Chapter 1 - Introduction

KNF4073 Engineering Management

Course Objectives

• Review the engineering management functions of planning, organizing, leading and controlling, introduce business fundamentals of cost accounting, financial accounting, financial management and marketing management, and prepare engineers to become effective leaders in meeting the challenges in the new millennium

2

Major Premises• Technology and business savvy represents a very

powerful combination of great demand in society• Market environment is rapidly evolving (changing

marketplace complexities, web-based technologies, globalization)

• Leaders with understanding of technology and management perspectives are needed

• Engineers with proper management and leadership training have great opportunities to add value in the new century

3

Focal Points

• Make engineers more effective as technical contributors (understand managerial points of view, effect teams coordination, drive to add value)

• Ready engineers for managerial positions (managerial functions, success factors, leadership talents, business/management perspectives, expectations, contributions

4

Course Materials

• Required Text – “Engineering Management: Challenges in the New Millennium,” Prentice Hall (2005)

• Harvard Business School Case Materials

5

Course Outcomes

Marks Distribution PO Assessed Marks Weight

CO1 Final Exam (Module I) = 15%Final Exam (Module II) = 15%Final Exam (Module III ) = 15%

Carry Mark (Module I) = 10%Carry Mark (Module II) = 10%Carry Mark (Module III) = 10%

PO12 75% [3]

CO2 Project = 10%Peer Evaluation = 5%

PO10 15% [2]

CO3 Oral Presentation = 5%Feedback (Reflection) = 5%

PO9 10% [1]

Total 100%

KNF4073 Engineering Management

Module Lecturers in Charge/ (Invited Speaker)

Module I Mdm Ana Sakura Zainal Abidin

Module II Prof Amir Azam Khan

Module III Dr Shanti Faridah Salleh

Module IV Invited Speaker from SMIDEC (proposal)

KNF4073 Engineering ManagementCLASS SCHEDULING

Week Electronics Mech + Chem

1 Module 0 Module 0

2

Module I Module II3

4

5

6

Module II Module III7

8

9

10

Module III Module I11

12

13

14 Module IV/ Oral Presentation

Module IV/ Oral Presentation

Learning Units Chapters

Module 0(No. of week = 1)

Introduction to Engineering Management

Module I(No. of weeks = 4)

1. The Functions of Engineering Management

2. Planning2. Organizing3. Leading

Module II(No. of weeks = 4)

4. Controlling5. Cost Accounting6. Marketing

Module III(No. of weeks = 4)

7. Engineers as Managers and Leaders

8. Ethics in Engineering Management

9. Globalization10. Engineering

Management in the New Millennium

Module IV(No. of week = 1)

Engineering Management and Entrepreneurship in Malaysian Perspective(Invited Speaker)

Class Policy

• Attend all classes• Read the chapters beforehand, as the

instructor will call upon students to discuss specific topics from time to time.

• Participate in class discussions (weekly lectures and HBS cases); Ask questions (in class or by emails); Arrange face-to-face meetings

• Participate and commit yourself to complete group project

8

Skills for Managers/Leaders

9

LeadershipSkills

AdministrativeSkills

Technical Skills

Value Addition• Increase Sales Revenue (new and enhanced

products/services - faster, better, cheaper - to create greater customer satisfaction)

• Reduced Cost to Do Business (simplified product design, new technologies, improved productivity, raised efficiency, reduced inventory via supply chains, new production and marketing partnerships and alliances)

10

Value Mantra

• As a Mantra, engineers and managers alike must focus on Work Which Adds Value (large/small, direct/indirect, short/long-turn, and certain/uncertain)

11

Value to Stakeholders

• Customers (Product quality, service)

• Shareholders (ROI, EPS)• Suppliers (Market position,

financial stability, collaboration)

• Employees (Workplace, compensation, stability)

• Community (Corporate citizenship, brand image, tax contribution)

12

Selected Definitions

• Efficiency - Accomplishing tasks with the least amount of resources (time, money, equipment/facilities, technology - know-how, procedure, process, skills) - do things right

• Effectiveness - Accomplishing tasks with efforts commensurate with the value created by these tasks - do the right things

13

Selected Definitions

• Strategic Decisions - Setting direction by specifying what are right things to do, high level engineering managers participate in making strategic decisions

• Operational (Tactical) Decisions - Engineers participate in defining how to do things right (e.g., methods or procedures to carry out a specific task/project efficiently)

14

Four Dimensional Work

15

Work with boss

Engineering Manager

Work with subordinates

With self (Manage own time)

Peers, Staff people

Work of an Engineer As Technical Contributor

• Understand objectives of tasks specified• Develop action plan for implementation• Define standards (performance metrics)• Select methodology/techniques• Implement task with proper efforts• Generate results and secure value• Report findings (impact, lessons)

16

Tips for Engineers

• Demonstrate Technical Competence & Innovative capabilities

• Brush Up Communications skills (ask, listen, write and talk)

• Show unfailing reliability to induce trust and confidence

• Be Proactive in seeking challenging tasks• Exhibit readiness for assuming larger responsibilities

(take courses, practice skills, gain experience)

17

Typical Engineering Activities

• Design/development of products/processes• Project engineering/management• Value engineering and analysis• Technology development and applied R&D

(laboratory, field)• Production/manufacturing and construction• Customer service

18

Engineering Management Functions

19

Engineer Manager

Controlling

Leading

Organizing

Planning

Engineering Management Functions

• Planning (forecasting, setting objectives, action planning, administering policies, establishing procedure)

• Organizing (selecting organizational structure, delegating, establishing working relationship)

• Leading (deciding, communicating, motivating, selecting/developing people)

• Controlling (setting performance standards, evaluating/documenting/correcting performance)

20

Changing Work Content

21

First Line Supervisor Mid Manager Executive

Technical 70% 30% 5%Managerial 25% 40% 25%Visionary 5% 30% 70%

Learnable Skills

• Time management and work Habits• Interpersonal skills to get along with people• Team building, communications and

motivation skills• Decision support tools (what-if analysis, risk

analysis, kepner-Tregoe decision tool, problem solving, root cause analysis, decision tree, optimization, etc.)

22

Talents to Be Nurtured Over Time

• Vision - Strategic thinking capabilities to set direction or initiate new projects through technological insight and intuition (lateral thinking)

• Net-Working - Building a wide base of business/professional connections

• Drive to Excel (competitive, proactive, energetic, persistent)

23

Interactions Between Groups

24

Procurement Design/Product Engineering

Manufacturing

Marketing Sales/Service

Customers

Warehouse

Suppliers

Challenges In the New Millennium

• Marketplace changes rapidly (Web-based technologies, globalization, customer demand, business networks) affecting how progressive companies will be organized

• Engineering managers to lead by supervising complex teams, innovating with vision for the future, designing global products, and organizing supply chains, apply global resources to derive economies of scale and scope.

25

Challenges In the New Millennium

26

Inside

Outside

Local

Global

Present

Future

Challenges

• Inside - implement projects/programs; manage people, technologies, and resources to add value; develop new product features to enhance company competitiveness; define, control and reduce costs to improve profitability; initiate technology projects to sustain company position

27

Challenges

• Outside - keep abreast of emerging technologies and apply them to strengthen company’s core competencies; apply web-based tools to enhance operations and foster customer relations; identify best practices to improve engineering operations and surpass them; create supply chain networks to derive speed, quality and cost benefits

28

Challenges

• Present - Do things right to keep company operating smoothly; use Balanced Scorecard to monitor non-financial and financial performance; control costs and eliminate wastes to attain profitability in the short-run

29

Challenges

• Future - seek e-transformation opportunities to create company profitability in the long-run; introduce new generation products timely; create vision for the future related to technologies; Define what should be done for technology-based success in the future

30

Challenges

• Local - Utilize resources to best achieve company’s objectives; take ethical and lawful actions while taking into account local conditions; maintain and nurture local professional networks; share lessons gained with people at other company sites

31

Challenges

• Global - Apply location-based resources to realize global economies of scale and scope for achieving cost and technology advantages; develop global professional networks; acquire a global mindset; exercise leadership roles in international settings

32

Assignments

• Read text - historical development of engineering management

• Seek opportunities to practice EM skills constantly - Student life, student societies, other non-profit groups

33

Literature References

• Fraidoon Mazda, “Engineering Management,” Addison Wesley (1997)

• Daniel L. Babcock, “Managing Engineering and Technology,” Second Edition, Prentice Hall (1996)

• M. W. Cardullo, “Introduction to Managing Technology,” John Wiley (1996)

• F. Lawrence Bennett, “The Management of Engineering,” John Wiley (1996).

• H. J. Thamhain, “Engineering Management,” John Wiley (1992)

34

Literature References

• W. D. Compton, “Engineering Management: Creating and Managing World-Class Organizations,” Prentice Hall (1997).

• Hamid Noori, “Managing the Dynamics of New Technology,” Prentice Hall (1990)

• M. Badawy, “Developing Managerial skills in Engineers and Scientists,” Second Edition, Van Nostrand Reinhold (1995)

• H. Uyterhoeven, “General Managers in the Middle,” Harvard Business Review (Sept-Oct. 1989)

• S. R. Covey, “The Seven Habits of Highly Effective People,” Simon and Schuster (1994)

35

Question #1.1

• Tom Taylor, the Sales Manager, was told by his boss, Carl Bauer, to take an order from a new customer for a batch of products. Tom knew that the products involved would only partially meet the customer’s requirements and that Carl knew that. But, Carl insisted that the order was too valuable to lose. What should Tom do?

36

Question #1.2

• Nancy Bush, the plant manager, needs to decide whether to make or buy a component for the company’s core product. She would like the advice of her production supervisors, since they must implement his eventual decisions. However, she fears that the supervisors will be biased towards making the component in house, as they tend to favor retaining more work for their people. What should Nancy Bush do?

37

Question #1.3

• Student A works hard to finish her Masters degree by the due date of January 8, in order to graduate on February 4. She plans to fly back to her own country immediately thereafter. If she graduates on June 10, the next available graduation date, she will need to pay tuition for one more semester. Her advisor Professor B cannot accept the work as presented, because the results of a major marketing activity designed by Students A will become available only after January 20, not before January 8. How can this problem be solved?

38

Question #1.4

• The engineering Manager proposes to install an automated bar code scanner costing $4,000. He estimates that he can save about 100 hours of labor time per month because of its speed. He further reasons that at the wage rate of $15/hour, the benefit of using the scanner is $1,500/month and the scanner can be paid back in 2.67 months.

• As the president of the company, do you agree or disagree with the way he computes the cost/benefit ratio? Why and why not?

39