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California $tate {lniyersity

Narthridge

Group Research Assignment II (Revised)

Overview of Engineering Management

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Hassan Alanazi
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Unmesh Sirvastava

Ibrahim Albawardi

Patrick Yomba

November 18,2009
Index

Defining Engineering Management....... 4

Objectives ofEM...... .................. 6

Manage the Workforce.... 6

Strategic Planning. 7

Forecasting 8

Organizing. 8

EM & MBA courses Comparison............. 9

Engineering Management Career l0


Salary. 10

Tasks 11

Business Activities of Engineering Management..... L2

Finance and A ccounting t2

Marketing 13

Managerial Science 14

Manufacturing systems and production 16

Conclusion 17

References 18
Introduction

Over the years, people have interests and concerns regarding the

aspects affecting their lives. Characteristics, such as financial, social, and

educational standards, have either positively or negatively affected them as

individuals or groups. For instance, education tends to have an effect on the

individuals by increasing their knowledge and expertise. One of the best

procedures to acquire an educational advantage is to gain an academic degree.

An academic degree is defined as a status levels awarded by an institution of

higher education, such as universities, as the result of successfully completing

a program of study (1). In other words, the academic degree serves as a proof,

given by an academic institute, of the educational experience a student gained

within his or her academic years.

Academic degrees have a wide variety of majors, such as medicine,

management, and engineering. Also, multiple levels, such as bachelor, master,

and doctorate, rank academic degrees. For management degree, students

majoring in management learn the successful skills and techniques to achieve

the organization's aim and goals in the business field. Such techniques include

planning, organizing, leading and controlling (2).

Also, management, as a major, has the flexibility to be merged to other

majors based on the industry demand. The successful application of

management on other majors has generated new managerial academic


programs. Moreover, the demand from the job market for new graduate with a

management perspective has increased the application within other different

majors. Examples of successful majors after the application are hospitality

management, information systems management, project management, and

engineering management. , \
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Engineering management has showed great success in the business

field by applying the managerial techniques to an engineering perspective that

generate more efficient results and findings. This report will define

engineering management as a major, shows its main differences and

similarities with other academic programs, the careers available for


engineering management graduates, and its applications within the business

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Defining Engineering Nlanagement:

As mentioned earlier, engineering management graduates have a high

demand in the business. Before discussing engineering management as a

major, a clear and precise definition of the major is required. Engineering

management is defined as: the blend of the management skills and


engineering experience that guides specialists in highly technical tasks (3).

The American Society for Engineering Management (ASEM) defines


engineering management as "the art and science of planning, organizing,

allocating resources, and directing and controlling activities which have a

technological component" (4).

The main subjects an engineering management student or manager

focuses on are material management, product design, quality management,

engineering economy, innovation management, and operation management.

Also, strong communication skills is required from an engineer manager to

present the findings clearly and in a professional manner. The degree is

provided in both on-campus and online with multiple academic levels, such

as bachelor, master, and certificate programs. Due to its attractiveness as a

major, engineering management have multiple concentrations for students to

choose from. Examples of the concentrations atei engineering and

technology management, operation research and management science, and

knowledge management (3).

Similar to the other engineering degrees, engineering management

graduates have established organizations to support engineering

management professionals. ASEM is the main organization that supports

engineering management professionals with new solutions, technologies,

and systems studied and successfully applied within the business. ASEM is

famous for their journal, which is an excellent source for effective case

studies and projects from around the US and world businesses (4).
As we learned from Dr. Mark lectures, engineering management goal

is to prepare managels and engineers to be ready to manage engineers,

strategic plan, forecast, organize and control. Most of engineering managers

manage engineers as we can imply from its comprehensive definition. They

lead a technology or engineeling organization to help reach its goals and reach

its bottom line which is profit (5).

Manage the Workforce:

Management in general involves interacting with people and getting

them to achieve the organization goals and objectives. This is more difficult

when we talk about managing engineers and high professionals. These

difficulties range from decision making and taking consideration managing

conflicts between each other. Engineering managels tend to make tough

decisions and these decisions are sometimes critical to some engineer's


personal life. Also, performance evaluation is one of the critical parts of

managing engineers. There ale so many different trends on evaluating an

engineer's performance and mistakes may arise when evaluating candidates.

Some of these critical factors are personal conflicts, miscommunications on

peer evaluation, one to one evaluation and negative approach. This could be

noticed when you are a coworker or a subordinate and you have to evaluate

the candidates you manage or work with. You could experience diversity of
personalities and the best way is sharing experiences to learn from each

individual when there is a lack of knowledge. (5)

Strategic Planning:

Strategic planning is a vital part of the engineering management

discipline which involves mission, vision, values and (Strengths Weaknesses

Opportunities Threats) SWOT analysis within an organization. Most of the

500 fortune companies have a successful mission and vision statements where

they declare their objectives and goals for the next five to ten years. For

example, chevron set their goals to satisfy a safety and quality of products in

Saudi Arabia that meet the people's values and expectations (5) (6).

SWOT analyses identify the internal and external factors that are

favorable and unfavorable to achieving organizations' objectives. SWOT


analysis helps an organization with a good forecasting and planning to reduce

risk to the company and identify weaknesses that are critical to the company's

outcome. Strengths and Opportunities are helpful to achieving the objectives

where on the other hand Weaknesses and threats are risky to achieving

organizational objectives. Likewise, strengths and weaknesses are internal

attributes of the organization where opportunities and threats are external


attributes of the environment. An organization could look at their strengths

and ask themselves what are the strengths of our company. This could open up

an opportunity for development such as investing on internet or online

marketing and product development (6).


Forecasting:

Forecasting is defined as "a statement about the future value of a

variable of interests such as demand". The purpose of forecasting is to make

effective decision. Forecasting could be a used in a long-term or short-term, It

has a valuable impact on decisions in variety of functions of accounting,

marketing, production, design and finance. Forecasting is important because it

plays an effective role in planning for a long range and short range of time.

There are many methods in forecasting. One of the methods is Delphi method,

it involves opinions and feedbacks. Also, there are some types of forecasts

such as judgmental, time series and associate models (5).

Organizing:

Organizing is one of the engineering management functions. It

alranges and relates jobs tasks relative to work to be performed by people.

- Financial Planning & Budget Analysis

- Time Management

- Organizing workplace

- Developing structure

Establishing Relationships and Delegating work (5).


BM & MBA Courses Comparison

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"-Here is a comparison of some of the major courses in Engineering

Management and Management of Business Administration within California

State University Northridge in the school of Business and Engineering. Most

of the Management of Business Administration and engineering management

courses are slightly similar in the degree courses plan. In MBA, courses are

more general where in engineering management courses are more

concentrated on engineering and management only (7) (8). \ ,l,i * i: . -

.MEM MBA
Engineering Financial & Cost Analysis Financial Theory & Policy

Economic Analysis of Engineering Systems Strategic Economics

Operational Research Operational Management

Engineering Statistics Business Statistics

Management of Engineering Professionals Human Resources Management

Advanced Engineering Management Management of Innovation

MEM Comprehensive Studies MBA Consulting Graduate Project

Table 1. Engineering management and MBA comparison (7) (8)


Engineering Management career

Salary:

The typical salary for an engineering manager in the United States

range from $99,000 to $128,000 with an average of $113,000.This salary

could change due the experience, company size and location (11).

Planning which is the most primary function and take the most time

requires the selections of goals and the tools to achieve that goal. To be able to

plan engineering manager have to forecast where forecast is the most

important and usually don't need money. Decision making is the step where

Engineering manager have to take action and deal with the uncertainty. By

Organizing Engineering manager tend to actualize the plan by using the

money allocating time schedule the operation. Organizing required a lot of

money. By leading they supervise and manage the activity or performance of

the technical personnel. Controlling allows Engineering Manager to have the

confirmation that they progressing in accord with the plans and objectives. By

controlling they keep things in check and balance (12). Engineering Manager

has the primary goal of for implementing the technical and scientific goals

define by management goal (14). Personally I believe Engineering managers

are very different from other managers by the fact that they have both

management and engineering background. That allows them to easily

understand technical task as well as manage them. To be able to lead

Engineering Manager need a lot of personality they should have good writing

and communication skill.

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Tasks:

Engineering Management student could explore a wide range of career

opportunity such as Project manager, consultant, plan supervisor,

manufacturing engineer, financial analyst, Chief Executive Officer and more.

From the university of Wisconsin-Madison official webpage we could notice

have the approximate information regarding the career of engineering


manager. "25 Va of engineering graduates will become Top Corporate

Management, Chief Operating Officer, Managing Director, Vice President of

Operations, Director of Engineering, Business Planning Manager, and

Manufacturing Management ". 30Vo of engineering manager students will

follow the career path of Plant Manager, Supervisor of Supply Chain

Integration, Manufacturing Systems Engineering Manager, and Project

Manager. 12 Vo of the students will choose to become, Quality Assurance

Engineer, Technical Contributor/Practitioner, Assembly and Test Engineer,

Automation Engineer, Applications Engineer, Materials Engineer

727o of the student will also become, Training Executive/Management,

Head of Supply Chain Management, Senior Management Consultant, and

Quality Engineer. I3Va of the student will take Other Executive/Management,

Group Manager, Mechanical Engineering Supervisor, Senior Manager

Information Systems, and Research/Development Project Manager. And

finally 87a of the student will choose Academic Professionals career. (13)

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Business Activities of Ensineering Management

Finance and Accounting:

The Engineering Management progams all over the world have great

importance of Engineering Finance and cost analysis. The course work mainly

consists of the following Syllabus:

Balance Sheet, Income Statement, The Cash Flow Statement,

Refinements of Accounting Transactions, Closing transactions, Ratio

Analysis, Cooking the Books, Financing a Business, Introduction to Cost

Accounting, Apply Overhead , Managerial Accounting (CPV Curve and

Contribution Margin), Budgeting and Variance Analysis, The Budget and

Controlling Expenses. ( 15)

By the above course work the Engineering Managers are totally


equipped to handle real life indusffy concepts such as future markets, pricing

of forwards and futures, interest exchange rates, option markets, option

markets and option strategies. (16)

Engineering managers should have sound knowledge of finance from

account receivables to account payables and double book entries, the

engineering managers need to know the sales and levenues and how each of

these financial tools helps in each sphere of business activities.

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The modern day Engineering Managers should know how to:

a. Accounting fundamentals such as debits, double-entry bookkeeping

and credits.

b. Analyze basic financial documents such as balance sheets and income

statements.

c. Use financial tools to manage performance of the business.

d. Determine how assets and liabilities affect area of operation.

e. Apply financial ratios and risks in decision making.

f. Justify requests for new capital investments.

g. Improve budgeting and finances.

h. Relate their department finance to bigger processes.

Marketing:

Very often in engineering companies, the role of marketing is assumed to

be too naffow a perspective. A more comprehensive view of marketing


identifies three distinct roles of marketing:

a. Business philosophy use in Marketing.

b. Strategic Marketing.

c. Marketing at functional level.

Thus, marketing especially in engineering industry is a combination of

particular skills and practices which are combined together to come up with

particular solutions to diverse set of problems, There was a survey done taking

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different manufacturing companies and came up with a finding which was

based on the following.

The Miles and Snow strategy in which the analyzers, prospectors,

defenders and reactors are considered as the optimum strategy which is mostly

used in the engineering industry to come up with optimum business plans. In

the engineering both prospectors and analyzers follow the latest trend in

Technology. Marketing in engineering is now done by different media such as

internet, print media and news media, with internet being the most famous

means of media of marketing. Engineering companies are now slowly

developing their marketing departments to get the marketing part of product

intact which was earlier being handled by various marketing and advertising

companies (18)

Managerial Science:

Managerial Science, is a branch of applied mathematics which is


combined with economics, business, engineering, and is utilized other sciences

which helps Engineering Managers make optimized decisions. Engineering

Managers apply methods which have come up with research and development

on various fields to come up to a solution which is optimized and gives the

best possible solution for the problem being considered. It utilizes Program
Evaluation and Review Technology (PERT), Critical Path Method (CPM),

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Linear programming and various other mathematical models to come up to an

optimal solution. This field is called Operations research

Some of the roles of engineering managers relating to Managerial Science are:

. Improve the operational systems, processes and their streamlining

going hand in hand with the company policies being intact.

. Manage and making the systems such as HR and technical support

more effective by coming up with process improvements and also

improving the methods of working of the manpower.

. Foresee and implement long term planning and striving hard towards

operational excellence.

. Look the financial aspect of the project inclosing finances and cost

factor.

. Management of agency budget coordinating with the upper


management.

. Developing individual and team budgets.

. Calculating and invoicing completed units of service.

. Managing the payroll.

. Developing and organizing the fiscal documents.

. Regular meetings with upper level management for operations and

development

. Project management (19).

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Manr"rtacturing systerns and production:

Manufacturing Process Management (MPM) is a collection of

technologies and methods used by Engineering Managers to define how

products are to be manufactured.

It is utilized in streamlining the process of manufacturing after each

cycle and also it is moreover important for proper management of the whole

manufacturing process.

MPM includes:

1. "Production process planning".

2. Planning the process of manufacturing

3. Planning of workflow and plant design

4. Workloads on multiple stations by fragmenting the workload.

5. Process Tools for simulation like manufacturing lines.

6. Simulation and production ergonomically

7. Activity Based Costing

8. Cost and time estimates of the process.

9. FMEA (20).

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Conclusion
,1

--,_ In conchi'Sion, engineering management is the art and science of


planning, organizing,locating resources, directing, and controlling activities.

It plays a large role in strategic planning, managing the workforce, forecasting,

and organizing. This also could involve SWOT analysis for a good short or

long term organizational plan. There are many similarities and differences

between MBA and MEM degree goals where EM is more concentrated and

focused on engineering professionals and activities. Also, the tasks of EM

vary from supply chain management, project management, and consulting.

Moreover, communication takes most of the managers' time, which can be

used for analyzing the goals and how to achieve them. As for business

activities, EM is involved in the following; accounting and finance,


managerial science, marketing, and manufacturing systems and production.

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