ENGINEERING MANAGEMENT:

INTRODUCTION

What is Engineering?

What is Management?

The profession in which a A set of activities (including

knowledge of the
planning and decision making,
mathematical and natural
organising, leading and
science gained by study,
control) directed at an
experience, and practice is organisations resources
applied with judgement to
(human, financial, physical
develop ways to utilize,
and informational) with the
economically, the materials aim of achieving
and forces of nature for the
organisational goals in an
benefit of mankind
efficient and effective manner.
(1979, US. Engineering
(Griffin)
societies).
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Introduction

ENGINEERING MANAGEMENT

Engineering Management is concerned with the direct supervision

of engineers and the management functions (planning, organising,
leading and controlling) in a technological organisation.

Prepare engineers to become

effective leaders in meeting the
challenges in this new millennium

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Introduction

MAJOR PREMISES
Technology and business savvy represents
a very powerful combination of great
demand in society
Market environment is rapidly evolving
(changing marketplace complexities, webbased technologies, globalization)
Leaders with understanding of technology
and management perspectives are needed
Engineers with proper management and
leadership training have great
opportunities to add value
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Introduction

TYPICAL ENGINEERING ACTIVITIES

Design/development of products/processes
Project engineering/management
Value engineering and analysis
Technology development and applied R&D (laboratory, field)
Production/manufacturing and construction
Customer service

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Introduction

WORK OF AN ENGINEER
AS TECHNICAL CONTRIBUTOR
Understand objectives of tasks specified
Develop action plan for implementation
Define standards (performance metrics)
Select methodology/techniques
Implement task with proper efforts
Generate results and secure value
Report findings (impact, lessons)

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Introduction

AIMS

Make engineers more effective as technical contributors

(understand managerial points of view, effect teams
coordination, drive to add value)
Ready engineers for managerial positions (managerial
functions, success factors, leadership talents,
business/management perspectives, expectations,
contributions)

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Introduction

DUAL AIMS
Make engineers more
effective as technical
contributors
(understand managerial
points of view, effect
teams coordination,
drive to add value)
Ready engineers for
managerial positions
(success factors,
leadership talents,
business/management
perspectives)

Make managers more

effective in decisions
involving technologies
(understand
engineering language,
limitations and
possibilities)
Ready managers for
contributing effectively
in the management of
a technology-critical
organisation.
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Introduction

HENRI FAYOL (1841-1925)

Mining Engineer

six primary functions of management:

forecasting

planning

organizing

commanding

coordinating

controlling (feedback->adjustment)

} leading
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Introduction

ENGINEERING MANAGEMENT
FUNCTIONS
Planning

Leading

Manager

Engineer

Organizing

Controlling

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Introduction

ENGINEERING MANAGEMENT FUNCTIONS

Planning (forecasting, setting objectives, action

planning, administering policies, establishing
procedure)
Organizing (selecting organizational structure,
delegating, establishing working relationship)
Leading (deciding, communicating, motivating,
selecting/developing people)
Controlling (setting performance standards,
evaluating/documenting/correcting performance)
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Introduction

SKILLS FOR TECHNICAL MANAGERS

Administrative
Skills

Leadership
Skills

Technical Skills

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Introduction

ENTERPRISE OBJECTIVE:
VALUE ADDITION
Management-speak:
Increase Sales Revenue
(new and enhanced
products/services - faster,
better, cheaper - to create
greater customer
satisfaction)
Reduced Cost to Do
Business (simplified
product design, new
technologies, improved
productivity, raised
efficiency, reduced inventory
via supply chains, new
production and marketing
partnerships and alliances)

Engineering-speak:
Efficiency Accomplishing tasks with
the least amount of
resources (time, money,
equipment/facilities,
technology - know-how,
procedure, process, skills)
- do things right
Effectiveness Accomplishing tasks with
efforts commensurate
with the value created by
these tasks - do the

right things

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Introduction

MANAGERIAL DECISION MAKING

What, where, who, how managers faces numerous and

challenging decisions
Decision making qualities - knowledge, information, and
decision making skills

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Introduction

Beware of Our Weakness:

We Are Poor at Learning from the Past
How to improve our management intuition?
Should fully utilize past information to update both
current beliefs and future predictions
We are active learners, but tend to filter information
to confirm our opinions.
Draw unbiased insights about the current state of the
world from available data
We are frequently poor observational statisticians.
[Dont know Bayes rule?]
Conservation bias: reluctant to give up prior beliefs
about the world, even in light of new information,
revision of beliefs towards right direction is often
insufficient, or overly conservative
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Introduction

LEARNABLE SKILLS
Management knowledge and skills
(operational, strategic,
financial/accounting, interpersonal
skills/communications, etc.)
Decision making skills/ tools (what-if
analysis, risk analysis, problem solving,
root cause analysis, decision tree,
optimization, etc.)
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Introduction

FREDERICK WINSLOW TAYLOR

(1856-1915)
Principles of Scientific Management (1911)
Replace rule-of-thumb work methods with methods
based on a scientific study of the tasks.
Scientifically select, train, and develop each worker
rather than passively leaving them to train
themselves.
Cooperate with the workers to ensure that the
scientifically developed methods are being
followed.
Divide work nearly equally between managers and
workers, so that the managers apply scientific
management principles to planning the work and
the workers actually perform the tasks.
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Introduction

SEEM 3530

Knowledge and skills in decision-making tools

Appreciation of management issues and complexities in
implementing decisions

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Introduction

 Planning
Project Scheduling
Project Budgeting and Selection

Organising
Strategic decision-making
Game theory

Leading
Incentives and Productivity
theory)

(Principal-agent

Controlling
Project Management
Performance evaluation

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Introduction

BP Oil Spill

PROJECT MANAGEMENT

Under-fire BP boss Tony Hayward

takes time out to enjoy Cowes Week

SEEM 3530

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Introduction

A Decision Making Example

Gilbert and Mostellers Marriage Problem:
Suppose you decide to marry, and to select your
life partner you will interview at most 100
candidate spouses. The interviews are arranged in
random order, and you have no information about
candidates you havent yet spoken to. After each
interview you must either marry that person or
forever lose the chance to do so.
If you have not married after interviewing
candidate 99,
you must marry candidate 100 !!
Your objective, of course, is to marry
the absolute best candidate of the lot.
But how?

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Introduction

BEWARE OF OUR WEAKNESS:

WE ARE MYOPIC
If we isolate a single critical
fault in human abilities to act
as efficient decision makers, it
is that we do not think ahead.
We are often unable to look
ahead more than one period or
step!
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Introduction

Heuristic vs. Analysis

Heuristic
A technique to solve a problem with a good but not
necessarily optimal solution
Based on experiences, hunches/instincts, and judgment

Analytical
Formulate the decision model for the problem
Use of computer and other tools to conduct an
extensive and thorough analysis to produce an
optimal solution
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Introduction

When Do Heuristics Work Well?

Optimal answers are often obvious
Draw on life experience to come up with an answer

Task environments are forgiving of mistakes

A wide range of behaviors/solutions are optimal or nearoptimal

One can learn by trial and error

Reinforcement learning: be more likely to repeat actions that
generate good results and less likely to repeat acts that
produce bad ones
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Introduction

When Do Heuristics Fail Us?

Ambiguity of Feedback
The trial and error method does not work: the decision is not
repeated or feedback is ambiguous

Complexity of Decision
The problem is not intuitive: beyond our cognitive
capabilities

High Penalty for Mistakes

A small mistake could lead to serious consequences
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Introduction

STRATEGIC DECISION MAKING

Marriage problem:
Interview the first 37 (100/e) candidates,
Then continue interviewing and marry the first
candidate that is better than the initial 37.
This maximises the chance of marrying the
absolute best candidate.
In this course, we will investigate models
and frameworks for strategic decision
making under uncertainty and risk
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Introduction

LEADING/MOTIVATION

Long hours,
Low pay,
high pressure

SEEM 3530

Tenth Worker Commits Suicide At Foxconn Plant

in Shenzhen
25 May, 2010
Chinese media
reported that the
families of those
who died had
received
compensation of up
to 100,000 yuan
(14,500 US),
equivalent to about
10 years' wages.

Introduction

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CHALLENGES IN THE NEW MILLENNIUM

Marketplace changes rapidly (Web-based
technologies, globalization, customer
demand, business networks) affecting how
progressive companies will be organized
Engineering managers to lead by supervising
complex teams, innovating with vision for the
future, designing global products, and
organizing supply chains, apply global
resources to derive economies of scale and
scope.
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Introduction

CHALLENGES IN THE NEW

MILLENNIUM

Inside O
utside
P
resent
SEEM 3530

F
uture
L
ocal G
lobal

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Introduction

CHALLENGES - INSIDE

Implement projects/programs; manage people, technologies,

and resources to add value; develop new product features to
enhance company competitiveness; define, control and reduce
costs to improve profitability; initiate technology projects to
sustain company position

Introduction

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CHALLENGES - OUTSIDE

Keep abreast of emerging technologies and apply them to

strengthen companys core competencies; apply web-based
tools to enhance operations and foster customer relations;
identify best practices to improve engineering operations and
surpass them; create supply chain networks to derive speed,
quality and cost benefits

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CHALLENGES - PRESENT

Do things right to keep company operating smoothly; use

Balanced Scorecard to monitor non-financial and financial
performance; control costs and eliminate wastes to attain
profitability in the short-run

Introduction

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CHALLENGES - FUTURE

Seek e-transformation opportunities to create company

profitability in the long-run; introduce new generation products
timely; create vision for the future related to technologies; Define
what should be done for technology-based success in the future

Introduction

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CHALLENGES - LOCAL

Utilize resources to best achieve companys objectives; take

ethical and lawful actions while taking into account local
conditions; maintain and nurture local professional networks;
share lessons gained with people at other company sites

Introduction

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CHALLENGES - GLOBAL

Apply location-based resources to realize global economies of

scale and scope for achieving cost and technology advantages;
develop global professional networks; acquire a global
mindset; exercise leadership roles in international settings

Introduction

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TIPS FOR ENGINEERING MANAGERS

Demonstrate Technical Competence &
Innovative capabilities
Brush Up Communications skills (ask,
listen, write and talk)
Show unfailing reliability to induce trust
and confidence
Be Proactive in seeking challenging tasks
Exhibit readiness for assuming larger
responsibilities (take courses, practice skills,
gain experience)
Introduction
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