French Corey ENG3003 ASS 2 S1 2020 PDF

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Warning: TT: undefined function: 32ENGENGINEERINGMANAGEMENTAssignment 2: Case Study: Peter Border v WilliamTrueblood of Trueblood PTY LTDABSTRACTAn Engineer receives strong criticism after finding a fault in their Design works and relaying to their Employer. Ethical guidelines and integrity are ques...

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ABSTRACT

ENG3003

An Engineer receives strong criticism after finding a fault in their Design works and relaying to their Employer. Ethical guidelines and integrity are questioned.

Corey French U1094721

ENGINEERING MANAGEMENT Assignment 2:

Case Study: Peter Border v William Trueblood of Trueblood PTY LTD

Report Word Count: 3290 Recommended Actions: 222

ENG3003

Engineering Management

Assignment 2

Executive Summary This case study aims to identify matters related to ethical obligations that Engineers face within the workplace. Bound to uphold the Code of Ethics by Engineers Australia, many professionals will experience or witness dilemmas with Employers or Employees conducting unethical behaviour to boost productivity, revenue, profits or reputation. By applying Triple & Quadruple Bottom Line reporting, businesses are objectively reviewed and assessed to ensure conformance with societal, environmental, cultural and financial goals whilst conducting business. Managerial, contractual, ethical and liability aspects will be critically evaluated in accordance with the current dilemma facing Employer and Employees. Courses of further action will be recommended and justified within this report, supporting the integrity of professional Engineers, whilst upholding contractual agreements relating to warranties and guarantees of manufactured products.

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Contents

Executive Summary .................................................................................................................... 1 Introduction to Scenario ............................................................................................................ 3 Body of Report ........................................................................................................................... 4 Management Issues ....................................................................................................... 4 Legal & Contractual Issues ............................................................................................. 6 Ethical Issues and Professional Practice ......................................................................... 6 Product Liability Issues or Intellectual Property ............................................................. 7 Possible Outcomes and Actions ..................................................................................... 9 References................................................................................................................................ 10

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Introduction to Scenario Peter Border is a qualified mechanical Engineer responsible for the design of complex industrial and infrastructure machinery for William Trueblood at Trueblood Enterprises. As the name suggests, William is the Owner and Director of his business which is based on design and manufacture of complex parts for large earthmoving equipment in Australia, established for 35 years. Trueblood currently employs 55 staff and has recently landed the contract to design and manufacture 110 excavator buckets over an 18-month contract. After initial design of 10 buckets had been transferred into production, faults were found within the Engineering Design which may lead to excavator buckets prematurely failing. As such, Peter has identified the issue and informed his boss William Trueblood of the concern they are currently facing. William has opted to plead ignorance to this matter and produce all parts in accordance with the initial design, due to fears of lost profits, however the integrity and ethical nature of such discoveries is questioned by Peter.

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Body of Report Management Issues Peter Border is a qualified Mechanical Engineering graduate with at least 2 years work experience under his belt. Comparatively, William Trueblood is a qualified Mechanical Tradesman with over 35 years industry experience, quantifying a substantial experience variance. However, experience and expertise are two disconnected traits which are neither guaranteed nor required to develop in an analogous manner. Many tradespeople are experts in their field of; fabrication, manufacturing or assembly – however there is no guarantee without tertiary or further education, that their expertise would transfer into design or documentation sectors. Therein lies a crux of the dilemma; William Trueblood may have been trained in manufacturing & assembly, overseen many Design teams and projects over his tenure – though without formal education surrounding the particulars of Engineering Design, William can hardly be attributed to comprehending the vast intricacies of Design works, especially when considering indepth knowledge of liabilities, planning, structure, legalities, contractual, ethical, theoretical and intellectual properties relating to Mechanical Engineering. William Trueblood may understand the fundamental aspects of many projects, though Peter Border, as a graduated Mechanical Engineer, possesses more in-depth analysis and investigative techniques and strategies, defined as expertise as opposed to significant experience. William Trueblood’s business model is based upon the design, design development and manufacture of complex parts for various industrial applications. This venture of 35 years as an established business would suggest that William has adept experience of contractual products and the expected timelines they involve. Complexity takes extensive time – from processing, design development, calculations and iterations, the process of designing a functional, reliable, guaranteed product is one which takes time. Evidently, William Trueblood as Owner has an executive decision-making status, one which must consider all aspects of contractual relationships prior to execution of contracts. From William’s significant experience handling such manufacturing projects, one may understand the reliance upon William to effectively oversee scoping the design, manufacturing and delivery of such products, and the contractual timelines which are defined by their formal bindings. It can be expected that William was ultimately responsible for the contractual deadline when executing the contract and shall be held responsible for not heeding the advice of versed Engineers Peter and Rohan when the design works were not completed to 100% satisfaction. Cranbrook Excavators is an exceptionally large global company with sales grossing over $2B per year – a fruitful client for Trueblood if subsequent works or contracts can be negotiated. Trueblood employs 55 staff currently, surmising a large economic difference between the two contracting parties. Judging by employed staff purely, Trueblood’s turnover may be an estimated $10-$25M per annum. As a Managing Director/Owner, William may value this relationship between Cranbrook tremendously considering the additional works requested by Cranbrook for a further 100 parts over 18 months. The total value of such works equates to $2.2M over 18-months, theoretically up to 10% of Trueblood’s estimated revenue for this period. From William’s perspective, garnering this relationship of guaranteed work for 18 months is a profitable and favourable endeavour – giving reason to his reluctancy of requesting an extension of time for design works or increase contract value for the manufacture of 100 upcoming components. One may argue that a relationship with a company of this size is one which must be nurtured – absorbing losses in order to preserve such relationships is common courtesy when large contracts in the future are probable. The first depiction of profit with current manufacturing costs yields as such below; Manufacturing Costs 1.0

Manufacturing Costs 2.0 (revised)

Profit = $3500/part, 15.9% Estimated Total Profit for 110 parts = $385,000.

Profit = $1500/part, 6.8% Estimated Total Profit for 110 parts (incl adjusting original 10 parts) = $165,000.

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Total predicted losses summate to $220,000, a 57.1% loss from initially envisioned profit margins. Evidently, William Trueblood is right to feel deflated by these potential losses, however, the project is still likely to generate a rough 7% profit margin, which must be financially contrasted against overheads and running costs of such operations. Lean resourcing with mass production of these parts is a pathway which may also be assessed, especially considering an 18-month pipeline of repeat work. The ability to create repetitive jigs and infrastructure which expediates productivity is one avenue which may be explored in order to recoup potential losses – creating a strong production line, manufacturing matching products may reduce costs for the upcoming 100 parts, using the ability to mass produce efficiently. The design nature of this product leaves a questionable timeline regarding contractual requirements and the effective quality control of prescribed items. The product was evidently complex in nature, which demands respective time in any capacity or industry. Peter was evidently pressed for time when handing over this design to the production team and expressed his belief that the analysis of such plans would require additional time. Ideally, this contract should have required input from the design team regarding the necessary timelines associated with design, testing and analysis – however they appear short of time, whether by personal fault or directional fault from the Contract executioner is unknown. Unsatisfactory products were evidently produced due to a shortage of Engineering analysis, involving both consideration for the contractual terms, alongside a demand for product and quality controls. When Peter had discovered his issue regarding the potential premature failure of his design development, he performed an Ethical obligation to report such findings to his boss, William. This action discharges Peter of any ethical dilemma on his behalf, according to the Ethical commitments made by professional Engineers. Upon performing his due diligence as a Mechanical Engineer, he has suggested a potential rectification to this fault, which will take place prior to the manufacture of such components. According to Figure 1, the ideal time for Engineering alterations is prior to manufacturing; during design stages, providing an evidently low cost – high benefit reward as opposed to modifications post-manufacture. William must consider these corrections early in contractual terms, as premature failure of all parts will exponentially increase costs for shutdowns, transport to and from Williams’ factory, alterations to severely weathered components and a whole suite of issues related to parts shortages and increased Figure 1: Engineering Change Implication Timeline. rates for resources such as steel and consumables at future intervals. Once notified of Peter’s fault, William Trueblood made the decision to not recall existing parts and to continue manufacturing future parts using the existing design. Evidently, this decision appears unethical, especially when “safe enough” was William’s ideology for the dilemma. The manufacture of 110 potentially faulty products is a significant breach of Ethical Code if these errors have been identified prior to production, and as professional Engineers, Peter and Rohan have an Ethical code which may require them to report such instances. “Safe enough” is a dogma which may suggest negligent liability on William’s behalf and could land his company in contractual turmoil if his duty of care as a manufacture is found to be in breach of contract. William, as Director and Owner of Trueblood, may be financially and contractual liable for any damages or shortcomings these parts incur, leaving Trueblood in more financial disorder than merely rectifying faulty parts. There is a due diligence which may be performed by William to notify the client for ethical and liability implications, regardless of the cause of such error. William appears to be operating from a perspective which considers only the direct predictable losses, using his decision-making powers to influence the company’s perspective on contractual, legal, ethical and financial obligations. The act of nonchalantly dismissing a significant design and production issue (“safe enough”) to enhance returns on profit and coherently risk the liability of such products suggests

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the mindset of Machiavellianism – a personality trait of which one uses deceptive, self-seeking or manipulative tactics to enhance their personal stake in matters of business. (Dalton, D, et al, 2013) advises that individuals adopting Machiavellianism (Machs) are “more likely to ignore ethical norms when confronted with moral issues” and may often implement unethical behaviour such as stealing, cheating and lying in their business favour or consumer practices. Furthermore, Machs operate with ethical characteristics based primarily on self-interest and betterment, motivated by maximising economic gain with little concern for others. ( Dalton, D, et al, 2013) conducts further research when Machs are involved with whistle-blowing Employees, and the salient intentions of which will be discussed further below.

Legal & Contractual Issues Evidently, Trueblood Enterprises is a significantly smaller operation than its contractual counterpart in Cranbrook Excavators. The contract between these two companies suggest opposing values when viewed from alternative perspectives, Contractual Value Cranbrook Excavators = $2.2M*(12/18 months)/$2B turnover p.a = 0.07% annual turnover Trueblood Enterprises = $2.2M*(12/18 months)/25M (estimated turnover p.a) = 5.9% annual turnover These statistics display the vast financial variance between the two, with Cranbrook merely scratching the surface of their global operation to fund this project. Cranbrook will not be financially stretched or disadvantaged by the displacement of this contract, however Trueblood may depend upon this income to fund their business prospects. Statistically, this project is 84 times larger for Trueblood than for Cranbrook and clearly, Cranbrook will likely have no hesitation to terminate this contract due to financial implications. Trueblood must consider the financial burden this may place on them if the relationship turns contractual. It is advisable that Trueblood considers the contractual and financial inferences when dealing with a much larger, suitably safeguarded legal entity when shortcuts or breaches of contractual obligations are made by themselves. Cranbrook Excavators have expressed their pleasure at the current contractual fulfilment, relating to cost, time and quality performance. One can perceive that Cranbrook will expect the further 100 components to be finished to the same standard, or better. Regardless of cost implications, the negligent act to sweep this Engineering failure under the theoretical rug will ensure Trueblood are running the quality-gauntlet for years to come, endangering not only a financial burden, but a contractual, relationship and any forthcoming contracts which may be of value to Trueblood. It is in Peter’s best interest as a professional Engineer to abide by the Ethical Code relating to Integrity – “acting on the basis of a well-informed conscience, giving due weight to all legal, contractual and employment obligations” (Engineers Australia, 2019). William has expressed his extreme disappointment with the Design Team in relation to this matter, attributing the entire inaccuracy upon the Peter & Rohan. This perspective is entirely plausible given the Design Team’s responsibility to effectively iterate, adjust and analyse designs to accommodate any potential Engineering failures or weak points. However, given the complex nature of Williams’ business model alongside his vast experience, one can summate responsibility to the Directive power accountable for the Contractual terms which have been agreed to – including Practical Completion dates and Design timelines. There is no question this program was rushed into Production prematurely, lacking a thorough Engineering analysis, which has contributed to the Design Team’s culpable error. The responsibility is evidently shared between the two parties - regardless of resultant actions performed by William or Peter.

Ethical Issues and Professional Practice Many issues arise surrounding this scenario and the Ethical dilemma that Peter and Rohan face as professional Engineers. The Engineering Code of Ethics will be brought into question and the correspondence and actions performed by both Peter and Rohan. It appears costs are Williams largest concern with this matter, however the cost-effectiveness of taking a gamble on 110 components to

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prematurely fail is one that does not uphold ethical values, financial viability or the associated additional cost risks involved. Upon reviewing Peter’s new analysis, he becomes “concerned with the possibility of fatigue failure for long term, leading further analysis to conclude it is a distinct possibility to fail at 15,000 hours, which requires further validation to be confirmed”. This statement leaves many factors to be considered; verifying the likelihood of failure, causes of such failure, root of the cause, behavioural and mechanical characteristics which may lead to premature failure alongside maintenance, repairs and overall care of such components. Engineering similes which commonly occur in modern Mechanical Engineering with comparable faults may opt for product recalls, disclaimers or discontinuations of such products, none of which will occur if William proceeds to negligently dismiss such circumstances. Rohan’s actions appear to suggest a conflicted opinion, being that he was hesitant to mention this scenario to William until imperilled so by Peter. Rohan’s initial thought process was rather unethical, attempting to sweep this under the rug and forgo any disciplinary action from his boss. Although not entirely unethical, after agreeing to consult William about the situation, Rohan received equal warning regarding the Design Teams blunder. It is unclear of Rohan’s actions during or after Peter’s presentation describing his findings, however it is believed that Rohan supported Peter in accordance with his Ethical Code. A recall of the manufactured 10 parts provides a 90.9% reduction in overall repeat works for Trueblood if William is to produce the remainder of the contract with the faulted design. In theory, the manufacture of 10 new components will take place in roughly the same time as the first set of buckets, meaning the substitution and rectification of the 10 currently faulty buckets will create a scheduled time loss of 9.1% (10/110 buckets behind schedule). This presents as the best-case scenario for the rectification of such works, when considering a recall of the entire fleet will cost significant shutdowns and production losses, additional to transportation or remote rectification works to secluded sites. The business owner/ Director is to make executive decisions, however as Professional Engineers, according to their equivalent Code of Ethics, may be inclined to notify the relevant authorities objectively – regardless of being labelled a whistle-blower. One consideration of Trueblood’s corporation will be the Triple Bottom Line inves...