ENGINEERING MANAGEMENT

1.0 Introduction

Engineering Management, also referred to as Industrial Engineering, Operations Management,

Production Engineering, Manufacturing Engineering or Manufacturing Systems Engineering; is
the engineering discipline that deals with the design, development, improvement,
implementation and evaluation of integrated systems of people, knowledge, equipment, energy,
material and process. It draws upon the principles and methods of engineering analysis and
synthesis, as well as mathematics, physical and social sciences together with the principles and
methods of engineering analysis and design to specify, predict and evaluate the results to be
obtained from such systems. The discipline while originally focused on manufacturing has
grown to encompass services and other industries as well.

The essence of Engineering Management is to eliminate wastes in terms of time, money,

materials, energy and other resources. Unlike other engineering disciplines that have specific
applications, Engineering Management is applied in virtually every industry (manufacturing,
non-manufacturing and services). Engineers in this field work to make processes more efficient,
products easier to manufacture and consistent in their quality, and increase productivity. It is
also used in service industries such as hospitals, airports, courts, and theatres, to shorten queues,
schedule flights or fleets, plan construction, streamline operating rooms, plan products
distribution, etc.

Organisational function
The management activities of most organisations are generally divided into the following
functional areas.
a. General Management,
b. Finance and Accounting,
c. Marketing,
d. Product and Service Design (Engineering and Research),
e. Human Resources,
f. Operations Management,
g. Information Systems,
h. Others (Legal, Insurance, etc)

The areas can further be sub divided to reflect inherent activities in them. Example, the general
management can be divided into the management board, the office of the chief executive, audit,
etc. The finance and accounting area can be sub divided to include a finance section, and an
accounting section each of which can further be sub divided into smaller units.
The operations management area in most if not all organizations contain the largest sub divisions
in industry. It is in this area that the primary activity or purpose for which the industry was
established in the first instance takes place. While all other areas are more of support units, the
operations area is the heart of any organization and its success or failure determines the destiny
of the organization.

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Research and engineering, and information systems serve on nearly the same footing as
operations management though to a relegated level but they chart the way forward and dictate
the future of the organization because they are the units primarily responsible for innovations and
developments.

The staffing in the organization is categorized into three, the top management, the staff and the
line workers. Production plants and service facilities of the organization fall under the operations
area.

Chart of a typical organization.

An organizational chart shows the hierarchies and their relationship in an establishment. While
the rows depict the various staff levels, the columns on the other hand show the various areas of
activity in the system.
Different organizational charts exits for different establishment depending on the nature of
business undertaken. A typical chart for a manufacturing concern is depicted in figure 1. below.

GENERAL
MANAGEMENT

FINANCE AND MARKETING OPERATIONS PERSONNEL AND OTHERS [LEGAL,

ACCOUNTS MANAGEMENT MANAGEMENT ADMINISTRATION INSURANCE, ETC]

INFORMATION PRODUCTION AND RESEARCH AND

SYSTEMS SERVICE FACILITIES DEVELOPMENT

UNIT I UNIT II UNIT III

Figure 1. Typical Organizational Structure

OPERATIONS MANAGEMENT

Definition
The most commonly accepted definition of operations management is that it is “a continual
process of using management functions effectively to integrate resources efficiently in order to
achieve goal of operations.”

The following key terms are extracted from the above definition for further elaboration.
a. Continual Process
b. Effectively
c. Management Functions
d. Integrate Resources
e. Efficiently
f. Operational Goals

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Continual Process:
Operation management is said to be a continual process in the sense that once it is started the
process continues and it cannot be said to have been achieved. Simply stated, it is a dynamic
process of employing resources to achieve goals.

Effectively
Effectively here refers to doing the right thing the right way. Resources are employed to produce
what is expected in the proper way it is supposed to be made such that it can satisfy the purpose
it is meant to serve.

Management Functions
Conventional management functions including planning, organizing, execution, staffing,
coordinating, and controlling, are put in place to properly manage operations towards achieving
set targets.

Integrate Resources
This is to bring together all resources including materials, men, machines, accessories,
information, etc, in appropriate units, blend them to achieve operational goals.

Efficiently
Efficiently simply means doing the job right the first time. That is to say all resources have been
used in the right manner to produce what is expected with minimum or no waste at all.

Operational Goals
Targets expected to be achieved by organization are usually referred to as the operational goal.
The goal may vary form achieving a certain capacity level to meeting a profit target or quality
level.

Operations Decisions
Operations management decisions can be examined within the frame work of the following four
inter related characteristics.

1. Time period to achieve objectives.

The decisions of management of an organization can be time oriented. Organizations can set date
targets to achieve objectives. The time period can be long term lasting ten years or more,
medium term lasting five years but less than ten, short term of one to five years, or based on the
present where results are expected to be achieved immediately a process is started.

2. Resources being managed.

Decisions can also be based on resources being managed. The resources range from facilities,
equipment, materials, labor, information, capital, to energy. Materials in terms of raw materials
to be processed or those that serves as additives, reagents, or catalyst. The resources may also be
the men or staff of the organization, the machines and plants that the organization uses in
processing it products and the accessories and information that shall be employed in the process.

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3. Operations management areas affected by decision.
Decisions can be based on capacity, materials, quality, process, personnel or on effectiveness,
efficiency, resources, targets and goals to be achieved or on any area related to operations.

4. Basic management functions involved.

Decisions may be based on the management functions in the organization. These may range form
decisions pertaining the staffing in terms of recruitment, hiring, training and development,
positioning and rationalization, to planning, executing, organizing, coordinating or controlling of
activities, etc.

FUNCTIONAL AREAS OF OPERATIONS

The major functional areas of operations management include the followings;
a. Capacity
b. Process design
c. Quality
d. Materials management
e. Human resources management
f. Integration of operations management decisions.

Capacity
Capacity refers to the availability and use of equipment, facilities and human resources.
Decisions in capacity requirement can be:
a. Long range capacity decisions
Long range capacity decisions have to do with decisions in facility size, layout and
location.
b. Medium range decisions
Medium range decisions relative to capacity include development of planned output,
employment levels, etc
c. Short term range decisions
Short term range decisions in the areas of scheduling of jobs and assignment of jobs
works centres

Processes
This deals with the knowledge and understanding of the organisation primary process. The areas
affected include; line flow, job shop, manufacturing cells, fixed positions etc

Quality
The quality function deals with conformance to quality requirement in terms of performance,
dependability, availability, reliability, appearance, etc
Product design, process design and technology, quality of materials needed, and execution of
transformation process also form part of the quality function.

Materials management
The materials management function includes; purchasing, inventory control, suppliers, control of
materials flow and orders.

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Human resources
The human resource function deal with values needs resourcefulness of employees, nurturing,
rewarding of resourceful employees and productivity of the organization in general.

Integration of operations management decisions

This deals with the statement of values, policies, strategies and procedures on all the decision
areas.

TYPES OF ORGANISATIONS
Organisations are classified into three
i. Manufacturing
ii. Non- manufacturing
iii. Services

Manufacturing
The primary purpose of a manufacturing industry is to convert raw materials and components
into finished goods or assembly using labour and machinery.

Materials

Labour Process Products

Machines

Non- manufacturing
These are organisations involved in such activities as agriculture, fishing, mining, and
construction.

Services
The primary purpose of service organisations is to do something to or for customers e.g -
restaurants, hospitals, financial institutions etc.