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Engineering Outsourcing
4

Engineering Outsourcing

Engineering Outsourcing

(OP)
I keep hearing of more and more companies sending their engineering work overseas.  My company just recently hopped on the bandwagon and started sending my work (and many others) to India.  It's kind of scary to see this happening.  I'm worried about the stability of my job with this happening.  Plus, I hate to say it, but the guys in India aren't bad.  The language barrier is tough but they are whizzes at the FEA software.  It seems like their actual engineering knowledge is somewhat lacking, but they work for peanuts compared to me.  Where is this headed?  I'm curious to hear everyone's opinions on this issue.

RE: Engineering Outsourcing

They will always need a local person to manage these guys.

Also, it is hard for foreigners to get a PE in some states so anything that requires a PE stamp will be safer than areas that dont.

Also anything involving inspection would be a safe bet also.

RE: Engineering Outsourcing

We've been doing a lot of work for the Japanese for many years.  And Korea.  And now China and India.  Outsourcing has gone full circle.

- Steve

RE: Engineering Outsourcing

In the late 1800's dirty laundry was sent by sailing ship  from San Francisco to Hawaii to be cleaned and pressed and returned by sailing ship.  Somehow that was the best economics for that instant in time (maybe all the people who would normally work in a laundry were in the gold fields?).  It wasn't the best economics a few years later.

Outsourcing Engineering is exactly the same thing.  There will be a time that it is better economics to run the FEA voodoo in India, but living standards and wage rates will shift and people in India will start needing more of their Engineers to do their own Engineering and the prices will go up.  Then we will be scrambling to recreate the expertise that we lost when the work went offshore.  At the end of the day everything is always changing, and is pretty certain to change again in the next instant.

David

RE: Engineering Outsourcing

Off shore or out of house, it really dosen't matter. You still need to be there to fix the problems they create.

Years ago, I had the job of reviewing drawing from an out of house engineering firm. It seemed we were always training there new guys, while we only worked with there experenced people when we had major problems.

Now looking at the other side of the company (not the same company) I see there projects done by out of house people, and the amount of waste is so blearing, it just makes me crenge.

 

RE: Engineering Outsourcing

My company does all sorts of "Offshoring".  For the past year 75% of my job has been overseeing the FEA work.  At times I do question the cost savings that everyone claims.  It takes high-proficiency people to oversee this stuff and while yes, they are cheaper per hour (like 4X cheaper) they also take much more time to do a given task.  I think it's a wash in the end overall.  We probably do save money by having them do the routine cookie-cutter type tasks and quite frankly I don't want to do them!  I have no problem with that.  What I do have a problem with is my company has set itself up such that the majority of the analytical work is now being done offshore.

Anyway, as for your job concerns - I wouldn't be.  So much more analysis is being done these days and there simply are not enough knowledgable people domestically to do it.  Like someone else said, someone needs to oversee & manage this stuff too.  Hopefully, you are working with a company there that has technical leads you can communicate with directly.  Many of the people are fairly low proficiency and it would be assinine for you to be working with them directly.

RE: Engineering Outsourcing

It's hard to say.  Engineering graduation rates are higher in India and other countries.  I overhear people here in the US saying that they discourage their young from majoring in engineering because their job can be offshored.  But that is a self-fulfilling prophecy.  If US students avoid engr because of offshoring fear, then the US will have a shortage of engrs and offshoring will be the only answer.

Also, there may not be enough engrs in the US to do the work, so companies look overseas to find needed talent.  I don't understand why Americans don't want to do engineering anymore.  Sure it's tough, but it is a great field.  I guess not enough people yearn to be an engr.  I can't imagine doing snything else.  I longed to be an engr since high school in the early '70's.  I still wouldn't pick any other masjor, now or then.  If I had it to do over again in the 70's, I'd still take EE.  If I was 18 right now, I'd go with EE.

Claude

RE: Engineering Outsourcing

Its been my experience that most people make mistakes and I think if you pay someone 4x less, expect 4x more errors.  You get what you pay for in the end.  

Same thing happened to me, supervise this crappy engineering firm.  Kept sending back markups and nothing proper was done.  Finally told my boss its a waste of time and money, since I spent a lot of time cleaning up their mistakes.  If you tell someone to make changes based on what you don't see, thoses changes dont happen, then whats the point?

I remember this project I was on and they kept using low skilled workers that a quality millright or welder should of been doing in the first place.  Cost them in the end when the inspector has a list a mile long from all the quality problems.  

I would start searching for a job if you dont want to oversight offshoring your job.  Life is too short overseeing a headache.   

RE: Engineering Outsourcing

A company that I worked for tried this in China.  Cheap parts were substituted and tolerances were all over the place.  They tried to cover up their mistakes by using the Loctite Bearing adhesive instead of boring the parts correct...etc.  After about a year they ditched the company and brought everything back to the US.

RE: Engineering Outsourcing

I left private industry precicely becuase of outsourcing.  I now work for the government in a job that requires U.S. citizenship.  

 

RE: Engineering Outsourcing

This has been going on for many many years, Jaguar/Landrover have many departments that have been sending work abroad or to local expert contractors. The worrying thing is now that all jobs at JLR now have a requirement to travel to India, this is to train Tata engineers. Tata have for many years been sending U.K. engineers to India to train engineers, looking at the type of questions seen on forums from indian engineers and seeing the type of work coming out of india, i would say they have a long way to go. The quality of products coming out of China still reminds me of crap found in chrismas crackers!

RE: Engineering Outsourcing

...as opposed to the UK's excellent legacy of oil-stained driveways?

 

Cheers

Greg Locock

SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.

RE: Engineering Outsourcing

Engcad, I think you will find that Tata actually own JLR, so if anything it is an Indian company outsourcing work to the UK.

Personally I am glad they do as one of the "local expert contractors" I would not currently have any work if they didn't.
 

RE: Engineering Outsourcing

I would question the overseas engineers being "whizzes" at FEA.  The output I have seen from overseas help has been pretty pictures at best.

I have had to deal with outsourcing help at two different companies and the result was the same as others have mentioned before: You will spend and equal or greater amount of time reworking their work.  Tons of mistakes.  To the engineers that actually work on projects the decision is clear: outsourcing isn't worth it.  However, the business guys only see the $$/hour.  The business guys, regardless of industry, view technical expertise as something you pick up at Walmart.  So they will always look for the low cost supplier, because in their mind they are getting the same thing for cheaper.

It is sad that more Americans are not interested in engineering, but seriously who could blame them when our average salary in engineering is dwarfed by the pay one would get by being on a reality show.  The abundance of opportunity is a major plus in America, but it does have its downsides.  

While in grad school I took a course where I was the only American student the class.  Universities love foreign grad students because they can charge the 4X the hourly course rate as an in-state or out-of-state student.  The guys (and girls) were blatant cheaters.  One time during an exam the proctor left the room and suddenly all of the other students began talking to each other for over 5 minutes.  I felt like I was in a coffee house in the middle of a hot debate.  This type of behavior was rampant throughout this particular course.  It really opened my eyes to a possible explanation why bachelor educated American engineers are hands down better than advanced degreed foreign engineers.  May be coincidental, but I doubt it.

I don't know if it is a cultural thing or not, but you have to detail out every process step to outsourced engineers.  On one hand it is good that they will do what they are told, but on the other hand they will not do anything unless they are told.  It is frustrating.  Just like others have mentioned above you feel as though you are training them all the while you are doing the work that your company is paying them to do.

But I think the cat is out of the bag.  More and more companies are pulling the work back to the United States.  Those companies that are not are late to the party and will learn quick enough.
 

Stephen Seymour, PE
Seymour Engineering & Consulting Group
www.seymourecg.com

RE: Engineering Outsourcing

I laugh. I see no sign that USAn engineers en masse are exceptional. The resources they are given ARE exceptional.

USAn engineers are pretty good, but I'd rather have Russian or German FEAers, they probably understand the maths. In fact I'd rather have Russian engineers full stop.







 

Cheers

Greg Locock

SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.

RE: Engineering Outsourcing

Most of the real smart people here (USA based company) have foreign accents, be they european (including eastern Europe & Russia) or asian.  In some cases they may have studied in the US, I'm not sure, but it's interesting to note.

Oh, and though I may have an accent I'm not including myself in the abover "really smart" category.

Posting guidelines FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm? (probably not aimed specifically at you)
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?

RE: Engineering Outsourcing

Greg,

I agree with you. The technical education of the average Eastern European engineer is excellent. The Poles who I've worked with on and off for ten years have a remarkable understanding of the underlying principles - far better than their equivalent from Western Europe or the USA - and the handful of Russians who I've met are of a similar quality. Factor in that much of their work is conducted in a foreign language using a non-native alphabet and you have some pretty impressive people.
  

----------------------------------
  
If we learn from our mistakes I'm getting a great education!
 

RE: Engineering Outsourcing

Well, Greg, I guess there are Russian engineers and then there are Russian-educated engineers.  I've met a few of the latter who were Soviet-era "recruits" from Soviet protectorates in the developing world, who were given an "education" in the USSR proper, consisting of a couple years of engineering and a couple years of Soviet indoctrination.  They didn't score high on the fundamentals by any stretch of the imagination, if it was engineering fundamentals you were talking about.

There's such a diversity in engineering education across the globe, and from place to place within certain countries, that it's impossible to make valid generalizations about engineers from country X or Y.  The best you can do is to establish a few normative tendencies in culture, attitudes, language skill etc. which give you some clues about whether or not a person is a likely fit for a particular work environment.  

We don't rely on any of that crap- we interview and ask technical questions.  Very necessary, given the answers we get from some candidates- even those with pretty resumes glittering with credentials.

There are good engineers and bad all over the world.  Nobody has a magical formula to crank out perfect ones every time.  And  no engineer arrives fully formed from university- they're a product of the culture and work environment in which they gained their education AND their work experience.   

RE: Engineering Outsourcing

Back to the OP's topic:  all consulting engineering is "outsourced" engineering really.  It suffers from a key problem:  a degree of separation from the work at hand.  Sometimes this separation is necessary and inevitable and completely manageable across an interface that can be proplerly defined.  And sometimes it's an impossible mess, requiring boots on the ground to have a hope of understanding the larger picture.

When the consultants are in another country, speaking another language, working in a different business culture, the interface just gets harder to manage.  This makes the job of the person setting up and managing that interface all the more difficult.  If the only upside is a lower hourly rate for the work being done, and the downside is the whole project turning into a clusterf@#k, with little to no liability for the consequences extending cross the interface, the arrangement can be a very poor value proposition.

RE: Engineering Outsourcing

Whatever. "The output I have seen from overseas help has been pretty pictures at best." may be true, but invited a certain amount of derision, based on my experience with engineers from 4 continents.

 

Cheers

Greg Locock

SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.

RE: Engineering Outsourcing

"While in grad school I took a course where I was the only American student the class.  Universities love foreign grad students because they can charge the 4X the hourly course rate as an in-state or out-of-state student.  The guys (and girls) were blatant cheaters.  One time during an exam the proctor left the room and suddenly all of the other students began talking to each other for over 5 minutes.  I felt like I was in a coffee house in the middle of a hot debate.  This type of behavior was rampant throughout this particular course.  It really opened my eyes to a possible explanation why bachelor educated American engineers are hands down better than advanced degreed foreign engineers.  May be coincidental, but I doubt it."

Did you talk to every single student in the class to find out if you're the only american or just concluded that they are all foreigners since they look or speak or dress differently from what you may consider "typical american".

You can't make generalizations just because of your personal experiences. It only shows how much "education" you really have. The Japanese and German car engineers has been kicking our asses for a long time but I don't think that they have a monopoly of all the good engineers.  
Every society or culture has their own share of good and bad. That is just a fact of life.
  

RE: Engineering Outsourcing

How can you say Japanese and German car engineers are kicking our asses? If you critically look at Japanese, German, and American designed cars, and the fact that almost none of the parts are interchable, not even the radios or tires. Then I would say that they are all inept (from the consumers point of view).

The issue to me looks like culural differences. In the US things are cheep, people are expencive. In places out-side the US people are cheep, and things are expencive. That in itself makes a big difference in the desired results.

RE: Engineering Outsourcing

RacingAz,

Yes I did talk to every person in class.  Most graduate engineering courses are typically very small.  Plus, the course I provided as an example was not the only course it had occurred in, however it was an example of the worst I had witnessed.  Others I had spoken with while at the undergraduate and graduate levels provided their own examples as well.

But thanks for assuming that I just stamped the other students as being foreign because they didn't look "American".  My opinions are based on my observations...your opinions about my statements are based on your own biasness.  

"You can't make generalizations just because of your personal experiences."

Oh really...Well then just because you say so I won't.  Have you ever had to extrapolate anything?  Have you ever had to make a judgment call based on the data presented to you?  I have only based my opinions on over a decade in both the academic and professional worlds in both engineering and manufacturing environments, but you are right I will just ignore all that.  You assume I am basing my opinion on one instance in time.  Tsk tsk.  Very bad assumption on your part.

" It only shows how much "education" you really have."

Are you serious?  Take your lame comments back to the daytime talk show where you got them.  

"Every society or culture has their own share of good and bad. That is just a fact of life."

Wow...now that is deep and insightful.   You should put that on the back of a fortune cookie.  I never would have even considered that until you mentioned it <rolling my eyes>.

The fact is the original posting was asking about sourcing engineering work to India.  I have posted my experience with India based foreign sourcing.  RacingAz, why don't you try to post your experiences (if any)?  
 

Stephen Seymour, PE
Seymour Engineering & Consulting Group
www.seymourecg.com

RE: Engineering Outsourcing

The solution, in my mind, would be to outsource everything to Canada.

After all, we are the only people in the world - including "...y'all..." who don't have an accent.

Our beer is also very good and - like most other things here - usually cold.

Regards,

SNORGY.

RE: Engineering Outsourcing

Outsourcing, like asking another engineer in your office, requires you have some idea of the experence and capabilities of who you are giving the work to.
If you don't have a good feel for that, then you need to take more care to check the work for accurcy, and correctness.

The benifit of insourcing is you can sit and have coffee with the enginner, and get to know what he can do.

But at some point you will have more work than you have people for, and outsourcing is a reality that you will have to deal with.

RE: Engineering Outsourcing

The trouble is, the out-source guy you meet will usually NOT be the one who does your work.  In consulting, the "bait and switch" is common.

The key to using outsource labour properly is to properly define and control the interface between their work and yours.

The benefit to in-source labour is that you need to waste less time constructing and maintaining an elaborate interface- and you get more cues as to how well the work is being done, rather tthan having to play "Where's Waldo" with the errors in the finished product.

 

RE: Engineering Outsourcing

Ah the bait and switch.  Had this with our attempt to outsource design checking.  Spoke to a fairly knowledgeable guy on the phone from the company who did a barely acceptable job on the first sample packet.  I would have reconsidered right there but management wanted to try again so they got some more stuff or something.  Well somehow one of the managers worked out that they'd put someone else, unqualified on this job and had effectively been charging us for training.

Not sure we sent any more to them.  Although they phoned up the last time the owner was in town seeing if we wanted to go to lunch to discuss more business!

However, this said, part of the problem was the lack of time/effort/attention to managing the project, it was pretty much set up for failure in the first place.  As has I think been mentioned outsourcing needs to be managed.  You may swap 10 designers or whatever for 3-4-5 project managers/people inspecting the work etc.  Of course, management doesn't always see this.

Instead we got contractors in, still not perfect but for our situation and the amount of project management time we had available, a much better solution.

Posting guidelines FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm? (probably not aimed specifically at you)
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?

RE: Engineering Outsourcing

seymours2571,

So you make your judgment about human behavior by using your engineering skills and mockery for statements that you cannot disprove. It does show you're lacking of a well rounded education.

I believe your experiences but you can't jump from there with a blanket statement that all American degreed engineers are better than their foreign counterparts. That's where I have a problem with.

I could easily say that people from OK are just a bunch of __?__ (fill in the stereotypes) based on my experiences but I don't think so and don't believe it. My travels in and out of the US taught me that you can't make generalizations on a group of people simply because of bad experiences.

Back to the OP's topic: Outsourcing has its good and bad, no doubt about it. You have to do your own due diligence and cost should not be the only denominator. When the lowest cost provider is all that matters, that's where the problem is. And it's not like a magic box that you throw all your work into, then pull out a finished product. It needs to be managed the same way as if the provider is in-house. My experience with a previous employer is that no one wants to manage the output that goes back to the company.    

   

RE: Engineering Outsourcing

I see where the problem arrises is where the project manager, while being an engineer, isen't the same type of engineer as the project he is managing.
i.e. a mechinical engineer who manages a large project, with some electrical parts. His focus is the mechinical part, and not the part he dosen't understand very well.

When the project is finished, and years go by, it gets handed to me because it has problems the operating group just can't tolerate any more.
And zap we discover the drawings were never "as built".

RE: Engineering Outsourcing

Bait and switch happens in all projects. When they bid for the project the team will be represented by senior managers, and you will be assured that this is the team that will be working on your project.

Sure enough for the first few months that will be true, but then they'll be needed to kick off the next project, so their 2ic's assistant will suddenly be 'promoted' to project manager.

The same happens further down the structure of course.

I've only seen this happen , oh, every time! The only way I can see around this is to assume that the relationship will be over multiple projects, in which case there is some necessity on the outsource supplier's part to play it straight, or if the outsource supplier is so small that it is their only project, in which case you might as well buy them up.

To be fair we do exactly the same, every two or three years engineers move onto new programs and the old ones get handed over to  a new generation of baffled youths.

 

Cheers

Greg Locock

SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.

RE: Engineering Outsourcing

We found it is just better to hire the retireies back part time through a temp firm. We get good people, they get some money, and still get to play golf for half a day.

And since some of them are not degreed engineers, but long time experenced workers, they handle the tasks that don't specificly require engineers. Like watching contractors, drawing verification, tail gate meetings, and salesmen calls.

RE: Engineering Outsourcing

One effective way to dampen the outsourcing is to impose a VAT - value added tax- on all items and services sold, as done  by  most overseas countries. It is unfortunate the US has not yet went this route- it is an effective way to pay down the deficit and fund single payer health care.

It also would increase the competitiveness of US products and services - currently all US products and services pay taxes which  imported or outsourced items escape- US products and services pay income tax, SS tax, Unemployment taxes etc on every manhur expended. To the extent the gov't is funded by universally applied VAT, then all products and services are equally taxed in the marketplace.

One  problem is that , at the instant a 10%  VAT is instituted, a 10% step change in inflation occurs- and the timing of such a step change in inflation should be coincindent with expected deflation, to minimize its political impact. Also, industries that depend on outsourced services and imported parts would "express their 1st amendment rights" by "lobbying" congress to not institute such a VAT. So, the status quo is maintained, which is OK if all other things remain the same, but not OK if the status quo cannot address other social cahnges.

RE: Engineering Outsourcing

"One effective way to dampen the outsourcing is to impose a VAT..."

That's a big leap of faith. The UK has had VAT for a long time and we've offshored just about everything, VAT or no VAT. Be careful what you ask for - do you really want another tax, because the others won't go away!
  

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If we learn from our mistakes I'm getting a great education!
 

RE: Engineering Outsourcing

Not quite true.  When we imposed our VAT (in Canada it's called the GST), we got rid of some other taxes, most notably a 13% tax that businesses used to pay.  Most people forget that.

By the way, it was and is the single most hated tax in Canada.  Imposing such a tax in the US is about as politically impossible as the US getting universal public healthcare.

Agreed that it didn't stop offshoring whatsoever.  But it's still a good tax in my opinion because it's linked to consumption and hence very difficult to evade.

 

RE: Engineering Outsourcing

A VAT is nothing but a way to hide the fact that our goverment is less effecient than that of other countries.

Lets fact it, the income taxes are a measure of goverment efficency, and most countries levy taxes, so to say a VAT covers what there goverment dosen't isen't true.

SS tax, and unemployment tax, while they aren't true taxes, they benifit you, and lower your income by an amount. SS tax is actually a transfer payment to someone who can't or dosen't want to work. And Unemployment tax is supose to be an insurance policy run by the state goverment, which usually becomes a transfer payment.

If the taxes are a problem to you, then vote them out.

A VAT is nothing more than an import tax, which is typically reduced by free trade agreements.

RE: Engineering Outsourcing

VAT isn't an import tax, or at least the UK version isn't. It applies to all products, imported and indigenous (ok, so we don't have many indigenous products any more but the principle still applies).

Companies can claim VAT back from the government, and VAT is paid by the final user, i.e. the public.
  

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If we learn from our mistakes I'm getting a great education!
 

RE: Engineering Outsourcing

Cranky 108?  VAT as instituted in CA isn't an import tax so I'm not sure what you're on about.

I don't think it's the golden bullet some espouse it to be, as Scotty points out the VAT rate in the UK is something like double that in CA (it varies in CA by county and even by town but is typically somewhere around 8%) and yet still loads of stuff is imported etc.

While I don't have the figures to hand, I'm not sure the US govt is that much less efficient than many others.

Posting guidelines FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm? (probably not aimed specifically at you)
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?

RE: Engineering Outsourcing

VAT is a consumption tax, and is paid on the added value at each stage of the production process.

So, if you create something and sell it you pay 15% on the difference between your costs and the price you get for it. The VAT you pay on your input costs is reclaimable.

As such it taxes the added value at each stage of the production chain. Hence the name.

The final consumer ends up paying all the VAT, the intermediates pay it on their margin.

In Australia half of all money paid into the governement is absorbed in friction, so adding these pay-it-and-claim-it-back type taxes is inefficient.

Cheers

Greg Locock

SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.

RE: Engineering Outsourcing

We purchase Gearboxes from a vendor that outsources to India. (I think its India) They always give the cheapest quotes, but we finally told them if they don't get their act together we are through with them. We tell them to make changes and when we get the revised drawings, often there are changes that we didn't request. Sometimes they even send us a totally different drawing. Guess you get what you pay for....

RE: Engineering Outsourcing

Whereas of course if you were working with first world suppliers they are all upright citizens who never make mistakes and can be trusted to read your mind and transform your vague wishes into results?

I am baffled why people think that outsourcing means pushing the whole job overseas and expecting perfection without any oversight.

It takes 2 years to figure out if a company is worth dealing with, and another couple of years before they really do things the right way.
 

Cheers

Greg Locock

SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.

RE: Engineering Outsourcing

Greg,

I believe your comment answered the question why most Indian based outsourcing (currently) does not work:

"It takes 2 years to figure out if a company is worth dealing with, and another couple of years before they really do things the right way."

Most medium to small sized business (either engineering or manufacturing) do not have the time to coddle their vendor for 2+ years in the hopes that in the end it is finally right.  Tier I and large companies may have that luxury, but most businesses do not.  For most small to medium sized companies they view Indian based outsourcing as a vendor based relationship, not some sort of business partnership.  Therefore, the Indian outsourcing companies are being paid to provide a deliverable they advertise as being able to provide.

Furthermore, these Indian based outsourcing firms and manufactures MARKET THEMSELVES as being able to provide equivalent services and manufactured parts as compared to domestic suppliers, but at a cheaper price.  I know for a fact that these Indian based outsourcing firms don't walk in and say: "We can provide the same part at a cheaper price...but....it will take 4 years for us to get it right".  

Finally, I would hardly consider providing detailed engineering prints to Indian based manufacturing facilities "vague wishes".  The errors I have witness from Indian based manufacturing facilities go way beyond just excessive material shrink.  The quantity, magnitude, and repetitiveness of the errors highlight the phase as TheMasterMechanic said "you get what you pay for..."

 

Stephen Seymour, PE
Seymour Engineering & Consulting Group
www.seymourecg.com

RE: Engineering Outsourcing

The reason we don't buy from India, isen't necessarly the quality, but the cost isen't low enough once you add in the cost of travel. And if you don't travel to see the quality, you don't get quality, even in the US.

The other reason we don't buy from over seas is we don't know how to compare the educational background of the people with what is available here.

Maybe if there was an international university rating system run by an independit group, it would help with the compairsion of educational backgrounds.

RE: Engineering Outsourcing

You make a good point cranky.  I have seen instances in certain manufacturing facilities where the outsourcing program directly conflicted with the lean inventory program.  In order to keep the shipping costs down larger and larger orders would be placed with the outsourcing firms, thereby creating large part inventories.  

I'm no tax expert, but I believe U.S. companies are taxed on inventories meant for future sale.  My understanding of the lean inventory programs was to reduce inventories for these tax savings and help with business cash flow.

Stephen Seymour, PE
Seymour Engineering & Consulting Group
www.seymourecg.com

RE: Engineering Outsourcing

Many toy companys in past years forgot that with longer supply lines, you need to keep higher inventorys for unforseen reasons.

Where semiconductor companys in recent years use air freight, instead of ships, because it makes the supply lines shorter.

For say a 15 hour flight, it takes about 40 hours for a round trip, plus the supervision time.

For a 8 hour flight, it takes about 24 hours for a round trip, plus the supervision time.

 

RE: Engineering Outsourcing

We have recently begun using 3rd party FEA folks from a non-domestic low cost provider. This has been to supplant (eventually replace?) our own FEA staff. The 3rd party seems to know how to build models & run them well, but fall down in a number of areas. For one, they don't know what an allowable stress, allowable eigenvalue, etc is. For another, they don't know when they have run into one of the numerous limitations that FEA software has. Too many folks these days have forgotten (perhaps never learned) their engineering fundamentals. I suspect that the provider will eventually learn from our own in-house staff, well enough to do the work that they were hired for. How long this will take is the question? And will it be worth the wait? That's for the company owners to decide.

RE: Engineering Outsourcing

So many of the problems listed above can be faced by outsourcing to folks in the same town.

Outsourcing fundamentally has issues requireing more 'management'/coordination etc. many of these are compounded by distance, different timezones, different cultures, differant laws, different education standards...

In theory, work will get sent out to them as long as they do an adequate job for lower cost.  

If they don't do an adequate job (and of course sometimes this can take a while to become apparant to stock holders) then it will stop - one way or another.

If they aren't significantly cheaper any more then the inconvenience will reverse the trend.

Supposedly this has already happed to some extent in Silicon Valley, though in at least some cases the solution was to move the 'foreign' talent to the US, not reemploy engineers already in the US.

For years many of the developing nations outsourced much of their engineering to the developed world.  Is it fundamentally unreasonable for it to now sometimes go the other way?

Posting guidelines FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm? (probably not aimed specifically at you)
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?

RE: Engineering Outsourcing

Russians make excellent programmers - Engineers? not so much. Think Chernobyl.

I'm not some American flag waiver, but I have to say American Engineers (Mechanical, Civil/Structural, Electrical/Power) are second best in the world - behind Germany (who is number 1). Number 3 is France followed by Japan at 4.

If I had to pick a firm based on nationality to build a power plant or off-shore platform that is how I would rank them.

JMHO

RE: Engineering Outsourcing

You do however appear to be an Australian flag waiver.

RE: Engineering Outsourcing

The issue of outsourcing is both a function of the short term investments that American companies are making that will one day come back to haunt us. Look at the Semi conductor industry which created vast leaps in the way we all live- from computers- phones- TV's etc. No country can maintain superior existence by relying on some one to build or manufacture for you. Eventually, those in the know will be replaced by the unskilled younger Engineers whose design, manufacturability and other critical skills are no longer being achieved at the job. True, outsourcing at first glance seems like a money saver but in the long run is going to hurt this country. Simplistically one never enhances their/ wife's culinary skills by eating out all the time. Due to outsourcing, certain engineering disciplines are at risk like Manufacturing engineering- how many would actually want to go the Engineering for this?. Most Engineers are now being pushed into project management now, for economic, diversity and job security- but what about design, manufacturing, documentation- learning good draft skills, procedural writing etc. These are all likely to be lost along the way.

And yes some, I concur that Engineer grads from certain countries don't seem to have the Engineering fundamentals right. We had a Doctrate Engineer from China who never seemed to know, understand or relate his fundamentals to the problem at hand. Just my 2 cents.  

RE: Engineering Outsourcing

3
I see that most posters here are on the client side of outsourcing and I think i will be the only Outsourcing provider in this forum.

I am 32 yr Indian male (Not Red Indian..India near Pakistan) working for a company in India as a Lead BDM which does outsourcing of Engineering work. mostly drafting and 3D piping modeling. (The cookie cutter types)

I have been with the company since its inception till date. so far 4 years have rolled by. We bagged our first overseas order for a big LNG client (South East Asia) for conversion of AutoCAD Drawings. We were doing it for $4 / Hour.

We did a good job, we posted an experienced CAD Engineer at their site to co-ordinate.

The local company (It was an UK EPC) who was outsourcing on behalf of the operator was charging 10 to 15 times!.

We did almost 2500 drawings plus some as-built.

Let me tell my experience as a service provider. We had some problems with quality and I will tell you why it is;

Most Outsourcing Service providers are started by professional Engineers, As capital they have thier knowledge and expertise.

But they dont have working capital or investment money.So what they do is to employ in-experienced people to reduce thier costs. Because they are confident that they can manage the output through them.

It begins good, but as the project volume increases, there pressure on delivery. Let me be frank in my opinion the westerners think that they are "perfect". Like punctuality an other stuff..The Chinese and Indian are not..they are more subject to situations and resource constraint and anything is acceptable (I myself don't like this attitude)

But the westerners are sometimes too fussy and demanding and they are not interested (they despise) to listen to any excuses or explanations as far as time is concerned.

Here starts the problem. It starts affecting the quality and accuracy of the work. Then I have seen some people client getting "pissed off.." (But not all our clients are "pissed off..")

Some of the posts in this thread mentioned it takes 2 years to find one and two years to develop one.

That is true, Most OSPs are start ups lacking, time and capital *even they sometimes dont have the monies to pay salaries)

The outsourcing company has to look long term (This is just like share investment)and develop the service provider in the following;

1) Give him constant work
2) Train the key people (prefer owner) constantly
3) Enforce certain things like stay of certain employees
4) Enter into a long term contract

Definitely it will be a valuable proposition only in the long run.

Now coming to the point of "Losing Jobs" let me take this personal,

I dont know the current situation now. The West and the developed countries in the beginning was always a "Producer" they produced both tangible and intangible goods (like technology)

The poor, underdeveloped and developed countries have always been the "consumer"

They don't have technology, they don't have money, they dont have social systems, they don't have good government, law and order is something written on the board. They dont produce anything other than cattle, cows and grains.

(Before even being a consumer, for more than 1000 years these third world countries were being exploited and squandered, violated of their resources and even people were mercilessly ill treated (and killed some times)and humiliated in their own countries (like getting thrown of the train in our own country, because we were slaves.

To be more specific the British, French, Spanish, Dutch, Portuguese all are guilty of these squandering (The Americans are just a product of these once upon a time squandering bunch)

Why is the toothpaste, the detergent, the cornflakes, the soap and so many other brands are always owned by a western company. Silly of me when i was a teen and when we had "Cable TV" and "STAR Plus" for the first time in India and when they showed "Colgate" "Surf" ads, I thought wow! Indian brands are selling in the US!

In India there are 2769 Multi National Companies doing business, like Kellogs, Coke, Pepsi, McDonalds, Walmart, Uni Lever etc etc etc etc...

We wont die without cornflakes and burgers, more over it is not our food.If in India we have 2769 MNCs think about all the third world.

For E.g Kellogs an American Brand did a total sales of $12.8 Billion globally. Out of which $8.5 Billion is only from the $8.5 Billion is only from its home market of N.America.33% of the sales is from Non-American Markets.

This is not only for a simple corn flakes, take anything, food, technology licenses, Hi-tech Machineries, Computer Chips, Specialty Process Equipment, Defence Equiment, Medicines, software (they are the people who earn more money)Finance and Insurance, (Most Insurance companies in the third world are tie ups of a Western Company)Most Engineering Companies are from the West in India.

So the west is the "Producer" and not the "consumer"..
and what do the Americans send for outsourcing? , boogie woogie toys,cheap plastics and slippers, and the "cookie cutter" type of services,data entry,call centers and what do they pay? a fortune?
just peanuts...

and occasionally some stuff like this FEA, Engineering  etc

The West mostly  "Produces" and sells "Cream" for a premium price with political "bullyism" (All the trade talks and stuff, opening up pur country doors with crowbars so that they can stuff the burgers in our mouth and send it down with thier colas..)
the other countries mostly just wash "dirty line" for scraps of left overs thrown from the dining table of the west.

Even till date, I dont know I have not done any research, The west is developed country, atleast every one has water to drink and a potty to shit..whereas many third word countries, don't have a place to shit and dont have water to drink.

Please dont fret and fume and make a "hulla-bulla" out of Engineering Outsourcing to other countries. This is just a narrow and selfish mindset forgetting about history and other economics.

What you should be more worried about is "Outsourcing Manufacturing" because the Engineering Revolves around this.

After 2 years I am here in Calgary now. I am approaching for work. I have entered into contract with a Candian Draftsman with 15 years experience to do the co-ordinating stuff.

I intend to form a Canadian Engineers team here and get work from Middle-East,

because you see, the sheiks are a greater duds than the half naked peasants of India (who are a unfit lot to be Engineers), who just happen to travel in a Camel, drink camels milk and live on dates...

RE: Engineering Outsourcing

So you think Germany has the best mechanical engineers? I'm sorry, but I was flown and drove all around Germany (and Europe) specifically to correct ME mistakes. I din't go to an elite school, but from what I saw the US education stacked up very impressively as compared to my German (and Russian, Italian, Turkish, Spanish and Greek counterparts).

As badly as the US public education system gets panned, seeing other education systems really opens your eyes.

For HVAC, industrial, biological and mining, I would pick an experienced US firm, but that would only be based upon other people having hired an American mechanical engineer for the same purposes in multiple countries, and my own experience. My experience also tells me that when someone asks me if I'm going to believe them or my lying eyes, I believe my lying eyes.

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