CONCEPT OF ENGINEERING MANAGEMENT
In this lesson, you will learn:
Engineering Management is the Fusion of Business and Engineering Principles.
The key functions of engineering management: planning, organizing, leading and controlling.
The evolution of engineering management and its connection to other disciplines.
The challenges faced by engineering managers such as globalization, uncertainty and team
management.
Engineering Management is the Fusion of Business and Engineering Principles.
As per the definition by the American Society for Engineering Management (ASEM) - “Engineering
management is the art and science of planning, organizing, allocating resources, and directing
and controlling activities that have a technological component”.
IEEE (Institute of Electrical and Electronics Engineers) has provided a more streamlined definition:
“Engineering management is the discipline addressed to making and implementing decisions for
strategic and operational leadership in current and emerging technologies and their impacts on
interrelated systems”.
The engineering manager is distinguished from other managers because he/she possesses an ability
to apply engineering principles and a skill in organizing and directing people and projects. They are
uniquely qualified for two types of jobs: the management of technical functions (such as design
or production) in almost any enterprise, or the management of broader functions (such as
marketing or top management) in a high-technology enterprise.
Evolution of Engineering Management
With the globalization of the manufacturing base, outsourcing of many technical services, the
efficiencies derived from advances in information technology, and the shifting of our economy to
being service-based, the roles of the technical organization and engineering managers have
dramatically changed.
To understand the engineering management discipline, we need to understand how it
relates to other disciplines. In reviewing the history of EM (Engineering Management), we assert
that EM has evolved from the engineering and management disciplines. Engineering management is
the bridge between the engineering and management disciplines.
Five disciplines mainly contribute to defining three different perspectives on the engineering
management field. The five discipline groups are:
Engineering Disciplines: The core engineering disciplines in which the focus is on the engineering
and design process unique to a domain (e.g., civil, traditional industrial, mechanical, electrical).
Discipline-Specific Engineering Management: The engineering management discipline that
focuses on the management process for a specific engineering discipline (e.g., management of the
civil engineering process, management of the industrial engineering process, etc.).
Generalist Engineering Management: The engineering management discipline that focuses on
the fundamental engineering management process across many engineering disciplines.
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Management of Technology: The business or management discipline that focuses on managing
the creation, development, and use of technology.
General Management: The management discipline that focuses on the management of any
organization.
Given these disciplines, three perspectives on engineering management are:
Discipline-Specific Engineering Management
Generalist Engineering Management and
Management of Technology
Engineering Management Representation
Main Functions of Engineering Management
Planning (forecasting, setting objectives, action planning, administering policies, establishing
procedures).
Organizing (organizing workplace, selecting a structure, delegating, establishing working
relationships).
Leading (deciding, communicating, motivating, selecting/developing people).
Controlling (setting performance standards, evaluating/documenting/correcting performance).
Few Example Areas of Engineering Management
Product Development
Manufacturing
Construction
Design Engineering
Industrial Engineering
Technology
Production
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Challenges Faced by Engineering Managers
Globalization
Short-term profit focus
Increased regulatory/environmental stewardship/ethical focus
Changing demographics of the workforce
Operating networks of relationships
Managing and leading teams
Understanding and managing uncertainty
Changing culture
Using tools and metrics to manage
Developing the needed management and leadership skills and behaviors
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ENGINEERING MANAGEMENT SKILLS
In this lesson, you will learn:
The key skills required by engineering managers.
How to ensure team alignment with business goals and project objectives in engineering.
The importance of developing a clear and efficient engineering execution plan.
Techniques for managing technical risks and setting effective standards and specifications.
Types of Skills Required for Managers
Managers need three types of skills: Technical, Interpersonal and Conceptual.
Technical skills are skills (such as engineering, accounting, machining, or IT-based) practiced by the
group supervised. Low-level managers have the greatest need for technical skills since they
are directly supervising the people who are doing the technical work, but even top managers must
understand the underlying technology on which their industry is based.
Interpersonal skills, on the other hand, are important at every management level since every
manager achieves results through the efforts of other people.
Conceptual skills represent the ability to “see the forest despite the trees”—to discern the critical
factors that will determine an organization’s success or failure. This ability is essential to the top
manager’s responsibility for setting long-term objectives for the enterprise, although it is necessary at
every level.
Major focus points required for Engineering Manager
Team Alignment: Visualize the business intent and contextualize the business requirements
so that the team understands them fully.
Scope of Facility: Synthesize the integrated facility scope within the boundaries of cost and
schedule.
Engineering Execution Plan: Develop and implement an engineering execution plan as part
of the overall project execution plan.
Technical Risk Management: Identify, assess, rank, and manage technical risks holistically.
Philosophies, Standards, and Specifications: Contract and ensure appropriate design
philosophies, standards, and specifications are set and met.
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Team Alignment
The engineering manager is typically the person who interfaces with the business owner. They must
understand what the business owner wants to achieve and then translate that understanding into
“engineering talk”. Business owners have a rough idea or concept in their minds very often, but
that does not translate into a defined and executable project. The engineering manager plays a
pivotal role as the interface between “the business” and “the project”, translating and
communicating between the two parties and managing the relationship.
To do this translation, engineering managers must have a good understanding of the drivers of the
economic and operating models of the facility. In this way, they ensure the alignment of people’s
thinking and the total engineering effort through all the project stages.
Engineering managers must ensure that their entire team of engineers understands the
business objectives and project objectives and establish alignment.
Scope of Facility
The scope of the facility must be developed that will meet the business needs. It needs to be
restrained, inexpensive, and elegant and it needs to be done fast. The proposed solution
must delight the business owner. Only once the scope is in place can the responsible manager
determine the cost and schedule. The engineering manager must understand the boundaries of cost
and schedule that will make business sense and guide the engineering teams toward developing a
concept within the boundaries of cost, schedule, quality, and reliability.
The description of the facility must be broken down into a facility breakdown structure, supported by
individual work packages with appropriate details. Operating safety and environmental
requirements must be properly translated into the engineering scope. Each work package
needs to be written up in detail, reviewed, and approved by at least the engineering manager, the
project manager, and the business owner. This scope definition package forms the basis for the total
project.
Achieving approval is crucial as it aligns everybody on what the project will deliver (and not deliver)
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and is a crucial document through which changes are managed and scope creep (and thus cost and
schedule overruns) prevented. A proper definition of how engineering scope changes will be
managed and controlled is an essential element for a successful outcome.
Managing the development of the scope of the facility towards an optimized solution requires
consideration of the complete business value chain during the front-end loading of the project. The
engineering manager should continually be on the lookout for an elegant solution, keeping it
“pleasingly ingenious and simple”.
Engineering Execution Plan
The engineering execution plan lays out all the methods, procedures, milestones, decision points, and
decision-makers, as well as the resources required to complete the engineering work. A welldeveloped plan is essential for completing the work fast. Exercising restraint during the
development of the execution plan means ensuring resource requirements, tools, and
decision-making processes that would adequately support the overall intent of achieving a
successful project and business venture.
All too often the front-end development is spoiled by indecision and recycling of concepts, under the
guise of reaching a proposal that is both technically and economically feasible. This often adds many
months to the front-end development that can be mitigated through a focused drive by the
engineering manager, always keeping the business objectives and boundaries in mind.
Technical Risk Management
Projects are subject to a plethora of uncertainties, i.e., risks and opportunities, that can affect the
project and business objectives. Although the activity is normally referred to as project risk
management, it covers both risk and opportunity management. Potential positive and
negative outcomes deserve equal attention.
If production is delayed through technical problems, either during construction or start-up, the slower
ramp-up of the revenue can have a devastating impact on the project finances and even on the owner
company itself. Proactive identification and mitigation of risks can go a long way toward securing the
expected outcomes. Engineering managers use various techniques like potential deviation
analysis, innovation assessments, and decision analysis techniques to identify potential risks
associated with for example planning, technology maturity, and technology selection processes.
Philosophies, Standards, and Specifications
Specifications should contribute during project execution to minimize cost and schedule, deliver
technical integrity, and during plant operations to meet operations requirements such as
maintainability, reliability, operability, throughput, product quality, and safety.
Standards and specifications are often blamed for cost overruns in that projects appear to be goldplated. Considering the business objectives in terms of the facility life, reliability, maintainability, and
operability the engineering manager needs to guide the engineering fraternity toward the
development of fit-for-purpose specifications.
Once the project requirements are set and detailed; design, manufacturing, and construction
commence. An engineering quality plan is required to ensure that the deliverable does meet the
agreed quality. A proactive and thorough quality assurance plan will enable non-conformities to be
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identified early on with enough time to correct the defects. If critical defects are only discovered late
during construction, it inevitably leads to long delays in start-up and will have a serious impact on the
viability of the business.
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ENGINEERING MANAGEMENT DOMAINS
In this lesson, you will learn:
How to use engineering management tools to plan, organize and control projects.
Leadership and organizational skills for managing teams and knowledge workers.
The role of strategic planning and financial management in adapting to changing environments.
Key concepts in project management, operations and systems engineering for improving
performance.
Engineering management is the fusion of business and engineering principles. By having knowledge
of economics and management they can forecast or can predict the utility, advantages and
disadvantages of the product and also, get to know the scope of the product and its contribution to
growth.
The American Society for Engineering Management (ASEM) is a global professional society dedicated
to the promotion and advancement of the engineering and technical management profession. ASEM
provides a foundation for anyone wanting to engage with or become knowledgeable about
the field of Engineering Management.
A Guide to the Engineering Management Body of Knowledge (EMBOK), published by the American
Society of Engineering Management (ASEM) divides the various engineering management domains
and competency areas into sub-areas. The EMBOK Guide includes competency areas under 11
domains that were derived from a role delineation study and should be possessed by
professionals, managers, and executives in the field of engineering management.
Engineering Management Tools and Skills
Leadership and Organizational Management
Strategic Planning
Financial Resource Management
Project Management
Operations
Marketing and Sales Management
Management of Technology
Systems Engineering
Legal Aspects of Engineering Management
Professional Codes of Conduct and Ethics
To discuss a few of them:
Engineering Management Tools and Skills
It defines planning, organizing, allocating resources, and directing and controlling activities that are
involved and required in the sector.
Leadership and Organizational Management
It will mainly require skills regarding managing and motivating knowledge workers, organizational
structure, management systems, systems thinking, leadership and human resources management,
and teaming.
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Strategic Planning
A Strategic Planning Process is a continuous activity that deals with the changes, both short-term and
long-term, that should be made to the Strategic Plan because of unknown variations in the political
and economic environment or technological breakthroughs. The most productive area of an
enterprise is where it understands and utilizes the strength of teams, technology, and
political and economic environments. This is normally done through Strategic Engineering
Management.
Financial Resource Management
The concept of producing the maximum benefit for Financial management involves planning,
organizing, directing, and controlling financial activities in an organization. They ensure the basic
objective of financial management is met by: Making important decisions through profit and loss
analysis, financial forecasting, and ratio analysis, among others. Managing Financial Resources
addresses the complicated issues of financial planning and control. These include
performance measures and cost analysis, methods of improving profitability, and techniques of
financial monitoring and control.
Project Management
Project management is the application of knowledge, skills, tools, and techniques to
project activities to meet the project requirements. Because the number of projects
undertaken by organizations has increased dramatically, project management has become a critical
skill for most companies. The EMBOK refers to the PMBOK (Project Management Body of
Knowledge) Guide as the accepted best practices for the project management profession and
describes the integrated processes as initiating, planning, executing, monitoring, controlling, and
closing.
Operations Management
The ultimate success of any commercial organization depends upon its ability to determine and
satisfy its customers’ needs. Today, organizations focus on quality, speed, efficiency, and
customer value to be globally competitive, and the long-term sustainability of any
organization depends on its commitment to continuous improvement.
Management of Technology
Technology is a key to business success. The development and use of technologies provide
organizations with a competitive advantage to improve the human condition. New Product
development and product enhancements are an integral part of managing technology.
Systems Engineering
Systems engineering is a multi-disciplinary approach that deals with large complicated and complex
systems. The focus of systems engineering is on system development, but it also considers the full
life cycle of the system. Typically, the systems engineering process is requirements-driven,
using requirements to ensure that the system developed meets all the stated customer’s
needs.
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PRODUCTIVITY, EFFECTIVENESS AND EFFICIENCY
In this lesson, you will learn:
Productivity is generally regarded as a measure of outputs divided by inputs.
Efficiency means doing things right and minimizing time, resources and effort.
Effectiveness focuses on doing the right things to achieve desired results or goals.
True productivity combines both efficiency and effectiveness for optimal performance.
Productivity is generally regarded as a measure of outputs divided by inputs. All the activities you get
done in a day may be considered your output, and the time you put into them is your input. Efficiency
is a measure of how well you do those things. If you can get more outputs from the same inputs, you
are said to have increased efficiency. Effectiveness is a measure of doing the “right things.” Highly
effective individuals and companies act in ways that move their highest priorities forward regularly.
Productivity = Output / Input
Efficiency = Doing Things Right
Effectiveness = Doing the Right Things
Difference Between Efficiency and Effectiveness
Efficiency
Efficiency refers to the ability to produce maximum output from the given input with the
least waste of time, effort, money, energy, and raw materials. It can be measured
quantitatively by designing and attaining the input-output ratios of the company’s resources like
funds, energy, material, labor, etc.
Efficiency is also considered a parameter to calculate performance and productivity by
making comparisons between the budgeted output and the actual outputs produced with the fixed
number of inputs. It is the ability to do things in a well-mannered way, to achieve the standard output.
Efficiency is an essential element for resource utilization, as they are very less in number, and
they have alternative uses, so they must be utilized in the best possible way.
Effectiveness
Effectiveness refers to the extent to which something has been done, to achieve the targeted
outcome. It means the degree of closeness of the achieved objective with the
predetermined goal of examining the potency of the whole entity.
Effectiveness has an outward look i.e. it discloses the relationship of the business organization with
the macro environment of business. It focuses on reaching a competitive position in the
market.
Effectiveness is result-oriented that shows how excellently an activity has been performed that led to
the achievement of the intended outcome which is either accurate or next to perfect.
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Key Differences Between Efficiency and Effectiveness
The ability to produce maximum output with limited resources is known as Efficiency. The level
of the nearness of the actual result with the planned result is Effectiveness.
Efficiency is ‘to do things perfectly’ while Effectiveness is ‘to do perfect things'.
Efficiency has a short-run perspective. Conversely, the long run is the point of view of
Effectiveness.
Efficiency is yield-oriented. Unlike Effectiveness, which is result-oriented.
Efficiency is to be maintained at the time of strategy implementation, whereas strategy
formulation requires Effectiveness.
Efficiency is measured in the operations of the organization, but the Effectiveness of strategies
is measured which are made by the organization.
Efficiency is the outcome of actual output upon given the number of inputs. On the other hand,
Effectiveness has a relationship with means and ends.
Comparison Chart: Efficiency and Effectiveness
Difference Between Productivity and Efficiency
If Andy produces 1,000 lines of code in a week while Brad produces 800 lines, it may look like Andy is
the more productive worker; that’s true if he has a low error rate. But if his code requires 30 hours of
debugging, and Brad’s works the first time it compiles, Brad is far more efficient than Andy — and this
plugs straight into his true productivity, his penchant to do the right things right.
Key Differences are:
Productivity is quantity; efficiency is quality: The biggest difference between productivity and
efficiency is simple: productivity measures bulk output; efficiency measures the proportion of output
that works as intended.
Productivity is performance; efficiency is how well you perform: Just because you perform
something doesn’t mean you do it well. Consider daytime TV actors vs. their movie and TV
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counterparts. Daytime actors produce a new show every weekday. They tend to do a decent job, no
knock to them, but the movie and TV actors have weeks or months to perfect their work, plus specialeffects budgets.
Productivity doesn’t consider underlying costs; efficiency does: Consider the coding example
above. Andy did 1,000 lines of code that week while Brad did 800, so Andy was the winner of the
productivity award. But his code was so buggy it doubled the cost of production. Meanwhile, Brad’s
code worked right the first time at half the cost of Andy’s. His more careful, methodical work saved
money instead of just getting the product out the door.
Productivity is a raw measure; efficiency is a refined one: Raw productivity shows how much
someone accomplished. Efficiency reflects productivity that generates profit and should always serve
as an input to production planning. Productivity is just output; efficiency includes built-in quality
control. It may not help speed productivity, but it ensures that what you produce fits your needs and
requirements first, so you don’t have to spend more resources fixing it.
Productivity is the combination of efficiency and effectiveness. This means that a company
that only attains efficiency or effectiveness is either partially productive or not productive at all. To be
productive, a company needs to be efficient and effective at the same time.
Productivity + Efficiency = True Productivity
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PRODUCT MARKETING AS A PART OF ENGINEERING
MANAGEMENT
In this lesson, you will learn:
Marketing and sales management are tightly coupled with engineering and engineering
management.
Customer satisfaction is crucial and must be measured through surveys, focus groups and
interviews.
Engineering managers influence pricing strategies by balancing product cost and customer
value.
Global trade requires adapting strategies to different cultural and international business
practices.
Marketing and sales management are tightly coupled with engineering and engineering management.
An understanding of the business side of product development, marketing, advertising, and sales on
the part of engineering managers can be of enormous benefit to both managers and the companies
that employ them. Engineers or similar professionals everywhere are involved in activities
traditionally reserved for marketing and salespeople. Figuring out how to meet a customer’s
needs, helping convince a prospective customer to choose a product or service, and developing spec
sheets for a conference are all marketing and sales activities that engineering management
professionals are routinely involved in.
Sales and Advertising Practices
Sales is the act of motivating a potential customer to decide to purchase a product or service.
Advertising is communicating to a target audience to make that audience aware of products and
services that exist. Both advertising and sales are critical to helping get the products and
services that engineers create into the hands of the right people.
It’s important to understand that, when advertising and selling internationally, differences in culture
and language need to be successful.
Customer Satisfaction Strategies
Customer satisfaction is important for any organization to measure and manage. Engineering
managers are not exempt from this. Customers are well-informed, intelligent, and able to
choose different providers if they aren’t satisfied with the products or services. This counts
as much for internal customers as it does for external customers.
To improve customer satisfaction, it must be measured first. Traditional techniques for
measuring customer satisfaction include surveys, focus groups, and interviews. It is very
important to design these tools carefully, as poor design can obfuscate results, and even lead to
drawing incorrect conclusions.
Marketing and Branding Techniques
Marketing is the act of determining what a given market needs and how to satisfy that need given
what the organization’s capabilities are and what competitors are doing. Marketing involves four
primary elements, commonly known as the “Four Ps” of marketing:
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Product: What you sell
Price: What the customers will pay
Place: How you will get the product to customers
Promotion: Advertising and sales
Engineering managers play a key role in developing an organization’s products and
services, establishing cost structures (which inform price), setting up distribution
channels, and developing product specifications and trade show materials.
Branding is about giving products an identity that acts as shorthand for the attributes of a given
product. BMW’s brand stands for luxury and performance. Walmart’s brand stands for value and
convenience. Both brands say very different things but are equally powerful. Engineering managers
play an important role in giving brands credibility through their design decisions.
Global Trade and International Operations
With globalization, companies in every industry will be faced with at least one of the following:
competition from abroad, needing to source materials or talent from abroad or trying to enter
overseas markets. It is important to bear in mind that values and management practices
differ throughout the world and Engineering Managers cannot assume that business as
usual will work in any other market.
Given that operating in an international market can necessitate different practices, it is important to
be aware of the various options that are available for doing business abroad. Domestic companies
can import or export goods, invest directly in foreign entities, license their products or
services to others, set up franchises, or use management contracts to profit from outside
markets.
Pricing Strategies
A product’s price is what the customer pays for a given product. Pricing is something of an art and
must consider the customer’s ability to pay, the organization’s goals and targets, the product’s cost,
and how the competition prices alternative products. Pricing should not be driven by cost alone
and needs to reflect the value conferred by the product. For example, books generally cost
pennies to produce but are priced orders of magnitude higher. This is because they provide much
more value than the sum of their physical parts.
Engineering managers can be heavily involved in product pricing, especially concerning controlling
product costs and understanding how competitors’ products are positioned.
Market-Driven Engineering Management Business Model-Sample
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QUALITY CONCEPTS AND DIMENSIONS
In this lesson, you will learn:
Quality is the degree to which characteristics satisfy requirements and standards.
Modern quality management focuses on continuous improvements and team-based
approaches.
Key QMS principles include customer focus, leadership and continual improvement.
Dimensions of quality include performance, reliability and serviceability.
Definition of Quality
Quality, as it applies to an object (product, service, process), is defined as the “degree to
which a set of inherent characteristics (attributes) of the object satisfies a set of
requirements.” Therefore, the quality of an object is determined by comparing a predetermined set
of characteristics against a set of requirements. If those characteristics conform to the requirements,
high quality is achieved, but if those characteristics do not conform, a low or poor level of quality is
achieved.
Modern quality management approaches relate in many ways to modern project management
approaches overall. More and more attention is being paid to the human aspect of the processes, the
team approach to quality, and the concept of total quality management. The quality management
process is more oriented toward permanent small incremental improvements and multiple
inspection points in the processes than it was in the past.
Principles of Quality Management System (QMS)
Quality Management is a generic term for Quality Framework (procedures, processes, tools,
checklists, etc.) which covers the Quality Assurance disciplines necessary to manage the Quality of
products and services in an organization. It is most closely linked and implemented as part of
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the ISO 9000 family of standards. The following eight main principles form the basis of
QMS:
Customer-Focused Organization
Leadership
Involvement of People
Process Approach
System Approach to Management
Continual Improvement
Factual Approach to Decision-Making
Mutually Beneficial Supplier Relationships
However, adaptation to the Quality Management system varies by both the type of company and the
industry sector. So, the easiest and most popular way to implement QMS in an organization is to
adopt the ISO 9001 model and develop the framework according to the standards.
ISO 9000:2015 Principles of Quality Management
Dimensions of Quality
The most fundamental definition of a quality product is one that meets the expectations of the
customer. However, even this definition is high level to be considered adequate. To develop a
more complete definition of quality, we must consider some of the key dimensions of a quality
product or service.
Performance
Does the product or service do what it is supposed to do, within its defined tolerances?
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Performance is often a source of contention between customers and suppliers, particularly
when deliverables are not adequately defined within specifications.
The performance of a product often influences the profitability or reputation of the end user. As such,
many contracts or specifications include damages related to inadequate performance.
Features
Does the product or services possess all the features specified, or required for its intended purpose?
While this dimension may seem obvious, performance specifications rarely define the features
required in a product. Thus, suppliers designing products or services from performance specifications
must be familiar with their intended uses and maintain close relationships with the end
users.
Reliability
Will the product consistently perform within specifications?
Reliability may be closely related to performance. For instance, a product specification may define
parameters for up-time or acceptable failure rates.
Reliability is a major contributor to brand or company image and is considered a
fundamental dimension of quality by most end-users.
Conformance
Does the product or service conform to the specification?
If it’s developed based on a performance specification, does it perform as specified? If it’s developed
based on a design specification, does it possess all the features defined?
Durability
How long will the product perform or last, and under what conditions?
Durability is closely related to the warranty. Requirements for product durability are often
included within procurement contracts and specifications.
For instance, fighter aircraft procured to operate from aircraft carriers include design criteria intended
to improve their durability in the demanding naval environment.
Serviceability
Is the product relatively easy to maintain and repair?
As end-users become more focused on the Total Cost of Ownership than simple procurement costs,
serviceability (as well as reliability) is becoming an increasingly important dimension of
quality and criteria for product selection.
Aesthetics
The way a product looks is important to end-users. The aesthetic properties of a product contribute to
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a company’s or brand’s identity. Faults or defects in a product that diminish its aesthetic
properties, even those that do not reduce or alter other dimensions of quality, often cause
rejection.
Perception
Perception is reality. The product or service may possess adequate or even superior dimensions of
quality but still fall victim to negative customer or public perceptions.
As an example, a high-quality product may get a reputation for being low quality based on poor
service by installation or field technicians. If the product is not installed or maintained properly and
fails as a result, the failure is often associated with the product’s quality rather than the quality of the
service it receives.
Eight Dimensions of Quality (Garvin,1988)
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QUALITY CONTROL, QUALITY ASSURANCE AND QUALITY
PLANNING
In this lesson, you will learn:
Quality Assurance (QA) ensures confidence in meeting quality requirements through planned
activities.
Quality Control (QC) involves operational techniques for inspecting and fulfilling quality
standards.
Quality plans define objectives, responsibilities and standards for maintaining quality in
projects.
ISO 9000 provides international standards for documenting and improving quality management
systems.
Quality Assurance (QA) and Quality Control (QC) are two terms that are often used interchangeably.
Although similar, there are distinct differences between the two concepts.
Quality Assurance
Quality assurance can be defined as "part of quality management, which is focused on
providing confidence that quality requirements will be fulfilled." The confidence provided by
quality assurance is twofold—internally to management and externally to customers, government
agencies, regulators, certifiers, and third parties.
An alternate definition is "all the planned and systematic activities implemented within the quality
system that can be demonstrated to provide confidence that a product or service will fulfill
requirements for quality."
Quality Control
Quality control can be defined as "part of quality management focused on fulfilling quality
requirements." While quality assurance relates to how a process is performed or how a product is
made, quality control is more the inspection aspect of quality management. An alternate definition is
"the operational techniques and activities used to fulfill requirements for quality."
Quality System, Quality Assurance, and Quality Control Relationships
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Quality Planning
A quality plan is a document, or several documents, that together specify quality standards, practices,
resources, specifications, and the sequence of activities relevant to a particular product, service,
project, or contract.
Quality plans should define:
Objectives to be attained (for example, characteristics or specifications, uniformity,
effectiveness, aesthetics, cycle time, cost, natural resources, utilization, yield, dependability,
and so on)
Steps in the processes that constitute the operating practice or procedures of the organization
Allocation of responsibilities, authority, and resources during the different phases of the process
or project
Specific documented standards, practices, procedures, and instructions to be applied
Suitable testing, inspection, examination, and audit programs at appropriate stages
A documented procedure for changes and modifications to a quality plan as a process is
improved
A method for measuring the achievement of the quality objectives
Other actions necessary to meet the objectives
At the highest level, quality goals and plans should be integrated with the overall strategic plans of
the organization. As organizational objectives and plans are deployed throughout the organization,
each function fashions its own best way of contributing to the top-level goals and objectives.
At lower levels, the quality plan assumes the role of an actionable plan. Such plans may
take many different forms depending on the outcome they are to produce. Quality plans may
also be represented by more than one type of document to produce a given outcome.
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Quality assurance or quality control plans evaluate and/or modify an organization’s procedures to
help ensure they provide the desired results. Quality control plans are often viewed as a set of
instructions that should be followed. They document the planning, implementation, and
assessment procedures for a project, as well as any QA or QC activities.
Some areas may be more detailed than others, based on the project, process, or organization’s
needs. It is important to note that each plan is unique based on the organization’s needs and its
Quality Management System (QMS). However, quality control plans should always have a
structure that permits improvements to the plan. This allows employees to offer input on how
to improve efficiency and quality. In addition, the plan should be reviewed by others periodically,
including stakeholders, to ensure the plan is comprehensive.
Three Elements of a Quality Plan
Elements of a Strategic Quality Plan
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ISO 9000 Standards Series
ISO 9000 is defined as a set of international standards on quality management and quality assurance
developed to help companies effectively document the quality system elements needed to maintain
an efficient quality system. They are not specific to any one industry and can be applied to
organizations of any size.
ISO 9000 can help a company satisfy its customers, meet regulatory requirements, and achieve
continual improvement. It should be considered as a first step or the base level of a quality system.
ISO 9000 vs 9001
ISO 9000 is a series, or family, of quality management standards, while ISO 9001 is a standard within
the family. The ISO 9000 family of standards also contains an individual standard named
ISO 9000. This standard lays out the fundamentals and vocabulary for Quality Management Systems
(QMS).
The ISO 9000 family contains these standards:
ISO 9001:2015: Quality Management Systems: Requirements
ISO 9000:2015: Quality Management Systems: Fundamentals and Vocabulary (definitions)
ISO 9004:2018: Quality Management: Quality of an Organization: Guidance to Achieve
Sustained Success (continuous improvement)
ISO 19011:2018: Guidelines for Auditing Management Systems
ISO Equivalent Standards in Different Countries
Most countries have their national standards-making bodies. National standards bodies may also
group to make regional standards. For example, national standards bodies in Europe are also
members of the European Committee for Standardization (CEN) as well as members of ISO. Together
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with its sister organizations, CENELEC and ETSI, CEN has a special role in developing
European Standards that can support European Union laws (known as ‘directives ‘) or
broader European public policies. Other regional standards groups exist as well, such as in Latin
America (COPANT), the Asia-Pacific region (PASC), The South African Bureau of Standards (SABS), The
African Regional Organization for Standardization (ARSO), and the American National Standards
Institute (ANSI).
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STATISTICAL PROCESS CONTROL
In this lesson, you will learn:
The differences between Statistical Process Control (SPC) and Statistical Quality Control (SQC).
How to apply SPC tools to monitor and control process inputs and outputs.
The use of quality control tools, such as control charts, histograms and Pareto charts, in process
improvement.
How to identify and analyze process variations using techniques like fishbone diagrams and
scatter plots.
SQC vs. SPC
Statistical Process Control (SPC) is defined as the use of statistical techniques to control a process or
production method. SPC tools and procedures can help you monitor process behavior, discover issues
in internal systems, and find solutions for production issues. Statistical process control is often used
interchangeably with Statistical Quality Control (SQC).
Statistical Quality Control (SQC) is defined as the application of the 14 statistical and analytical tools
(7-Quality Control and 7-Supplemental) to monitor process outputs (dependent variables). Statistical
Process Control (SPC) is the application of the same 14 tools to control process inputs (independent
variables). Although both terms are often used interchangeably, SQC includes acceptance sampling
whereas SPC does not.
Quality Control Tools
Cause-and-Effect Diagram (also called Ishikawa Diagram or Fishbone Diagram)
Check Sheet
Control Chart
Histogram
Pareto Chart
Scatter Diagram
Stratification
Cause-and-Effect Diagram (also called Ishikawa Diagram or Fishbone Diagram)
A fishbone diagram is a cause-and-effect discovery tool that helps figure out the reason(s) for defects,
variations, or failures within a process.
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Check sheet
A check sheet is a structured, prepared form for collecting and analyzing data. This is a generic
data collection and analysis tool that can be adapted for a wide variety of purposes and is
considered one of the seven basic quality tools.
Control Chart
The control chart is a graph used to study how a process changes over time. Data are plotted in time
order. A control chart always has a central line for the average, an upper line for the upper
control limit, and a lower line for the lower control limit. These lines are determined from
historical data. By comparing current data to these lines, you can conclude whether the process
variation is consistent (in control) or unpredictable (out of control, affected by special causes of
variation).
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Source: asq.org
Histogram
A histogram is the most used graph to show frequency distributions and is mainly used to analyze
whether a process can meet the customer’s requirements.
Source: asq.org
Pareto Chart
A Pareto chart is a bar graph. The lengths of the bars represent frequency or cost (time or money)
and are arranged with the longest bars on the left and the shortest to the right. They are mainly used
when there are many problems or causes and we want to focus on the most significant
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Source: project-management.com
Scatter Diagram
The scatter diagram graphs pairs of numerical data, with one variable on each axis, to
look for a relationship between them. If the variables are correlated, the points will fall along a
line or curve. The better the correlation, the tighter the points will hug the line. They are mainly used
when trying to determine whether the two variables are related.
Source: spcforexcel.com
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Stratification
Stratification is defined as the act of sorting data, people, and objects into distinct groups or layers. It
is a technique used in combination with other data analysis tools and is used when data analysis may
require separating different sources or conditions.
Supplemental Tools
Data Stratification
Defect Maps
Events Logs
Process Flowcharts
Progress Centers
Randomization
Sample Size Determination
Process Flowcharts
A flowchart is a picture of the separate steps of a process in sequential order. It is a generic tool that
can be adapted for a wide variety of purposes and can be used to describe various processes, such as
a manufacturing process, an administrative or service process, or a project plan.
Comparison between SPC and SQC
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PROCESS VARIABILITY AND PROCESS CAPABILITY
In this lesson, you will learn:
Variability affects product uniformity, performance and brand image.
High variability in raw materials increases final product inconsistency and cost.
Process capability measures output variability and production efficiency.
Cp, Cpk, Pp and Ppk are used to assess process performance and control.
Variability and its Effects
Variability is the extent to which data points in a statistical distribution or data set vary from the
average value, as well as the extent to which these data points differ from each other.
High Cost of Variability in Final Product
Customers expect both uniformity and low cost when they buy your product. Variability defeats both
objectives.
The following broad outcomes are possible when a highly variable product is sold:
The customer may be unable to use the product for the intended purpose. Imagine a
food ingredient such as fresh milk, a polymer with a viscosity that is too high, or a motor oil with
unsuitable properties that causes engine failure.
Product leads to poor performance. The user must compensate for the poor properties
through additional costs. For example, more energy will be required to work with a polymer
whose melting point is higher than expected.
Brand image is diminished. Products, even though acceptable, will be considered with
suspicion in the future.
High Cost of Variability in Raw Materials
If any sort of process control system is implemented, then any variability in the raw materials that are
received and processed is manifested as variability in the final product. This usually shows up in
proportion: higher variability in the inputs results in higher variability in the product
quality.
Even if feedback is taken in between additional costs will be incurred, since materials that were not to
specification need to be processed which requires energy and/or time, reducing profit due to the
supplier’s raw material variability.
Process Capability
Process capability provides two critical pieces of information. First, it provides a measure of the
variability in the output of a given process. Second, it compares the capability of a proposed
specification and provides critical data that enables production efficiency—while also
identifying potential problem areas.
Process capability requires a data set from an in-control process, which means that the output
measures the process in question and then creates a normal bell-curve distribution over time. Using
standard, in-control data sets is key to the success of process capability analysis.
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Difference Between Cp, Cpk, and Pp, Ppk
The Potential Capability (Cp) is used to measure how capable a process is of making parts within
predetermined limits or specification limits. These limits are defined by a Lower Specification Limit
(LSL) and an Upper Specification Limit (USL).
The actual Capability during Production (Cpk) measures whether the process is centered
between the previously determined specification limits. The k is the factor that centralizes the
data. If you picture a bell curve, the Cpk measures how centered the curve is between the LSL and
USL limits of the curve.
Both the Cp and Cpk measurements assume that the sampling comes from a normal distribution of a
large (more than 50 measurements), randomly selected sample.
The Preliminary Process Capability (Pp) and its respective Preliminary Process Capability Index (Ppk)
are used more commonly to evaluate new processes that haven’t been established yet or processes
that don’t come from a normal distribution of data.
When to use Pp, Ppk, Cp or Cpk
Cpk vs Ppk
Ppk tells us how a process has performed in the past and it cannot be used to predict the future
because the process is not in a state of control.
If a Process is in Statistical Control:
The values for Cpk and Ppk will converge to almost the same value because sigma and the sample
standard deviation will be identical.
In other words, if Cpk = Ppk, the process is likely in statistical control.
If a Process is NOT in Statistical Control:
Cpk and Ppk values will be distinctly different, perhaps by a very wide margin.
Cp vs Cpk
Cp and Cpk measure how consistent you are around your average performance.
The ‘k’ stands for ‘centralizing factor.’ The index takes into consideration the fact that your data may
not be centered.
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Cpk tells us what a process can do in the future, assuming it remains in a state of statistical control.
Significance of Cpk
Cpk measures how close a process is performing compared to its specification limits and
accounts for the natural variability of the process.
Larger is better. The larger the Cpk is, the less likely it is that any item will be outside the
customer specification limits.
When Cpk is negative it means that a process will produce output that is outside the customer
specification limits.
Process Stability and Process Capability
Process Stability refers to the consistency of the process concerning important process characteristics
such as the average value of a key dimension or the variation in that key dimension. If the process
behaves consistently over time, then we say that the process is stable or in control.
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AGILE APPROACH TO QUALITY
In this lesson, you will learn:
The key differences between traditional and agile approaches to quality management.
How an agile Quality Management System (QMS) fosters simplicity, flexibility and continuous
improvement.
The principles of lean agile, including reducing waste, optimizing resources and improving work
quality.
The importance of process stability and capability in achieving effective quality management.
Agility means creating and implementing solutions and products by reacting rapidly to current events
and proactively to what is anticipated for the future, whilst working in autonomous and interactive
networks.
The approach of agile quality management means constantly rediscovering the balance between the
process approach, traditional project management, and agile working practices within an
evolutionary environment and developing a culture that promotes agility.
Traditional Quality Management vs Agile Quality Management
Traditional Quality Management
Quality is addressed reactively through product testing and fixing issues.
Product testing occurs at the last stage of the product development process. Some features of
the products are tested after a long time.
Focuses on pre-established requirements.
Prioritizes documentation.
Work progress is monitored through periodical meetings and status reports.
The project manager/quality manager controls the work process.
Difficult to find issues in products at the end of the project. Also, it’s costly to fix those issues.
Executives Managers or team leaders make most decisions.
Agile Quality Management
In agile, quality is addressed both proactively and reactively. Proactively through encouraging
face-to-face communication and reactively through product testing.
In agile, testing is part of the everyday process.
Focuses on customers' changing needs.
Prioritizes working process.
Work progress is monitored through daily meetings and results.
The team members control the work process.
Easy to find the problems when you test constantly. Also, fixing issues is easier than the
traditional approach.
Gives freedom to team members. They make all the decisions regarding requirements, design
and development.
Traditional Approach vs. Agile approach
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Key Characteristics of Agile Quality Management System (QMS)
An agile QMS will help organizations achieve regulatory compliance and drive forward quality. Some
of their key characteristics are:
Quality goes Beyond Compliance
Companies should focus on implementing a system that allows them to pursue value beyond
compliance. This means a system that is in a state of dynamic improvement. Quality policies should
be in place to ensure processes, skills and systems are constantly improved.
Simplicity
Simplicity is an essential characteristic of an agile QMS. Highly regulated industries are often at risk of
requiring overly complex processes. Such processes are not only more difficult to audit but can also
pose a risk to compliance. An agile QMS should be lean and simple, purposefully streamlining and
simplifying processes to save time and valuable resources. The simpler a QMS, the easier uptake
will be and the simpler it is for employees to follow quality processes.
Create a Culture of Quality
The QMS should enable the organization to operate flexibly and with a quality-driven culture. It will
ensure compliance with regulatory bodies, but a common pitfall for organizations is concentrating on
complying with regulatory requirements to the detriment of agility. This can be more of a risk than
organizations realize; for example, if your regulatory agency introduces new requirements that
require a central change in processes, can you react quickly and appropriately? This could be a
struggle if you work wholly with rigid operating procedures.
An agile QMS will help you achieve a quality-driven culture with the flexibility for process iteration.
Lean Quality Management System and Lean Agile
The lean management approach is essentially a quality management system. It is a continuous
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process that oversees all aspects of an organization’s operation, identifying inefficiencies and
unnecessary waste.
The key is being able to visualize the value stream. This assists in identifying and removing any
unnecessary steps in the workflow, eliminating waste, optimizing the use of resources and ensuring
that all activities are creating value.
Lean Management acts as a guide to building a stable and successful business that is constantly
evolving and improving, identifying any problems with ease, and resolving them quickly.
Lean-Agile is a development method that helps teams identify waste and refine processes. It’s a
guiding mindset that facilitates efficiency, effectiveness, and continuous improvement.
Benefits of Lean-Agile:
Waste Less Time
Reduce Costs
Improve Work Quality
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Source: cimlss.rs
Process stability and process capability are different ideas and there is no inherent relationship
between them. That is, knowing that the process is capable (or not capable) tells us nothing
about the process's stability. Furthermore, knowing if the process is stable (or not) tells us nothing
about the process's capability.
Source: winspc.com
In the upper left quadrant, the process is stable (in control) but is not capable of meeting
specifications. If we viewed this process with a control chart, it would illustrate a stable process
and we would have no idea that it’s not capable.
In the lower-left quadrant, the process is stable and capable.
In the lower right quadrant, the process is not stable, although we might say that it is capable of
meeting specifications (Note: This is not the correct interpretation as will be discussed shortly.)
In the upper right quadrant, the process is neither stable nor capable.
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INTRODUCTION TO PRODUCT MANAGEMENT
In this lesson, you will learn:
The key responsibilities of product management, from strategy to cross-functional coordination.
Different product management roles, such as growth and technical product managers
Key phases of the product management process, including idea management and prioritization.
Essential skills for product managers, like communication and strategic thinking.
Product management is the role and function within an organization that is responsible for a product’s
overall success.
Product management spans from strategic objectives to tactical activities, including:
Setting a product vision and strategy that is differentiated and delivers unique value based on
customer demands. This includes defining product characteristics and analyzing the market and
competitive conditions.
Defining what the product team will deliver and the timeline for implementation. This includes
creating a release plan, capturing actionable feedback and ideas and prioritizing features.
Providing cross-functional leadership, most notably between engineering teams, sales and
marketing and support. A key aspect of this is communicating progress against the product
roadmap and keeping everyone informed of updates.
Types of Product Management Roles
Common types of specialized product management roles are:
Growth Product Manager
A growth product manager is primarily focused on furthering a specific metric their
company has set to measure the growth of their business. Typically, growth product managers
work closely with product marketing and traditional marketing teams to ensure their initiatives are
expanding their product reach.
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Technical Product Manager
Technical product managers are less focused on the appearance of a product and instead are
dedicated to ensuring that its inner workings are solid. A background in engineering or
development is almost always required for technical product management roles, as this
type of product manager works hand in hand with engineering teams to improve things like a
product’s core functionality.
Data Product Manager
Data product managers are responsible for ensuring that customer interactions are tracked properly
across the product interface so that other stakeholders can gain valuable insights into how users are
navigating the product.
Product Management Responsibilities
Product managers have both internal and external product management responsibilities. Internal
product management involves gathering customer research, competitive intelligence, and industry
trends, as well as setting strategy and managing the product roadmap. External product
management includes product marketing responsibilities, such as messaging and
branding, customer communication, new product launches, advertising, PR and events.
Product Strategy and Roadmap Planning (Internal)
Strategy and Vision
Customer Interviews
Defining Features and Requirements
Building Product Roadmaps
Release Management
Go-to resource for the Development Team
Product Marketing and Go-to-Market Activities (External)
Competitive Differentiation
Positioning and Messaging
Naming and Branding
Customer Communication
Product Launches
Press and Analyst Relations
Sales and Support Training
Essential Product Manager Skills
Outstanding Communication Skills
Basic Technical Expertise
Deep Business Skills
Research Abilities
Analytical Skills
Interpersonal Abilities
Marketing and Sales Abilities
Delegation Skills
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Strategic Thinking
Prioritization Skills
Product Management Process
Idea Management
In this phase of the product management process, new suggestions, ideas, and feature requests are
captured as part of the product backlog. These serve as good sources of inspiration for the product’s
evolution and the good ideas should be locked down and developed further.
Product Specifications
In the specification phase of the product management process, ideas and feature requests from the
product backlog are fleshed out in more detail. This is to better understand the impact and effort
expected for each.
Road-Mapping
In this phase, the entire product strategy and vision are considered and focus is put on the initiatives
that line up with the big vision of the product. A roadmap is a communication tool that helps
communicate where you are, where you are heading, and how you expect to get there.
Prioritization
In this phase, a more detailed look is taken at the backlog and roadmap, to set priorities based on a
variety of inputs. The process involves deciding what should be built and when based on what will
bring the most value to the user and the product.
Delivery
In this phase of the product management process, the product manager works closely with the
engineering, marketing, support and other teams to make sure features are delivered to a high
quality and product specification.
Analytics & Experiments
In this phase, experiments are run and analytics are tracked to continually test and improve the
product and understand what’s true of value to users.
Customer Feedback
Throughout the cycle, customer feedback plays a key role in validating and improving proposed
features and products. It offers direct insight and suggestions that help to understand how you are
doing at solving the problems you’re already trying to address. It also helps in discovering new
problems you weren’t aware of.
Product Management Life Cycle
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PRODUCT DEVELOPMENT ROADMAP
In this lesson, you will learn:
The purpose and types of product development roadmaps.
Key stages in the product lifecycle from idea generation to market launch.
How product managers use roadmaps to guide product development.
Strategic decisions product managers make at each phase of the product lifecycle.
Introduction to Product Roadmap
A product development roadmap is a strategic document used to guide and communicate the
direction of a product. Product development roadmaps are an important tool for strategy and
planning, allowing product owners, departments, and stakeholders to easily align on the
direction of a product. These roadmaps show how a product will enter and compete in the market
and ensure cohesion and support across all stages of the product development process.
A product roadmap is a shared source of truth that outlines a product's vision, direction, priorities,
and progress over time. It’s a plan of action that aligns the organization around short and long-term
goals for the product or project, and how they will be achieved.
Types of Product Roadmaps
Internal Development Team Roadmap
This document type mostly includes the priorities of value delivered to clients, exact product
release dates, and project milestones.
As many product teams use the Agile Methodology, this roadmap type is largely represented by
sprints.
They enable you to get accurate task areas and define bottlenecks within a specific timeframe.
Internal Product Management Roadmap
This roadmap type focuses on how product teamwork facilitates achieving high-level business
objectives and the company’s KPIs (Key Performance Indicators).
Most commonly, this document is organized within a month or quarter timescale.
This allows for forecasting a product’s global progress.
Internal product management roadmaps mostly include fewer details about the development
process.
Internal Sales Team Roadmap
This roadmap type is related to new opportunities and a better customer product value
proposition.
One of the key ways to use this document is to present it to the target audience during a
marketing campaign.
This will help to increase engagement and boost sales.
External Product Development Roadmaps
This roadmap type is a perfect choice to put the wind of customers in future product releases.
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Make sure it is visually appealing and easy to read
It will help to present new product features efficiently and get customers engaged in the future
development of a product.
Product Life Cycle
All products go through these phases: Discovery, Delivery, and Market Adoption.
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Phase 1: Coming Up With Product Ideas
During this phase, most of the product manager’s time is spent managing, validating, and triaging
product ideas from various sources.
Some common channels are:
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Phase 2: Validating Ideas
Product managers make decisions on which idea goes into the product roadmap.
Problem Validation: Is the product solving a problem? Or Is this a solution to retrofitting a
problem?
Market Validation: How big is the market for the problem it’s solving? What is the return on
investment if this problem is solved?
Solution Validation: Can a solution be built with a reasonable amount of resources (people,
money, and time)? What are the operational costs to keep the product in the market? What are
the opportunities we are giving up doing this?
Phase 3: Strategy & Planning
Product managers make decisions on the product strategy to highlight what needs to be built.
The product strategy will contain the following information:
The Problem
The Customer
Market Competition
Product Vision
High-level Concepts
Financial Model (forecast of users and revenue)
Delivery Milestones
Phase 4: Developing the Product
In this phase, the product manager coordinates with different teams to manage product delivery.
Product managers make decisions in the areas below:
What features and functionality go into the product
Sign off on final experience designs and technical solutions
Help developers break down features and prioritize how to sequence product delivery
Phase 5: Product Launch
Product managers make decisions on the go-to-market strategy for the product. Usually, before
development is completed.
Work with a project manager to decide which teams you’ll need support from. (For smaller
projects, a Product manager can do this without a project manager)
Decide which marketing collaterals, FAQs, training materials, and other artifacts need to be
updated.
Work with the business to decide on different launch phases to reduce company risk
Phase 6: Iterate to Find Product-Market Fit
Product managers decide which problems will take the product to the next growth phase.
Phase 7: Maintain Market Saturation
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Product managers make decisions on the following:
Which initiatives to focus on that will give a balance of acquisition, engagement, and retention
Which competitor to keep a closer eye on
Which features and improvements to reduce cost, improve efficiencies, and scale the platform
Phase 8: Keep, Kill, or Reboot
Product managers make decisions on one of the following:
Keeping the product in the market: If the product is stable, maintain it in the market
without investing in major new features. Focus on marketing and distribution. Use the cash from
an existing product to spin off new products.
Kill off the product: If the product is not successful, consider sunsetting the product by:
Transition users to an alternative.
Terminate the product and support users along the way.
Reboot the product: Most of the time, the product is still solving the same problem. So more
features can be introduced to improve user experience.
Product Process and the Product Life Cycle Combined
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PRODUCT ANALYTICS AND ENGAGEMENT
In this lesson, you will learn:
Product analytics track and analyze user engagement to optimize a product or service.
Trend, journey, attribution and retention analyses reveal insights into user behavior.
Analytics help personalize customer experiences and inform business decisions.
Measuring product engagement involves tracking metrics like stickiness, feature adoption and
retention.
Product Analytics
Product Analytics is the process of analyzing how users engage with a product or service. It enables
product teams to track, visualize, and analyze user engagement and behavior data. Teams use this
data to improve and optimize a product or service.
Product Analytics can answer different types of questions ranging from trends to
analyzing feature adoption or engagement over time, to visualizing intricate experiences and
user flows inside or outside the product.
Few Important Types of Analysis
Trend Analysis
Analyzing trends over time is one of the most used types of reporting in Product Analytics. It helps
companies visualize whether feature adoption is increasing or decreasing over time. A Trends
Analysis is centered around one or more specific touchpoints in the user journey by slicing
and dicing them and then zooming into their performance over time.
Product teams can identify the most and least used product features and how each feature’s usage
compares to the past.
Journey Analysis
For most product use cases, a user must go through a series of steps to reach the solution. Those use
cases can occur over a long period, involving multiple users and multi-channel interactions (Macro
Journey). Other use cases can be as short as a few product clicks, such as submitting a
form or configuring an account (Micro Journey).
It’s critical to visualize the user’s path to reach every goal and where they could be dropping off along
the way.
The Journey Analysis provides better visibility to bottlenecks in the user journey to further
fine-tune the user experience.
Attribution Analysis
Customer Journey Analysis helps a company see its products or services through its customers' eyes.
A customer's journey is the sum of all the experiences they have while interacting with a
company or brand.
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Similarly, to the Journey Analysis, the Attribution Analysis uses user flow data, but it instead points
toward the users who have completed their journey and analyses their touches in reverse.
Retention Analysis
The Retention Analysis helps your business analyze the rate at which users continue to engage with a
product or feature over multiple periods.
Importance of Product Analytics
Product analytics show companies what their users do, by showing them their actions. These are
known as revealed behaviors and are very telling for businesses everywhere.
Data leads to Profitable Decisions
Product analytics can help any organization from personalizing a sales pitch to identifying and
reducing risks to its business.
Personalize the Customer Experience
Businesses collect customer data to enhance the digital experience with their product. By using
product analytics to create user profiles from this data, businesses can gain insights into customer
behavior and a more personalized experience.
Running behavioral analytics on customer segmentation optimizes the entire customer
experience along their journey. Product analytics tools can help companies segment—and better
understand— their user base according to different attributes.
Inform Business Decisions
Businesses can also use product analytics to guide decisions and minimize financial decline.
Predictive product analytics can propose what could happen in response to changes in the product or
business and can indicate how the team should react to these changes.
Streamline Functions and Operations
Businesses can improve operational efficiency through product analytics.
Gathering and analyzing qualitative data about the product can reveal where production
delays or roadblocks originate. This helps predict any future problems that may arise.
If a product forecast shows that a specific feature is not adopted, the product team can supplement or
replace this feature to avoid a decline in customer experience.
Reduce Risk and Tackle Friction
Product analytics help businesses understand risks and take preventive measures. Businesses can
also use product analytics to limit friction after a feature failure occurs. With product analytics,
businesses can comprehensively outpace their competition in terms of profit than
companies that do not.
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Product Engagement
Product engagement is the observation of how users are interacting with the product. Measuring
product engagement means tracking any number of metrics around the frequency and depth of
interactions between user and product over time.
Product engagement is the degree to which users interact with the product.
A product engagement manager is required to measure engagement, and then tweak the
product to improve feature adoption, and subsequently product adoption.
Product engagement is crucial to any product, as it can mean the difference between retention
and churn.
Measuring product engagement requires setting up product analytics and identifying any
problem areas, before coming up with testable hypotheses.
Measuring Product Engagement
Set up Product Analytics
Discover the most important metrics to keep track of
Measure Product Engagement Score (PES)
Detect Problem Areas
Construct a Hypothesis
Track and Measure Results
Measure Product Engagement Score (PES)
PES is one of the most important metrics to keep track of. PES is a combination of three factors:
stickiness, feature adoption, and retention.
Stickiness: This is the percentage of users that come back every day or every week. A time period
can be chosen for tracking this metric.
Feature Adoption: A lot of the features may go unused. Tracking which of them sees the most
usage by the most customers helps to determine which features are most popular.
Retention: This is the number of users who are still around after some time.
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GROWTH IN PRODUCT MANAGEMENT
In this lesson, you will learn:
The role and key skills of a Growth Product Manager.
The concept and benefits of Product-Led Growth.
The steps and metrics for implementing a Product-Led Growth strategy.
How to measure the success of a product-led approach using various metrics.
Introduction to Product Growth Management
Growth product management is a specialized form of product management, which focuses on how to
make the product successful.
Since growth product management is the marketing side of a company, its goal is to make money by
acquiring new users and retaining these users for a long time. Therefore, growth products are often
seen as business-to-consumer or business-to-employee products.
A growth product manager sometimes referred to as a product growth manager, focuses on
improving a business metric or goal (e.g., acquisition, activation, retention, referral, or
revenue) by removing barriers to value.
Essential must-haves for Growth Product Manager
Genuine curiosity to experiment and measure the impact
An understanding of the initiatives that will drive the most significant business impact
A willingness to fearlessly question assumptions and challenge the status quo
The ability to identify and reduce friction in the user experience
Strong analytical skills and data-driven and methodical
Diplomacy to successfully work with a cross-functional team and with different departments
depending on the initiative
Excellent communication skills to effectively make a compelling business case when prioritizing
initiatives and developing experiments
A deep knowledge of customers (e.g., Why do they use the product? What are their problems?
What are the barriers to value?)
A passionate commitment to moving the needle of product growth
Traditional Product Managers vs. Growth Product Managers
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Product-led Growth
Product-led growth is defined as a go-to-market strategy that relies on using the product as the main
vehicle to acquire, activate, and retain customers.
Unlike sales-led companies where the whole goal is to take a buyer from Point A to Point B
in a sales cycle, product-led companies flip the traditional sales model on its head. Productled companies make this possible by giving the buyer the keys to using the product and helping them
experience a meaningful outcome while using the product.
Product-led companies often benefit from shorter sales cycles, lower Customer Acquisition Costs
(CAC), and a higher Revenue Per Employee (RPE).
The Approach of a Product-led Team
A product-led marketing team asks, “How can we use our product as the #1 lead magnet?”
A product-led sales team asks, “How can we use the product to qualify our prospects for us?”
That way, we have conversations with people that already understand our values.
The product-led customer success team asks, “How can we create a product that helps
customers become successful without our help?”
While the product-led engineering team asks, “How can we create a product with a quick timeto-value?”
Benefits of Product-led Team
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Dominant and Growth Engine: Product-led businesses tend to scale faster than their
competitors
Significantly Lower Customer Acquisition Costs: Faster sales cycles, high Revenue-Per-Employee
(RPE), and better user experience
Steps in Product-led Growth Model
Understand the Value
To build a successful product-led business, you need to understand the three main outcomes that
motivate the purchase of the product.
Functional Outcome: The core tasks that customers want to get done
Emotional Outcome: How customers want to feel or avoid feeling because of executing the
core functional outcome
Social Outcome: How customers want to be perceived by others by using the product
Communicate the Perceived Value of the Product
Communicating the product value is at the crux of a Product-led Growth strategy. Sales-led
companies hide their pricing, asking potential buyers to request the price. Product-led companies
eliminate this unnecessary friction with up-front pricing.
Deliver What is Promised
What is promised during marketing and sales is the perceived value. What is delivered in the product
is the experienced value. Ideally, the perceived value aligns with the experienced value.
In a product-led business, tackling the value gap can be the single, most profitable activity.
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Measuring Product-led Growth
Time to Value
Time To Value (TTV) is the amount of time it takes new users to realize the product’s value. The goal
should be to reduce time to value as much as possible—the sooner users reach their first aha moment
or activation event, the better.
Product-Qualified Leads
Product-Qualified Leads (PQLs) are typically activated, users. These are users who have completed a
key action within the product, had their moment, and experienced the product’s value for themselves.
Feature Adoption Rate
Feature Adoption Rate (FAR) measures how many new users adopt a particular feature.
Number of new users of a specific feature * 100 = Feature adoption rate in %
Total number of product users
Expansion Revenue
Also called expansion Monthly Recurring Revenue (MRR), this metric measures the revenue generated
from existing customers through upsells, add-ons, and cross-sells.
Average Revenue per User
The Average Revenue Per User (ARPU) is the amount of money, on average, that is expected to be
made by an individual user. ARPU is a good, high-level indicator of business health.
The Average Revenue Per User (ARPU) = Monthly Recurring Revenue (MRR)
Number of customers
Customer Lifetime Value (CLV)
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Customer Lifetime Value (CLV) predicts the amount of revenue the business will receive from a single
customer over the lifetime of their account.
Customer Satisfaction Score (CSAT)
Gives insights into the percentage of active users who have a pleasant experience using the product.
Number of positive survey responses * 100 = Customer Satisfaction Score (CSAT) in %
Total number of survey responses
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ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING USAGE
IN PRODUCT MANAGEMENT
In this lesson, you will learn:
AI, deep learning and machine learning enhance product management by automating and
optimizing tasks.
Machine learning integrates at various levels, improving features, enabling new ones, or
creating products.
Key ML solutions include recommender systems, event prediction, classification, generative
models and clustering.
AI aids in product development by enhancing analytics, reducing costs and improving efficiency.
Artificial intelligence, deep learning, and machine learning are all used in product management to
enhance, improve, create and shape products.
Artificial Intelligence is the science and engineering of developing computer systems (and software)
that can perform human-like tasks.
Most of these tasks can be broken down into the following categories:
Machine Learning (e.g., Spotify learning your music preferences)
Natural Language Processing (e.g., Pypestream’s conversational engine, understanding user
intents)
Speech (e.g., Google’s Assistant, Amazon’s Alexa, or Apple’s SIRI)
Expert Systems (i.e. Input user problem, output advice/predictions)
Planning, Scheduling, Optimizing
Robotics (e.g., Amazon’s warehouse robot motion skills and pathfinding)
Vision (e.g., Tesla’s self-driving car)
Machine learning and Product Management
Machine Learning (ML) makes it possible for product managers to scale data analytics, expedite
research, automate tasks, and alert users. With a well-managed algorithm, it is easy to enhance the
product and grow the user base.
Machine Learning is a type of AI that focuses on an algorithm’s ability to learn to perform a specific
task without being explicitly given instructions on how to do so. Rather, it learns from experience.
Deep Learning, Reinforcement Learning, Supervised Learning, and Unsupervised Learning are subsets
of Machine Learning that achieve the task of learning through different techniques.
Deep Learning: A subfield of machine learning that focuses on the development of algorithms
inspired by the structure of the human brain called artificial neural networks.
Deep learning, Machine learning, and Artificial intelligence
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Types of Machine Learning Integration in Product Management
There are three different levels of ML integration in product management:
ML improves an existing feature (e.g., increasing the accuracy of a recommendation system).
ML enables new features (e.g., photo search by content rather than keyword).
ML enables new products (e.g., driverless cars).
Primary ML solutions
Recommender/ranking systems provide a ranked list of documents from a corpus. These
documents can be anything from apps in the app store to movies on Netflix.
Event/action prediction models predict the likelihood of an event or user action. At Google, ML is
used to predict a click (e.g., showing you videos that you're likely to click).
Classification models classify arbitrary objects into known classes, like categorizing emails as
spam or not spam.
Generative models generate output in a form like the input they were trained with, like
translation models that turn text in one language into text in another language.
Clustering is a form of unsupervised machine learning in which similar objects are “clustered”
together, like segmenting users into groups.
Case Study: Google Forms
Google Forms uses ML to predict “question type” (short answer, multiple-choice, checkbox) based on
the text typed into the “question” field. This change was engineering-led, but the product manager
played several key roles in the process:
Identifying product improvements (e.g., reducing cognitive load by automating “question type”
selection).
Brainstorming which signals to use to train the model.
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Defining how to surface the experience (e.g., providing a suggested question type vs. autoapplying a suggestion).
Helping analyze outcomes of different models.
Planning and managing launch strategy (e.g., should we launch internally or to a subset of
users?).
Sanity-checking recommendations (e.g., ensuring that the model yields good results on test
data; the feature only triggers when the model’s predictive confidence is high, etc.).
Artificial Intelligence for Product Management
AI product managers mostly work on creating, improving, and enhancing products using artificial
intelligence and ML models.
Artificial Intelligence to Measure Customer Satisfaction
Deep Data Analytics specializes in extracting user opinions from unstructured data using artificial
intelligence. Whether the valuable information is hidden in surveys, social media, or customer care,
DDA’s models extract relevant information on products, attributes, or use cases quickly and efficiently
and make it available in aggregated form for product development.
Deep Data Analytics can collect and analyze feedback on competing products.
Where is the competition ahead, and which product features let users switch?
Artificial Intelligence in Product Development
Leveraging AI technologies can enhance organizations' analytics capability to use their
resources more efficiently, make better forecasts, and reduce inventory costs. Thanks to
better analytics capabilities, companies can also switch to predictive maintenance, eliminating
downtime costs and reducing maintenance costs
In enterprises, start-ups, and firm businesses, AI helps in product development in the
following ways:
Ensure the company’s peers have a successful product integration.
The product development teams can utilize AI and ML algorithms in the development cycle.
Help in achieving greater economies of scale, efficiency, and speed gains across the entire
process of product development.
Assist the three core areas of product development, i.e., Digital prototyping, Product life cycle
management, and Product profile management.
Enable the organizations to find their optimal configuration out of the array of possible
combinations.
Give the organizations insights into their new product development on a large scale.
Perform a deep analysis of price elasticity and sensitivity.
Provide deep analysis to reduce energy costs and negative price variances of the product.
Help in cost management, strategic sourcing, and procurement for the new product
development process.
Provide a variety of customization options.
Empower next-generation thinking and framework design.
Develop systems to reduce time to showcase while improving product quality.
Enhance product adaptability and cater to the needs of the customer.
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Help in identifying product design constraints.
Overall assistance in developing an optimized product.
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