Engineering Outsourcing/Workshare Concerns?
Engineering Outsourcing/Workshare Concerns?
(OP)
Virtually all of the major engineering firms are now sending at least some piping design and CAD work overseas (namely, India) and many are beginning to do the same for the various engineering disciplines.
I would be curious to hear everyone's experiences, worries and predictions about a growing trend of American engineering firms sending engineering work abroad.
Jafka
I would be curious to hear everyone's experiences, worries and predictions about a growing trend of American engineering firms sending engineering work abroad.
Jafka





RE: Engineering Outsourcing/Workshare Concerns?
Americans seem to sell stress. My boss profits from selling my ability to deal with stress more than for my engineering skills. Don't sell expertise: sell stress management. Put a bunch of incompetents on the job and commit to have your lackeys respond and responsible. Aggressive behavior the american way....
RE: Engineering Outsourcing/Workshare Concerns?
One company brought in a whole construction outfit from India to build a new facility in a Good Ol' Boy state. The union people refused to work with them in any way. They sent the entire team home and hired a US outfit. A good friend familiar with that situation told me about it.
Years ago an older engineer laughed as blue collar jobs were eliminated. He laughed heartily claiming engineering jobs would never be outsourced or eliminated. I pointed a few things out and he stopped laughing and soberly claimed it would never happen. He's been retired for many years so it didn't happen to him. It's happening to us.
RE: Engineering Outsourcing/Workshare Concerns?
Fe
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
Of course my position is slightly different to yours, since I am an outsourcee in effect.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Engineering Outsourcing/Workshare Concerns?
There are pros and cons to it.
The only pro I can see is the cost
Cons include the different culture, less familiarity with local codes, the timezones, money going overseas.
The big thing that often gets underestimated in this type of thing is the amount of 'value judgements' that are required in engineering. If you are to have someone decide on what is the acceptable level of risk and safety on a project would you prefer someone who lives in a similar town to yourself or someone who lives in a country where the only road rule that is obeyed is 'the biggest vehicle gets right of way'.
Also, who takes responsibility for this project? It would be much more difficult to get compensation for negligence e.t.c. from a foreign company than from a local one.
RE: Engineering Outsourcing/Workshare Concerns?
"Wildfires are dangerous, hard to control, and economically catastrophic."
Ben Loosli
RE: Engineering Outsourcing/Workshare Concerns?
I've also seen a bunch of articles about off shoring/out sourcing of manufacturing & even some tech jobs starting to decline as people start to better appreciate some of the issues.
Of course, at least some of these folks are getting the engineers from India to come to the US on H1B rather than reemploying locals.
Our management is just trying to take us the off shoring of manufacturing route, cause they apparently love to grab at discredited management fads that aren't very applicable to our size/market.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
This has been going on for years in many companies. It's cheaper to hire Ph.D.'s in Poland, Russia, etc. than to hire US Ph.D.'s. Two of my former employers have been doing this for years. Some of it was work I would have enjoyed doing. But......
Articles have been written about the decline of US generated patents, which I think coincides with this. We learn by doing and a lot of patents have come from manufacturing companies. In years past, one employer had a lot of patents. Now? Not so much. Maybe their foreign R&D halls have those now.
It takes years to build on knowledge and much of that is done through manufacturing. I've heard professors closely tied to the steel industry say they don't think we'll ever get that back because we've lost too much knowledge letting it go offshore.
You never admit to making a mistake nor do you say anyone else has made a mistake. That is the surprising SOP for many people up to nations. It's called the need to save face and let others save theirs, too. While allowing others to save face is noble, when the stakes are high, it seems foolish to me.
RE: Engineering Outsourcing/Workshare Concerns?
However, as you point out, much of the experience used to do that well was learnt in the process of actually making them.
Eventually it seems the places currently building them will earn that experience, while those left back in the UK will no longer have actual experience.
I wonder about similar in the US etc. too.
Or something like that.
I'm trying hard not to be protectionist, but probably failing.
As to the saving face issue, my point exactly.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
It is a crying shame how we let all of our major manufacturing leave. People always talk about this being the information age and that is where all the good jobs are going to be but there is a large base that has neither the interest or education to benefit from an economy that marginalizes manufacturing. Not everyone is going to be a computer programmer or a financial analyst. Working as a mechanic or a welder is not a shameful thing. Now for slightly cheaper products, we have fewer jobs, a huge loss of expertise, and a gigantic trade deficit.
How is it or was it in our best interest to let this happen? How much has it costed us to let cities like Detroit, Flint, Camden, Albany, Pittsburgh, Dayton, Rochester, and Cleveland decay? Have the people without college degrees benefited from the loss of manufacturing and the start of the information age? How have their wages tracked over the last 30 years? How much do chronically unemployed people cost society? (crime, unemployment, loss of tax revenue, effects on children) I could imagine you won't have to try too hard to put together a compelling argument for tariffs and the need to abolish NAFTA.
RE: Engineering Outsourcing/Workshare Concerns?
I have heard of many jobs coming "home" in the last few years because of the "horrors" of out sourcing. Many companies abandoned Mexico years ago.
Just as soon as the Chinese or Indians or whomever want microwaves, toilets, TVs, phones, etc. they will come on par with us.
Look at Japan. Sure, in the 50s and 60s they were cheap - they just wanted to eat. NO MORE. They have a lifestyle comparable to us and are no longer "cheap".
RE: Engineering Outsourcing/Workshare Concerns?
If we can't compete on price, or quality, then we ourselves need to look at why.
The pitty is we can't outsource managment to the point it makes the managment we have more efficent, effective, upto date, reasonable, etc.
RE: Engineering Outsourcing/Workshare Concerns?
Fe
RE: Engineering Outsourcing/Workshare Concerns?
HAZOP at www.curryhydrocarbons.ca
RE: Engineering Outsourcing/Workshare Concerns?
Similarly, I collaborate with a big CAE provider as part of my job. My contact is now based in India and has changed at least three times in the last five years. Each time my contact changes, I have to start again.
- Steve
RE: Engineering Outsourcing/Workshare Concerns?
Over the last 5 years, I've heard all the horror stories of piping designers laying out major pipes through walls, totally undersized switchgear, etc etc. Mostly it meant that expats would have to go to the foreign office and sort out the issues. They'd come back raving on about how useless the engineers were and so on.
But these bad experiences were DEVELOPING the foreign office. They learn how to get better, and just as importantly, they learn what "better" actually looks like. And with more and more systems in place designed specially for outsourcing, the management of the work is getting easier and more efficient.
Staff turnover in the foreign office is a problem, but most companies realise that the most important thing is to have good technical lead engineers and designers and they make sure to retain them.
Over the years I've noticed a growth in the use of low cost centre offices. Most of the major projects are now bid with a portion of the job done in a low cost centre, mainly the tedious "sausage-making" parts of the project, e.g. cranking out drawings, MTO's, data sheets, etc
My personal view on this has been to advocate the expanded use of automation and database tools, for instance in electrical engineering, things like Intergraph's Smartplant Electrical. The managers all thought this was a terrific idea, but never wanted to invest in it properly - most just wanted a plum project to come along so they could develop the capability on the client's dime.
RE: Engineering Outsourcing/Workshare Concerns?
their reply was something like "we could get 1 CEO at $100,000/yr, why would we want 1 at $10million/yr" ...
outsourcing Can work, but the CFOs and CEOs see only the dollar bills they're "saving". the cost of rework or fixing problems rarely comes back to the original engineers. and then there's the in-service costs (maintenance, warrantee, ...). Out-sourcing Can work if (IMHO) you spend a tonne of effort to make sure the job is done right; if you build a long term strategic relationship with your partner, and not just shop for the lowest price.
RE: Engineering Outsourcing/Workshare Concerns?
I love the CEO comment, made me laugth.
unfortunately the many are being sacrificed for the profit of the few.
The good news is that it is only temporary, in a decade or so their living standard will be much closer to ours and they will be just as expensive as we are.
RE: Engineering Outsourcing/Workshare Concerns?
or as our's falls ?
RE: Engineering Outsourcing/Workshare Concerns?
Also some of the people who have been outsourcing have been loosing business because of there shotty workmanship.
Just goes to show, you have to do your homework when you outsource.
RE: Engineering Outsourcing/Workshare Concerns?
Excellent point and one I emailed Dr. Walter Williams about. He never answered or wrote about that. It must've been a dumb question, in his estimation.
RE: Engineering Outsourcing/Workshare Concerns?
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Engineering Outsourcing/Workshare Concerns?
As "theirs" rises, so SHOULD their currency, and with their currency, their labour cost. The latter is not so true in China, but nobody has the stomach for tarrifs any more.
RE: Engineering Outsourcing/Workshare Concerns?
I've read reports about inner city problems escalating with the decline of manufacturing jobs. It stands to reason that people are going to get in trouble more often and probably more egregiously if they have nothing productive to funnel that energy into. At least, that's the way I think. Idle hands are the Devil's workshop kinda' thing.
RE: Engineering Outsourcing/Workshare Concerns?
Has the standard of living really dropped compared with say twenty years ago, or is it just not improving in ways that YOU (or I) approve of? or is it just that the rate of improvement has dropped? or the rate of rate of improvement has gone negative?
Or do you just mean $?
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Engineering Outsourcing/Workshare Concerns?
However, this gets a bit too close to 'beer tax analogy' territory for me so I'll pass on saying any more.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
For a particular example:
http://www
If you want to see the same trend on multiple "social health" indicators:
http://www.equalitytrust.org.uk/why/evidence
Again, I have no problem with development or international trade, even though it does come with a significant downside for rich societies such as the one I have the priviledge to live in. I do have a problem with some people not playing by the same economic rules as everyone else (i.e. China monkeying around with its currency). I also have a problem with the way the benefits and costs of these changes are shared within my own society.
RE: Engineering Outsourcing/Workshare Concerns?
Yes, my standard of life has definitely declined.
"Good to know you got shoes to wear when you find the floor." - Robert Hunter
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
I don't judge anyone's standard of living but my own. It's the only one I have a little control over by deciding what, how, when, and if to spend money. If someone can afford their own personal jet to fly around the globe, more power to them. If they can afford a Hummer, Caddy, etc., more power to them. It isn't for me to think anything about or try to regulate their behavior. I like capitalism and free markets. We've got thousands of laws in the Federal Register and I dare say we need far fewer and many are probably asinine.
We grew up in poverty but I have cousins who did not, by a large margin. Money is not the source of happiness but it can make life easier, if handled properly. Some of my cousins could handle their inheritance and some couldn't. It's been an interesting lesson to observe through my own family.
RE: Engineering Outsourcing/Workshare Concerns?
That said they will get better and that should give us all something to think about.
RE: Engineering Outsourcing/Workshare Concerns?
They are already starting to produce some high quality products instead of just copying.
Sending work and training their engineers, simply accelerates the time when both countries will do major engineering without any external input.
They will be going overseas and taking on major projects on their own without any input from the host country. In the same manner that engineers from the UK the USA Russia and Germany did in the last century.
B.E.
The good engineer does not need to memorize every formula; he just needs to know where he can find them when he needs them. Old professor
RE: Engineering Outsourcing/Workshare Concerns?
A majority of people choose the second scenario.
Keeping your boot on someone else's neck is apparently a common need, even if it hurts you.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Engineering Outsourcing/Workshare Concerns?
One means of dampening the transfer of labor tasks overseas is to institute a VAT value added tax , on all goods and services. It also improves the collection of revenue to the national treasury, but the on the date of its initiaion one would see a one-time spike in inflation ,and of course a reversal of political fortunes.
RE: Engineering Outsourcing/Workshare Concerns?
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
It is however a minefield of forms and documentation and of course you are at the mercy of fluctuations in currency exchange rates.
So no high VAT does not hurt businesses who export.
RE: Engineering Outsourcing/Workshare Concerns?
That sounds like a tarrif rather than a VAT. A VAT is simply a sales tax that also applies to services.
RE: Engineering Outsourcing/Workshare Concerns?
A uniformly applied VAT , to imports as well as domestically produced goods and services,does not violate the fair trade agreements, but does cause the imported goods + services to contribute to the federal treasury. Current tax model in the US implies foreign produced goods and services contribute ZERO to the US treasury, while doemstically produced goods and service bear the brunt of the cost of running the gov't based on employee contributions to income tax, SS tax, medicare tax ,etc.
RE: Engineering Outsourcing/Workshare Concerns?
Likewise, if I send stuff to my family in the UK direct from a US online or catalog or similar VAT has to be paid on it.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
While I'm not sure exactly how it works in the UK...
The basic idea is that if Bob cells widgets made in China in the US, the US govt gets little or no direct revenue from either the manufacture or sale of the widget (though it probably would from the distribution chain). If the widget had been made in the US the govt would have got tax revenue from the business making the widget, and the employees of the widget company and maybe some other sources I'm missing.
If you implement a sales tax, then whether the widget is made in the US or China, the govt gets some money when it's sold.
If this revenue is then used to at least partially offset/reduce the tax burden/cost of business of the US widget company, they can reduce their costs, and hence reduce their widget price to me more competitive with the Chinese widget co.
Or at least that's the basic idea as I understand it.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
A sales tax or vat can only either be even across the board or as you say would benefit overses competitors rather than locals.
VAT can be claimed back by the intermediate contributors and will only be paid on the value of the final product (in theory).
RE: Engineering Outsourcing/Workshare Concerns?
The point is to somehow get tax revenue from the 'manufacture and sale' of the widget even if the manufacture is done in another country.
So instead of taxing it during the manufacturing stage, you tax it as the selling stage.
Or more likely just adjust the level of taxation in the manufacturing stage.
This helps level the playing field.
As to ajacks reply, perhaps my question was poorly worded. My query was more along the lines of does having VAT in the UK cause less of the work traditionally done by UK workers to be sent over seas.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
Typically if you export from a VAT company the exporter can claim the VAT back from the country it is exported from.
As such it doesn't really affect outsourcing much either way, at a first order level.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Engineering Outsourcing/Workshare Concerns?
My point exactly, all this talk of levelling the playing field using VAT is completely misleading.
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
Look at these scenarios from the manager's perspective.
"Since production is already done overseas why not move the bulk of the engineering also, so they can work efficiently together in the same facility(same language/time zone/culture blabla)!"
"Yeah, they talk about lack of quality and increased risks and stuff but i think they are just scared to lose their jobs!"
"We just need some 'goones' here to manage all this stuff, I'm sure the one's we are letting stay feel special and 'elected'!"
I don't think it is all that bad though if you are willing to adapt to such changes in a constructive way.
RE: Engineering Outsourcing/Workshare Concerns?
I don't
A valid point like that needs recognition like it or not. Denying such a fact doesn't help the 'engineers case' only makes it worse
RE: Engineering Outsourcing/Workshare Concerns?
This is the attitude of the ignorant and money savers.
It's too bad they don't realize that for the most part (Aus ect. not included) that engineer at 100/hr is worth 20 of the ones for 10/hr.
Fe
RE: Engineering Outsourcing/Workshare Concerns?
If it's close to you, would you not want it to work safely, and correctly? If it's 2000 miles away, would you care as much?
I've seen this when I worked in two states at the same time. The closer to home projects seemed to work better.
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
Yeah such working conditions are a shame but the market is more than willing to accept so what can you do about it..
RE: Engineering Outsourcing/Workshare Concerns?
1 Provide goods or a service that are high end or location specific that people will pay good money for.
2 Convince the local work force that they would like to work six ten hour days a week for $10 with little or no health care or cover.
3 Convince everyone in the country (or at least enough to make it viable) that they would like to pay $100 for something they can currently buy for $5.
Simples.
RE: Engineering Outsourcing/Workshare Concerns?
You forgot the most obvious solution:
4. Drain ocean so no shipping can take place
RE: Engineering Outsourcing/Workshare Concerns?
Yes the health and safety regs in the USA are pretty appalling. You do realise 10 bucks an hour is twice the US minimum wage, typically?
True story - a friend of mine visits the USA to see some mines. He goes to the locker room and dons his standard Australian safety gear. The foreman asks him to take it off and wear their stuff as his will cause discontent.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Engineering Outsourcing/Workshare Concerns?
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
And for out sourced products, there is an added cost of quality control.
The safety issues that are spoken of above, do they really apply to engineering? Maybe and maybe not, depending on the final product.
Then again, with the worker issues here in the US, you could get a better product by out sourcing.
RE: Engineering Outsourcing/Workshare Concerns?
ht
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
"Good to know you got shoes to wear when you find the floor." - Robert Hunter
RE: Engineering Outsourcing/Workshare Concerns?
Where do they get these guys?
RE: Engineering Outsourcing/Workshare Concerns?
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
RE: Engineering Outsourcing/Workshare Concerns?
"Good to know you got shoes to wear when you find the floor." - Robert Hunter
RE: Engineering Outsourcing/Workshare Concerns?
They always want to promote people who don't make mistakes, which does not include engineers. They come from the accounting departments.
There is another trend of changing jobs every 3 to 5 years, so you don't have to fix the problems you create.
RE: Engineering Outsourcing/Workshare Concerns?
Especially if you don't care much about the business long-term.
Regards,