This project will develop, implement and disseminate an innovative approach for conducting engineering laboratory projects. The innovation consists of having students continuously improve simple physical models of systems while emulating the methods followed by practicing engineers. The objectives of this laboratory approach are to introduce fundamental engineering skills early in the curriculum, reinforce them at the senior level, and provide an entertaining yet challenging learning environment that will help retain and attract engineering students. This laboratory approach will be implemented by assigning teams of two students to an operational electromechanical system with the open-ended task of improving it by following a systematic engineering process. The projects will be working models of real systems built by students using fischertechnik(R) construction components and controlled using a personal computer. Each design team will receive a complete system and all the documentation generated the previous semester with the assignment of improving the performance of the system. During their design process, students will execute the following steps: 1) Systems analysis to identify opportunities for improvement, 2) Evaluation of alternatives and selection of the improvements to be made, 3) Preparation of a project proposal for approval by the instructor, 4~ Planning and execution of the approved modifications, 5) Verification and measurement of the improvements achieved and 6) Preparation of technical documentation. Student teams will be aware that their results and reports will be used by future teams, therefore they will understand the need to develop clear and complete documentation. This methodology, with variations in the specific equipment software, and complexity levels, will be incorporated into a freshman Computer Aided Engineering course required of all engineers and into a senior-level Computer Integrated Manufacturing course required of Industrial and Systems Engineering majors.