Engineering Management Lecture 2 (Planning and Forecasting) PDF

‫كلية الهندسة – قسم الهندسة الكهربائية‬ ‫العام الدراسي‪2023 /2022 :‬م – الفصل الدراسي الثاني‬ ‫المقرر‪ :‬اإلدارة الهندسية‬ ‫الفرقة‪ :‬الرابعة‬ ‫رقم المحاضرة‪2 :‬‬ ‫عنوان المحاضرة‪PLANNING AN...

‫كلية الهندسة – قسم الهندسة الكهربائية‬ ‫العام الدراسي‪2023 /2022 :‬م – الفصل الدراسي الثاني‬ ‫المقرر‪ :‬اإلدارة الهندسية‬ ‫الفرقة‪ :‬الرابعة‬ ‫رقم المحاضرة‪2 :‬‬ ‫عنوان المحاضرة‪PLANNING AND FORECASTING I :‬‬ ‫‪Mr. MUBARAK MOHAMMED‬‬  SYLLABUS  Introduction to Engineering Management  Planning and Forecasting  Decision Making  Planning Production Activity  Leading Technical People  Organizing and Controlling  Engineering Project Management 2  OBJECTIVES  Define the planning.  Identify the types of planning.  Explain the strategic planning and operational planning.  Identify the planning activities.  Define the forecasting.  Identify the types of forecasting.  Explain the methods of forecasting.  Planning  It is probably the most important of the identified managerial functions.  It focuses you on how best to achieve the desired results. Planning is decide in advance:  What to do ? Definition:  How to do it ? Planning is the work done to predetermine a  When to do it ? course of action, in order to provide focus and  Who is to do it ? direction for enhancing the efficiency and  How much will it cost? effectiveness of the company  What do we need to do it?  Planning  The Foundation for Planning  Vision, Purpose, Mission  Clear vision of the basic purpose or mission for which an organization exists is essential for long-term success of any enterprise.  Vision is the basic purpose of the organization.  Mission needs to be revised from time to time to ensure the underlying assumptions are still valid.  Strategic Planning  Once a mission is chosen, an organization needs to achieve that mission.  Strategic planning is the organized process for selecting these strategies.  Strategic planning is the strategy which defines how the organization plans to move from its current state to the state envisioned in its mission and vision frameworks. Future State Strategic Planning Current State  Strategic Planning  There are essentially eight key areas for establishing objectives:  Market share: sales ratio of an enterprise in a particular market.  Innovation: critical for high-tech organization.  Productivity: measure of an organization ability to produce more goods and service.  Physical and Financial Resources: Organizations need to establish goals for the resources needed to perform effectively.  Manager Performance and Development: Need to plan for the development and availability of needed managers and manpower.  Worker Performance and Attitude: measures for ensuring the well-being of workers.  Profitability: Critical for any for-profit organization  Social Responsibility: What role will the organization play in society.  Strategic Planning  Strategic Planning Questions:  What are the company’s vision, mission and value system?  What specific goals (profitability, market share, sales, technology leadership position, global penetration) to accomplish by when, with what investment and which technology?  Which new or improved product streams to offer by when (considering product life cycle)? Mission Vision - Company Aspiration Why do we exist? Market capital Whom are we serving? Business standing What do we do to serve them? Ranking in industrial sector Market Share  Strategic Planning  Tools for Strategic Planning: 1. Market research 2. SWOT analysis 3. Sensitivity analysis (what-if, scenarios, Monte Carlo) 4. External benchmarking 5. Technology forecasting 6. Product life cycle analysis  Operational Planning  Define tasks or events to be accomplished with the least amount of resources within the shortest time, to assure that the company applies its resources efficiently to achieve its short- term and long-term goals.  Operational Planning Questions:  What is the most efficient way of accomplishing a project or task with known objectives (doing things right) ?  How to link up with three best suppliers in the marketplace for parts needed?  What are the operational guidelines for performing specific work? Activities Related to Planning  Some Planning Concepts  Responsibility for Planning:  It is the continuing responsibility of each manager.  The higher managers rise the more time they spend on planning.  Ultimate responsibility lies with top and middle management.  Plans must lead to action.  Some Planning Concepts  Planning Premises:  These are the assumptions under which the developed plans are expected to be executed.  Assumptions are based on forecasts and trends in market and technology..  When there is uncertainty, there is a need to develop contingency plans.  Some Planning Concepts  Planning Horizon:  How far into the future do you want to plan.  Varies depending on: 1. The nature of the business. 2. The market organization is in. 3. The required details for the plans.  Forecasting  What is Forecasting?  Process of predicting a future event.  We can forecast:  Underlying basis of all business decisions.  Production levels  Technological developments  Production  Needed manpower  Inventory  Governmental regulations  Personnel  Needed Funds  Facilities  Training needs  Resource needs  Sale levels.  Forecasting  Types of Forecasts: 1. Economic forecasts  Address business cycle (inflation rate, money supply) 2. Technological forecasts  Predict rate of technological progress  Predict acceptance of new product 3. Long-term forecast  Predict sales of existing product  Forecasting  Types of Forecasts by Time Horizon: 1. Short-term forecast  Up to 1 year: usually less than 3 months (Job scheduling, worker assignments). 2. Medium-term forecast  3 months to 3 years: (sales & production planning, budgeting). 3. Long-term forecast  More than years: (new product planning, facility location).  Forecasting  Steps of Forecasting: 1. Determine the use of the forecast 2. Select the items to be forecasted 3. Determine the time horizon of the forecast 4. Select the forecasting model(s) 5. Gather the data 6. Make the forecast 7. Validate and implement results  Forecasting Approaches  Qualitative Methods 1. When past data cannot be used reliably to predict the future.  Technological trends – Regulations. 2. When no past data is available, because the situation is very new.  Entry into new markets – Development of new products. Methods: 1. Jury of executive opinion 2. Sales Force Composite 3. User’s Expectations 4. Delphi Method  Forecasting Approaches  Qualitative Methods  Used when data is tangible, can be used reliably to predict the future, and there is sufficient historical data upon which to base forecasts.  Sales – Profits – Production levels. Methods: 1. Moving Average 2. Weighted Moving Average 3. Exponential Smoothing 4. Regression Analysis 21 22