Product Management

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Product Management

• Engineering
• Organisation

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References

• Babcock D L Managing Engineering and
  Technology Chapter 5
• Shannon R E Engineering Management Chapter 3

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Why is this important?

• One person can only do so much
• More than one allows-
• Specialisation
• Greater output
• Economies of scale
• More than one requires-
• Organisation

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System view

• The whole is greater than the sum of the parts
• Reductionism (Descartes)
• Break the whole down to smaller, manageable,
  parts
• Caution
• Doing a part well does not guarantee the whole
• Coordination is key
• Organisation essential to ensure holistic function

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Legal Forms of Organisation

• Sole trader
• Partnership
• Proprietary Limited Company
• Government Organisations

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Sole Trader

• Individual trading in own right
• Benefits
• Total control
• Easy to set up and close down
• Profit only taxed once
• Disadvantages
• Unlimited liability
• Difficult to raise capital
• Life and health of proprietor is crucial

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Partnership

• Like Sole Trader but gt1 owner
• More skills but divided authority.
• Ultimate liability to each and every partner
• Conflict!!

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Limited Company

• Legal entity owned by shareholders (gt1)
• Governed by Corporations Law
• Liability limited to shares in company
• Profit may be taxed twice (Co and individual)

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Government Department
Parliament
Minister
Politician
Head ofDepartment
Public Servant
Divisional Heads
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Organisational Network

• Two Network directions
• Vertical
• Horizontal

YOU
Information
Responsibility
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Basic Network
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Span of Control

• For 64 workers...
• Span 420 managers
• Span 262 managers
• Span 8-8 managers

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Basic Rules of Organisation

• Each department responsibility of ONE person
• Each person should have lt 7 reporting
• The less levels, the better (pref lt 5)
• Lines of authority must be clear
• Ideally, single
• If multiple, clear rules for use

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Progress 1
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Progress 2
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Progress 3
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Progress 4
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Product Departmentalisation
Line management of operations Staff positions for
overall control
YouManaging Director
Finance Director
Production Director
Marketing Director
RD Director
CD Cabinet Division
Disc Box Division
Production
Personnel
Production
Personnel
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Geographic Departmentalisation
Line management of operations Staff positions for
overall control
YouManaging Director
Finance Director
Production Director
Marketing Director
RD Director
Domestic Division
SE Asia Division
Production
Personnel
Production
Personnel
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People in Structures
Board of Directors
Managing Director
Finance Accounts
Manufacturing
Marketing Sales
Engineering
Product Eng
Production Eng
RD
Service
You
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Project Departmentalisation
Technical Director
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Matrix Organisation
Functionally oriented control
Project A
Project B
Logistics
Engineering and Test
Manufacturing
Quality Control
Facilities
Project C
Project-oriented control
Project D
Control E
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The Board of Directors
Board of Directors
ManagingDirector
External Directors
CompanyStructure
Internal Directors
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Role of the Board

• Directors are responsible to shareholders
• Ensure shareholders assets are protected
• Ensure shareholders assets are well used
• Directors are responsible in law
• Ensure the company obeys all laws
• Directors have a duty of care and diligence
• Must take steps to ensure they know enough
• If you plan to be a director, join the
  Australian Institute of Company Directors.

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Working in a Team

• Method for focusing skills towards result
• Requires
• Goodwill
• Democracy
• Teamwork
• Meeting procedure

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Teamwork

• Democracy
• Allows all to influence decision
• Brings all brains to bear on problem
• Who does the job influences the decision
• BUT must be ultimate decision-maker

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Teamwork

• Teamwork
• Method for implementing democracy
• Requires team leader
• Decisions must be adopted by all
• by consensus (preferably)
• If not, then accept anyway
• Team spirit, equality and cooperation important

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Meeting Procedure

• Formal procedures
• Worked out over centuries
• Ensures control, conflict resolution and
  decisions
• Has legal status, based in common law
• Enforced in important meetings (eg Board)
• Important as fall-back in other meetings

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Meeting Chair

• Elected by meeting
• Authority accepted by meeting
• Can only remove by majority vote of meeting
• Determines who speaks and for how long
• Determines what is acceptable within debate
• Controls all aspects of meeting

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Meeting Secretary

• Write record of meeting (minutes)
• Minutes must be accepted by next meeting
• Meeting agenda
• List of items for discussion at meeting
• Forms basis of meeting
• Nothing can be discussed if not on agenda

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Motion

• Proposed resolution of meeting
• Must have proposer and seconder
• Meeting can only discuss motion until resolved
• Normally, only one opportunity to speak
• Proposer has right to sum up and respond
• Can move amendment to motion
• Becomes a motion in its own right

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Voting

• Only eligible members may vote
• Vote can be accepted on voice or ballot
• Usually, simple majority wins
• If tied, chair has casting vote
• By custom, votes to preserve status quo

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Meeting Democracy

• Normal meetings (especially teams) not formal
• But
• If conflict arises, best to fall back to formal
  meeting
• Remember
• Chair
• Minutes
• Agenda
• Control of debate

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Time and Money

• Time Money
• People
• Stocks
• Equipment
• Time to Market

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Time and People

• Typically, largest part of product cost
• People are hired by period
• People are paid while on the job
• The longer the job takes, the more the people
  cost
• Factored up by on-costs
• Productive vs non-productive time
• Time actually doing the job
• Time doing other things

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Time and Stocks

• Stocks of material and components for products
• Paid from capital
• Not recouped until incorporated into products and
  sold.
• Cost is interest paid or foregone
• Accrues over time
• Old stock may be unusable
• Time destroys the asset

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Time and Equipment

• Equipment is paid out of capital
• Recouped as its use is incorporated into product
• Idle time is time in which money is not made
• Equipment can become obsolete
• Opportunity lost for further income

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Time to Market

• First to market is a big advantage
• Every month later than competitor loss of
  market share
• First into market sets norm
• Better first and not best than best and not first
• Laws of marketing - not what we may wish

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Conclusions

• Play to win
• Dont go in expecting to lose
• Organise to focus on company goal
• Ensure you have the skills to win
• If not, get them - dont go in with insufficient
• Time is money
• You need to run as fast as your competitors
• If you cant - find another event!

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Tutorial

• Discuss Assignment 1
• Forming teams
• Roles
• Reporting
• Marking