Case Study: Reducing Labor Costs Using Industrial Engineering Techniques

To achieve productivity improvements in manufacturing companies, application of new technology or adoption of mass production may not always be possible.The most practical approach is to attack the work process itself—that is, review and redesign the operations and apply automation and mechanization.In such cases,a productivity audit employing industrial engineering (IE) techniques is used for evaluating the existing manufacturing situation and identifying the potential for increased productivity.Additional industrial engineering methods are applied to develop improvement opportunities. In this chapter,we introduce various industrial engineering techniques and use a case study to show how these techniques are applied in practice.The case study presented is from CompanyA, a bathtub manufacturer.The improvement process began with an audit of the current productivity situation.Then, following a master plan,productivity improvement actions were taken one by one.The result was a 20 percent reduction in cost after a two-year project. Because it is not possible to cover all aspects of the project in this chapter, the focus will be on the activities aimed at the reduction of labor cost. We also explain how the scope of the application of industrial engineering techniques is expanding.