Management and engineering are two main topics for all organizations. In the article, we will discuss both topics in detail.
The role of management for industrial organizations
Management can be defined as the implementation of continuous management influence, which is expressed in maintaining optimal proportions between all elements of the managed subsystem of the enterprise and its available resources to achieve operational, tactical, and strategic goals. Resources include all material, financial, technological, and human components.
The main functions of management are:
Planning – provides for the definition of goals and objectives for implementation, as well as determines the means and ways for their implementation.
Organization – helps to achieve the goals by creating an appropriate organization of labor, production, and management.
Management – regulates the work and directs the efforts of staff.
Control – provides for monitoring of teams of people and is an activity to detect deviations from established norms and rules. In the presence of deviations, the specific reasons for their occurrence are analyzed and the need for regulatory impact is determined.
The role of engineering for industrial organizations
The essence of engineering is expressed in the distribution and combination of different types of resources of the industrial enterprise (labor, technical, material, energy, information) in space and time to produce a certain amount of production. It defines the general scheme, principles, methods, and means for carrying out the production activity in the industrial enterprise and has an important role in its design and improvement.
The object of study is production engineering, the production process, and in particular its construction in space and its implementation in time. Reference: “Reorganization of business processes in the organization”, https://w-europe.org/reorganization-of-business-processes-in-the-organization/
The aim is to establish optimal proportions between the different types of resources of the enterprise to achieve the pre-planned production result at a minimal cost.
The design of the managed subsystem of the industrial enterprise – is decided at the creation of new industrial enterprises or the expansion of existing ones. This is a one-time activity, but too labor-intensive.
Improvement of the managed subsystem of the industrial enterprise – it is necessary to continuously improve, as the external and internal conditions under which it operates change.
Ongoing determination of the necessary types of resources and provision of conditions for their effective use – for the production of different types of products or services it is necessary to periodically determine the necessary resources.
Participation in the design and improvement of the managed subsystem – the leading role is played by the management, respectively the engineering has a secondary role, expressed in the design and improvement of individual elements or activities of the managed subsystem.
Management and engineering complement each other in the creation, operation, and improvement of the industrial enterprise. Reference: “Business process reengineering”, https://mstsnl.net/business-process-reengineering/
Methods for analysis of industrial organizations
The analysis of the industrial enterprise is a complex process in which different approaches can be used depending on the position of the researcher, the time for conducting the analysis, the possibilities for processing the received information, the necessary complexity and thoroughness of the research, etc. The following two approaches are most commonly used:
System approach – in it the organization is considered as a unit of interconnected and interacting parts, united by a common goal. The activities in which the research manifests itself are systematic research, systematic analysis, systematic explanation, systematic design, etc.
This approach is characterized by the fact that it considers phenomena and processes based on the principle “from general to private”.
Situational approach – based on the statement that the effectiveness of management depends on the competitive situation. Improving efficiency depends mainly on finding and implementing the right combination of strategy, technology, commitment, and staffing needs on the one hand and the specific impact of the environment on the other.
At the same time, a very important point in the development of projects for the improvement of an industrial enterprise is to carefully and thoroughly analyze the situation in the internal and external environment.
Methodology for the analysis of the state of industrial organizations
Public and business organizations are created and exist to meet various human needs, such as education, culture, transport, goods, services, and more. Regardless of the subject of activity, there are many common characteristics between the individual organizations:
Each of them is an open system, uniting the efforts of a group of people, provided with the necessary resources to achieve certain goals, distributed and coordinated through a structure-guided and controlled by management.
The transformation of input resources into a final product allows the organization to be represented through the universal system model “input-process-output”, and its efficiency to be measured through the output/input ratio.
Organizations are created by people
Organizations are created by people, in them, they unite their efforts for a joint activity to obtain a total result higher than the sum of the results of their activity. i.e. in the organizations, a synergistic rule is realized – combining the efforts and resources is done to obtain a higher economic result.
The main goal of the production enterprise is the production of the agreed quantity of products for consumer or investment purposes or the performance of the agreed volume of services within a predetermined period to satisfy specific customer requirements and needs.
According to the commercial law, the enterprises are: sole trader, sole proprietorship with limited liability or sole proprietorship joint-stock company, general partnership, limited partnership, limited liability company, joint-stock company, or limited partnership with shares, state enterprise, cooperative.
Analysis of the inputs and outputs of the industrial enterprise
To analyze the inputs of the production enterprise, an analysis of the main resources must be made:
Human resources – the people of an enterprise are the most important resource, on the provision and use of which depends on its success and functioning;
Financial resources – this is the capital of the company, which is an expression of the total available economic strength of the enterprise, which according to its goals and needs is invested in various forms of property. It serves to provide it with property, which is divided into two main forms: fixed and short-term assets;
Material resources – one of the main resources for the activities of enterprises. The concept generally includes raw materials, materials, energy carriers, and semi-finished products, from which ready-to-eat products are obtained by additional processing, as well as materials that do not materially enter the manufactured products but are used in the production process; Reference: “Business process reengineering”, https://mstsnl.net/business-process-reengineering/
Information resources – good information provision is the basis for making effective decisions with considerable risk. Information is extremely important for all elements in terms of marketing, finance, and staff.
The analysis of the outputs of the industrial enterprise takes into account the benefit and application of the manufactured product, to what extent the customer is satisfied with the qualities of the product, and whether these qualities give a competitive advantage to the product.
The market must be clearly defined for the business organization. You need to know very well the size of the market, the requirements of customers in this market, the presence of competitors, the prices of goods in the target market, etc.
Markets can be differentiated by different characteristics such as type of goods sold, geographical region, demographic characteristics, which customers are people or other companies, and others.
Analysis of the external environment
The external environment is the set of external conditions and constraints in which the organization operates. External factors are those components of the external environment through which it affects the functioning of the business organization.
External factors have a direct and indirect effect on the system. The factors have a direct effect: consumers, suppliers, competitors, and regulations.
Consumers are those components of the external environment whose needs the organization satisfies through the results of its economic activity;
Providers are individuals, organizations, and institutions that offer on the market and provide the necessary resources for the organization to carry out its overall activities;
Competitors are business organizations with similar goods and business resources, which therefore limit the organization’s access to relevant markets and cause a redistribution of consumers and suppliers;
The normative-legal regulation includes all laws, by-laws, regulations, ordinances, decrees, decrees, decisions, norms, etc. of international, state, and municipal bodies, which determine the rules according to which the economic activity is carried out and the relations between the organizations are settled.
External factors with indirect action are: political and economic situation, technological development, socio-cultural relations, regional relations.
The analysis of the external environment goes through several stages, which allow making a comprehensive assessment of the nature of the external environment of the business organization.
Analysis of the internal environment
The internal environment requires an analysis of the state of the enterprise, and it must identify its internal weakness and strengthen its internal strength.
There must be comparability between market requirements and the competence of the enterprise. It must be able to mobilize its resources and develop the skills needed to successfully implement the strategy.
The more important internal conditions are existing products; knowledge of the market and market opportunities; existing users and relationships with them; human resources – work skills, motivation, retraining; natural resources – available buildings, equipment, processes, and their location.
The main goal of the internal environment is to determine where the opportunities and threats are for the company, to determine how resources can be used more effectively to neutralize threats and utilize opportunities.
The study of the internal environment provides a basis for responding adequately to the constantly changing conditions, as well as to the competitive actions by developing a strategy.
The co-operating organizational components, the desired results, and the processes of their achievement can be grouped into several main internal variables: goals, collaborators, structure, technology, and tasks.
The goals of the organizations
The goals of the organizations are to satisfy public and individual needs with goods, subject to their economic activity. The management of the organization must strive to achieve the maximum possible match “goals – results”;
Employees are part of the human resources that come from the external environment, selected according to certain criteria following the current rules and relationships of the labor market and the specifics and requirements of the relevant activities in the organization;
The structure of the organization is the totality of its components and the relatively constant connections between them, through which it remains operational and stable in different economic and managerial situations.
The tasks are prescribed works, to varying degrees differentiated parts of the overall activity of the organization, which are performed in a predetermined period in a predetermined manner and by a predetermined contractor;
Technology is a specific, specifically used way to perform the tasks of employees, corresponding to the achievement of the goals of the organization. They can be production, management, and information.