Why Engineering Management?

Modern Industry requires competent manager to ensure that products are developed and brought to the market place to meet the ever increasing needs of sophisticated customers. Managers who understand the technology they are controlling. Engineering Managers to deal with other areas like Finance Manufacturing Marketing Budgets Project plans

Does that mean requirement for good engineers has diminished? Dual Career ladder. Engineering Manager Skills Team Building Communication Motivation Time Management 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 about things (Managers) not true any more. What young engineers or scientist think about management? Management is time-wasting effort mainly spent on covering up ones mistakes and stabbing peers in the back in a bid to reach the top of the corporate ladder. If this impression is wrong then what's the management and how one becomes good manager?

A more accurate statement would be There are those who do things and those who get things done. Scientific idea Needs a large multidisciplined team to develop it into a product and take it to the market. Activities need to be coordinated and managed One Golden rule about Management theory was first management is that there are no popularized in the USA and spread rules. slowly to Europe. No right or wrong First Business school founded in USA in 1881, 100 years later more Not exact science like engineering than 500 business schools. Management consists of two parts Two British schools were formed in Tasks which are predictable 1965. People non predictable Learn cricket in ground Managers are not the bosses 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 maximum efficiency Material consideration favors large sizes Efficiency falls off as size increases

Solutions??? Organization divided into divisions e.g manufacturing only. Each division Level of autonomy for profit or loss.

 General Manager answerable to head quarter Tasks of head quarter Formulating corporate strategy Setting divisional goals Monitoring divisional performance Management Styles Administrators Many, Many different management Look to company rules and styles. regulations for solving all problems. Style often determined by the personality of the manager. Usually good employees and loyal. Common/Major styles are 7 Formal in their approach, working with strict lines. Not very good communicators. Protect their department, status and staff. Not very good at resolving conflicts. Matching practical situation to theory and get lost. Time Servers Climbers Generally older managers. Driven by extreme personal ambition. Avoiding stress and low profile. Want to achieve and to be seen Subordinates less motivated. achieved. Avoiding decisions that may lead to Personal advancement by fair or mistakes. foul means. Demotivated by slow Consider themselves father or results. mother figure Personal knowledge important and Understand people and can build learn from staff. Self interest an effective team. comes before organization and peers will be fought to gain an advantage. Generals Supporters Young person who exhibits a lot of Balanced view about the world, the energy. organization, subordinates and themselves. Like to rule and manipulate the power but achievement oriented. Experienced managers with knowledge of management Hard worker techniques. Sociable Work through people to achieve Strong willed individuals aims Optimistic about the future some Develop staff by giving them times wrongly. responsibilities. Staff highly motivated. Lacks technical knowledge. Deep thinker and excellent imagination which may lead to a clash b/w the goals of org and what they believe to be right. Tends to be loners. Nice Guys Bosses Generally weak-willed. Bully (frighten) staff. Less interested in achieving tasks. Power is like drug (Primo Levi). Dont criticize the poor performers Playing things by books where it

because Communication problem Invisible contribution towards organizations goals Greater amount of overheads.

so retarding their development. suits them Low productivity. Only strong talkers and hide behind abusive language. Conflicts simmer under the surface. Poor decisions Exercise Management Responsibilities Ali, financial director, presented The functions that a manager his recommendations for the new performs are complex, which is accounting system to the board of partly why it is so difficult to define Compaq Manufacturing Company. and record them accurately. The system has been devised very Managers have certain largely by Jamal, one of Alis staff, responsibilities but also but Ali omitted to say this during constrained by other factors. his presentation. The company head, Sultan, complimented Ali on the new system, in the belief that most of the work was done by Ali himself. Ali didnt correct him, but resolved to give Jamal a bonus for his work. Which management style is Ali exhibiting? Management Responsibilities Shareholders Suppliers Invested their money in No organization can survive corporation. without a source for all the components and raw materials it Employees needs, at the right price and right Excepts rewards for their time. labor, good working Community conditions, and a job that meets their career The organization must aspirations. ensure that the environment is protected and the Customers employment balance Make it possible for the maintained. organization to exist. Constraints Except to receive the good they need at Competitor the right price and the right time. Can result in loss of Customers market and revenues. External customers Government Who buy the companys Constraint in two ways, products. by direct and indirect Internal customers action. Depend on the manager and his/her department to provide a product or service to which they can add value before it reaches the external customers Planning Natural Environment Very little control over the natural environment. Labor Market Severe constraint when shortage of skilled staff. Pressure Groups Environmental groups Trade and user organizations

 Creditors Restricted by creditors who wish to obtain short term returns on their loans. Planning (continue) Strategic sets the long term directions for the company. Must include a what-if type of activity. Strategic plans often tread the fine line b/w survival (short-term goals) and growth (long-term goals). SWOT Analysis (Strength, Weakness, Opportunities, Threats)

Organizing Splitting of the work into manageable tasks and allocating these to groups or individuals. No fixed boundaries b/w jobs and responsibilities. To carry out plan of action set is required People are recruited. Teams established. Leaders appointed. Integrating Occupies the longest time as plan of action is carried out to achieve the companys goals. Manager has little time to think before taking decision and needs to shift rapidly b/w resolving todays problems, evaluating, and modifying long term plans and resolving personal conflicts.

Planning (continue) Establishing processes and setting performance standards. Plan of Action Budgets, covering expenses, capital and human resources. Planning Phase two key items Need Process for change Manger must be proactive, foreseeing change and taking early action rather than reacting to change. Organizing (continue) All staff focused on common goals. Understanding customers need and communicating these to teams. Not one-off activity but continuous improvement. Effective delegation. Integrating (continue) In spite of the pressure on their time, manager must be able to see the whole picture, differentiating the wood from trees so that correct decision can be made. Obtaining correct information is important for correct decision. Better to put off the decision for longer. Risk must be minimized if possible and what-if plan must be included. Integrating (continue) Impartial arbitrator in disputes within the team. Showing warmth and understanding attitude. Knowing where can bent the organizational rules to suit extreme circumstances. Team the most valuable

Integrating (continue) Managers must act as acknowledged leader who set the directions but be flexible to change. Decisions Involving group Individual. Good communication Information flow down and up. Manager as information filter.

resource and using it efficiently. Measuring Involves taking stock of achievements and putting in corrective actions, including process change if necessary. Faults at the end are expensive to correct. Several items need to be measured and controlled during the life of the project, such as: The costs, including salaries, expenses and capital need to be compared with the budget values. Skills and specialized equipment are more important than monetary values of labor and capital. Measuring (cont..) Methods of taking measurements Formal method Weekly measure charts Progress against a set of agreed deliverables Informal method Measures a manager is continually making throughout the day. Management by Walking About (MWA). Added benefit of improving communication and raising morale within the team. Measuring (cont..) Three mistakes made during measuring Measures are just the formalities. Managers feel that a poorly performing team reflects badly on them. Managers dont fully trust their staff and apply very tight measures and controls. Measuring (continue) Progress on the project, measured on a time-scale and must be measured against deliverables. Contents of product changes The market requirement changes, Too long to achieve the original goals. Quality of the product. Measuring (cont..) Purpose of Measuring For growing staff and rewarding them, not finding the defects and determining punishment. To record and provide feedback, resulting in corrective action and process improvement.

Engineering Manager (cont..) Technical considerations Engineers do carry out many tasks that are done by managers. Management related activities Communication in meetings Influencing people Supervising technicians Peer interaction. Good engineers Must be master of their

Engineering Manager The move to management is seen as promotion. Problems Good engineer doesnt always make a good manager. They leave a career in which they are competent for one in which they no experience or interest. Technical Consideration (cont) The difference b/w engineers and engineering managers is the emphasis that is place on these activities. Manager must be creative since the management rules are not fixed and environment is uncertain and continually changing.

technology Awareness of other issues Political and social impact of their work, The customer and market requirements, Cost of product they are developing. Technical Consideration (cont) Engineering managers dont give up their technical skills. They take on much broader view of the activities e.g. the effects on company profits and customers. They are middle manager, who receive the goals from above and translate these into strategy and plan of action.

Technical workers wants to be managed by technical person.

The Time Factor Time management is one of the factors that the engineering manager finds difficult to cope with. Engineering tasks require thought & time. Engineering manager requires time for thought and for strategy and plan formulation. Open door policy. The People Factor People problems the most difficult to tackle People nature are complex Technical staff educated and independent. Engineer Concerned with task Engineering manager Concerned with people, the tasks being achieved through people whether they are within ones direct control or not.

Technical Consideration (cont) Plans must take into account many nontechnical issues such as Economics, marketing, competition and political considerations. More responsibilities than authorities being dependent on other departments. Delay in project Market requirements may change Mangers must accept the changes. Two steps forward and one step back. The Time Factor (cont) Engineering management requires the ability to shift rapidly from one task to the next, from one person to another in a short time. Partly completed jobs are abandoned, begin replace by another of higher priority The People Factor (cont..) New managers expects to command and lead. Must delegate technical tasks. Reviews and discussions with staff should not be limited to tasks but should cover personnel issues as well such as development. Show firmness but be constructive. Stress strengths while striving to improve weakness. Take pride in growing people.

The People Factor (cont..) New managers must be sensitive to peers.

 Engineering development is a uncertain business many tasks are started which never reach the market place. Engineering Managers must plan for product failure and be able to reorganize their team when this occurs, while still maintaining high motivation. The Organization An organization may be considered to be a group of people with defined relationships to each other. e.g. Family, or students society. Collection of human and material resources, which are gathered together for 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 system that contains one or more of the following elements: A collection of people in formal and informal groupings. Individuals who have defined tasks and responsibilities. The manner in which these tasks interact and relate to each other is defined. The tasks all lead to achievements of a common aim.

Organization Dynamics Organization are dynamic feedback systems that need to be creative for survival. Managers cant easily predict cause and effect. Managements main task creating conditions for the organization to learn and develop. Effective learning requires Open and questioning enviornment. Different from the past structure, where staff obeyed orders either out of fear or blind loyalty. Most organizations tend to oscillate b/w two states

Changes in the organizations driven by The emphasis on results not the process. Horizontal activities More opportunities for action and exerting (use of) influence within an organization. External contacts Disappearing formal control mechanisms b/w managers and subordinates. Many opportunities for advancement. Organization Dynamics (cont..) Self-Organizing groups Effective mechanism for organization development and learning. Boundaryless Organization Main causes of boundary creation Authority (formal and informal) Knowledge Managers cant avoid to use formal authority but should be used To create an open organization Staff participation Staff Empowerment

 Integration Disintegration. Organization structures An organizational structure indicates the method that an organization employs to define lines of communication, policies, authority and responsibilities. It determines the extent and nature of how leadership is distributed throughout the organization as well as the method by which information flows.

Hierarchical Structures (cont..)

And must not for tight control or giving orders and directions 1.Hierarchical Structures The most common & considered to be essential for control of large organization. Also known as Bureaucratic Structures. Clearly defined roles and responsibilities. Characteristics of Hierarchical Structures A hierarchy of authority. Specialization of tasks. A system of rules. Impersonality in the application of rules. Hierarchical Structures (cont..) Types of Authority Legal or organizational Authority Traditional Authority Personal Authority Span of Control limited to 6 or seven 15 to 20 are also workable as depends on Capabilities of the managers concerned Their subordinates Type of work being done. Overlapping Hierarchical Organization Strict personal responsibility and accountability are difficult. Every one sees their job as challenging, important and meaningful. Responsibility contributing to organizations goals.

Hierarchical Structures (cont..) Communications medium not effective. Aim of an organization Break the total task and responsibility into small units. Hierarchical organization structure allows large no of people to be managed and preserves accountability. Staff Functions in Organization

Staff Functions in Organization (Cont) Staff functions Responsible for strategy formulation. Advisory role Supporting the organization Ensuring that uniform policies applied across an organization. Conflict b/w staff and mangers

Staff Functions in Organization (Cont) Dismantle large headquarters staff function. Pushing responsibilities down to many more smaller divisions. Controlled from headquarters by set of objectives such as profit level or market penetration. Service groups not part of staff functions Responsible for supplementary activity Customer documentation, customer facilities. Project/Product Based Hierarchies

Functional Hierarchy

Enables people to specialize & learn from each other within their discipline. Loyalty is given to function rather than the company. Geographical Hierarchy

Best Applied to very large Projects. Not suitable for small projects. Hierarchical Structures (cont..) Advantages of Hierarchical Organisations Authority and responsibility and clearly defined Clearly defined promotion path. There are specialists managers and the hierarchical environment encourages the effective use of specialist managers. Employees very loyal to their department within the organisation.

Efficient only if operation in each region is very large. Disadvantages of Hierarchical Organisations The organisation can be bureaucratic and respond slowly to changing customer needs and the market within which the organisation operates. Communication across various sections can be poor especially horizontal communication. Departments can make decisions which benefit them rather than the business as a whole especially if there is Inter-departmental rivalry.

2.The Matrix Organization Aims to capture the best of both the functional and project organizations. Two parallel Hierarchies.

The Matrix Organization (cont..)

The Matrix Organization (cont..) Project Responsibility Provides day-to-day guidance on work to be done. Determine all priorities related to work. Ensuring funding availability. Ensuring conflict resolved. Plan projects & ensure objectives are being met. Provide customer interface. Monitor project progress including resource usage & spend Relationship b/w project, functional and matrix organization

Functional Responsibility Provides personnel of correct skills for job to be done. Determine methods to be used in carrying out tasks, including tools. Look after pay & rations of staff, including personal development. Ensure technical know-how transferred b/w projects. Monitors progress of functional contributors and help with technical problems.

Aims Of Matrix Organization To provide a focus on the customer. Providing Copies of project organization to customer. To provide a view across all the various functional areas in

Aims Of Matrix Organization To allow projects to be formulated, grow and deliver products to the customer, including post-sales support, with minimum time and expense. To provide staff leveling Each project needs a different number of engineers with different skills, at different stages. To provide a project focus on all the work being done. Functional groups only focus on a portion of the total work. Project group has a view of the total job. The Matrix Organization (cont..) Matrix management suitable for use in situations needing multiple simultaneous management capabilities. Parallel reporting provides a method for resolving the conflicting needs of functions, projects, products and so on.

order to determine the impact of development or changes in one area on another. To provide a platform for faster decision making. To allow the project to concentrate on delivering the product to the customer, by moving some of the day-to-day issues to functional organization. The Matrix Organization (cont..) Matrix organizations have been criticized Staff have more than one manager. Want of Best people for project. Advantages to be gained for engineers working in matrix organization: Experience in a function and in a projects. Engineers can learn from various managers. Appraisals and promotions based on input from two managers. Easy for engineers to move between jobs. 3.The Informal Organization

Most important The actual structure used is not important ; the attitude and skills of the staff are more critical.

The Matrix Organization (cont..) Project managers should be allowed to get resources from outside. Functional managers should be allowed to get funds from outside. MATRIX management structure must not be confused with TASK TEAM or TASK FORCE. Aims are similar Task team lasts for much shorter time. Matrix mgt designed to last for a long time and will tackle several projects in their lifetime.

Informal organization can occur at all levels. Reasons The failure of the official organization to provide leadership. 3.The Informal Organization 3.The Informal Organization Employees turn to informal Secondary group organization to gain sense of Large, formal, and satisfaction, recognition and impersonal. belonging. Specific aim, e.g. Gossip groups, alliance groups productions of goods and etc services. Maintains own disciplines, sets Can be disband after its own standards and provides achieving its goals. its own rewards.

3.The Informal Organization The official organization fails to provide the employees with a feeling of self-respect and achievement. Doesnt make the employee feel accepted. The employee dont feel that they are receiving sufficient recognition and developments. The official communication channels are ineffective.

 Large organization usually composed of Primary group Small size, easy face to face communication Close interaction leading to interpersonal relationship Individuals acquire opinions, attitudes and goals. Self-sustaining and its main goal is its own existence. 4.Global Organization Traditional multinational organizations were structured on a strict pyramid.

Informal organization may modify the formal structure to fit a given circumstance. They can be powerful and beneficial. Managers try to break informal organizations to reduce the influence of the unofficial leader. Ways should be find to make use of the informal organization.

4.Global Organization Global Managers have allegiance to their company not to the country. Global Managers Driven by Economic considerations Looking for the greatest competitive advantage. Decisions like where to locate major plants or activities are based on Economic, business, & political considerations. Customer needs world wide Local sourcing of components and materials Skills availability and

4.Global Organization Rapid changes market conditions made it difficult for companies to succeed with this form of organization. For success they need to pay attention to local enviornment Employee culture Consumer Behavior Political Considerations Competitive strategy. Impossible to measure/guess local conditions by operating at long distance. New Corporate headquarters Much smaller May be located anywhere in the world May be a suite in a hotel May be mobile Major activities like Manufacturing and R&D are done on several sites. 4.Global Organization Pyramid organization has been replaced by a Treacle organization.

Multitude of operations and headquarters are bound together into shapeless group.

cheapest. 4.Global Organization Cosmopolitan Management structure E.g. US Company operating in Italy may have French Chief Executive. Headquarters staff may be mixture of several nationalities in top positions. Employees want to attract investment in their country. Increase in general pay and living standard. Generating more tax to be spent on infrastructure improvement and social services.

4.Global Organization Positive reactions from govt. to multinationals Foreign investment as important as export. Tax concessions and grants Managers play off one country/state against another in order to obtain the best deal for their company.

Management Decisions Management decision making is often an art rather than a science. Conventional theories of decision making do not always apply. Characteristics of management decision making are: The problem is often ill defined or unpredictable. Complex Human behavior

4.Global Organization Multinational companys problem Maintaining its identity within the global enviornment. Multinationals need to think globally but act locally. Global business Collection of local businesses helping and learning from each other. Time needed to gain customer acceptance and to find and develop multinational managers Who understand The markets in which they are operating The culture and values of the global company that employs them Decision Making Decision making is usually required to solve a problem. Scientific decision Straightforward process and one which is carried out many times during the working day. Management decision Affects many more people and need to be made in a changing and uncertain enviornment. Process for decision making Definition of the problem. Gathering facts related to the problems. Comparing facts with the criteria based on knowledge and experience. Taking the best course of action. Management Decisions Gathering information on which to be base a management decision is often a hazardous process. The management decision is essentially one of choosing between several alternatives. Once a decision has been made it requires consensus and commitment. Following implementation the decision must be continually monitored. The process of management decision making based on experience and

 Much wider in scope and affects many more people and functions. Management Decisions A problem has set of alternative solutions Problem it self changes with time and so do the solutions or the optimum solution may change. E.g. need to sell more products. Decision-making styles are often affected by the organization in which a manager operates. For a strict mechanistic organization the roles and responsibilities of individuals are well defined and decision making is routine process, where staff respond automatically in a prescribed way. Efficient results and quick decisions but fails when event changes. Management Decisions Flow Diagram

judgment. Management Decisions Decisions can be divided into Routine decisions Purchase of materials. Taken at much lower level in the organization. Infrequent decisions Major impact on organization. Taken by senior management.

Management Decisions Any decision, good or bad, is better than no decision at all. Some managers faces incomprehensible choices within an uncertain enviornment and get paralyzed/confused. First question manager must ask Is this decision necessary? Most decisions are made instantly leading to immediate problem solving without solving the cause of problem.

The decision-making process Whether decision is really required? Every decision introduces change Depending on the extent of change, can result in a shock to the organization. Beneficial or disrupting. Half decision is much

The decision-making process Types of problem Routine True cause is usually known and there is generic solution for that. Unique Reveal the symptom of problem not the cause and generic solution doesnt exist. Once problem identified manager

worse than no decision at all. Define the problem Break problem into understandable terms and small units. Find the true cause of problem. E.g. if the sales are low Product cost being too high Sales force trained poorly Insufficient advertisement No demand for the product Key question is whether corrective action or new strategy is needed. Managers settle for corrective actions Treating the symptom of the problem rather than getting at the cause. The decision-making process Alternative solutions to the problem 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 solution cannot be used any reason. Managers must see things from others perspective not just assume that their solution is right.

may decide no decision required in the current situation. Needs to decide on the best method for arriving at decision on its solution Decision ones own (individual decision) Quicker to implement No compromises b/w those taking part in decision. Involving others. Can ensure that all the facts have been considered Solution is more likely to be accepted by the group members.

The decision-making process Cognitive style of a manager Defined by McKenney and Keen (1974). How information is collected and analyzed in arriving at a decision.

The decision-making process Selection of best solution from the array of alternative solutions. Often there is no one unique quality solution. Best Solution then modified to incorporate any compromises; E.g. to again commitment from

Decision Making Techniques Decision TABLE

people. After compromises solution still meets the conditions set when defining problem. Implementation of decision The actions needed to carry it out must be part of the decision and not added later. Best solution may need to be re-examined. The result of implemented decision monitored constantly Decision Making Techniques The Vroom-Yetten Model In general, a consultative or collaborative The Vroom-Yetten Model style is most appropriate when: Vroom & Yetton (1973) You need information from others to Proposed a set of possible solve a problem. management decision-making styles. Range from autocratic The problem definition isn't clear. (AI) to democratic (GII). Team members' buy-in to the decision AI is important. The manger makes the You have enough time to manage a decision entirely on group decision. his/her own. An autocratic style is most efficient when: AII You have more expertise on the subject than others. The manager first collects information from You are confident about acting alone. others (possibly telling The team will accept your decision. them why the There is little time available. information is needed) & then makes the decision on his or her own. CI The manager discuss the problem individually with others and gets their collective input before making the decision on his or her own. The Kepner-Tregoe Method The Kepner-Tregoe Method-Example A series of steps has to be followed for problem analysis and decision making. Specify the problem both in terms of what it is and what it is not. A poor problem definition "The server crashed. A clarified problem definition "The e-mail system crashed after the 3rd shift support engineer applied hot-fix XYZ to Exchange Server 123.

The Kepner-Tregoe Method Example Identify the difference between what the problem is and what it is not.

The Kepner-Tregoe Method Example Look for the causes (solutions) that explain these differences. "If ____ is the root cause of this problem does it explain the problem IS and what the problem COULD BE but IS NOT?"

The Kepner-Tregoe Method Example Test the cause (solution). Compare with actually happened with what would have happened if the proposed cause (solution) had been in action. If the proposed cause (solution) explains what actually happened and did not happen, without requiring too many assumptions, then it is correct. Quality The definition of quality depends on the role of the people defining it. Common Definitions of Quality 1. Conformance to specifications How well the product or service meets the targets and tolerances determined by its designers. 2. Fitness for use A definition of quality that evaluates how well the product performs for its intended use.

The Kepner-Tregoe Method Example Test the cause (solution). Compare with actually happened with what would have happened if the proposed cause (solution) had been in action. If the proposed cause (solution) explains what actually happened and did not happen, without requiring too many assumptions, then it is correct. QUALITY 3. Value for price paid Quality that consumers often use for product or service usefulness. 4. Support services Quality defined in terms of the support provided after the product or service is purchased. 5. Psychological criteria A way of defining quality that focuses on judgmental evaluations of what constitutes product or service excellence.

Differences Between Manufacturing and Service Organizations Manufactu Service ring Organizations Organizati ons Conforma nce to specificati ons Tangible factors

Performan Responsiveness to ce customer needs Reliability Features Durability Courtesy/friendline ss Timeliness/promptn ess Atmosphere

Cost Of Quality Prevention costs are all costs incurred in the process of preventing poor quality from occurring. Planning cost Cost of product and process design Employee training costs of maintaining records of information and data related to quality.

Serviceabi Consistency lity Cost Of Quality Appraisal costs are incurred in the process of uncovering defects. cost of quality inspections, product testing, and performing audits. the costs of worker time spent measuring quality and the cost of equipment used for quality appraisal. Internal failure costs are associated with discovering poor product quality before the product reaches the customer site. Cost of Quality Internal Failure Cost cost of correcting the defective items.(rework) Scrap cost the material, labor, and machine cost spent in producing the defective product. machine downtime cost due to failures in process discounting defective items cost for salvage value. External failure costs are associated with quality problems that occur at the customer site. THE EVOLUTION OF TOTAL QUALITY MANAGEMENT (TQM)

Cost Of Quality External failure costs customer complaints , product returns, and repairs, warranty claims, recalls, and litigation costs, product liability issues Lost sale & lost customer Companies that consider quality important invest heavily in prevention and appraisal costs in order to prevent internal and external failure costs External failure costs tend to be particularly high for service organizations.

TQM It provides overall concept that fosters never ending continuous improvement in the organization. Its philosophy stress a systematic, integrated, consistent organization wide perspective involving everyone and every thing. It primarily focuses on total customer satisfaction. (Internal and External both)

TQM Definition Total Everyone associated with the company is involved in continuous improvement Quality Customers expected and implied requirements are met fully. Management Executives are fully committed. TQM Philosophy The plandostudyact (PDSA) cycle describes the activities a company needs to perform in order to incorporate continuous improvement in its operation.

TQM Philosophy Customer Focus The first, and overriding, feature of TQM is the companys focus on its customers. Quality is customer driven. Meeting or exceeding customer expectations. Continuous improvement (Kaizen) A philosophy of never-ending improvement. Two activities for continuous improvement. plan do study act (PDSA) cycle benchmarking. TQM Philosophy Benchmarking Studying the business practices of other companies for purposes of comparison. Employee Empowerment Part of the TQM philosophy is to empower all employees to seek out quality problems and correct them. Given continual and extensive training in quality measurement tools. Better working conditions and salary.

Use of Quality Tools If employees are to identify and correct quality problems, they need proper training. They need to understand how to assess quality by using a variety of quality control tools, how to interpret findings, and how to correct

TQM Philosophy Team approach two heads are better than one. Quality circle- most common type of team A team of volunteer production employees and their supervisors who meet regularly to solve quality problems. 8- 10 members Weekly meeting & open discussion functioning of quality circles is friendly and casual, it is serious business Use of Quality Tools 1. Cause-and-effect diagrams are charts that identify potential causes for particular quality problems. They are often called fishbone diagrams.

problems. seven tools of quality control Use of Quality Tools 2.Flowchart a schematic diagram of the sequence of steps involved in an operation or process. everyone develops a clear picture of how the operation works and where problems could arise. 5.Control Chat used to evaluate whether a process is operating within expectations relative to some measured value such as weight, width, or volume. Regularly measure the variable of interest and plot it on a control chart. As long as the observed values fall within the upper and lower control limits, the process is in control and there is no problem with quality. 6.Pareto analysis a technique used to identify quality problems based on their degree of importance. The logic behind Pareto analysis is that only a few quality problems are important, whereas many others are not critical. Product Design Analysis can be very beneficial in developing a product design that meets customer needs. Quality function deployment (QFD) A tool used to translate the preferences of the customer into specific technical requirements. view the relationships among the variables involved in the design of a product, such as technical versus customer requirements

3. Checklists a list of common defects and the number of observed occurrences of these defects. allows the worker to collect specific information regarding the defects observed 6.Scatter diagrams graphs that show how two variables are related to one another. They are particularly useful in detecting the amount of correlation, or the degree of linear relationship, between two variables.

7.Histogram a chart that shows the frequency distribution of observed values of a variable.

QFD begins by identifying important customer requirements, requirements are numerically scored based on their importance, and scores are translated into specific product characteristics. Evaluations are then made of how the product compares with its main competitors relative to the identified characteristics

Reliability Reliability is the probability that a product, service, or part will perform as intended for a specified period of time under normal conditions. a product with a 90 percent reliability has a 90 percent chance of functioning as intended Or the probability that the product will fail is 1-.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 a reliability 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 component fails the other component takes over.

Reliability Reliability can be increased by redundancy Redundancy is built into the system by placing components in parallel, so that when one component fails the other component takes over. Redundancy

Process Management According to TQM a quality product comes from a quality process. Quality at the source The belief that it is best to uncover the source of quality

Managing Supplier Quality TQM views traditional Supplier quality practice as contributing to poor quality and wasted time and cost. TQM extends the concept of quality to suppliers and ensures

problems and eliminate it. that they engage in the same quality practices. Quality at the source exemplifies the difference suppliers must meet preset between the old and new quality standards. concepts of quality. Companys representative at The old concept suppliers location to involve focused on inspecting supplier in every stage from goods after they were product design to final produced. production. The new concept of quality focuses on identifying quality problems at the source and correcting them. 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 excellence and establish best-practice standards in industry. The award is given to two companies in manufacturing, service, and small business. 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 seven categories:

Deming Prize A Japanese award given to companies to recognize efforts in quality improvement. The award is given by Union of Japanese Scientists and Engineers (JUSE) since 1951. Competition for the Deming Prize was opened to foreign companies in1984. In 1989 Florida Power & Light was the first U.S. company to receive the award. ISO 9000 Standards International Organization for

Deming Prize A Japanese award given to companies to recognize efforts in quality improvement. The award is given by Union of Japanese Scientists and Engineers (JUSE) since 1951. Competition for the Deming Prize was opened to foreign companies in1984. In 1989 Florida Power & Light was the first U.S. company to receive the award. ISO 9000 Standards In December 2000 the first major

Standardization A set of international quality standards and a certification demonstrating that companies have met all the standards specified. Increases in international trade during the 1980s created a need for the development of universal standards of quality. In 1987 ISO published its first set of standards for quality management called ISO 9000.

changes to ISO 9000 were made, introducing the following three new standards: ISO 9000:2000Quality Management Systems Fundamentals and Standards. ISO 9001:2000Quality Management Systems Requirements. ISO 9004:2000Quality Management Systems Guidelines for Performance.

ISO 9000 Standards ISO certification entire process can take 18 to 24 months and can cost anywhere from $10,000 to $30,000 and to be recertified by ISO every three years. Today 4000 companies certified. Shortcoming of ISO certification is that it focuses only on the process used and conformance to specifications. ISO certification does not address questions about the product itself and whether it meets customer and market requirements. WHY TQM EFFORTS FAIL Lack of a genuine quality culture Lack of top management support and commitment Over- and under-reliance on statistical process control (SPC) methods

ISO 14000 A set of international standards and a certification focusing on a companys environmental responsibility. Focusing on three major areas: Management systems standards measure systems development and integration of environmental responsibility into the overall business. Operations standards include the measurement of consumption of natural resources and energy. Environmental systems standards measure emissions, effluents, and other waste systems.

Product Specification All attributes of product tangible and intangible must be considered. Three key factors to be considered Product performance Superior performance to gain competitive advantage Time to market Product is unsuccessful If market window has been missed Cost Price is often fixed by competitors and customers. Product Specification The buyers perception of the product is vitally important

Product Management Important task within marketing of product. Product Management is the responsibility of Product Line Manager To generate profits and continuity of profit. Product specification for market requirements. Guiding the product through development & manufacturing. Successful launch of the product Managing product life cycle 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 among performance, time and cost. Best product specification team consists of Marketing, Engineering and Project Management. Improvement in communication b/w the three functions lead to more successful products.

Product Specification The key to successful product specification is to be market guided.

 Buyers want a product which meets their needs , at an affordable price and with low perceived risk. Key questions are Will the product do what is wanted? Will it be reliable? Will it be easy to use? The newer the product or supplier the higher the perceived risk. Product Specification The Innovative overload can be encountered By ensuring that new product developments are on the basis of small improvements to previous products New features and benefits are added to meet the target market requirements. Products are easy to use. Benefits from using the product should be obvious to the consumer.

Product Specification Exit Barriers: This is the cost to the company if , after entering the market, it wished to withdraw at a later date. Capacity: This is the capacity which the operators in the market segment have in meeting the requirements of the market. Market Dominance: It is important to the new entrant into a market that it does not have dominant suppliers who can dictate the agenda. Product Development

Market changing continually and organization can either choose to react to it or to initiate it. Scientific or engineering advances should be used to meet market need, leading to commercializing of technology. In current technological market-place there is real danger of innovation overload. Wide choice of complicated, sophisticated, expensive hightech products often results in the consumer being frightened off and not making a purchase. Product Specification In specifying a product the target market should be kept in mind. Markets are generally characterized by several factors. Size and Phase: This defines the overall market potential for the product and whether its growing, remaining steady or is in decline Entry Barriers: The barriers to market entry may be high, such as the technical development needed, a new process in manufacturing start-up, large no of strong competitors or entrenched customers. Product Specification Market Importance: The market should not be contributing to a large part of a companys revenue, since this will make the company too dependant on the whims of a few customers. Competitors will defend their market segment.

Product Development

 It is essential for a manufacturing-based organization to have a continuous stream of new products being developed in order Replacing existing products Extend an existing products life Broaden a product range either to increase market share or counter competitors. Reduce the cost and improve performance of a product by incorporating the latest technology. Enter new markets Meet changed customer needs. Product Development Risk of Accelerated product development Risk of mistakes increases. Companys internal process may not be able to cope with faster development requirements and may break down. Poor design and inadequate testing at early stage of programme , increasing rectification cost. The problem of slower development time customer requirements may change during development phase, forcing a change on the product and this too can be expensive. Product Development Using a common basic research base as the base technology for all products. Several applied research projects are then developed off this base each leading to products which are

Products tend to have a shorter life now than they did over the past few years. The amount of revenue obtained by a company from new products is also increasing every year. Time is utmost important in new product development. Product delay has the greatest impact on profitability and should normally be avoided, even if it requires an increase in development or manufacturing cost.

Product Development Effect of shortening development times on product risk The risk of failure is high at conceptual stage and decreases as the product enters the market. Reduces the overall risk involved. Techniques to reduce product development time but maintain quality. Incremental development. Technology available from other projects or outside companies can also be used. Policy of incremental innovation not invention.

Product Development Internal technical skills can now be used on other projects. Cash flow becomes positive earlier in product cycle. Disadvantages of buying products from outside Pay over the odds for the products.

launched and eventually phased out. Products may be acquired rather than developed in house. Advantages The uncertainties of development time and cost are avoided and product can be brought faster. If the product is already on the market then its success is known and cost of unsuccessful product launch is avoided. Manufacturing Options

The market reputation gained by the existing product may hamper its entry into other market. Problem of supporting and development of product Good internal engineers will leave. Internal process for new product development will be weakened. Reputation as innovator will be weakened.

Lead or Follow a Technology? Leading provides competitive edge Higher price can be charged Gaining customer loyalty Disadvantage The market must be educated High risk of failure Leading organization must have enough resources to stay in the market while it develops slowly. Slow growth will discourage the competitors resulting in high price and larger profit. The Aims of Selling Aims of any sales operation are: To make a sale, Converting interest in the product into positive buying intention. To understand the customers need and to position the product so

Lead or Follow a Technology? Following technology Allows to learn from competitors mistakes Enter a market with better engineered product. Cost can be kept low and prices to be such as to provide a competitive advantage and take market share. Disadvantage Competitors already have strong customer loyalty Market does not grow rapidly enough to support new entrant.

Motivation A force which excites and drives a person to action. Psychological entity Two main types of motivation driver Primary motivation drivers, which are 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 must be skilled in differentiating the product and creating a competitive advantage for it. To ensure that buyers are satisfied with their purchases. The relationship b/w buyer and seller should be regarded as long term partnership and not as a one off sale. 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 to discover important facts affecting them from rumors and hearsay.

pleasure Writing a good report will get praise from the boss.

Motivational Theories Maslows Need-Hierarchy Model of Motivation Psychological Needs Basic needs like hunger , thirst and shelter. Safety Needs Protection from threats and danger. Social Needs Belonging to a group, acceptance by ones peer as their equal, giving and receiving of affection. Esteem Needs Ego, selfconfidence, status

Motivation and Performance Every action has positive and negative factors 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 and goals. Motivation on job. The most important factor since if the person is not motivated to achieve then no amount of training or support tools will result in good performance. Motivational Theories Maslow further proposal A higher level need only arises when the ones below it are satisfied. A satisfied need no longer dominates an individuals behavior, the next higher takes over. An unsatisfied need acts as a motivator. Higher level needs are never completely satisfied. Self actualization needs Esteem Needs Social Needs Safety Needs

and recognition Psychological Needs from others. Self-actualization needs Continual selfdevelopment, realization of ones own potential Fredrick Herzberg- Two Factor Fredrick Herzberg- Two Factor theory of theory of motivation motivation Also referred as motivation Two processes are needed to minimized hygiene theory. dissatisfaction and maximized satisfaction. Human needs can be grouped into two levels True motivation arise from doing things which can be controlled by ones self. Lower level needs People can be classifed as hygiene Extrinsic or as seeker and motivation seeker. dissatisfiers e.g. pay & working condition. If absent create dissatisfaction but the presence also doesnt create satisfaction. Upper level needs Intrinsic or motivators or satisfiers Challenging job, having responsibility for the task being done, getting recognition for work well done, belonging to a group. In absence neither satisfaction nor dissatisfaction. Fredrick Herzberg- Two Factor theory of motivation Hygiene Seeker Low interest in type of work or standard of performance. Very little satisfaction obtained from succeeding in the job. Motivation seeker Very high interest in type of work and the standard to which it is performed. Very high level of satisfaction obtained from succeeding in the job.

Concerned with the enviornment in Motivated by the job itself and less which the job is done rather than the job concerned with the enviornment in itself. which it is performed. High reaction to changes (improvement or deterioration) in hygiene factor. Leadership Management keeps an organization running Low to reaction to change in hygiene factors. t MANAGERS: l administrate l focus on systems and

Leaders vs. Managers t LEADERS: l inno

 Leadership involves getting things started Leadership involves facilitating change Great Leaders Live with integrity, lead by example develop a winning strategy or big idea build a great management team inspire employees to greatness create a flexible, responsive organization use reinforcing management systems

Marks of a Great Leader s Servicing and sacrificing s Initiating and risk taking s Needing no credit s Empowering others s Clarifying values s Socially responsible s Sharing s Caring s Learning

Five Ways to Lead 3.Expertise Approach-Characteristics Champions a specific proprietary expertise. Uses this as their competitive advantage. Directs their energies into capitalizing on it. 4. Box Approach Characteristics Centered around a set of rules, systems and procedures Behavior regulated within well-defined boundaries Controls play the most critical role. What good leaders do not do

structures focu l rely on control s on people l have a shortl inspi range view re trust l ask how and l have when a long-range l have eyes on view bottom line l ask l initiate what and l accept status why quo l have l do things right eyes on horizon l origi nate l chall enge status quo l do the right thing Five Ways to Lead 1.Strategic Approach-- Characteristics Establishes organizational structure Communicates a strategic vision Generates support Makes decisions 2.Human Assets Approach-Characteristics Manages for success through people policies, program and principles Emphasize on teamwork, building leaders and true empowerment Most popular leadership style. Five Ways to Lead 5.Change Approach characteristics Embraces the new and different Focus on changing the Fundamental underpinnings of the organization. l

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Price of Leadership

 Compete with their own people Place popularity ahead of effectiveness Sacrifice the means for the end Create a future that enables self preservation Sacrifice the team to prove a point Steal anothers thunder Team Building A team is a small number of people with complementary skills who are committed to A common purpose Set of performance goals A common approach For which they hold themselves mutually accountable Key to team work is the support provided by individual team members to each others. Defining team for short term task is not easy. TEAM BULIDING Working Group Output determined by individual contribution. Focus on individual goals and accountability. Individual commitment. No responsibility for results a part from own. Share information and knowledge and help each other do their jobs to achieve individual goals. Performance achieved equals the sum of that of individual members. Purpose of group clearly defined by outside authority and does not change. Need not have measureable goals. Emphasis on harmony and avoidance of conflict. Actions agreed and then delegated. Stages of Development First/Drifting stage: Individual come together and get to know each other.

Quite often, its a lonely step. Anger, disappointment subversive compliance come with the territory. The price is often deeply personal. People dont like to see their leaders as human beings.

TEAM BULIDING Team Output determined by individual and collective work. Focus on team goals with individual and mutual accountability. Common commitment. Share information and knowledge and joint contributions of members achieve collective goals. Performance achieved exceeds the sum of that of individual members. Broad purpose of team defined by outside authority but is then shaped by team members. This can change during the life of the team. Must have measurable goals Emphasis on questioning and probing to arrive at the best agreed solution. Actions agreed and implemented.

Stages of Development 3rd stage/ Unison Stage Whole team is behaving as a single, highly organized body, under a single leader.

 Official role of each Works towards common goals and member is defined. pull in the same direction, with a common purpose. Little synergy within the team. The interest of the team matches those of the individuals and there Interest of the is no goal conflict. individual team members are placed before those of the team as a whole. Second Stage/Gelling stage Like minded individuals form into small groups. Self- interest comes first Some loyalty to the group and unofficial leaders. 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 gain commitment and share responsibility.