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Industrial Management & Engineering Economy (Meng 5241) : Mechanical Engineering Dep'T. Wolaita Sodo University
Industrial Management & Engineering Economy (Meng 5241) : Mechanical Engineering Dep'T. Wolaita Sodo University
Introduction to
management
Functions of management
Organizational structure
Basics of productivity
1.1 Introduction to management
Operational
functions
a) Production
b) Marketing
c) Purchasing
d) Financing
e) Personnel
MANAGARIAL FUNCTIONS AND
1)
SUBFUNCTIONS
PLANNING - Forecasting, decision making ,strategy,
formulation policy- Making , programming , scheduling,
budgeting problem solving , innovation , investigation and
research
Steps in organizing
1) Identifying the activities required for achieving
objectives.
2) Classifying these activities in to convenient
groups.
3) Assigning the group of activities to appropriate
persons.
Importance of organizing
Sound organization facilitate growth and
diversification.
Optimum use of human
resources by matching work with
talent.
Maintain good harmonious structure in the office.
Group activity is equivalent to social structure of
organization.
It is a mechanism of management to
direct ,controls and coordinates the activities of
enterprise.
3- Staffing
It is concerned with the Human resources of the
enterprise.
It is concerned with acquiring, developing, utilizing,
and maintaining human resources.
It is a process of matching jobs with individuals to
ensure right man for the right job.
According to koontz and O Donnel “The
managerial functions of staffing involves managing
the organizational structure through proper and
effective selection, appraisal and development of
personnel to fill the roles designed in to the
structure.
Steps in staffing
1) Manpower planning
2) Recruitment, selection, placement
3) Training and development
4) Appraisal ,promotion and transfer
5) Employee remuneration
Features of staffing
It is a function of management.
It is an integral part of the process of
management.
It is concerned with the human
resources.
Aims at optimum utilization of human
Importance of staffing
It helps in discovering and obtaining competent
employees for various job.
It improve the quantity and quality
ofoutput by putting right man for right job.
It improves job satisfaction of employees.
It reduces cost of personnel by avoiding
wastage of human resource.
It facilitates the growth and diversification.
4- Directing
“Directing consist of the process and techniques
utilized in using instructions and making certain
that operations are carried out as planned”
It is concerned with the execution of plans
through organized action.
It is also known as commanding or actuating.
5- Controlling
Task of managers is to evaluate how well an
organization has achieved its goals and to take
any corrective actions needed to maintain or
improve performance.
The outcome of the control process is the
ability to measure performance accurately
and regulate organizational efficiency and
effectiveness.
1.3 Organizational structure
Why Have a Structure?
All businesses have to organise what they do.
A clear structure makes it easier to see which
part of the business does what.
Ways to structure a business
Advantag Disadvantages
es – Closed communication
Specialisat each could lead to
lack of focus
ion focuses on
Departments can
departmen
Accountability – its
become resistant to
tsomeone
own is change
work
responsible for the Coordination may
section take too long
Clarity – know your Gap between top and
Organization by
Product/Activity
Advantag
Disadvantages
es
Clear on market
segme helps Duplication of functions
focus
customers‟
nt me (e.g. different sales force
needs
Positive et
competition for each division)
between divisions Negative effects
Better control as each of competition
division can act as Lack of central control
separate profit centre over each separate
division
Organization by
Area
Advantages Disadvantag
Serve local needs es
Conflict between
better local and central
Positive
More effecti management
competition
communicati ve Duplication of
on and local betwe
firm resources and
customers en functions
Cont...
I. line,
II. functional,
25
I. Line
Organization
26
Cont...
.
sometimes called 'military organization', because
it is how the armed forces are organized.
28
Cont.
it..
is the function (the type of activity), which determines
the areas of authority and responsibility.
30
Cont..
. In such a structure, the line managers control
32
Cont.
..
These are temporary organizational structures
formed for specific projects for a specific period of
time and are dismantled, once the required goal is
achieved.
A typical example for this kind of organizational
structure can be the goal to design
The specialists are selected primarily on the basis of
task-related skills and expertise rather than decision
making experience or planning ability.
Occurs frequently in:
Construction ( e.g. building a bridge)
Aerospace engineering ( i.e. designing and launching
33 weather satellite)
Marketing( e.g. advertising company for new product)
Cont..
. Advantages of
Disadvantages
matrix include:
organization: Reporting for two
Decision making is supervisors
decentralized which creates confusion
to different level. The design encourages
Extensive managers who share
communications subordinate to jockey for
networks help to process power.
large amount of The mistaken belief can
information. arise that matrix
With decisions delegated management is the same
to appropriate levels, thing as group decision
higher management making − in other words
levels are not over every one must be
34
loaded with operational consulted for every
1.4 Basics of productivity
Productivity is the relationship between the
outputs generated from a system and the
inputs that are used to create those outputs.
Mathematically
O
P=
I
Systems
concept
inputs outputs
transformations Customers
Land Goods
people and
SYSTEM
capital services
facilities
equipment
tools O
energy I
materials
information productivity
Productivity Improvement
O O O O O
I I I I I
Productivity Measurement Problems
Individual level
Group level
Department level
Corporate level
National level
Global level
FactorsAffecting Productivity Improvement
at Global Level
Education
Technology
Macroeconomic policies
Social and culture environments
Foreign aids
Foreign investments
Industry policies & competition
Other Measures Affecting Productivity
Efficiency - Measures the resources expected
to be consumed to the resources actually
consumed. Hence, it focuses on the input side
of the system. (To what degree did the system
utilize the “right” things.)
Effectiveness - Measures what the system sets
out to accomplish (objective) with what was
actually accomplished; plan vs. actual. Hence,
effectiveness is an output measure. (Is the
output “right” - right quality, right quantity, on
Quality - Degree to which the outputs (products
and services) from the system conform to
requirements or meet customer expectations.
The focus is on quality attributes (e.g.,
conformance, performance, convenience,
responsiveness, perceived quality.)
Quality of Work Life - Measures the way that
employees in a system respond to the socio
technical aspects of that system.
Innovation - Measures the applied creativity of
the system. Relates to the design and
development of improved products, services, and
processes.
2 Plant Design
Basics of Plant
Layout
Study of Plant
Layout
Ergonomics
Industrial
Safety
Introductio
Ton make a decision about layout
planning, 4 different questions must have an
answer:
Which centers do we have to consider?
How much space and capacity is required for each
center?
If there is not enough space, productivity may be
reduced.
Too much spaceis expensive and may also
reduce productivity.
How must the space be configured at each center?
Space quantity, shape and the elements of the
work center are related to each other.
Where should each center be located at within the
Facility Layout Definition
A facility layout is an arrangement of everything
needed for production of goods or delivery of
services. A facility is an entity that facilitates the
performance of any job.
It may be a machine tool, a work centre, a
manufacturing cell, a machine shop, a
department, a warehouse, etc. (Heragu, 1997).
Objectives of Plant Layout
The main objective consists of organizing
equipment and working areas in the most efficient
way, and at the same time satisfactory and safe
for the personnel doing the work.
Sense of Unity
The feeling of being a unit pursuing the same
objective.
Minimum Movement of people, material and
resources.
Safety
In the movement of materials and personnel
work flow.
Flexibility
In designing the plant layout taking into
These main objectives are reached
through the attainment of the following facts:
Congestion reduction.
Elimination of unnecessary occupied areas.
Reduction of administrative and indirect work.
Improvement on control and supervision.
Better adjustment to changing conditions.
Better utilization of the workforce, equipment and
services.
Reduction of material handling activities and stock in
process.
Reduction on parts and quality risks.
Reduction on health risks and increase on workers
safety.
Moral and workers satisfaction increase.
Reduction on delays and manufacturing time, as well as
increase in production capacity.
Factors affecting Plant
Layout
The final solution for a Plant Layout has to take into
account a balance among the characteristics and
considerations of all factors affecting plant layout, in
order to get the maximum advantages.
The factors affecting plant layout can be grouped into
8 categories:
1. Materials
2. Machinery
3. Labor
4. Material Handling
5. Waiting Time
6. Auxiliary Services
7. The building
8. Future Changes
1 Materials
The layout of the productive equipment will
depend on the characteristics of the product to
be managed at the facility, as well as the
different parts and materials to work on.
Main factors to be considered: size, shape,
volume, weight, and the physical-chemical
characteristics, since they influence the
manufacturing methods and storage and
material handling processes.
The sequence and order of the operations will
affect plant layout as well, taking into account
the variety and quantity to produce.
2 Machinery
Having information about the processes,
machinery, tools and necessary equipment, as
well as their use and requirements is essential
to design a correct layout.
The methods and time studies to improve the
processes are closely linked to the plant
layout.
Regarding machinery, we have to consider the
type, total available for each type, as well as
type and quantity of tools and equipment.
It‟s essential as well to know about space
required, shape, height, weight, quantity and
type of workers required, risks for the
personnel, requirements of auxiliary services,
3 Labor
Labor has to be organized in the production
process (direct labor, supervision and auxiliary
services).
Environment considerations: employees‟ safety,
light conditions, ventilation, temperature, noise,
etc.
Process considerations: personnel
qualifications, flexibility, number of workers
required at a given time as well as the type of
work to be performed by them.
4- Material Handling
Objective: Minimize material handling well
Material
as combining handling does
with not other
add value to the
a
product;
operationsit‟sjust
eliminating whenwaste.
unnecessary and costly s
5 Waiting time - Stock
Objective: Continuous material flow through the
facility, avoiding the cost of waiting time and
demurrages that happen when the flow stops.
On the other hand, the material waiting to flow
through the facility not always represents a
cost to avoid. As stock sometimes provides
safety to protect production, improving
customer service, allowing more economic
batches, etc.
It‟s necessary then to consider space for the
required stock at the facility when designing
the layout.
Resting time to cool down or heating up…
6 Auxiliary Services
Support the main production activities at the
plant:
Related to labor: Accessibility
paths, fire protection installations,
supervision, safety, etc.
Related to material: quality control.
Related to machinery: maintenance and
electrical and water lines.
The auxiliary services represent around 30% of
the space at a facility.
The space dedicated to
auxiliary services is usually considered as
waste.
7 - The building
If it has been already selected, its characteristics
will be a constraint at the moment of designing
the layout, which is different if the building has to
be built.
8 - Future changes
One of the main objectives of plant layout is
flexibility.
It‟simportant to forecast the future changes to avoid
having an inefficient plant layout in a short term.
Flexibility can be reached keeping the original
layout as free as possible regarding fixed
characteristics, allowing the adjustment to
emergencies and variations of the normal process
activities.
Possible future extensions of the facility must be
Types of Plant
Layout
The production process normally determines
the type of plant layout to be applied to the
facility:
1. Fixed position plant layout
Product stays and resources move to it.
2. Product oriented plant layout
Machinery and Materials are placed
following the product path.
3. Process oriented plant layout (Functional Layout).
Machinery is placed according to what they do and
materials go to them.
4. Cell Layout
Hybrid Layout that tries to take advantage of
1- Fixed-Position
Layout
• A fixed-position layout consolidates the
resources necessary to manufacture a good or
deliver a service, such as people, materials,
and equipment, in one physical location.
• The production of large items such as heavy
machine tools, airplanes, buildings,
locomotives, and ships is usually
accomplished in a fixed-position layout.
2 Product oriented plant layout
This type of plant layout is useful when the
production process is organized in a continuous
or repetitive way.
Continuous flow: The correct operations flow
is reached through the layout design and the
equipment and machinery specifications.
Repetitive flow (assembly line): The correct
operations flow will be based in a line
balancing exercise, in order to avoid problems
generated by bottle necks.
The plant layout will be based in allocating a
machine as close as possible to the next one in
line, in the correct sequence to manufacture the
Product oriented plant layout
Advantages:
Reduced material handling activities.
Work In Process almost eliminated.
Minimum manufacturing time.
Simplification of the production planning and
control systems.
Tasks simplification.
Disadvantages:
No flexibility in the production process.
Low flexibility in the manufacturing times.
High capital investment.
Everyworkstation is criticalto the
process.- The lack of personnel or
shut down of a machine stops the whole process.
Product Layout for Wine
Manufacturer
3- Process oriented plant layout (Functional
Layout)
This type of plant layout is useful when the
production process is organized in batches.
Personnel and equipment to perform the same
function are allocated in the same area.
The different items have to move from one area to
another one, according to the sequence of
operations previously established.
The variety of products to produce will lead to a
diversity of flows through the facility.
The variations in the production volumes from one
period to the next one (short periods of time) may
lead to modifications in the manufactured quantities
as well as the types of products to be produced.
Process Layout for a Machine
Shop
4- Cellular
Layout
• In a cellular layout the design is not according to the
functional characteristics of equipment, but rather by
self-contained groups of equipment (called cells),
needed for producing a particular set of goods or
services.
• Group technology, or cellular manufacturing, classifies
parts into families so that efficient mass-production-type
layouts can be designed for the families of goods or
services.
• Cellular layouts are used to centralize people expertise
and equipment capability.
• Examples: groups of different equipment (called cells)
needed for producing families of goods or services,
group legal (labor law, bankruptcy, divorce, etc.), or
Cellular Manufacturing Layout
M D
D D
M M D D D
SG CG CG D
M M D D D SG
Tractor
trailer
Tractor
trailer
Feeder Feeder
lines lines Overflow
Ergonomics - Introduction
Discussion Points
1.What do we mean by
Ergonomics? 2.Why do we
study Ergonomics?
3.What are the environmental factors
thataffect the productivity of
workers?
Ergonomics -
Introduction
What is Ergonomics?
Ergonomics is the study of the interaction
between people and machines and the
factors that affect the interaction.
The name „ergonomics‟ comes from the Greek
words
„ergon‟, which means work and „nomos‟ which
means law.
In ergonomics, absenteeism, injury, poor
quality and unacceptably high levels of
human error are seen as system problems
rather than „people‟problems.
Ergonomics can also be defined as
“ a branch of science that is concerned
with the achievement of optimal
relationship between workers and their work
environment.”
It deals with
Assessment of human capabilities
and limitations (biomechanics and
anthropometry)
Work and Environmental stresses
(work physiology and industrial psychology)
Static and dynamic forces on the human body
(Biomechanics), etc
Ergonomics – Contributing
Disciplines
Ergonomics -
Objectives
Ergonomics - Objectives
The focus is on the interaction between the
person and the machine and the design of the
interface between the two.
Improved machine performance that increased
–Objectives:
Work system design
safety, accident improv
avoidance, functional ed
performance
–Also includes environment such as
lighting
Product design
–Objectives: safety, comfort, user-friendly,
mistake proof, avoidance of liability lawsuits
Ergonomists – What They Do
Research on human capabilities and
limitations
–Discover the characteristics of human
performance, e.g., how much can an average
worker lift?
The human
The equipment
The environment
Human
Components
Human senses - to sense the operation
–Vision, hearing, touch, taste, and smell
Human brain - for information processing
–Thinking, planning, calculating, making
decisions, solving problems
Human effectors - to take action
–Fingers, hands, feet, and voice
Machine
Components
The process – function or operation performed
by human- machine system
Displays - to observe the process
–Direct observation for simple processes
–Artificial displays for complex processes
Controls - to actuate and regulate the process
–Steering wheel, computer keyboard
Environmental
Components
Physical environment
–Location and surrounding lighting,
noise, temperature, and
humidity
Social environment
–Co-workers and colleagues at work
–Immediate supervisors
–Organizational culture
–Pace of work
Physical
Ergonomics
How the human body functions during physical
exertion
–Physiology – vital processes carried out by
living organisms and how their constituent
tissues and cells function
How physical dimensions of the body affect
capabilities of worker
–Anthropometry – physical dimensions of the
human body
Cognitive
Ergonomics
Concerned with the capabilities of the human
brain and sensory system while performing
information processing activities
Human cognitive processes include:
–Sensing and perception
–Use of memory
–Response selection and execution
Occupational
Ergonomics
Occupational ergonomics strives to review
work systems and modify them to minimize
occupational stresses.
Ergonomic principles can be used in the
following areas: 1.Design, modification,
replacement and maintenance
of
equipment
2.Design and modification of work
methods 3.Controlling physical
factors
Work Place Stress Factors