Engineering Management

KNR 4553 / KNL 4603

Topic 3 - Planning
Planning
• a major function in engineering management.
• the work done by an engineering manager to
predetermine a course of action.
• is made necessary by rapid changes in technology,
environment, and organizations.

The purpose of planning is to enhance the effectiveness

and efficiency of the company by providing focus and
direction (Daft 2015; Institute of Leadership &
Management 2007; Zucker 2007; Axson 2010)
 There are two
(2) types of
planning that
add value to a
company:

• STRATEGIC

• OPERATIONAL
(TACTICAL)
Types of Planning
Strategic Planning

• sets the goals, purpose, and

direction of a company.
• usually involved top-level
engineering managers (CEO, CTO,
VP).
• focuses on identifying worthwhile
future activities.
• ensures that the company applies its
resources—core competencies,
• corporate know-how, proprietary
technologies, skilled manpower
resources, business relationships,
and so on—effectively to achieve the
short- and long-term goals of the
company
Operational Planning
• Performed by middle level (managers
and directors) and lower level
(supervisors and group leaders).
• define the specific tactics and action
steps needed to accomplish the goals
specified by top management
(Duggan 2011).
• involves a process of analysis by
which a corporate goal or a set of
corporate intentions is to be
accomplished by performing a group
of action steps.
• also called platform-based planning
because it
• extrapolates future results from a
well-understood, predictable
platform of past experience.
 • Prediction of the
future
• Applicable
experience and
insight
• Random process
of strategy
making

The major difficulties

of strategic planning
Reasons of failed
strategic plans
• Not thinking strategically
• Failure to identify critical success factors
for the company
• Not having both an internal and an
external focus.
• Lack of long-term commitment from
company management.
• Reluctance of senior management to
accept responsibility for tough decisions.
• Not leaving enough flexibility in the
plans, thus causing difficulties in
adjusting to the changing environment.
• Failure to properly communicate the plan
and thus not securing support and
management buy-in.
Methods for strategic planning
Deduction:
Based on data, managers invoke general administrative and economic
principles to a specific situation, weigh alternatives, and make rational choices.
This method needs a lot of data, and is useful for mature and stable industries.

Trial and error:

Experiment with several options and select one. This is good for ambiguous,
novel, or complex situations in order to experiment and learn from the
experience.

Analogies:
Various strategies are made by analogies. Decision-makers often need to think
back to a familiar situation, draw lessons from it, and apply those lessons to
the current situation. However, making decision by analogy must be done
carefully.
 • Time management
• Projects and
programmes
• Corporate Know-
How
• Proactive tasks

Planning Roles of
Engineering Managers
Time management

• managers need to
plan and prioritize
their personal daily
according to the
value each task may
add
• to maximize the
value contributed
by their daily
activities
Projects and Programmes
• to plan projects and programs assigned to them by
upper management
• to fully understand the applicable project objectives,
relevant performance metrics, the significance of
project’s outcome to the company
• staff members selection for input
• integration of input for project plan draft and
distribution of plan for final details
• securing authorization from upper management
prior to project commencement
Corporate Know-How

• critically important to maintain and

enhance company’s competitiveness in the
marketplace
• Many types / forms:
• documentable knowledge : should be
planned for capture, retain, and widely
disseminate
• cognitive knowledge: to find effective
ways to induce experts to externalize
the knowledge
• problem-solving expertise: plan for
perseverance of learning experience.
Proactive Tasks
• Plan to devote efforts to proactively pursue certain
other tasks:
• Utilizing new technologies to simplify and enhance the
products and services of the company
• Creating business networks and searching for partners to
form mutually beneficial alliances
• Offering new or enhanced services to customers
• Initiating new programs to promote healthy customer
relationships
• Developing novel products/services with distinguishable
attributes
• Reengineering and simplifying specific operational
processes to increase efficiency
• Outsourcing specific tasks to augment cost-effectiveness
and to reduce time tomarket
Tools for Planning
1. Market research
• 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
2. SWOT analysis
• A well-performed SWOT analysis will bring to the fore an
assessment of the company’s current position, as such
procreates a road map by which a company can make informed
decisions about improving its core competencies to meet its
current and future business and operational needs
3. Financial what-if analysis and modeling
• What-if analyses are readily performed to discover the
sensitivity of the company’s financial performance relative to the
changes of specific input variables
 4. Scenario
planning
• defines the
major forces that
may move a
company in
different
directions, maps
out a small
number of
alternatives
futures
• defines
narratives to
describe these
scenarios
• develops options

Tools for Planning

for managing
within these
future worlds
Tools for Planning

5. Performance benchmarks
those that have been successfully
applied by successful firms in the
same or a related industry
• Customer-related measures
• Process-related measures
• Financial measures
• Employee-related measures
• Competition-related measures
Tools for Planning
6. Technology forecasting
• critical importance to those companies whose
products are composed of high-technology
components
• Engineering managers need to understand the
value that any of these emerging technologies
may have on the products and services offered
by their employers and plan accordingly
7. Product life cycle analysis
• Engineering managers need to examine the life
cycles of all products marketed by their
enterprises.
• Doing so will guide them in introducing new
products or product enhancements in a timely
manner in order to sustain company
profitability.
Planning Activities

• Forecasting
• Action planning
• Issuing policies
• Establishing
procedures
Planning Activities -
Forecasting
The objective of forecasting is to estimate and predict
future conditions and events

Steps of forecasting:
1. Identify critical factors
2. Determine the forecasting horizon
3. Select forecasting methods
• Mechanical projection
• Analytical projection
4. Forecast future eventualities
5. Prepare for the forecast
6. Adjust forecasts regularly
7. Ensure understanding and acceptance
Planning Activities
– Action Planning
The process of establishing
specific objectives, action
steps, and a schedule and
budget related to a
predetermined program,
task, or project

Steps:
1. Analyze critical needs
2. Define specific
objectives
3. Define standards
4. Define key action steps
5. Create a schedule
 Planning
Activities
– Issuing Policies
For companies to operate smoothly and consistently,
corporate rules and regulations are used to prescribe
acceptable practices.

Effective policies must have common characteristics:

1. applies uniformly to the organization
2. remains relatively permanent, unless and until
repealed
3. fosters the objectives of the company
4. frees managers and employees to focus on
important matters
5. encourages effective teamwork
6. issued by top management or authorized
managers with perspective, balance, and
objectivity
Planning Activities
– Establishing Procedures
Developing procedures is of
critical importance to a
company because of the
following:
1. preservation the best
way to perform
repetitive work
2. provide the basis for
method improvements
3. ensure standardized
action
4. simplify training
5. retain corporate
memory
Planning Activities
– Establishing Procedures
Techniques for developing procedures:
1. Concentrating on procedures for critical work that
is in high demand, repetitive, and time-consuming.
2. Charting graphically the work required
3. Reviewing work characteristics carefully in order
to decipher
4. Proposing procedures in the context of existing
objectives, policies, and programs by keeping the
procedures to a minimum
5. Defining improvements to procedures and
updating them regularly.
6. Formulating the procedures in writing.
7. Communicating with all affected parties to ensure
understanding and acceptance.