PLANNING

A major function of service management involves planning. In service companies it is the

engineering manager who determines the best course of action for a given project.

Importance of Planning in Engineering

Every professional engineer must treat his projects seriously by allocating enough time to
planning and organizing future actions. A project plan is useful not just for improving the quality
of the end product, but also for developing better team dynamics and better results for the
company they're working for.

NEW BUSINESS TECHNOLOGY TRENDS

● Relationships. Companies pursue open innovation by involving customers, suppliers,

small specialty businesses, and independent contractors in the creation of new services.
● Extracting more value from interactions. Companies gain value from the active
interactions between employees.
● Increased degree of automation. Companies gain productivity by pursuing automation
of repetitive tasks and processes.
● Better utilization of corporate resources. Companies use in-house information
technologies and other resources more efficiently by leasing part of them to outside
companies.
● More science into management. As the quality and quantity of data continue to grow,
the use of these technologies will lead to strengthened corporate competitiveness.
Decision alternatives are also more readily tested due to available technologies.
● Creating new business from information. New business opportunities may be
invented by pulling information from a vast network of data sources.
Identifying new opportunities. Planners should reflect and identify patterns that may next
shape their markets and industries.

2 TYPES OF PLANNING
1. Strategic planning sets the goals, purpose, and direction of a company. The top-level
engineering managers (i.e., chief technology officer and vice president of
engineering)are usually involved in strategic planning for the company. Strategic
planning focuses on identifying worthwhile future activities. Specifically,strategic planning
assures that the company applies its resources—core competen-cies, skilled manpower
resources, business relationships, and others—effectively to achieve its short and long
term goals.
2. Operational planning. Present with ease and wow any audience with Canva
Presentations. Managers at both middle levels (managers and directors) and lower
levels (supervi-sors and group leaders) perform operational planning in order to define
the specific tactics and action steps needed to accomplish the goals specified by top
management. Managers and directors break down the company goals into short-term
 objectives. Supervisors and group leaders specify events and assignments that can be
implemented with the least amount of resources within the shortest period of time.
Operational planning ensures that the company applies its resources efficiently to
achieve its stated goals.
Operational planning is also called platform-based planning because it extrapolates
future results from a well understood, predictable platform of past experience. Results of
such planning are predictable because they are based on solid knowledge rather than
assumptions.

STRATEGIC PLANNING

Strategic planning is important but difficult, because no one is prophetic enough to know
what the future holds.
Strategic planning requires an immense amount of strategic thinking (Aaker 2001;
Schmetterer 2003)

MAJOR DIFFICULTIES OF STRATEGIC PLANNING

1. Prediction of the future.
2. Applicable experience and insight.
3. Random process of strategy making.

STRATEGIC PLANS OFTEN FAIL DUE TO

1. Not thinking strategically
2. Failure to identify critical success factors for the company
3. Lack of firm and long-term commitment from company management
4. Reluctance of senior management to accept responsibility for tough decisions;
incompatible company culture in risk taking.
5. Not leaving enough flexibility in the plans, causing difficulties in adjusting to the changing
environment.
6. Failure to properly communicate the plan and thus not securing support and
management buy-in.
7. Difficulty to implement, as divisions do not always collaborate on futuristic stuff, while
focusing on day-to-day operations.
8. Poor employee compensation scheme, which does not invigorate strategic planning and
implementation.
9. Lack of integration of strategy with implementation

METHODS USED TO PLAN STRATEGICALLY

1. Deduction
2. Trial and Error
3. Analogy
TECHNIQUES TO IMPROVE STRATEGIC PLANNING
1. Define the key long-term strategic issues first, before considering budget and operational
issues.
2. Bring together the right people.
3. Adapt planning cycles to the needs of each business.
4. Implement a strategic-performance management system.
5. Integrate human-resources systems into the strategic plan.

PARTICIPANTS IN THE PLANNING

● DECISION MAKERS - Top-level decision makers must be closely involved in the

planning process, to ensure that there is a firm commitment of corporate resources for
the implementation of the planning outcome.
● WORKERS WITH KNOWLEDGE - Company after the company set up high-level
corporate planning departments made up of full time planners who would devise
business strategies. The approach failed to generate the expected business results. As
outlined by Mintzberg (1994), one of the key weaknesses of this approach was that the
strategic planners, while being superior analysts of hard business data, were outsiders
insofar as the various specific business functions (marketing, production, engineering,
and procurements) were concerned. Planning new strategies for the future required both
hard data and intuitive assumptions.

THESE ARE THE ROLES THAT CONSIST THE PARTICIPANTS IN THE PLANNING:
1. Planning Engineer - Planning engineers help engineering teams deliver projects on
schedule. They develop strategies, determine material and labor costs, monitor crew
performance, ensure health and safety regulations are obeyed, and that communications
channels are open.
2. Contract Manager - A contracts manager in the construction industry manages
contracts relating to building projects.
3. Site Manager - Site managers, also known as construction managers, are responsible
for supervising construction sites and running construction projects.
4. Estimator - To collect and analyze data and information in order to estimate costs
associated with manufacturing a product.
5. Subcontractors - To ensure that all subcontracts associated with the projects are
defined, awarded, planned, and efficiently executed in a systematic and organized
manner complying with company subcontract procedures and within the budgets
allocated and within the constraints of the projects.
6. Clients - Clients appreciate honesty, and engineers are ethically obligated to act as a
faithful agent for their clients

PLANNING ROLES OF ENGINEERING MANAGERS

● ASSIST THEIR OWN SUPERIORS IN PLANNING - It is important that engineering
managers spend time and effort to actively assist their direct superiors in planning.
 ● ASK FOR SUPPORT FROM SUBORDINATES - In order to optimally benefit from the
knowledge, expertise, and insights of staff.

DEVELOP ACTION PLANS

● TIME MANAGEMENT
● PROJECT AND PROGRAMS
● CORPORATE KNOW HOW
● PROACTIVE TASK

TOOLS FOR PLANNING

- Engineering managers utilize a number of tools to prepare strategic plans. Some of these tools
generate hard data, whereas others offer qualitative insights into specific subject areas
(Kaufman 2000). The following are examples of some useful planning tools.
● MARKET RESEARCH - Market research applies a number of tools to discover the
preference of customers with respect to the company’s products, services, marketing
strategy, product prices, competitive strengths, and brand reputation in the marketplace.
Specific tools include polling by questionnaires, product concept testing, focus groups,
and pilot testing. The outputs of market research help assess the company’s current
marketing position and future growth opportunities in the marketplace.
● SWOT ANALYSIS - SWOT is the abbreviation for strength, weakness, opportunities,
and threats. Each company has strengths and weaknesses in comparison to its
competitors. The competitors offer products in direct competition with the products of the
company. On the one hand, because of the company’s strengths or core competencies,
there may be opportunities offered in the marketplace that the company ought to exploit
aggressively. The strengths of the competitors and the conditions in the marketplace, the
company might be subjected to certain future threats. Such potential threats could be the
result of technology advancement, business alliances, marketing partnerships, and other
such step changes accomplished by the competition.
● FINANCIAL WHATIF ANALYSIS AND PLANNING - Spreadsheets are useful in
modeling the financial performance of an operation. Financial statements (such as an
income statement, balance sheet, and funds flow statement) are usually modeled in a
spreadsheet program. What-if analyses are readily performed to discover the sensitivity
of the company’s financial performance relative to the changes of specific input
variables.
● SCENARIO PLANNING - Scenario planning defines the major forces that may move a
company in different directions, map out a small number of alternative futures
(scenarios), specify narratives to elucidate these scenarios, and define options for
managing within these future worlds (Garvin and Levesque 2006).\
● PERFORMANCE BENCHMARKS - Performance benchmarks are those that have been
achieved by successful companies in the same industry in which the host company
operates.
WATSON OFFERS AN EXCELLENT SET OF BROAD BASED BENCHMARKS:
● Customer-related measures
● Process-related measures
● Financial measures
● Employee-related measures
● Competition-related measures

PRODUCT LIFE CYCLE ANALYSIS - Every product has a life cycle that moves typically
through the stages of initiation, growth, market saturation, and decline.

PLANNING ACTIVITIES

WHAT IS PLANNING ACTIVITIES?

1. STRATEGIC PLANNING: Forecasting, Action Planning, and Issuing Policies.
2. OPERATIONAL PLANNING: Action Planning, Issuing Policies, and Establishing
Procedures

1. FORECASTING
● To estimate;
● And to predict future conditions and events.
● Six Insightful Rules for Effective Forecasting (Saffo, 2007):
1. Define a cone of uncertainty.
2. Look for the S curve.
3. Embrace the things that don't fit.
4. Hold strong opinions weakly.
5. Look back twice as far as you look forward.
6. Know when to make a forecast.
● TECHNOLOGY FORECAST
1. Basis of the opinions of a group of selected scholars.
2. Speed of computing

2. ACTION PLANNING
1. Analyze critical needs.
2. Define specific objectives.
3. Define standards.
4. Define key action steps.
5. Devise a schedule.
6. Develop a budget.

3. ISSUING POLICIES - Company policies address important issues such as employee

hiring and termination, equal employment opportunity (eeo) policies, annual performance
appraisals, savings plans, benefits, medical insurance, pension plans, sick leave, safety, contact
with representatives of competitors, and other issues.
4. ESTABLISHING PROCEDURE
● CONCENTRATING
● CHARTING
● REVIEWING
● PROPOSING
● DEFINE
● FORMULATING
● COMMUNICATING

SOME SPECIFIC ADVICE ON PLANNING

- Good up-front planning is essential for any company to achieve its desired corporate
objectives. Managers need to pay sufficient attention to planning activities in order to
make sure that certain pivotal factors are sufficiently addressed in the strategic or
operational plans they formulate.

ASSUMPTIONS - Plans are typically built on both hard data and assumptions. Assumptions are
usually based on extrapolations of past experience and intuitive projections into the future. It is
important for managers to constantly seek and interpret additional resources and insights to
verify their assumptions. This is to ascertain that the plans they introduce are built on an
increasingly solid foundation.

PEOPLE - Managers need to take into account the suitability of people, including their
background, personality, training, mental flexibility, interpersonal skills, collaborative attitudes,
adaptability, and emotional attachments to specific ways things are done.

SMALL BUT SURE STEPS

1. Identify clearly the desired end results and the series of small steps required to reach
them.
2. Allow a timely control and mid[1]course correction, if needed.
3. Aim at attaining a series of small progressions (or continuous improvements) that are
more acceptable in numerous old-style companies than one large achievement (or a
step change) after a long period of time.

CONTINGENCY PLANNING - Striving for acquiring hard data and soft information to
continuously validate the assumptions introduced in the planning, managers should take an
additional uncertainty modulating step: Study exhaustively the sensitivity of various assumptions
to the company business and incorporate contin[1]gency steps, including fallback positions, in
order to minimize the adverse impact of questionable assumptions

COMMITMENT - Managers need to secure company commitment before any plan can be
implemented successfully. Company management must declare their intentions and their
readiness to allocate resources needed to achieve the planned objectives. Without a firm
company commitment, nothing of value will emerge from the planning efforts.
STEPS - Set Objectives and Specify Subgoals
1. Strategic Management,
2. Business Management,
3. Operational Management
4. Project Or Program Management,
5. Engineering Management,
6. Production And Manufacturing,
7. Marketing Management,
8. Financial Control, And
9. Globalization.

Develop Action Plan

1. Preparation (By a Certain Date)
2. Group Leader
3. Supervisor
4. Manager
5. Director
6. Vice President

PLANNING IN THE HEALTHCARE INDUSTRY

- Planning in healthcare organizations include formulating targets and aiming for the long-term
vision of the company. You may make a strategy to accomplish these goals and objectives once
you have them in mind. You can't simply establish objectives and goals based on your
requirements. Also, you must set them in accordance with economic trends, government
regulations, and technical developments.

According to Zuckerman (2006), the state of healthcare strategic planning is lagging:

1. Establish a unique, far-reaching vision.
2. Attach critical issues.
3. Formulate focused clear strategies.
4. Differentiate from the competition.
5. Achieve real results.
6. Organize preplanning.
7. Structure effective participation.
8. Think strategically.
9. Manage implementation.
10. Manage strategically.
Zuckermann offered another five state-of-the-art approaches to healthcare planning,riding to
Zuckerman (2006), the state of healthcare strategic planning is lagging borrowed from other
industries:
11. Use knowledge management.
12. Advocate innovations and creativity in strategic approaches.
13. Emphasize bottom-up versus top-down strategic planning.
14. Use an evolving, flexible, and continuously improving process.
 15. Shift from static to dynamic strategic planning

THESE BEST PRACTICES STAND IN FOR SOME GENERALLY APPLICABLE GUIDELINES,

WHICH ARE NOT SPECIFIC TO THE FOUR UNIQUE CHARACTERISTICS OF THE
HEALTHCARE INDUSTRY (GINTER AND SWAYNE, 2006)
1. Built-in characteristics - Unrelated diversifications or vertical integration may not be
appropriate for organizations with healthcare as their core. Their product development
strategies take a very narrow focus, as most technologies are derived from outsiders
2. Culture -Physician managers maintain medical practices, as well as discharge their own
administrative responsibilities.
3. Outside control of hospitals and physicians drives the entire process -Their
requirements can collide with those of other clients (patients, governments). Medicare,
insurance providers, and other third-party payers have an influence on prices and market
power.
4. Society has an impact on healthcare organizations -The idea of healthcare as a right,
access to care, quality of life or death, who pays for the cost of care, and other similar
societal problems have an impact on healthcare strategic planning.