Developing essential business and engineering skills through case competitions

The intersection of business and engineering is being discussed now more than ever as companies are demanding that new hires graduating from baccalaureate engineering degree programs have a level of business expertise to complement their technical skill sets. Companies also expect business students to have an understanding of technical concepts to be effective working in teams composed of employees with both business and engineering backgrounds. With corporate investment and engineering project funding decisions more reliant upon company financial statements and stock price impact, now more than ever, it is crucial for engineers and business people to be able to share common skill sets to effectively evaluate project investment alternatives. This paper discusses an integrated approach being taken at multiple universities to develop business and engineering competencies in industrial engineering and business students through case competitions. The paper will describe two different approaches and compare and contrast the business and engineering sponsored case competitions. Motivation and Background The Pennsylvania State University (Industrial Engineering Program) Motivation The motivation for bringing business concepts into the engineering classroom and for bringing real world case competitions is a result of the expectations of corporate employers in this new economy. At Penn State, making curriculum changes to the current engineering economy course came directly from suggestions made by corporate executives serving on multiple engineering advisory boards for the industrial engineering department. Input from the industrial engineering advisory boards noted that industrial engineering graduates needed to graduate with a more thorough understanding of the link between engineering economic decisions and business planning, financial statements, and financial accounting. It is crucial for industrial engineering students to learn not only how to provide a definitive argument explaining the conclusion of their engineering decision (both from a qualitative and quantitative perspective) but also how to take this one step further to be able to understand and explain how their decision will impact company financial statements (i.e., the bottom line of the company). At Penn State, industrial engineering students are only exposed to a semester of financial accounting and financial statements if they choose to complete a minor in business/liberal arts. An overhaul of the engineering economy course in the industrial engineering program was completed. However, simply adding additional lecture material in the engineering economy course to cover the link between engineering economic decisions and business planning, financial statements, financial accounting, and stock value was only one part of addressing the needs of the companies hiring industrial engineering students from this university. The advisory boards and the course instructor that presenting a real world company problem would force the students to apply engineering economy tools learned in the course and to justify their engineering decisions would allow the students to gain real world training in this area. The team competition component was expected to add another element of motivation for the study and to provide a real world competitive business environment. University of Pittsburgh (Center for Supply Chain Management Program) Motivation The strategic intent of the Business School from the University of Pittsburgh, within the scope of this paper is the integration of theory and practice. This strategy is realized through four guiding principles: experience-based learning, collaboration, innovation, and globalization. The principles are embodied in the University’s Center for Supply Chain Management (SCM) which conducts research projects, educational programs, and outreach activities in close collaboration with corporate partners, professional organizations, and other schools within the University. The Center for SCM has sponsored several working sessions with industry. Recurring themes from the working sessions are the need for students who are able to employ systems thinking and critical thinking, in a team setting, to analyze processes and data, to arrive at data-driven recommendations, and then communicate the analysis and recommended way forward effectively. One of several ways these industry needs are met is through the “Race to the Case” competition. The Swanson School of Engineering at Pitt also recognizes the critical need to provide students with experienced-based learning opportunities. The instructor for the engineering economy course (housed in the department of industrial engineering (IE)) has incorporated numerous active learning pedagogies, including case studies and model-eliciting activities, within the course over many years. The instructor saw the “Race to the Case” competition as an additional opportunity to provide IE students with an opportunity to apply engineering economy and other industrial engineering skills to a real world problem. The Race to the Case, represented by Figure 1, is an annual case competition, sponsored by the Center for SCM in collaboration with the Engineering School and run primarily by the students themselves, where engineering and business students collaborate to analyze the data presented in a SCM focused case study, and then propose actions that resolve the case in a manner that balances delivery, quality, cost, and flexibility. Cases are chosen that require both engineering expertise and business acumen to successfully analyze their data and synthesize recommendations. The 2015 case focused on the impact of 3D Printing (additive manufacturing) on SCM in China; integrating theory and practice through experience-based learning, collaboration, innovation, and globalization. Figure 1: Logo for the Race to the Case Competition Developed and Hosted by The University of Pittsburgh. Background from Prior Literature A challenge instructors often face is how to make abstract concepts concrete for their students. Drawing on experiential-learning theory (ELT), Baker, Jenson, and Kolb recommend a procedure that moves students through a four-stage process of: experiencing, reflecting, abstracting, and acting. The incorporation of case studies in the classroom is one method of simulating experiencing, reflecting, abstracting, and recommending actions based on the real world scenario depicted by the case. Additionally, engineering education literature has continuously shown that projects with industry can be helpful for undergraduate and graduate students, even the processes of soliciting, administering, and managing industry projects that reinforce academic topics in engineering, technology, manufacturing, project management, lean, and six sigma. Other topics that are reinforced include professionalism (through interaction with industry), teamwork, and leadership. Formally, these projects are also often assessed as students work to meet the established learning outcomes. Another benefit of incorporating industry projects within engineering economy courses is that academic materials such as course lectures and notes have excellent coverage of project economic analysis, but these academic materials lack the hands-on use of economic analysis within a design that a project with industry can provide. In a broader context, within the K-16 realm, there has been a push to increase the mathematical competency of students, particularly financial literacy. Within the book, Mathematics and Democracy: The Case for Quantitative Literacy, the findings and suggestions are aligned with National Academy of Engineering recommendations; that an individual will need to have a basic understanding of decision making to make competent financial decisions in order to survive in the 21st century society. Engineering economics takes this level of understanding to a higher ceiling by including competent financial decisions for a company or organization with respect to projects and designs. The importance of economically quantifying projects has been shown in prior literature, as the economic and social well-being progress is a direct consequence of technical change and its application in the modern world. Solow originally estimated that technological and engineering advances led to 80% of the economic growth and development of a society . Furthermore, incorporating economic decision considerations within the design process is what sets engineers apart from other specialists with respect to financial decisions. Basically, understanding the economic characteristics of a technology or a design and its costs is what distinguishes engineering economics from other branches of economics, accounting, and finance. Also, engineers are equipped to analyze a project, technology, and design with respect to sustainability and environmental factors. Introduction to the Competitions Penn State Industrial Engineering Program At Penn State, 116 industrial engineering students competed in a case competition sponsored by a major U.S. retailer as part of their junior engineering economy course. The problem given to the students was a real world challenge currently being addressed by the U.S. retailer. The case competition was carried out in an effort to complement an evolving engineering economy curriculum with increased emphasis on business concepts rooted in finance and financial accounting, namely financial statement analysis. The first place team was awarded $1,500, second place $1,000, and third place $500. A well-known, large U.S. retailer worked with the instructor of the engineering economy course at Penn State to put together the case study problem and charter. This was the first large case study competition of its kind for this retailer.