The Application of Modern Industrial Engineering in Small and Medium-sized Enterprise Management

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1 Advanced Materials Research Online: ISSN: , Vols , pp doi: /www.scientific.net/amr Trans Tech Publications, Switzerland The Application of Modern Industrial Engineering in Small and Medium-sized Enterprise Management Yuduo Lu 1, a, Jiao Yu 1, b Dan Li 1, c 1 School of Economics, Dalian University of Technology, Dalian, China a b,c Keywords: Small and medium-sized enterprise, Modern industrial engineering, Competitiveness, Sustainable development. Abstract. At present, small and medium-sized enterprises have played an important role in China's economic development. Starting with the introduction of modern industrial engineering, this paper firstly pointed out the problems of small and medium enterprises in the development process, analyzed the need for the implementation of industrial engineering, and finally proposed the application patterns and development trends of industrial engineering in Small and medium-sized enterprise management. Introduction At present, Small and medium-sized enterprises(smes), which account for 99% of the whole enterprises, have played an irreplaceable role in China's economic development, providing 60% of industrial output and 40% of profit and tax, and also employ 75% of the working population. But in recent years, the development of SMEs has gradually been slowed down. Its profit has been decreased, and the phenomenon of losses and bankruptcy has increased year by year. Overall, there are probably 68% in the whole SMEs closing down in the first five years, 19% of enterprises can survive 6-10 years, and only 13% lasts more than 10 years. Therefore, it is necessary for SMEs to change the backward situation of short life cycle, frequent replacement, high bankruptcy rate and low revival rate, in order to give a full play in economy and also maintain a healthily sustainable development of SMEs. In this case, industrial engineering is viewed as one of the best ways that can help SME to get out of plight, improve their production efficiency, lower operating costs and finally promote the competitiveness of enterprises. Modern Industrial Engineering Originated in the 1880s, industrial engineering (IE) is regarded as an engineering science, applying planning, optimization and implementation of various schemes to create, maintain and improve the system of industry, agriculture and service industry and so on, so as to help improve benefit and efficiency [1]. Generally speaking, IE can be divided into traditional industrial engineering (or classical industrial engineering) and modern industrial engineering. Traditional industrial engineering focuses on the theory study, including Time Study and Motion Study, aiming at improving enterprises efficiency and quality and reducing production cost. With the development of science and technology, IE absorbs operation research, system science, information science, etc and evolves into modern industrial engineering, which jumps out of the traditional business circle, extends its application to the entire production and management system, and finally faces the internal and external ecological environment of the enterprises [2]. Modern industrial engineering has distinct time characteristic that is formed on the basis of traditional industrial engineering and has been infiltrated into social production, which applies information technology to support business strategy, and simultaneously pays attention to the role of people and the best match between human and machine, so as to face the whole operation and management process, and investigate the large scale industrial production and industrial economic system [3]. All rights reserved. No part of contents of this paper may be reproduced or transmitted in any form or by any means without the written permission of Trans Tech Publications, (ID: , Pennsylvania State University, University Park, USA-12/05/16,13:11:33)

2 3108 Advanced Manufacturing Technology, ICMSE 2012 Modern industry engineering emphasizes the integration of system and global optimization, and pursues the optimal of the whole efficiency and competitiveness. It is characterized by systematization, flexibility, intelligence and integration, thus forming a series of theory and method, such as Flexible Production, Intelligent Manufacturing, Humachine Systems, Concurrent Engineering, Virtual Reality Manufacturing, Lean Production and Customization Production Management Model and so on. The Necessity of the Application of Modern Industrial Engineering in Small and Medium-sized Enterprises Since the 1980s, with the deepening of reform and opening-up, the enterprises in coastal areas have gradually promoted the application of industrial engineering. There are hundreds of SMEs in coastal regions applying industrial engineering in different aspects, involving home appliances, building materials, information and a dozen industries. Industrial engineering has been taken as an important means in improvement of companies management level. Nevertheless, after nearly 30 years fast and rapid development, China s industrial engineering still faces many problems that influence and restrict its further promotion and development [4]. Because of the great gaps between China and developed countries, mainly manifesting in the lag of technology and management level and the lack of capital and talent, the application of industrial engineering technology have not been systematized and generalized in some of the SMEs, and also have not become the consciousness of the technicians and managers from SMEs, thus failing to exert its function in management and production. The leaders from SMEs in the under-developed regions, especially the northern areas, can hardly know about the industrial engineering, much less apply it in the companies management. The present situation in China is that SMEs use traditional mature technology to product, so the products are maily labor-intensive, which are are reletively low in technique content and added value, and require less-skilled human resouces, thus causing higher staff turnover rate. In the whole production cost, the proportion of the cost in the depreciation of equipments, the update of new machines and research and development of new product account for a small percentage, while salary expenses constitute a high proportion, and gradually increase the labor cost in the whole expense. The situation can be changed by applying modern industrial engineering. The outstanding feature of IE is that its effect is notable and it requires less investment but gain higher output. Some of the SEMs even do not have to additionally inject investment, but only reconstruct the production elements, optimize the production process, and rectify the sequence of the work and standardize it, thus can evidently increase the production efficiency and profit and tap the companies potential. It is an advanced technology that we need in the change into intensive reproduction, and meet the need of domestic market [5]. With the development of times, the increasing fierce global market competition also requests the China s SMEs to quickly advance its production efficiency and overall competitiveness. In this case, the application of industrial engineering will be of great help not only in bailing enterprises out of the difficulties, but also supporting enterprise development in the future. Application Mode and Development Trend of Modern Industrial Engineering in SEMs Implementation Mode of Modern Industrial Engineering in SEMs. As for the SEMs in China, they should add the content of management accumulation to the management innovation system. Under this premise, management innovation system should take a complex management pattern, which is design --- improvement --- informationization as shown in Figure1, namely: advanced technology (such as information technology) + management foundation (IE design and improvement) management accumulation and innovation increase in enterprises competitiveness.

3 Advanced Materials Research Vols Information and information system Mechanism innovation Guide innovation Enterprise High efficiency IE Program Design Equipment material products Plan Control Operation cost Enterprise target Low cost Improve innovation Human resources Management innovation Fig.1 Reference mode of Chinese management innovation Development Trend and Countermeasures. Strengthen the Education and Training of Industrial Engineering. China's industrial engineering is still in the initial stage. Because of the lack of understanding in the whole society and SMEs, the application of IE has struggled in the theoretical research, system development and popularization, and cannot meet the needs of the companies. Therefore, the primary job in the promotion of industrial engineering is to strengthen the education and training among the technicians and managers in SMEs, and develop personalized training courses according to the needs of the enterprises. Meanwhile, the training methods have to be renewed constantly in order to ensure the quality of training. Extend the Local Application of Modern Industrial Engineering. The managers from SMEs can locally apply the single industrial engineering techonology in one function department in enterprises to gradually extent the popularization, such as the application of production plan technology to reasonably organize the production process and lower the production cost in the process; the application of human resources management technology to recruite, train and evaluate staffs so as to realize a high effcient and sciencfic human resources management; and the application of various quality management technonlogy to realize the control on product quality and work quality. Found Cross-functional Teams. Industrial engineering department is directly under the leadership of operation manager, participates in other departments through the way of cross-functional team, and drops out of the specific business of other functional departments [6], which is the basic development mode of industrial engineering in internal system of enterprises in the future. It has a large range of functions, and is flexible, fully authorized, and can provide effective support for management decision. Promote the Integration of Industry, University and Research. Combination of industry, university and research is the effective way to develop and apply industrial engineering in SMEs. Universities have professional experts who are working on latest industrial engineering theory research, and taking the responsibilities to train industrial engineering professionals for enterprise [7]. Enterprises can cooperate with university, make fully use of its talent and technique advantage and realize the transformation of productivity.

4 3110 Advanced Manufacturing Technology, ICMSE 2012 Application of Industrial Engineering Based on Circular Economy. Nowadays, the production and operation environment faced by modern enterprises has undergone profound changes. The companies have to switch to the sustainable development by paying more attentions to the environment. As the idea of sustainable development has been accepted by all countries around the world, it is used to constrain the behavior of enterprises in the form of laws and regulations [8]. Meanwhile, the environmental standards have been part of market access condition in some developed countries. Under this strict market environment, it is important to coordinate the relationship between enterprises and environment. The modern industrial engineering aims at researching production and operation system, increasing productivity, economic benefit and competitiveness, and maintaining sustainable development under the severe market competition. Its application goal has switched from best way to continuous improvement. In the latter half of the 20 th century, the objective of industry engineering was targeted for the local optimum system and individual work with the development of operation research and computer science, and it is changed into the continuous improvement in the aspect of adaptation of the national situation and the market environment. Conclusions Industrial engineering is a new science combining engineering and management science. Modern industrial engineering can improve operation method, reduce labor intensity, optimize production system, reduce and eliminate waste in the production, standardize workers operation process, and regularize production system operation, so as to improve the enterprises overall efficiency and competitiveness. In order to successfully apply this technology in SMEs, the managers must pay attention to its characteristics and SMEs unique features, and cannot simply equal it to the other engineering technology, or the other management methods. According to the characteristics of modern industrial engineering technology and the features of SMEs, the application of modern industrial engineering technology should be designed periodically, in order to meet the need of the changeable market. References [1] Chongqing Guo: Industrial Engineering and Management Vol. 8 (2003), p. 3 (In Chinese) [2] Tao Zhao, Ershi Qi: Industrial Engineering Vol. 3 (1998), p. 43 (In Chinese) [3] Kjell B. Zandin, in: Maynard s Industrial Engineering Handbook, edited by McGraw-Hill, New York (2001), in press. [4] Yu Lin, Ershi Qi, Yingjie Shi: Science of Science and Technology Management Vol. 4 (2007), p. 148 (In Chinese) [5] Zhenbi Luo, Liqiang Zhu, Weiheng Yang: Industrial Engineering and Management Vol. 1 (2003), p. 21 (In Chinese) [6] Xinsheng Zeng: International Economic Cooperation Vol. 1 (2006), p. 23 (In Chinese) [7] Lizhuo Liu: Economic Outlook Vol. 1 (2009), p. 116 (In Chinese) [8] Chunfa Li: Industrial Engineering Vol. 3 (2008), p. 1 (In Chinese)

5 Advanced Manufacturing Technology, ICMSE /www.scientific.net/AMR The Application of Modern Industrial Engineering in Small and Medium-Sized Enterprise Management /www.scientific.net/AMR

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