Abstract The capability to develop high quality prod-ucts and processes constitutes the competitive advantage of many engineering companies. In production management, numerous tools exist for improving both effectiveness and efficiency. This study explores the applicability of these pro-duction management principles to engineering management. An academic focus group and engineering managers in seven German companies were interviewed and the application of several methods was identified. The outcomes confirm that the application of production management principles to en-gineering processes is related to the degree of novelty that is inherent to engineering projects in companies. Furthermore, the application of production-based methods needs to be embedded in a structured engineering process to be useful in a company. However, most engineering management ap-proaches focus on effectiveness rather than efficiency.

Keywords Engineering Management, Production

Management, Product Development, Process Development

I. INTRODUCTION

The engineering process plays an important role in technology-based companies. Their engineering and manufacturing processes must be flexible in order to fulfil individual customer requirements and to contribute to the companys competitive advantage [1]. Furthermore, for engineering processes, lead-time and productivity are important factors to achieve customer satisfaction [2]. In addition, the respective engineering activities have to be efficient [3] [4]; this efficiency requirement has become even more important during the recent economic crisis [5]. Overall, it is, therefore, implied that engineering re-sources have to be both effectively and efficiently de-ployed during development and engineering activities. The need to utilise engineering resources effectively and efficiently is bolstered when there is a scarcity of en-gineers, as is the case in Germany. The German economy, currently ranked fourth in the world [6], is dominated by Hidden Champions [7], which are mostly small or me-dium enterprises (SMEs) and family-owned businesses. These companies are often leaders in their specific niche market. They have achieved success through flexible, specialised and speedy fulfilment of customer require-ments and delivering high quality products [8]. Despite the current economic situation, these companies are still suffering from a shortage of 44,000 academically skilled engineers. This shortage created an estimated economic loss of 6.6 billion in 2009 [9]. The required engineers are usually responsible for development and engineering ac-tivities [10]. Increasing the engineering capacity is diffi-

cult and impractical, since other German-speaking coun-tries, like Switzerland, are experiencing a similar scarcity of engineers [11]. Another possible solution, however, could be the application of production management prin-ciples to engineering processes in order to increase the efficiency and effectiveness of the engineering resources that are available. Production management has developed an extensive body of knowledge in how to increase effectiveness and efficiency. Several authors have suggested the application of production management principles to engineering man-agement [12], e.g. Just in Time [13] or the adoption of lean principles [14] [15]. The objective of this paper is to investigate whether German SMEs have already adopted principles from production management to their engineer-ing processes. Furthermore, this study explores what the conditions for applying these principles are and how they might be applied. The results were achieved during a two-step research process. First, a focus group meeting with several academics with a background in engineering or production management was organised. Interviews with managers in seven German engineering companies were then conducted. Although explorative, this study repre-sents the first systematic approach to investigate the ap-plication of production management principles to engi-neering management. This paper describes the findings of this qualitative study. The next section describes briefly the different en-gineering processes and their similarities to manufactur-ing processes. The research methodology is then de-scribed in section three, which is followed by the out-comes in section four. The findings of the study are dis-cussed in the section after that, and the final section pro-vides conclusions and issues for further research.

II. MANAGEMENT OF ENGINEERING PROCESSES

A thorough understanding of the development and engineering processes is necessary to assess the applica-bility of production management principles; hence, a ge-neric reference model has been developed for products based on systems theories [16] [19], see Fig. 1. The pri-mary engineering process can be divided into different stages, which transform market demand and customer requirements into instructions and specifications for prod-ucts, processes or systems [17]. The higher process and evaluation level layers, i.e. R&D management, corre-spond with a higher degree of novelty [18], which implies potentially more iterations and requires more creativity.

Application of production management principles to engineering processes: An explorative study

Johannes Hinckeldeyn1, Rob Dekkers2, Jochen Kreutzfeldt1 1Department of Mechanical Engineering and Production, University of Applied Science, Hamburg, Germany

2Business School, University of the West of Scotland, Paisley, United Kingdom Corresponding author: Johannes.Hinckeldeyn@haw-hamburg.de

2 of 5

As a result, these layers will not be considered any further in this paper, and the generic reference model of the pri-mary engineering process and the information flow to manufacturing will only serve as the basis for this study. In addition to the information flow from engineering to material supply, manufacturing and deployment, a feedback loop connects these processes. The creation of a product or service starts with the supply of materials and progresses to the product lifecycle, including service, and finally ends with disposal. During all these stages, obser-vations may be made that result in feedback to the proc-esses and may ultimately initiate engineering activities. The feedback loops consist of four tiered layers and fol-low the evaluation mechanisms of the steady-state model in [19]. Hence, engineering processes not only transform customer requirements into information for the primary production and development process, but they also cover the incorporation of internal feedback into existing prod-ucts and processes. Based on the generic reference model, it is now pos-sible to compare engineering and manufacturing proc-esses (Table I). Engineering processes are more compara-ble to job shops than flow shops according to [20]. Due to the specialisation of engineers, engineering departments are often functionally organised [21]. This type of organi-sation fosters the flexibility necessary for the fulfilment of individual customer requirements [22]. However, job shops are known to have a complex planning process [23] but limited productivity [24], which contradicts the effi-ciency and productivity objectives of production [25] and engineering [26]. Hence, it might be expected that the traditional organisation encourages the flexibility neces-sary for dealing with a wide range of customer require-ments but at the same time does not offer the productivity necessary to deal with a scarcity of engineering resources.

To improve productivity and control of engineering activities, solutions have been put forward in industry. An initial condition for productivity and control seems to be the existence of a structured engineering process. Several authors and organisations have developed ideal types of engineering processes. Examples are the Stage-Gate-Process [27] and the VDI-guideline 2221 [28]. Second, the use of Order Entry Points [12] [29], modular designs and product platforms [30] [31], [12] has been advocated to counter the impact of customisation for the engineering and manufacturing processes. This might be considered a known approach in industry, even though its impact has not been fully exploited for engineering management [12]. A third approach could be multi-project manage-ment [32] [33], since projects are the preferred form of organisation in engineering [34]. However, multi-project management in engineering has not applied specific modes of control and no structured solutions for effi-ciency increase has been developed to date [35]. These facts imply that these three solutions address mostly ef-fectiveness as opposed to efficiency. This inference also implies that efficiency might only be achieved through adequate control and planning. Plan-ning within the production process can be differentiated into three levels: operational, tactical and short-term plan-ning, similar to engineering [36]. The control of the pro-duction process focuses usually on the timely fulfilment of customer requirements. To meet these, throughput time and process speed are important factors [37]. Assuming the similarity between both production and engineering processes (both viewed as a job shop), it must be investi-gated, whether production management principles can be adopted for engineering management problems, while accounting for differences (iteration, creativity and nov-elty).

Fig. 1. Generic reference model of the engineering process.

3 of 5

III. METHODOLOGY

This explorative study seeks to find answers to three research questions: i. What is the validity of the generic reference model

(including novelty, iterations and feedback loops)? ii. To what extent can engineering and manufacturing

processes be compared for the purpose of control and planning?

iii. Which methods taken from production management could be and are applied in engineering management?

For this study, two explorative research methods, focus group meetings and problem-centred interviews, were used to explore the application of tools and princi-ples from production management to engineering man-agement. A focus group1 meeting [38] [39], two hours long, was held with German academics. In addition, engi-neering managers from seven small and medium-sized companies in Germany were interviewed. The companies in the convenience sample were chosen in such a way that all stages of Fig. 1 were covered. Table II displays the companies size and in which engineering process steps each is involved. Problem-centred interviews [40] were introduced. The average duration of an interview was one hour. The accumulated data of both methods was evalu-ated by a qualitative content analysis [41], and the results are presented in the next section.

1 The Academic Focus Group is labeled in tables by the letter A.

IV. RESULTS

During the focus group meeting, the generic reference model was confirmed as well as the assumed differences between engineering and production. Since all partici-pants had experience with the management of engineering processes, it was also asserted that the skill level of indi-vidual engineers constitutes a limiting factor. Further-more, the focus group meeting confirmed the possibility for applying production management approaches to engi-neering management albeit that the participants empha-sised the impact of novelty and creativity on the capability for planning and control. All seven interviewees were requested to report methods from production management, which they have adopted for engineering management problems. The find-ings are shown in Table III. The columns show the ap-plied production management approaches that were deemed useful by the interviewees. The results can be classified into four areas: (i) quality management, (ii) standardisation of processes, (iii) planning and (iv) con-trol. All the interviewees from industry identified quality management as an important approach to their engineer-ing processes. Thus, they try to learn from production management. In addition, some engineering managers reported the existence of a quality assurance department for engineering processes; these departments are respon-sible for correcting and proofreading engineering infor-mation. To assure the quality in engineering, some interview-ees have introduced a structured engineering process. To-gether with quality management and standardisation, both taken from production management, mainly address effec-tiveness. For planning, a structured engineering process ap-pears to be the foundation; additionally planning is some-

TABLE II INVESTIGATED ENGINEERING COMPANIES

No Branch Staff Engineering Process Step

1 Tooling for Plas-tics Industry 5 Product Design, Engineering, Production Engineering

2 Tooling for Metal Bending 6 Product Design, Engineering, Production Engineering

3 Plant Engineering for Refrigeration 10 Engineering, Process Engi-neering

4 Automated Tool-ing Machines 200 Product Design, Engineering, Production Engineering

5 Automotive Sup-plier 100 Product Design, Engineering, Production Engineering, Production Process Support

6 Food Industry 500 Process Design, Process Engineering, Production Process Support

7 Production Engi-neering Consult-ing

180 Production Engineering, Production Process Support

A Academic Focus Group 8 Product Design, Engineering, Production Engineering, Product Process Support

TABLE I COMPARISON OF ENGINEERING AND PRODUCTION PROCESSES

Parameter Engineering Process Job Shop Flow Shop

Input Information, expertise, per-sonal capacity

Information, personal and machine capaci-ty, material

Information, personal and machine capacty, material

Output Information Products and spare parts Products and spare parts

Recurrence of Activities

Low to medium

Low to medium

Medium to high

Recurrence of Parts

Low to medium

Low to medium

Medium to high

Buffer Man-agement

Engineering outcomes are services, not storable

Buffers are possible in all stages of the process

Buffers are possible in all stages of the process

Scheduling Low to medium preci-sion

Medium preci-sion in scheduling

High precisionin scheduling

Reasons for Bottlenecks

Shortage of capacity, exper-tise and infor-mation

Shortage of information, capacity or material

Shortage of information, capacity or material

Sequence of Operations

Iterative and non-directional

Iterative and non-directional Sequential

Degree of Automation Low

Usually me-dium Usually high

4 of 5

times based upon production management principles. One interviewee mentioned the necessity of a segmented engi-neering process for planning and control dependent on the customer of the engineering order. Furthermore, engineer-ing projects often benefit from lessons learnt from earlier projects (sometimes by parameterisation). These experi-ences can also be used for continuous improvement of the engineering processes. Another solution is to plan based on specialisation, as found in job shops. An additional way is to differentiate between several levels of planning accuracy, akin to planning levels in production. An appli-cation of decentralised planning solutions, similar to autonomous work groups, could also be found. However, the overview of applied approaches might be incomplete, due to the limited number of interviews. Control approaches were less common than planning approaches. This might be due to the lack of a structured engineering process in some companies, which is neces-sary for control modes. However, cases of lean manage-ment, KANBAN principles, and value stream mapping were documented. An interesting perspective came about from the food and automotive interviewees whose areas are highly regu-lated. Participants from these branches argued that they need to structure and standardise their engineering proc-esses to meet regulations and the requirements to docu-ment their internal processes. The regulatory pressure upon these companies might even call for the application of production management principles to engineering; however, this specific area needs further investigation.

V. DISCUSSION

The possibility to apply production management principles to engineering management was positively evaluated by all participants. This finding agrees with existing literature, e.g. [12] [14]. However, approaching

engineering exactly like production was accepted by no one. The reason for this is the degree of novelty that is inherent to engineering projects; an increasing degree of novelty usually limits the possibility to apply previous experience associated with recurrence. This finding im-plies that principles from production management are only applicable to engineering if they can account for the novelty required. An initial condition for the application of production management principles is the existence of a structured engineering process, as also proposed by [16] [17]. The engineering process should be structured in a similar manner to the production process. This requirement is important, since even production management principles can only be applied to production if processes are struc-tured and specified. Additionally, the prevalence for methods related to quality management indicates that most companies are seeking to increase effectiveness of engineering manage-ment. In this way, they aim to contribute to overall pro-ductivity of both engineering and manufacturing. How-ever, this emphasis might indicate the potential contribu-tion of efficiency measures to increase productivity. Other known solutions, like Order Entry Points and multi-project management, aim to increase effectiveness over efficiency. Hence, this leads to the inference that the im-pact of efficiency measures through planning and control is under-researched.

VI. CONCLUDING REMARKS

The objective of this study was to explore the applica-tion and applicability of production management princi-ples to engineering management. According to the find-ings, it is possible to draw parallels between production and engineering management. By using production man-agement methods, effectiveness and efficiency in engi-neering can be increased and therefore support compa-nies, allowing them to enhance their overall productivity. A structured engineering process is critical for the application of production management measures, al-though the degree of novelty is a limiting factor; and that structuring should facilitate planning and control. How-ever, the outcomes of the focus group indicate that meas-ures for effectiveness prevail above those for efficiency, consistent with the limited literature available on this topic. Yet, this study is limited by its qualitative nature and by the low number of participants. The next steps are to develop a holistic framework of applicable production management methods to engineering based on a larger number of interviews and to explore the potential impact of efficiency measures. The proposed framework will be tested and verified using quantitative and qualitative re-search methods.

TABLE III OUTCOMES OF INTERVIEWS AND FOCUS GROUPS

Production Management Approaches

No C

ontin

uous

Im

prov

emen

t Pro

cess

Cos

t Pla

nnin

g

Dec

entra

lised

Pla

nnin

g

Diff

eren

t Lev

els o

f Pla

nnin

g

Func

tiona

l Pla

nnin

g

KA

NB

AN

/ H

eiju

nka

Lean

Man

agem

ent

Para

met

eris

atio

n

Prio

ritis

atio

n

Qua

lity

Man

agem

ent

Segm

enta

tion

Stan

dard

ised

Pro

cess

es

Val

ue S

tream

Map

ping

1 x x x 2 x x 3 x x 4 x x x x 5 x x x 6 x x x x x 7 x x x x A x x x x x x x

5 of 5

ACKNOWLEDGMENTS

The authors would like to thank all participants and Mitchell Smith for proofreading an early version.

REFERENCES

[1] E. Westkmper, Introduction in the organization of produc-tion (in German), Springer, Berlin, 2005, pp.16 - 20.

[2] S.C. Wheelwright und K.B. Clark, Creating project plans to focus product development, Harvard Business Review, vol. 70, 1992, pp. 70-82.

[3] R.B. Handfield, Effects of concurrent engineering on make-to-order products, in IEEE Transactions on Engi-neering Management, vol. 41, 1994, pp. 384-393.

[4] M.A. Schilling and C.W.L. Hill, Managing the New Prod-uct Development Process: Strategic Imperatives, in The Academy of Management Executive, vol. 12, 1998, pp. 67-81.

[5] E. Beinhocker, I. Davis, and L. Mendonca, How the world looks like after the crisis (in German), in Harvard Business Manager, October 2009, pp. 18 - 28.

[6] UNCTAD, UNCTAD Handbook of Statistics, United Na-tions Publication, 2008.

[7] B. Venohr and K.E. Meyer, The German Miracle Keeps Running: How Germanys Hidden Champions Stay Ahead in the Global Economy, Berlin: University of Applied Sci-ence Berlin, 2007.

[8] U. Berkermann, J. Eckert-Kmen, and N. Nemarnik, Me-chanical engineering 2020: Global market medium sized businesses (in German), IKB, 2009.

[9] O. Koppel, Shortage of engineers in Germany- Amount and economic consequences (in German) Kln: Association of German Engineers (VDI), 2009.

[10] S. Krebs, Engineers in Mechanical and Plant Engineering, VDMA, 2007.

[11] M. Gehrig and T. Fritschi, Shortage of engineers in Swit-zerland and Kanton Graubnden (in German), Dec. 2008.

[12] R. Dekkers, Engineering management and the Order Entry Point, in International Journal of Production Research, Vol. 44, 2006, pp. 4011-4025.

[13] H. Wildemann, Just-in-time in R & D: Guideline for JIT in research and development (in German), Mnchen: TCW Transfer-Centrum, 1994.

[14] P. Adler, A. Mandelbaum, V. Nguyen, and E. Schwerer, Getting the most out of your product development proc-ess, Harvard Business Review, 1996, pp. 134 - 152.

[15] G. Schuh, H. Baum, M. Lenders, and J. Mller, Lean Innovation (in German), in wt Werkstattechnik online, vol. 100, 2010, pp. 310 - 316.

[16] U. Pulm, A systematic view of product development (in German), Dissertation Style, Technische Universitt Mnchen, 2004.

[17] DIN ISO 9000, Quality management systems Funda-mentals and vocabulary, in Quality management systems, Berlin: Beuth Verlag GmbH, 2005, pp. 22 - 25.

[18] S. Simon, Junction of research and development (in German), in Handbook global production, Hanser Fachbuchverlag, 2006, pp. 350 - 371.

[19] R. Dekkers, (R)Evolution: organizations and the dynamics of the environment, New York: Springer, 2005.

[20] H. Steyn, Project management applications of the theory of constraints beyond critical chain scheduling, in Interna-

tional Journal of Project Management, vol. 20, Feb. 2002, pp. 75-80.

[21] P.D.T. O'Connor, The Practice of Engineering Manage-ment: A New Approach, John Wiley & Sons Ltd, 1994.

[22] H. Dyckhoff, Production Management (in German), Berlin, Heidelberg: Springer-Verlag Berlin Heidelberg, 2007.

[23] R. Vahrenkamp, Production Management (in German), Mnchen: Oldenbourg Verlag, 2008.

[24] J. Tiedtke, Characteristics of different productions (in German), in Allgemeine BWL, 2007, pp. 439-454.

[25] W.T. Stewart and R.J. Calloway, Engineering productiv-ity: The management of improvement, in Engineering Management International, vol. 1, May. 1982, pp. 109-116.

[26] C.T. Maravelias und C. Sung, Integration of production planning and scheduling: Overview, challenges and oppor-tunities, in Computers & Chemical Engineering, vol. 33, December 2009, pp. 1919-1930.

[27] R.G. Cooper, Stage-gate systems: A new tool for manag-ing new products, in Business Horizons, vol. 33, 1990, pp. 44-54.

[28] VDI-Gesellschaft Entwicklung Konstruktion Vertrieb, VDI Guideline 2221 Systematic approach to the development and design of technical systems and product, (in German), in VDI-Handbuch Produktentwicklung und Konstruktion, Dsseldorf: VDI-Verlag, 1993, pp. 1-44.

[29] M. Rudberg and J. Wikner, Mass customization in terms of the customer order decoupling point, Production Plan-ning & Control: The Management of Operations, vol. 15, 2004, pp. 445-458.

[30] T.W. Simpson, J.R.A. Maier, and F. Mistree, Product platform design: method and application, Research in En-gineering Design, vol. 13, 2001, pp. 2 - 22.

[31] M.H. Meyer und J.M. Utterback, The product family and the dynamics of core capability, Massachusetts Institute of Technology (MIT), working paper, Sloan School of Man-agement, 1992.

[32] S. Fricke and A. Shenbar, Managing multiple engineering projects in a manufacturing support environment, in IEEE Transactions on Engineering Management, vol. 47, 2000, pp. 258-268.

[33] A.P. Van der Merwe, Multi-project management--organizational structure and control, in International Journal of Project Management, vol. 15, Aug. 1997, S. 223-233.

[34] J. Rump, F. Schabel, D. Alich, and S. Groh, Managerial project management. A survey (in German), Mannheim: IBE, 2010.

[35] J. Dahlgren and J. Sderlund, Modes and mechanisms of control in Multi-Project Organisations: the R&D case, in International Journal of Technology Management, vol. 50, 2010, S. 1-22.

[36] C.M. Chang, Engineering Management: Challenges in the New Millennium, Prentice Hall, 2004.

[37] R. Gulati and S. Eppinger, The coupling of product archi-tecture and organizational structure decisions,,working paper number 3906, Massachusetts Institute of Technology, Sloan School of Management, Cambridge, May. 1996.

[38] D.W. Rook, D.W. Stewart, und P.N. Shamdasani, Focus Groups: Theory and Practice, Sage Publication, 2006.

[39] R.A. Krueger, Focus Groups: A Practical Guide for Ap-plied Research, Sage Publications, 2008.

[40] P. Mayring, Introduction into qualitative social science: A manual for qualitative thinking (in German), Beltz, 2002.

[41] P. Mayring, Qualitative content analyse: Basics and tech-niques (in German) Beltz, 2008.

/ColorImageDict > /JPEG2000ColorACSImageDict > /JPEG2000ColorImageDict > /AntiAliasGrayImages false /CropGrayImages true /GrayImageMinResolution 200 /GrayImageMinResolutionPolicy /OK /DownsampleGrayImages true /GrayImageDownsampleType /Bicubic /GrayImageResolution 300 /GrayImageDepth -1 /GrayImageMinDownsampleDepth 2 /GrayImageDownsampleThreshold 2.00333 /EncodeGrayImages true /GrayImageFilter /DCTEncode /AutoFilterGrayImages true /GrayImageAutoFilterStrategy /JPEG /GrayACSImageDict > /GrayImageDict > /JPEG2000GrayACSImageDict > /JPEG2000GrayImageDict > /AntiAliasMonoImages false /CropMonoImages true /MonoImageMinResolution 400 /MonoImageMinResolutionPolicy /OK /DownsampleMonoImages true /MonoImageDownsampleType /Bicubic /MonoImageResolution 600 /MonoImageDepth -1 /MonoImageDownsampleThreshold 1.00167 /EncodeMonoImages true /MonoImageFilter /CCITTFaxEncode /MonoImageDict > /AllowPSXObjects false /CheckCompliance [ /None ] /PDFX1aCheck false /PDFX3Check false /PDFXCompliantPDFOnly false /PDFXNoTrimBoxError true /PDFXTrimBoxToMediaBoxOffset [ 0.00000 0.00000 0.00000 0.00000 ] /PDFXSetBleedBoxToMediaBox true /PDFXBleedBoxToTrimBoxOffset [ 0.00000 0.00000 0.00000 0.00000 ] /PDFXOutputIntentProfile (None) /PDFXOutputConditionIdentifier () /PDFXOutputCondition () /PDFXRegistryName () /PDFXTrapped /False

/CreateJDFFile false /Description > /Namespace [ (Adobe) (Common) (1.0) ] /OtherNamespaces [ > /FormElements false /GenerateStructure false /IncludeBookmarks false /IncludeHyperlinks false /IncludeInteractive false /IncludeLayers false /IncludeProfiles true /MultimediaHandling /UseObjectSettings /Namespace [ (Adobe) (CreativeSuite) (2.0) ] /PDFXOutputIntentProfileSelector /NA /PreserveEditing false /UntaggedCMYKHandling /UseDocumentProfile /UntaggedRGBHandling /UseDocumentProfile /UseDocumentBleed false >> ]>> setdistillerparams> setpagedevice