Evolution of

Engineering
Management
Del Institute of Technology
September 2014
 Outline
• Definition of Engineering Management
• Functions of Engineering Management
• Industrial Engineering
Definition of Engineering
Management
What is Engineering?
• The profession in which a
knowledge of the
mathematical and natural
science gained by study,
experience, and practice is
applied with judgement to
develop ways to utilize,
economically, the materials
and forces of nature for the
benefit of mankind
(1979, US. Engineering
societies).
SEEM 3530
What is Management?
• A set of activities (including
planning and decision making,
organising, leading and
control) directed at an
organisation’s resources
(human, financial, physical
and informational) with the
aim of achieving
organisational goals in an
efficient and effective manner.
(Griffin)
Introduction 4
Definition of Engineering management
Engineering Management or Management Engineering

 Engineering Management (EM) is a specialized form of

management that is required to successfully lead engineering
or technical personnel and projects.

 Engineering Management is a career that brings together the

technological problem-solving savvy of engineering and the
organizational, administrative, and planning abilities of
management in order to oversee complex enterprises from
conception to completion.
Definition of Engineering management
Engineering Management or Management Engineering

 Engineering Management programs typically include

instruction in accounting, economics, finance, project
management, systems engineering, mathematical
modeling and optimization, management information
systems, quality control & six sigma, operations research,
human resources management, ethical and legal
perspectives, team relations, safety and health.

 It empowers engineering managers with knowledge, and

skills needed to lead technical organizations or processes
to success.
Definition of Engineering management

Example areas of engineering are:

Product Development, Manufacturing, Construction, Design Engineering,
Industrial Engineering, technology, production, or any other field that
employs personnel who perform an engineering function.

Engineering managers
They manage engineers who are driven by non-commercial thinking, thus
require the necessary people skills to coach, guide and motivate technical
professionals.

One of most important topic in EM is Project Management

 Engineering Management
• Engineering Management is concerned with the
direct supervision of engineers and the
management functions (planning, organising,
leading and controlling) in a technological
organisation.
• Prepare engineers to become
effective leaders in meeting the
challenges in this new millennium

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 Major Premises
• Technology and business savvy represents
a very powerful combination of great
demand in society
• Market environment is rapidly evolving
(changing marketplace complexities,
web-based technologies, globalization)
• Leaders with understanding of
technology and management
perspectives are needed
• Engineers with proper management and
leadership training have great
opportunities to add value
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 Typical Engineering
Activities
• Design/development of products/processes
• Project engineering/management
• Value engineering and analysis
• Technology development and applied R&D
(laboratory, field)
• Production/manufacturing and construction
• Customer service

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 Work of an Engineer
As Technical Contributor
• Understand objectives of tasks specified
• Develop action plan for implementation
• Define standards (performance metrics)
• Select methodology/techniques
• Implement task with proper efforts
• Generate results and secure value
• Report findings (impact, lessons)

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

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 Dual Aims
• Make engineers more • Make managers more
effective as technical effective in decisions
contributors (understand involving technologies
managerial points of view, (understand engineering
language, limitations and
effect teams possibilities)
coordination, drive to add
• Ready managers for
value) contributing effectively in
• Ready engineers for the management of a
managerial positions technology-critical
(success factors, organization.
leadership talents,
business/management
perspectives)
Henri Fayol (1841-1925)
• Mining Engineer
• six primary functions of management:
o forecasting
o planning
o organizing
o commanding
o
o
coordinating
controlling (feedback->adjustment)
} leading

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Engineering Management
Functions

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Engineering Management Functions
• Planning (forecasting, setting objectives,
action planning, administering policies,
establishing procedure)
• Organizing (selecting organizational structure,
delegating, establishing working relationship)
• Leading (deciding, communicating,
motivating, selecting/developing people)
• Controlling (setting performance standards,
evaluating/documenting/correcting
performance)
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Skills for Technical Managers

Administrative
Leadership Skills
Skills

Technical Skills

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 Enterprise Objective:
Value Addition
Management-speak:
• Increase Sales Revenue (new
and enhanced
products/services - faster,
better, cheaper - to create
greater customer satisfaction)
• Reduced Cost to Do Business
(simplified product design, new
technologies, improved
productivity, raised efficiency,
reduced inventory via supply
chains, new production and
marketing partnerships and
alliances)
Engineering-speak:
• Efficiency - Accomplishing
tasks with the least amount
of resources (time, money,
equipment/facilities,
technology - know-how,
procedure, process, skills) -
do things right
• Effectiveness -
Accomplishing tasks with
efforts commensurate with
the value created by
these tasks - do the right
things
 Managerial Decision
Making
• What, where, who, how – managers faces
numerous and challenging decisions

• Decision making qualities - knowledge, information,

and decision making skills

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 Beware of Our Weakness:
We Are Poor at Learning from the Past
How to improve our management “intuition”?
 Should fully utilize past information to update both
current beliefs and future predictions
“We are active learners, but tend to filter information
to confirm our opinions.”
 Draw unbiased insights about the current state of the
world from available data
We are frequently poor observational statisticians.
[Don’t know Bayes’ rule?]
 Conservation bias: reluctant to give up prior beliefs
about the world, even in light of new information,
revision of beliefs towards right direction is often
insufficient, or overly conservative
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 Learnable Skills
• Management knowledge and skills
(operational, strategic,
financial/accounting, interpersonal
skills/communications, etc.)

• Decision making skills/ tools (what-if

analysis, risk analysis, problem solving, root
cause analysis, decision tree,
optimization, etc.)

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Frederick Winslow Taylor
(1856-1915)

Principles of Scientific Management (1911)

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

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 Decision Making
• Knowledge and skills in decision-making tools
• Appreciation of management issues and
complexities in implementing decisions

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• Planning
o Project Scheduling
o Project Budgeting and Selection
• Organising
o Strategic decision-making
o Game theory
• Leading
o Incentives and Productivity (Principal-agent
theory)
• Controlling
o Project Management
o Performance evaluation

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 BP Oil Spill
Project Management

Under-fire BP boss Tony Hayward

takes time out to enjoy Cowes Week

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

“If we isolate a single critical

fault in human abilities to act
as efficient decision makers, it
is that we do not think ahead.”

We are often unable to look

ahead more than one period or
step!

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 Heuristic vs. Analysis
Heuristic
 A technique to solve a problem with a “good” but not
necessarily “optimal” solution
 Based on experiences, hunches/instincts, and judgment

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

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 When Do Heuristics Work Well?

 Optimal answers are often obvious

Draw on life experience to come up with an answer

 Task environments are forgiving of mistakes

A wide range of behaviors/solutions are optimal or near-
optimal

 One can learn by trial and error

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

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 When Do Heuristics Fail Us?

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

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

 High Penalty for Mistakes

A small mistake could lead to serious consequences

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Functions of Engineering
Management
 Definition of Management
Management

 The efficient utilization and direction of resources to achieve

objectives.

 Coordinated activities to direct and control an organization

(ISO 9000/2000).

 Management is the process of Planning, Organizing,

Directing/Leading, Communicating, Motivating and Controlling
the efforts of the organizational members and resources in
order to achieve organizational goals.
• ISO: International Organization for Standardization
 Functions of Management
What the Functions of Management?

They include several interrelated functions which are:

1) Planning
2) Organizing
3) Coordinating / Directing
4) Communicating
5) Motivating
6) Controlling
 Functions of Management
1) What is planning?
 It is the process of setting goals, developing strategies, and
outlining tasks and schedules to accomplish the goals.
 http://www.businessdictionary.com/definition/controlling.html

 A process is Sequence of interdependent and linked

procedures which, at every stage, consume one or more
resources (employee time, energy, machines, money) to
convert inputs (data, material, parts, etc.) into outputs. These
outputs then serve as inputs for the next stage until a known
goal or end result is reached.
Planning can be viewed from following points:
 Subject:- Financial Planning, Time Planning, Quality Planning,
Organizational Planning, …….
 Organization:- Corporate Planning, Project Planning,…….
 Time:- Long-Range. Planning, Short-Range Planning, Weekly Planning, ….
 Functions of Management

2) What is organizing?
 It is The process of determining the responsibilities and
scope of authority of each position in the company
structure and defining how each company segment
interrelates with the others.

 It is the arranging several elements into a purposeful

sequential or spatial (or both) order or structure.

 It is the assembling required resources to attain

organizational objectives.
 Functions of Management

3) What is coordinating?
The synchronization and integration of activities,
responsibilities, and command and control structures to
ensure that the resources of an organization are used
most efficiently in pursuit of the specified objectives.
Along with organizing, monitoring, and controlling,
coordinating is one of the key functions of management.
 http://www.businessdictionary.com/definition/coordination.html
 Functions of Management

4) What is communicating?
 Engineering Communication: The ability to effectively communicate
information about the design and engineering process. To that end, the
competition requires teams to submit technical reports, prepare and deliver
engineering presentations, and create poster displays.
 http://www.marinetech.org/rov_competition/2008/2008_ENGINEERING_COMMUNICATION
_FINAL.pdf

 Business Communication: communication used to promote a product,

service, or organization; relay information within the business; or deal with
legal and similar issues. It is also a means of relaying between a supply
chain, for example the consumer and manufacturer.
 http://en.wikipedia.org/wiki/Business_communication
 Functions of Management

5) What is motivating?
 Internal and external factors that stimulate desire and energy in people to
be continually interested in and committed to a job, role, or subject, and
to exert persistent effort in attaining a goal

 Motivation results from the interactions among conscious and

unconscious factors such as the (1) intensity of desire or need, (2)
incentive or reward value of the goal, and (3) expectations of the
individual and of his or her significant others.
 http://www.businessdictionary.com/definition/motivation.html
 Functions of Management

6) What is controlling?
 The basic management function of (1) establishing
benchmarks or standards, (2) comparing actual
performance against them, and (3) taking corrective action,
if required
 http://www.businessdictionary.com/definition/controlling.html

Control function can be viewed as follow:

 Controlling involves making sure that the results achieved are in line with
the planned results.
 The main feature of control is action to correct performance deviations
and to insure that expected results are forthcoming.
 Control = Monitor + Compare + Analysis + Action
Industrial Engineering
 HISTORY AND PERSPECTIVE OF

INDUSTRIAL ENGINEERING
• How did the two words “industrial” and “engineering” become
combined to form the label “industrial engineering”?
o What is the relationship of industrial engineering to other
engineering disciplines, to business administration, to the social
sciences?
• To understand the role of industrial engineering (IE) in today’s
complex world, it is helpful to learn the historical developments that
were involved in the progress of IE.
• Principles of early engineering were first taught in military academies
and were concerned primarily with road and bridge construction and
defenses.
• Interrelated advancements in the fields of physics and mathematics
laid the groundwork for practical applications of mechanical
principles.
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• The first significant application of electrical science was the development
of the telegraph by Samuel Morse (1840).
• Thomas Edison’s invention of the carbon lamp (1880) led to widespread
use of electricity for lighting purposes.
• The science of chemistry is concerned with understanding the nature of
matter and learning how to produce desirable changes in materials.
o Fuels were developed needed for the new internal combustion
engines.
o Lubricants were needed for mechanical devices.
o Protective coatings were needed for houses, metal products, ships,
and so forth.
• Five major engineering disciplines (civil, chemical, electrical, industrial,
and mechanical) were the branches of engineering that came out prior to
the 1st World War.
• Developments following 2nd World War led to other engineering
disciplines, such as nuclear engineering, electronic engineering,
aeronautical engineering, and even computer engineering.
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 Chronology of Industrial Engineering
• Charles Babbage visited factories in England and the United States
in the early 1800’s and began a systematic recording of the details
involved in many factory operations.

• He carefully measured the cost of performing each operation as

well as the time per operation required to manufacture a pound of
pins.

• Babbage presented this information in a table, and demonstrated

that money could be saved by using women and children to
perform the lower-skilled operations.

• The higher-skilled, higher-paid men need only perform those

operations requiring the higher skill levels.

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• Frederick W. Taylor is done potential improvements to be gained through
analyzing the work content (minimum amount of work required to accomplish
the task) of a job and designing the job for maximum efficiency.

• Frank B. Gilbreth extended Taylor’s work considerably. Gilbreth’s primary

contribution was the identification, analysis and measurement of fundamental
motions involved in performing work.

• Henry L. Gantt, developed the Gantt chart. The Gantt is a systematic graphical
procedure for pre-planning and scheduling work activities, reviewing progress,
and updating the schedule.

• During the 1920s and 1930s much of fundamental work was done on
o economic aspects of managerial decisions,
o inventory problems,
o incentive plans,
o factory layout problems,
o material handling problems,
o principles of organization.

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 Definition of Industrial Engineering
• The formal definition of industrial engineering has been adopted by the
Institute of Industrial Engineers (IIE):

“Industrial Engineering is concerned with the design, improvement, and

installation of integrated systems of people, materials, information,
equipment and energy. It draws upon specialized knowledge and skill in
the mathematical, physical, and social sciences together with the
principles and methods of engineering analysis and design to specify,
predict, and evaluate the results to be obtained from such system”.

Scope
• The degree of industrial engineering is evidenced by the wide range of
such activities as research in biotechnology, development of new
concepts of information processing, design of automated factories, and
operation of incentive wage plans.

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Thank You