Engineering Economy in 1912

Engineering Economy in 1912

In the same issue of Industrial Engineering that Percy C. Day published his treatise on herringbone gears, Sterling H. Bunnell offered “Expense Burden: Its Incidence and Distribution.” Those of you who have taken the exams associated with professional engineer licenses are probably having flashbacks to the dreaded Engineering Economy section. For some readers these may seem like a foreign language, but for many years engineers were expected to not only understand accounting principles but also to actively work to reduce these “indirect” charges through improved processes and organization.

I could make an argument that engineers abdicating their responsibilities in that area have contributed to the decline of manufacturing activity in the United States. When was the last time your engineering department even talked about “burden,” much less brainstormed ways to lower it? By remaining aloof from “bean counting” we, as a profession, have abandoned the age-old precept that “a good engineer works for free.”

Some of you probably think that still applies to you — in a sarcastic way. The concept, as explained to me back at the dawn of time, was that a good engineer endeavors to “save” his employer the equivalent of his or her salary through reduced waste and scrap, improved methods and tools, and more efficient designs. When we stop measuring and valuing these things we end up being viewed as part of the overhead, rather than a valuable company asset.

Think of the economic situation when Sterling H. Bunnell penned this paper. The “unsinkable SS Titanic” was months away from its fatal voyage, Henry Ford was striving to improve his big-selling Model T while simultaneously reducing its price, and great strides were being made in all types of machinery and transportation equipment. The Great War was not yet on the horizon so it was possible to concentrate on building wealth.

Bunnell could be quite blunt in his remarks; one paragraph begins with “By far the most difficult of the problems presented for the joint solution by the engineer and the accountant is the distribution of factory burden on correct principles.” It concludes with a stern caution — “Accounting of this character has made it possible to operate many a factory at a huge profit, until the economically worn-out shell could be unloaded on some capitalist innocent enough to dispense with engineering advice, and purchase on the book figures of past operation.” In between he describes the still common practice of managing for short-term results rather than long-term viability.

When considering your role in your company remember that thousands of great engineers lose their employment every year because the “bean counters” have decided an operation is no longer viable. If you like what you do and where you live, and who you work with, strive to be that engineer who “works for free” and find ways to reduce “manufacturing burden.”

(Editor’s Note: For the full article referenced in this post, click here: Expense Burden – Sterling Bunnell)

Categories: Gear Talk With Chuck

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Charles D. Schultz

Charles D. Schultz is President of Beyta Gear Service and one of Gear Technology's technical editors.

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