1 THE FIELD OF ENGINEERING MANAGEMENT

 The Functions of the Engineer

 The Engineer in Various Types of Organization
Management Skills Required at Various Levels
 What is Engineering Management?
 Management Defined
 The Process of Management
 Requirements for the Engineer Manager's Job
 How One May Become a Successful Engineer
Manager
 Chapter 1

THE FIELD OF ENGINEERING MANAGEMENT

Engineers are expected to perform a variety of tasks depending on their specialization

and job level, It is important to the engineer that he knows what is expected of him so that he
may be able to perform his job effectively and efficiently. His next concern will be to identify the
skills required but which he does not have. As engineers are not trained to directly deal with
people, it is expected that their weakne8s will most often be on people-based skills. This
difficulty will be more apparent once they are assigned to occupy management positions. It
follows that if the engineer manager would want to do his job well, some exposure to
engineering management activities becomes necessary

THE FUNCTIONS OF THE ENGINEER

Since prehistoric times, mankind has benefited from the various tools, equipment, and
projects developed by engineers, among these, are the following:

1. The stone bladed axe which was a very useful tool; and the irrigation system used to
promote crop growing 6000 to 3000 B.C,

2. the pyramids of Egypt 3000 to 600 BO

3. road building by the Romans-600 B.C to AD 400;

4. the production of paper and gunpowder by the Chinoe100 A.D to 1600 AD

5. the production of steam engine and the spinning and weaving machinery 1801 A.D. to 1709
A.D; and

6. the manufacture of cars and household appliances modern times.

A listing of all useful tools, equipment, and projects developed and produced by
engineers will be sufficient to produce volumes of books. These contributions indicate that
engineers have become an indispensable segment of the world's professions. This expectation
will continue for a long time.

Even as engineers are currently producing solutions to many of the difficulties faced by
mankind, much is still expected of them. Their outputs, new or improvements of old ones, are
very much needed in the following specific problem concerns:

1. the production of more food for a fast growing world population

2. the elimination of air and water pollution:

 3. solid waste disposal and materials recycling

4. the reduction of noise in various form

5. supplying the increasing demand for energy supplying the increasing demand for mobility

7. preventing and solving crimes; and

8. meeting the increasing demand for communication facilities.

Specifically, the functions of' engineering encompass the following areas

1. Research - where the engineer is engaged in the process of learning about nature and
codifying this knowledge into usable theories.

2. Design and development - where the engineer undertakes the activity of turning a
product concept to a finished physical item. Design for manufacturability and value
engineering teams (a feature of some companies) are charged with improvement of designs
and specifications at the research, development, design, and production stages of product
development.

3. Testing - where the engineer works in a unit where new products or parts are tested for
work ability.

4. Manufacturing - where the engineer is directly in charge of production personnel or

assumes responsibility for the product.

5. Construction - this is where the construction engineer (a civil engineer) is either directly
in charge of the construction personnel or may have responsibility for the quality of the
construction process.

6. Sales - where the engineer assists the company's customers to meet their needs, especially
those that require technical expertise.

7. Consulting - where the engineer works as consultant of any individual or organization

requiring his services.

8. Government - where the engineer may find employment in the government performing
any of the various tasks in regulating, monitaring, and controlling the activities of various
institutions public or private.

9. Teaching - where the engineer gets employment in a school and is ansigned as a teacher
of engineering courses. Some of them later become deans, vice presidents, and presidents.

10. Management - where the engineer is assigned to manage groups of people performing
specific tasks
 THE ENGINEER IN VARIOUS TYPES OF ORGANIZATION

From the viewpoint of the engineer, organizations may be classified according to the
degree of engineering jobs performed:

1. Level One ( I ) - those with minimal engineering jobs like retailing firms.

2. Level Two ( II ) - those with a moderate degree of engineering jobs like transportation
companies.

3. Level Three ( III ) - those with a high degree of engineering jobs like construction firms.
Management Skills Required at Various Levels

` Among the types of organizations, the engineer will have a slim chance of becoming the
general manager or president of level one, unless of course, he owns the firm. The engineer
manager may be assigned to head a small engineering unit of the firm, but there will not be too
many firms which will have this unit.

In level two firms, the engineer may be assigned to head the engineering division. The
need for management skills will now be felt by the engineer manager.

Level three firms provide the biggest opportunity for an engineer to become the president
or general manager. In this case, the engineer manager cannot function effectively without
adequate management skills.

WHAT IS ENGINEERING MANAGEMENT?

Engineering management refers to the activity combining "technical knowledge with the
ability to organize and coordinate worker power, materials, machinery, and money.

When the engineer is assigned to supervise the work of even a few people, he is already
engaged in the first phase of engineering management. His main responsibility is to lead his
group into producing a certain output consistent with the required specifications

The top position an engineer manager may hope to occupy is the general manager ship or
presidency of any firm, large or small. As he scales the management ladder, he finds that the
higher be goes up, the less technical activities he performs, and the more management task he
accepts. In this case, it is but proper that the management functions taught in pure management
courses be understood by the engineer manager.
 MANAGEMENT DEFINED

Since the engineer manager is presumed to be technically competent in his specialization,

one may now proceed to describe more thoroughly the remaining portion of his job, which is
management.

Management may be defined as the "creative problem solving-process of planning,

organizing, controlling an organization’s resource to achieve its mission and objectives."

THE PROCESS OF MANAGEMENT

Management is a process consisting of planning, organizing, directing (or leading), and

controlling.

Explained in a simple manner, management must seek to find out the objectives of the
organization, think of ways on how to achieve them, decide on the ways to be adapted and the
material resources to be used, determine the human requirements of the total job, assign specific
tasks to specific persons, motivate them, and provide means to make sure that the activities are in
the right direction.

The specific activities in the management process are discussed more thoroughly in the
succeeding chapters.

REQUIREMENTS FOR THE ENGINEER MANAGER'S JOB

Depending on the type of products or services a firm produces, the engineer manager
must have the following qualifications:

1. a bachelor's degree in engineering from a reputable school; In some cases, a master’s degree in
engineering or business management is required

2 a few years’ experience in a pure engineering job,

3. training in supervision;

4. special training in engineering management

These qualifications will be of great help to the engineer manager in the performance of
the various management functions
 HOW ONE MAY BECOME A SUCCESSFUL ENGINEER MANAGER

Successful engineer managers do not happen as a matter of chance, although luck is a

contributory factor. It is very important for the engineer manager to know the various factors
leading to successful management.

Kreitner indicates at least three general preconditions for achieving lasting success as a
manager. They are as follows:

1. ability

2. motivation to manage, and

3. opportunity.

Ability
Managerial ability refers to the capacity of an engineer manager to achieve organizational
objectives effectively and efficiently.

Effectiveness, according to Higgins, refers to a description of "whether objectives are

accomplished while efficiency is a description of the relative amount of resources used in
obtaining effectiveness.

Motivation to Manage
Many people have the desire to work and finish specific tasks assigned by superiors, but
not many are motivated to manage other people so that they may contribute to the realization of
the organization's objectives.

A management researcher, John B. Miner, developed a psychometric instrument to

measure objectively an individual's motivation to manage. The test is anchored to the following
dimensions:

1. Favorable attitude toward those in positions of authority, such as superiors

2 Desire to engage in games or sports competition with peers.
3. Desire to engage in occupational or work-related competition with peers
4. Desire to assert oneself and take charge
5. Desire to exercise power and authority over others
6 Desire to behave in a distinctive way, which includes standing out from the crowd
7. Sense of responsibility in carrying out the routine duties associated with managerial work.
 High scores in theforegoing dimensions are associated with high motivation to manage

Opportunity
Successful managers become possible only if those having the ability and motivation are
given the opportunity to manage. The opportunity for successful management has two
requirements:

1. Obtaining a suitable managerial job, and

2. Finding a supportive climate once on the job.

Newspaper advertisements abound with needs for engineer managers. It is a little dificult
to determine if the firms requiring their services provide a supportive climate for effective and
efficient management. A supportive climate is characterized by the recognition of managerial
talent through financial and nonfinancial rewards.

SUMMARY
Engineers are known for their great contributions to the development of the world's
civilization. There are many areas where their presence is necessary like research, design and
development, testing, manufacturing, construction, sales, consulting, government teaching, and
management

Engineers may be found contributing their share in the various levels of organization.

Engineering activities need to be managed and engineers are sometimes placed in

positions where they have to learn management skills.

Management is concerned with planning, organizing, leading, and controlling an

organization's resources to achieve its mission and objectives.

There are certain qualifications required of the engineer manager.

One may become a successful engineer manager if the preconditions of ability,

motivation to manage, and opportunity to manage are met.
 2 DECISION-MAKING
 Decision Making as a Management Responsibility
 What is Decision Making?
 The Decision Making Process
 Approaches in Solving Problems
 Quantitative Models for Decision Making
 Chapter 2

DECISION-MAKING

Managers of all kinds and types, including the engineer manager, are primarily tasked to
provide leadership in the quest for the attainment of the organization's objectives. If he is to
become effective, he must learn the intricacies of decision-making. Many times, he will be
confronted by situations where he will have to choose from among various options. Whatever his
choice, it will have effects, immediate or otherwise, in the operations of this organization.

The engineer manager's decision-making skills will be very crucial to his success as a
professional. A major blunder in decision-making may be sufficient to cause the destruction of
any organization Good decisions, on the other hand, will provide the right environment for
continuous growth and success of any organized effort.

DECISION-MAKING AS A MANAGEMENT RESPONSIBILITY

Decisions must be made at various levels in the workplace. They are also made at the
various stages in the management process. If certain resources must be used, someone must
make decision authorizing certain person to appropriate such resources

Decision-making is a responsibility of the engineer manager. It is understandable for

managers to make wrong decisions at times. The wise manager will correct them as soon as they
are identified. The bigger issue is the manager who cannot or do not want to make decisions.
Delaney concludes that this type of managers are dangerous and "should be removed from their
position as soon as possible."

Management must strive to choose a decision option as correctly as possible. Since they
have that power, they are responsible for whatever outcome their decisions bring. The higher the
management level is, the bigger and the more complicated decision-making becomes.

An example may be provided as follows:

The production manager of a certain company has received a written request from à
section head regarding the purchase of an air-conditioning unit. Almost simultaneously, another
request from another section was forwarded to him requiring the purchase of a forklift. The
production manager was informed by his superior that he can only buy one of the two requested
items due to budgetary constraints.

The production manager must now make a decision. His choice, however, must be based on
sound arguments for he will be held responsible, later on, if he had made the wrong choice.
WHAT IS DECISION-MAKING?

Decision-making may be defined as "the process of identifying and choosing alternative

courses of action in a manner appropriate to the demands of the situation.

The definition indicates that the engineer manager must adapt a certain procedure
designed to determine the best option available to solve certain problems.

Decisions are made at various management level (i.e., top, middle and lower levels) and
at various management functions (i.e., planning, organizing, directing, and controlling) Decision-
making, according to Nickels and others, "is the heart of all the management functions."

THE DECSION-MAKING PROCESS

Rational decision-making, according to David H. Holt is a process involving the following steps:

1. diagnose problem

2. analyze environment

3. articulate problem or opportunity

4 develop viable alternatives

5 evaluate alternatives

6. make a choice

7. implement decision

8. evaluate and adapt decision results

Diagnose Problem
If a manager wants to make an intelligent decision, his first move must be to identify the
problem. If the manager fails in this aspect, it is almost impossible to succeed in the subsequent
steps. An expert once said identification of the problem is tantamount to having the problem
half-solved."

What is a Problem? A problem exists when there is a difference between an actual

situation and a desired situation. For instance, the management of a construction company
entered into contract with another party for the construction of a 25 storey building on a certain
site.

The actual situation of the firm is that it has not yet constructed the building. The desired
situation is the finished 25-storey building. In this case, the actual situation is different iferent
from the desired situation. The company, there for, has a problem and that is, the construction of
the 25-storey building

Analyze the Environment

The environment where the organization is situated plays a very significant role in the
success or failure of such an organization. It is, therefore, very important that an analysis of the
environment be undertaken.

The objective of environmental analysis is the identification of constraints, which may be

spelled out as either internal or external limitations.

Example of internal limitations are as follows:

1. Limited funds available for the purchase of equipment.

2. Limited training on the part of employees.

3. III-designed facilities

Examples of external limitations are as follows:

1. Patents are controlled by other organizations.

2. A very limited market for the company's products and services exists

3. Strict enforcement of local zoning regulations.

 When decisions are to be made, the internal and external limitations must be considered.
It may be costly, later on, to alter a decision because of a constraint that has not been previously
identified

An illustration of failure to analyze the environment is as follows:

The president of a new chemical manufacturing company made a decision to locate his
factory in a place adjacent to a thickly populated area. Construction of the building was made
with precision and was finished in a short period. When the clearance for the commencement of
operation was sought from local authorities, this could not be given. It turned out that the
residents opposed the operation of the firm and made sure that no clearance is given.

The president decided to relocate the factory but not after much time and money has been
lost. This is a clear example of the cost associated with management disregarding the
environment when decisions are made. In this case, the president did not consider what the
residents could do.

Components of the Environment. The environment consists of two major concerns:

1. internal and

2. external.

The internal environment refers to organizational activities within a firm that surrounds
decision-making. Shown in Figure 2.1 are the important aspects of the internal environment

The external environment refers to variables that are outside the organization and not
typically within the short-run control of top management. Figure 2.2 shows the forces
comprising the external environment of the firm.

Develop Viable Alternatives

Oftentimes, problems may be solved by any of the solutions offered The best among the
alternatives solutions must be considered by management. This is made possible by using a
procedure with the following steps:

1 Prepare a list of alternative solutions.

2. Determine the viability of each solutions

3. Revise the list by striking out those which are not viable.
To illustrate:

An engineering firm has a problem of increasing its output by 30%. This is the result of a
new agreement between the firm and one of its clients.

The list of solutions prepared by the engineering manager shows the following alternative
courses of action:

1. improve the capacity of the firm by hiring more workers and building additional facilities;
2. Secure the services of subcontractors;
3. buy the needed additional output from another firm
4. stop serving some of the company's customers and
5. delay servicing some clients.
The list was revised and only the first three were deemed to be viable. The last two were deleted
because of adverse effects in the long-run profitability of the firm

Evaluate Alternatives
After determining the viability of the alternatives and a revised list has been made, an
evaluation of the remaining alternatives is necessary. This is important because the next step
involves making a choice. Proper evaluation makes choosing the right solution less difficult.

How the alternatives will be evaluated will depend on the nature of the problem, the
objectives of the firm, and the nature of alternatives presented. Souder suggests that "each
alternative must be analyzed and evaluated in terms of its value, cost, and risk characteristics.

The value of the alternatives refers to benefits that can be expected. An example may be
described as follows: a net profit of P 10 million per year if the alternative is chosen.
Make a Choice
After the alternatives have been evaluated, the decision-maker must now be ready to
make a choice. This is the point where he must be convinced that all the previous steps were
correctly undertaken

Choice-making refers to the process of selecting among alternatives representing

potential solutions to a problem. At this point, Webber advises that particular effort should be
made to identify all significant consequences of each choice. To make the selection process
easier, the alternatives can be ranked from best to worst on the basis of some factors like benefit,
cost, or risk.

Implement Decision
After a decision has been made, implementation follows. This is necessary, or decision-
making will be an exercise in futility.

Implementation refers to carrying out the decision so that the objectives sought will be
achieved. To make implementation effective, a plan must be devised.

At this stage, the resources must be made available so that the decision may be properly
implemented. Those who will be involved in implementation, according to Aldag and Stearns,
must understand and accept the solution”.

Evaluate and Adapt Decision Results

In implementing the decision, the results expected may or may not happen. It is, therefore,
important for the manager to use control and feedback mechanisms to ensure results and to
provide information for future decisions.

Feedback refers to the process which requires checking at each stage of the process to
assure that the alternatives generated, the criteria used in evaluation, and the solution selected for
implementation are in keeping with the goals and objectives originally specified.

Control refers to actions made to ensure that activities performed match the desired
activities or goals that have been set.

In this last stage of the decision-making process, the engineer manager will find out
whether or not the desired result is achieved. If the desired result is achieved, one may assume
that the decision made was good. If it was not achieved, Ferrel and Hirt suggest that further
analysis is necessary " Figure 2.3 presents an elaboration of this last step
APPROACHES IN SOLVING PROBLEMS

In decision-making, the engineer manager is faced with problems which may either be simple or
complex. To provide him with some guide, he must be familiar with the following approaches:

1. qualitative evaluation, and

2. quantitative evaluation

Qualitative Evaluation-
This term refers to evaluation of alternatives using intuition and subjective judgment. Stevenson
states that managers tend to use the qualitative approach when:

1. The problem in fairly simple

2. The problem is familiar.
3. The cost involved are not great
4. Immediate decisions are needed.
An example of an evaluation using the qualitative approach is as follows:
Quantitative Evaluation-
This term refers to the evaluation of alternatives using any technique in a group classified as
rational and analytical.

QUANTITATIVE MODELS FOR DECISION MAKING

The types of quantitative techniques which may be useful in decision-making are as follows:

1. Inventory models

2. queuing theory

3. network models

4. forecasting

5. regression analysis

6. simulation

7. linear programming

8. sampling theory

9 statistical decision theory

Inventory Models
Inventory models consist of several types all designed to help the engineer manager make
decisions regarding inventory. They are as follows:

1. Economic order quantity model-this one is used to calculate the number of items that should
be ordered at one time to minimize the total yearly cost of placing orders and carrying the items
in inventory."

2. Production order quantity model- this is an economic order quantiy technique applied to
production orders.

3. Back order inventory model- this is an inventory model used for planned shortages.

4. Quantity discount model- an inventory model used to minimize the total cost when quantity
discounts are offered by supplier.
Queuing Theory
The queuing theory is one that describes how to determine the number of service units
that will minimize both customer waiting time and cost of service.

The queuing theory is applicable to companies where waiting lines are a common
situation. Examples are cars waiting for service at a car service center, ships and barges waiting
at the harbor for loading and unloading by dock-workers, programs to be run in a computer
system that processes jobs, etc.

Network Models
These are models where large complex tasks are broken into smaller segments that can be
managed independently.

The two most prominent network models are:

1. The Program Evaluation Review Technique (PERT)- a technique which enables engineer
managers to schedule, monitor, and control large and complex projects by employing three time
estimates for each activity.

2. The Critical Path Method (CPM)- this is a net work technique using only one time factor
per activity that enables engineer managers to schedule, monitor, and control large and complex
projects.

Forecasting
There are instances when engineer managers make decisions that wil have implications in
the future. A manufacturing firm, for example, must put up a capacity which is sufficient to
produce the demand requirements of customers within the next 12 months. As such, man-power
and facilities must be procured before the start of operations. To make decisions on capacity
more effective, the engineer manager must be provided with data on demand requirements for
the next 12 months. This type of information may be derived through forecasting.

Forecasting may be defined as "the collection of past and current information to make
predictions about the future."
Regression Analysis
The regression model is a forecasting method that examines the association between two
or more variables. It uses data from previous periods to predict future events.

Regression analysis may be simple or multiple depending on the number of independent

variables present. When one independent variable is involved, it is called simple regression;
when two or more independent variables are involved, it is called multiple regression

Simulation
Simulation is a model constructed to represent reality, on which conclusions about real-
life problems can be used." It is a highly sophisticated tool by means of which the decision
maker develops a mathematical model of the system under consideration.

Simulation does not guarantee an optimum solution, but it can evaluate the alternatives
fed into the process by the decision-maker.

Linear Programming
Linear programming is a quantitative technique that is used to produce an optimum
solution within the bounds imposed by constraints upon the decision. Linear programming ia
very useful as a decision-making tool when supply and demand limitations at plant, warehouse,
or market areas are constraints upon the system.

Sampling Theory
Sampling theory is a quantitative technique where samples of populations are statistically
determined to be used for a number of processes, such as quality control and marketing research.

When data gathering is expensive, sampling provides an alternative. Sampling, in effect, saves
time and money.
Statistical Decision-Theory
Decision theory refers to the "rational way to conceptualize, analyze, and solve problems
in situations involving limited, or partial information about the decision environment.

A more elaborate explanation of decision theory is the decision making process presented
at the beginning of this chapter. What has not been included in the discussion on the evaluation
of alternatives, but is very important, is subjecting the alternatives to Bayesian analysis.

The purpose of Bayesian analysis is to revise and update the initial assessments of the
event probabilities generated by the alternative solutions. This is achieved by the use of
additional information.

When the decision-maker is able to assign probabilities to the various events, the use of
probabilistic decision rule, called the Bayes criterion, becomes possible. The Bayes criterion
selects the decision alternative having the maximum expected payoff, or the minimum expected
loss if he is working with a loss table.?