ASEM Blog

An important development over the last month has been the decision to move the 2020 ASEM International Annual Conference (IAC) to a virtual format. This action has been taken in response to the current and anticipated conditions prevalent in Denver and across the globe related to the COVID-19 pandemic. Our plan is to have a comprehensive technical conference and we hope that the virtual event will still provide an excellent opportunity for sharing knowledge and learning on engineering management as well as staying updated on developments with ASEM. Further details on the conference will be released in due course.

I would also like to discuss how engineering management has the potential to help technical specialists to broaden their skills and knowledge base, thereby supporting career development in engineering and technology- based industries. In this regard, the term ‘T-shaped skills’ has its origins in the article by David Guest called “The Hunt is on for the Renaissance Man of Computing”, which appeared in The Independent (London) back in 1991. The term has been adopted by different organizations and it is basically a metaphor for the depth and breadth of a person’s skills. The vertical part of the T signifies the depth of skills along with the corresponding knowledge and proficiency in a single disciplinary area – including analytical thinking and problem solving associated with being deep in a given technical area. Whereas the horizontal bar of the T relates to a broader set of skills and knowledge and a corresponding ability to engage and work with people across different disciplines. We can further consider these skills as so called boundary crossing competencies, including teamwork, communication, decision-making, project working, managing complex situations and sense making. But how does this relate to engineering management? In order to answer this question, it is useful to apply the T-shaped skills model to an industrial sector and we can do this by considering the oil and gas industry and the case for a geological engineer.

In this illustrative example, the engineer benefits from having a deep specialism in geological engineering, including areas such as engineering mathematics, strength of materials, rock mechanics and geochemistry. Competence in these and related areas provides the engineer with an ability to solve technical problems as well as analytical thinking in geological engineering. However, to be effective in the oil and gas industry, there is also a need to work in project teams with other technical specialists (such as materials and mechanical engineers) as well as with colleagues from other functional areas (such as finance and commercial managers).

Consequently, it is important to have a good grasp of a wider set of skills and knowledge related to management but with a clear technological relevance. For example, the engineer may need to understand various areas, such as project management, team leadership, organizational management, technology management, economic development and planning, and systems modelling and analysis. Here the discipline of engineering management can support the geological engineer to be effective in multifunctional project teams as part of working in the oil and gas industry.

This simple case highlights the benefits of building on a solid technical education in a core engineering or scientific discipline, which is further enhanced with an education and understanding of engineering management – helping to prepare for a career in not just the oil and gas sector but in many other knowledge- based industries. The new 5th Edition of the Engineering Management Body of Knowledge Guide (EMBOK Guide) is an excellent source for such underpinning knowledge across the discipline of engineering management and should serve as the ideal resource to help us all maintain our T-shaped skills.

Dr. Simon Philbin
ASEM President

by Don Kennedy, Ph.D., P.Eng., IntPE, CPEM, FASEM

The concept I am talking about today is sometimes called the “more is better” fallacy, and I will pick accruals as an example of this.

You may have been in meetings discussing alternatives to address some hazard. One is simple and cheap - the other is complex and expensive. The top manager might say “you cannot put a price on safety.” The fallacy here is that the more expensive alternative is the better one. We know this is not necessarily true. Many times things are cheaper because they are better and the option most often chosen. The expensive option is expensive because it is unique and requires more custom labor.

Accruals, for those that do not know, are accounting entries used to cover expenses that are incurred but will not be paid for before the end of the current fiscal period. Accountants typically ask the managers for their estimates for these accruals. I call accruals “imaginary numbers that we make up and they go away at the first day of the next period.” I give them effort warranted by that view. I have provided accruals totaling more than $50 million for which I spent around 4 hours compiling. The company audited my numbers and found no irregularities.

Another manager spent a whole week (40 hours) on his numbers that totaled around $10 million. He was very thorough trying to identify every potential cost that could be incurred before the end of the year. He was very happy with his result and the effort expended to come up with those accruals.

Now for the difference between the two approaches. I knew how much my department was spending every month. Christmas and New Years Eve fall before the end of the year and spending is typically lower in December than other months as a result. Construction companies often take 2 weeks off at the end of the year in my area. I identified all activities I knew would happen and assumed things that might happen would not. Invoices often come in more than a month after the expense was incurred so there is a lag, especially at year end. I made sure my $50 million was not going to be more than the realized amount.

By trying to include as much as possible, the other manager produced a number higher than the normal monthly rate of spending of $6 million. Managers might be optimistic about all the work that might get done, especially if there is pressure to get things finished by the year end deadline. But things happen.

As I flippantly alluded to, accruals are reversed on the first day of the new accounting period. So my department had a -$50 million entry and the other had a -$10 million entry on January 1. My true numbers were $55 million in December but only $45 million in January, so the $50 million in January looked very normal. The other department had only $4 million actuals in December and $5 million in January. The total expenses in January for that department after the reversal entry was minus $1 million. This raised a lot of red flags for that manager to explain how there could be negative expenses. Trying to be very thorough and list every possible event, created a problematic number. Doing less was a better approach.

Less is often more.

I would like to welcome you to the monthly newsletter for May. I hope that you and your families are all well in these difficult times caused by the COVID-19 pandemic. Like many others I have been working from home and trying my best to practice social distancing when outside. This somewhat unfortunate term seems like it will be with us for some time – or at least until a vaccine is discovered and found to be effective through passing clinical trials.

The COVID-19 situation is rapidly evolving and is causing not just a health crisis in many countries but also leading to potential major economic difficulties. This may result in many changes across different industries, including the university sector. The higher level of indebtedness combined with lower revenues is unfortunately a difficult combination for any organization to deal with – and this includes not just industrial companies and academic institutions, but also governments, and is something that will also be faced at the personal level by many people.

The pressure caused by the COVID-19 crisis is forcing organizations to work different – this of course includes virtual working (i.e. more videoconferences, teleconferences, etc.) but it also could potentially lead to an increased pace in the adoption of digital technologies, such as virtual reality and augmented reality. An example of a recent business-driven innovation is the rise of a new form of e-commerce, so called livestream e-commerce, which has become popular in China as a way for sellers and consumers to interact virtually during the pandemic. This has the potential to grow significantly and effectively combines a user experience of commerce with social media and entertainment. It seems that even during pandemics, new disruptive technologies and business models will continue to emerge.

As we look ahead it will be important for ASEM to remain relevant and competitive in such a changing landscape and therefore adopting new working practices alongside updating and enhancing the current products and services is important. An example of a new approach was in the last month where ASEM held a virtual Town Hall Meeting. This event was hosted by ASEM Headquarters and led by Gene Dixon (ASEM Executive Director Elect) and provided an excellent opportunity for the Society’s membership to be briefed on key developments being pursued by ASEM and also receive feedback directly from members. I was pleased to see that the meeting enabled interaction with a number of members and was clearly a success – I look forward to further meetings being held in the future.

I would also like to acknowledge the fantastic ASEM Practice Periodical issued this last month, which had the very timely theme of “This Crisis Will Not Go to Waste: Engineering Management’s Response to COVID-19”. Many thanks to Annmarie Uliano (ASEM Communications Director) for coordinating this issue of the Periodical as well as the excellent contributions by the authors: Woodrow Winchester III, Jesse Kamm, Teresa Jurgens-Kowal, Alexis Devenin, Harry Moser, Tanveer Naseer, Larry Mallak, and our former President, Frances Alston. Clearly engineering management has much to offer in response to the COVID-19 pandemic.

Finally, I wanted to update you all that in the last month we held the ASEM Spring Board of Directors Meeting. The meeting was held virtually and not face-to-face due to the COVID-19 situation. But this did not stop us from having a whole day’s worth of excellent discussions. Indeed, I was delighted to lead the meeting and with the other members of the Board we discussed a number of important matters related to the operations and strategic development of ASEM. This included areas such as development of the Society’s portfolio of publications, strategies to support our certification program, preparations for the annual conference, international development of the society, marketing and development initiatives as well as other strategic projects. The meeting provided an excellent opportunity to discuss key issues to be addressed and for the Board of Directors to consider the priorities for the Society moving forward. In this regard, I look forward to working alongside members of the Board and others on these and other exciting initiatives for ASEM over the coming months.

Dr. Simon Philbin
ASEM President

by Frances Alston, PhD, CPEM

Engineering managers are faced with new challenges today due to the COVID-19 outbreak.  They face both strategic and tactical level challenges in preserving the viability of the enterprise.  In light of these challenges and the response opportunities provided by pandemic, many manufacturers are actively engaged in strategic teaming to pivot their operations in  producing the equipment and supplies such as personal protective equipment (PPE), laboratory testing supplies, and ventilators to support lifesaving activities.  In many instances’ development of these types of equipment were not a part of the company strategic plan thus the leadership team is required to change their business strategies, processes, equipment, retrain workers and more.   In such times, employees need to have belief in their leadership team to invoke the trust needed to accept that the changes that are being made are necessary.  Employees should be engaged in these changes as stakeholders in order to increase acceptance and teaming; thus, intrinsically the role of engineering managers becomes paramount and important.

Engineering managers are skilled in strategic planning activities that include planning, organizing, allocating resources, directing and controlling activities.   Here is a snapshot of how these skills can be and are employed by engineering management in helping provide real solutions to the equipment and PPE shortage faced by the world resulting from the COVID-19.

• Planning (strategic, tactic, and operational) – changing operations to add new processes and practices takes the use of a comprehensive planning approach to ensure success.

• Organizing – rearranging work and the organizations so that new processes can be efficiently accomplished while keeping in place their core product processes and procedures.  

• Allocating resources – resources include capital, equipment, and people which can be challenging in itself due to implementation of new processes and systems while ensuring the health & safety of workers.  

• Directing – in an effort to direct work it is necessary to motivate, supervise, and influence employees to accept the new processes and way of conducting business.

• Controlling activities – measuring performance to ensure that the new product line meets specified quality and technical specifications.

The role of an engineering manager is admittedly becoming more variable as the nation attempt to grapple with and irradiate the COVID-19 virus.  Engineering managers have the skills and training to adapt to and manage change, lead conceptual and product designs, configuration of production lines, new product introduction, and the capability to verify that products meet quality control standards.  Active engagement by engineering managers in assisting efforts focused on providing leadership and resolving technical issues that are presented by the COVID-19 can facilitate health and safety for workers, their families, and communities. 

About the Author

Dr. Frances Alston holds a B.S. degree in Industrial Hygiene and Safety, a M.S. degree in Hazardous and Waste Materials Management/Environmental Engineering, and a Ph.D. in Industrial and Systems Engineering. She is a Fellow of the American Society for Engineering Management, a Certified Hazardous Materials Manager and a Certified Professional Engineering Manager.

Dr. Alston has been effective in facilitating integration of Environment, Safety, Health, and Quality (ESH&Q) projects and programs as a core business function while leading a staff of business, scientific, engineering, and technical professionals. programs in diverse cultural environments. She has extensive experience in assessing programs and cultures and the development of improvement strategies achieving positive outcomes.

by Woodrow W. Winchester, III, PhD, CPEM

In responding to the COVID-19 pandemic, the capabilities of America’s industrial complex are truly being tested.  These tests and, often, demonstrations of both organizational limitations and resiliency (e.g. pivoting) are offering vital engineering management (EM) practice lessons.  And, in what is now being coined the era of “business as unusual” with anticipated disruptors on the horizon like responding to the impacts of climate change, these lessons must be learned and not lost.

While the scale and scope may differ, there have been other contemporary business disruptors that have offered valuable EM practice lessons.  However, in many instances, these lessons were merely observed and not engaged.  The question is why? For, some lessons, if they were fully embraced and sustained, may have enhanced organizational responsiveness to COVID-19.  Systems thinking, as an EM practice enabler, may offer an answer.   

Systems thinking, a discipline for examining wholes, interrelationships, and patterns, provides a valuable capability for engineering managers in enacting lessons offered by disruptors such as COVID-19.  From making visible the interconnectedness of manufacturing systems to further exposing the influence of structural issues such as racism in America; the COVID-19 pandemic is making clear that linear thinking and reductionist approaches to practice are not sufficient and can undermine needed change.  Thinking systemically, as an EM practice underpinning, is paramount.

In connecting with EM, systems thinking can be viewed as a meta-discipline; offering a language by which to guide the engineering manager’s thinking and action.  Echoing the EM Handbook:

“new tools, methods, and technologies will continue to be developed to assist engineering managers.  Although they may be useful, none will have the prolonged continuity provided by thinking that is philosophically grounded and principle driven.  This is the challenge faced by engineering managers:  To develop a sound philosophy, principles, and values that inform consistent decision, action, and interpretation in the face of increasing complexity.  Systems thinking offers a significant path forward to meet this challenge.”  

While systems thinking’s potential is great in creating the conditions for more robust EM practices and actions (See Figure 1), putting it into action can be challenging for the engineering manager.  

Figure 1:  Roles that Systems Thinking can Play in EM (Figure 18.1 EM Handbook)

The EM handbook offers insights around those core challenges and offers guidelines for the engineering manager to gain the advantages from applying systems thinking.  Tools such as the Habits of a Systems Thinker by the Waters Center for Systems Thinking and soft systems methods such as Rich Pictures can aid the EM in building their systems thinking competencies in practice contexts.  While outward focused development is important, equally of import; is inward or personal development.

Self-awareness and self-examination are critical in thinking systemically.; as, they “bring more attention to our mental models, which might be holding us back and keeping us from seeing the big picture in an unbiased way” (HumanCurrent).  Inward focused tools such as the Reflexivity Statement support the engineering manager in personally reflecting; elucidating insights (e.g. personal assumptions, mental models, and beliefs) that (1) may occlude the engineering manager’s ability to think systemically and (2) could be inadvertently reinforced in practice.

We can’t let this Pandemic be a waste.  COVID-19 is making even more clear the complex and interconnected world that we, as engineering managers, practice – the new or (next) normal.  Valuable EM lessons that will advance the practice are being presented (see:  Bringing Manufacturing Back to the U.S. is Easier Said Than Done).  Acting more systemically in both thought and action can prevent these lessons from being lost.  As discussed, disrupters to the level or exceeding what is being felt by COVID-19 will happen again and our ability and capacity to respond both as a profession and discipline cannot be compromised.

About the Author

Woodrow W. Winchester, III, PhD, CPEM is a Senior Lecturer and the Director of Engineering Management at the University of Massachusetts – Amherst.  A trained human factors engineer and Certified Professional in Engineering Management (CPEM), Dr. Woodrow W. Winchester, III is an advocate for more equitable, inclusive, and consequential approaches to technological design and deployment.  He is currently under contract with CRC Press to write Inclusion by Design: Future Thinking Approaches to New Product Development (ISBN: 978-0-367-41687-4).

by Jesse Kamm, PhD

COVID19 brought a variety of problems and reactions. If you’re a curious individual, you’ve read a plethora of articles, blogs, and social media posts. Many opined on the reliance of data, trusting science, models of impact and infection, and debates on policy making. Reporting on COVID19 public policy became a cacophony of noise. When it comes to noisy data, ASEM members and students are uniquely skilled to serve as the voice of calm and reason during trying times. As engineering managers, we know data can be messy and situations can be far more complex than we would like. But we also know that decisions need to be made in a timely fashion, no matter how imperfect, and we know how to deliver when pressed.

Many posts and articles argued for science, not politics, to guide decision making. What does it mean to let science decide policy? After all, engineering managers know that hard data doesn’t always tell the full story. There are issues around context and “soft” considerations. Even the way people feel emotionally can factor into a decision (Ugh! Feelings!... groans my inner engineer).

Engineering managers recognize that science and policy judgement are two separate things. How we translate the science, implement a plan, and tell the story of the decision is of utmost importance but that’s not science, it’s judgement. This makes us uniquely positioned to engage the public in the interpretation of data to inform sound decision making.

In most scientific research we look for two kinds of results (I concede others exist, but the two I cover encompass most scientific research). The results typically come in the form of descriptive and inferential statistics.

Descriptive results tell us what’s happening, in most often, numeric terms but might also simply tell the story of things as they exist. Inferential statistics leverage the central limit theorem to infer results on the population at large and use models to rule out random chance in our hypothesis.

Science is a system that says “Hey! This small slice of the pie that you’re looking at, well it isn’t random. This is what’s happening and it’s happening for a reason.”. What it doesn’t tell you is what you should do with that information. This is where judgement comes in.

Judgement is imperfect. Judgement attempts to use all data, even “soft'' imperfect data that might not be considered science at all. Things like economic effects, personal perspectives on social constructs like liberty and tyranny, even intuitive “gut” reactions can be valid inputs in judgement. (Remember the fight or flight story of the tiger shaped shadow in the grass…don’t wait for science on that one… trust your judgement and make the decision!). Nobel laureate Daniel Khaneman’s research in cognitive behaviors and decision making helps us understand human’s behavior and data. (See suggested readings below). Judgement comes from humans alone - not from science – messy, imperfect, full of cognitive bias humans.

Judgement via policy decisions can be rooted in science and yet have conflicting variables that lead towards opposite positions that are equally valid. That’s what I love about science. Where that data leads with regard to action is entirely subjective. This is what people misunderstand. Science is not a magic box that tells us the answer. It’s more like a game of Clue with partial answers that we come to understand more and more over time through a body of research. As EM’s we know that all models are wrong, yet when we couple them with probability, we get useful data.

As engineering managers, we know people are messy, imperfect, beings. We also know data, models, and the scientific method are very valuable tools to inform decision making. What makes us unique is our ability to translate the science, the data, and the models into something useful.

Suggested Books for Further Reading

Cooke, R. M. (1991). Environmental ethics and science policy series. Experts in uncertainty: Opinion and subjective probability in science. Oxford University Press.

Kahneman, D. (2011). Thinking, fast and slow. New York: Farrar, Straus and Giroux.

About the Author

Jesse D. Kamm, Ph.D., PMP is an imperfect, full of cognitive bias engineering manager with a passion for bridging the gap between industry and academics. His experience in themed environment projects, hospitality, retail, faith based and community partnership projects, medical centers, senior living, and work/live/play development projects coupled with his experience with academic journals, conferences, universities and industrial trade schools programs, and as a Co-PI on grants involving the National Science Foundation and the U.S. Department of Labor provide a unique perspective on the scholar-practitioner. Connect with him on Linkedin or at jkammphd@gmail.com.

by Alexis Devenin, PMP

Not all jobs can be done remotely. This is the case of plant maintenance activities. Maintenance managers have the responsibility to reduce the infection risks of maintenance workers during work. In addition to implementing the sanitary measures widely promoted by health experts, managers must reflect on Maintenance Strategy in order to accomplish reliability and operational continuity.

The world is in “pause” or slow motion. Hence, there is an opportunity to reflect and improve the way things are done. In Maintenance Strategy, a rationalization of work must be done to minimize workers’ risk exposition. To do that, think in the following actions:

• Review the frequency and criticality of maintenance work.  Maintenance plans consider a lot of inspection and preventive change activities. The frequency of these activities has been set a long time ago, and no one has reviewed or updated these frequencies according to equipment behavior. This is not because of laziness, but rather because maintenance is usually a dizzying activity that doesn’t get the attention for a  deep analysis. The slow rhythm of productive activities as a consequence of the pandemic is an opportunity to check the frequencies and content of the existing maintenance plans. Maintenance may be able to  be done less frequently without a significant increase in risk of failure or equipment deterioration, and unnecessary interventions could be eliminated.

• Favor predictive maintenance over preventive maintenance. Preventive maintenance often considers changes that are not necessarily related to an imminent failure. In fact, many failures are not related to wear or time in use. A lot of unnecessary works can be eliminated by switching to predictive maintenance instead of preventive maintenance. Predictive technologies like vibration analysis, thermography, oil analysis, nondestructive examination, etc. allow for diagnosis of equipment condition, and allows maintenance work to be honed in to where it is necessary.

• Increase the effort in planning activities. The duration of many maintenance activities can be extended due to a  lack of good planning. It is necessary to increase detailed planning to avoid delays related to lack of materials, tools, permits, and coordination. Planning can help ensure that workers will be in the plant for just the required amount of time, minimizing their exposure to others during the pandemic. .

• Check the required critical spare parts stock. Supply chains are strongly affected due to the pandemic, and delivery times are very uncertain. For this reason, it’s important to reflect on the availability of critical spare parts in order to avoid additional troubles in maintenance of machines with unexpected failures.

• Finally, make an effort to maintain a good work environment. Social distancing has affected the way we communicate. As maintenance is a stressful activity and in which, at times, relationships become very tense, it is essential to ensure good communication and team spirit.

About the Author

Alexis Devenin is a Mechanical Engineer with his MBA and PMP certification. He is an Engineering Project Manager with 20 years of experience in the Steel, Mining and Renewable Energy industries. Connect with Alexis on LinkedIn.

I would like to welcome you to the monthly newsletter for April and I hope that you are all well in these continuing challenging times caused by COVID-19.

In this newsletter I would like to discuss how engineering management can be viewed from different perspectives including how it can help with the delivery of projects. As we know, projects are a key part of our lives. We may want to refurbish part of our house, which can be viewed as a project, or we could be planning for a special holiday, which can also be viewed as a project. Essentially a project is a temporary organization designed to meet a set of agreed objectives – and delivered according to the so called ‘iron triangle’, that is, according to a fixed budget, schedule and specification while achieving a pre-defined quality level. In this regard we can all become project managers and the set of skills and knowledge associated with this area is of course the field of project management.

I like to view project management as a subset of engineering management. Indeed, I have worked on projects and programmes (sorry, programs) for a large part of my career. Starting out as a graduate scientist working at the UK’s Ministry of Defence, I worked on projects to develop new types of energetic materials. I became a project manager and later on a program manager, overseeing R&D in areas such as the chemical analysis of propellant formulations and the mechanical testing of solid rocket motors. Working on these projects and programs, I was able to leverage my scientific knowledge, while beginning to establish and build my management skills and knowledge. Later in my career, I was able to work on various other projects, including the refurbishment of naval vessels along with the development of R&D programs for oil and gas applications.

Throughout this time I was able to strengthen my project and program management skills and knowledge, including using process-driven as well as agile techniques. In parallel with this project management development, I was also able to draw on a wider set of skills and knowledge from the field of engineering management – even though at the time I was not necessarily aware that I was doing it. This included developing an understanding and using different techniques from systems engineering – formalized requirements capture, system modelling and using various system diagramming techniques. I also developed my knowledge of technology management, which was especially useful in an R&D environment. Learning how to assess technologies according to the TRL (technology readiness level) scale, using technology roadmaps to communicate the development trajectory for a portfolio of technologies, as well as drawing on innovation management practices. A further area that was developed was engineering economics, learning how to build a business case for a new technology program based on calculation of the NPV (net present value) for the investment. These additional areas took me beyond my original project management knowledge base, and expanded into different parts of the wider engineering management discipline.

We can consider engineering management from a further viewpoint. Some people debate the relative importance of IQ and EQ. Without going into lots of detail, I would argue that striving to have a good level of both is the ideal. The traditional view of scientists and engineers is that they have a good IQ but may sometimes be deficient in EQ. But why can’t we have good levels of both? Engineering management can help with this. Managing teams of engineers, working on projects as well as managing and directing programs along with strategic management and organizational leadership – all these areas, which are part of engineering management, require good people skills, and with experience, we can further develop our EQ alongside our technical orientation towards IQ.

In conclusion, engineering management can be viewed through many different lenses. As a disciplinary area that can support career development and help with the management of technology projects and programs. As a subject that includes a number of core building blocks (such as project management, systems engineering and technology management). As a field that helps technical specialists to build and enhance their EQ alongside their IQ. I would encourage us all to consider which lens we currently view engineering management through, and what it would be like to use a different lens from time to time.

Dr. Simon Philbin
ASEM President

by Teresa Jurgens-Kowal, PE, NPDP, PMP®, CPEM

Like most of us, I have seen tremendous changes in my way of life over the past two months.  January and February were extraordinarily busy for me as I conducted innovation best practice training online, in the Washington, D.C. area, and in Germany.  My business was flourishing.  

Now, since conferences are cancelled and company budgets for training and consulting are dried up, I don't know when or where my next assignment will be.  My professional worries are compounded by personal concerns - my aging father had a heart attack and my husband's job transferred us to a new city where I literally know not one single person.  

As an engineer and as a leader, I have chosen to tackle the plunging economy with a strategic approach.  As engineering managers, we must deliberately choose steps to support our teams during what is expected to be a very long economic recovery.  

The Six Stages of Grief

Psychologists teach that whenever we experience a loss, we grieve.  The loss can be the death of a beloved family member or friend.  A loss is also a significant change.  Many people have, and are, experiencing job loss.  Students have lost contacts with classmates and teachers,and as Americans we have lost many freedoms through “stay-at-home” orders.

I don't know about you but over the past two months, I have felt all these emotions and I've circled back to shock, anger, and depression more than once.  But as engineering and technology leaders, we must demonstrate hope to begin to rebuild.  Our team members and direct reports need to understand our mission and vision for recovery.  

Doing Less with Less

So often we hear the phrase “do more with less.”  That is probably not an option under the current economic conditions.  I have heard reports that we should expect unemployment levels of 20% or more.  Such rates of unemployment have not been witnessed in America since the Great Depression of the 1930s.  

It also stands to reason that as the U.S. government sends out stimulus checks to put money into peoples’ pockets immediately, we will see higher taxes and inflation in the weeks and months to come.  Some people will find the stimulus checks more attractive than working and the labor shortage will impact manufacturing, logistics, and the availability of education and services.  

Even more dismal is the glut of oil in reserves.  Because people cannot go to work and airplanes are not flying, we are not using gasoline or jet fuel as much.  This has caused refineries to scale back production.  The Railroad Commission of Texas is considering quotas on oil production for the first time in 80 years (that is, since the Great Depression).  

Honest engineering managers will note that they are going to have less money and fewer people to accomplish goals and to get business going again.  What are some actionable steps you can take?  What will create hope? 

Less Money

It is natural for businesses to reallocate budgets from training and R&D to operations when their very survival is at stake.  As an engineering manager, you should examine every cost to verify the continuation of the service.  If you have been successful with staff working from home, do you need as much office space?  Perhaps, with the crisis, you have found ways to bypass bureaucratic forms and approvals.  Maybe you don't need a luxury vehicle fleet anymore.  

Let me caution, however, to not cut too far.  Costs and investments are different.  In order to survive an extended economic downturn, engineering and technology managers need to identify products, services, and features that add value.  Such innovations require adequate investment, and research shows that companies that continue to invest in R&D during stock market declines are best positioned for growth when a recession ends.  

Less People

The percentage of Americans employed has gradually shrunk for about 50 years already.  We know that many companies have been forced to furlough, layoff , and fire workers during the corona-panic.  Many of these people will not return to their jobs for a lot of reasons.  It would be naive to assume your team will be the same size - or have the same skill sets –- as you had just two months ago.  

Your team will still be grieving, and they are frightened by the rhetoric from constant television coverage.  As a leader, you must consult with each individual one-on-one and with the whole team together.  Discuss the organization’s goals and plans for survival.  Prioritize the projects and actions that will provide short-term revenue over the next three to six months.  Then, list the projects and plans that will deliver results in the next 12 to 18 months.  Finally, add projects that are growth-oriented for the long-term .  

While it will likely be “all hands on deck” to assign teams to short-term survival projects, recognize the projects that inspire passion in your team members.  Short-term projects will include adding operational efficiencies, enhancing automation, and managing increasingly complex distribution systems with limited supplies.  You may have some of the front-end work already done on these projects, so be sure to have open discussions with all available team members and senior executives regarding a strategic path forward.  

Providing Hope

Nothing is ever bad forever and nothing is ever good forever.  Unless we all plan to hibernate in caves, business will someday resume in some fashion.  As engineering managers, we must recognize our team members are traumatized and that our operations are maimed.  Yet, we can offer hope by listening to our stakeholders (bosses, customers, employees), and quickly implementing survival tools.  We must do less with less.  So, consider your most critical recovery projects for investing, and assign your best skilled workers to execute those projects.  

We have a long road ahead to rebuild our businesses after committing economic suicide.  But the leaders in recovery can be – and should be – data-driven, hardworking engineering managers!

What steps will you take personally and professionally as an engineering manager to support economic recovery? 

About the Author

I am passionate about innovation and inspired by writing, teaching, and coaching.  I tackle life with an infusion of rigor, zeal, and faith.   It brings me great joy to help you build innovation leadership.  I am an experienced innovation professional with a thirst for lifelong learning.  My degrees are in Chemical Engineering (BS and PhD) and in Computer and Information Decision Making (MBA).  My credentials include PE (State of Louisiana), NPDP, PMP®, and CPEM, and I am a DiSC® certified facilitator.  Contact Teresa Jurgens-Kowal at info@simple-pdh.com or connect with me on LinkedIn.

by Harry Moser, Founder/President, Reshoring Initiative

Tectonic shifts in global supply chains were apparent even before the COVID-19 outbreak. Analysis by Bank of America points to tariffs, automation, carbon footprint issues, and national security as driving factors of the shift.[1] The Reshoring Initiative’s 2019 Data Report, due to be released in May, adds rising offshore wages and increased recognition of a broad range of costs and risks. Geopolitical turmoil and shifting priorities had made far-flung supply chains less appealing. The COVID-19 precipitated shock to our hyper-connected global supply chains was systemic and paralyzing. The coronavirus crisis revealed clear evidence of our overdependence on imports, especially from China. Companies have begun to reevaluate their supply chains and consider reshoring.

The increased credibility of reshoring or not offshoring is highly relevant to engineering management. Harvard Business School’s Professors Pisano and Shih have clearly described how the industrial commons is depleted when manufacturing is offshored.  Both engineering and manufacturing suffer from the separation. There is also a tendency to overcome the problem by having engineering follow manufacturing to low labor cost countries.

Import Overdependence

The COVID-19 outbreak has made Americans keenly aware of our overdependence on imports of medical devices and pharmaceuticals. According to the Department of Commerce,  97% of all antibiotics in the U.S. come from China.[2] U.S. manufacturers source 80% of their active pharmaceutical ingredients (APIs) overseas, primarily from China, and China is the chief supplier of APIs for producers in other countries.  Eight-six percent of U.S. hospitals and healthcare systems are concerned about personal protective equipment (PPE) shortages for frontline medical workers.[3] However, about 80% of all PPE is manufactured in Asia. 

Impact on Supply Chains

A recent report by the United Nations Conference on Trade and Development said, “the COVID-19 outbreak will potentially accelerate existing trends of decoupling and reshoring driven by the desire…to make supply chains more resilient.”[4]  According to a Thomas study, 60% of U.S. manufacturers say business has been impacted by the coronavirus.[5] A recent Thomas follow-up study found that over 50% of manufacturers surveyed are ‘likely’ to ‘extremely likely’ to bring production and sourcing back to North America post-coronavirus. Additionally, 47% of U.S. manufacturers report they are now seeking domestic sources of supply.[6] The Reshoring Initiative can provide resources to evaluate if reshoring is right for your company.

Trade Data

Trade data shows a decline in Chinese shipments that began in mid-February 2020 as the coronavirus outbreak caused Chinese factories to shutter. Key U.S. medical shipments from around the world slowed during the crisis. Hand sanitizer and swab imports from China dropped by 40%, and N95 mask imports were down 55% in March 2020.[7]  As Chinese factories slowly reopened, export restrictions were enforced due to quality issues and China’s need to fill their own domestic demand. Critical medical supplies were stranded as suppliers and brokers were unable to receive official clearances for U.S. bound shipments.[8] 

Use TCO for the Offshoring/Reshoring Decision

A broad range of costs and risks can be quantified using the free online Total Cost of Ownership Estimator®. Making sourcing decisions based solely on price often results in a 15% to 25% understatement of offshoring costs. TCO analysis helps companies objectively quantify, forecast and minimize total cost. It takes into account the Ex Works price plus 28 additional costs and risks. TCO quantifies factors, such as those associated with the risk of supply chain shocks or disruptions caused by natural disasters, political unrest or even pandemics. Use of TCO breaks down internal silos, making the impacts on sales, inventory, warranty and engineering relevant to the sourcing decision. Recommended reading includes “Getting A Company Started with TCO” to plan your TCO analysis. 

About the Author

After leading GF AgieCharmilles for 25 years, Harry founded the Reshoring Initiative to bring five million manufacturing jobs back to the U.S. Largely due to the success of the Reshoring Initiative, Harry was inducted into the Industry Week Manufacturing Hall of Fame 2010, participated actively in President Obama’s 1/11/12 Insourcing Forum at the White House and is on the Commerce Department Investment Advisory Council. Harry is frequently quoted in the WSJ, NYT and Forbes, and seen on Fox Business, MarketWatch, and other national TV and radio programs.  He received engineering degrees at MIT and an MBA from U. of Chicago.

Apply for a National Reshoring Award

National Metalworking Reshoring Award Companies that have successfully reshored metal-worked products, parts or tooling, including castings, are invited to compete for the National Metalworking Reshoring Award. The Reshoring Initiative, PMA, NTMA, and AMT are pleased to sponsor this competition. Applications must be submitted by June 30, 2020. To view award details and enter to win, visit www.amtonline.org/reshoringaward. OEMs and contract manufacturers are both eligible. FDI (foreign direct investment) is also eligible. AMT and the Reshoring Initiative are also focused on helping companies make the right sourcing decisions: Rebuilding the Domestic Supply Chains.