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ENGINEERING MANAGEMENT

ENGINEERING MANAGEMENT

ENGINEERING MANAGEMENT

Refers to the activity combining “technical knowledge with the ability to organize and

coordinate worker power, materials, machinery

and money”.

WHY DO WE NEED TO STUDY ENGINEERING MANAGEMENT?

INDUSTRIAL ENGINEERS

INDUSTRIAL ENGINEERS DESIGN IMPROVEMENT INSTALLATION OF SYSTEMS OF : MEN MATERIALS EQUIPMENT
INDUSTRIAL ENGINEERS DESIGN IMPROVEMENT INSTALLATION OF SYSTEMS OF : MEN MATERIALS EQUIPMENT
INDUSTRIAL ENGINEERS DESIGN IMPROVEMENT INSTALLATION OF SYSTEMS OF : MEN MATERIALS EQUIPMENT

DESIGN

IMPROVEMENT

INSTALLATION OF SYSTEMS OF :

MEN

MATERIALS

EQUIPMENT

INDUSTRIAL ENGINEERS DESIGN IMPROVEMENT INSTALLATION OF SYSTEMS OF : MEN MATERIALS EQUIPMENT
Components of Management

Components of Management

Planning Setting goals and deciding how best to achieve them. Organizing Grouping activities and resources
Planning Setting goals and deciding how best to achieve them. Organizing Grouping activities and resources
Planning Setting goals and deciding how best to achieve them. Organizing Grouping activities and resources

Planning

Setting goals and deciding how

best to achieve them.

Organizing

Grouping activities and resources in a logical fashion.

Leading

Involves influencing others to engage

in the work behaviors necessary to

reach organizational goals.

Staffing determines the human resource needs, recruits, selects, trains and develops human resources for jobs

Staffing

determines the human resource needs,

recruits, selects, trains and develops

human resources for jobs created by

an organization.

Controlling

Process of ascertaining whether

organizational objectives have been

achieved.

Production Is the creation of goods & services

Production

Is the creation of goods & services

Operations Management

Is the set of activities that creates value in the form of goods & services by transforming

inputs into outputs.

Input or Output ??

Input or Output ??
Input or Output ??
Input or Output ??

Organizing to Produce Goods & Services

To create goods and services, all organizations

perform three functions;

1.

Marketing which generates demand or at least takes the order for a product or service

2.

Production/ Operations which creates the

product

3.

Finance/ Accounting- tracks how well the organization is doing.

Why do we need STUDY OM?

Om is one of the three major

functions of any organization and it

is integrally related to all other

business functions

We want to know how goods and

services are produced.

To understand what operations

managers do.

Costly part of an organization

WHAT OPERATIONS MANAGERS DO

Basic Management Functions Planning Organizing Staffing

Leading

Controlling

10 Major Decisions in OM

Design of goods and services

Managing Quality Process & Capacity Design

Location strategy

Layout strategy

Human Resource & Job design

Supply Chain Management

Inventory, material requirements

planning and just in time

Intermediate and short-term

scheduling

Maintenance

Management Inventory, material requirements planning and just in time Intermediate and short-term scheduling Maintenance
Management Inventory, material requirements planning and just in time Intermediate and short-term scheduling Maintenance
Management Inventory, material requirements planning and just in time Intermediate and short-term scheduling Maintenance
Management Inventory, material requirements planning and just in time Intermediate and short-term scheduling Maintenance

JOBS OF OPERATIONS MANAGER

JOBS OF OPERATIONS MANAGER

Significant Events on Operations Management

Significant Events on Operations Management

GOODS

GOODS TANGIBLE product Production usually separate from consumption Can be inventoried Low customer reaction Some aspects

TANGIBLE product

Production usually separate

from consumption

Can be inventoried Low customer reaction

Some aspects of quality is

measurable

Product is transportable

SERVICES

SERVICES Intangible Product Produced and consumed at the same time High customer interaction Often Unique Quality

Intangible Product

Produced and consumed at the same time

High customer interaction

Often Unique

Quality difficult to measure

Provider, not product is often

transportable

Service or Goods ??

Service or Goods ??
Service or Goods ??
Service or Goods ??
Service or Goods ??
Service or Goods ??

PRODUCTIVITY

Relationship of the volume of goods and services produced to the physical inputs used in its production.

Productivity can therefore be measured in terms of the ratio of output to input of

Productivity can therefore be measured in terms of the ratio of output to input of

labor, capital, energy, materials or

combination of these.

One resource input single-factor productivity

Productivity =
Productivity =
Units produced Labor-hours used
Units produced
Labor-hours used
1,000 = 250 = 4 units/labor-hour
1,000
=
250 = 4 units/labor-hour

PRODUCTIVITY CALCULATIONS

Multiple resource inputs multi-factor productivity

Productivity =
Productivity =
Output Labor + Material + Energy + Capital + Miscellaneous
Output
Labor + Material + Energy +
Capital + Miscellaneous
 Also known as total factor productivity  Output and inputs are often expressed in
 Also known as total factor productivity
 Output and inputs are often expressed in dollars

PRODUCTIVITY CALCULATIONS

EXAMPLE 1: PRODUCTIVITY

EXAMPLE 1: PRODUCTIVITY ABS-CBN movie title department wants to evaluate its labor and multi-factor productivity w/

ABS-CBN movie title department wants to evaluate its labor and multi-factor productivity w/ a new computerized search

system. The department has a staff of four, each working 8- hours per day (for a payroll cost of $640/day) and overhead

expenses of $400/day. ABS-CBN processes and closes on 8

titles each day. The new computerized title search system will allow the processing of 14 titles/day. Although the staff, their

work hours, and pay are the same, the overhead expenses are

now $800 per day.

EXAMPLE 1: PRODUCTIVITY SOLUTION

Labor productivity (old) = 8 titles/day = 0.25 titles/hour

32 hrs

Labor productivity (new) = 14 titles/day = 0.4375 titles/hour

32 hrs

Multi-factor productivity (old) = 8 titles/day = 0.0077 titles/dollar

$640 + $400

Multi-factor productivity(new) = 14 titles/day = 0.0097 titles/dollar

$640 + $800

PRODUCT DESIGN

process of deciding on the

unique characteristics & features of the company’s

product.

PROCESS SELECTION

development of the process

necessary to produce the

designed product

IDEA DEVELOPMENT All product designs begin with an idea. IDEA DEVELOPMENT PRODUCT SCREENING PRELIMINARY DESIGN
IDEA DEVELOPMENT All product designs begin with an idea. IDEA DEVELOPMENT PRODUCT SCREENING PRELIMINARY DESIGN

IDEA DEVELOPMENT

All product designs begin with an idea.

IDEA DEVELOPMENT
IDEA
DEVELOPMENT
PRODUCT SCREENING
PRODUCT
SCREENING
PRELIMINARY DESIGN & TESTING
PRELIMINARY
DESIGN & TESTING
FINAL DESIGN
FINAL DESIGN
Product idea Product idea developed, evaluated, need sources can be to consider Product prototypes built,
Product idea
Product idea
developed,
evaluated, need
sources can be
to consider
Product
prototypes built,
Final product
specifications
customers,
operations,
tested and refined
completed
competitors or
suppliers
marketing &
financial req’t
BENCHMARKING The process of studying the practices of companies considered in “best -in- class” and

BENCHMARKING

The process of studying the practices of companies considered in “best-in-class” and comparing your company’s performance

against theirs.

TYPES OF BENCHMARKING

Industry or market benchmarking analysis

seeks to assess the overall positioning of a company

within a certain market or industry.

Financial benchmarking in business

This flavor of competitive benchmarking compares

the fiscal performance and well-being of a company

to that of similar organizations.

Product benchmarking analysis

Seeks to compare the performance and/or quality of

similar products or services offered by different organizations.

Seeks to compare the performance and/or quality of similar products or services offered by different organizations.
Seeks to compare the performance and/or quality of similar products or services offered by different organizations.
Seeks to compare the performance and/or quality of similar products or services offered by different organizations.

TYPES OF BENCHMARKING

Operational benchmarking

Compares the day-to-day internal business operations of a company to those of other similar organizations.

Individual benchmarking in business

seeks to compare the performance of individual

employees to that of other, similar employees,

whether internal or external.

to compare the performance of individual employees to that of other, similar employees, whether internal or
to compare the performance of individual employees to that of other, similar employees, whether internal or
REVERSE ENGINEERING The process of disassembling a product to analyze its design features.

REVERSE ENGINEERING

The process of disassembling a product to analyze its design features.

PRODUCT SCREENING

The company’s product screening team evaluates the product design according to the needs of the major business function.

BREAK-EVEN ANALYSIS

Computes the quantity of goods a company needs to sell

just to cover its costs, or break even, called the “break-

even point”.

FORMULA:

QBE=

F SP - VC

F = Fixed cost VC = Variable cost per unit

Profit = total revenue total cost

= (SP) Q ( F + (VC × Q))

Q = Number of units sold SP = Selling price

EXAMPLE 1: BREAK-EVEN ANALYSIS

Patrick, owner of Sports Feet Manufacturing, is considering whether

to produce a new line of footwear. Patrick has considered the processing needs for the new product as well as the market

potential. He has also estimated that the variable cost for each

product manufactured and sold is $9 and the fixed cost per year is

$52,000.

a) If Patrick offers the footwear at a selling price of $25, how many

pairs must he sell to break even ? b) If Patrick sells 4000 pairs at the $25 price, what will be the contribution to profit ?

EXAMPLE 1: BREAK-EVEN ANALYSIS

a) If Patrick offers the footwear at a selling price of $25, how many

pairs must he sell to break even ?

QBE=

F

=

SP VC

$52,000 = 3,250 pairs $25 - $9

The break-even quantity is 3250 pairs. This is how much Fred would have to sell to cover costs.

EXAMPLE 1: BREAK-EVEN ANALYSIS

b) If Patrick sells

4000 pairs

contribution to profit ?

at

the $25 price, what will

Profit = total revenue total cost

= (SP) Q ( F + (VC × Q))

be the

Profit = $25 (4000) ($52,000 + ($9 × 4000)) Profit = $12,000

The contribution to profit is $12,000 if Fred can sell 4000 pairs from his new line of footwear.

DESIGN FOR MANUFACTURE (DFM) is a series of guidelines that we should follow to produce

DESIGN FOR MANUFACTURE (DFM)

is a series of guidelines that we should follow to produce a product easily and

profitably.

PRODUCT SIMPLIFICATION

means reducing the number of parts and features of the product whenever possible.

PRODUCT SIMPLIFICATION means reducing the number of parts and features of the product whenever possible.

PRODUCT STANDARDIZATION

refers to the use of common and interchangeable parts.

PRODUCT STANDARDIZATION refers to the use of common and interchangeable parts.
PRODUCT DIVERSIFICATION when a new product is added to the product mix of an organization.

PRODUCT DIVERSIFICATION

when a new product is added to the product mix of an organization.

PRODUCT LIFE CYCLE A series of stages that products pass through in their lifetime, characterized

PRODUCT LIFE CYCLE

A series of stages that products pass through in their lifetime, characterized by changing product demands over time.

CONCURRENT ENGINEERING

An approach that brings together multifunction teams in the early

phase of product design in order to simultaneously design the product and the process.

REMANUFACTURING uses components of old products in the production of new ones.

REMANUFACTURING

uses components of old products in the production

of new ones.

TECHNOLOGY DECISIONS

INFORMATION TECHNOLOGY

(IT)

INFORMATION TECHNOLOGY (IT) Technology that enables storage, processing, and communication of information within and
INFORMATION TECHNOLOGY (IT) Technology that enables storage, processing, and communication of information within and
INFORMATION TECHNOLOGY (IT) Technology that enables storage, processing, and communication of information within and

Technology that enables storage, processing, and communication of information within and

between firms.

ENTERPRISE RESOURCE PLANNING (ERP)

within and between firms. ENTERPRISE RESOURCE PLANNING (ERP) Large software programs used for planning and coordinating
within and between firms. ENTERPRISE RESOURCE PLANNING (ERP) Large software programs used for planning and coordinating
within and between firms. ENTERPRISE RESOURCE PLANNING (ERP) Large software programs used for planning and coordinating

Large software programs used for planning and

coordinating all resources throughout the entire

enterprise.

GLOBAL POSITIONING SYSTEM (GPS)

GLOBAL POSITIONING SYSTEM (GPS) A type of wireless technology that uses satellite transmission to communicate exact
GLOBAL POSITIONING SYSTEM (GPS) A type of wireless technology that uses satellite transmission to communicate exact
GLOBAL POSITIONING SYSTEM (GPS) A type of wireless technology that uses satellite transmission to communicate exact

A type of wireless technology that uses satellite transmission

to communicate exact locations.

RADIO FREQUENCY IDENTIFICATION (RFID)

exact locations. RADIO FREQUENCY IDENTIFICATION (RFID) A wireless technology that uses memory chips equipped with
exact locations. RADIO FREQUENCY IDENTIFICATION (RFID) A wireless technology that uses memory chips equipped with
exact locations. RADIO FREQUENCY IDENTIFICATION (RFID) A wireless technology that uses memory chips equipped with

A wireless technology that uses memory chips equipped with radio antennas attached to

objects used to transmit streams of data.

AUTOMATION

A U T O M A T I O N Using machinery to perform work without
A U T O M A T I O N Using machinery to perform work without
A U T O M A T I O N Using machinery to perform work without

Using machinery to perform work without human operators.

Automated guided vehicle (AGV)

work without human operators. Automated guided vehicle (AGV) A small battery-driven truck that moves materials from
work without human operators. Automated guided vehicle (AGV) A small battery-driven truck that moves materials from
work without human operators. Automated guided vehicle (AGV) A small battery-driven truck that moves materials from

A small battery-driven truck that moves materials from one location to the other.

Robotics

R o b o t i c s are excellent for physically dangerous jobs such as
R o b o t i c s are excellent for physically dangerous jobs such as
R o b o t i c s are excellent for physically dangerous jobs such as

are excellent for physically dangerous

jobs such as working with radioactive or toxic

materials.

Computer Numeric Control (CNC)

or toxic materials. Computer Numeric Control (CNC) A machine controlled by a computer that can perform
or toxic materials. Computer Numeric Control (CNC) A machine controlled by a computer that can perform
or toxic materials. Computer Numeric Control (CNC) A machine controlled by a computer that can perform

A machine controlled by a computer that can perform a variety of tasks.

Computer-Aided Design

(CAD)

Computer-Aided Design (CAD) A system that uses computer graphics to design new products. Computer-integrated manufacturing
Computer-Aided Design (CAD) A system that uses computer graphics to design new products. Computer-integrated manufacturing
Computer-Aided Design (CAD) A system that uses computer graphics to design new products. Computer-integrated manufacturing

A system that uses computer graphics to design new products.

Computer-integrated manufacturing (CIM)

design new products. Computer-integrated manufacturing (CIM) term used to describe the integration of product design,
design new products. Computer-integrated manufacturing (CIM) term used to describe the integration of product design,
design new products. Computer-integrated manufacturing (CIM) term used to describe the integration of product design,

term used to describe the integration of product

design, process planning, and manufacturing using an

integrated computer system.