ENGINEERING MANAGEMENT

PLANNING TECHNICAL ACTIVITIES

INTRODUCTION
If managing an organization is to be pursued vigorously, planning
will constitute the most important activity. Managers who plan are
afforded with the opportunity to carefully analyze situations which
directly contribute to effective decision-making.
The engineer manager, regardless of his management level, will
have to devote some of his time to planning. The higher the management
level the engineer manager is in, the more sophisticated his planning
activity becomes.

THE NATURE OF PLANNING

There are many instances when managers are overwhelmed by various
activities which at times becloud his judgment. This must be expected
since anybody who is confronted by several situations happening
simultaneously will loose sight of the more important concerns. To
minimize mistakes in decision-making, planning is undertaken.
A plan, which is the output of planning, provides a methodical
way of achieving desired results. In the implementation of activities,
the plan serves as a useful guide. Without the plan, some minor tasks
may be afforded major attention which may, later on, hinder the
accomplishment of objectives.
An example of the difficulty of not having a plan is illustrated.
The management of an engineering firm was able to identify the
need to hire additional three employees. The manager proceeded to
invite applicants, screen them, and finally hired three of them. When
the hiring expense report was analyzed, it involved more than double
the amount spent by other firms in hiring the same number of people.
When an inquiry was made, it was found out that the manager
committed some errors of judgment. For instance, he used an expensive
advertising layout in a newspaper when a simple message will do.
Also, it was found out that the absence of a hiring plan
contributed to the high cost of hiring.

PLANNING DEFINED
 Various experts defined planning in various ways, all of which
are designed to suit specific purposes.
Planning, according to nickels and others, refers to “the
management function that involves anticipating future trends and
determining the best strategies and tactics to achieve organizational
objectives.” This definition is useful because it relates the future
to what could be decided now.
Aldag and Stearns, on the other hand, define planning as “the
selection and sequential ordering of tasks required to achieve an
organizational goal.” This definition centers on the activity required
to accomplish the goals.
The definition of Cole and Hamilton provides a better guide on
how to effectively perform this vital activity. Planning, according to
them is “deciding what will be done, who will do it, where, when, and
how it will be done, and the standards to which it will be done.”
For our purpose, it will suffice to define planning as selecting
the best course of action so that the desired result may be achieved.
It must be stressed that the desired result takes first priority and
the course of action chosen is the means to realize the goal.

PLANNING AT VARIOUS MANAGEMENT LEVELS

Since engineer managers could be occupying positions in any of
the various management levels, it will be useful for them to know some
aspects of planning undertaken at the different management levels.
Planning activities undertaken at various levels are as follows:
1. Top management level – strategic planning
2. Middle management level – intermediate planning
3. Lower management level – operational planning

STRATEGIC PLANNING
The term strategic planning refers to the process of determining
the major goals of the organization and the policies and strategies
for obtaining and using resources to achieve those goals. The top
management of any firm is involved in this type of planning.
In strategic planning, the whole company is considered,
especially its objectives and current resources. The output of
strategic planning is the strategic plan which spells out “the
decision about long-range goals and the course of action to achieve
these goals.”

INTERMEDIATE PLANNING
Intermediate planning refers to “the process of determining the
contributions that subunits can make with allocated resources.” This
type of planning is undertaken by middle management.
 Under intermediate planning, the goals of a subunit are
determined and a plan is prepared to provide a guide to the
realization of the goals. The intermediate plan is designed to support
the strategic plan.

TYPES OF PLANNING
 THE ORGANIZATION AND TYPES OF PLANNING UNDERTAKEN

OPERATIONAL PLANNING
The term operational planning refers to “the process of
determining how specific tasks can best be accomplished on time with
available resources.” This type of planning is a responsibility of
lower management. It must be performed in support of the strategic
plan and the intermediate plan.
THE PLANNING PROCESS
The process of planning consists of various steps depending on
the management level thar performs the planning task. Generally,
however, planning involves the following:
1. Setting organizational, divisional, or unit goals
2. Developing strategies or tactics to reach those goals
3. Determining resources needed and
4. Setting standards

SETTING ORGANIZATION, DIVISIONAL, OR UNIT GOALS

The first task of the engineer manager is to provide a sense of
direction to his firm (if he is the chief executive), to his division
(if he heads a division), or to his unit (if he is a supervisor). The
setting of goals provides an answer to the said concern. If everybody
in the firm (or division or unit, as the case may be) is aware of the
goals, there is a big chance that everybody will contribute his share
in the realization of such goals.
Goals may be defined as the “precise statement of results sought,
quantified in time and magnitude, where possible.” Examples of goals
are provided in the figure.
EXAMPLES OF GOALS, BY ORGANIZATIONAL LEVEL
DEVELOPING STRATEGIES OR TACTICS TO REACH GOALS
After determining the goals, the next task is to devise some
means to realize them. The ways to realize the goals are called
strategies and these will be the concern of top management. The middle
and lower management will adapt their own tactics to implement their
plans.
A strategy may be defined as “a course of action aimed at
ensuring that the organization will achieve its objectives.”
An example of a strategy is as follows:
The decision of a construction firms management to diversify
its business by engaging also in the trading of construction materials
and supplies.
When the above-mentioned strategy is implemented, it may help the
construction firm realize substantial savings in the material and
supply requirements used in their construction activities. The firm
will also have greater control in the timing of deliveries of
materials and supplies.
A tactic in short-term action taken by management to adjust to
negative internal or external influences. They are formulated and
implemented in support of the firm’s strategies. The decision about
short-term goals and the courses of action are indicated in the
tactical plan.
An example of a tactic is the hiring of contractual workers to
augment the company’s current workforce.

DETERMINING RESOURCES NEEDED

When particular sets of strategies or tactics have been devised,
the engineer manager will, then, determine the human and nonhuman
resources required by such strategies or tactics. Even if the resource
requirements are currently available, they must be specified.
The quality and quantity of resources needed must be correctly
determined. Too much resources in terms of either quality or quantity
will be wasteful. Too little will mean loss of opportunities for
maximizing income.
To satisfy strategic requirements, a general statement of needed
resources will suffice. The specific requirements will be determined
by the different units of the company.
To illustrate:
Suppose the management of a construction firm has decided,
in addition to its current undertaking, to engage in the trading
of construction materials and supplies.
A general statement of required resources will be as
follows: A new business unit will be organized to deal with the
buying and selling of construction materials and supplies. The
amount of ₱50 million shall be set aside to finance the activity.
Qualified persons shall be recruited for the purpose.
SETTING STANDARDS
The standards for measuring performance may be set at the
planning stage. When actual performance does not match with the
planned performance, corrections may be made or reinforcements given.
A standard may be defined as “a quantitative or qualitative
measuring device designed to help monitor the performances of people,
capital goods, or processes.”
An example of a standard is the minimum number of units that must
be produced by a worker per day in a given work situation.

TYPES OF PLANS
Plans are of different types. They may be classified in terms of
functional areas, time horizon, and frequency of use.

FUNCTIONAL AREA PLANS

Plans may be prepared according to the needs of the different
functional areas. Among the types of functional area plans are the
following:
1. Marketing Plan – This is the written document or blueprint for
implementing and controlling an organization’s marketing
activities related to a particular marketing strategy.
2. Production Plan – This is a written document that states the
quantity of output a company must produce in broad terms and by
product family.
3. Financial Plan – It is a document that summarizes the current
financial situation of the firm, analyses financial needs, and
recommends a direction for financial activities.
4. Human Resource Management Plan – It is a document that indicates
the human resource needs of a company detailed in terms of
quantity and quality and based on the requirements of the
company’s strategic plan.

PLANS WITH TIME HORIZON

Plans with time horizon consists of the following:
1. Short-range plans – These are plans intended to cover a period of
less than one year. First-line supervisors are mostly concerned
with these plans.
2. Long-range plans – These are plans covering a time span of more
than one year. These are mostly undertaken by middle and top
management.

PLANS ACCORDING TO FREQUENCY OF USE

According to frequency of use, plans may be classified as:
1. Standing plans and
2. Single-use plans.
 Standing Plans. These are plans that are used again and again, and
they focus on managerial situations that recur repeatedly.
Standing plans may be further classified as follows:
1. Policies – They are broad guidelines to aid managers at every
level in making decisions about recurring situations or function.
2. Procedures – They are plans that describe the exact series of
actions to be taken in a given situation.
3. Rules – They are statements that either require or forbid a
certain action.
Single-Use Plans. These plans are specifically developed to
implement courses of action that are relatively unique and are
unlikely to be repeated.
Single-use plans may be further classified as follows:
1. Budgets
2. Programs, and
3. Projects

A budget to Weston and Brigham, is “a plan which sets forth the

projected expenditure for a certain activity and explains where the
required funds will come from.
A program is a single-use plan designed to coordinate a large set
of activities.
A project is a single-use plan that is usually more limited in
scope than a program and is sometimes prepared to support a program.
TYPES OF PLANS
PARTS OF THE VARIOUS FUNCTIONAL ARE PLANS
The engineer manager may be familiar with engineering plans,
knowing the details from beginning to end. However, the ever-present
possibility of moving from one management level to the next and from
one functional area to another presses the engineer manager to be
familiar as well with other functional area plans.

THE CONTENTS OF THE MARKETING PLAN

The structure and content of marketing plans vary depending on
the nature of the organizations adapting them. William Cohen maintains
that the following must be included in the marketing plan.
1. The Executive Summary – Which presents an overall view of the
marketing project and its potential.
2. Table of Contents
3. Situational Analysis and Target Market
4. Marketing Objectives and Goals
5. Marketing Strategies
6. Marketing Tactics
7. Schedules and Budgets
8. Financial Data and Control

THE CONTENTS OF THE PRODUCTION PLAN

The production plan must contain the following:
1. The amount of capacity the company must have
2. How many employees are required
3. How much material must be purchased

THE CONTENTS OF THE FINANCIAL PLAN

The components of the financial plan are as follows.
1. An analysis of the firm’s current financial condition as
indicated by ana analysis of the most recent statements.
2. A sales forecast
3. The capital budget
4. The cash budget
5. A set of pro forma (or projected) financial statements
6. The external financing plan
AN EXAMPLE OF A MARKETING PLAN SCHEDULE
 AN EXAMPLE OF A PRODUCTION PLAN SCHEDULE

CONTENTS OF THE HUMAN RESOURCES PLAN

 The human resources plan must contain the following:
1. Personnel requirements of the company
2. Plans for requirement and selection
3. Training plan
4. Retirement plan

PARTS OF THE STRATEGIC PLAN

The strategic plan must contain the following:
1. Company or corporate mission
2. Objectives or goals
3. Strategies
Company of corporate mission refers to the “strategic statement
that identifies why an organization exists, its philosophy of
management, and its purpose as distinguished from other similar
organizations in terms of products, services, and marker.”

MAKING PLANNING EFFECTIVE

Planning is done so that some desired results may be achieved. At
times, however, failure in planning occurs.
Planning may be made successful if the following are observed:
1. Recognize the planning barriers
2. Use of aids to planning
The planning barriers, according to Plunkett and Attner, are as
follows:
1. Manager’s inability to plan
2. Improper planning process
3. Lack of commitment to the planning process
4. Improper information
5. Focusing on the present at the expense of the future
6. Too much reliance on the planning department
7. Concentrating on only the controllable variables
Among the aids to planning that may be used are:
1. Gather as much information as possible
2. Develop multiple sources of information
3. Involve others in the planning process

SUMMARY
Technical activities, like other activities, require effective
planning, i.e., if objectives and goals are to be realized.
A plan is a methodological way of achieving results.
Planning is undertaken at various management levels.
 Various steps are required in the planning process depending on
the management level.
Plans may be classified in terms of functional areas, time
horizon, and frequency of use.
Plans can be made effective by recognizing the planning barriers
and making use of aids to planning.