Engineering Outsourcing/Workshare Concerns? 4

Jafka · May 25, 2011

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

dvd · May 25, 2011

I work for an outfit that is considering doing the same. I don't much care for it. What will occur is that we will end up taking on the stress of the engineering project while someone else puts in the hours. I was told that the project budget was being set up to have me interface with someone twelve time zones away for two hours per day. If that is my only project I will end up making the same amount per day as the lower paid foreign worker.

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....

lacajun · May 25, 2011

From what I've seen on two projects, it's not a good idea. Language barrier, cultural barrier, experience barrier, time zones, expertise barriers, standards barriers, etc. I would not do it. It's nice to be able to "reach out and touch someone."

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.

FeX32 · May 25, 2011

Lets hope good R&D never gets outsourced.

[peace]

Fe

Stoker · May 25, 2011

People who think that they are immune to this are simply naive. As manufacturing continues to move to the far east, not only design but also other engineering roles such as production engineering, quality and reliability go too. However, we are seeing an increasing number of support jobs go as well. In many cases I see engineering roles in the US and Canada dissolve from pure engineering work to "supervising" and "concept development work" while the brunt of the detail design work is done on the other side of the planet.

GregLocock · May 26, 2011

I think it is an excellent idea. It exposes Americans to the rest of the world and will make their industries more flexible and profitable.

Of course my position is slightly different to yours, since I am an outsourcee in effect.

Cheers

Greg Locock

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csd72 · May 26, 2011

Personnally I am against it though I cannot deny I have a bias.

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.

looslib · May 26, 2011

I was ccordinating a project that a former company outsourced to India about 12 years ago. We gave them the design specs, CAD information so the attributes would work when the files came back, existing CAD files that they had to interface to, etc. The work came back in a few weeks and the managers liked the hours that had been charged. Then we started loading the files back into our system. They had not used the CAD automation tools or hardware libraries we had supplied. Every file had to be updated with the library reference files and the attributes added. Since the attributes drove the drawing titleblock information, all of that had to be redone as well. We spent as much time redoing the work as they did in doing the work in the first place. After this, we started bringing Indian engineers to our facility for 6-9 months to learn how to do it our way and how to use our tools. This was made easier as the engineers worked for the India subsidery of our parent corporation.

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KENAT · May 26, 2011

Outsourcing Engineering has challenges from what I've seen, and unless you're buying in expertise (or it's part of an offset deal or similar) not just labor, I struggle to see how it pays off in many situations. However, it seems to work for some folks - or at least they claim it works.

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.

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lacajun · May 26, 2011

FeX32 said:
Lets hope good R&D never gets outsourced.

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......

Stoker said:
In many cases I see engineering roles in the US and Canada dissolve from pure engineering work to "supervising" and "concept development work" while the brunt of the detail design work is done on the other side of the planet.

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.

KENAT said:
or at least they claim it works.

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.

KENAT · May 26, 2011

lacajun, you actually pick up on an issue that concerns me. People talk about the knowledge economy in the UK. Things like they may not build many ships any more but design them for other nations etc. and make more per hour for doing so.

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.

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DannyGlover · May 26, 2011

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.

MiketheEngineer · May 26, 2011

Who seals the work?? Who is responsible??

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".

cranky108 · May 26, 2011

Outsourcing is all about using lower cost labor, or expanding productivity without adding people.

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.

FeX32 · May 26, 2011

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Fe

owg · May 26, 2011

XM Radio today reported that Indian companies are hiring US employees to fill call centre requirements. There may be hope for engineers.

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SomptingGuy · May 26, 2011

My employer has a low-cost centre in a part of Europe where salaries are lower. The staff turnover there is huge. It's really hard to keep up and make useful relationships with the guys.

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

juleselec · Jun 1, 2011

The last company I worked for, a multinational engineering services consultant, were quite heavily involved in what they euphemistically called "High Value Engineering", which was pretty cynical code for cheap labour.

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.

rb1957 · Jun 1, 2011

i liked the engineering reply to (i think it was) Jack Walsh's justifiction for out-sourcing engineering (something like "i can get 10 engineers at $10/hr, why would i want 1 at $100/hr).

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.

csd72 · Jun 1, 2011

rb1957,

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.

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