Resources Controlled by an Engineering Manager
In general, the engineering manager has a number of resources at his or her disposal, which are to be optimally applied: (1) managerial time for planning, directing, monitoring, and controlling; (2) staff with proper expertise available; (3) budget authorized to use; (4) access to corporate hardware and know-how; (5) access to external capabilities (e.g., business partners, independent inventors, and university experts); and (6) access to company- internal management information. These resources are effectively utilized to (1) define the priority of all tasks to be done; (2) determine the specific objectives of each task to be accomplished; (3) specify the constraints for each task (such as time, budget, outcome); (4) invite the assignee to suggest specific ways to accomplish the task; (5) monitor progress; (6) document the task results; (7) glean important learning from this case; and (7) offer individual feedback and evaluation.
Nature of Work by Engineering Managers
The work of engineering managers is four dimensional. Engineering managers need to interface with and manage the interactions with subordinates, as well as coordinate their own management actions with those of other managers and peer groups. They manage their own time and efforts. They also attempt to anticipate the requirements of their superiors by making recommendations for future courses of action. Figure 1.4 illustrates this four-dimensional nature of work.
Engineering managers plan, organize, lead, and control people, teams, money, technology, facilities, and other resources to achieve the business objectives of the company. To ensure company operations for the short term, they pay attention to problem solving and conflict resolution. As a rule, engineering managers do not perform the technical work themselves. Instead, they work through people. Their job is to decide what the unit, department, or company should be doing to advance the objectives of the company and then assign resources to implement their decisions.
An illustration of managerial concern is an issue related to product development. Some companies initiate new product development on a market-driven basis. First, they use market surveys and customer feedback to define product concepts of potential interest to customers. Then they secure resources to develop the product concepts, manufacture the
Four-dimensional work of engineering managers.
prototypes, conduct tests of a prototype to further improve design details, and offer customer services to market the products involved. Doing so allows them a high probability of achieving commercial success. Other companies adopt a technology-driven approach. They first invent and develop new technology, and then they incorporate the resulting inventions and innovations in products that they hope to sell to the marketplace. Each of these approaches has advantages and disadvantages. Surveys show that both approaches have yielded successes and failures.
Another example is the potential difference in opinion between departments when deciding on "buy versus build" options and on setting task priorities. Still another area of potential disagreement is the choice about the level of standardization in product design that reduces cost while allowing a sufficient level of innovation to enhance competitiveness. In general, enforcing a high level of standardization with strict rules and guidelines tends to impede creativity and innovation, as illustrated by Figure 1.5. Managers are expected to constantly interact and work closely with other managers to resolve such differences.
For those engineers who elect to become managers, there are skills that can be readily learned to make them more efficient and effective. These include time management, work habits, people-related skills (such as team building, communications, and motivation), and use of decision support tools (e.g., multicriteria decision-making [Triantaphyllou 2010], what-if analysis by modeling, risk analysis, Monte Carlo simulation, forecasting, statistics, regression, linear programming, optimization, and office technologies).
The company wants to develop a new product to preemptively enter the marketplace. Current information from marketing is sketchy, and the market size cannot be predicted accurately. Indications are that foreign imports are about to foray the market, causing the company to lose the precious opportunity of a preemptive entry.
Should the company initiate a product development program now or wait for more marketing information? Are there other options available to the company?
Yes, there is a third option: The company can act as a distributor and import the foreign product itself, but with its own brand name. This will allow the company to gauge the market acceptance of a low-quality and low-price product. If the results show that
customers like the product and the market size is large, then the company can continue importing or develop a low-cost alternative to compete.
Selling a foreign product under the company name requires that the company enter into a private-label production contract with the foreign producer. Typically, such an arrangement includes some of the following elements:
- • The contract is good for a predetermined period (e.g., two years) and renewable with mutual consent. The company agrees to pay a unit product cost of x dollars for at least y units per year. The foreign producer agrees to hold the product defect rate at or below z per thousand. The foreign producer remains an exclusive subcontractor to the company for the product types in question during the contract period.
- • The company respects all proprietary design and other know-how of the foreign producer. The company is obliged not to use any proprietary design of the foreign producer for the development of its own product or for use by its new production partners.
- • The company is responsible for marketing, distributing, selling, and serving the product in the target market (e.g., the United States). The foreign producer agrees to upgrade product design, based on the marketing inputs of the company.
- • The company strives to invest in the foreign producer for creating the next generation of products. The foreign producer has the first-refusal rights to accept such investment (i.e., funds and technology).
- • Each party can cancel the arrangement after an initial period of collaboration. The foreign producer can go to someone else for marketing the product in the target market. The company may develop its own products or engage another foreign producer as a subcontractor. Thus, selling the foreign product does not preclude the company from selling a similar product after the contract has expired. Companies change subcontractors all the time.
Such a private-label production arrangement is typically a win-win arrangement. The company can preemptively explore the market—that is, test the market and get valuable feedback from customers regarding useful product features—without spending a lot of resources. The foreign producer achieves instant profitability that is assured for the contract period, plus the potential of additional future investment from the company for the next-generation product design and production.