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I'm a 2006 grad mechanical engineer. My freshman year, I thought the exact same thing... what does a mechanical engineering do? These days I think more along the lines of "what doesn't a mechanical engineer do". I realize that's a bold statement, but bear with me.
I would say there are a two main categories mechanical engineers in the real world:
- Design Engineers
- System Engineers
Design engineers typically create something new - anything from a kitchen blender to a locomotive engineer. System engineers usually work to optimize, maintain, or upgrade existing systems - anything from power plant to medical drug production.
Engineering in general is using science and math to predict the behavior of something. That something can be a chemical reaction (ChemE's), an electrical circuit (EE's), a physical product (ME's), or a complex system (ME's, EE's, ChemE's, etc).
As I design engineer, I am given a design problem. I work with a cross-functional team (yes, the much hated teamwork they give you in school is just practice for the real word) to determine how to solve the problem. I then design my solution based on the fundamental engineering principles that I have learned and the experience that I have gain. I build it, test it, and then improve it before it goes to production. Sometimes due to schedule constraints, all of my improvements cannot be incorporated, thus I must make decisions based on schedule and product performance.
Keeping in mind, that I work at a much smaller company, my role as a mechanical engineer is much bigger. Day to day, my job involves design meetings, quiet design work at my desk, building prototypes with my hands (awesome!), testing the prototype to failure (MORE AWESOME!), working with vendors to manufacture my prototypes, traveling the world to manufacturing facilities to ensure my design is implemented properly.
In larger companies, the mechanical design engineer's role is smaller. They may only design, or only test, or only travel to manufacturing facilities, etc. Regarding company size, it's good to know if you want to be a small part of something big (think Boeing , and how awesome planes are), or a big part of something small (thing headphones, pens, pencils, and other small things).
I've never done system engineering, but I know many who have. This is more of optimization a system. For example, there are many thermodynamic cycles that go on in a power plant. By monitoring the changes in these cycles (temperature, pressure, vibration, etc), you can predict what has gone wrong in the system before you get into the system to fix it - and sometimes you can do this before something catastrophically breaks causing downtime. Imagine you car, based on a small change in sound or vibration, you can pinpoint that your transmission is about to fail before it fails. Now, you can schedule a time to get it fixed rather than having your transmission fail on your way to a really important meet, or a hot date. Now imagine doing the same thing for large systems, where down time doesn't mean missing a date, but instead missing the opportunity to make a lot of money.
If you look at almost any industry, a mechanical engineer is involved. Medical, consumer, industrial, commercial. Typically, if you can touch it, a mechanical engineer was involved. This makes mechanical engineering really broad and appealing to almost any personal interest... which is AWESOME! I love audio, I always have. Thus I have steered my mechanical engineering degree towards the audio world. I have designed headphones, speakers, and subwoofers and loved every bit of it. If I had done the same work, let's say for a toaster company, I would not have loved my job as much because... as much as I enjoy toast, I don't love toasters they way I love audio.
Get your ME degree and during the long hours of Thermodynamics, Heat and Mass Transfer, Fluids (ewww), and kinetics, figure out what you really love. Where do you dream of working? Chances are, they need a mechanical engineer. Steer your electives and your internships in that direction and land you dream job when you graduate!