Adonis Diaries

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Certified B; (Jan. 1st, 2010)

Here you have three “entrepreneurs” who were acquainted at the University of Stanford launching a certification procedure in 2006.  This start up organization was funded for its first 30 months by the Rockefeller Foundation; the idea is to prepared a questionnaire of about 200 questions (obviously, aided by “certified” expert companies) that interested companies willing to submit to the audit and respond to the questionnaire will be issued a “B” grade for benefits as virtuous and transparent enterprises.  The certification is rendered according to five criteria:

First, the enterprise has to explicitly integrate “social performance” (impact on local community, employees, clients, and out sources) in its mission declaration.

Second, it has to explicitly integrate “environmental performance” (ecological building, renewable energies) in its mission.

Third, it has to share financial information with employees (obviously, except individual salary).

Fourth, it has to divulge the proportion of high ranking cadres that is being evaluated routinely in function of objectives related to social and environmental performance.

Fifth, it has to be totally transparent on all political contributions and expenses for lobbying interest groups.

The interested enterprise has to include in its statutory documents recognition of its responsibilities.  The enterprise will cough up one dollar for each $1,000 on its net profit as expense for the certification up to $25,000.  Any company making $ 3 million per year in profit will be willing to pay $3,000 to “green-wash” its image: most companies pay a lot on green propaganda since the trend awareness is “ecologically correct”.  The main barrier is for the organization to be passionate and motivated to make sure that investment on ads by B enterprise is not higher than money spent on program with tangible results.

What other advantages B enterprises get for being certified? The municipal council of Philadelphia has officially recognized the mark B and is offering $4,000 of tax free credit for each B company. It is assumed that environmentally minded investors who care for social and environmental impacts will give priority to B enterprises!  Actually, it is the extended network of socially and environmentally minded companies that prefer to do business with like minded enterprises that is the most profitable for being certified B.

So far, 240 firms have signed up in 28 States for a total of $7 billion in sales. What are the stats? 72% of the B enterprises use renewable energies; 50% gave incentives to employees to commuting in public transports; 44% engaged in systems of employee’s shareholding.

The certifying organization hired 12 employees across the USA to do “random” audits: every two years, a B enterprise has to ask to renew its certification, a pay for certification renewal even if it was not audited.  This is how certification organization make money: they get paid for doing nothing after the first issuing of certification for many years until it is discredited for fraud. The B certification organization is currently working on a budget of $1.5 million and growing exponentially.

This mania of widespread certification organizations is gold mine: now and then, a few “accredited” members in every discipline or syndicate make waves on the ground that “performance” (ethics, standard of knowledge, training, transparency…) is declining and that the discipline has to be reformed; then, they start a certification process that never goes far because money is generated when an idea catch up with the awareness wave of the public.

Designing what? The Human Factors Concept

 

The bottom line in industrial engineering is to design a system that would optimize production, inventory, distribution, material handling by maximizing profit or minimizing cost or finding a trade-off that would satisfy the marketing department, the shareholders, the after sale, the union, the consumer product, and the health and safety agencies and so forth.

Now we can recognize that optimizing a system involves inter-relationship among various interested groups of people.  The inter-relationship with consumers, operators, employees, workers, management, and shareholders requires a good understanding of the research done in psychology, sociology, marketing, econometrics and other social studies. This fact is anathema to mathematical solutions that do not consider constraints on human needs, demands, safety and health regulations and specifications, and variability in capabilities and limitations and ethnic idiosyncrasies.

Can industrial engineering discipline be of any aid to small and family based businesses and industries with limited financial resources and marketing scope?  It should be of aid if the boss is an industrial engineer but my opinion is that this discipline is geared toward large industrial complex that hires many employees and workers even if many sections are automated.  Designing an optimum system of production without serious awareness of the research done in the consequences of shift work, pay rate, sleep deprivation, and the political infighting among departments, management, syndicates and employees is tantamount to failure.  We can understand that there are many strong and interesting interactions among industrial, social, psychological and business administration fields.

Whether we like it or not human factors engineering that studies the capabilities and variability of the human element, his health and safety and risk taking tendencies or avoidance should be an intrinsic part of designing work production.  The reality is that companies are wary of hiring generalists such as industrial or human factors engineers for the benefit of specific specialties that are much more in demand because they are better known, even if a global view and comprehension of a system can, in the medium and long terms, deliver much better performance in production, minimizing lost work days, turnover, human aches and pains, emotionally and physically. 

Private companies conjecture that they cannot afford human factors engineers whose jobs are designing interfaces for end users to interact efficiently with complex systems; this is partly true because experimenting with human subjects is time consuming and very costly when dealing with the innumerable variables involved in studying the behavior of workers, employees, engineers and consumers.

I like the current tendency to label industrial engineering as engineering management because the scope matches the management requirement and responsibilities and avoid the connotation with mechanical design and fabrication.


adonis49

adonis49

adonis49

December 2021
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