Measurement of impact of selected industrial engineering practices on companies’ economic performance

Abstract

Industrial engineering (IE) represents a significant tool how to eliminate waste in both manufacturing and other areas of the enterprise. This helps reduce costs, increase production effectiveness and other characteristics, which can lead to better competitiveness and performance. Finding IE methods that have significant impact on overall business performance is the main purpose of this paper. Another objective was to determine whether the impact of industrial engineering methods applies to all industries in the Czech Republic or whether it applies only to selected industries. The data was obtained through an online questionnaire survey, the survey focused on a wide range of manufacturing companies (N=235) from different industries, different sizes and ages. For comparing the overall business performance among individual respondents, a ROE 1 (Return on Equity) indicator was selected. To measure this indicator from the impact of the tax, investment and credit policy, a modified ROE indicator (ROE 2 calculated first with EBITDA - Earnings before Interest, Taxes, Depreciation and Amortization and then ROE 3 calculated with EBIT - Earnings before Interest and Taxes) was used. The results show that the use of IE methods in manufacturing plants is limited to a few selected methods. Similarly, only a few industrial engineering methods are typically used in high performance firms and can therefore be said to be involved in increasing performance. The statistically significant relationship between specific IE method and the higher performance measured by ROE 1 or ROE 2 was observed only for standardization, 5S, JIT, APS and six sigma. Presented research also shows that this influence of methods does not apply to individual IE methods globally in all the sectors studied, but only in some of them.