Untitled Quiz

Engineering Management

• Engineering Management is concerned with the design, installation, and improvement of integrated systems.
• It involves people, material, information, equipment, and energy.
• It draws upon specialized knowledge and skills in mathematical, physical, and social sciences.
• It applies engineering analysis and design principles to specify, predict, and evaluate results.
• Scientific discipline designs, implements, and develops models, processes, and systems.
• It considers engineering relationships between management tasks (planning, organizing, leading, controlling) and the human element.
• It encompasses various services like production, research, marketing, finance, etc.
• Engineering management is the fusion of business and engineering principles.
• Specialized knowledge of economics and management helps forecast product utility, advantages, disadvantages, and growth contribution.
• This field applies engineering principles to business practice.
• It brings together technological problem-solving, organizational, administrative, and planning skills to manage complex enterprises.

Engineering Management Domain

• Core areas include mathematics, operations research, statistics, manufacturing systems engineering, accounting, economics, strategy, project management, human resource management, and psychology.

Example areas of engineering management

• Product development
• Manufacturing
• Construction
• Design engineering
• Industrial engineering
• Technology
• Production

Successful engineering managers

• Require training and experience in business and engineering.
• Need to operate effectively and efficiently for improved problem-solving and operational improvement
• Need to understand human resource management, finances, industrial psychology, quality control, operations research, and environmental management

Engineering

• The profession combining knowledge of mathematics and natural sciences.
• Gained through study, experience, and practice.
• Applied with judgment to develop ways to utilize materials and natural forces for mankind's benefit.

Management

• A set of activities, including planning, decision-making, organizing, leading, and control.
• Directed at an organization's resources (human, financial, physical, and informational).
• Aiming to achieve the organization's goals efficiently and effectively.

Function of Manager

• Planning
• Organizing
• Directing
• Controlling

Planning

• Managers must have objectives in mind.
• Effective planning involves defining objectives.
• Deciding what/when/how/who needs to be done.

Organizing

• Gathering and allocating resources.
• Coordinating organizational work.
• Deliberate structuring regarding authority, communication flow, and task accomplishment.

Directing

• Redirecting human behavior toward achieving objectives.
• Motivating others to produce.
• Influencing subordinates.

Controlling

• Keeping things on track.
• Steering performance toward desired goals.
• Coordinating monitoring and adjusting performance.

Managerial Skills

• Top management: Conceptual skills (solving long-term problems and viewing the entire organization as a system).
• Middle management: Human relations skills (working effectively with others and ensuring harmony).
• Supervisory management: Technical skills (using tools, applying knowledge, and managing processes).

Contrast between American and Japanese organizations

• American: Mobile employees, personal decision-making, individual responsibility, rapid advancement, specialization in careers, explicit control mechanisms, focused concern for employees.
• Japanese: Lifetime employment, collective decision-making, group responsibility, slow and systematic advancement, general career perspective, implicit control system, holistic concern for employees.

Difference Between Boss & Leader

• Boss: Drives employees, depends on authority, inspires fear, blames for breakdowns, uses people, takes credit, commands, says "Go."
• Leader: Coaches employees, relies on goodwill, generates enthusiasm, shows how to do things, develops people, gives credit, asks, says "Let's go."

Course Outline

• Engineering Management
• Marketing & Strategy
• Organizational Model & Human Resource
• Cost Management & Productivity
• Project Management
• Quality Control
• Operations Research
• Supply Chain
• Industrial safety

Marketing

• Market: A collection of buyers and sellers, interacting to determine product prices.
• Buyers: Consumers purchasing goods and companies purchasing labor/inputs.
• Sellers: Consumers selling labor, resource owners selling inputs, and firms selling goods.
• Arbitrage: Buying a product at a low price and selling it for more in another location.
• Product: Anything offered to satisfy a need or want.
• Market Price: Transactions are exchanges of goods for a price.
• Goods: Physical, tangible entities.

Core Market Concept

• Needs, wants, and demands.
• Markets
• Core Marketing Concepts.
• Exchange, transactions, and relationships
• Value and satisfaction
• Marketing offers: products, services, and experiences

Types of Markets

• Perfectly Competitive Markets: Many buyers and sellers, no individual can influence price.
• Example: Agricultural markets
• Noncompetitive Markets: Individual producers can influence price.
• Example: OPEC in the world oil market

The Supply Curve

• Shows how much producers are willing to sell at a given price.
• This relationship is shown by the equation Qs = Qs(P). Variables include labor, capital, and raw materials.

The Demand Curve

• Shows how much consumers are willing to buy at a given price.
• The relationship can be shown by the equation QD = QD(P). Variables include income, consumer tastes, price of related goods, substitutes, and complements.

The Market Mechanism

• Supply and demand interact to determine market-clearing price.
• When not in equilibrium, the market adjusts to eliminate shortages/surpluses and return to equilibrium.
• Effective markets must be competitive.

Surplus

• Market price is above equilibrium.
• There's an excess supply.
• Producers lower prices to increase demand.

Shortage

• Market price is below equilibrium.
• There's a shortage of supply.
• Producers raise prices to decrease demand and increase supply.

Consumer Behavior

• The explanation of how consumers allocate income to purchase goods/services.

The Consumer Decision Process

• Need recognition: The buyer recognizes a problem or need.
• Information search: The buyer searches for more information.
• Evaluation of alternatives: The buyer evaluates alternative brands.
• Purchase decision: The buyer purchases the product.
• Post-purchase behavior: The buyer takes further action based on satisfaction/dissatisfaction.
• Cognitive Dissonance: Buyer's discomfort after purchase.

Stages in Adoption Process

• Awareness: The consumer becomes aware of a new product but lacks information.
• Interest: The consumer seeks information about a new product.
• Evaluation: The consumer considers whether trying the new product makes sense.
• Trail: The consumer tries a new product on a small scale.
• Adoption: The consumer decides to use the product regularly.

Individual Differences in Innovativeness

• Innovators: Adventurous, try new ideas at risk.
• Early Adopters: Guided by respect, community leaders, adopt new ideas early.
• Early Majority: Deliberate, rarely leaders, adopt new ideas before the average person.
• Late Majority: Sceptical, adopt innovation after most people have tried it.
• Laggards: Tradition-bound, suspicious of changes, adopt innovation only when it becomes a tradition.

Difference between Market Segmentation, Targeting, and Positioning

• Market Segmentation: Identify bases for segmenting the market.
• Market Targeting: Develop measures of segment attractiveness.
• Market Positioning: Develop positioning for each target segment.

Market Segmentation

• Process of subdividing the total market into groups or segments of people/organizations with similar needs.
• Enables planning a marketing mix to satisfy those needs.

Market Segmentation Variables

• Geographic (global, national, etc., climate, urban/rural)
• Demographic (age, family size, gender, marital status)
• Psychographic (attitudes, interests, lifestyles)
• Behavioural (usage rates, brand loyalty)
• Socioeconomic (income, education, occupation, religion)
• Lifestyle, personality

Market Targeting

• Organizations target their products among the various segments once markets are segmented.
• Marketing plans and schemes assist in targeting.

Market Positioning

• Creating and maintaining a product concept in prospective buyers' minds, considering competing products.
• A company positions a new product with the characteristics most desired by the target market.

New Product Development Process

• New product strategy
• Idea generation
• Idea screening
• Concept development and testing
• Business analysis
• Test marketing
• Marketing strategy
• Commercialization

Product Life-Cycle

• The progression of a product's sales and profits over its lifetime.
• Stages include product development, introduction, growth, maturity, and decline.

Product Life-Cycle (Stages Breakdown)

• Introduction: Low sales, high cost per customer, negative profits, innovators as customers, few competitors, create product awareness and trial.
• Growth: Rapidly rising sales, average cost per customer, rising profits, early adopters, growing number of competitors, maximize market share.
• Maturity: Peak sales, low cost per customer, high profits, middle majority, stable number of competitors, maximize profit while defending market share.
• Decline: Declining sales, low cost per customer, declining profits, laggards as customers, declining number of competitors, reduce expenditure and milk the brand.

Strategy

• A set of actions managers take to increase company performance relative to industry rivals.
• A strategy is implemented to create a competitive advantage over other companies.
• A company has a competitive advantage when its profitability exceeds industry averages – this advantage is considered 'sustained' if it persists over time.
• Strategy lies in creating tomorrow's competitive advantage faster than competitors can imitate it.

Stakeholders

• Individuals or groups with an interest, claim, or stake in the company's performance.
• Anyone in an exchange relationship with the company.

Corporate Governance

• Mechanisms to monitor managers, ensuring they pursue strategies beneficial to stakeholders.

Internal Stakeholders

• Stockholders
• Employees
• Executives and managers
• Board members

External Stakeholders

• Customers and suppliers
• Creditors
• Governments
• General public

The Mission Statement

• Establishes guiding principles for strategic decision-making, encompassing mission, vision, values, and corporate goals.
• A key indicator of how an organization views stakeholder claims.

The Mission

• Describes what the company does, potentially being product-oriented or customer-oriented.

The Vision

• Outlines what the company aspires to achieve, setting ambitious yet realistically attainable goals that motivate employees.

Major Goals

• Precise and measurable future states that a company strives to achieve.
• The goals should: be precise and measurable, address important issues, be challenging yet realistic, have a specified time period.

Industry

• A group of companies offering products or services that are close substitutes for one another.

SWOT Analysis

• Distilling the findings of internal and external audits.
• Highlighting strengths, weaknesses, opportunities, and threats facing a company.
• Analysis is crucial for identifying strategic actions.

Porter's Five Forces Model

• Risk of entry by potential competitors: Height of barriers to entry (economies of scale, brand loyalty, absolute cost advantage, superior production operations, control of particular inputs, access to cheaper funds, customer switching costs, government regulation)
• Intensity of rivalry among established companies: Competitive struggles (industry's structure, demand)
• Bargaining power of buyers: The ability to drive prices down/quality up (size of buyers, number of suppliers, cost to have many suppliers)
• Bargaining power of suppliers: Ability of suppliers to increase industry costs (substitutes, importance of the industry to the supplier)
• Threat of substitutes: Other products satisfying similar needs.

Stages in the Industry Life Cycle

• Embryonic: Industry development is slow, buyers are unfamiliar with product, and prices are high.
• Growth: Demand takes off, many new customers, relatively low competition, entry barriers relatively low.
• Shakeout: Growth slows, demand approaches saturation levels, few potential first-time buyers, high rivalry.
• Mature: Market is totally saturated, limited replacement demand, growth is low/zero, barriers increase, competition drives down prices.
• Decline: Falling demand, excess capacity, growth becomes negative, technology substitution/demographics.

Company Profitability

• Amount of value customers place on products/services determines profitability (and competitive advantage).
• A company's price is often lower than the customer-perceived value.

Company Profitability (Ways to Improve)

• Economies of scale (increase efficiency of production as the number of goods increases).
• Spread fixed costs across large product volumes.
• Greater specialization of labor.

Value Creation

• Two key strategies for creating value:
• Low cost: Driving down cost structure
• Differentiation: Creating uniqueness.

Building Competitive Advantage

• Efficiency, Innovation, Quality, and Customer Responsiveness are the foundational factors.

Efficiency

• Outputs per unit of input.
• Factors such as employee productivity and capital productivity are crucial.

Innovation

• The act of developing new products or processes.
• Includes product and process innovation.

Quality

• Customers perceive qualities better than competitors' attributes.
• Types of quality include excellence and reliability (products consistently perform intended functions).
• Designing for quality should include factors like style, aesthetic appeal, features, and level of service.

Customer Responsiveness

• Providing superior customer needs identification and fulfillment.
• High customer satisfaction leads to differentiation and a stronger competitive advantage.

Strategic Change

• Shifting a company from its current state to a desired future ideal in order to improve competitive advantage and profitability.
• Key mechanisms include reengineering (focus on processes) and restructuring (simplifying structures and streamlining operations).

The Change Process

• Determining the need for change, identifying gaps in performance.
• Identifying obstacles to change and managing those obstacles accordingly.
• Evaluating change effectively.

Project Management

• The art of directing and coordinating resource allocation (human/material) throughout a project to achieve defined objectives (scope, cost, time, quality, and participation satisfaction.)
• Planning, monitoring, and control of project people, processes, and events are crucial to its success.
• Application of knowledge, skill, tools, and techniques to achieve stakeholder needs.

Project Management (Key Components):

• Defining: Initial phase, involves feasibility analysis, establishing project goals, tasks and responsibilities, and assigning a project manager.
• Planning: Scheduling tasks, budgeting, identifying and managing resource requirements (personnel, equipment, etc.), potential threats and risks.
• Executing: Implementation of plans in action, utilizing most of the resources, and monitoring/managing the project's progress.
• Delivering: Closing the project (before its normal end if feasible), releasing resources and staff, and documenting lessons learned.

Precedence Diagramming Method (PDM)

• Method for constructing a project schedule network diagram, using boxes (nodes) to represent activities and arrows demonstrating dependencies.
• It is also referred to as Activity-on-Node (AON) and the method of choice by most management software packages. Precedence relationships include Finish-to-Start, Finish-to-Finish, Start-to-Start, and Start-to-Finish).

Critical Path Method

• Mathematically-based algorithm for scheduling project activities.
• Establishing a project model includes identifying tasks, duration of tasks, and dependencies between tasks.
• Calculation of the longest path enables determining a project's earliest and latest completion times.

S-Curve Concept

• Used for tracking progress and growth during a project lifecycle.
• Compares projected man hours/costs against actual numbers/costs in the same timeframe.
• Provides a graphical representation of progress, and the baseline data enable detailed comparisons.

Supply Chain Management

• All facilities, functions, and activities concerning the flow and transformation of goods/services from raw materials to the end-user.
• Includes associated flows of information.
• Integrated processes for sourcing, making, and delivering products.

Supply Chain Management (Keys to Effectiveness):

• Managing information flow through the chain.
• Responding to uncertainties in demand without creating costly excess inventory.
• Creating effective supply chain inventory control systems.
• Building information communication and trust among related entities.

Inventory Control

• Inventory management is used to balance product availability and inventory costs.
• It is crucial when supply/demand is variable and unpredictable.
• Systems include continuous/fixed-order-quantity methods and periodic/fixed-time-period methods.
• Types of inventory: raw materials, purchased parts/supplies, work-in-process (WIP) products, items in transport, tools/equipment.
• Costs related to inventory include carrying costs (storage, handling, etc.), ordering costs, and shortage costs (lost sales from insufficient stock).
• The ABC classification system groups items by sales volume (high volume are 'A', medium volume ‘B’, and low volume ‘C’ to effectively manage inventory).