Transcript EAS 521 - Principles of Engineering Management I

SEEM 3530 Engineering and
Technology Management
Introduction
What is Engineering?
What is Management?
• 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).
• 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
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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
Introduction
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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, webbased technologies, globalization)
• Leaders with understanding of technology and
management perspectives are needed
• Engineers with proper management and
leadership training have great opportunities to
add value
Introduction
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Typical Engineering Activities
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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
Introduction
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Work of an Engineer
As Technical Contributor
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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)
Introduction
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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)
Introduction
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Dual Aims
• Make engineers more
effective as technical
contributors (understand
managerial points of view,
effect teams coordination,
drive to add value)
• Ready engineers for
managerial positions
(success factors,
leadership talents,
business/management
perspectives)
Introduction
• Make managers more
effective in decisions
involving technologies
(understand engineering
language, limitations and
possibilities)
• Ready managers for
contributing effectively in
the management of a
technology-critical
organisation.
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Henri Fayol (1841-1925)
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Mining Engineer
six primary functions of management:
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forecasting
planning
organizing
commanding
leading
coordinating
controlling (feedback->adjustment)
Introduction
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Engineering Management
Functions
Introduction
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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)
Introduction
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Skills for Technical Managers
Administrative
Skills
Leadership
Skills
Technical Skills
Introduction
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Enterprise Objective:
Value Addition
Management-speak:
Engineering-speak:
• Increase Sales Revenue (new
and enhanced products/services faster, better, cheaper - to create
greater customer satisfaction)
• Efficiency - Accomplishing
tasks with the least amount of
resources (time, money,
equipment/facilities,
technology - know-how,
procedure, process, skills) -
• 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)
Introduction
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do things right
• Effectiveness Accomplishing tasks with
efforts commensurate with
the value created by these
tasks - do the right things
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Managerial Decision Making
• What, where, who, how – managers faces
numerous and challenging decisions
• Decision making qualities - knowledge,
information, and decision making skills
Introduction
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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
Introduction
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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)
– Replace rule-of-thumb work methods with methods
based on a scientific study of the tasks.
– Scientifically select, train, and develop each worker
rather than passively leaving them to train themselves.
– Cooperate with the workers to ensure that the
scientifically developed methods are being followed.
– Divide work nearly equally between managers and
workers, so that the managers apply scientific
management principles to planning the work and the
workers actually perform the tasks.
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• Knowledge and skills in decision-making
tools
• Appreciation of management issues and
complexities in implementing decisions
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• Planning
– Project Scheduling
– Project Budgeting and Selection
• Organising
– Strategic decision-making
– Game theory
• Leading
– Incentives and Productivity (Principal-agent theory)
• Controlling
– Project Management
– Performance evaluation
Introduction
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BP Oil Spill
Project Management
Under-fire BP boss Tony Hayward
takes time out to enjoy Cowes Week
Introduction
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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?
Introduction
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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!
Introduction
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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 nearoptimal
 One can learn by trial and error
Reinforcement learning: be more likely to repeat actions that
generate good results and less likely to repeat acts that
produce bad ones
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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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Strategic Decision Making
• Marriage problem:
• Interview the first 37 (100/e) candidates,
• Then continue interviewing and marry the first
candidate that is better than the initial 37.
• This maximises the chance of marrying the
absolute best candidate.
• In this course, we will investigate models and
frameworks for strategic decision making
under uncertainty and risk
Introduction
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Leading/Motivation
Long hours,
Low pay,
high pressure
Introduction
Tenth Worker Commits Suicide At Foxconn Plant
in Shenzhen
25 May, 2010
Chinese media
reported that the
families of those
who died had
received
compensation of up
to 100,000 yuan
(14,500 US),
equivalent to about
10 years' wages.
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Challenges In the New
Millennium
• Marketplace changes rapidly (Web-based
technologies, globalization, customer demand,
business networks) affecting how progressive
companies will be organized
• Engineering managers to lead by supervising
complex teams, innovating with vision for the
future, designing global products, and organizing
supply chains, apply global resources to derive
economies of scale and scope.
Introduction
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Challenges In the New
Millennium
Inside
Outside
Present
Future
Local
Introduction
Global
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Challenges - Inside
Implement projects/programs; manage
people, technologies, and resources to add
value; develop new product features to
enhance company competitiveness; define,
control and reduce costs to improve
profitability; initiate technology projects to
sustain company position
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Challenges - Outside
Keep abreast of emerging technologies and
apply them to strengthen company’s core
competencies; apply web-based tools to
enhance operations and foster customer
relations; identify best practices to improve
engineering operations and surpass them;
create supply chain networks to derive
speed, quality and cost benefits
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Challenges - Present
Do things right to keep company operating
smoothly; use Balanced Scorecard to
monitor non-financial and financial
performance; control costs and eliminate
wastes to attain profitability in the short-run
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Challenges - Future
Seek e-transformation opportunities to create
company profitability in the long-run;
introduce new generation products timely;
create vision for the future related to
technologies; Define what should be done for
technology-based success in the future
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Challenges - Local
Utilize resources to best achieve company’s
objectives; take ethical and lawful actions
while taking into account local conditions;
maintain and nurture local professional
networks; share lessons gained with people
at other company sites
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Challenges - Global
Apply location-based resources to realize
global economies of scale and scope for
achieving cost and technology advantages;
develop global professional networks;
acquire a global mindset; exercise
leadership roles in international settings
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Tips for Engineering Managers
• Demonstrate Technical Competence & Innovative
capabilities
• Brush Up Communications skills (ask, listen, write
and talk)
• Show unfailing reliability to induce trust and
confidence
• Be Proactive in seeking challenging tasks
• Exhibit readiness for assuming larger responsibilities
(take courses, practice skills, gain experience)
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