managment 1

8/6/2019 Managment 1

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Why Engineering Management?

Modern Industry requirescompetent manager to ensure thatproducts are developed andbrought to the market place tomeet the ever increasing needs of sophisticated customers.

Managers who understand thetechnology they are controlling.

Does that mean requirement forgood engineers has diminished?

Dual Career ladder.

Engineering Manager Skills

Team Building

Communication

Motivation

Time Management

Engineering Managers to deal with

other areas like Finance

Manufacturing

Marketing

Budgets

Project plans

What is management?

Management is the use of techniques, based on measures,artfully applied.

Parrot Manager

“There are those who do things(workers) and those who talk abothings (Managers)” not true anymore.

A more accurate statement wouldbe

“There are those who do things andthose

who get things done.”

Scientific idea

Needs a large multi-disciplined team to develop itinto a product and take it tothe market.

Activities need to becoordinated and ‘managed’

What young engineers or scientistthink about management?

Management is time-wastingeffort mainly spent oncovering up one’s mistakesand stabbing peers in theback in a bid to reach the toof the corporate ladder.

If this impression is wrong thenwhat's the management and howone becomes “good” manager?

One Golden rule aboutmanagement is that there are norules.

No right or wrong Not exact science like engineering

Management consists of two parts

Tasks which are predictable

People non predictable

Learn cricket in ground

Managers are not the “bosses”

Management theory was firstpopularized in the USA and spreadslowly to Europe.

First Business school founded inUSA in 1881, 100 years later morthan 500 business schools.

Two British schools were formed i1965.

Types of Managers

Managers come in every shape and size, with different personalities.

All employee within an organization are in reality managers.MANAGEMENT STYLES:

Organization Size

Optimum size for maximumefficiency

Material consideration favors largesizes

Efficiency falls off as size increases

Solutions???

Organization divided into divisione.g manufacturing only.

Each division

Level of autonomy for profit

or loss.



because

Communication problem

Invisible contribution towardsorganization’s goals

Greater amount of overheads.

General Manager answerablto head quarter

Tasks of head quarter

Formulating corporatestrategy

Setting divisional goals

Monitoring divisionalperformance

Management Styles

Many, Many different management

styles. Style often determined by the

personality of the manager.

Common/Major styles are 7

Administrators

Look to company rules and

regulations for solving allproblems.

Usually good employees and loyal

Formal in their approach, workingwith strict lines.

Not very good communicators.

Protect their department, statusand staff.

Not very good at resolvingconflicts.

Matching practical situation to

theory and get lost.Time Servers

Generally older managers.

Avoiding stress and low profile.

Subordinates less motivated.

Avoiding decisions that may lead tomistakes.

Consider themselves “father ormother figure”

Understand people and can buildan effective team.

Climbers

Driven by extreme personalambition.

Want to achieve and to be seenachieved.

Personal advancement by fair orfoul means. Demotivated by slowresults.

Personal knowledge important anlearn from staff. Self interestcomes before organization andpeers will be fought to gain anadvantage.

Generals

Young person who exhibits a lot of energy.

Like to rule and manipulate thepower but achievement oriented.

Hard worker

Sociable

Strong willed individuals

Optimistic about the future some

times wrongly.

Supporters

Balanced view about the world, thorganization, subordinates andthemselves.

Experienced managers withknowledge of managementtechniques.

Work through people to achieveaims

Develop staff by giving themresponsibilities.

Staff highly motivated.

Lacks technical knowledge.

Deep thinker and excellentimagination which may lead to aclash b/w the goals of org and whthey believe to be right.

Tends to be loners.Nice Guys

Generally weak-willed.

Less interested in achieving tasks.

Don’t criticize the poor performers

Bosses

Bully (frighten) staff.

Power is like drug (Primo Levi).

Playing things by books where it



so retarding their development.

Low productivity.

Conflicts simmer under thesurface.

Poor decisions

suits them

Only strong talkers and hide behinabusive language.

Exercise

Ali, financial director, presentedhis recommendations for the newaccounting system to the board of Compaq Manufacturing Company.

The system has been devised verylargely by Jamal, one of Ali’s staff,but Ali omitted to say this duringhis presentation. The companyhead, Sultan, complimented Ali onthe new system, in the belief thatmost of the work was done by Alihimself. Ali didn’t correct him, butresolved to give Jamal a bonus forhis work. Which management styleis Ali exhibiting?

Management Responsibilities

The functions that a managerperforms are complex, which ispartly why it is so difficult to definand record them accurately.

Managers have certainresponsibilities but alsoconstrained by other factors.

Management Responsibilities

Shareholders Invested their money in

corporation.

Employees

Excepts rewards for theirlabor, good workingconditions, and a job thatmeets their careeraspirations.

Customers

Make it possible for the

organization to exist.Except to receive the good they need atthe right price and the right time.

Customers

External customers

Who buy the company’sproducts.

Internal customers

Depend on the managerand his/her departmentto provide a product orservice to which theycan add value before itreaches the externalcustomers

Suppliers No organization can survive

without a source for all thecomponents and raw materials itneeds, at the right price and righttime.

Community

The organization mustensure that the environmenis protected and theemployment balance

maintained.Constraints

Competitor

Can result in loss of market and revenues.

Government

Constraint in two waysby direct and indirectaction.

Natural Environment

Very little control over the naturalenvironment.

Labor Market

Severe constraint when shortage of skilled staff.

Pressure Groups

Environmental groups

Trade and user organizations

Planning



Creditors

Restricted by creditors who wish toobtain short term returns on theirloans.

Planning (continue)

Strategic sets the long term directions forthe company.

Must include a what-if type of activity.

Strategic plans often tread the fine lineb/w survival (short-term goals) and growth

(long-term goals). SWOT Analysis (Strength, Weakness,

Opportunities, Threats)

Planning (continue)

Establishing processes ansetting performancestandards.

Plan of Action

Budgets, covering

expenses, capitaland humanresources.

Planning Phase two keyitems

Need

Process for change

Manger must be proactiveforeseeing change andtaking early action ratherthan reacting to change.

Organizing Splitting of the work into manageable

tasks and allocating these to groups orindividuals.

No fixed boundaries b/w jobs andresponsibilities.

To carry out plan of action set is required

People are recruited.

Teams established.

Leaders appointed.

Organizing (continue) All staff focused on

common goals.

Understanding customersneed and communicatingthese to teams.

Not one-off activity butcontinuous improvement.

Effective delegation.

Integrating

Occupies the longest time as plan of actionis carried out to achieve the company’sgoals.

Manager has little time to think beforetaking decision and needs to shift rapidlyb/w resolving today’s problems,evaluating, and modifying long term plansand resolving personal conflicts.

Integrating (continue)

In spite of the pressure ontheir time, manager mustbe able to ‘see the wholepicture’, differentiatingthe wood from trees sothat correct decision canbe made.

Obtaining correctinformation is importantfor correct decision.

Better to put off thedecision for longer.

Risk must be minimized ifpossible and ‘what-if’ planmust be included.


Managers must act as acknowledgedleader who set the directions but beflexible to change.

Decisions

Involving group

Individual.

Good communication

Information flow down and up.

Manager as information filter.


Impartial arbitrator indisputes within the team.

Showing warmth andunderstanding attitude.

Knowing where can bentthe organizational rules tosuit extremecircumstances.

Team the most valuable



resource and using itefficiently.

Measuring

Involves taking stock of achievements andputting in corrective actions, includingprocess change if necessary.

Faults at the end are expensive to correct.

Several items need to be measured andcontrolled during the life of the project,

such as: The costs, including salaries,

expenses and capital need to becompared with the budget values.

Skills and specialized equipment aremore important than monetaryvalues of labor and capital.

Measuring (continue)

Progress on the project,measured on a time-scaleand must be measuredagainst deliverables.

Contents of productchanges

The marketrequirementchanges,

Too long to achievethe original goals.

Quality of the product.

Measuring (cont..)

Methods of taking measurements

Formal method

Weekly measure charts

Progress against a set of agreed deliverables

Informal method

Measures a manager iscontinually making throughoutthe day.

Management by Walking About(MWA).

Added benefit of improving communicationand raising morale withinthe team.

Measuring (cont..)

Purpose of Measuring

For growing staff and rewarding themnot finding thedefects anddeterminingpunishment.

To record andprovide feedback,resulting incorrective action anprocessimprovement.

Measuring (cont..) Three mistakes made during measuring

Measures are just the formalities.

Managers feel that a poorlyperforming team reflects badly onthem.

Managers don’t fully trust their staff and apply very tight measures andcontrols.

Engineering Manager The move to management

is seen as promotion.

Problems

Good engineerdoesn’t always makea good manager.

They leave a careerin which they arecompetent for one inwhich they noexperience orinterest.

Engineering Manager (cont..)

Technical considerations

Engineers do carry out many tasksthat are done by managers.Management related activities

Communication in meetings

Influencing people

Supervising technicians

Peer interaction.

Good engineers

Must be master of their

Technical Consideration (cont…

The difference b/wengineers and engineeringmanagers is the emphasisthat is place on theseactivities.

Manager must be creativesince the managementrules are not fixed andenvironment is uncertain

and continually changing.



Engineering development is a uncertainbusiness many tasks are started whichnever reach the market place.

Engineering Managers must plan forproduct failure and be able toreorganize their team when this occurs,while still maintaining high motivation.

The Organization

An organization may be considered tobe a group of people with defined

relationships to each other. e.g. Family,or students society.

“Collection of human and materialresources, which are gathered togetherfor a stated aim. e.g. factory, or firm of solicitors etc”.

“A structure defining the division of work and interaction b/w individuals,groups, and resources.”

The Organization (cont…)

An organization is systemthat contains one or more of

the following elements: A collection of people in

formal and informalgroupings.

Individuals who havedefined tasks andresponsibilities.

The manner in whichthese tasks interact andrelate to each other isdefined.

The tasks all lead toachievements of acommon aim.

Changes in the organizations driven by

The emphasis on results not theprocess.

Horizontal activities

More opportunities for action andexerting (use of) influence withinan organization.

External contacts Disappearing formal control

mechanisms b/w managers andsubordinates.

Many opportunities foradvancement.

Organization Dynamics

Organization are dynamicfeedback systems that need to becreative for survival.

Managers cant easily predict causeand effect.

Management’s main task “creatingconditions for the organization tolearn and develop”.

Effective learning requires

Open and questioningenviornment.

Different from the paststructure, where staff obeyed orders either out of fear or blind loyalty.

Most organizations tend to

oscillate b/w two states

Organization Dynamics (cont..)

Self-Organizing groups

Effective mechanism fororganization developmentand learning.

Boundaryless Organization

Main causes of boundarycreation

Authority (formal andinformal)

Knowledge

Managers cant avoid to useformal authority but shouldbe used

To create an openorganization

Staff participation

Staff Empowerment



Integration

Disintegration.

And must not for tightcontrol or giving orderand directions

Organization structures

An organizational structureindicates the method that anorganization employs to definelines of communication, policies,authority and responsibilities. Itdetermines the extent and nature

of how leadership is distributedthroughout the organization aswell as the method by whichinformation flows.

1.Hierarchical Structures

The most common & considered tobe essential for control of largeorganization.

Also known as BureaucraticStructures.

Clearly defined roles and

responsibilities. Characteristics of Hierarchical

Structures

A hierarchy of authority.

Specialization of tasks.

A system of rules.

Impersonality in theapplication of rules.

Hierarchical Structures (cont..) Hierarchical Structures (cont..)

Types of Authority

Legal or organizational

Authority Traditional Authority

Personal Authority

Span of Control limited to 6 orseven

15 to 20 are also workable adepends on

Capabilities of themanagers concerned

Their subordinates

Type of work beingdone.

Hierarchical Structures (cont..)

Communications medium noteffective.

Aim of an organization

Break the total task andresponsibility into smallunits.

Hierarchical organization structureallows large no of people to bemanaged and preserves

accountability.

Overlapping Hierarchical Organization

Strict personal responsibility andaccountability are difficult.

Every one sees their job aschallenging, important andmeaningful.

Responsibility contributing toorganization’s goals.

Staff Functions in Organization Staff Functions in Organization (Cont…)

Staff functions

Responsible for strategyformulation.

Advisory role

Supporting the organization

Ensuring that uniformpolicies applied across anorganization.

Conflict b/w staff and mangers



Staff Functions in Organization (Cont…)

Dismantle large headquarters staff function.

Pushing responsibilities down tomany more smaller divisions.

Controlled from headquarters byset of objectives such as profitlevel or market penetration.

Service groups not part of staff functions

Responsible forsupplementary activity

Customerdocumentation,customer facilities.

Functional Hierarchy

Enables people to specialize &learn from each other within theirdiscipline.

Loyalty is given to function ratherthan the company.

Project/Product Based Hierarchies

Best Applied to very largeProjects.

Not suitable for small projects.

Geographical Hierarchy

Efficient only if operation in eachregion is very large.

Hierarchical Structures (cont..)Advantages of HierarchicalOrganisations

Authority and responsibility andclearly defined

Clearly defined promotion path.

There are specialists managersand the hierarchical environmentencourages the effective use of specialist managers.

Employees very loyal to theirdepartment within theorganisation.

Disadvantages of HierarchicalOrganisations

The organisation can bebureaucratic and respond slowly tchanging customer needs and the

market within which theorganisation operates.

Communication across varioussections can be poor especiallyhorizontal communication.

Departments can make decisionswhich benefit them rather than thbusiness as a whole especially if there is Inter-departmental rivalry



2.The Matrix Organization

Aims to capture the best of both the functional and projectorganizations.

Two parallel Hierarchies.

The Matrix Organization (cont..)


Project Responsibility

Provides day-to-dayguidance on work to bedone.

Determine all prioritiesrelated to work.

Ensuring funding

availability. Ensuring conflict

resolved.

Plan projects & ensureobjectives are being met.

Provide customerinterface.

Monitor project progressincluding resource usage& spend

Functional Responsibility

Provides personnel of correctskills for job to be done.

Determine methods to be used icarrying out tasks, includingtools.

Look after ‘pay & rations’ of

staff, including personaldevelopment.

Ensure technical know-howtransferred b/w projects.

Monitors progress of functionalcontributors and help withtechnical problems.

Relationship b/w project, functional

and matrix organization

Aims Of Matrix Organization

To allow projects to be formulated,grow and deliver products to thecustomer, including post-salessupport, with minimum time andexpense.

To provide staff leveling

Each project needs a differentnumber of engineers withdifferent skills, at differentstages.

To provide a project focus on all thework being done.

Functional groups only focus ona portion of the total work.

Project group has a view of thetotal job.

Aims Of Matrix Organization

To provide a focus on thecustomer.

Providing Copies of project organization tocustomer.

To provide a view across all

the various functional areas in


Matrix management suitable for use insituations needing multiplesimultaneous managementcapabilities.

Parallel reporting provides a methodfor resolving the conflicting needs of

functions, projects, products and soon.



order to determine the impactof development or changes inone area on another.

To provide a platform forfaster decision making.

To allow the project toconcentrate on delivering theproduct to the customer, bymoving some of the day-to-dayissues to functional

organization.

Most important

The actual structure used is notimportant ; the attitude andskills of the staff are morecritical.


Matrix organizations havebeen criticized

Staff have more than onemanager.

Want of Best people forproject.

Advantages to be gained forengineers working in matrixorganization:

Experience in a functionand in a projects.

Engineers can learn fromvarious managers.

Appraisals andpromotions based oninput from twomanagers.

Easy for engineers tomove between jobs.


Project managers should be allowed toget resources from outside.

Functional managers should beallowed to get funds from outside.

MATRIX management structure mustnot be confused with TASK TEAM orTASK FORCE.

Aims are similar

Task team lasts for much shortetime.

Matrix mgt designed to last for along time and will tackle severalprojects in their lifetime.

3.The Informal Organization

Informal organization canoccur at all levels.

Reasons

The failure of the officialorganization to provideleadership.


The official organization

fails to provide the employeeswith a feeling of self-respect andachievement.

Doesn’t make the employee feelaccepted.

The employee don’t feel that they arereceiving sufficient recognition anddevelopments.

The official communication channelsare ineffective.


Employees turn to informalorganization to gain sense of satisfaction, recognition andbelonging.

Gossip groups, alliance groupsetc

Maintains own disciplines, setsits own standards and providesits own rewards.


Secondary group

Large, formal, andimpersonal.

Specific aim, e.g.productions of goods andservices.

Can be disband after

achieving its goals.



Large organization usuallycomposed of

Primary group

Small size, easyface to facecommunication

Close interactionleading tointerpersonalrelationship

Individuals acquireopinions, attitudesand goals.

Self-sustaining andits main goal is itsown existence.

Informal organization maymodify the formal structure to fia given circumstance.

They can be powerful andbeneficial.

Managers try to break informalorganizations to reduce theinfluence of the unofficial leader

Ways should be find to make useof the informal organization.

4.Global Organization

Traditional multinationalorganizations were structuredon a strict pyramid.


Rapid changes market conditionsmade it difficult for companies tosucceed with this form of organization

For success they need to pay attentionto local enviornment

Employee culture

Consumer Behavior

Political Considerations

Competitive strategy.

Impossible to measure/guess localconditions by operating at longdistance.

New Corporate headquarters

Much smaller

May be located anywhere in theworld

May be a suite in a hotel May be mobile

Major activities likeManufacturing and R&D are donon several sites.


Global Managers haveallegiance to their companynot to the country.

Global Managers Driven by

Economic considerations

Looking for the greatestcompetitive advantage.

Decisions like where to locatemajor plants or activities arebased on

Economic, business, &political considerations.

Customer needs worldwide

Local sourcing of components andmaterials

Skills availability and


Pyramid organization has beenreplaced by a ‘Treacle’ organization.

Multitude of operations andheadquarters are bound together intoshapeless group.



cheapest.4.Global Organization

Cosmopolitan Managementstructure

E.g. US Companyoperating in Italy mayhave French Chief Executive.

Headquarters staff may bemixture of several nationalities

in top positions. Employees want to attract

investment in their country.

Increase in general payand living standard.

Generating more tax tobe spent oninfrastructureimprovement and socialservices.


Multinational company’s problem

Maintaining its identity withinthe global enviornment.

Multinationals need to think globallybut act locally.

Global business

Collection of local businesseshelping and learning from each

other. Time needed to gain customer

acceptance and to find anddevelop multinational managers

Who understand

The markets inwhich they areoperating

The culture andvalues of the globalcompany that

employs them4.Global Organization

Positive reactions from govt.to multinationals

Foreign investment asimportant as export.

Tax concessions andgrants

Managers play off onecountry/state against anotherin order to obtain the best dealfor their company.

Decision Making

Decision making is usuallyrequired to solve a problem.

Scientific decision

Straightforward processand one which is carriedout many times during theworking day.

Management decision

Affects many more peopleand need to be made in a

changing and uncertainenviornment.

Process for decision making

Definition of the problem.

Gathering facts related tothe problems.

Comparing facts with thecriteria based onknowledge and experience

Taking the best course of action.

Management Decisions Management decision making

is often an art rather than ascience.

Conventional theories of decision making do not alwaysapply.

Characteristics of managementdecision making are:

The problem is often illdefined or unpredictable.

Complex Human

behavior

Management Decisions Gathering information on which to be

base a management decision is often ahazardous process.

The management decision isessentially one of choosing betweenseveral alternatives.

Once a decision has been made itrequires consensus and commitment.

Following implementation the decisionmust be continually monitored.

The process of management decision

making based on experience and



Much wider in scope andaffects many morepeople and functions.

judgment.

Management Decisions

A problem has set of alternative solutions

Problem it self changes withtime and so do the solutions orthe optimum solution maychange.

E.g. need to sell moreproducts.

Decision-making styles areoften affected by theorganization in which amanager operates.

For a strict mechanisticorganization the rolesand responsibilities of individuals are welldefined and decisionmaking is routineprocess, where staff respond automatically ina prescribed way.

Efficient resultsand quick decisionsbut fails whenevent changes.


Decisions can be divided into

Routine decisions

Purchase of materials.

Taken at much lower levelin the organization.

Infrequent decisions

Major impact onorganization.

Taken by seniormanagement.

Management Decisions FlowDiagram


Any decision, good or bad, is betterthan no decision at all.

Some managers faces

incomprehensible choices within anuncertain enviornment and getparalyzed/confused.

First question manager must ask

Is this decision necessary?

Most decisions are made instantlyleading to immediate problem solvingwithout solving the cause of problem.

The decision-making process

Whether decision is reallyrequired?

Every decisionintroduces change

Depending on theextent of change,can result in ashock to theorganization.

Beneficial ordisrupting.

Half decisionis much


Types of problem Routine

True cause is usuallyknown and there is genericsolution for that.

Unique

Reveal the symptom of problem not the cause andgeneric solution doesn’texist.

Once problem identified

manager



worse thanno decision atall.

Define the problem

Break problem intounderstandable termsand small units. Find thetrue cause of problem.

E.g. if the sales are low

Product cost being

too high Sales force trained

poorly

Insufficientadvertisement

No demand for theproduct

Key question is whethercorrective action or newstrategy is needed.

Managers settle for

corrective actions Treating thesymptom of the problemrather thangetting at thecause.

may decide no decisionrequired in the currentsituation.

Needs to decide on thebest method for arriving atdecision on its solution

Decision one’s own(individual decision)

Quicker toimplement

Nocompromisesb/w thosetaking part indecision.

Involving others.

Can ensure thaall the factshave beenconsidered

Solution ismore likely tobe accepted bythe groupmembers.


Alternative solutions to theproblem needs to be defined.

As a result of facts

May be based on

opinions. Several alternatives are useful

Provide a quick fall-back if the chosen solutioncannot be used anyreason.

Managers must see thingsfrom other’s perspective not just assume that their solutionis right.


Cognitive style of a manager

Defined by McKenney and Keen(1974).

How information is collected and

analyzed in arriving at adecision.


Selection of best solution fromthe array of alternativesolutions.

Often there is no oneunique ‘quality’ solution.

Best Solution then modified toincorporate any compromises;

E.g. to again

commitment from

Decision Making Techniques

Decision TABLE



people.

After compromisessolution still meets theconditions set whendefining problem.

Implementation of decision

The actions needed tocarry it out must be partof the decision and notadded later.

Best solution may needto be re-examined.

The result of implemented decisionmonitored constantly

Decision Making Techniques

The Vroom-Yetten Model

Vroom & Yetton (1973)Proposed a set of possiblemanagement decision-makingstyles. Range from autocratic(AI) to democratic (GII).

AI

The manger makes thedecision entirely onhis/her own.

AII

The manager firstcollects information fromothers (possibly tellingthem why theinformation is needed) &then makes the decision

on his or her own. CI

The manager discuss theproblem individually withothers and gets theircollective input beforemaking the decision onhis or her own.

The Vroom-Yetten ModelIn general, a consultative or collaborativestyle is most appropriate when:

You need information from others tosolve a problem.

The problem definition isn't clear.

Team members' buy-in to the decisionis important.

You have enough time to manage agroup decision.

An autocratic style is most efficient when:

You have more expertise on thesubject than others.

You are confident about acting alone.

The team will accept your decision.

There is little time available.

The Kepner-Tregoe Method

A series of steps has to befollowed for problem analysis anddecision making.

Specify the problem both interms of what it is and whatit is not.

A poor problem definition

"The server crashed.“

A clarified problem definition

"The e-mail systemcrashed after the 3rdshift support engineerapplied hot-fix XYZ toExchange Server 123.“

The Kepner-Tregoe Method-Example



The Kepner-Tregoe Method Example

Identify the differencebetween what the problem isand what it is not.


Look for the causes(solutions) that explain thesdifferences.

"If ____ is the root cause of this problem does it explainthe problem IS and what theproblem COULD BE but IS

NOT?"


Test the cause (solution).Compare with actually

happened with what wouldhave happened if theproposed cause (solution)had been in action.

If the proposed cause(solution) explains whatactually happened and didnot happen, withoutrequiring too manyassumptions, then it iscorrect.


Test the cause (solution).Compare with actually

happened with what wouldhave happened if theproposed cause (solution)had been in action.

If the proposed cause(solution) explains whatactually happened and didnot happen, withoutrequiring too manyassumptions, then it iscorrect.

Quality

The definition of quality dependson the role of the people definingit.

Common Definitions of Quality1. Conformance to specifications

How well the product orservice meets the targetsand tolerances determinedby its designers.

2. Fitness for use

A definition of quality that

evaluates how well theproduct performs for itsintended use.

QUALITY

3. Value for price paid Quality that consumers often

use for product or serviceusefulness.

4. Support services

Quality defined in terms of the support provided afterthe product or service ispurchased.

5. Psychological criteria

A way of defining qualitythat focuses on judgmentalevaluations of whatconstitutes product orservice excellence.



Differences Between Manufacturingand Service Organizations

ManufacturingOrganizations

ServiceOrganizations

Conformance tospecificati

ons

Tangible factors

Performance

Responsiveness tocustomer needs

Reliability Courtesy/friendliness

Features Timeliness/promptness

Durability Atmosphere

Serviceability

Consistency

Cost Of Quality

Prevention costs are all costsincurred in the process of preventing poor quality fromoccurring.

Planning cost

Cost of product and processdesign

Employee training

costs of maintaining records

of information and datarelated to quality.

Cost Of Quality

Appraisal costs are incurred in theprocess of uncovering defects.

cost of quality inspections,product testing, andperforming audits.

the costs of worker timespent measuring quality and

the cost of equipment usedfor quality appraisal.

Internal failure costs areassociated with discovering poorproduct quality before the productreaches the customer site.

Cost of Quality

Internal Failure Cost

cost of correcting thedefective items.(rework)

Scrap cost

the material, labor, andmachine cost spent inproducing the

defective product. machine downtime cost due

to failures in process

discounting defective itemscost for salvage value.

External failure costs areassociated with quality problemsthat occur at the customer site.

Cost Of Quality

External failure costs

customer complaints ,

product returns, and repairs,warranty claims, recalls, andlitigation costs, productliability issues

Lost sale & lost customer

Companies that consider qualityimportant invest heavily inprevention and appraisal costs inorder to prevent internal andexternal failure costs

External failure costs tend to beparticularly high for service

organizations.

THE EVOLUTION OF TOTAL QUALITY MANAGEMENT (TQM)



TQM

It provides overall concept thatfosters never ending continuousimprovement in the organization.

Its philosophy stress a systematic,integrated, consistentorganization wide perspectiveinvolving everyone and everything.

It primarily focuses on total

customer satisfaction. (Internaland External both)

TQM Definition

Total

Everyone associated with thcompany is involved incontinuous improvement

Quality

Customers expected and implied requirements aremet fully.

Management

Executives are fullycommitted.

TQM Philosophy

Customer Focus

The first, and overriding,feature of TQM is thecompany’s focus on itscustomers.

Quality is customer driven.

Meeting or exceedingcustomer expectations.

Continuous improvement (Kaizen)

A philosophy of never-endingimprovement.

Two activities for continuousimprovement.

plan –do– study – act(PDSA) cycle

benchmarking.

TQM Philosophy• The plan–do–study–act (PDSA)

cycledescribes the activities a companyneeds to perform in order to incorporatecontinuous improvement in itsoperation.

TQM Philosophy

Benchmarking

Studying the businesspractices of other companiesfor purposes of comparison.

Employee Empowerment

Part of the TQM philosophyis to empower all employeesto seek out quality problemsand correct them.

Given continual andextensive training in qualitymeasurement tools.

Better working conditionsand salary.

TQM Philosophy

Team approach

two heads are betterthan one.

Quality circle- mostcommon type of team

A team of volunteerproduction employeesand their supervisorswho meet regularly tosolve quality problems

8- 10 members

Weekly meeting &

open discussion functioning of quality

circles is friendly andcasual, it is seriousbusiness

Use of Quality Tools

If employees are to identify andcorrect quality problems, theyneed proper training. They need tounderstand how to assess qualityby using a variety of qualitycontrol tools, how to interpret

findings, and how to correct

Use of Quality Tools1. Cause-and-effect diagrams are

charts that identify potentialcauses for particular qualityproblems. They are often calledfishbone diagrams.



problems.

seven tools of quality controlUse of Quality Tools2.Flowchart

• a schematic diagram of thesequence of steps involvedin an operation or process.

• everyone develops a clearpicture of how the operationworks and where problems

could arise.

3. Checklists• a list of common defects and

the number of observedoccurrences of these defects

• allows the worker to collectspecific informationregarding the defectsobserved

•

5.Control Chat• used to evaluate whether a

process is operating withinexpectations relative tosome measured value suchas weight, width, or volume.

• Regularly measure thevariable of interest and plotit on a control chart.

• As long as the observedvalues fall within the upper

and lower control limits, theprocess is in control andthere is no problem withquality.

6.Scatter diagrams• graphs that show how two

variables are related to oneanother. They areparticularly useful indetecting the amount of correlation, or the degree oflinear relationship, betweentwo variables.

6.Pareto analysis• a technique used to identify

quality problems based ontheir degree of importance.

• The logic behind Paretoanalysis is that only a fewquality problems areimportant, whereas many

others are not critical.

7.Histogram• a chart that shows the

frequency distribution of observed values of avariable.

•

Product Design

Analysis can be very beneficial indeveloping a product design thatmeets customer needs.

Quality function deployment (QFD)

A tool used to translatethe preferences of thecustomer into specifictechnicalrequirements.

view the relationshipsamong the variablesinvolved in the designof a product, such astechnical versuscustomer requirements

QFD begins byidentifying importantcustomerrequirements,requirements arenumerically scoredbased on theirimportance, and scoresare translated intospecific productcharacteristics.

Evaluations are then made of how theproduct compares with its maincompetitors relative to the identifiedcharacteristics



Reliability

Reliability is the probability that a product, service, or part will perform asintended for a specified period of time under normal conditions.

a product with a 90 percent reliability has a 90 percent chance of functioningas intended

Or the probability that the product will fail is1-.90=.10, or 10 percent. 1 out of 10 will fail.

The reliability of a product is a direct function of the reliability of its



component parts.Rs (R1) (R2) (R3) . . . (Rn)

A system with five components in series, each with a reliability of .90, has areliability of only (.90)(.90)(.90)(.90)(.90)= (.90)5= 0.59.

• Reliability can be increased by redundancy• Redundancy is built into the system by placing

components in parallel, so that when one componentfails the other component takes over.

Reliability

Reliability can be increased by redundancy

Redundancy is built into the system by placing components in parallel, sothat when one component fails the other component takes over.

Redundancy

Process Management

According to TQM a qualityproduct comes from a qualityprocess.

Quality at the source

The belief that it is best to

uncover the source of quality

Managing Supplier Quality

TQM views traditional Supplierquality practice as contributing topoor quality and wasted time andcost.

TQM extends the concept of

quality to suppliers and ensures



problems and eliminate it.

Quality at the sourceexemplifies the differencebetween the old and newconcepts of quality.

The old conceptfocused on inspectinggoods after they wereproduced.

The new concept of

quality focuses onidentifying qualityproblems at the sourceand correcting them.

that they engage in the samequality practices.

suppliers must meet presetquality standards.

Company’s representative atsupplier’s location to involvesupplier in every stage fromproduct design to finalproduction.

The Malcolm Baldrige National Quality Award (MBNQA)

Established in 1987 intended to reward and stimulate quality initiatives.

An award given annually to companies that demonstrate quality excellenceand establish best-practice standards in industry.

The award is given to two companies in manufacturing, service, and smallbusiness. Past winners include Motorola Corporation, Xerox, FedEx, 3M, IBM,and the Ritz-Carlton

The Malcolm Baldrige National Quality Award (MBNQA)• Certified Baldrige examiners conduct site visits and examine numerous

company documents. They base their evaluation on following sevencategories:

Deming Prize

A Japanese award given tocompanies to recognize efforts in

quality improvement. The award is given by Union of

Japanese Scientists and Engineers(JUSE) since 1951.

Competition for the Deming Prizewas opened to foreign companiesin1984.

In 1989 Florida Power & Light wasthe first U.S. company to receivethe award.

Deming Prize

A Japanese award given tocompanies to recognize efforts in

quality improvement. The award is given by Union of

Japanese Scientists and Engineers(JUSE) since 1951.

Competition for the Deming Prizewas opened to foreign companiesin1984.

In 1989 Florida Power & Light wasthe first U.S. company to receivethe award.

ISO 9000 Standards

International Organization for

ISO 9000 Standards

In December 2000 the first major



Standardization

A set of international qualitystandards and a certificationdemonstrating that companieshave met all the standardsspecified.

Increases in international tradeduring the 1980s created a needfor the development of universalstandards of quality.

In 1987 ISO published its first setof standards for qualitymanagement called ISO 9000.

changes to ISO 9000 were made,introducing the following threenew standards:

ISO 9000:2000–Quality Management Systems–Fundamentals and Standards.

ISO 9001:2000–Quality Management Systems–Requirements.

ISO 9004:2000–Quality Management Systems–Guidelines for Performance.



ISO 9000 Standards

ISO certification entireprocess can take 18 to 24months and can costanywhere from $10,000 to$30,000 and to be recertifiedby ISO every three years.Today 4000 companies

certified. Shortcoming of ISO

certification is that it focusesonly on the process used andconformance tospecifications. ISOcertification does not addressquestions about the productitself and whether it meetscustomer and marketrequirements.

ISO 14000

A set of international standards and acertification focusing on a company’senvironmental responsibility.

Focusing on three major areas:

Management systems standardsmeasure systems developmentand integration of environmental

responsibility into the overallbusiness.

Operations standards include themeasurement of consumption of natural resources and energy.

Environmental systems standardsmeasure emissions, effluents, another waste systems.

WHY TQM EFFORTS FAIL

Lack of a genuine qualityculture

Lack of top managementsupport and commitment

Over- and under-reliance onstatistical process control(SPC) methods

Product Management

Important task within marketing of product.

Product Management is theresponsibility of Product Line Manager

To generate profits and continuitof profit.

Product specification for marketrequirements.

Guiding the product throughdevelopment & manufacturing.

Successful launch of the product

Managing product life cycleProduct Specification

All attributes of producttangible and intangible mustbe considered.

Three key factors to beconsidered

Product performance

Superiorperformance togain competitiveadvantage

Time to market Product is

unsuccessful If market windowhas been missed

Cost

Price is often fixedby competitorsand customers.

Product Specification

One of the most significant causes of new product failure is lack of integration of R&D and Marketing.

Marketing must drive R&D.

Trade-offs often required amongperformance, time and cost.

Best product specification teamconsists of Marketing,Engineering and ProjectManagement.

Improvement in communicationb/w the three functions lead tomore successful products.


The buyer’s perception of the

product is vitally important


The key to successful product

specification is to be market guided.



Buyers want a productwhich meets their needs, at an affordable priceand with low perceivedrisk.

Key questions are

Will the productdo what iswanted?

Will it be reliable?

Will it be easy touse?

The newer the productor supplier the higherthe perceived risk.

Market changing continually andorganization can either choose toreact to it or to initiate it.

Scientific or engineering advancesshould be used to meet market need,leading to commercializing of technology.

In current technological market-placethere is real danger of innovationoverload.

Wide choice of complicated,sophisticated, expensive high-tech products often results in theconsumer being frightened off and not making a purchase.


The Innovative overload canbe encountered

By ensuring that newproduct developmentsare on the basis of smallimprovements toprevious products

New features andbenefits are added tomeet the target marketrequirements.

Products are easy to use.

Benefits from using theproduct should be obvious tothe consumer.


In specifying a product the targetmarket should be kept in mind.

Markets are generally characterized byseveral factors.

Size and Phase:

This defines the overallmarket potential for theproduct and whether itsgrowing, remaining steadyor is in decline

Entry Barriers:

The barriers to market entrmay be high, such as thetechnical developmentneeded, a new process inmanufacturing start-up,large no of strong

competitors or entrenchedcustomers.


Exit Barriers:

This is the cost to thecompany if , afterentering the market, itwished to withdraw at alater date.

Capacity:

This is the capacitywhich the operators inthe market segmenthave in meeting therequirements of themarket.

Market Dominance:

It is important to thenew entrant into amarket that it does nothave dominantsuppliers who candictate the agenda.


Market Importance:

The market should not becontributing to a large part of acompany’s revenue, since this wimake the company too dependanon the whims of a few customers

Competitors will defend theirmarket segment.

Product Development Product Development



It is essential for amanufacturing-basedorganization to have acontinuous stream of newproducts being developed inorder

Replacing existingproducts

Extend an existingproduct’s life

Broaden a productrange either to increasemarket share or countercompetitors.

Reduce the cost andimprove performance of a product byincorporating the latesttechnology.

Enter new markets

Meet changed customerneeds.

Products tend to have a shorter lifenow than they did over the past fewyears.

The amount of revenue obtained by acompany from new products is alsoincreasing every year.

Time is utmost important in newproduct development.

Product delay has the greatestimpact on profitability and should

normally be avoided, even if itrequires an increase indevelopment or manufacturingcost.

Product Development

Risk of Accelerated productdevelopment

Risk of mistakesincreases.

Company’s internalprocess may not be ableto cope with fasterdevelopmentrequirements and maybreak down.

Poor design andinadequate testing atearly stage of programme , increasingrectification cost.

The problem of slowerdevelopment time

customerrequirements maychange duringdevelopmentphase, forcing a

change on theproduct and thistoo can beexpensive.

Product Development

Effect of shortening development timeson product risk

The risk of failure is high atconceptual stage and decreasesas the product enters the market

Reduces the overall risk involved

Techniques to reduce productdevelopment time but maintain quality

Incremental development.

Technology available from other

projects or outside companies caalso be used.

Policy of incremental innovationnot invention.

Product Development

Using a common basicresearch base as the basetechnology for all products.

Several appliedresearch projects arethen developed off thisbase each leading toproducts which are

Product Development

Internal technical skills can nowbe used on other projects.

Cash flow becomes positiveearlier in product cycle.

Disadvantages of buying products fromoutside

Pay over the odds for theproducts.



launched and eventuallyphased out.

Products may be acquiredrather than developed inhouse. Advantages

The uncertainties of development time andcost are avoided andproduct can be broughtfaster.

If the product is alreadyon the market then itssuccess is known andcost of unsuccessfulproduct launch isavoided.

The market reputation gained bythe existing product may hamperits entry into other market.

Problem of supporting anddevelopment of product

Good internal engineers willleave.

Internal process for new productdevelopment will be weakened.

Reputation as innovator will be

weakened.

Manufacturing Options

Lead or Follow a Technology?

Leading provides competitiveedge

Higher price can becharged

Gaining customerloyalty

Disadvantage The market must be

educated

High risk of failure

Leading organization musthave enough resources tostay in the market while itdevelops slowly.

Slow growth willdiscourage thecompetitors resulting inhigh price and largerprofit.

Lead or Follow a Technology?

Following technology

Allows to learn from competitors’mistakes

Enter a market with betterengineered product.

Cost can be kept low and prices

to be such as to provide acompetitive advantage and takemarket share.

Disadvantage

Competitors already have strongcustomer loyalty

Market does not grow rapidlyenough to support new entrant.

The Aims of Selling

Aims of any sales operationare:

To make a sale,Converting interest inthe product intopositive buyingintention.

To understand thecustomer’s need and to

position the product so

Motivation

A force which excites and drives aperson to action.

Psychological entity

Two main types of motivation driver

Primary motivation drivers, whichare instinctive, such as hunger,thirst, pain.

Secondary motivation drivers,which are learned, for example

that certain behavior gives



that it meets this need.

Sales person mustbe skilled indifferentiating theproduct andcreating acompetitiveadvantage for it.

To ensure that buyersare satisfied with their

purchases. The relationship

b/w buyer andseller should beregarded as longterm partnershipand not as a oneoff sale.

pleasure

Writing a good report willget praise from the boss.

Fall in motivation

Unfair treatment of employees; favoritism.

Excessive emphasis within

the company on status. Non-recognition of

achievements.

Petty regulation.

Poor communication.

Employees having todiscover important factsaffecting them fromrumors and hearsay.

Motivation and Performance

Every action has positive and negativefactors associated with it.

Performance on a job is determined by

several factors: Ability related to the task to be

done.

Availability of support tools.

The organizational enviornment.

Clearly defined missions andgoals.

Motivation on job.

The most important factorsince if the person is notmotivated to achieve then

no amount of training orsupport tools will result ingood performance.

Motivational Theories

Maslow’s Need-HierarchyModel of Motivation

Psychological Needs

Basic needs likehunger , thirst andshelter.

Safety Needs

Protection fromthreats anddanger.

Social Needs

Belonging to agroup, acceptanceby one’s peer astheir equal, givingand receiving of affection.

Esteem Needs

Ego, self-

confidence, status

Motivational Theories

Maslow further proposal

A higher level need only ariseswhen the ones below it aresatisfied.

A satisfied need no longerdominates an individual’sbehavior, the next higher takesover.

An unsatisfied need acts as amotivator.

Higher level needs arenever completely satisfied.

Self actualizationneeds

Esteem Needs

Social Needs

Safety Needs



and recognitionfrom others.

Self-actualization needs

Continual self-development,realization of one’s ownpotential

Psychological Needs

Fredrick Herzberg- Two Factortheory of motivation

Also referred as motivationhygiene theory.

Human needs can be groupedinto two levels

Lower level needs

Extrinsic or asdissatisfiers e.g.pay & workingcondition.

If absent createdissatisfaction butthe presence alsodoesn’t createsatisfaction.

Upper level needs

Intrinsic ormotivators orsatisfiers

Challenging job,havingresponsibility forthe task beingdone, getting

recognition forwork well done,belonging to agroup.

In absence neithersatisfaction nordissatisfaction.

Fredrick Herzberg- Two Factor theory of motivation

Two processes are needed to minimizedissatisfaction and maximizedsatisfaction.

True motivation arise from doing thingwhich can be controlled by ones self.

People can be classifed as hygieneseeker and motivation seeker.

Fredrick Herzberg- Two Factor theory of motivation

Hygiene Seeker Motivation seeker

Low interest in type of work or standardof performance.

Very high interest in type of work andthe standard to which it is performed.

Very little satisfaction obtained fromsucceeding in the job.

Very high level of satisfaction obtainedfrom succeeding in the job.

Concerned with the enviornment inwhich the job is done rather than the jobitself.

Motivated by the job itself and lessconcerned with the enviornment inwhich it is performed.

High reaction to changes (improvementor deterioration) in hygiene factor.

Low to reaction to change in hygienefactors.

Leadership

Management keeps an

organization running

Leaders vs.Managers

tLEADERS:l inno

t MANAGERS:l administratel

focus onsystems and



Leadership involves gettingthings started

Leadership involvesfacilitating change

Great Leaders

Live with integrity, lead byexample

develop a winning strategy or“big idea”

build a great management

team inspire employees to

greatness

create a flexible, responsiveorganization

use reinforcing managementsystems

vatel focus on peoplel inspire trustl havea long-rangeviewl ask what and

whyl haveeyes onhorizonl originatel challenge statusquol dothe rightthing

structuresl rely on controll have a short-

range viewl ask how and

whenl have eyes on

bottom linel initiatel accept status

quol do things right

Marks of a Great Leaders Servicing and sacrificings Initiating and risk takings Needing no credits Empowering otherss Clarifying valuess Socially responsibles Sharings Carings Learning

Five Ways to Lead 1.Strategic Approach-- Characteristics

Establishes organizationalstructure

Communicates a strategic vision

Generates support

Makes decisions

2.Human Assets Approach--Characteristics

Manages for success throughpeople policies, program andprinciples

Emphasize on teamwork, buildingleaders and true empowerment

Most popular leadership style.Five Ways to Lead

3.Expertise Approach--Characteristics

Champions a specificproprietary expertise.

Uses this as theircompetitive advantage.

Directs their energies

into capitalizing on it. 4. Box Approach–

Characteristics

Centered around a setof rules, systems andprocedures

Behavior regulatedwithin well-definedboundaries

Controls play the mostcritical role.

Five Ways to Lead

5.Change Approach– characteristics

Embraces the new and different

Focus on changing the“Fundamental underpinnings” of the organization.

What good leaders do not do Price of Leadership



Compete with their ownpeople

Place popularity ahead of effectiveness

Sacrifice the means for theend

Create a future that enablesself preservation

Sacrifice the team to prove apoint

Steal another’s “thunder”

Quite often, it’s a lonely step.

Anger, disappointment subversivecompliance come with the territory.

The price is often deeply personal.

People don’t like to see their leaders ashuman beings.

Team Building

A team is a small number of people with complementary skills who are committed to

A common purposeSet of performance goals

A common approachFor which they holdthemselves mutually accountable

Key to team work is thesupport provided byindividual team members toeach others.

Defining team for short termtask is not easy.

TEAM BULIDINGWorking Group

Output determined byindividual contribution.

Focus on individual goals andaccountability.

Individual commitment. Noresponsibility for results apart from own.

Share information andknowledge and help eachother do their jobs to achieveindividual goals.

Performance achieved equalsthe sum of that of individualmembers.

Purpose of group clearlydefined by outside authority

and does not change. Need not have measureable

goals.

Emphasis on harmony andavoidance of conflict.

Actions agreed and thendelegated.

TEAM BULIDINGTeam

Output determined by individual andcollective work.

Focus on team goals with individualand mutual accountability.

Common commitment. Share information and knowledge and

joint contributions of members achievecollective goals.

Performance achieved exceeds the sumof that of individual members.

Broad purpose of team defined byoutside authority but is then shaped byteam members. This can change duringthe life of the team.

Must have measurable goals

Emphasis on questioning and probingto arrive at the best agreed solution.

Actions agreed and implemented.

Stages of Development

First/Drifting stage:

Individual cometogether and get to

know each other.

Stages of Development

3rd stage/ Unison Stage

Whole team is behaving as asingle, highly organized body,

under a single leader.

http://www.pathways.cu.edu.eg/subpages/training_courses/Teams/images/1_1.gif



Official role of eachmember is defined.

Little synergy within theteam.

Interest of theindividual teammembers are placedbefore those of theteam as a whole.

Second Stage/Gelling stage

Like minded individualsform into small groups.

Self- interest comesfirst

Some loyalty to thegroup and unofficialleaders.

Works towards common goals andpull in the same direction, with acommon purpose.

The interest of the team matchesthose of the individuals and thereis no goal conflict.

Effective Team Characteristics

Highly efficient and result oriented.

High level of energy and enthusiasm.

Synergy between individuals members of the team, who act in unison to

meet team goals. Sense of purpose

Excellent working atmosphere of trust and mutual support.

The team has strong leader who uses participative leadership style to gaincommitment and share responsibility.

managment 1

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