What is Industrial Engineering?

Industrial Engineering deals with the study of industrial organizations and to the improvement of processes that they implement to assure their durability. In a systemic approach, a process is a set of activities using resources transforming inputs into outputs. Such processes can be physical ones (transformation of raw materials into finished goods), informational ones (data processing to extract useful information), decisional ones (decision of purchase considering the actual inventories and estimated orders).

In such a systemic approach, industrial organizations themselves (manufacturing company, service companies, hospitals etc.) can be schematized as a high level process which:

takes some of their inputs (material, energy, services) in their environment,
transforms these inputs into products and/or services, combining work and skills of employees and equipment, in order to meet the customer's requirements.

Such transformation creates added value, adding some more to inputs. The form, and later on, the measurement of the added value varies from one organization to another. The added value of an emergency service cannot be brought back to an amount in euros, considering its state-approved dimension. But generally speaking, the organizations considered are industrial ones in a market environment. The added value can be simply measured comparing the monetary value of inputs and outputs. This is the added value on which the State puts a tax. It also measures the wealth of a nation, the GDP (Gross Domestic Product), which is the sum of the added-taxes of its companies).

Basically, problems dealt with in Industrial Engineering are industrial ones. Since the 1950s, the industrial world as a whole has undergone important changes, mainly due to:

the inversion of the ratio between offer and demand,
the internationalization and globalization of the economy,
the technical and technological changes,
the growing importance of information management.

For most of the products available, the world capacities of production largely exceed what the market can absorb. One switches from a production economy where customers buy what the companies produce on a standard way to a market economy where companies have to meet the customers' customized requirements and demand forecasts are less and less accurate. Such an exaggerated competition leads companies to innovate continuously and to renew their offers more and more rapidly. The time to market and product life cycles get shorter and shorter. As for the customers, they get more and more informed and demanding. Competition plays an equivalent role on costs, quality, time limits or capacity of innovation.
In a context of globalization, the emergence of newly industrialized countries with low wages, connected with the relatively low costs of means of transport, favor relocations and/or the settlement of foreigner competitors. Such relocations first dealt with products or services of low added value or whose added value was mainly due to labor (textile, telephone call centers, tests in computer developments) and mass production (toys). Nowadays, relocations also deal with productions requiring well-mastered high technologies or easily controllable ones (microelectronics). The continuity of the industrial activity and employment on national and regional territories becomes one of the major stakes.
Technological evolutions become more and more sophisticated, expensive and difficult to control. Companies do not have the human and financial means to keep being competent and innovative on all the technologies they use anymore. Generally speaking, big companies have to reorient their activities on to the ones they know best (their core activity) and to get the skills they do not have anymore from other firms. Later on, they can be organized in networks (called virtual or extended enterprises). As far as they are concerned, small companies have no choice but to get organized and cooperate with one another.
With the rise of computers, the increasing complexity of information to take into account, information management plays a more and more important part in industrial strategies (MRP software, then ERP, APS, CRM...). New business modes come out: ebusiness via Internet (B2B and B2C), market places or electronic auctions.

Research problems in industrial engineering evolve together with those of industry. Roughly, the centers of interest shifted:

from the workshop to the global management of supply chains (Supply Chain Management),
from technical aspects (automation of machines) to informational ones (setting up of an ERP and APS),
from the management at lowest cost of items designed in-house to the selection of partners who can provide the skills and knowledge lacking.