BOOOOM

Operations
Management
Course Outline
Basic Concepts: Introduction, Operations Management Basics
Product and Process Design: The Product Development Process, Analyzing a Process,
Process Decision
Facility Location Planning & Facility Layout: Facility Planning, Location Decisions,
Facility Layout
Capacity Design and Planning: Introduction - Capacity Planning, Managing Supply and
Demand
Production Planning: Introduction, Scheduling
Productivity and Work Study: The Organization and Productivity, Job Design
Materials, Purchasing & Stores Management: Materials Management, The Supply
Chain,Supply Chain Performance
Inventory Management: Introduction - Inventory Management, Elementary Inventory
Models,Inventory Control
Managing for Quality: Introduction, Statistical Control
Maintenance Management: Introduction-The Maintenance Function, Maintenance
Strategies, Maintenance Performance
Operations Management
 Operations function consists of all activities directly related
to producing goods or providing services.
Organization
Production/
Finance Marketing
Operations
Business Operations Overlap
Production/
Operations
Marketing Finance
Examples of operations:
Operations Examples
 Goods Production  Farming, Mining, Construction,

Manufacturing, Power Generation
 Storage / Transportation  Warehousing, Trucking, Mail Service,

Moving, Taxis, Buses, Hotels, Airlines
 Retailing, Wholesaling, Banking,

 Exchange Renting, Leasing, Library, Loans
 Films, Radio, Television, Concerts,

 Entertainment Recordings
 Newspapers, Radio and Television,

 Communication Newscasts, Telephone, Satellites
Definitions
• Operations management is the management of an
organization’s productive resources or its production
system.
• A production system takes inputs and converts them
into outputs.
• The conversion process is the predominant activity of
a production system.
• The primary concern of an operations manager is the
activities of the conversion process.
Value added
The difference between the cost of inputs and the value
or price of outputs.
Value added
Inputs Transformation / Outputs

Material Conversion Goods
Labor Process Services
Capital
Feedback
Control
Feedback Feedback
What is Operations Management?
Defined
Operations management (OM) is defined
as the design, operation, and
improvement of the systems that create
and deliver the firm’s primary products
and services
The Importance of Operations Management
• Synergies must exist with other functional

areas of the organization
• Operations account for 60-80% of the

direct expenses that burden a firm’s profit.
The historical development of
operations management
• Operations in some form has been

around as long as human endeavor itself
but, in manufacturing at least, it has
changed dramatically over time
Three Major Phases
Craft manufacturing
• Craft manufacturing describes the process by
which skilled craftspeople produce goods in
low volume, with a high degree of variety, to
meet the requirements of their individual
customers.
Mass production
• In many industries, craft manufacturing began
to be replaced by mass production in the 19th
century. Mass production involves producing
goods in high volume with low variety – the
opposite of craft manufacturing.
Mass Production(Innovations 1)
• Standardization:
• An important innovation in operations that
made mass production possible was the
system of standardised and interchangeable
parts known as the ‘American system of
manufacture’, which developed in the United
States and spread to the United Kingdom and
other countries.
Mass production(Innovations 2)
Scientific Management:
• A second innovation was the development by
Frederick Taylor (1911) of the system of
'scientific management’, which sought to
redesign jobs using similar principles to those
used in designing machines.
Mass Production(Innovations 3)
Moving Assembly Line:
• A third innovation was the development of
the moving assembly line by Henry Ford.
Instead of workers bringing all the parts and
tools to a fixed location where one car was put
together at a time, the assembly line brought
the cars to the workers.
Mass Production (in nut shell)
• A system through which large
volumes of standardized products
could be assembled by unskilled
workers at constantly decreasing
costs .
Modern Period
• During the 1970s, markets became highly
fragmented, product life cycles reduced dramatically
and consumers had far greater choice than ever
before.
• TQM
• JIT
• SCM
Modern Period(Different Approaches)
• Flexible specialization
• Lean production
• Mass customization
• Agile manufacturing
Modern Period(in a nutshell)
• These approaches all seek to

combine the high volume and
low cost associated with mass
production with the craft
production.
Transformation Process
The transformation model
Random
Disturbances
Input
Some inputs are used up in the process of
creating goods or services; others play a part
in the creation process but are not used up.
To distinguish between these, input
resources are usually classified as:
• Transformed Resources
• Transforming Resources
Input
Three types of resource that may be
transformed in operations are:
• Materials
• Information
• customers
Input
The two types of transforming resource are:
• staff
• facilities
Output
• The principal outputs of a doctor's surgery are
cured patients; the outputs of a nuclear
reprocessing plant include reprocessed fuel and
nuclear waste. Many transformation processes
produce both goods and services. For example, a
restaurant provides a service, but also produces
goods such as food and drinks.
• Transformation processes may result in some
undesirable outputs (such as nuclear waste)
Activity
Organisation Inputs Outputs
Restaurant
MBA Institute
Refrigerator Mfc.
A transformation process is defined as a user of
resources to transform inputs into some desired
outputs
Transformations
• Physical--manufacturing
• Locational--transportation
• Exchange--retailing
• Storage--warehousing
• Physiological--health care
• Informational--telecommunications
One useful way of categorising different types
of transformation is into:
• manufacture
• transport
• supply
• service
Feedback
Feedback information is used to control the
operations system, by adjusting the inputs
and transformation processes that are used
to achieve desired outputs.
Random Disturbances
• It is unplanned or uncontrollable
environmental influences.
• It causes planned and actual output to differ.
Examples:-
Weather
Inflation
Equipment breakdown
Government controls
Activity
Organisation Inputs Outputs Random Feedback
Disturbances
Restaurant
MBA Institute
Refrigerator Mfc.
Boundary Of Operations
• suppliers
• customers
• the environment.
Product & Services
Product
• People buy ,want satisfaction, not objects.
• Example: Consumers buy televisions because they want
entertainment, not because they want a box with a screen.
• Product Bundle of physical, service, and symbolic
attributes designed to satisfy a customer’s wants and needs
Goods & Services
• Services Intangible tasks that satisfy the
needs of consumer and business users.
• Goods Tangible products that customers
can see, hear, smell, taste, or touch.
Products & Services
• Purely Manufacturing organizations do not
just sell a product but provides services also.
• Pure service industries such as banks ,
hospitals , education and consultancies also
often provides a product.
Product & Services
• In manufacturing we get a tangible or identifiable
product, which is obtained as a series of
transformation process.
• In service industry end product is often intangible.
Here it is the customer that has been processed.
• In services it is often the process that are bought
rather than the product.
• Some organizations may be considered as hybrid.
Example :Restaurant
Flying in an aeroplane.
Role of a operations manager
Human resource management
The people employed by an organization
either work directly to create a good or
service or provide support to those who do.
People and the way they are managed are a
key resource of all organizations.
Asset management
• An organization's buildings, facilities,
equipment and stock are directly involved in
or support the operations function
Break Even Analysis
Break Even Analysis is the concept that links
capacity to cost.It explains the significance of
having greater productive capacity to lower
cost and maximize profit or contribution.
Breakeven point is that at which the
contribution margin is able to cover total
fixed cost.
Break Even Analysis
Let:
F-Fixed cost of production
v-variable cost of production per unit.
p-selling price of per unit of the product.
c-contribution of one unit of product towards fixed
cost.
S-sales volume required to achieve break even.
Contibution margin c=p-v
BEP S=F/c
Cost management
Most of the costs of producing goods or
services are directly related to the costs of
acquiring resources, transforming them or
delivering them to customers
Decision making
Decisions need to be made in:
• designing the operations system
• managing the operations system
• improving the operations system.
Decision making
The five main kinds of decision in each of these
relate to:
• the processes by which goods and services are
produced
• the quality of goods or services
• the quantity of goods or services (the capacity of
operations)
• the stock of materials (inventory) needed to
produce goods or services
• the management of human resources.
Designing of Product & Process
PURPOSE OF DESIGN
• Produce a technological solution to a need!

– Create a physically recognizable object.
– Create an object with economic worth and
financial feasibility.
– Choose an optimum alternative solution.
– Develop a new way to do something.
– Reduce cost, inconvenience, improve safety.
– Produce convenience, service, value.
Product Design
– Product design must support product
manufacturability (the ease with which a product
can be made)
– Product design defines a product’s characteristics
of;
• appearance,
• materials,
• dimensions,
• tolerances, and
• performance standards
Design of Services versus Goods
• Service design is unique in that the service and
entire service concept are being designed
– must define both the service and concept
- Physical elements, aesthetic & psychological
benefits
e.g. promptness, friendliness, ambiance
The four “C’s of Design
• Creativity
– Requires creation of something that has not existed or
not existed in the proposed state.
• Complexity
– Requires decisions on many variables & parameters
• Choice
– Requires making choices between many possible
solutions at all levels, from basic concept to small details.
• Compromise
– Requires balancing multiple and sometimes conflicting
requirements.
Manufacturing and Process Selection
Factors Influencing Process
Choices
 Volume: Average quantity of the products produced in a
manufacturing system
– Low volume: Turnkey project management firms such as L&T and BHEL
– High volume: Consumer non-durable and FMCG sector firms,
Automobile, Chemical Processing
– Mid-volume: Consumer durables, white goods and several industrial
products
 Variety: Number of alternative products and variants of each

product that is offered by a manufacturing system
– Variety of product offerings is likely to introduce variety at various
processes in the system; alternative production resources, materials,
and skill of workers
 Flow: Flow indicates the nature and intensity of activities

involved in conversion of components and material from raw
material stage to finished goods stage
Relationship between
volume and variety
Volume Variety
Mass Mid volume Project

Production Mid variety Organisations
Petrochemicals, Motor Manufacturing Turnkey Project
Automobile Pharmaceuticals Execution
Processes & Operations
Systems
Available Alternatives
Two broad process classifications include
Intermittent operations – produce a variety

of products in lower volumes
Repetitive operations – produce one or a

few standardized products in high volume
Process Selection
• Process selection is based on five
considerations
– Type of process; range from intermittent to
continuous
– Degree of vertical integration
– Flexibility of resources
– Mix between capital & human resources
– Degree of customer contact
Process Selection
• Process types can be:
– Project process /Job Shop– make a one-at-a-time

product exactly to customer specifications
– Batch process – small quantities of product in

groups or batches based on customer orders or
specifications
Process Selection
– Line process – large quantities of a standard
product
– Continuous process – very high volumes of a fully

standard product
© 2007 Wiley
© 2007 Wiley
© 2007 Wiley
© 2007 Wiley
© 2007 Wiley
Underlying Process Relationship Between Volume
and Standardization Continuum
Differences between Intermittent and
Repetitive Operations
Decision Intermittent Operation Repetitive Operation
Product variety Great Small
Degree of standardization Low High
Organization of resources Grouped by Function Line flow
Path of products Varied, depends on product Line flow
Factor driving production Customer orders Forecast of demand
Critical resource Labor Capital
Type of equipment General purpose Specialized
Degree of automation Low High
Throughput time Longer Shorter
Work-in-process inventory More Less
Designing Processes
• Process design tools include
– Process flow analysis
– Process flowchart (Also used to evaluate and
improve processes.)
• Design considerations include
– Make-to-stock strategy
– Assemble-to-order strategy
– Make-to-order strategy
Process Design Tools
• Process flow analysis is a tool used to analyze and
document the sequence of steps within a total
process. Usually first step in Process Reengineering.
• Process Re-engineering is a structured

approach used when major business changes
are required as a result of:
– Major new products
– Quality improvement needed
– Better competitors
– Inadequate performance
Flowchart Symbols
Tasks or operations Examples: Giving an

admission ticket to a
customer, installing a
engine in a car, etc.
Examples: How much

Decision Points change should be given to a
customer, which wrench
should be used, etc.
Process Analysis Terms

Process: Is any part of an organization that takes
inputs and transforms them into outputs
Flowchart Symbols
Storage areas or Examples: Sheds, lines of

queues people waiting for a service,
etc.
Examples: Customers
Flows of materials moving to a seat, mechanic
or customers getting a tool, etc.

Cycle Time: Is the average successive time between
completions of successive units
Example: Flowchart of Student Going to School
Go to Yes
Drive to Walk to
school
school class
today?
No
Goof
off
Utilization: Is the ratio of the time that a resource is
actually activated relative to the time that it is available for
use
Types of Processes
Single-stage Process
Stage 1
Multi-stage Process
Stage 1 Stage 2 Stage 3
Other Process Terminology

Blocking
Occurs when the activities in a stage must stop because there is no place to
deposit the item just completed
Starving
If an employee is waiting at a work station and no work is coming to the
employee to process.
Other Process Terminology
• Bottleneck
– If an employee works too slow in a multi-stage process, work will begin to
pile up in front of that employee. In this is case the employee represents the
limited capacity causing the bottleneck.
• Pacing
– Refers to the fixed timing of the movement of items through the process
A buffer refers to a storage area between stages where the output of
a stage is placed prior to being used in a downstream stage
• Make-to-order
– Only activated in response to an actual order
• Make-to-stock
– Customer orders are served from target stocking level
Process Design Tools
© 2007 Wiley
Process Performance Metrics
• Operation time = Setup time + Run time
• Throughput time = Average time for a unit to move through the

system
• Velocity = Throughput time

Value-added time
• Cycle time = Average time between completion of units
• Throughput rate = 1 .
Cycle time
• Efficiency = Actual output

Standard Output
Process Performance Metrics (Cont.)
• Productivity = Output
Input
• Utilization = Time Activated

Time Available
Process Throughput Time Reduction

Perform activities in parallel
Change the sequence of activities
Reduce interruptions
Process Performance Metrics
Chapter 15: The Essentials of Control
Learning Objectives
 Understand what is meant
by organizational control
 Differentiate among
different levels, types, and
forms of control
 Know the essentials of
financial controls
 Know the essentials of
non-financial controls
 Know the basics of lean
control systems
 Develop a personal
balanced scorecard
Organizational Control in the P-O-L-C Framework
Planning Organizing Leading Controlling
1. Vision & Mission 1. Organization Design 1. Leadership 1. Systems/Processes
2. Strategizing 2. Culture 2. Decision Making 2. Strategic Human

Resources
3. Goals & Objectives 3. Social Networks 3. Communications
4. Groups/Teams
5. Motivation
Strategy Strategy Implementation

Formulation
What Is Organizational Control?
The process by
which an Establish
standards
organization
influences its
subunits and Take
corrective
Measure
members to behave action
performance
in ways that lead to

the attainment of Compare
performance
organizational goals to standards
and objectives
The Costs and Benefits of Organizational Controls
Key Costs Key Benefits
Cost and productivity

Financial costs control
Culture and Quality control

reputation costs
Opportunity recognition
Responsiveness costs
Manage uncertainty and
complexity
Poorly implemented
controls Decentralized decision
making
Two Levels of Control: Strategic and Operational
Strategic control is
Operational control is
concerned with tracking
concerned with executing
the strategy as it is being
the strategy and includes
implemented, detecting
measuring return on
any problem areas, and
investment, net profit,
making any necessary
cost, and product quality
adjustments
Types and Examples of Control
Behavioral Control Outcome Control
Organizational culture Market demand or economic
Feedforward
forecasts
Control
Control Proactivity
Hands-on management The real-time speed of a

Concurrent
Control
supervision during a project production line
Qualitative measures of Financial measures such as

Feedback
customer satisfaction profitability, sales growth

Control
Feedback Controls
Concurrent involve the
Feedforward Controls gathering of
Controls information about
proactively address involve the real- a completed
what can be done time process of activity, evaluating
ahead of time to monitoring and that information,
help the plan adjusting ongoing and taking steps to
succeed activities and improve the similar
processes activities in the
future
Financial and Non-Financial Controls
Financial Controls Non-Financial Controls
 Costs & expenses and  Things expected to lead
to positive performance
Budgeting
 Includes customer loyalty,
 Includes assets, sales, referrals, employee
and/or profitability satisfaction, and other
forecasts such performance
measures
Financial controls tell you when good organizational
performance is reflected in good financial outcomes
The Balance Sheet
The Income/Profit and

Loss (P&L) Statement
Cash Flow Statement

The “balance sheet”
The balance sheet is a snapshot that includes total
assets (what the business owns – items of value)
and total liabilities (what the business owes)
Balance Sheets are usually done

at the end of each month
Contrasting Assets
Current Assets Fixed Assets are those
are those assets that are assets that are not easily
cash or can be readily converted to cash in the
converted to cash in the short term - they are
short term assets that only change
over the long term
 Examples include
accounts receivable or  Examples include land,
inventory buildings, equipment,
vehicles, furniture and
fixtures
Liabilities
Current Liabilities are those coming
due in the short term
Long-term Debt/Liabilities come

due in a time period of more than
one year
Owner's Equity refers to the

amount of money the owner has
invested in the firm
Non-Financial Controls
Customer satisfaction
is an increasingly
important metric in
strong non-financial
controls
Measuring non-financial controls is important as they are

likely to affect profitability in the long term
Common Mistakes
with Non-Financial Controls
Not Using Non- Not Being Failing to

Financial Linked to Validate the
Controls Strategy Links
Failing to Set
Appropriate Measurement
Performance Failures
Targets
Sample Mix of Non-Financial and Financial Controls
Non-Financial Controls
Financial Controls
Qualified,
Recruiting & Satisfied
Satisfied, Profitable
Selection Customers
Staff Store
G ofi
Su irn
W uc
Q qu
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ua en
or at
Pr
Fa
Ed
pe es
Fr
w bi
k io
lit cy
th lit
rv s
ex n
y
is
pe
io
n
rie
y
nc
e
Measures
Lean Controls
Lean is a system of
non-financial controls
used to improve
product and service
quality and decrease
waste
“it is a process for

measuring and
reducing inventory
and streamlining
production”
The Elimination of Waste
is the Soul of Lean
Muda is a key
concept in lean
control
Muda is a Japanese
term for activity that
is wasteful and
doesn't add value
Kaizen = Continuous Improvement
Companies that
implement lean
adopt the Japanese
mindset that it is
always possible to
improve any
business activity
Advantages of Balanced Scorecard
More clearly will tie goals and

objectives to the organizations’
vision, mission and strategy
Moves beyond the financial

measurement of just goals and
objectives
The Strategy Map: A Causal Relationship Between
Non-Financial and Financial Controls
Your Personal Balanced Scorecard
Learning and growth: your skills and

learning ability
Internal: your physical health and mental

state
Customer (external): relations with your

spouse, children, friends, employer, and
colleagues
Financial stability. To what degree are

you able to fulfill your financial needs?
Chapter 13
Engineers in Marketing
and Service Activities
Advanced Organizer
Managing Engineering and Technology
Management Functions Managing Technology Personal Technology
Planning Research Time Management
Design Ethics
Decision Making
Production Career
Organizing
Quality
Leading
Marketing
Controlling
Project Management
Chapter Outline
Marketing & Engineers

• Types of Marketing Relationships
• Engineering Involvement in Marketing
• After Sales Service
Engineers in Service Organizations
• Importance of Service Industries
• Characteristics
Chapter Objectives
• Describe the need for engineers in

marketing
• Describe the various ways engineers work

in the service industry
Marketing
• Identifying customers
• Studying customer’s needs
• Obtaining opportunity to make an offer
• Closing a deal
Types of Marketing Relationships
(Length of Relationship, and Commitment)
• Transaction-based Relationships
• More Sustained Relationships
• Highly Committed Relationships
Marketing Functions
• Consumer products
– Mass production
– Major purpose of purchase: Consumption
– Uniform requirements (high substitutability)
– Small quantity
• Industrial products
Engineering Involvement
(Industrial products)
• Installation
– Large, durable custom construction
– Selling/design/cost estimation/supervision
• Accessories
– Short-lived capital goods (equipment)
– Designing for general customer (S)
• Raw materials
– Extractive & agricultural products
– Assessment of quality (B)
• Process materials
– Goods that change form in production
– Specifications (B)
• Component parts
– Goods that do not lose identity in production
– Eng. Design (S) / Introduction to Users
• Fabricated items
– Custom-made items
– Eng. Design/ Specifications (B)
– Bids (S)
• Maintenance/Repair/Operating
– Consumed in process of production or use
– Parts/Schedule/Procedure/Methods (S)
• Services
– Incidental use
– Sell / Perform
After-Sales Service
• Installation
• Warranty
• Field service
• Documentation
• Training
• Provisioning & providing repair facilities
• Providing retrofit, rebuild, & overhaul
• Supplying spares & supplies
The 22 Immutable Laws of
Marketing
1. The Law of Leadership
– It’s better to be first than it is to be better.
– Hertz, IBM, Coca-Cola, Heineken, Times
2. The Law of the Category
– If you can’t be first in a category, set up a new category
you can be first in.
– Miller Lite, Dell, Charles Schwab
3. The Law of the Mind
– It’s better to be first in the mind than to be first in the
marketplace.
– IBM (Remington Rand)
The 22 Immutable Laws of Marketing: Violate Them at

Your Own Risk! --by Al Ries and Jack Trout
Marketing
4. The Law of Perception
– Marketing is not a battle of products, it’s a battle of
perceptions.
– Honda, Campbell’s soup, New - classic Coca-Cola
5. The Law of Focus
– The most powerful concept in marketing is owning a
word in the prospect’s mind.
– Google, IBM, FedEx, Xerox, Coke, Kleenex
6. The Law of Exclusivity
– Two companies cannot own the same word in the
prospect’s mind.
– DHL (worldwide)
Marketing
7. The Law of the Ladder
– The strategy to use depends on which rung you occupy
on the ladder.
– Hertz/Avis/National, AT&T/MCI/Sprint
8. The Law of Duality
– In the long run, every market becomes a 2-horse race.
– Eveready/Duracell, Kodak/Fuji, Hertz/Avis,
McDonald’s/Burger King, Nike/Reebok
9. The Law of the Opposite
– If you’re shooting for 2nd place, your strategy is
determined by the leader.
– Coca-Cola/Pepsi, McDonald’s/Burger King
The 22 Immutable Laws of Marketing: Violate Them at Your
Own Risk! --by Al Ries and Jack Trout
Marketing
10. The Law of Division
– Over time, a category will divide and become two or
more categories.
– Computer: PC, Workstations, Mainframe
11. The Law of Perspective
– Marketing effects take place over an extended period of
time.
– “Sales”, (short-term vs. long-term effects)
12. The Law of Line Extension
– There’s an irresistible pressure to extend the equity of
the brand.
– IBM: copiers, satellite, prodigy, OS/2, Lotus/WP
Marketing
13. The Law of Sacrifice
– You have to give up something in order to get something.
(Product line, target market, constant change)
– Dept. stores vs. Toys “R” Us, Limited, The Gap
14. The Law of Attributes
– For every attribute, there is an opposite, effective attribute.
– Coke-classic, Pepsi-younger generations
– McDonald’s-young kids, Burger King-teens
15. The Law of Candor
– When you admit a negative, the prospect will give you a
positive.
– “Avis is No.2 in rent-a-car”, “Joy, the most expensive
perfume”

Marketing
16. The Law of Singularity
– In each situation, only one move will produce
substantial results.
– New Coke vs. Classic Coke
17. The Law of Unpredictability
– Unless you write your competitors’ plans, you can’t
predict the future.
– IBM: Micro-channel
18. The Law of Success
– Success often leads to arrogance, and arrogance to
failure.
– DEC: PC, Open System, RISC
Marketing
19. The Law of Failure
– Failure is to be expected and accepted.
– Wal-Mart (Ready, fire, aim), 3M (Champion system)
20. The Law of Hype
– The situation is often the opposite of the way it appears
in the press.
– New coke, USA Today, NeXt computer
21. The Law of Acceleration
– Successful programs are not built on fads, they’re built
on trends.
– Cabbage Patch Kids vs. Barbie doll

Marketing
22. The Law of Resources

– Without adequate funding, an idea won’t get off the
ground.

Engineers in Service Organizations
• Employment in “Goods producing” sector remain

basically the same level (total #) from ‘86 to ‘96,
and 2006 (projected), which represents 22.0%,
18.5% and 16.2% respectively
• Employment in “Service producing” sector
increased from 74M (‘86) to 94M (‘96), and 112M
(2006, projected), which represents 66.6%, 71.2%
and 74.1% respectively
Top 10 Industries in Projected
Employment Growth
• Computer & data processing services (7.6%)
• Health services (5.3%)
• Management & public relations (4.8%)
• Misc. transportation services (4.8%)
• Residential care (4.8%)
• Personnel supply services (4.3%)
• Water & sanitation (4.2%)
• Individual & misc. social services (4.1%)
• Offices of health practitioners (3.9%)
• Amusement & recreation services (3.5%)
Top 10 Industries in Projected
Employment Declining
• Coal mining (-6.0%)
• Watches, clocks, and parts (-4.0%)
• Footwear, except rubber and plastic (-4.0%)
• Search & navigation equipment (-3.8%)
• Crude petroleum, natural gas (-3.7%)
• Luggage, handbags, & leather products (-3.6%)
• Tobacco products (-3.1%)
• Metal cans & shipping containers (-3.1%)
• Tires & inner tubes (-2.9%)
• Photographic equipment & supplies (-2.6%)
Technical Employment
in Service Sector
• About 22% of engineers worked in service

producing industries (educational, research,
consulting, hospitals & computing)
• About 14% of engineers worked for government
(highway & other public works, DOD, DOE, NIST)
• About 6% of engineers worked in transportation,
communication, & public utilities
• About 5% of engineers worked in wholesale, retail
trade, & FIRE (finance, insurance, & real estate)
Characteristics of Service Sector
• More intangible
• Performed in real-time (scheduling)
• Most professional & consulting services are
customized, personalized, & labor intensive
• Infrastructure (electricity, transportation,
communication, etc.) providers are capital
intensive
CHAPTER 10
MOTIVATING
AND LEADING
EMPLOYEES
Copyright © 2014 Pearson Canada Inc. 1-1

Learning Objectives
1. Identify and discuss the basic forms of behaviour
that employees exhibit in organizations.
2. Describe the nature and importance of individual
differences among employees.
3. Explain the meaning and importance of
psychological contracts and the person job-fit in
the workplace.
4. Identify and summarize the most important
models of employee motivation.

Learning Objectives
5. Describe the strategies used by organizations to
improve job satisfaction and employee motivation
6. Define leadership and distinguish it from
management.
7. Summarize the approaches to leadership that
developed in the 20th century.
8. Describe the most recent ideas about effective
leadership.

Forms of Employee Behaviour
(LO 10-1)
Employee Behaviour
• Performance behaviour
• Organizational citizenship
• Counterproductive behaviours
– absenteeism
– turnover

Individual Differences among Employees
(LO 10-2)
• Personality
– five fundamental traits that are especially relevant to
organizations

(LO 10-2)
• Emotional Intelligence (EQ — Emotional Quotient)


(LO 10-2)
• Attitudes
– Reflection of our beliefs and feelings about specific ideas
situations and other people
– Job Satisfaction
– Organizational (job) Commitment

Matching People and Jobs
(LO 10-3)
• Psychological contract
– expectations held by employees concerning their contribution to an
organization and what the organization will provide in return

Matching People and Jobs
(LO 10-3)
Person–Job Fit
matching of the
employee’s
… the needs of the
contributions, needs,
job
job-related behaviours
and abilities to …

Motivation in the Workplace
(LO 10-4)
• Motivation
– the set of forces that cause people to behave in certain
ways
Motivational Theories Overview

• Classical Theory & Scientific Management
• Behaviour Theory
• Contemporary Motivation Theories

(LO 10-4)
• Classical Theory
– workers are motivated primarily by money
– if money motivates, then paying employees more
would result in higher levels of production
• Scientific Management
– analyzes jobs and find more efficient ways to perform
them
• time-and-motion studies

(LO 10-4)
• Early Behavioural Theory
Human-
Maslow’s Two-Factor
Resources
Hierarchy of (Motivator-
Model: Theory X
Needs Model Hygiene) Theory
and Y
– Hawthorne Effect
• Tendency for workers productivity to increase when they are
receiving special attention from management

(LO 10-4)
• Human Resources Model (Theory X and Theory Y)

– two diametrically opposed perceptions of employees
Theory X Theory Y
• Employees dislike work
• Employees like work
• Lazy
• Energetic
• Irresponsible
• Growth oriented
• Uncooperative
• Responsible
• Threaten, or punish, for results
• Cooperative
• Use intrinsic, rather than extrinsic
rewards
Copyright © 2014 Pearson Canada Inc.

(LO 10-4)
• Maslow’s Hierarchy of Needs
– basic needs must be met before an individual seeks to achieve
higher level needs.

(LO 10-4)
• Hertzberg Two-Factor Theory
– highlights two sets of factors associated with satisfaction and
dissatisfaction in the workplace
• Recognition • Supervisors
• Working
Motivating • Responsibility Hygiene Conditions
• Advancement • Pay and
Factors • Achievement Factors Security
(Satisfaction vs. • Work itself (Dissatisfaction • Interpersonal
vs. No Relations
No Satisfaction)
Dissatisfaction) • Company
Policies and
Procedures

(LO 10-4)
Contemporary Motivation Theory
• Expectancy Theory
• Equity Theory

(LO 10-4)
• Expectancy Theory
– people are motivated to work towards rewards that they want and
believe they have a reasonable chance of obtaining

(LO 10-4)
• Equity Theory
– Individuals compare their perception of
what they contribute (inputs) < others’ inputs

=
what they receive (outputs) others’ outputs
>
– The result is a feeling of equity or inequity

• the ratios must be fair, not the same, to perceive equity

Strategies for Enhancing Motivation
(LO 10-5)
Reinforcement/Behaviour Modification Theory
Goal Setting Theory
Management by Objectives
Participative Management and Empowerment
Team Management
Job Enrichment and Job Redesign
Modified Work Schedules

(LO 10-5)
Reinforcement/Behaviour
Modification Theory
Positive
Negative
behaviour is
behaviour is
reinforced
punished
through rewards

(LO 10-5)
• Goal Setting Theory

– Focus on setting goals top help motivate employees
– SMART Goals
Specific
Measurable
Achievable
Realistic
Time framed

(LO 10-5)
• Management by Objectives
– system of collaborative goal setting that extends from the top to
the bottom of the firm
– employees learn more about company-wide objectives
– feel as though they are part of a team
– see how they can improve company performance by achieving
their own goals

(LO 10-5)
• Participative Management and Empowerment

– employees are more satisfied if they have a say in how
they do their jobs and how the company is managed
– employees feel more committed to goals
• not desired by all employees

(LO 10-5)
• Team Management
– individual employees are given decision-making
responsibility for certain narrow activities
• Types of Teams
Problem Project Self-

Solving Teams Managed
Teams (Venture) Teams
Transnational
Virtual Teams
Teams

(LO 10-5)
• Job Enrichment
– expanding or adding one or more motivating factors to
a job
– used to increase job satisfaction
• Job Redesign
– increases job satisfaction by improving the employee–
job fit
• combining tasks
• creating natural work groups
• establishing client relationships
– useful for individuals with strong needs for growth or
achievement

(LO 10-5)
• Modified Work Schedules

– allow individuals to fulfill work commitments more
effectively around personal or community obligations
compressed
flextime
workweek
workshare
telecommuting
programs

(LO 10-5)
• Flextime
– Adjusts the standard daily work schedule to fit employees’ needs
• all must be available during the core time
• start and end times can vary
• some offices will also allow flexible hours between 11:00 a.m. and
1:00 p.m. for lunch

(LO 10-5)
• The Compressed Workweek

– employees work less days but complete the same
amount of hours
Example of a
Regular Workweek
Compressed Workweek
• Monday 9 a.m.–5 p.m. (8hrs) • Monday 8 a.m.–6 p.m. (10hrs)
• Tuesday 9 a.m.–5p.m. (8hrs) • Tuesday 8 a.m.–6p.m. (10hrs)
• Wednesday 9 a.m.–5p.m. (8hrs)

• Wednesday 8 a.m.–6p.m. (10hrs)
• Thursday 8 a.m.–6p.m.
• Thursday
(10hrs)
9 a.m.–5p.m. (8hrs)
• Friday OFF
• Friday 9 a.m.–5p.m. (8hrs)
• Sat–Sun. OFF
• Sat–Sun. OFF
• Total (10hrs*4 Days) = 40 hrs -break
• Total (8hrs*5 Days) = 40 hrs -break
(LO 10-5)
• Telecommuting
– Employees do all or some work away from the office
– Home-based office technology is used
• computers, voicemail, email, modems, cell phones, overnight
delivery services

(LO 10-5)
• Workshare Programs
– two people share a single, full-time position (also
referred to as job sharing)
– useful for those who wish to stay in the workforce part-
time (mothers with young children or partially retired
persons)
– most workshare employees are university-educated
women in professional occupations

Leadership and Motivation
(LO 10-6)
• Leadership
– the process of motivating others to meet goals
– needed to create and direct change and to help the organization
get through tough times

Approaches to Leadership
(LO 10-7)
• Trait Approach
– identifies traits that would distinguish leaders from non-
leaders
• Behavioural Approach
– determines how the behaviours of successful leaders
differs from those of unsuccessful leaders
• task oriented vs. employee oriented

(LO 10-7)
• Leadership Styles
Autocratic Democratic Free Rein
– Many managers use one style but some may use a

combination of styles depending on the situation

(LO 10-7)
Situational (Contingency) Approach
• Leaders behave differently in different

situations
• Based on:
– characteristics of the leader
– characteristics of the subordinates
– characteristics of the situation

Leader
Followers Situation
TASK
ORGANIZATION
ENVIRONMENT

Recent Trends in Leadership
(LO 10-8)
• Transformational Leadership
– the ability of the leader to recognize the need for
change, create a vision to make that change happen
• Transactional Leadership
– emphasizes routine, regimented activities that focus on
maintaining stability or the status quo

(LO 10-8)
• Charismatic Leadership
– have a high level of confidence
– possess a strong need to influence others
– communicate high expectations of subordinates
– generally more successful at influencing subordinates

(LO 10-8)
• Leaders as Coaches
– help select team members and other new employees
– provide some general direction
– help train and develop the team and the skills of its
members
– help the team get the information and resources it
needs

(LO 10-8)
• Gender and leadership

– more women in management roles
– women tend to be more democratic when making
decisions
• Cross-cultural leadership
– new leaders are coming from diverse backgrounds
– these new leaders may have different leadership styles

(LO 10-8)
Canadian versus US Leadership Styles

• Canadians are:
– more subtle and subdued
– more committed to their companies
– less willing to follow mindless fads
– more accustomed and open to diverse cultures

(LO 10-8)
• Strategic Leadership
– able to see the whole picture and envision necessary
changes
• Ethical Leadership
– follows high standards of ethical leadership
• Virtual Leadership
– involves communication electronically rather than face
to face

Controlling as a
Management Function
 Controlling
A process of monitoring
performance and taking action to
ensure desired results.
It sees to it that the right things
happen, in the right ways, and at
the right time.
1
Controlling as a
Management Function
 Controlling
Done well, it ensures that the
overall directions of individuals
and groups are consistent with
short and long range plans.
It helps ensure that objectives and
accomplishments are consistent
with one another throughout an
organization.
2
Controlling as a
Management Function
 Controlling
It helps maintain compliance with
essential organizational rules and
policies.
3
Controlling as a
Management Function
 Cybernetic Control System
One that is self-contained in its
performance monitoring and
correction capabilities.
(thermostat)
The control process practiced in
organizations is not cybernetic,
but it does follow similar
principles.
4
The Control Process
 Establish objectives and

standards.
 Measure actual performance.
 Compare results with objectives
and standards.
 Take necessary action.
5
Establish Objectives and
Standards
 The control process begins with

planning and the establishment
of performance objectives.
 Performance objectives are
defined and the standards for
measuring them are set.
6
Establish Objectives and
Standards
 There are two types of standards:

Output Standards - measures
performance results in terms of
quantity, quality, cost, or time.
Input Standards - measures work
efforts that go into a performance
task.
7
Measuring Actual
Performance
 Measurements must be
accurate enough to spot
deviations or variances between
what really occurs and what is
most desired.
 Without measurement, effective
control is not possible.
8
Comparing Results with
Objectives and Standards
 The comparison of actual

performance with desired
performance establishes the need for
action.
 Ways of making such comparisons
include:
Historical / Relative / Engineering
Benchmarking
9
Taking Corrective Action
 Taking any action necessary to

correct or improve things.
 Management-by-Exception focuses
managerial attention on substantial
differences between actual and
desired performance.
10
Taking Corrective Action
Management-by Exception can

save the managers time, energy,
and other resources, and
concentrates efforts on areas
showing the greatest need.
There are two types of exceptions:
• Problems - below standard
• Opportunities - above standard
11
Effective Controls
The Best Controls in Organizations

are
 Strategic and results oriented

 Understandable
 Encourage self-control
12
Effective Controls
The Best Controls in Organizations

are
 Timely and exception oriented

 Positive in nature
 Fair and objective
 Flexible
13
Types of Control
 Preliminary
Sometimes called the
feedforward controls, they are
accomplished before a work
activity begins.
They make sure that proper
directions are set and that the
right resources are available to
accomplish them.
14
Types of Control
 Concurrent
Focus on what happens during
the work process. Sometimes
called steering controls, they
monitor ongoing operations and
activities to make sure that
things are being done correctly.
15
Types of Control
 Postaction
Sometimes called feedback
controls, they take place after
an action is completed. They
focus on end results, as opposed
to inputs and activities.
16
Types of Controls
Managers have two broad

options with respect to control.
 They can rely on people to
exercise self-control (internal)
over their own behavior.
 Alternatively, managers can
take direct action (external) to
control the behavior of others.
17
Types of Control
 Internal Controls
Allows motivated individuals to
exercise self-control in fulfilling
job expectations.
The potential for self-control is
enhanced when capable people have
clear performance objectives and
proper resource support.
18
Types of Control
 External Controls
It occurs through personal supervision
and the use of formal administrative
systems.
Performance appraisal systems,
compensation and benefit systems,
employee discipline systems, and
management-by-objectives.
19
Organizational Control
Systems
 Management Processes
Strategy and objectives
Policies and procedures
Selection and training
Performance appraisal
Job design and work structures
Performance modeling, norms, and
organization culture
20
Systems
 Compensation and Benefits

Attract talented people and
retain them.
Motivate people to exert
maximum effort in their work.
Recognize the value of their
performance contributions.
21
Systems
 Employee Discipline
Discipline is defined as influencing
behavior through reprimand.
Progressive Discipline ties
reprimand to the severity and
frequency of the employee’s
infractions.
Positive Discipline tries to involve
people more positively and directly
in making decisions to improve their
behavior.
22
The “Hot Stove Rule”
To be Effective Discipline Should be:

 Immediate  Informative
 Focus on  Occur in a
activity not supportive
personality setting
 Consistent  Support
realistic rules
23
Systems
 Information and Financial
Activity-based costing - the true
cost of all products and services.
Economic value added - examine
the value added by all activities.
Understand the implication of key
financial measures of (ratios)
organizational performance
24
and Control
 Purchasing
Economic Order Quantity
automatic reorder points
Just-In-Time Scheduling
25
and Control
 Project Management
Program Evaluation and Review
Technique (PERT) - Identifies and
controls the many separate events
in complex projects.
26
and Control
 Statistical Quality Control

Based on the establishment of
upper and lower control limits,
that can be graphically and
statistically monitored to ensure
that products meet standards.
27
Leadership & Motivation
416
Dr. Kostelis
Objectives
 Examine leadership with managerial
function
– Planning, organizing, leading, & controlling
 Examine theoretical foundation

– Motivation & Leadership theories
 Practical application
Q&A
 Write in your notes 5 attributes of a good
leader.
– We’ll compare to later answers
Leadership Matters, Character Matters
Influence others toward goal and
achievement of those goals
Process where an individual influences

others to do what s/he wants them to
“A leader is a person who has the ability

to get other people to do what they
don’t want to do and like it” - Harry Truman
A leader is best
when people barely know he exists
Not so good
when people obey and acclaim him
Worse when they despise him
But of a good leader
who talks little
when this work is done
his aim fulfilled
they will say:
“WE DID IT OURSELVES”
- Lao-tse (c. 565 B.C.)
 Why do people follow?
 Why do people lead?
 Why are some people successful and
why are some unsuccessful?
– Psychological contract (Schein, 1970) and

have expectations of things in return
– Influenced by how view authority and past
experiences
What does it take to be a leader?
 Trust your subordinates – you can’t expect them to go all out for
you if they think you don’t believe in them
 Develop a vision – people want to follow someone who knows
where he or she is going
 Keep your cool – the best leaders show their mettle under fire
 Encourage risk – nothing demoralizes the troops like knowing the
slightest failure could jeopardize their entire career
 Be an expert – from boardroom to mailroom, everyone had better
understand that you know what you’re talking about
 Invite dissent – your people aren’t giving you their best … if they
are afraid to speak up
 Simplify – you need to see the big picture in order to set a course,
communicate it, and maintain it
Kenneth Labich – article in Fortune

What does it take to be a leader?
 Learn from others

 Expertise
 Create trust
 Patience, Persistence, Focus, and
Passion
 Communication
 Compassion and respect
10 Commandments of Leadership
1. Treat everyone with respect and dignity
2. Set the example for others to follow
3. Be active
4. Maintain the highest standards of honesty
and dignity
5. Insist on excellence and hold your people
accountable
6. Build group cohesiveness and pride
7. Show confidence in your people
8. Maintain a strong sense of urgency
9. Be available and visible to your staff
10. Develop yourself to your highest potential
Leadership is broader than
managerial functions
 Managing and leading
 Manager and leader
 Management and leadership
Management
 Getting things done with and through
people
 Goal attainment, organizing, and
monitoring performance
 Management versus Leadership
 Are managers leaders?

– Leaders manage
– Managers lead
*Yet not synonymous
Management and Leadership
 Two distinctive and complementary
systems
 Ideal world, they’re balanced,
integrated
– One person is both
*A good leader needs to manage, but not

always the case, sometimes more
necessary than others
MANAGERS LEADERS
 Plan, coordinate  Facilitate interpersonal
interaction
 Evaluate and supervise
 Charisma
 Negotiate, budget
 Innovate, inspire
 Reality check, sets time
 Vision, communicate it
limits, copes with
 Ability to change things,
complexity set direction, look at larger
picture, align people, look
 Bring order and consistency at competition and do
better and different, willing
to listen and learn,
 Planning complement to sensitive to concerns
direction  Gains trust, empowers,
enable others to reach
potential
MANAGERS
LEADERS
 Administers
 Innovates
 Is a copy
 Is an original
 Maintains
 Develops
 Accepts reality
 Investigates it
 Focuses on system &
structure  Focuses on people
 Relies on control  Inspires trust
 Has short-range view  Has a long-range plan
 Asks how and when  Asks what and why
 Has eye on bottom  Has eye on horizon
 Imitates  Originates
 Accepts status quo  Challenges it
 Does things right  Does the right thing
Motivation Theories
 Part of leadership process by which someone
gets another to do what s/he wants to do
 For this it helps to know what motivates
people
– Motivation – understanding the construct is closely
linked to leadership
– Motivation is traced back to the 1930s (Murray)
– Simple terms – has to do with one’s willingness to
do something
– Relates to need satisfaction and behavior is goal
oriented.
Maslow’s Hierarchy of Needs
 Abraham Maslow
– Brandeis professor in the 50-60s, died in 70s
– Ahead of his time
– Worked with company in DelMar, CA (Non-
Linear Systems) in 1960s and noticed
workers were most productive at end of the
line due to fact produced a sense of
accomplishment
– He coined “Enlightened Management” to
describe work conditions, leading to self
actualization or achievement of one’s
potential (trust, teamwork, recognition)
 Abraham Maslow
– He found teams made better workers and better
workers made better teams
 Creativity flowed from ambiguity
 Knowledge breads knowledge
– Used term “Synergy” to describe self-reinforcing
process and wrote:
 “The more influence and power you give to someone else in
the team situation, the more you have for yourself”
– “Business was not a “chain of links or a chain of
cause and effect, but rather a web in which every
part is related to every other part”
– Urged pursuit of “continued improvement”
 People are motivated on the basis of five
classes of needs ordered in hierarchy of
power or force
 Once lower order needs are satisfied

externally, other levels become more
important and then motivate and
dominant behavior
– Higher order are satisfied internally
Expectancy Model
 The strength of a tendency to act in a certain
way depends of the strength of an expectation
that the act will be followed by a given
outcome and on the attractiveness of that
outcome (Nader & Lawler)
– Attractiveness – importance an individual places on
the potential outcome or reward than can be
achieved on the job
– Performance – reward linkage – degree to which the
individual believes that performance at a particular
level will lead to the attainment of a desired
outcome
– Effort – performance linkage – the perceived
probability by the individual that exerting a given
amount of effort will lead to performance
Expectancy Model
 The strength of a person’s motivation to
perform (effort) depends on how strongly
s/he believes that s/he can achieve what
is attempted
 And if s/he works to achieve the goal

(performance), will s/he be adequately
rewarded and will that reward satisfy the
goals?
Expectancy Model
 Maximize pleasure and minimize pain
 Drives are influenced by outcome of
actions
 Based on subjective assessment of
likelihood of certain outcomes –
perceived outcome is the “expectancy”
David McClelland
 Examined leadership motives and identified three
needs
 Need for AFFILIATION
– Desire to be liked and accepted
– Stay in good terms with people
 Need for ACHIEVEMENT
– Desire to be challenged, enjoy risk taking
– Competitive, thrive in moderate to difficult goals
– Willing to assume responsibility
– Seeks feedback
 Need for POWER
– Self-serving power
– Institutionally minded power
Additional Theories
 Equity Approach – belief individual has in
equity or fairness of rewards and
punishments in determining performance
and satisfaction
 Goal-Setting Theory – cognitive approach
that focuses on process of setting goals
 Reinforcement Theory – stimulus, response,
consequences, future response
– Behavior Modification
Leadership Theories
 Leadership – behavioral process of directing and
influencing someone toward a set of goals
 Power – ability to exert influence, that is to
change the attitudes or behavior of individuals or
groups
Nature of Leadership
 A person can be an effective manager, good
planner and a fair, organized administrator, but
lack the motivational skills of a leader.
 Others can be effective manager, skilled at
inspiring enthusiasm and devotion, but lack the
managerial skills to channel the energy they
arouse in others.
Leadership Theories
 Trait Approach
 Behavioral Approach
– Leadership Functions
– Leadership Styles
 Contingency (Situational) Approaches
– Hersey and Blanchard
– Fiedler Model
– Path-Goal
 Future of Leadership Theory
– Transformational or Charismatic
Trait Theory
 Tries to identify what qualities a leader
possesses
 Trait – predisposition to act in a certain way
– Over time it is a relatively permanent feature of
behavior, thus behavior is relatively consistent
and predictable
– Underlying assumption – LEADERS ARE BORN
 Two approaches
– Compare traits who emerged as leaders with
those who did not emerge
– Compare traits of effective leaders with
ineffective leaders
Behavioral Theory
 Trait research was unsuccessful, thus tried to
isolate behavior characteristics of effective leaders
 What effective leaders WERE and what they DID
 Behavior can be learned, thus if supported we
could train people to be leaders and teach
leadership
 Several studies were done to examine leader
behavior and focused on two aspects of
Leadership behavior
– Leadership Functions: task-related activities that must
be performed by leader to perform effectively
– Leadership Styles: various patterns of behavior favored
by leaders during process of directing and influencing
(High) Leadership Styles
- Ohio State
Low Structure High Structure

And And
Consideration
High Consideration High Consideration

Democratic
Low Structure High Structure

And And
Low Consideration Low Consideration
(Low)
Laissez-Faire Authoritarian
(Low) Initiating Structure (High)
Situational Leadership Theory
 Basically can’t change our style, thus better
to match leader and situation
– Leader-member relations (good-poor)
 Degree of confidence, respect, trust workers
have for leader
– Task structure (structured-unstructured)
 Degree to which jobs are procedurized
– Position-power (strong-weak)
 Degree of influence a leader has over
promoting, hiring, and disciplinary
Situational Leadership Theory
 Hersey & Blanchard (1980s)
– Move through Four Phases, correlated to life cycle
– Varies depending on “maturity” of followers
 Desire for achievement (capacity of setting high,
attainable goals)
 Willingness to accept responsibility
 Task-related ability and experience
– As maturity levels increase, leader lessens task,

increases relationship
– Then as maturity proceeds, decrease task and
relationship behavior
Future of Leadership Theory
 Transformational or Charismatic Leadership
– Leaders who, through their personal vision and
energy, inspire followers and have a major impact
on their organizations
 Seeks change, proactive
 Innovative, creative
– Leaders who determine what followers need to do
to achieve objectives, classify those requirements,
and help followers become confident they can
reach their objectives
 Inspire others to do more than expected
 Raise level to self-actualization
 Empower others

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Operations

 Goods Production  Farming, Mining, Construction,

 Storage / Transportation  Warehousing, Trucking, Mail Service,

 Retailing, Wholesaling, Banking,

 Films, Radio, Television, Concerts,

 Newspapers, Radio and Television,

Inputs Transformation / Outputs

• Synergies must exist with other functional

• Operations account for 60-80% of the

• Operations in some form has been

• These approaches all seek to

• Produce a technological solution to a need!

 Variety: Number of alternative products and variants of each

 Flow: Flow indicates the nature and intensity of activities

Mass Mid volume Project

Intermittent operations – produce a variety

Repetitive operations – produce one or a

– Project process /Job Shop– make a one-at-a-time

– Batch process – small quantities of product in

– Continuous process – very high volumes of a fully

• Process Re-engineering is a structured

Tasks or operations Examples: Giving an

Examples: How much

Process Analysis Terms

Storage areas or Examples: Sheds, lines of

Process Analysis Terms

Other Process Terminology

• Throughput time = Average time for a unit to move through the

• Velocity = Throughput time

• Efficiency = Actual output

• Utilization = Time Activated

Process Throughput Time Reduction

Change the sequence of activities

Planning Organizing Leading Controlling

1. Vision & Mission 1. Organization Design 1. Leadership 1. Systems/Processes

2. Strategizing 2. Culture 2. Decision Making 2. Strategic Human

Strategy Strategy Implementation

in ways that lead to

Key Costs Key Benefits

Cost and productivity

Culture and Quality control

Hands-on management The real-time speed of a

supervision during a project production line

Qualitative measures of Financial measures such as

customer satisfaction profitability, sales growth

The Balance Sheet

The Income/Profit and

Cash Flow Statement

Balance Sheets are usually done

Long-term Debt/Liabilities come

Owner's Equity refers to the

Measuring non-financial controls is important as they are

Not Using Non- Not Being Failing to

“it is a process for

More clearly will tie goals and

Moves beyond the financial

Learning and growth: your skills and

Internal: your physical health and mental

Customer (external): relations with your

Financial stability. To what degree are

Managing Engineering and Technology

Management Functions Managing Technology Personal Technology

Planning Research Time Management

Marketing & Engineers