Topics to be b e covered cov ered Introduction to management Functions of management
Planning Organizing Directing Controlling
Managerial roles and skills Basics of Productivity
Introduction to Management 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. The creation of conditions that allow the effective use of resources (human, financial, material, equipment, technical and etc.) to achieve a specified goal. Organizational resources (5M): Men (human beings), Money, Machines, Materials and Methods.
Introduction to Management 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. The creation of conditions that allow the effective use of resources (human, financial, material, equipment, technical and etc.) to achieve a specified goal. Organizational resources (5M): Men (human beings), Money, Machines, Materials and Methods.
Major Premises
Technology and business savvy (know-how) represents a very powerful combination of great demand in society.
Market
environment is rapidly evolving (changing marketplace
complexities, web-based technologies, globalization): globalization):
Leaders
with understanding of technology and management
perspectives are needed. Engineers
with proper with proper management and leadership training training have have great
opportunities to add value.
Management Challenges
Market
place
globalization,
changes
rapidly
(Web-based
technologies,
customer demand) 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.
Management Challenges Inside
Outside
Present
Future
Local
Global
Challenges - Inside Implement projects/programs; Manage people, technologies, and resources to add value; Develop
new
product
features
to
enhance
competitiveness; Define, control and reduce costs
to improve profitability;
Initiate technology projects to sustain company position.
company
Challenges - Outside Keep
abreast (in touch) 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.
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.
Challenges - Future Seek
e-transformation
opportunities
to
create
company
profitability in the long-run; Introduce new generation products timely; Create vision for the future Define
future.
related to technologies;
what should be done for technology-based success in the
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;
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.
Management concerns
1
Management concerns Efficiency:
is getting the most output from the least amount of
inputs in order to minimize resource costs.
“Doing things right ”
Effectiveness:
is completing activities so that organizational
goals are attained.
“Doing the right things”
Functions of Management
Planning
Planning is determining the objectives and formulating the methods to achieve them.
Forecasting, setting objectives, action planning, administering policies, establishing procedure.
A job well planned is
half done.
During planning one needs to ask oneself the following: What
am I trying to accomplish i.e. what is my objective?
What resources do I have?
What Is
are the methods and means to achieve the objectives?
this the optimal path or method?
Steps in Planning 1. Determining the goals or objectives for the entire 2. 3. 4. 5. 6.
organization. Making assumptions on various elements environment. Decide the planning period. Examine alternative courses of actions. Evaluating the alternatives. Make derivative plans.
of
the
Organizing
Selecting organizational structure, delegating, establishing working relationship.
Division of Work.
Assign Tasks: Departmentalization.
Link Departments: Hierarchy Development
Decide how much Authority to Designate/ Authority, Responsibility and Delegation.
Decide the Decide
Levels at which Decisions are to be made.
how to Achieve Coordination.
Staffing Selecting
and training individuals for specific job functions,
and charging them with the associated responsibilities.
Determining the number of employed personnel in an organization or program, Also called workforce.
Directing/Leading A
function that includes motivating employees, directing others,
selecting the most effective communication channel, and resolving conflict .
Ability to command people.
Attracting people
to the organization.
Marshaling and allocation of resources Creating
good working conditions
Controlling Controlling is
a three-step process of measuring progress toward
an objective, evaluating what remains to be done, and taking the necessary corrective action to achieve or exceed the objectives. Measuring:
determining through formal and informal reports the
degree to which progress toward objectives is being made. Evaluating:
determining cause of and possible ways to act on
significant deviations from planned performance. Correcting :
taking control action to correct an unfavorable trend or
to take advantage of an unusually favorable trend.
Steps in Controlling 1. Establish Standards of Performance.
2. Measure Actual Performance. 3. Compare Performance to Standards. 4. Take Corrective Action.
Levels of Manager’s First-line
Managers: often called supervisors stand at the base of the
managerial hierarchy. Middle
Managers: heads of various departments and organize human
and other resources to achieve organizational goals. Top
Managers: set organizational goals, strategies to implement them
and make decisions.
Managerial Skills A
manager is someone skilled in knowing how to analyze and
improve the ability of an organization to survive and grow in a complex and changing world .
Management knowledge and skills (operational, strategic, financial/accounting, interpersonal skills/communications, etc.) Technical
skills
Human skills Conceptual skills
Technical Skills Technical
skill
involves
understanding
and
demonstrating
proficiency in a particular workplace activity. A
persons’ knowledge and ability to make effective use of any
process or technique constitutes his technical skills. For e.g. Engineer, accountant, data entry operator, lawyer, doctor
etc.
Human Skills An
individuals’ ability to cooperate with other members of the
organization and work effectively in teams. Communication. For e.g. Interpersonal relationships, solving
acceptance of other employees.
people’s problem and
Conceptual Skills Ability
of an individual to analyze complex situations and to
rationally process and interpret available information. For eg: Idea generation and analytical process of information.
Basics of Productivity Productivity
is a common measure of how well resources are
being used or a measure of the efficient use of resources usually expressed as the ratio of output to input. Productivity,
the relative efficiency of economic activity—that is,
the amount of products or services produced compared to the amount of goods and labor used to produce them.
Productivity =
Outputs Inputs
Basics of Productivity
Labor Productivity
Quantity (or value) of output / labor hrs
Quantity (or value) of output / shift
Machine Productivity
Energy Productivity
Quantity (or value) of output / machine hrs
Quantity (or value of output) / kwh
Capital Productivity
Quantity (or value) of output / value of input
Measures of Productivity Partial measures Multifactor measures Total measure
Output Labor
Output Machine
Output Labor + Machine
Output Capital
Output Energy
Output Labor + Capital + Energy
Goods or Services Produced All inputs used to produce them If we produce only one product, the numerator can be either the total units of product or total $ value of the product.
If we produce several products, the numerator is the total $ value of all products. Usually, the numerator is the total $ value of all outputs. The denominator is total $ value of all inputs.
Measures of Productivity Example 1
Which productivity measures can be calculated?
7040 Units Produced
What is the multifactor productivity?
Single productivity measures like labor, material and capital can be determined. Combination of the inputs can be determined as multifactor productivity.
Sold for $1.10/unit Cost of labor : $1,000 Cost of materials: $520 Cost of overhead: $2000
out put MFP = laborcost + materialscost + overhead cost
=
(7040 units) ($1.10) $1000 + $520 + $2000
= 2.20
Measures of Productivity
Example 2 5,500 Units Produced Sold for $35/unit 500 labor hours are used Cost of labor: $25/hr Cost of raw material: $5,000 Cost of overhead: 2 x labor cost What is the labor productivity? What is the multifactor productivity?
=
Labor productivity:
5,500 units/500 hours = 11 units/hour
Or we can arrive at a unitless figure:
(5,500 units*$35/unit)/(500 hours * $25/hr) =15.4
(5,500 ) ∗ ($35) (500ℎ. ) ∗ $25/ℎ. + ($5000) + 2 ∗ (500ℎ. ) ∗ $25/ℎ. MFP =
4.52
Measures of Productivity Example 3
Assume that you have just determined that service employees have used a total of 2400 hours of labor this week to process 560 insurance forms. Last week the same crew used only 2000 hours of labor to process 480 forms.
Which productivity measure should be used?
Answer: Could be classified as a Partial Measure (labor productivity).
Is productivity increasing or decreasing?
Answer: Last week’s productivity = 480/2000 = 0.24, and this week’s productivity is = 560/2400 = 0.23.
So, productivity has decreased slightly.
Importance of productivity
To beat competition
Guide to management
Indicator of
Progress
Maximum utilization of scarce resources
Ways of increasing productivity
Increasing output and input largely
Increase output while keeping input the same Increase output very much while increase input a little Keep the output unchanged while decreasing inputs
Factors affecting productivity
Standardization
Methods
Technology
Design of the workspace
Scrap rates
Capacity utilization
Labor turnover, layoffs,
Layout
Scheduling
Equipment breakdowns
Part and material shortages
Inadequate investment in
new workers
Bottlenecks
training & education of the employees
Key Steps for Improving Productivity Develop productivity measures for all operations Determine critical
(bottleneck) operations
Develop methods for productivity improvements Establish reasonable goals Get management support (make it clear that management
supports and encourages productivity improvements.) Measure and publicize improvements
Exercise 1 1. A company that makes shopping carts for supermarkets recently purchased new equipment, which reduced the labor content needed to produce the carts. Information concerning the old system (before adding the new equipment) and the new system (after adding the new machines) includes: Old System New System Output/hr 80 84 Workers 5 4 Wage $/hr 10 10 Machine $/hr 40 50 a) Compute labor productivity for both the Old System and the New System. b) Compute total factor productivity for both the Old System and the New System. c) Suppose production with old equipment was 30 units of cart A at a price of $100 per cart, and 50 units of cart B at a price of $120. Also suppose that production with new equipment is 50 units of cart A, at a price of $100 per cart, and 30 units of cart B at a price of $120. Compare total-factor productivity for the old and the new systems.
Exercise 2 2. A company has introduced a process improvement that reduces the processing time for each unit and increases output by 25% with less material but one additional worker. Under the old process, five workers could produce 60 units per hour. Labor costs are $12/hour, and material input was $16/unit. For the new process, material input is now $10/unit and overhead is charged at 1.6 times direct labor cost. Finished units sell for $31 each. a) Compute single factor productivity of labor in the old system. (Compute it in four possible ways.) b) Compute all factor productivity for both old and new systems. Factor Output # of workers Worker cost Material Overhead Price
Old System 60 5 $12/hr $16/unit 1.6(labor cost) 31
New System 60(1.25) = 75 6 $12/hr $10/unit 1.6(labor cost) 31
