The Evolution of Industrial Engineering
Administrator | Selasa, 22 Maret 2016, 11:18
At its birth, Industrial Engineering was focusing on improving manufacturing processes where one approach (mechanical approach) is insufficient to deliver a competitive productivity level. In this beginning, the need for more multi-perspective yet integr

The introduction of quality principles, approach and management has broaden the scope performances to not just productivity. Other performances emerged were derived by focusing on the customer, such as quality, cost, delivery, or safety. However, in those early days, customer is just a source of performance, not a partner in developing the product.

When IE finally realized that in order to deliver a better performance than competitor, they must evolve to manage all stages of a product life cycle: from designing the product, the process, delivering the product and maintain them. This would require more helicopter views moving back and forth from product, process, plant to policy. This combinations of integrated approach 5M, quality and product life cycle are the basics of most curriculum design of IE in the world, including in IEUI.

However as the time goes by, IE observed that its alumni and its approaches can be applied into non-manufacturing based industry, which is the services industry, primarily because the “systems” perspectives embedded in the approaches. The systems life cycle which is based on product life cycle was introduced as the ultimate approach that can encompassed many different colors of Industrial Engineering at this time. This is why many Industrial Engineering Programs are evolving their names into Industrial and Systems Engineering Program.

The [Service+Product] Bundle and Service Oriented Goods

With the rise of popularity of Industrial Engineering, many people still links industrial engineering with producing goods only (eg. plants or production process) because its root in Mechanical Engineering. However, the term of Industry is not just producing goods, but also services, such as tourism industry, creative industry, etc.

Why? because similarity principle of value addition. In factory, you can produce noodles from flour that has higher price – more value. Then, you can produce instant noodle from the noodles, package it as “mie instan” you got higher prices per kg than just plain flour – more value.

So industry is actually adding value to a material by changing the material into a product. Therefore, the new and more appropriate definition of industry is creating, adding and delivering values to the customer.

In this new definition, Industrial Engineers must start to reorientating their skills and knowledge to not just building products, but also thinking about (1) the additional services support needed for the product to perform, and (2) the understanding that customer actually consume the services that a product deliver, not just the product  itself.

The number (1) is called [service+product] bundle, an understanding that every product will habe an accompanying services attach to that product. It is why there is a guarantee period in many of the quality products we purchased. In this period, any damage not caused by improper usage can be repair at no cost. Of course, this means the company must provide repair services through educating technical person, after sales customer relations, parts inventory management, and other sub-systems of services to support the product. If we want to purchase in credits, we need banks or credits services provider.

The number (2) is called service oriented products. It is a broader understanding the when we sell a product, we are actually selling the service provided with that product. With this perspective, we are not trapped on thinking that our roles is just making a high quality product, but a high quality product that its service wanted by the customer.
Mobile phone gadgets that you have might not have the best possible processor, but its integrated service (music download, apps store, video streaming, maps and etc) could already enough for you. Apple products is a good example of this, their mobile products is a gateway for other services that its tied to their ecosystems of apps, e-books, music, videos.

- See more at:

What is Service Design?

A short animation explaining the basics of service design.

  • Date 2016-01-11
  • Speaker Dr. Andrew Kusiak
  • Category Industrial Engineering
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About Speaker

Dr. Andrew Kusiak

Professor of the Department of Mechanical and Industrial Engineering University of Iowa USA