Cebu Institute of Technology

University
N. Bacalso Avenue, Cebu City, Philippines
COLLEGE OF ENGINEERING AND ARCHITECTURE
Department of Industrial Engineering

COURSEWARE
ES034 | ENGINEERING MANAGEMENT
Week 6

Prepared by: ENGR. JOYCE MARIE MONTEGRANDE

Adopted by:
Engr. Aries M. Rivero
Engr. Antoinette M. Almaden
Engr. Anna Marie A. Granaderos
Engr. Cheradee Ann M. Cabanlit
Engr. Ciara C. Bacalso

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 Welcome to Week 6!
Last week, we delved into the environment of organizations (including the global environment),
the usefulness of information in decision making, the decision making processes and some of
the tools that can be used for a successful and data-driven decisions.

Do you still remember the management process and managerial functions being covered in
Week 1? Can you name the first managerial function? If you can, you are set for Week 4!

For this week, we will cover the first managerial function. We will cover the importance of this
managerial function in an organization and even our personal lives. Also, we’ll get to know some
of the tools that will aid an organization in executing this first managerial function.

Sharing to you an ideal study guide that will help you through the week.

Definition and Importance of Planning -

Mar 3
Planning Process
Mar 4 Types of Plans - Key Elements of Planning
Types of Planning Tools: Network Diagram -
Mar 5
Critical Path Method and Gantt Chart
Mar 6 Answer the activities in Moodle and in Courseware
Finalize the output for submission and answer the Digital
Mar 7
Learning Journal

Again, if you have any questions, feel free to reach out to me!

I hope you will enjoy and learn so much for this week! ☺

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 PLANNING
PART SIX

Definition and Importance of Planning

Planning Process
Types of Plans
Key Elements of Planning
Types of Planning Tools: Network Diagram,
Critical Path Method and Gantt Chart

INTENDED LEARNING OUTCOMES

✓ Define how managers plan
✓ List and explain the types of plans managers use and key elements of planning
✓ Use the planning tools and techniques
✓ Discuss management function by objective

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 Time Management Checkup

When it comes to planning, one of the first things that may come to mind is time. It is one of our most
precious resources and time management is an essential career skill. Some 77% of managers in one
survey said that the new digital age has increased the number of decisions they have to make. Not too
surprising perhaps. But what about this?

Forty-three percent said there was less time available to make these decisions.

And, who hasn’t complained or heard others complain “there’s just not enough hours in the day to get
everything done”? Don’t you wonder about the time you waste every day? —instant messages, voice
and text messages, drop in visitors, and more? Of course, you have to be careful in defining waste. It
isn’t a waste of time to occasionally relax, take a breather from work or daily affairs, and find humor and
pleasure in social interactions. Breaks help us gather and replenish energies. It is a waste to let
friends dominate your time so that you don’t work on a term paper until it is too late to write a really good
one, or delay a decision to apply for an internship until the deadline is passed.

Now, let’s have a quick check up on how well you manage your time. List down what is asked in the
following:

List 1—What I have to do tomorrow

(A) Most important, top priority—these are things you must do.
(B) Important, not top priority—these are things you should do.
(C) Least important, low priority—these are things you might do.
(D) Not important, no priority—these are things you should not do.

Ask yourself: Do my actions match the priorities?

List 2—Time wasters

(A) Things I can control—they won’t happen if I don’t let them.
(B) Things I can’t control—they happen and I can’t do anything about it.

Ask yourself: Are you taking control where you can?

WHAT IS PLANNING?

Does it make sense to plan in a world typified by rapid and dramatic change? The answer is a resounding
“yes!”
✓ Planning programs identify what the organization wants to accomplish and how.
✓ Planning is a process that helps managers set objectives for the future and map out the activities
and means that will make it possible to achieve those objectives.
There are both formal and informal planning processes. Most organizational leaders prefer to develop a
formal written statement of future objectives and the approaches to reach them. The document can then
be shared with those responsible for the execution of the plan, thereby reducing ambiguities and creating
a common understanding. The written plan can be adjusted as necessary.
As shown in the figure below, there are four key elements to a plan: objectives, actions, resources, and
implementation.

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 Objectives are goals or targets that the firm wishes to reach within a stated amount of time. Setting objectives
requires the firm to anticipate what is likely to happen in the future. A reasonable forecast allows a firm to
set objectives that are both challenging and realistic.

Actions are the specific steps the firm intends to take to achieve the desired objectives. Example, return on
investment may be increased by downsizing, subcontracting some of the work, decreasing inventories, using
technology to increase productivity, or developing new products.

Planned actions cannot be carried out effectively without careful resource allocation. It is also the planning
step that determines where the resources will come from (for instance, borrowing versus internally generated
funds) and how the resources will be deployed to achieve the agreed-on objectives.

Finally, plans must be accompanied by implementation guidelines that show how the intended actions will
be carried out. Implementation involves dividing tasks among the different actors, specifying reporting
relationships, and establishing timelines.

Answer Knowledge Check #1 on Moodle!

WHY AND HOW MANAGERS PLAN

The management process involves planning, organizing, leading, and controlling the use of resources
to achieve performance objectives.
The first of these functions, planning, sets the stage for the others by providing a sense of direction. It is a
process of setting objectives and determining how best to accomplish them.
Importance of Planning

When planning is done well it creates a solid platform for the other management functions. It helps with
organizing—allocating and arranging resources to accomplish tasks, leading—guiding the efforts of human
resources to ensure high levels of task accomplishment, and controlling—monitoring task accomplishments
and taking necessary corrective action.
Good planning makes organization (1) action oriented—keeping a results driven sense of direction; (2)
priority oriented—making sure the most important things get first attention; (3) Advantage oriented—
ensuring that all resources are used to best advantage; (4) Change oriented—anticipating problems and
opportunities so they can be best dealt with.
Planning at various management levels
1. Top management level – strategic planning
2. Middle management level – intermediate planning
3. Lower management level – operational planning
Strategic Planning
The term strategic planning refers to the process of determining the major goals of the organization and the
policies and strategies for obtaining and using resources to achieve those goals. Strategic plans outline the
firm's long-range (two to five years) organizational goals and set a course of action the firm will pursue to
reach its goals.
Intermediate Planning/Tactical Planning
Tactical action plans are developed at the division or department level. They specify the activities that must
be performed, when they must be completed, and the resources a division or department will need to
complete the portions of the strategic action plan under its purview. The primary criterion of effectiveness
for tactical action plans is the extent to which they contribute to the achievement of the company’s strategic
objectives. Tactical plans typically focus on departmental goals and cover a period of one to three years.

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Operational Planning
Line managers and employees directly responsible for individual tasks or activities are the ones who create
operational action plans. These plans tend to be narrowly focused on resources, methods, timelines, and
quality control issues for a particular kind of operation. In general, the time frame for operational action
plans is shorter than for tactical action plans. Operational plans usually define actions for less than one
year and focus on accomplishing a firm's specific objectives.

Answer Knowledge Check #2 on Moodle!

THE PLANNING PROCESS

The five basic steps in the planning process are:
1. Setting organizational, divisional or unit goals - Identifying of the desired outcomes or results
in very specific ways and providing a sense of direction to the firm. Goals are precise statement of
result sought, quantified in time and magnitude. Know where you want to go; be specific enough
that you will know you have arrived when you get there, or know how far off the mark you are at
various points along the way.

2. Developing strategies or tactics to reach goals - After determining the goals, the next task is to
devise some means to realize them. The ways to realize the goals are called strategies and these
will be the concern of top management. The middle and lower management will adapt their own
tactics to implement their plans. A strategy may be defined as "a course of action aimed at ensuring
that the organization will achieve its objectives." A tactic is a short-term action taken by
management to adjust to negative internal or external influences.

3. Determining Resources Needed – when the strategies or tactics have been devised, the engineer
manager will then determine the human and nonhuman resources required by such strategies or
tactics. To satisfy strategic requirements, a general statement of needed resources will suffice.

4. Setting standards – The standards for measuring performance may be set at the planning stage.
When actual performance does not match with the planned performance, corrections may be made
or reinforcements given. A standard may be defined as "a quantitative or qualitative measuring
device designed to help monitor the performances of people, capital goods, or processes."

APPLICATION | WHAT WOULD YOU DO? – The Planning Retreat

It’s been a bit over two years since your promotion to division manager. You’re now accountable for delivering about
10% of your firm’s total revenues, and oversee more than 100 people working in five different departments. This
year you’d like to make the annual planning retreat really valuable to everyone. All managers from team leaders to
department heads will be present. You will have them off site for a full day. What goals will you state for the retreat
in the e-mail you send out with the retreat agenda? Knowing the steps in the planning process, what will the retreat
agenda look like? (Refer to the worksheet for the format)

TYPES OF PLANS
Plans are of different types. They may be classified in terms of functional areas, time and frequency of use.
Functional Area Plans
1. Marketing plan— this is the written document or blueprint for implementing and controlling an
organization's marketing activities related to a particular marketing strategy."
2. Production plan — this is a written document that states the quantity of output a company must
produce in broad terms and by product family.

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 3. Financial plan — it is a document that summarizes the current financial situation of the firm, analyzes
financial needs, and recommends a direction for financial activities.
4. Human resource management plan — it is a document that indicates the human resource needs of
a company detailed in terms of quantity and quality and based on the requirements of the company's
strategic plan.
Plans with time horizon
1. Short-range plans — these are plans intended to cover a period of less than one year. First-line
supervisors are mostly concerned with these plans.
2. Long-range plans — these are plans covering a time span of more than one year. These are mostly
undertaken by middle and top management.
Plans according to frequency of use
1. Standing Plans. These are plans that are used again and again, and they focus on managerial
situations that recur repeatedly. Plans created to help the organization deal with issues that come
up on a regular basis. Standing plans may be further classified as follows:
a. Policies — they are broad guidelines to aid managers at every level in making decisions about
recurring situations or function.
b. Procedures — they are plans that describe the exact series of actions to be taken in a given
situation.
c. Rules — they are statements that either require or forbid a certain action. Written statement of
the general permissible bounds for the application of particular policies.

2. Single-Use Plans. These plans are specifically developed to implement courses of action that are
relatively unique and are unlikely to be repeated. Single-use plans may be further classified as
follows:
a. Budget - according to Weston and Brigham, is "a plan which sets forth the projected expenses
for a certain activity and explains where the required funds will come from”.
b. Program - is a single-use plan designed to coordinate a large set of activities
c. Project - is a single-use plan that is usually more limited in scope than a program and is
sometimes pre-pared to support a program.

Answer Knowledge Check #3 on Moodle!

AN OVERVIEW OF STRATEGY AND STRATEGIC PLANNING

Developing strategy for an organization may seem a deceptively simple task: (1) Find out what customers
want, (2) provide it for them at the best prices and service, and (3) make sure competitors can’t copy what
you are doing well.
In practice, things can get very complicated. The reality is that strategies don’t just happen; they must
be developed and then be well implemented. And at the same time that managers in one organization are
doing all this, their competitors are trying to do the same—only better.
Strategic management is the process of formulating and implementing strategies to accomplish long-term
goals and sustain competitive advantage. You can think of it as making decisions that allocate an
organization’s resources so it will consistently outperform rivals.
As shown in the figure below, the process begins with strategic analysis to assess the organization, its
environment, its competitive positioning, and its current strategies. Next comes strategy formulation, the
process of developing a new or revised strategy. The final phase is strategy implementation, using
resources to put strategies into action, and then evaluating results so that the implementation can be
improved or the strategy itself changed.

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Essentials of Strategic Analysis
1. Vision Statements

Vision Statement of Nike:

“To bring inspiration and innovation to every athlete in the world

An aspirational description of what an organization would like to achieve or accomplish in the mid-
term or long-term future. It is intended to serves as a clear guide for choosing current and future
courses of action.

2. Mission Statements

Mission Statement of Nike:

“To do everything possible to expand human potential. We do that by creating

groundbreaking sport innovations, by making our products more sustainably, by
building a creative and diverse global team and by making a positive impact in
communities where we live and work.”

Mission Statements are “enduring statements of purpose that distinguish one business from other
similar firms. A mission statement identifies the scope of a firm’s operations in product and market
terms.” It addresses the basic question that faces all strategists: “What is our business?”.

Mission statements helps managers inspire the support and respect of an organization’s
stakeholders. These are individuals and groups—including customers, shareholders, employees,
suppliers, creditors, community groups, and others—who are directly affected by the organization
and its accomplishments.

Figure below gives an example of how stakeholder interests can be linked with the mission of a
business firm.

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 3. Core Values and Culture

Organizational values and culture should be analyzed in the strategic management process to
determine how well they align with the mission. Core values are broad beliefs about what is or is
not appropriate behavior.

The presence of core values helps build a clear organizational identity. It gives the organization a
sense of character as seen through the eyes of employees and external stakeholders. This
character is part of what we call the organizational culture or predominant value system of the
organization as a whole. A clear and strong organizational culture helps guide the behavior of
organization members in ways consistent with mission and core values.

4. Goals

Great goals tend to have these five characteristics:

a. Specific—clearly targeted key results and outcomes to be accomplished.
b. Timely—linked to specific timetables and “due dates.”
c. Measurable—described so results can be measured without ambiguity.
d. Challenging—include a stretch factor that moves toward real gains.
e. Attainable—although challenging, realistic and possible to achieve.

KNOWLEDGE CHECK 4.1

Go to https://cit.edu/vision-mission-goals-core-values/

1. Evaluate the Vision Statement of CIT – University through identifying a phrase from the Vision Statement that
clearly depicts the what the organization would like to achieve in the future.
2. Evaluate the Mission Statement of CIT –University through identifying a phrase from the Mission Statement that
highlights any of the stakeholder.
3. As a Technologian, what are your concrete actions showing that you truly inhibit each of the core values?

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ACTION LEARNING EXERCISE 4.2
How to Write Good Objectives and Plans (Plan = What + When + How)
Instructions: Well-written objectives are the heart of effective planning. An objective should state what is to be
accomplished (in measurable terms) and when it will be accomplished. An objective becomes a plan when the how
is added. Here is an everyday example of a well-written plan: “I will (“what?”) lose 5 pounds (“when?”) in 30 days
(“how?”) by not eating desserts and walking a mile four days a week.”
Remember the following handy three-way test to assess how well your plans are written.
• Test 1: Does this plan specify what the intended result is, and is it stated in measurable terms?
• Test 2: Does this plan specify when the intended result is to be accomplished?
• Test 3: Does this plan specify how the intended result is to be accomplished?
Write a plan that passes all three tests for each of the following areas of your life.
Self-improvement plan: What? _________________________________________
When? _________________________________________
How? _________________________________________
School-related plan: What? _________________________________________
When? _________________________________________
How? _________________________________________
Community-service plan: What? _________________________________________
When? _________________________________________
How? _________________________________________
For Consideration/Discussion
1. What is the hardest part of writing good plans? Explain in no more than 3 sentences.
2. From a managerial standpoint, why is it important to have plans written in measurable terms?

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 TYPES OF PLANNING TOOLS

The following example will be used in making the Network Diagram, Critical Path Method and Gantt Chart.
Company ABC has an upcoming seminar to conduct in a specific barangay in Cebu City with the following
activity table. Create the network diagram, identify the critical path and Gantt chart. Project start date is on
January 8, 2020 exclusive of Sundays.

Activity Description Precedent Activity Time Estimates

A Project Team Planning NONE 2
B Consultation with Barangay Officials A 1
C Reservation of Guest Speakers A 2
D Estimation of Materials & Equipment Expenses B 1
E Fund Raising C, D 3
F Canvassing and Procurement of Materials E 1
G Renting of Sound Equipment E 1
H Printing of Certificates and Program F 1
I Information Dissemination G, H 3

A. Network Diagram
Network diagram is a visual representation of a project’s schedule. It is also well known useful for planning
and tracking the project from beginning to finish and it represents a project’s critical path as well as the
scope for the project.

This uses circles or nodes to denote schedule of activities.

These various nodes are connected from beginning to end with arrows to depict a logical progression
of the dependencies between the schedule activities.

Each node is coded with a letter or number that correlates to an activity on the project schedule and the
duration or length of the activity is shown above the nodes.
It is also designed to show which activities must be completed for other activities to commence. By
convention, all arrows run left to right.
Steps in making the Network Diagram:
1. Find all activities in the table that have no immediate predecessors — they can all start as soon as the
project will begin. In the example, only activity A has no immediate predecessors.
2. Find all activities that have the first activity as an immediate
predecessor. Activity B and C have activity A as an immediate
predecessor. Draw a circle or node to represent the activities and arrows
from activity A to activity B and C.

3. Indicate the duration or length of all the activities above the nodes.

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 4. Continue in the same way with the remaining activities. The network diagram of the activity table is
shown below.

B. Critical Path Method

According to James Kelley, is an algorithm for scheduling a set of project activities. The critical path refers
to the sequence or order of schedule activities that will make up the entire duration of a project.

A critical path is determined by identifying the longest stretch of dependent activities and measuring
the time required to complete them from start to finish.

To identify the critical path of the project, consider all the possible paths and the path with the longest
stretch of dependent activities is considered as the critical path. From the network diagram above,
the paths are the following:

A-B-D-E-F-H-I = 12 days Critical Path:

A-B-D-E-G-I = 11 days A-B-D-E-F-H-I and A-C-E-F-H-I with 12 days
A-C-E-F-H-I = 12 days duration
A-C-E-G-I = 11 days

Engineer managers should keep an eye on the activities on the critical path since any delay on those
activities will directly impact the completion date of the project.

C. Gantt Chart
Gantt charts convey this information visually. It outlines all of the tasks involved in a project, and their order,
shown against a timescale. This gives an instant overview of a project, its associated tasks, and when these
need to be finished.

Discovered by Henry Gantt in around 1910. His chart was designed to help manufacturing supervisors see
whether their work was on, ahead of, or behind schedule, and it formed the foundation of the tool we use
today.

Steps in making Gantt Chart:

1. Evaluate dependency and relationships between different phases and tasks. Some tasks and/or phases
of a project may be able to be accomplished independently of other tasks and phrases. From the example,
project team planning must be finished before consultation of barangay officials and reservation of guest
speakers.

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2. Create a timeline on a graph. Draw a horizontal timeline 12 days (Duration of the critical path)
for the Gantt chart at the top of the graph. The timeline
represents the entire project with the start date on the left 8 9 10 11 13 14 15 16 17 18 20 21

and end date on the right. Duration of the critical path will
be the number of days in the timeline. From the example,
the project will start on January 8, 2020 exclusive of
Sundays.

3. List each activity of the project on the left side ACTIVITY 8 9 10 11 13 14 15 16 17 18 20 21

of the graph. Each activity should have its own A
line in the graph. To make the Gantt chart look B
C
more organized, be sure to list each task in the D
order they need to be completed in. E
F
G
H
I

4. Arrange bars for each phase and/or tasks within the timeline. Use a highlighter or colored bars to highlight
when each task starts and finishes within the timeline. Some bars may have overlapping dates, bars that
represent tasks that are dependent on other tasks will need to start after the dependent task is completed.
The time estimate for activity A
ACTIVITY 8 9 10 11 13 14 15 16 17 18 20 21 is 2 days so it will be done on
A January 8-9, 2020.
B Activity A is completed after
C January 9; activity B will then
start on January 10 since it is
D dependent to activity A.
E
Activity I is dependent to
F activity G and H. So it should
G start once BOTH activities are
completed which will be on Jan
H 18 – activity H just ended on
I Jan 17.

Problem Solving 4.1

1. Mr. Smith, owner of a bicycle manufacturer company, is planning to launch a new product line. But before launching the product,
your team needs to conduct a market, product and financial analysis. As the project manager of the company, you are tasked to
make a network diagram, identify the critical path and construct a Gantt chart to have an overview of the project schedule. The
project will start by May 4, 2020 exclusive of weekends.

Activity Description Required Predecessor Duration (months)

A Product design (None) 5
B Market research (None) 1
C Production analysis A 2
D Product model A 3
E Sales brochure A 2
F Cost analysis C 3
G Product testing D 4
H Sales training B, E 2
I Pricing H 1
J Project report F, G, I 1

Don’t forget to answer the Digital Learning Journal! 😊

END OF WEEK 6

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