The Evolution of Industrial Engineering
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 integrative approach is already realized, and its coined by the terms 5M: man, machine, money, material and methods.
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.
Short Videos to explain the concepts, however it is called Service Design Concept:
Service Systems Engineering
SSE defined as
Service System Engineering is a multidisciplinary approach to manage and design value co-creation of a service system. It extends the holistic view of a system to a customer-centric, end-to-end view of service system design.
(International Council on Systems Engineering – INCOSE)
From the definition we derived 3 things that IEUI named The 3C of SSE: Co-creation, Connectivity, and Comprehensive.
Co-creation of Values
The concept of co-creation is wen the customer is involved as a co-producer of the value. The value is extracted from the relationship between customer and producers. Using a service oriented goods perspectives, because the service is co-created with the customer, the exchange naturally is customer focus.
This concepts is supported by Design Thinking, as explained in this short video
Connectivity to get a Holistic view of systems
In order to get holistic view of a systems, we must broaden our focus from just components, into connectivity. This means using systems thinking and approach to analyse a problem. Connecting the dots and not just focusing on the dots themselves could be the sources of differentiation and innovation. In delivering a service or product, a company cannot do all things by itself, it requires other companies to support and working together. Concepts of outsourcing reinforces this.
Comprehensive end-to-end view
Connectivity and Co-creating has forced the natural things to do: the important to see the whole chain of processes with comprehensive view.
To elaborate this SSE, please read the How SSE is interpreted in IEUI Curriculum article.
What SSE is and What SSE is not
SSE is not a specialization, a new study program or a special course. SSE is embedded and interpreted as part of Industrial Engineering Curriculum. SSE is an archetype, paradigm and way of thinking developed by IEUI based on the Systems Thinking Principles. As a new paradigm and thinking framework, SSE could open ups a new possibilities of improvements and ways of problem solving, which is the heart of Industrial Engineering.