Your Engineer Is Bankrupting You

The Most Expensive Line on the Paper

In my early years at a German machinery firm in Stuttgart, we were building a new generation of textile machines. Our Lead Engineer, let’s call him Klaus, was a genius. He wore a pristine white lab coat. He kept his pencils sharpened to a needle point.

One day, he handed me a drawing for a drive shaft.

“Victor,” he said. “This is the heart of the machine. It must be perfect.”

I looked at the drawing. He had specified a diameter of 20mm with a tolerance of +/- 0.005mm. He also requested a specific grade of Japanese steel that had a lead time of 16 weeks. And finally, he designed a custom thread pitch on the end of the shaft, something that required a custom-made cutting tool.

“Klaus,” I asked. “Why is the tolerance so tight? This shaft just spins a rubber belt.”

He looked at me with disdain. “Because we are German engineers, Victor. We do not build loose garbage. We build precision.”

I respected his pride. But I hated his logic.

That single shaft cost us €400 to manufacture. The lead time was four months. The rejection rate at the factory was 30% because the grinders couldn’t hold that temperature-sensitive tolerance.

Six months later, we did a Value Engineering workshop. We loosened the tolerance to +/- 0.05mm. We switched to standard European steel. We changed the thread to a standard ISO metric pitch.

The cost dropped to €45. The lead time dropped to two weeks. The machine ran exactly the same.

Klaus was not designing for the customer. He was designing for his own ego.

This is the “Over-Engineering Tax.” It is the invisible cost that bleeds companies dry. It is not stolen by corrupt suppliers; it is designed into the product by well-meaning engineers who do not understand the supply chain.

The Tolerance Trap: Paying for Air

Let’s talk about tolerances. This is where money vanishes into thin air.

In engineering, tolerance is the allowable limit of variation. Nothing in the physical world is perfect. If you want a bar to be 100mm long, it will never be exactly 100.0000mm. It might be 100.01mm or 99.99mm.

The tighter the tolerance, the more expensive the process. But the cost does not rise in a straight line. It rises exponentially.

• +/- 0.1mm: This is “Standard.” You can do this on a normal machine. Cost: 1x.
• +/- 0.05mm: This requires a good machine and a skilled operator. Cost: 2x.
• +/- 0.01mm: This requires a climate-controlled room to prevent the metal from expanding with heat. It requires grinding, not just cutting. Cost: 5x.
• +/- 0.001mm: This is aerospace grade. You are paying for magic. Cost: 20x.

The problem is that engineers treat tolerances as a safety blanket.

An engineer thinks: “I am not sure if this part will fit. If I make the tolerance loose, it might rattle. If I make it tight, I am safe. I will not get fired for a tight tolerance.”

So, he types +/- 0.01mm into the CAD software. It takes him one second. It costs the company millions over the lifecycle of the product.

I call this “Lazy Precision.”

Instead of doing the math to see if the part actually needs to be precise, the engineer just demands perfection to cover his own backside.

The Supply Chain Consequence: When you demand tight tolerances, you shrink your supplier pool.

• With a standard tolerance, I can bid your project to 50 factories. Competition drives the price down.
• With a “Klaus tolerance,” I can only bid to 3 elite factories in Switzerland or Japan. They know they are the only game in town. They charge whatever they want.

You have lost your leverage before you even sent the Request for Quotation (RFQ).

The Curse of the “Special” Screw

There is a disease in design departments called “Not Invented Here” syndrome. Engineers love to reinvent the wheel.

I once audited a company making consumer coffee machines. They were in a crisis. They couldn’t ship products because they were missing one screw.

I looked at the BOM (Bill of Materials). Item #402: Hex Screw, M4.5 x 12mm, Custom Head.

“M4.5?” I asked. “Why M4.5?”

Standard screws are M4 or M5. M4.5 is a ghost. It exists in theory, but nobody stocks it.

The Engineering Director shrugged. “The M4 was slightly too weak. The M5 was slightly too big for the aesthetic design. So we chose M4.5.”

Because they wanted to save 0.5mm of space, they forced the procurement team to order a custom screw.

• Standard M5 Screw: Costs $0.002. Available in every hardware store on Earth. Lead time: 0 days.
• Custom M4.5 Screw: Costs $0.15. Minimum Order Quantity (MOQ) is 100,000 pieces. Lead time: 12 weeks.

Because of this one screw, they had to hold 100,000 units of inventory. When their screw supplier had a fire in their factory, the coffee machine company stopped production for a month.

They lost the Christmas season sales. Because of a screw.

The Minimalist Rule: If you can buy it from a catalog, do not design it. If your engineer draws a screw, a spring, or a washer that I cannot buy on Amazon or McMaster-Carr, he better have a Nobel Prize-winning reason for it.

Standard parts are the immune system of the supply chain. They allow you to heal quickly. If one supplier fails, you buy from another. Custom parts are a chronic disease. You are dependent on them forever.

DFM: Design for Manufacturing (or, Design for Reality)

Engineers design on a computer screen. In the software, everything is weightless. The material is infinitely strong. The cutting tool has zero diameter.

But factories live in reality.

I have seen drawings that contain “The Impossible Corner.” Imagine a square pocket milled into a block of aluminum. The engineer draws the corners of the pocket as perfect 90-degree angles.

The Problem: A CNC milling machine uses a rotating round tool. A round tool cannot cut a square corner. It physically cannot do it. It leaves a radius.

To get a sharp square corner, you have to use a different, expensive process called EDM (Electrical Discharge Machining), where you burn the metal away with electricity.

• Round Corner: 3 minutes machine time. $10 cost.
• Square Corner: 3 minutes milling + 2 hours EDM. $150 cost.

Does the customer care if the corner is square or slightly round? Usually, no. It’s inside the housing. Nobody sees it. But the engineer drew a square because it was easier to draw a rectangle in CAD than a rectangle with filleted corners.

His laziness in drawing caused a 1500% cost increase in manufacturing.

This is why DFM is critical. DFM means asking: “How will a human being and a machine actually make this?”

If your engineering team does not consult with the manufacturing team during the design phase, you are not designing a product. You are designing a fantasy.

The Material Fetish: “Titanium is Cool”

Young engineers love exotic materials. They read about Carbon Fiber and Titanium and Inconel in magazines. They want to use them.

I had a project where the engineer specified “Aircraft Grade Aluminum 7075” for a simple bracket that held a plastic cover.

“Why 7075?” I asked. “Why not standard 6061?”

“7075 is stronger,” he said.

“Yes,” I replied. “It is also three times the price. It is harder to machine, so the tools wear out faster. And it corrodes faster if we don’t anodize it. Does this bracket hold a heavy load?”

“No. It holds a 50-gram plastic cover.”

He used a Ferrari engine to pull a plow.

The Availability Risk: It’s not just about price. It’s about availability. Standard materials (Steel 1018, Aluminum 6061, Plastic ABS) are like rice and potatoes. Every factory has them. Exotic materials are like truffles. If there is a war, or a trade embargo, or a strike at the mine, the truffle supply vanishes. If you build your supply chain on exotic materials, you are building on sand.

How to Tame the Engineer (A Guide for the Boss)

You cannot just tell an engineer to “be cheap.” They will hear “make it bad.” You have to speak their language. You have to speak about Risk and Efficiency.

Here is the protocol I implemented in my consulting practice for “Inner Circle” clients. We call it the “Red Pen Review.”

Before any drawing is released to the supplier, it must pass a review meeting. In this meeting, we look for three things:

1. The “Why” Interrogation

For every tolerance tighter than standard, the engineer must explain why. “Because I said so” is not an answer. They must show the “Tolerance Stack-up Analysis.” They must prove that if this part is 0.05mm off, the machine will fail. If they cannot prove it, the tolerance is loosened.

2. The Catalog Test

We look at every screw, bolt, nut, and washer. If it is not a standard ISO/DIN part, it is rejected. Unless the part is the core IP of the product, it must be standard. We force them to design around the standard part, rather than designing a custom part to fit their geometry.

3. The “Fat Finger” Rule

We look at the assembly process. Can this part be installed backwards? If yes, the worker will install it backwards. We force the engineers to add “Poka-Yoke” (mistake-proofing) features. Asymmetrical tabs. Guide pins. This costs nothing in design, but saves thousands of dollars in the factory.

Final Thoughts: Simplicity is the Ultimate Sophistication

There is a famous quote by Leonardo da Vinci: “Simplicity is the ultimate sophistication.”

A bad engineer makes things complex. He adds parts. He adds strict rules. He tries to control chaos with force.

A great engineer makes things simple. He uses gravity. He uses standard parts. He designs loose fits that self-align.

When I look at a BOM and I see 500 lines of custom, high-tolerance, exotic parts, I do not see genius. I see a fragile, expensive disaster waiting to happen.

When I see a BOM with 50 lines of standard parts, loose tolerances, and common materials, I know I am looking at a masterpiece.

Your supply chain does not begin at the loading dock. It begins on the drafting table. If you want to cut costs, stop squeezing your suppliers. Go buy your Lead Engineer a coffee. And then hand him a catalog of standard parts.