Engineering Management Flashcards
Engineering Council
UK Regulatory Body for Engineering Profession. Publishes UK-SPEC
UK-SPEC
defines qualifications and competencies for legally protected titles
UK Professional Bodies
may accredit degree programs for meeting academic requirements for recognised titles
International Accreditation Agreements
for recognising mutual equivalence in academic programs. Seoul Acord for Computing. Washington Acord for Engineering
Topchik’s 5 Stages of Personal Growth
Attention Getting
Flying Blind
Steadiness
On the Rise
Doing
Mono-tasking
Focus on one task in full immersion leading to sense of achievement and happiness unlike multi-tasking
Eisenhower Principle
Time management and prioritisation framework for categorisating tasks
Two Axis: Importance & Urgency
| Do now | Set Time Aside
————————————–
| Delegate It |Question why you are doing it.
Covey’s 7 Habits
Be Proactive.
Begin with the End in Mind.
Put First Things First.
Sharpen the Saw.
Think Win-Win.
Seek First to Understand, then to be Understood.
Synergise.
SMART Goals
Specific,
Measurable,
Achievable,
Realistic,
Time-bounded
Entrepreneurship Characteristics
More Control, high risk, high reward
Intrapreneurship
Less control, less risk, less reward. More Funds
Gibrat’s Law
Growth rate of a firm is independent of the size at the beginning of an observation period suggesting it is random.
Growth occurs in random shocks with no systematic determinants.
Studies find its true for larger firms but smaller firms are more volatile.
Therefore, a good approximation
Edith Penrose’s Theory of Growth
Growth is from effective management i.e. managers become more efficient with experience, taking less time to do tasks, freeing up managerial resources. Fast growing firms have higher operating costs, managers focused too much on growth divert attention from efficiency, increasing cost. Above the optimal growth rate, operating costs increase
Robin Marris’s Theory of Managerial Capitalism
An optimal growth rate is a balancing act that maximises reinvestment while still providing satisfactory dividends to shareholders
Fundamental Accounting Equation
Assets = Liabilities + Equity
Assets are what the business owns.
Liabilities are what the business owes to third parties.
Equity is what the business owes to its owners (profit is equity)
Double Entry Bookkeeping
Balance of accounting equation is kept by debiting and crediting each transaction
Going Concern
Companies will continue normal operations and financial obligations are fine
Financial Accounting
Publishing financial information to stakeholders for informed decisions
Management Accounting
Focuses on providing financial information for internal use to monitor, manage and support decision making
Top-down Budgeting
Senior managers tell lower levels what to expect and leave them to work out details
Bottom-up Budgeting
Lower levels tell senior managers what they can achieve and what they need
Participatory BudgetingApproach
Budgets are negotiated between different levels in the organisation
International Financial Reporting Standard (IFRS)
Data must be relevant and faithful. Followed in UK and EU. USA follow GAAP
Overhead
Costs required to run a business that cannot be directly attributed to any specific business activity
Traditional Costing System (TCS):
Calculates the total overheads and shares the figure proportionally with respect to a common cost driver. Prone to misallocation as only using a single parameter is not realistic for the causes of costs
Activity Based Costing (ABC)
- Suppose total labour costs are £6M and total machine costs are £10.5M. Product A uses 100k labour hours and 200k machine hours. B uses 200k and 150k. So labour costs are £20 per hour and machine costs are £30k per hour. Product A pays £2M labour costs and £6M machine costs
Manufacturing Learning Curve
Manufacturing improves with experience and scale i.e. labour efficiency increases with repetition, better equipment is available etc.
The Value Chain
Framework to analyse and understand activities and processes in a company that contribute to its overall value. Inward Logistics, Operations (manufacturing), Marketing & Sales, Distribution, Follow-up Services. Identify cost reductions and where to outsource.
Core Competency
Combination of multiple resources and skills that distinguish a firm in the marketplace. It should be difficult to imitate
Investment Appraisal
Financial analysis process to evaluate profitability and risks of an investment opportunity
Capital Investment Appraisal
Decide long-term investments to take on.
Time Dependent Monetary Value
Future Value = n × (1 + r/100)^y.
Present Value = n / (1 + r/100)^y.
Discounting
Process of translating future value of money to present value
- Payback Method:
Investment Proposal Evaluation Methods
Ignores time dependent value of money. Calculates number of years before cumulative cash for exceeds initial investment to identify short payback periods
- Net Present Value (NPV):
Calculates expected monetary gain or loss from a project by discounting all future cash flow to the present point of time. Compares to initial investment
Boston Consulting Group (BCG) product Portfolio matrix
Axis of market share and growth.
High both: Stars.
High share, low growth: cash cows.
High growth, low share:
Question marks. Low both: Dogs
Multiple Criteria Decision Making (Pareto)
Framework for selecting best option when multiple attributes to consider.
* Pareto Optimal Solution: No adjustments possible without one criterion becoming worse
Cooperative Game Theory
Used to ensure stability (no coalition of agents should want to deviate from solution) and fairness (agents are rewarded for what they contribute to the group)
Stable Allocation
Distribution of costs and benefits among agents such that all parties gain and are satisfied with the collaboration . Stability satisfies: Efficiency (summation of allocated cost equals total cost) and Rationality (Allocated costs should be less than or equal to their cost if they defect the cooperation)
Taylor
Workers should be matched to jobs responsibly based on abilities and expected output.
Hawthorne Experiments
No correlation between productivity and working conditions. Instead, belonging to a group creates status and boosts morale. Productivity increases when workers are treated with respect and given autonomy.
Statistical Quality Control
Monitor and improve quality of products and processes with statistical methods using detailed measurements.
Six Sigma Approach
Reduce manufacturing failures to 1 in a million or less by having at least six standard deviations from the mean (3 either side) occur before a process results in a defect. Standard depends on industry
Bathtub Curve
Observed failure rates, early failure. Constant rando failure. Wear out failure.
Deming’s Definition of Quality
: Non-faulty systems
Juran’s Definition of Quality
Fitness for use
Crosby’s Definition of Quality
Conformance to requirements
Feigenbaum’s Definition of Quality:
Customer satisfaction
Kaizen
Philosophy of continuous improvement through stepwise improvement
Waler Shewarts PDCA:
Plan, Do, Check, Act.
Project
A series of tasks with a specific objective, have defined start and end dates (temporary), and consume resources.
Programme
Series of project too large to constitute a single project
Project Motivations
Market demand. Customer requests. Technological advance. Legal Requirement.
Project Success
Determined by time, budget, performance, and client acceptance.
Project Issues
Commonly, little planning, unrealistic timescales ,conflicting objectives, poor cost estimation. No consideration of risks or contingency plan
Project Manager
Leads and oversees project development process
Internal Stakeholders
Top management, accounting, functional managers, team members
External Stakeholders
Clients, competitors, suppliers, intervenor groups (political, consumer, environmental
