ENGINEERING MANAGEMENT

CHAPTER 3: PLANNING TECHNICAL ACTIVITIES

PLANNING

- The process of determining a set of actions or

strategies to achieve specific goals or objectives. It
involves thinking ahead about what needs to be done,
how it will be done, when it will be done, and by
whom.

The Nature of Planning: Its importance

- A plan is used to guide, determined from simulating

situations and how to deal with it effectively, in
accordance to the goals.

PLANNING DEFINED

Nickel and others:

- Planning refers to the management function that
involves anticipating future trends and determining the
best strategies and tactics to achieve organizational
objectives.
Aldag and Stearns:
- The selection and sequential, ordering of tasks
required to achieve an organizational goal.
Cole and Hamilton:
- Deciding what will be done, who will do it, where,
when and how it will be done, and the standards to
which it will be done.

Planning at Various Management Levels The Planning Process

STRATEGIC PLANNING - refers to the process of determining

the major goals of the organization and the policies and
strategies for obtaining and using resources to achieve those
goals. The top management of any firm is involved in this type
of planning.
● A high-level overview or the organization
● Long term plan
● Forward looking
1. Setting Organizational, Divisional, or Unit Goals
INTERMEDIATE PLANNING - process of determining the
- Goals may be defined as the “precise
contributions that subunits can make the allocated resources.
statement of results sought, quantified in
This type of planning is undertaken by middle management.
time and magnitude, where possible”.
● Tactics used to achieve the strategy
● Short term plan
● Includes specific goals, budget, resources
OPERATIONAL PLANNING - refers to the process of
determining how specific tasks can best be accomplished on
time with available resources. This type of planning is a
responsibility of lower management, to support the strategic
and intermediate plan.
● Plan for day to day running or the organization
● Controlled via daily/weekly/monthly reports

2. Developing Strategies or Tactics to Reach Goals

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 - After setting goals, the next step is to create - plans may be classified as:
strategies to achieve them, with top management ● STANDING PLANS
overseeing this process. Middle and lower - Plans that are used again and again, and they focus
management then customize tactics for plan on managerial situations that recur repeatedly.
implementation. CLASSIFIED AS:
STRATEGY - defined as a “course of action aimed at 1. Policies - they are broad guidelines to aid managers
ensuring that the organization will achieve its objectives. at every level in making decisions about recurring
TACTIC - short term action taken by management to situations or function.
adjust to negative internal or external influences. 2. Procedures - plans that describe the exact series of
actions to be taken in a given situation.
3. Determining Resources Needed 3. Rules - they are statements that either require or
- Once specific strategies or tactics are formulated, the forbid a certain action.
engineering manager assesses the necessary human ● SINGLE-USE PLANS
and nonhuman resources. It’s crucial to specify - Plans are specifically developed to implement
resource requirements, even if they are currently courses of action that are relatively unique and are
available. unlikely to be repeated.
4. Setting Standards 1. Budgets - are plans which sets forth the projected
- Performance standards can be established during the expenditure funds will come from.
planning stage. If actual performance deviates from 2. Programs - designed to coordinate a large set of
the planned performance, adjustments or activities.
reinforcements can be implemented. 3. Projects - is usually more limited in scope than a
- A standard may be defined as “ a quantitative or program and is sometimes prepared to support a
qualitative measuring device designed to help monitor program.
the performances of people, capital goods, or
processes.” The Contents of the Marketing Plan

Types of Plans 1. Executive Summary

- Overall view of the marketing project and its potential
2. Table of Contents
1. FUNCTIONAL AREA PLANS - A detailed outline of the document, along with
corresponding page numbers
- a group or category of activities in an organization that 3. Situational Analysis and Target Market
contributes to its overall functioning and efficiency. Among the - Contains SWOT Analysis
types of functional area plans are the following: - Indicates a specific group of customers that a
● MARKETING PLAN company aims to reach.
- Written document or blueprint for implementing and 4. Marketing Objectives and Goals
controlling an organization's marketing activities - Outlines what the company aims to achieve through
related to a particular marketing strategy. its marketing efforts.
● PRODUCTION PLAN 5. Marketing Strategies
- Written document that states the quantity of output a - Outline how the marketing objectives will be achieved.
company must produce in broad terms and by product 6. Marketing Tactics
family. - Specific actions and methods employed to implement
● FINANCIAL PLAN marketing strategies.
- Document that summarizes the current financial
needs, and recommends a direction for financial
activities.
● HUMAN RESOURCE MANAGEMENT PLAN
- Document that indicates the human resource needs
of a company detailed in terms of quantity and quality
and based on the requirements of the company’s
strategic plan.

2. TIME HORIZON

- refer to the different time frames associated with planning

activities. These can include:
● SHORT-RANGE PLANS
7. Schedules and Budgets
- These are plans intended to cover a period of less
- Timelines outlining schedules with allocated financial
than one year. First-line supervisors are mostly
resources.
concerned with these plans.
8. Financial Data and Control
● LONG-RANGE PLANS
- Contains details on the financial aspects of the
- These are plans covering a time span of more than
marketing plan.
one year. These are mostly undertaken by middle and
top management.
The Contents of the Production Plan
3. FREQUENCY OF USE
1. Capacity Requirements

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 - The amount of capacity the company must have. - High-level statements that represent the overarching
- Production volume analysis achievements the organization seeks
- Assessment of the availability of production lines, ● Strategies
assembly systems, and skilled - Broad approaches or plans of actions the organization
2. Employee Allocation will pursue to achieve its objectives.
- How many employees are required
- Assigning skilled workers to specific production
- Implementing shift scheduling

3. Material Procurement
- What type and quantity of materials must be Making Planning Effective
purchased.
- Identifying suppliers of specialized materials required - Recognize the planning barriers
- Managing inventory levels to avoid shortages 1. Manager’s inability to plan
2. Improper planning process
The Contents of the Financial Plan 3. Lack of commitment to the planning process
4. Improper information
1. Current Financial Analysis 5. Focusing on the present of the expense of the future
- An analysis of the firm’s current financial condition as 6. Too much reliance on the planning department
indicated by an analysis of the most recent 7. Concentrating on only the controllable variables
statements.
2. Sales Forecast - Use of aids to planning
- Predicts future sales based on market trends, 1. Gather as much information as possible
historical data, and potential growth. 2. Develop multiple sources of information
3. Capital Budget 3. Involve others in the planning process
- Plans for significant, long-term investments such as
equipment, facilities, and technology.
4. Cash Budget
- Estimates cash inflows and outflows over a specific
period of time.
5. Set of Pro forma (or projected) financial
statements
- Presents anticipated future financial statements,
including income statements, balance sheets, and
cash flow statements
6. The external financing plan
- Outlines strategies for obtaining external funding if
needed.

The Contents of the Human Resources Plan

1. Personal Requirements
- defines the necessary workforce in terms of quantity
and skill sets.
2. Recruitment and Selection Plan
- Outlines strategies for attracting and hiring qualified
candidates
3. Training Plan
- Identifies training needs and programs to enhance
employee skills.
4. Retirement Plan
- Addresses strategies for managing employee
retirement transitions.

Strategic Plan

- a long-term plan that aims for better formulation and

implementation strategy to achieve organizational goals and
sustainable competitive advantage.

Parts of the Strategic Plan

● Company or Corporate Mission

- Defines the purpose of your business within your
industry or the world.
● Objectives or Goals