2. Engineering Management_Planning

Planning Plannin g Technica Technicall Activities

Planning  According ording   Acc

to Nickels Nickels and others, refers to “the management management function that involves anticipating future f uture trends and determining the best strategies and tactics to achieve organizational objectives”.

  Adlag

and Stearns, define def ine planning as “ the selection and sequential ordering of task required to achieve an organizational goal” goal”

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 According to  According to Cole Cole and Hamilton is “deciding “deciding what what will will be done, who  will do do it ,where, when ,and how how it will be done, and the the standar standards ds to  which it will be done.

Planning At Various Management Levels Planning activities undertaken at various levels are as follows: 1. Top Management Levels

Strategic Planning

2. Middle Management Levels

Intermediate Planning

3. Lower Management Levels

Operational Planning

Strategic Planning 

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The term strategic planning refers to the process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieved those goals. The top management of any firm involved in this type of planning. The output of strategic planning is the strategic plan which spells out “the decision about long-range goals and the course of action to achieved these goals.

Intermediate Planning 

Intermediate planning refers to “the process of determining the contributions that subunits can make with allocated resources. This type of planning is undertaken by middle management

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Under intermediate planning, the goals of a subunit are determined and a plan is prepared to provide a guide to the realization of the goals. The intermediate plan is designed to support the strategic plan.

Operational Planning 

The term operational planning refers to “ the process of determining how specific tasks can best be accomplished on time with available resources”. This type of planning is a responsibility of lower management. It must be performed in support of the strategic plan and the intermediate plan.

The Planning Process 1. 2. 3. 4.

Setting Organizational, divisional, or unit goals. Developing Strategies or tactics to reach those goals. Determining Resources Needed Setting Standards

Setting Organizational, Divisional, or Unit Goals 

The first task of the engineer manager is to provide a sense of  direction to his firm(If he is the Chief Executive), to his division (If he Heads a Division), or to his unit ( If he is a Supervisor). The setting of  goals provide answer to the said concern. If everybody in the firm(or Division or Unit, as the case may be) is aware of the goals, there is a big chance that everybody will contribute his share in the realization of  such goals.

The Planning Process Goals may be defined as the “precise statement of results sought, quantified in time and magnitude, where possible.

Developing Strategies or Tactics to Reach Goals  After determining the goals, the next task is to devise some means to realize them. A strategy may be defined as “a course of action aimed at ensuring that the organization will achieve its objectives.”  A tactic, on the other hand, is a short-term action taken by  management to adjust negative internal or external inf luences. They  are formulated and implemented in support of the firm’s strategies.

Determining Resources Needed  After implementing strategies or tactics, the engineer manager will, then, determine the human & nonhuman resources required by such strategies or tactics.

Determining Resources Needed The quality and quantity of resources needed must be correctly  determined. Too much resources in terms of either quality or quantity   will be wasteful. Too little will mean loss of opportunities for maximizing income. To satisfy strategic requirements, a general statement of needed resources will suffice.

Setting Standards The standards for measuring performances may be set at the planning stage. When actual performance match with the planned performance, corrections may be made or reinforcements given.  A standard may be defined as “a quantitative or qualitative measuring device designed to help monitor the performances of people, capital goods, or processes.”

Types of Plans Plans are of different types. They may be classified in terms of functional areas, time horizon, and frequency of use. Functional Area Plans 1. Marketing plan – this is the written document or blueprint for implementing & this is a written document that states the quantity  of output a company controlling an organization’s marketing activities related to a particular marketing strategy. 2. Production plan –must produce in broad terms & by product family. 3. Financial plan – it is a document that summarizes the current financial situation of the firm, analyzes financial needs, and recommends a direction for financial activities. 4. Human resource management plan – a document that indicates the human resource needs of a company detailed in terms of quantity and quality and based on the requirements of the company’s strategic plan

Plans with Time Horizon 1. Short-range plans – are plans intended to cover a period of less than one year. First-line supervisors are mostly concerned with these plans. 2. Long-rang plans – are plans covering a time span of more than one  year. These are mostly undertaken by middle and top management.

Plans According to Frequency of Use 1. Standing Plans – These are plans that are used again and again, and they focus on managerial situations that recur repeatedly. a. Policies – they are broad guidelines to aid managers at every  level in making decisions about recurring situations or function. b. Procedures – are plans that describe the exact series of actions to be taken in a given situation. c. Rules – are statements that either require or forbid a certain action.

Plans According to Frequency of Use 2. Single-Use Plans – plans are specifically developed to implement courses of action that are relatively unique and are unlikely to be repeated. a. budgets b. programs, and c. projects.  A budget, according to Weston and Brigham, is “a plan which sets forth the projected expenditure for a certain activity and explains where the required funds will come from.  A program is a single-use plan designed to coordinate a large set of  activities.  A project is a single-use plan that is usually more limited in scope than a program and is sometimes prepared to support a program.

Various Functional Area Plans

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Marketing Plan Production Plan Financial Plan Human Resources

Marketing Plan Contents of Marketing Plan:        

The Executive Summary  Table of contents Situational Analysis and Target Market Marketing Objectives and Goals Marketing Strategies Marketing Tactics Schedules and Budgets Financial Data and Control

Production Plan

Contents of Production Plan:   

The amount of capacity the company must have How many employees are required How much material must be purchased

Financial Plan

Contents of Financial Plan: 

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 An analysis of the firm’s current financial conditions as indicated by an analysis of the most recent statements sales forecast Capital budget Cash budget  A set of pro forma(or projected) financial statements The external financing plan

Human Resources Plan

Contents of Human Resources Plan:    

Personal requirements of the company  Plans for recruitment and selection Training plan Retirement plan

Strategic Plan The Strategic Plan must contain the ff:   

Company or corporate mission Objectives or goals Strategies

Making Planning Effective Planning is done so that some desired results may be achieved. Sometimes failure in planning occurs. Planning may be made successful if the following are observed: Recognize the planning barriers Use of aids to planning  

Planning Barriers according to Plunkett and Attner       

Manager’s inability to plan Improper planning process Lack of commitment to the planning process Improper information Focusing on the present at the expense of the future Too much reliance on the planning department Concentrating on only the controllable variables

Aids to Planning

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Gather as much information as possible Develop multiple sources of information Involve others in the planning process