Engineering as a commodity: Can we reverse the trend? 38

[lacajun]

--
From Engineering News-Record, 4/23/2012, Gary J. Tulacz:

This view is hurting the designers, too. "Engineering has always been a problem-solving profession," says Giorgio. "When you treat design like a commodity, it will be managed that way, without regard to the value-added capabilities of the top problem-solvers."

Pamela K. Quillin, P.E.
Quillin Engineering, LLC

 

[Twoballcane]

I’m curious, for those who own their own firm or company, what is your ball park salary or how much of the revenue do you take in personally?


Tobalcane
"If you avoid failure, you also avoid success."
“Luck is where preparation meets opportunity”

 

[KENAT]

Sompting, I wasn't really thinking of the old polytechnic issue, more folks that take HNC/HND etc at local technical colleges or whatever they're called at different times in different places and go to the more technical/academic side - worked with several back in the UK that were as good or better than many degreed engineers I've worked with. I was also thinking about the German system where there is a distinction between the more academic institutions and the more applied ones as I understand if from our German Interns.

As to Twoballcane's point, I have to agree somewhat. Based on what I make I'm doing very nicely for the level of education I have. Are there folks doing better with the same or less, sure. However there are lots of jobs that require a bachelors degree (or equivalent) but that pay a lot less - even only half. Now my pay is skewed some by working in a very high cost of living area, however compared to other bachelors degrees engineers do OK.

Posting guidelines faq731-376

http://eng-tips.com/market.cfm?

(probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484​

 

[JohnRBaker]

BTW, my university started out as a School of Mines in 1885.

I also dug up my old transcript (my wife claims I never throw away any of MY stuff) and I was off a bit on a couple of the credit hour figures. The PE requirement was only 3 credit hours for graduation and one of these was a class in Industrial-oriented 'First Aid', administered under the guidelines and supervision of the U.S. Bureau of Mines (which was merged with other federal agencies in 1995) since the school was still granting mining degrees in 1965 when I took the mandatory class. My comment about 6 PE credits was with respect to the MAXIMUM number that could be used to calculate grade-point, but only 3 counted toward meeting the criteria for graduation and as I've already mentioned, I got 'varsity' credit (i.e. PE credit) as a result of my being a member of the ARMY ROTC exhibition drill-team (we never considered ourselves as 'jocks' like the hockey players did, but we did get to wear cooler looking 'uniforms' and we can't forget the rifles and bayonets).

As for the non-core electives, instead of 18 that number was really 15, of which only 12 could in a single area of study, which in my case was American History, with the last 3 credits in Psychology.

What I did recall correctly was that the requirements for my ME degree was 205 credit hours, which included the 15 non-core electives and 3 PE credits, of which one was the mandatory First Aid course.

So I guess in reality only something less than 9% of the credit hours required for my Bachelor of Science degree back in 1971 was in what many would call 'non-core electives'.

OK, even I'll admit that we've thoroughly beaten this dead horse...



John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

 

[ash060]

Speaking of commodity in engineering. We were speaking with a possible new client and we were told that they pay $0.30 sq. ft for one-story houses and $0.40 sq. ft for two-story houses for the structural design.

Sounds alot like a commodity to me.

I think we told him in the words of one of my good professors "to go pound sand", and I don't except to hear back.

 

[zdas04]

Flat rate per unit area is definitely commodity pricing. I would run away from a client who thought I added commodity value.

As to the earlier question about how someone is doing after starting their own business, I have to say "very well, thank you". My business is a sole proprietorship with zero non-owner employees. My first year in business (and my worst year ever of course) I paid more taxes than I grossed my last year as an employee. Nine years later I am turning away work that I can't find time to do. I provide a unique service in a niche market and no one thinks of me as a "commodity". The few potential clients who think that Engineering is a commodity service look at my hourly rates (non-negotiable) and walk away. Many of them call back in 6 months and ask "what would you have charged for XYZ project", I tell them and their next comeback is usually "would you be willing to come fix the mess we're in for that?". That kind of conversation has led to some really good customers.

I see a lot of engineering firms (lower case) that are incapable of saying "We don't know how to do what you're asking, we need to pass". I keep getting called into projects that were started by incompetent individuals and perpetuated by incompetent management. A big part of my practice is fixing those messes.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.

 

[lacajun]

Mr. Baker, my experience was similar to yours. I won't take the time to review my transcript but I can say with a high degree of certainty that my degree plan was far less than 205 hours. It should have been more but the profs said student complaints led to a decrease in hours required to graduate.

TGS4 (Mechanical)
27 Jun 12 11:28
Quote (lacajun)
...Psychology, sociology, management, organizational behavior, ... were all required courses in my day....

I've read a lot but most is non-fiction.

By my reckoning, these two statements, while intended to be completely unrelated, are essentially synonymous.

TGS4, from my perspective they are not. Some of what I learned in those classes I classified as false. Some of the required reading in English was fiction, too.

As to how much I make through my company, a pittance of what I made in Corporate America. Unlike zdas04, I have nothing unique to offer anyone and I am not in a niche market. In fact, in 2009 a respected and somewhat well-known instrument engineer said I have nothing special to offer and that I am an above average instrument engineer but nothing more. He must be correct as I've made less than $2000 in the last 14 months. I cannot get a loan from the bank so I'm using my savings to keep everything going. So I get the privilege of working long hours most days to figure out where I am going wrong and what I need to do to correct the situation. I am on the cusp of making some tough decisions. They are mine alone to make. I will make them and accept whatever comes after.

I often wonder why I have worked so hard to land in this situation. If it weren't for Mother's family's values and Biblical teaching, I would quit and live under a bridge for the next 20-30 years. I will continue and may still end up under a bridge despite working hard to not get there. I wonder how long my backpacking gear will last.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC

 

[lacajun]

Mr. Baker, my undergrad alma mater has a technology program, which I was in at one time and earned an AS in electronics. I had no confidence of being able to cut engineering. When I made the switch, I was astounded at the rate and depth of the material covered in engineering. It was quite an adjustment to make and I felt as though I was treading water for months. So, from my perspective, the technology program there is very good but it is not an engineering program. If I had not taken that torturous path, I wouldn't have that perspective. I mean no disrespect to anyone in/from a technology program either. I've worked with engineering tech grads that were greater than me in many ways. We had choices to make and we made different choices. I cannot account for that.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC

 

[zdas04]

Pamela,
From the list of forums that you participate in I'm guessing that you don't work in Oil & Gas at all. While you are making those "hard decisions" you might think about coming to the dark side. The controls problems are simpler than you'd see in most industrial applications, but the volume of installations is staggering. Expertise in flow measurement is pretty much required for an Automation or Controls Engineer, but that stuff can be self taught reasonably quickly. In my experience an "above average" Automation Engineer would be a star in this industry.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.

 

[KENAT]

lacajun, I don't think anyone here with a technologist training is claiming to have the equivalent of a 'university' education.

However, a bunch of us that went to University in other countries/systems and didn't have a bunch of non engineering electives or requirements as part of our studies are questioning if it's fair to say we went to 'trade schools'.

I doubt that aspect has too much to do with perceived commoditization. It seems this is more of a concern in the engineering as a service side of things if I'm understanding correctly.

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(probably not aimed specifically at you)
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[lacajun]

KENAT (Mechanical)
27 Jun 12 10:48
(Sorry lacajun, went off into the weeds a bit there.)

Weeds are welcome terrain.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC

 

[lacajun]

David, I've done flow and worked for Marathon Petroleum's Canton, OH refinery before Micro Motion lured me away to do global industry marketing for them in refining. Great job and wonderful company. For the first time in my career, I didn't have to beg for money to spend. What! A! Concept! I've attended Enercom the last few years in Denver to network in O&G. That's where the CEO of a $100 million dollar cap looked at my business card then looked at me and laughingly said I couldn't possibly be the engineer. Someone else began talking to him, while I was, and he walked off without another word to me. I've not made much other progress to make contact with O&G companies. O&G must not need me. Problem is others don't seem to either. There must be some problem with me I have yet to discover.

KENAT, I thought "trade school" could have been worded differently but I understood the point Mr. Baker was trying to make, which was a good point. I apologize for the faux pas on my compatriot's part. It seems we've all arrived at some understanding of "fluff" courses. Having worked with engineers from other countries, I think we're all in the same boat, i.e., we have a spectrum of abilities, interests, motivations, etc. I respect people based upon how they treat others and handle themselves. I've not found any university book teaching those fine subjects. Personally, I would have enjoyed more engineering courses but that wasn't in their plan. I enjoyed the engineering courses a lot.

I think commoditization relates to the perceived lack of value we bring to improve the lives of others. Where would so many aspects of modern life's advancements be without engineers? Most people don't have any idea what it takes to bring an iPhone, iPad, wind screens, automobiles, fuels, batteries, toilet tissue, notepads, paper clips, medicines, etc. to market.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC

 

[zdas04]

The more I work with downstream and refining guys the more certain that this should be two industries. Upstream is very different from refining in virtually every way. One jerk doesn't define the industry.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.

 

[lacajun]

Oh, I don't know, David. I tend to think anyone with wit/2 can learn upstream. Engineers have always quizzed other engineers about their ability to learn a new industry. As long as the math, science, and engineering principles don't change, they'll be OK and they'll come up to speed.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC

 

[zdas04]

Didn't say it was hard, just that it is DIFFERENT. My work has more in common with Civil guys doing water treatment than Mechanical guys doing refineries.

Even the "similar" calcs are very different. I generally design pipe to ASME B31.8. The processes make sense and the results take into account varying population density.

One of my [plant background] clients recently had me do a wall thickness calc using B31.3. There were more steps, a lot more table look ups, and at the end I got the same pipe selection I got under B31.8. That was fine for most of upstream (very low population density on the whole), but if I had been running the pipe adjacent to an elementary school or a hospital the B31.3 calcs would have given me a wall thickness with inadequate safety margin built in. But the plant guys turn up their noses at the [simplistic in their estimation] B31.8 calcs.

Downstream Plant guys are much like Chemical Plant guys. Upstream guys work with much lower risk density and don't see the value of most of the Plant junk. Like I said, a different industry.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.

 

[lacajun]

I see your point, David, and agree.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC

 

[lacajun]

SNORGY, shoot me an email through my website and I'll send the documents to you. Since they are copyrighted, I don't want to post them here. I took my work off so they're nice and clean for your thoughts.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC

 

[SNORGY]

Thanks lacajun.

 

[blaxabbath]

Not to revert to the original topic too much (I'm a fairly recent grad so cannot speak firsthand about the rigors of old academia) but I had to comment because I just sat in a staff meeting Monday and my boss enthusiastically announced to my office that he was outsourcing my job.

To elaborate, I work in about an eight person office where I am the only engineer. I work with one other project manager who, though generally bright and technical minded, knows only to read standards and run the individual calculations. The rest of the office is sales/marketing. So the company thinks it is really making some headway into Mexico and the owner (Business undergrad; MBA; insists that he is equivalent to a structural engineer because he runs a small construction material sales company) says he is going to open an office in Monterrey by the end of the year and excitedly elaborates on how he can, "get engineers in Mexico with the exact same education as Blax for a fraction of the cost!" Everyone gets excited about the expansion and, while 85% of my work is supporting jobs via email/telephone, I am sitting there thinking, well there goes any hope for decent wages here.

So I feel like engineering is treated as a commodity for two reasons:
1) To the extent to which many people (owners and engineers) lean on standards as the law. I can't tell you how many discussions I've had with the owner about cases where a code/standard does not reasonably apply. His response: "Standard X is the closest thing because a direct standard does not exist. And we are covered (meaning lawyers) if we use Standard X. If you vary from the standard, now we are taking on liability for this engineering." I am wrapping up my last year as an EIT and the company doesn't like spending money for outside engineering reviews of my work, so it's a convenient financial and legal decision to read it off the book (a practice that I don't agree with professionally or, in general, morally).
2) Cost: Everything is being standardized in business. E-Myth is all about the franchise model. And, while efficient, I see cases where the behaviors -- rather than the outlining responsibilities -- of engineers are standardized within the job description. I don't agree with it, but I think that is the trend in general and, when an outfit does decide it needs a real engineering mind, they go pull in a consultant as necessary.

Frankly, the commoditization of engineers -- specifically newer ones like myself -- was a big factor in my decision to go into contracting as early in my career as I am. I'm in an industry that is exciting but quite small. So where there has been limited organic engineering growth, I can now assure that I can really understand the full approaches to more applications in the industry.

Composite Strengthening Systems, LLC
Turnkey Design and Installation Services
Coming Fall 2012: COMPOSITE-STRENGTHENING.COM

 

[lacajun]

All of God's best to your efforts and endeavors, blax! Congratulations for taking that step so early in your career. I don't think you will regret it.

The outsourcing you've mentioned has been going on for awhile to various degrees. Early in my career, an older engineer said engineering could never be outsourced. His line of reasoning didn't make sense at the time and still doesn't. Ultimately, engineering is more easily outsourced than many old timers thought. Some of it has worked out and some of it hasn't.

Standardization has been occurring for quite some time. I'm learning through my own company how detrimental that has been to other manufacturers and small businesses. I wonder about the economic analysis behind some of these efforts now. Were they valid then? Are they still valid today?


Pamela K. Quillin, P.E.
Quillin Engineering, LLC