engineering management chapter 3 (planning technical activity)

8/10/2019 Engineering Management Chapter 3 (Planning Technical Activity)

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Alcover, Jasper Clint M.BSCp.E - 5

PlanningTechnicalActivity


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If managing organization is to be

pursued vigorously, planning will

constitute the most important

activity. Managers who plan areafforded with the opportunity to

carefully analyze situations which

directly contribute to effective

decision-making.


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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.


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The Nature of Planning

Being busy canaffect decision-making,

so planning is undertaken


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Plan the output of planning

provides a methodical way of

achieving desired results serves as a useful guide

(Without the plan, some minor tasks may be

afforded major attention which may, later on,

hinder the accomplishments of objectives)


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The management of an engineering firm was

able to identify the need to hire additional 3

employees. The manager proceeded to inviteapplicants, screen them, and finally hired

three of them. When the hiring expense

report was analyzed, it involved more thandouble the amount spent by other firms in

hiring the same number of people.

An example of the difficulty of not

having a PLAN


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When an inquiry was made, it was found out

that the manager committed some errorsin 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 costof hiring.


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Planning Defined

According to Nickels :Planning 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.]


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According to Aldag and Stearns :Planning refers to

the selection and sequential ordering

of tasksrequired to achieve an organizational

goal.

[This definition centers on the activity

required to accomplish the goals]


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Definition Summary :

Planning

selecting the best course of action so

that the desired result may be achieved.It must be stressed that the desired

result takes priority and the course of

action chosen is the means to realize

the goal.


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PLANNING AT VARIOUS MANAGEMENT LEVELS


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Types of Planning


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STRATEGIC PLANNING

process of determining the major goals of the

organizational and the policies and strategies forobtaining and using resources to achieve this

goal.

the whole company is considered, specifically itsobjectives and current resources.

Involved: Top Management

Output : Strategic Plan ( the decision about long-range goals and the course of action to achieve this

goals )


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INTERMEDIATE PLANNING

process of determining the contributions that

subunits can make with allocated resources.

the goals of a subunit are determinedand a plan

isprepared to provide a guide to realization of

the goals.Involved: Middle Management

Output : Intermediate Plan

( designed to support the strategic plan )


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OPERATIONAL PLANNING

The process of determining how specific task

can best be accomplished on time with available

resources.

Involved: Lower Management

Output : Operational Plan( designed to support the strategic plan &

the intermediate plan )


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Planning Process

consist of various steps depending on themanagement level that performs the planning

task

1. setting organizational, divisional, or unitgoals

2. developing strategies or tactics to reach

those goals3. determining resources needed

4. setting standards


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1. Setting Organizational, Divisional,

or Unit goals

The 1st task of the manager is to provide a sense

of direction to his firm (if he is the chief executive),

to his division (if division chief), or to his unit (if 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/her

sharein the realization of such goals.


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Goals

may be defined as the precisestatement of results sought,

quantified in time and magnitude,where possible.


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Example of Goals


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2. 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 arecalled strategies and these will be the

concern of top management. The middle

and the lower management will adapttheir own tactics to implement their

plans.


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Strategy

may be defined as the course ofaction aimed at ensuring that the

organization will achieve itsobjectives.


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Example of Strategy

The decision of a construction firmsmanagement to diversify its business by

engaging also in the trading of

construction materials and supplies.

If 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.


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Tactic

a short-term action taken by management

to adjust to negative internal or externalinfluences.

formulated and implemented in support

of the firmsstrategies.Output : Tactical Plan.


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Example of Tactic

Hiring of contractual workers toaugment the companys current

workforce

i i d d


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3. Determining Resources Needed

Note 1:When particular sets of strategies or

tactics have been devised, the engineer

manager will, then, determine the humanand nonhuman resources require by such

strategies or tactics. Even if the resourcerequirements are currently available, they

must be specified.


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Note 2:

The quality and the quantity of

resources needed must be correctly

determined. Too much resources in termsof either quality or quantity will be

wasteful. Too little will mean loss of

opportunities for maximizing income.


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Note 3:To specify strategic requirements, a

general statement of needed resources

will suffice. The specific requirements willbe determined by the different units of

the company.

l


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Example :Suppose the management of a construction firm has

decided, in addition to its current undertakings, toengage in the trading of constructions 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 constructionmaterials and supplies. The amount of Php 50

million shall be set aside to finance the activity.

Qualified persons shall be recruited for the purpose.


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4. Setting Standards

The standards for measuring

performance will be set at the

planning stage. When actualperformance does not match with the

planned performance, correctionsmay be made or reinforcements.


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Standarda quantitative or qualitative

measuring device designed to helpmonitor the performances of people,

capital goods, or processes.


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Types of Plans

Plansare different types

may be classified in terms of :1. functional areas

2. time horizon and

3. frequency of use

1 F i l A Pl


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1. Functional Area Plans

Plans may be prepared according to

the needsof the different functional

areas.Types :

a. Marketing Plan

b. Production Planc. Financial Plan


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a. Marketing Plan this is the written document or

blueprint for implementing andcontrolling an organizations

marketing activities related to a

particular marketing strategy.


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b. Production Plan this a written document

that states that the quantityof output a company must

produce in broad terms and

by product family.


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c. Financial Plan

it is a document thatsummarizes the current

financial situation of thefirm, analyzes the financial

needs, and recommends a

direction for financial

activities.


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d. Human Resource Management Plan

it is a document that indicates the human

resource needs of a company detailed in

terms of quantity and qualityand based on

the requirements of the companysstrategic

plan.

2 Ti H i Pl


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2. Time Horizon Plans

consist of the following:

a. Short-Range Plans

b. Long-Range Plans


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a. Short-range plans

these are plans intended to cover aperiod of less than one year.

Involved : First-line supervisors

b. Long-range plans

these are plans covering a time span

of more than one year. Involved : middle and top

management

4 Pl A di t


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4. Plans According to

Frequency Use

may be classified as :a. Standing Plans

b. Single-Use Plans

St di Pl


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a. Standing Plans

plans that are used again and

again, and they focus on managerial

situations that recur repeatedly.may be classified as :

a1. Policies

a2. Procedures

a3. Rules


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a1.Policies

they are broad guidelines to aid

managers at every level in making

decisions about recurring situations

or function


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a2.Procedures

they are plans that describe theexact series of actions to be taken in

a given situation.

a3. Rules

they are statements that eitherrequire or forbid a certain action.

b Si l U Pl


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b. Single-Use Plans

may be classified as :

b1. budgets

b2. programs

b3. projects


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b1.Budget

according to Weston and Brigham, is

a plan which sets forth the

projected expenditure for a certain

activity and explains where therequired funds will come from.


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b2.Program

is a single-use plan use designed tocoordinate a large set of activities.

b3. Project

is a single-use plan that is usually

more limited in scope than aprogram and is sometimes prepared

to support a program.


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PARTS/CONTENTS OF THE

VARIOUS FUNCTIONALAREA PLANS

Contents of the Marketing Plan


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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 beincluded in the marketing plan.


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1. The Executive Summary

which presents an overall view of themarketing project and its potential.

2. Table of Contents

3. Situational Analysis and Target Market4. Marketing Objectives and Goals

5. Marketing Strategies

6. Marketing Tactics7. Schedules and Budgets

8. Financial Data and Control

Contents of the Production Plan


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Contents of the Production Plan

The production plan must contain the

following :

1. the amount of capacity thecompany must have

2. how many employees are required

3. how much material must bepurchased

Contents of the Financial Plan


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Contents of the Financial Plan

The financial plan must contain the following :

1. An analysis of the firms current financial

condition as indicated by an analysis of the

most recent statements2. A sales forecast

3. The capital budget

4. The cast budget

5. A set of proforma (or projected) financial

statements

6. The external financing plan

Contents of the Human


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Contents of the Human

Resources PlanThe human resources plan must containthe following :

1. Personnel requirements of the

company

2. Plans for recruitment & selection3. Training Plan

4. Retirement Plan

Parts of the Strategic Plan


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Parts of the Strategic Plan

1. Company or corporate mission

2. Objectives or goals

3. Strategies


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Making PlanningEffective


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Planning is done so that some

desired results may be achieved. Attimes, however, failure in planning

occurs.

Planning may be made successful if


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Planning may be made successful if

the following are observed:

1. Recognize the planning barriers2. Use of aids to planning

Planning Barriers (According to


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Planning Barriers (According to

Plunkett & Attner)

1. Managersinability to plan

2. Improper planning process

3. Lack of commitment to the planning process

4. Improper information5. Focusing on the present at the expense of

the future

6. Too much reliance on the planningdepartment

7. Concentrating on only the controllable

variables

Aids on Planning that may be used


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Aids on Planning that may be used

1. Gather as much information as

possible

2. Develop multiple sources of

information

3. Involve others in the planningprocess


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engineering management chapter 3 (planning technical activity)

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