Rationalization in Production Industries


The term Rationalization is derived from the word ‘Rational’ which means to work with reason, logic and understanding. Under rationalization, the old and obsolete methods of production are replaced by new and scientific methods which help in maintaining the cost per unit at the minimum.

Brief History of Rationalization

Rationalization was first practised in Germany when the industries destroyed in the First World War were re-established. It brought about a revolution and became righty successful in Germany in a short span of time. Gradually, it became internationally accepted and very popular worldwide.


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Rationalization is the organisation of such techniques and processes which, when implemented in an industry helps reduce the need for human resources and minimises the cost of raw materials. The use of such processes and techniques helps in earning maximum profits on minimum costs.

In other words, we can say that it is the process based on the combined efforts in which the old, unrecognised or unscientific techniques of production are replaced by new and scientific production techniques, which in turn, minimises the utilization of time, labour and other capital inputs.

The Key of the Modern Industry

Rationalization is the process of making something more efficient or logical. In the context of modern industry, it can refer to a number of different things, including:

  • The use of scientific methods to improve production processes. This can involve things like time and motion studies, or the use of statistical analysis to identify areas where efficiency can be improved.
  • The introduction of new technologies to automate tasks. This can free up workers to focus on more complex tasks, or it can lead to the elimination of some jobs altogether.
  • The reorganization of production processes to improve efficiency. This can involve things like the consolidation of production facilities, or the introduction of new methods of transportation and distribution.

Rationalization without tears

The process of rationalization should be adopted but it should not be painful to workers. In rationalization, machines are installed at the place of workers, due to which most of the workers become unemployed. That is why they are always against the rationalization.

On the basis of the above analysis, we can say that it is a step towards modernisation and it must be adopted for the development of a nation. But as far as its disadvantages, difficulties and opposition by workers are concerned, it is advisable that for moving two steps ahead, we can move one step behind, too. Rationalization can lead a country and its industry towards the path of progress, though It may be some difficulties in its adoption.

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