IELM 2010 Industrial Engineering and Modern Logistics

Instructor: Ajay Joneja, room: 5537, phone: 7119

Course materials: www://lmes.ust.hk

TA: Terence Cheung Chong Mo

References: Notes (posted on web-site)Readings (posted on website)

Grading: HW (10%); Reading report (10%); Exam 1 (40%); Exam 2 (40%); Bonus for class participation: 3%

Mechanical Engineers make … machines,

Electrical engineers make … electronics,

Civil engineers make … buildings, bridges,

Industrial engineers make … decisions

What is Industrial Engineering

The Engineering of making smart decisions

Decisions about what?

The design, installation and operation of integrated systems

Examples of Systems

Financial systems

Production systems

Supply chains and Logistics systems

Service systems

Some Industrial Engineering graduates

Tim Cook, CEO of Apple Inc. B.S. IE, Auburn University, 1982

Mike Duke, CEO of Wal-Mart B.S. IE, Georgia Institute of Technology, 1971

Chad Holliday, Chairman of Bank of America B.S. IE, University of Tennessee, 1970 Former Chairman and CEO of DuPont

Industrial Engineering practice at Walt Disney

http://www.youtube.com/watch?v=krCjsxDhNyM

Industrial Engineering in Hong Kong

In the 2002/03 Budget Speech, the Hong Kong Government identified four pillar industries: Financial service Trading and logistics Tourism Producer and professional services

In the 2014 Policy Address, Chief Executive C. Y. Leung highlighted the following IE-related industries Financial service Logistics industry Innovation and technology Industries

Industrial Engineering in Hong Kong

In 2010, the four industries generated value added of HK$988.4 billion (or 58% of GDP), employed 1,690,200 persons (or 48.2% of total employment)

Financial service

Trading logistics Tourism Services

value added(HK$m)

262,000(15.4%)

434,500(25.5%)

74,600(4.4%)

217,200(12.8)

employment 219,500(6.3%)

785,900(22.4%)

218,100(6.2%)

466,700(13.3%)

per capita VA(HK$m) 1.19 0.55 0.34 0.47

Agenda for the course

Week Topic (technique)

1 Introduction & background

2 Planning of systems (spanning trees)

3 Transportation (shortest paths)

4 Logistics planning (maximum flows)

5-6 Production and operations planning (LP, MILP)

7 Mid-term

8 Random variations (probability basics)

9 Managing quality (statistics)

10 Supply Chain Management basics (inventory)

11 Managing inventory (EOQ)

12 Managing inventory (Newsvendor

13 More randomness (queues)

Expected learning outcomes

Upon successful completion of the course, you will be able to:

Identify the main components of modern logistics systems and why/how they developed to their current state

Model and solve operations decisions problems

Model and solve decentralized decision problems

Reading

You are required to read at least one book from the reading list

Write a two-page report on the book (all submissions will be checked by Turnitin® for plagiarism prevention)

The reading report is due on midnight, April 29

Reading list

• The Goal– By Eliyahu M. Goldratt– A novel on process improvement and Theory of

Constraints– An IE classical

• Predictably Irrational– By Dan Ariely– An easy reading book on behavioral economics

and human decision biases– A more advanced book is Daniel Kahneman’s

Thinking, Fast and Slow

Reading list

• Outliers: The Story of Success– By Malcolm Gladwell– To understand how outliers become outliers– A great book and New York Times best seller

• The Machine that Changed the World– By Womack, Jones and Ross– On Japanese manufacturing systems, called “lean

production”– An IE classic

Reading list

• The World Is Flat– By Thomas Friedman– A book that analyzes globalization in the early

21st century and, in particular, global supply chains.

• Some book on big data– You may suggest a popular book related to big

data– Your suggested book must be approved by the

instructor before the end of add/drop period

?

Example: Choices, values, frames by Kahneman & Tversky

Early history of IE

1730-1800’s: Industrial Revolution organized factories

James Watt

The BBC animation of Watts’ single acting engine is here.

Historical Landmarks

1730-1800’s: Industrial Revolution organized factories

James Watt

The BBC animation of Watts’ single acting engine is here.

1776: Adam Smith specialization of labour

Historical Landmarks..

- Advocated free trade

- ‘Fair’ prices set automatically in markets under competition, (the ‘Invisible hand’)

1832: Charles Babbage division of labourorganization of work

Historical Landmarks...

Reconstruction of Babbage’s Difference Machine(precursor of the modern computer)

Historical Landmarks….

1800s: Henry Maudslay Interchangeability

- Interchangeable components for manufacture of rigging blocks

- Also introduced standard sized screws-nuts

Main requirement: Repeatable, Precision machining

1900s: Frederick Taylor mass production Frank and Lillian Gilbreth time and motion study

Historical Landmarks…..

Taylor

Taylor’s principles of Scientific Management:

1. Divide each task into parts, develop the best way to do each part;

2. Select the best person to do the each part;

3. Train, teach and develop the worker;

4. Provide financial incentives to follow the methods;

5. Managers plan the activities, and workers execute the tasks.

1905-1920: Henry Ford mass production

Ford Model T

Historical Landmarks……

1900-1920: Andrei Markov Markov chains Agner Erlang Queueing Theory

Basis for: queues, inventory control,stock prices, forecasting,…

Historical Landmarks…….

Markov[source: www.darbyhudson.com]

~1950: George Dantzig Simplex Methodto solve Linear programs

Applications Production planning, Schedules, …

George Dantzig

Historical Landmarks……..

1924: Dr. Walter A. Shewhart Statistical Quality Control

1950’s: Deming Quality management

1950’s: Genichi Taguchi Design of experiments

Historical Landmarks………

Applications: Controlling the quality of a process/product

Shewhart Taguchi

1945-1950: Ergonomics

Historical Landmarks……….

Keyboard designsToys Hazards : • Choking (marbles etc.)• Injury from sharp edge• Poisoning

1960’s: Ford motor company Ford Mustang(Mass customization)

Historical Landmarks………..

Further readings

Next topic: facilities planning (graph techniques, minimum spanning trees)

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