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5.8 The two parts of a production system

Every production system has two parts:

1. Long lasting, physical assets, including facilities, production equipment, information technology, and equipment for material handling and storage.
2. Procedures to train workers, schedule work, to do work, to perform maintenance, to order inventory, and to track work.

Here are some examples.

A steel plant has:

1. Furnaces, ladles, molds, and equipment for chemical analysis.
2. Procedures to follow in making steel, including how much scrap steel and other material, what temperatures, and what molds are to be used for each job that is done.

A hospital has:

1. X-ray and other diagnostic machines, rooms for patients, operating rooms, and information systems.
2. Procedures for checking patients in and out, for scheduling operations, and for tracking patient information.

A fast food restaurant has

1. A building, equipment used to make the meals, and places for people to eat.
2. A menu, opening hours, and procedures workers follow to greet customers, to take orders, and to prepare and deliver meals to customers.

One way to understand the distinction between the two parts is to imagine that you visit an organization when no one is working. You can observe the first part, the physical assets, but you cannot observe the second part, the procedures for how the work is done. Analogously, in a computer system, the first part is the hardware and the second part is the software.

The distinction between these two parts of the production system is not perfect, but it is useful and it is a traditional way to describe the tasks of an industrial engineer.

Changing the first part of a production system, the physical assets, usually takes a lot of time. When we build a building, we generally intend to use the building for a long time. We can remodel the inside of the building at some cost, but altering the size or shape of a building is a major project.

Changes to the second part of a production system, the procedures, can usually be done more quickly. Changing job responsibilities of workers or making a change to training procedures requires thought, work, and time, but can be done much more quickly than changing a building.

Industrial engineering education is often broken into courses that study these two parts of the production system. Most programs include a course focused on facility location and layout and a course focused on operations planning and control. I have followed that approach. The next two chapters describe the tasks industrial engineers do regarding these two parts of the production system. Chapter 5 focuses on the physical assets of an organization and Chapter 6 focuses on the procedures for using those assets.