Industrial management

2. Definition of Industrial Engineering
They find the most efficient and effective ways to make things.

3. What is Industrial Engineering?
 Electrical Engineering – to engineer an
electrical product or system.
 Computer Engineering – to engineer a
computer or a system of networked
computers.
 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!!

4. Plant location
 Every entrepreneur is faced with the problem of deciding
the best site for location of his plant or factory.
 What is plant location? Plant location refers to the choice
of region and the selection of a particular site for setting up
a business or factory.
 But the choice is made only after considering cost and
benefits of different alternative sites. It is a strategic
decision that cannot be changed once taken. If at all
changed only at considerable loss, the location should be
selected as per its own requirements and circumstances.
Each individual plant is a case in itself. Businessman
should try to make an attempt for optimum or ideal
location.

5. What is an ideal location
 What is an ideal location? An ideal location is one where
the cost of the product is kept to minimum, with a large
market share, the least risk and the maximum social gain.
It is the place of maximum net advantage or which gives
lowest unit cost of production and distribution. For
achieving this objective, small-scale entrepreneur can
make use of locational analysis for this purpose.

6. Manufacturing and service companies make location
decisions based on many criteria. Following are the
factors that should be considered for location of an
industry or service unit :
1) Primary Factors :
a) Nearness to customers
b) Near raw materials
c) Supply of capital
d) Logistic facilities and
infrastructure
e) Skilled labour availability
f) Power supply
g) Business climate
2) Secondary Factors :
a) Host community and political
factors
b) Natural factors
c) Historical factors
d) Initial start and living conditions
e) Personal factors
f) Government policies
g) Environmental considerations
h) International factors

7. Primary factors
 (a) Nearness to Customers: Nearness to customer helps a
plant to incorporate customer needs into the products
being made in the unit. Finished goods to customers can
reach faster and in less cost. There is less chance of
breakage or damage during transportation.
 (b) Nearness to raw materials: Cost of raw material input is
a large cost in case of manufactured goods. The time &
cost of transporting raw material is less if the plant is
located near the source of raw material. For example,
thermal power plants are located near to the coal mines.
 (c ) Supply of capital: Short term and long term funds are
required for any manufacturing or service industry. A
company decides to locate its plant in such a location

8. Primary Factors
 (d) Logistic facilities and Infrastructure: Adequate roads, rail,
phone, postal and transportation facilities are to be
considered while deciding on the location of plant and
service facilities.
 (e ) Skilled labour Supply: Regular supply of skilled labour is
one of the major factors to be considered while deciding on
the plant or service location. Example: Software companies
are located in Bangalore, Hyderabad and New Delhi.
 (f) Power Supply: This is a very critical factor to be analyzed.
Uninterrupted power supply with proper voltage is one of the
prerequisites of plant location decision.
 (g) Business Climate: Companies must find a positive
business climate or environment in the area, state or a
country to set-up manufacturing or service facility there.

9. Secondary Factors
 (a) Host community and political factors: The community
near the industry proposed location should be willing to
welcome the new industry. Local people should feel that
there will be improvement in their quality of life due to the
new industry
 (b) Natural Factor: Land, water, climate condition, sources
of material attract and help some industries Example: Tea
industry, cotton industry, coffee industry, coconut oil
industry etc.
 (c) Historical factors: Capitals of old kingdoms of
yesteryears, large religious places sometimes attract
companies to set up their plants.
 (d) Initial start and living conditions: Some industries were
started earlier in certain places during the British era in its
early stages. The industries since then have developed
making good living conditions. The related industries start

10. Secondary Factors
 (e) Personal factors: The history of the entrepreneuring
company or family or personal considerations play a key
role in location decision.
 (f) Government policies: Government play their own role in
the location decision of new industries. The Government of
India and the state governments have made special efforts
in making industries grow and made manufacturing and
service units all over India with a view to have a balanced
developmental spread all over the country and the region.
 (g) Environmental considerations: Environmental issues for
certain industries for a particular location are to be checked
before deciding on location.
 (h) International factors: For companies deciding to go
overseas for locating a unit for manufacturing or service
must consider behavioral aspects, cultural differences,

11. Selection of Site
Urban or City area.
Rural area.
Suburban area.

12. Advantages of Urban area
 Good transport facilities are available for the movement of
raw-materials and finished products by rail and road and at
times, by water and air.
 Good and prompt postal and communication services are
available.
 Banking and credit facilities available.
 Services of insurance companies are available in city areas.
 Sufficient storing facilities including cold-storage , are
available.
 Ample availability of skilled and unskilled workers.
 Advantages of vicinity of the market for the product. Due to
large population,

13.  The local demand for the product is fairly high.
 Facility of the ancillary and services units, which develop
around the
 industrial strip of the city area.
 Sufficient passenger transport facilities by road and railways
are available to employees.
 Development of the training institutes for workers and
management institutes for executives put the city area units
into privileged position.
 Educational, medical and recreational institutes increase the
amenities of lives in the city area .
 Certain specific municipal services facilities are available
only in the city areas, like water supply, drainage, fire fighting
facilities, sufficient police protection etc.

14. Disadvantages of Urban or City Area
 The cost of land is very high as compared to rural areas
 Even at high cost, sufficient land is not available, which puts
constraints on the arrangement of plants and machines.
Sometimes multi-story buildings are used which are not
suitable for the installation of heavy
 plant and machines
 Due to high standard of living in city area, the cost of labour
is relatively high
 Due to possibilities of changing jobs from one unit to another,
and tendency of competitors to snatch away the good
employees, the rate of labour turnover is very high in city area

15.  The trade union movement is very strong in city area.
Militant trade unionists disturb the amicable industrial
relations, which gives rise to strikes and lockouts
 Various types of taxes is levied in city areas. The rates of
taxes are relative high. Eg. Octroi is a typical tax of the city
area which is not levied in rural areas.
 Certain municipal restrictions put constraints and involve
extra cost due to height of the building, disposal of waters,
treatment of affluent water , elimination of air pollution
caused by smoke etc.
 The industrialization in the city areas gives birth to slums
and dirty residence which creates the typical problems of
sanitation and health.

16. Advantages of Rural area
 As compared to the city area, the land is available at
cheaper rates.
 Large plots of the land area available which can be
developed for a factory sites, office buildings and residential
quarters. Horizontal arrangement of plant machines in the
vast areas of land is possible.
 Due to lower standard of living, the rates of labour are
relatively lower.
 As compared to the city area, the labour force is more or
less stable which reduces the rate of labour turnover. The
industrial relations between labour and management are
relatively amicable.

17.  The local taxes which are found in the city areas are
practically nonexistent in rural areas.
 The municipal restrictions which are found in city areas do
not exist in rural areas. E.g. height of buildings.
 Slumps and dirty residence are not found in rural areas. The
rural areas is conducive to good health of workers.
 Due to lack of congestion, there is danger of fire caused by
surrounding units.

18. Disadvantages of Rural Area
 Transportation facilities are not available in good condition
and sufficient quantities.
 Banking and credit facilities are also not available. The
indigenous money-lenders are charging exorbitantly for
these services.
 Absence of insurance facilities.
 Storing and warehouse facilities are not available in rural
areas.
 Passenger transport facilities are not available, as are
available in city area.
 Like in city areas, the advantage of ancillary and service
units is not available.

19.  Such units are very far from the market place and this
increases the cost of distribution of finished goods.
 Sometimes the means of transport are not available.
 It is not possible to tap the advantage of industrial training
institutes or management development pragrammes which
is possible in city areas.
 It is generally not easy to get skilled workers in rural areas.
 Municipal facilities like water supply, drainage, fire-
fighting etc. are not available in rural areas.
 There is absence of recreation facilities, good educational
institutes, good and sufficient medical facilities.

20. Advantages of Suburban Area
 Land is available at a cheaper rate as compared to urban
areas.
 Adequate land is available for future expansion unit. The
machines can be installed horizontally and still the
provision for future expansion can be made.
 Infrastructure facilities like road, water supply, drainage,
banking, warehousing,
insurance etc. are developed Government, municipal
authorities or industrial associations.
 As city area is nearest, the skilled and unskilled, both type
of labour are available.

21.  It is possible to tap the advantage of industrial training
institutes, management development programmes, research
institutes etc. which are available in nearby city area.
 The nearby city area provides a substantial market for the
products of the unit. This reduces the cost of marketing the
finished products and other ancillary advantages of
marketing are available.
 Educational institutes, medical facilities and other
recreational facilities are available in the suburban area
itself as well as in the nearby city area.

22. Location Models
1. Factor Rating Method
2. Point rating Method
3. Qualitative Factor Analysis

23. Plant Layout and its Types

24. “Plant layout ideally involves allocation of space and
arrangement of equipment in such a manner that
overall operating costs are minimized”.
Layout?

25. Objectives of Layout
1. Efficient utilization of available floor space
2. To ensure that work proceeds from one point to
another point without any delay
3. Provide enough production capacity.
4. Reduce material handling costs
5. Reduce hazards to personnel
6. Utilize labor efficiently
7. Increase employee moral.

26. Objectives of Layout….Cont..
8. Reduce accidents
9. Provide for volume and product
flexibility
10.Provide ease of supervision and control
11.Provide for employee safety and health
12.Allow ease of maintenance
13.Allow high machine or equipment
utilization
14.Improve productivity

27. PRINCIPLES OF PLANT LAYOUT
 PRINCIPLE OF MINIMUM MOVEMENT :As far as possible materials
and labour should be moved over minimum distances.
 PRINCIPLE OF FLOW :The work areas should be arranged according
to the sequence of operations so that there is continuous flow of
materials without congestion. The layout should allow for easy
movement of materials without interruption or delay.
 PRINCIPLE OF SPACE All available cubic space should be effectively
used both vertically and horizontally.
 PRINCIPLE OF SAFETY There should be consideration for safety and
convenience of workers. There should be built in provision for the safety
and comfort.
 PRINCIPLE OF FLEXIBILITY Layout should be designed in the manner
that production facilities can easily be rearranged when it becomes
necessary in future on account of expansion and technological
advancement.
 PRINCIPLE OF INTERDEPENDENCE Interdependent operations and
processes should be located in close proximity to each other.
 PRINCIPLE OF OVERALL INTEGRATION All the plant facilities and
services should be fully integrated into a single operating unit so as to
maximize efficiency and minimize costs of production.
 PRINCIPLE OF MINIMUM INVESTMENT The layout should yield
savings in fixed capital investment through optimum utilization of

28. a. Product;
b. Process;
c. Fixed Position
d. Combined
Types of Layout

29. Product layout(line Layout):
 The materials move form one workstation to
another sequentially without any backtracking
or deviation.
 Materials are fed into 1st machine and semi-
finished goods travel automatically from
machine to machine.
 The output of one machine becoming input of
the next.
Eg: Food Processing Unit; Paper mill

30. Product layout(line Layout):
Eg: Paper mill

31. Product layout(line Layout):
Advantage Disadvantage
1.Low material
handling cost
2.Continuous work
3.Optimum floor
space
1.Initial cost is very
high
2.Repetitive process

32. Process (functional)layout:
 In this type of layout machines of a similar
type are arranged together at one place.
 The work has to be allocated to each
department in such a way that no machines
are chosen to do as many different job as
possible.
Eg: Process oriented layout for an hospital

33. Process (functional)layout:
Eg: Process oriented layout for an hospital
Surgery
Radiology
ER
triage
room
ER Beds Pharmacy
Emergency room admissions
Billing/exit
Laboratories
Patient A - broken leg
Patient B - erratic heart
pacemaker

34. Process layout:
Advantage Disadvantage
1.Low capital
2.Overhead cost are
relatively low.
3.Effective
supervision
1.High material
handling cost
2.Time lag is higher

35. 1.Manufacturing Layout
c. Fixed (position) layout:
 Here, Major products being produced is
fixed at one location.
 All other facilities are brought and arranged
around the work center.
Eg: Ship building, Dam construction, flyover
construction.

36. c. Fixed (position) layout:
Eg: Ship building, Dam & flyover construction.

37. Fixed (position) layout:
Advantage Disadvantage
1.Save cost, as
customization is
necessary
1.Lengthy production
period, heavy
investment cost
2.Several operations
are carried out
simultaniously.

38. Combined layout:
 In many manufacturing units, several products are
produced in repeated numbers with no likelihood of
continuous production, combined layout is followed.
Eg: Soap industry, all inputs are almost manufactured in
separate units viz glycerin, water treatment, fragrance
etc.

39. Combined layout:
Eg: Soaps

40. Line Balancing
 Line: an assembly line composed of several work stations, at
which specific operations are performed. To work effectively,
with no work pile-ups between stations, the line must be
balanced,
 e.g. work must get through each workstation in roughly the same
amount of time.

41. Need for Line balancing
 the main job in line balancing is to eliminate or reduce wip
(work in process) at bottleneck operations.
 keeps inventory costs low, resulting in higher net income
 allows operator to work all day long giving an opportunity
to earn more money and increases his/her work efficiency
 keeps the prices low which turns into repeat sales
 means better production planning

42. Line Balancing
LINE BALANCING (Process Organization) The Line Balancing is “
to design a smooth production flow by allotting processes to workers
so as to allow each worker to complete the allotted workload within
an even time ”
LINE BALANCING (Process Organization) It is a system where
you meet the production expectations and you can find the same
amount of work in process in every operation at any point in the day.

43. Classification of Production System
 Continuous Production system
 Intermittent production system
 Project production system

44. TYPES OF CONTINUOUSPRODUCTION
SYSTEM
 FLOW TYPE
 Output cannot be segregated into different units
 High degree of uniformity
 Output cannot be measured directly
 Example-power plant
 MASS PRODUCTION
 Straight line flow of materials
 Output of one stge normally becomes input for
another
 Output visible in form of identical units
 Standardised output produced in large quantities

45. Types of intermittent production
systems
 1.BATCH PRODUCTION SYSTEM-
 Variety of products are made in small quantities
 Various products compete for share of machines
 Outputs are aggregated in form of batches
 Batches may comprise of similar or dissimilar
outputs
 2.JOB-ORDER PRODUCTION SYSTEM
 Does not has its own standard product but accepts
whatever customer orders come in
 Output identifiable in terms of specific job order
 Material flow is very

46. PROJECT PRODUCTION
SYSTEM
Project is a temporary endeavour having a defined
beginning and end ;undertaken to meet unique goals
and objectives
Project is non repetitive
This type of production system uses resources on
different projects
Product remains fixed and manpower and facilities
put work on it

47. Materials Handling

48. Materials handling is
the art and science of moving,
packing and storing of
substances in any form.
Materials Handling

49.  Function of production control
 Concerned with scheduling of production control
 Material Handling adds value to product cost
 Material Handling increases effectiveness of in
plant layout by reducing the cost
Importance of Material Handling

50.  To Lowers unit materials handling cost
 To reduce manufacturing cycle time
 To provide better control of the flow of materials
 To provide better working conditions
 To provide Contribution for better quality by
avoiding damages to products
 To Increase storage capacity
 To provide higher productivity at lower
manufacturing costs
Objectives of Materials Handling

51.  Material should be moved as little as possible
 Reduction in time by using shortest routers and
mechanical material handling equipment
 The material movement should be in lots rather
than in individual units
 Design of material handling equipment should
be such that it can increase the effectiveness
 Gravity should be used
 Rehandling and back tracking of materials
should be avoided
 Periodically Repairing ,Maintaince & Checkup
of existing material handling equipments
Material Handling Principles

52. Production
problem
Human element
involved
Capabilities of
the handling
equipment
available

53. Production
Problem
Volume of
Production to
be maintained
Layout of plant
& building
facilities
Class of
materials to be
handled

54. Equipment
s Factors
Adaptability
Speed
Space
requirements
Supervision
required
Environment
Cost
Ease of
Maintaince
Power
Load
capacity
Flexibility

55. Human Factors
Capabilities of
manpower
Safety of
Personnel

56. 1. Equipments oriented systems :-
a) Convey or Systems
b) Tractor transfer system
c) Fork lift truck
d) Industrial truck system
e) Underground system
2. Material Oriented Systems
a) Unit handling system
b) Bulk handling system
c) Liquid handling system
Types of Material Handling Systems

57. 3. Methods oriented system
a) Manual systems
b) Automated systems
c) Job shop handling system
d) Mass production system
4. Function oriented system
a) Transportation systems
b) Conveying systems
c) Transferring systems
d) Elevating systems

58. 1. Conveyers
2. Cranes, Elevators and Hoists
3. Industrial Trucks
4. Auxiliary Equipments
Types of Materials Handling Equipment

59. 1. Conveyors-
 Gravity or powered devices
 Used for moving loads from one point to
point over fixed paths.

60. Belt Conveyor-Motor driven belt usually made of
metal fabric

61. Chain Conveyor-Motor driven chain that
drags material along a metal side base.

62. Roller Conveyor- Boxes , large parts or units loads
roll on top of a series of rollers mounted on a rigid frame.

63. High volume of air flows through a tube carrying
materials along with air flow.

64. These are overhead devices used for moving
varying loads intermittently between points
within an area.
2. Cranes, Elevators and Hoists

65. Cranes –Devices mounted on overheard rail or
ground wheels or rails .They lift, swing and
transport large and heavy materials

66. Elevators –Types of cranes that lift
materials –usually between floors or buildings

67. Hoists- Move vertically or horizontally. May be
air hoist , electric hoist, chain hoist

68. 3. Industrial Trucks- May be electric,
deisal, gasoline or gas powered
Fort lift Truck Pallet truck-

69. Devices or attachments used with
handling equipments to make their use
more effective and versatile
Auxiliary Equipments

70. Skid boxes

71. Expendable pallet