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Introduction To Engineering Management 2
Introduction To Engineering Management 2
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)
Introduction 1
Aims
Introduction 3
Henri Fayol (1841-1925)
• Mining Engineer
• six primary functions of management:
– forecasting
– planning
– organizing
–
–
commanding
coordinating } leading
– controlling (feedback->adjustment)
Introduction 4
Engineering Management
Functions
Planning Leading
Engineer Manager
Organizing Controlling
Introduction 5
Engineering Management Functions
Administrative
Leadership Skills
Skills
Technical Skills
Introduction 7
Enterprise Objective:
Value Addition
Management-speak: Engineering-speak:
• Increase Sales Revenue (new • Efficiency - Accomplishing
and enhanced products/services tasks with the least amount of
- faster, better, cheaper - to resources (time, money,
create greater customer equipment/facilities,
satisfaction) technology - know-how,
procedure, process, skills) -
• Reduced Cost to Do Business do things right
(simplified product design, new
technologies, improved
productivity, raised efficiency, • Effectiveness -
reduced inventory via supply Accomplishing tasks with
chains, new production and efforts commensurate with
marketing partnerships and the value created by these
alliances) tasks - do the right things
Introduction 8
Managerial Decision Making
• What, where, who, how – managers faces
numerous and challenging decisions
Introduction 9
Beware of Our Weakness:
We Are Poor at Learning from the Past
How to improve our management “intuition”?
Should fully utilize past information to update both
current beliefs and future predictions
“We are active learners, but tend to filter information
to confirm our opinions.”
Draw unbiased insights about the current state of the
world from available data
We are frequently poor observational statisticians.
[Don’t know Bayes’ rule?]
Conservation bias: reluctant to give up prior beliefs
about the world, even in light of new information,
revision of beliefs towards right direction is often
insufficient, or overly conservative
Introduction 10
Learnable Skills
• Management knowledge and skills (operational,
strategic, financial/accounting, interpersonal
skills/communications, etc.)
Introduction 11
Frederick Winslow Taylor
(1856-1915)
Principles of Scientific Management (1911)
– Replace rule-of-thumb work methods with methods
based on a scientific study of the tasks.
– Scientifically select, train, and develop each worker
rather than passively leaving them to train themselves.
– Cooperate with the workers to ensure that the
scientifically developed methods are being followed.
– Divide work nearly equally between managers and
workers, so that the managers apply scientific
management principles to planning the work and the
workers actually perform the tasks.
Introduction 12
• Knowledge and skills in decision-making
tools
• Appreciation of management issues and
complexities in implementing decisions
Introduction 13
• Planning
– Project Scheduling
– Project Budgeting and Selection
• Organising
– Strategic decision-making
– Game theory
• Leading
– Incentives and Productivity (Principal-agent theory)
• Controlling
– Project Management
– Performance evaluation
Introduction 14
BP Oil Spill
Project Management
Introduction 16
Beware of Our Weakness:
We Are Myopic
(unimaginative,uncreative)
“If we isolate a single critical
fault in human abilities to act
as efficient decision makers, it
is that we do not think ahead.”
Introduction 17
Heuristic vs. Analysis
Heuristic
A technique to solve a problem with a “good” but not
necessarily “optimal” solution
Based on experiences, hunches/instincts, and judgment
Analytical
Formulate the decision model for the problem
Use of computer and other tools to conduct an
extensive and thorough analysis to produce an
“optimal” solution
Introduction 18
When Do Heuristics Work Well?
Introduction 19
When Do Heuristics Fail Us?
Ambiguity of Feedback
The trial and error method does not work: the decision is not
repeated or feedback is ambiguous
Complexity of Decision
The problem is not intuitive: beyond our cognitive
capabilities
Introduction 20
Strategic Decision Making
• Marriage problem:
• Interview the first 37 (100/e) candidates,
• Then continue interviewing and marry the first
candidate that is better than the initial 37.
• This maximises the chance of marrying the
absolute best candidate.
Present Future
Local Global
Introduction 24
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
Introduction 25
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
Introduction 26
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
Introduction 27
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
Introduction 28
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
Introduction 29
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
Introduction 30