1 Introduction

to Industrial
CHAPTER Management

1.1 INTRODUCTION
Industrial Management deals with the development, improvement,
implementation and evaluation of integrated systems of people, money,
knowledge, information, equipment, energy, materials and/or processes. It also
deals with designing new product prototypes more efficiently. It incorporates the
principle and methods of engineering analysis and synthesis with the
mathematical, physical and social sciences together to specify, predict, and
evaluate the results of systems or processes.
The industrial management modes of thinking will be valuable in the
challenging strategy and positioning work of the organizations of the future and
in creating optimal conditions for success. A perspective built on systems
thinking is ideally suited for the type of planning and analysis required as
organizations work to enhance positioning and strategy and creating positive
internal conditions in the ever changing markets. ‘‘How does managerial work
support the overall positioning and strategies of the organization?” ‘‘What are
the cause-and-effect linkages between managerial work and ‘filling the treasure
chest’?’’ ‘‘How is managerial work connected to other efforts in the
organization, and how can it strengthen the connection and create synergies
where they don’t currently exist?’’ ‘‘What is full potential performance and how
is managerial work moving the organization toward that goal?’’, are some
questions that are help to understand the connections between work and
organizational attainment.

The principles of industrial management are not only universally

applicable across industries, but across all operations in government, commerce,
services, or industry. The theoretical basis of industrial engineering is a science
of operations, and to use this science in most applications one must
simultaneously consider at least three criteria: (1) quality, (2) timeliness, and (3)
cost.
The goal of industrial engineering is to ensure that goods and services are
being produced or provided at the right quality at the right time at the right cost.
From a business perspective the practice of industrial engineering must
culminate in successful application. This requirement typically dictates that a
practicing industrial engineer effectively use “soft”
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as well as “hard” science. In the final analysis, the industrial engineer’s job is to
make both new and existing operations perform well. The preponderance of
traditional industrial management techniques deal with physical entities (e.g.,
equipment, buildings, and tools) as well as informational entities (e.g., time,
space) for an operation, employing what can be thought of as hard science.
However, management related factors in the workplace that determine the
motivation level of an employee to perform his or her assigned duties well, or
actively participate in operational improvement over time, represent the soft
science of industrial management. In recent years, there has been a growing
awareness of the importance of this soft science component of industrial
management. Not only must the motivation of individual workers be attained
through effective management efforts, but the motivation of work groups as
well. Individual workers rarely work alone; they typically respond to a social
need to fit in as a member of a work group.

1.2 CONCEPT OF INDUSTRIAL MANAGEMENT

Industrial management term applied to highly organize modern methods
of carrying on industrial, especially manufacturing and operations. Industrial
management is a process of planning, organizing, directing, controlling and
managing the activities of any industry. It combines and transforms various
resources used in the system and subsystem of the organization into value added
product in a controlled manner. Industrial management includes following for
the effective management. Industrial Engineering and Management aims to
uncover and solve organizational issues by attempting to establish a desirable
allocation of management resources through the use of technologies. In an area
where reactions to continuous changes are needed, the field of Industrial
Engineering and Management utilizes “technology on technology”, including a
variety of management technologies and history and philosophy of science and
technology.

As shown in fig. 1.1, the industrial engineering and management view,

approach, domain and methodology. It involves the environment which includes
man, materials, money and information. The environment with physical and
mathematical sciences, humanities and engineering creates an approach for the
industrial management and engineering. Broadly the industrial management
concept includes the planning, controlling and organizing the system. Planning
is the activity that establishes a course of action and guide future decision-
making. In this the person defines the objectives for the operations subsystem of
the organization and the policies and procedures for achieving the desired
INTR DUCTION TO INDUST RIAL MANA GEMENT 3
object ives. This stage includes clarifying the role and focu s of operatio ns in

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the organization’s overall strategy. It also involves pr oduct plannin g, facilit y
designing a nd using the conversion pro cess.
Activities th at assure the actual perfo rmance in accordance w ith
planned performance known as t he controlling. To ensure t hat the plans f or the
operations subs ystems are ac complished, the operations manager m ust exerci
se control b y measuring actual outpu ts and com paring them to planned
operations management. Controlling costs, quality, and schedu les are the
important functions here.

Fig. 1.1
Organizing a re the activities that establ ishes a struct ure of tasks and
authority. The man agers establish a structur e of roles and the flow of inform
ation within the operation s subsystem. They determine the activiti es requir ed
to achieve the goals an d assign authority and responsibility f or carryi ng them
out.

1.3 EVOLUTI ON OF IND USTRIAL MANAGE MENT

Industrial management has been recogn ized as an im portant factor in
any c ountry’s econ omic growth from last t wo centuries. The industrial
management began in eighteenth century whe n Adam Smith recognized the
econo mic benefits o f specialization of labor. He recommended breaking of
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jobs down into subtasks and recognizes workers to specialized tasks in which
they would become highly skilled and efficient. In the early twentieth century,
F.W. Taylor implemented Smith’s theories and developed scientific management.
From then till 1930, many techniques were developed prevailing the traditional
view.
The evaluation of management from early ages is summarized in table

Date Contribution Contributor

1776 Specialization of labour in Adam Smith
manufacturing
1799 Interchangeable parts, cost Eli Whitney and others
accounting
1832 Division of labour by skill; Charles Babbage
assignment of jobs by skill;
basics of time study
1900 Scientific management time study Frederick W. Taylor
and work study
developed; dividing planning and
doing of work
1900 Motion of study of jobs Frank B. Gilbreth
1901 Scheduling techniques for Henry L. Gantt
employees, machines jobs in
manufacturing
1931 Statistical inference applied to W.A. Shewart
product quality: quality
control charts
1947 Linear programming G.B. Dantzig, Williams
& others
1950 Mathematical programming, on- A. Charnes, W.W.
linear and stochastic process Cooper
1960 Organizational behaviour: continued L. Cummings, L. Porter
study of people at work
INTRODUCTION TO INDUSTRIAL MANAGEMENT 5
1970 Integrating operations into overall W. Skinner J. Orlicky

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strategy and policy, and G.Wright
Computer applications to
manufacturing, Scheduling
and control, Material Requirement
Planning (MRP)
1980 Quality and productivity W.E. Deming and J.
applications from Japan: Juran.
robotics, CAD-CAM

Japan introduced the JIT (just in time) concept for the inventory
management. Now a day’s all industries uses automation, CAD/CAM, CIM,
MRP, SCM & TQM. These are the industrial management techniques used in
managing all phases of industry.

The Rise of Factories:

Before the Industrial Revolution, people worked with hand tools,
manufacturing articles in their own homes or in small shops. In the third quarter
of the 18th century steam power was applied to machinery, and people and
machines were brought together under one roof in factories, where the
manufacturing process could be supervised. This was the beginning of shop
management. In the next hundred years factories grew rapidly in size, in degree
of mechanization, and in complexity of operation. The growth, however, was
accompanied by much waste and inefficiency. In the developed countries many
engineers, spurred by the increased competition of the post-Civil War era, began
to seek ways of improving plant efficiency. The Development of Industrial
Management Studies of Worker Performance:

The first sustained effort in the direction of improved efficiency was

made by Frederick Winslow Taylor , an assistant foreman in the Midvale Steel
Company, who in the 1880s undertook a series of studies to determine whether
workers used unnecessary motions and hence too much time in performing
operations at a machine. Each operation required turning out an article or part
was analyzed and studied minutely, and superfluous motions were eliminated.
Records were kept of the performance of workers and standards were adopted
for each operation. The early studies resulted in a faster pace of work and the
introduction of rest periods.
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Industrial Management of the Machine:
Industrial management also involves studying the performance of
machines as well as people. Specialists are employed to keep machines in good
working condition and to ensure the quality of their production. The flow of
materials through the plant is supervised to ensure that neither workers nor
machines are idle. Constant inspection is made to keep output up to standard.
Charts are used for recording the accomplishment of both workers and machines
and for comparing them with established standards. Careful accounts are kept of
the cost of each operation. When a new article is to be manufactured it is given a
design that will make it suitable for machine production, and each step in its
manufacture is planned, including the machines and materials to be used.

Other Aspects of Industrial Management

The principles of scientific management have been gradually extended to
every department of industry, including office work, financing, and marketing.
Soon after 1910 American firms established the first personnel departments, and
eventually some of the larger companies took the lead in creating environments
conducive to worker efficiency. Safety devices, better sanitation, plant
cafeterias, and facilities for rest and recreation were provided, thus adding to the
welfare of employees and enhancing morale. Many such improvements were
made at the insistence of employee groups, especially labor unions.

Over the years, workers and their unions also sought and often won
higher wages and increased benefits, including group health and life insurance
and liberal retirement pensions. During the 1980s and 1990s, however, cutbacks
and downsizing in many American businesses substantially reduced many of
these benefits. Some corporations permit employees to buy stock; others make
provision for employee representation on the board of directors or on the shop
grievance committee. Many corporations provide special opportunities for
training and promotion for workers who desire advancement, and some have
made efforts to solve such difficult problems as job security and a guaranteed
annual wage.

Modern Trends of Ind4ustrial Management:

Modern technological devices, particularly in the areas of computers,
electronics, thermodynamics, and mechanics, have made automatic and
semiautomatic machines a reality. The development of such automation is
bringing about a second industrial revolution and is causing
INTRODUCTION TO INDUSTRIAL MANAGEMENT 7
vast changes in commerce as well as the way work is organized. Such

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technological changes and the need to improve productivity and quality of
products in traditional factory systems also changed industrial management
practices. In the 1960s Swedish automobile companies discovered that they
could improve productivity with a system of group assembly. In a contrast to
older manufacturing techniques where a worker was responsible for assembling
only one part of the car, group assembly gave a group of workers the
responsibility for assembling an entire car. The system was also applied in
Japan, where managers developed a number of other innovative systems to
lower costs and improve the quality of products. One Japanese innovation,
known as quality circles, allowed workers to offer management suggestions on
how to make production more efficient and to solve problems. Workers were
also given the right to stop the assembly line if something went wrong, a sharp
departure from U.S. factories. By carefully controlling the manufacturing
process, Japanese managers were able to cut waste, improve productivity, and
reduce inventory, thus significantly reducing costs and improving quality. By the
early 1980s, Japanese companies, which had once been criticized for producing
for producing low-quality goods, had established a reputation for efficiently
producing high-quality, high-tech products. In the 1980s and early 90s many
U.S. companies looked to increase their competitiveness by adapting Japanese
methods for improving manufacturing quality.

1.4 APPLICATION OF INDUSTRIAL MANAGEMENT

Applications of industrial management are summarized in the following
departments of industry:
1. Managing and arranging the location of facilities
2. Design of Plant layouts
3. Management t of material handling systems
4. Supply chain management.
5. Production and Planning control
6. Quality control & Total quality management
7. Inventory & Materials management
8. Maintenance management
9. Operations management
10. Labor management
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1.5 SCOPE OF INDUSTRIAL MANAGEMENT
As far as the scope of industrial management is concerned it is applicable
in all segments of industry as well as in daily life. As in daily life, we plan our
activities; we coordinate available resources and control our activities to achieve
certain goals in the most economic way. In the same way any organization must
follow the Principles of Management for its survival and growth and to be
economically viable. These management principles are applicable to all
activities in industry also.
Reading and learning Industrial Management will enable one to be
capable of solving the problems of the organization, may be in a Production
Shop, Hospital, Departmental shop, an Educational Institution or even a coffee
shop. The problems a manager faces in various organizations are more or less
similar to that of Production department but smaller in magnitude. Hence the
knowledge of Industrial Management will help anybody managing business
activities, tackle the problems encountered.
For example: The Industrial Management consists of Planning in various
segments of industry in all the departments, e.g. Production, Inspection &
quality, Procurement, Store management, management of activities in assembly
line etc. In production department the management includes selection of
materials, planning of processes, Routing, Scheduling and controlling the
activities etc., Take the example of an Educational Institution. Here too,
selection of raw materials i.e. students & faculty, Planning of the Courses,
imparting instructions to the students and conduct of the examination, smooth
flow of transfer of knowledge and information. The education institution has to
continue the process of evaluation and up-gradation, so that it is able to impart
more relevant and meaningful knowledge to its product i.e. students trained by
the institute. Principles of management are helpful in achieving these objectives
most efficiently and economically.

Similarly, these principles are equally applicable to the service providing

organizations so that these are able to provide best of services at minimal cost,
most effectively and efficiently. Scope of Industrial Management encompasses
all industrial and human activities.

1.6 BENEFITS DERIVED FROM EFFICIENT

INDUSTRIAL MANAGEMENT
The efficient Industrial Management will give benefits to the various
sections of the society. They are:
(i) Consumer benefits from improved industrial Productivity,
increased use value in the product. Products are available to
INTRODUCTION TO INDUSTRIAL MANAGEMENT 9
him at right place, at right price, at right time, in desired quantity

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and of desired quality.
(ii) Investors: They get increased security for their investments,
adequate market returns, and creditability and good image in the
society.
(iii) Employee gets adequate Wages, Job security, improved working
conditions and increased Personal and Job satisfaction.

(iv) Suppliers: Will get confidence in management and their bills can
be realized without any delay.
(v) Community: community enjoys Benefits from economic and social
stability.
(vi) The Nation will achieve prospects and security because of
increased Productivity and healthy industrial atmosphere.

QUESTIONS
1. What do you understand by term “industrial management?”
2. Give the concept of industrial management.
3. Write short notes of “Evolution of industrial management”
4. Focus on scope of Industrial management.
5. Give the applications of industrial management.