Chapter Three – Planning Technical Activities

Learning Outcomes:
At the end of the session, the student is expected to:
1. To define planning and appreciate its importance in their profession.
2. To classify planning depending on the management level and its use.
Pre-test:
1. Why is planning an important activity for engineer managers?
Initiation:
If managing an organization is to be pursued vigorously, planning will constitute the most
important activity. Managers who plan are afforded with the opportunity to carefully analyze situations
which directly contribute to effective decision-making
The engineer manager, regardless of his management level, will have to devote some his time to
planning. Why and how to make plan is to be discussed in this chapter.
Discussion:
I. Introduction
- A plan provides a methodical way of achieving desired results. It serves as a guide in
the implementation of complex activities.
- Various expert defines planning as follows:
i. “The management function that involves anticipating future trends and
determining the best strategies and tactics to achieve organizational
objectives.” – Nickels et.al.
ii. “The selection and sequential ordering of tasks required to achieve and
organizational goal.” – Aldag and Stearns
iii. “Deciding what will be done, who will do it, where, when, and how it will be
done, and the standards to which it will be done.” – Cole and Hamilton

II. Planning at Various Management Levels

- Since engineer manager may be assigned at different management level, it will be
useful to know the different aspect of planning at each management level.
- Planning activities done at each management level are as follows:
i. Top Management Level – Strategic planning
 Strategic Planning
- 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 achieve those goals.
- Its long-term planning where the whole organization is
considered, specifically its objectives and resources.
- A strategic plan usually has a range of one to ten years and
prepared by top management officers like Chief Executive
Officer, President, Vice Presidents, General Manager, and
Division Heads.
 ii. Middle Management Level – Intermediate planning
 Intermediate Planning
- Intermediate Planning refers to the process of determining the
contributions that subunits can make with allocated resources.
- An intermediate plan usually has a range of six months to two
years and prepared by middle management officers like
Functional Managers, Product Line Managers, Department
Heads.
- 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.

iii. Lower Management Level – Operational planning

 Operational Planning
- Operational Planning refers to the process of determining how
specific tasks can best be accomplished on time with available
resources.
- An operational plan usually has range of one week to one year
and prepared by lower management officers like Unit Managers
and First Line Supervisors.
- It must be prepared in support of intermediate and strategic
plan.

III. The Planning Process

- A planning process consists of various steps and may be depending on the
management level. Generally, planning involves the following:
i. Setting Organizational, Divisional, or Unit Goals
- Setting goals is the first step in preparing a plan. It provides a sense of
direction for the organization, division, or unit
- A goal may be defined as the “precise statement of results sought,
quantified in time and magnitude, where possible.”

ii. Developing Strategies or tactics to Reach Goals

- After setting goals, next step is to devise ways to realize it. This is
where strategies and tactics are developed.
- A strategy may be defined as “a course of action aimed at ensuring
that the organization will achieve its objectives.”
- A tactic is a short-term action taken by the management to adjust to
negative internal or external influences. They are formulated and
implemented in support of the organization’s strategies.
 iii. Determining Resources Needed
- After devising strategies or tactics, next step is to determine the
human and nonhuman resources required by such strategies or
tactics.
- The quality and quantity of resources needed must be correctly
determined.
- To satisfy strategic requirements, a general statement of needed
resources will suffice. (Example: Cost Estimate and Bill of Quantities)

iv. Setting standards

- A standard may be defined as “a quantitative or qualitative measuring
device designed to help monitor the performances of people, capital
goods, or processes.”

IV. Types of Plans

- Plans are of different types. They may be classified in terms of functional areas, time
horizon, and frequency of use.
i. Functional Area Plans and its Parts
- These are plans prepared according to the needs of different
functional areas. The types of functional area plans are the following:
1. Marketing Plan
 This is the written document of blueprint for
implementing and controlling an organization’s
marketing activities related to particular marketing
strategy.
 Contents of a Marketing Plan
1. Executive Summary – presents an overall view of
the marketing project and its potential.
2. Table of Contents
3. Situational Analysis and Target Market
4. Marketing Objectives and Goals
5. Marketing Strategies
6. Marketing Tactics
7. Schedules and Budgets
8. Financial Data and Control

2. Production Plan
 This is a written document that states the quantity of
output a company must produce in broad terms and by
product family.
 Contents of a Production Plan
1. Amount of capacity the company must have
2. Number employees required
3. Quantity of materials that must be purchased
 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.
 Contents of a Financial Plan
1. Analysis of the firm’s current financial condition
2. Sales forecast
3. Capital budget
4. Cash budget
5. Set of projected financial statement
6. External financial plan

4. Human Resource Management Plan

 It is a document that indicated 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.
 Contents of a Human Resource Plan
1. Personnel requirements of the company
2. Plans for recruitment and selection
3. Training plan
4. Retirement plan

ii. Plans with Time Horizon

- Plans with time horizon are the following:
1. Short-range Plans – these are plans intended to cover a
period of less than a year. First-line Supervisors are mostly
concerned with these plans.
2. Long-range Plans – these are plans covering a time span of
more than a year. These are mostly undertaken by middle and
top management.

iii. Plans According to Frequency of Use

- According to frequency of use, plans may be classified as:
1. Standing Plans – these are plans that are used again and again,
and they focus on managerial situations the recur repeatedly
and can be further classified as:
 Policies – they are broad guidelines to aid managers at
every level in making decisions about recurring
situations or functions.
 Procedures – they are plans that describe the exact
series of action to be taken in a given situation.
  Rules – they are statements that either require or forbid
a certain action.
2. Single-Use Plans – these plans are specifically developed to
implement courses of action that are relatively unique and are
unlikely to be repeated and it may be further classified as
follows:
 Budget Plan – according to Weston and Brigham, as
budget plan is “a plan which sets forth the projected
expenditure for a certain activity and explains where
the required funds will come from.”
 Program Plan – is a single-use plan design to coordinate
a large set of activities.
 Project Plan – is a single-use plan that is usually more
limited in scope than a program and is sometimes
prepared to support a program plan.

V. Parts of the Strategic Plan

- The strategic plan must contain the following:
i. Company or Corporate Mission – refers to the “strategic statement that
identifies why an organization exists, its philosophy of management, and its
purpose as distinguished from other similar organizations.
ii. Objectives and Goals
iii. Strategies

VI. Making Planning Effective

- Planning may be made successful if the following are observed:
i. Recognize the planning barriers
ii. Use of aids to planning
- According to Plunkett and Attner, the planning barriers are as follows:
i. Manager’s inability to plan
ii. Improper planning process
iii. Lack of commitment to the planning process
iv. Improper information
v. Focusing on the present at the expense of the future
vi. Too much reliance on the planning department
vii. Concentrating on only the controllable variables
- Among the aids to planning that may be used are:
i. Gather as much information as possible
ii. Develop multiple sources of information
iii. Involve others in the planning process

VII. Summary
- Technical activities, like other activities, require effective planning.
- A plan is a methodological way of achieving results.
 - Planning is undertaken at different management levels.
- Various steps are required in the planning process depending on the management
level.
- Plans may be classified in terms of functional areas, time horizon, and frequency of
use.
- Plans consist of various parts that the engineer manager must be familiar with.
- Plans can be made effective by recognizing the planning barriers and making use of
aids of planning.

VIII. Assessment
i. What are the steps in the planning process?
ii. What is a production plan? What are its components?
iii. What are the barriers to planning?
IX. References:
Engineering Management, Roberto G. Medina