans and measuring the deviations. Taking immediate corrective actions to minimize the negative impact of

deviations from the plans. Feeding back the recorded information to the planning section in order to

improve future plans.

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Production Control

Control system use in manufacturing organization

Transformation process

Or

Value addition

InputResources

Objectivesoutput

Products

Services

An open loop control system

A closed loop control system

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Production Control

Many different forms of production control: Quality control

Stock control

Order processing/chasing against schedules

Cost control

People and labor productivity

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Aggregate production planning

Aggregate production planning is concerned with planning overall productionof all products combined (i.e., in tones of steel, liters of paint etc.) over a planning horizon (generally next 3 to 6 months or max 1 year) for a given(forecast) demand schedule.

An aggregate plan will determine workforce levels, Machining time, over-time, allocation over planning horizon, and inventory levels with the objectiveof minimizing cost. These results help in the development of operating

budgets. Like, workforce levels will be translated into the labor budge, andinventory levels can be used to determine requirements of storage space.

Management options to meet fluctuation demand

Many aggregate planning strategies are available to the manager. Thesestrategies involve the manipulation of inventory, production rate, manpowerneeds, capacity, and other controllable variables. When we very any one ofthe variables at a time to cope with changes in product output rates, we call itas pure strategies. Mixed strategies, in contrast, involve the use of two ormore pure strategies to arrive at a feasible production plane.

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Aggregate production planningManagement options to meet fluctuation demand

1 Pure strategiesI Changing inventory levels: Build inventories in slack periods in anticipation

of higher demands later in planning horizon. If we accumulate inventoriesduring slack periods of demands, working capital and cost associated withobsolescence, storage, insurance, and handling will increase. Conversely,

during periods of increase demand, changes in inventory levels or backlogsmight lead to poorer customer service, longer lead times, possible lost sales,and potential entry of new competitors in the market.

II Changing workforce size: The manager may change the size of the workforce by hiring and firing of employees to match the production rate so as to meetthe demand exactly. In many instances new employees require training and

the average productivity is temporarily lowered. A layoff frequently results inlower worker morale and lower productivity, and the remaining employeesmay retard output to protect themselves against a similar fate.

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1 Pure strategiesIII Varying working hours: Use over time in peak periods, and under time in

slack periods to very output, while holding work force and facilities constant.However, there is a limit on how much over time is practical. Excessiveovertime may weak workers and their productivity may go down. The

incremental costs associated with shift premium, supervision, and overheadmay be significant. In period of slack demand, the firm also faces the difficulttask of absorbing the workers idle time.

IV Subcontracting: As an alternative to changing workforce or inventory, perhaps the company could subcontract some work during the peak demand periods and increase the capacity to satisfy the demand. Again, a potential

danger exists of opening doors to competition .V Influencing demand: Because changing demand is a chief source of aggregate

planning problems, management may decide to influence the demand patternitself. For example, telephone companies level their loads by offering lowerevening rates. The airline industry offers weekend discounts and winter fares.But it is not always possible.

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1 Pure strategiesVI Very capacity through changes in plant and equipment : But it is generally

long term option .2 Mixed strategies

Every pure strategy has a countervailing cost associated with it, and pure

strategies are often infeasible. Therefore, a combination of strategies, ormixed strategy, is often used. Mixed strategies involve the use of two or morecontrollable variables to arrive at a feasible production plan.

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Aggregate production planningExample #1:

ABC Corporation has developed a forecast for a group of items that has thefollowing seasonal demand pattern.

2400300821001307

19702006

17703805

13906004

79040033901702

2202201

Cumulative DemandDemandQuarter

Suppose that the firm estimates that it costs $100 per unit to increase the production rate, $150to decrease the production rate, $50 per quarter to carry the items on inventory, and anincremental cost of $80 per unit if subcontracted. Compare the cost incurred if pure strategies

are used.

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Aggregate production planning

Cumulative and average forecast graph.

Cumulative requirements graph

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Product design and development

Introduction Factors for PDD Product analysis Summary

Product design and development is basic need of every manufacturingcompany, but why?

Consumers want and expect new and better products Not-to-innovate approach is becoming increasingly risky. If you unable to fulfill

the customer requirements than customer may drive your company out of themarket

Innovating new product is expensive and risky. It is risky because developed product may not successful in the market.

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When we go for product design and development procedure we can

see three scenarios or factors.

1. Most product ideas, which go to development stage, never reach the market(lack of money, technology, manpower, change in demand etc.)

2. Many products that do reach the market are not successful (inferior quality,

high cost, change in customers taste, poor in functionality, lacking in marketingskills etc.)

3. Product is successful but has shorter life cycle than expected (change incustomers taste, change in technology, competition in market etc.)

Factors to study for PDD1. Product identification related factors

Gap in demand demand>supply Under-utilized resources contract manufacturing, lending of facilities New product ideas friend, co-workers, environment

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Factors to study for PDD


2. Market related factors Prestige of the company Technologically sound product Customers requirements Market potential Product life Competition

3. Legal factors Environment pollution Import restrictions on capital goods Restrictions on finance

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Factors to study for PDD


6. Manufacturing related factors Availability of technological know-how its cost, related equipments Cost of manufacturing facilities Quality of manufactured product quality of the product must meet the

customer requirements (it is government by the customer) Rate of production must meet the market demand

7. Distribution related factors Availability of distributors they should have good reputation in the

market, facilities, manpower

Availability of ware houses (storage house of in transportation product)space requirements, facilities, cost After sale service maintenance, repair, spares, cost Sales personal (they are the interface between the customer and the

product) marketing skills, implementation of sale promotional schemes(they should be able to implement of sale promotional schemes) etc.

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Product analysis It is performed before actual design starts It is based on the information collected about the customers

requirements and the level of competition

The first task in product analysis is to become familiar with the product!What does it do? How does it do it? What does it look like? All thesequestions, and more, need to be asked before a product can beanalysed.

Why product analysis i s so important ? Design modifications are more expensive at a later stage of product life Design modifications are unwelcome, once the product is launched Design modifications at later stage also delay the launch of a new

product

Factors of p roduct analysis Its objective should be to satisfy as many functions as possible Its objective should be keep product cost as low as possible It is a trade-off between product functionality and product cost It focuses on development of multiple product concepts Additional considerations

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Product analysis Additional considerations

It has to be manufactured and assembled minimum cost and easily Product has to work It has to sell It must be profitable

Several aspects are considered Functionality aspect Operational aspect Quality aspect Reliability aspect Durability aspect Maintainability aspect

Aesthetic aspect: i.e., how that product look, how is the texture of thatproduct, what is the shape and size of that product, what are the surfacefinish of that product, picketing of that product etc.

Product analysis is not just as to evaluate some product idea but it convertsthe idea into useful product.

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Product analysis

Information flowduring product

analysis

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Value analysis and value engineering

Techniques of Value Analysis and Engineering that identifying andremoving unnecessary cost, and thus improving the value, must be donewithout reducing in the slightest degree quality, safety, life, reliability,Maintainability, and the features and attractiveness that the customerwants.

What is Value?

Value is the relationship between the defined function the customerrequires and the costs incurred to provide that function.

Miles described four types of value.1. Use value : The properties and qualities which accomplish a use, work, orservice.

2. Esteem value : The properties, features, or attractiveness which cause usto want to own it.3. Cost value : The sum of labor, material, and various other costs requiredto produce it.4. Exchange value : Its properties or qualities which enable us to exchangeit for something else we want.

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When is VA/VE used?

Existing part/product cost is high Existing technology is complex/old though simpler means are available There is a need to release a cheaper product by cutting down some of

the existing feature The existing customer demands a minimal increment in product features

that are in use There is a need to cut down the manufacturing cycle time/cost To determine the best design alternatives for Projects, Processes,

Products, or Services To improve quality, increase reliability and availability, and customer

satisfaction.

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Benefits of VE Decreasing costs

Increasing profits

Improving quality

Expanding market share Saving time

Using resources more effectively

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Six Step Value Engineering Job PlanValue engineering is often done by systematically following a multi-stage

job plan. Miles' original system was a six-step procedure which he calledthe "value analysis job plan." Depending on the application, there may befour, five, six, or more stages.

Phase 1. Orientation : Understand the customers needs and wants.Understand the functions performed by the product and thecontribution of each part and each feature of the part and thecomplete product to the functions to be performed by the product.

Phase 2. Information : Collection of information on quantities, vendors,drawings, materials, manufacturing methods, and costs.

Phase 3. Speculation : Using all the techniques of value analysis to comeout with alternative low cost materials and methods to producecomponents and the product. Creativity is to be employed here.Value engineer has to involve experts from various disciplines tohelp with ideas.

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Six Step Value Engineering Job Plan Techniques to be used:

A. Blast : In this stage alternative products, materials, process, or ideasare generated. These alternatives should, first of all, qualify foraccomplishing some important part of the function in a veryeconomical manner or, at least, serve as an economical base formodifications that are likely to accomplish an important part of function.

B. Create : In create phase, the technique of "Use real creativity" needsto be employed to come out with ways by which the low costalternatives identified during the blast stage can be modified toaccomplish the specified function to a much greater extent withpertinent increase in cost.

C. Refine : In this step, much more creativity is used and also thetechniques "Use industry experts to extend specialized knowledge"and "Utilize and pay for vendors skills and knowledge" are used torefine the ideas developed during the create step to come out with arefined alternative that fully accomplishes the specified function at alower cost. During refine step, some more functionality is added as

well as some additional cost.

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Phase 4. Analysis : Refines and combines ideas, establish costs on allideas, and ranks the ideas generated in the creativity phase. The twomost common Value Method techniques used for ranking are "criteriaweighting matrix and evaluation analysis ranking" .

Phase 5. Program planning : Approach the specialists to further refinethe selected alternatives. Inform the specialists the acceptedsuggestions and give mandate to them to take steps to implement the

suggestions Phase 6. Program execution : Pursue regularly the specialists and

vendors to get their inputs on various tasks assigned to them. Theoutput of this phase is a detailed design,

Phase 7. Status summary and conclusion . The results of the valueengineering study are to be presented to decision makers. The reports

needs to have a summary sheet as well as the full supportingdocumentation. The value engineering project is concluded when theproduct is manufactured and distributed at the lowered cost as per thevalue engineering study.

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Job shop production

The following are the important characteristics of job shop type productionsystem:

Machines and methods employed should be general purpose as productchanges are quite frequent.

Planning and control system should be flexible enough to deal with thefrequent changes in product requirements.

Man power should be skilled enough to deal with changing work

conditions. Schedules are actually non existent in this system as no definite data isavailable on the product.

In process inventory will usually be high as accurate plans and schedulesdo not exist.

Product cost is normally high because of high material and labor costs. Grouping of machines is done on functional basis (i.e. as lathe section,

milling section etc.) This system is very flexible as management has to manufacture varying

product types. Material handling systems are also flexible to meet changing product

requirements.

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Key benefits of job production

a high level of customisation is possible to meet the customer'sexact requirements

significant flexibility is possible, especially when compared to massproduction

workers can be easily motivated due to the skilled nature of the workthey are performing

Disadvantages include

higher cost of production requires the use of specialist labour (compare with the repetitive,

low-skilled jobs in mass production) slow compared to other methods (batch production and mass

production)

Job shop production

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Batch ProductionBatch production is the manufacture of a number of identical articles either

to meet a specific order or to meet a continuous demand. Batch can bemanufactured either-

only once

or repeatedly at irregular time intervals as and when demand arise

or repeatedly at regular time intervals to satisfy a continuous demand

The following are the important characteristics of batch type productionsystem:

As final product is somewhat standard and manufactured in batches,

economy of scale can be availed to some extent. Machines are grouped on functional basis similar to the job shop

manufacturing.

Semi automatic, special purpose automatic machines are generally usedto take advantage of the similarity among the products.

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Batch Production

Labor should be skilled enough to work upon different product batches.

In process inventory is usually high owing to the type of layout andmaterial handling policies adopted.

Semi automatic material handling systems are most appropriate inconjunction with the semi automatic machines.

Normally production planning and control is difficult due to the odd sizeand non repetitive nature of order.

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Batch Production

Advantages of batch production are : It can reduce initial capital outlay because a single production line can beused to produce several products.

Batch production is also useful for a factory that makes seasonal items,products for which it is difficult to forecast demand, a trial run forproduction, or products that have a high profit margin.

Labour costs are reduced so the final price is lower. Production rate is faster

Batch production also has disadvantages. There are inefficiencies associated with batch production as equipment

must be stopped, re-configured, and its output tested before the nextbatch can be produced.

Larger stocks of raw materials must be kept.

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Mass Production

In mass production, same type of product is manufactured to meet thecontinuous demand of the product. Usually demand of the product is veryhigh and market is going to sustain same demand for sufficiently longtime.

The following are the important characteristics of mass production system:

As same product is manufactured for sufficiently long time, machines canbe laid down in order of processing sequence. Product type layout is mostappropriate for mass production system.

Standard methods and machines are used during part manufacture.

Most of the equipments are semi automatic or automatic in nature. Material handling is also automatic (such as conveyors).

Semi skilled workers are normally employed as most of the facilities areautomatic.

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Mass Production

As product flows along a pre defined line, planning and control of thesystem is much easier.

Cost of production is low owing to the high rate of production. In process inventories are low as production scheduling is simple and can

be implemented with ease.

Lectures 2 8

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