×
INTELLIGENT WORK FORUMS
FOR ENGINEERING PROFESSIONALS

Contact US

Log In

Come Join Us!

Are you an
Engineering professional?
Join Eng-Tips Forums!
  • Talk With Other Members
  • Be Notified Of Responses
    To Your Posts
  • Keyword Search
  • One-Click Access To Your
    Favorite Forums
  • Automated Signatures
    On Your Posts
  • Best Of All, It's Free!

*Eng-Tips's functionality depends on members receiving e-mail. By joining you are opting in to receive e-mail.

Posting Guidelines

Promoting, selling, recruiting, coursework and thesis posting is forbidden.

Students Click Here

Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?
13

Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

(OP)
Hi folks

Offshoring (and the ensuing layoffs) has really gathered pace since the GFC. You've heard, you've seen, you know. In australia at least, offshoring seems to have really ramped up in the past few years. I understand the business case, it doesn't make sense to pay a local worker $100/hr when someone from a developing economy can do it for $4 and a bag of rice.

The question is, how far can it go? Will we reach a point where any job that doesn't actually require a physical presence can just be done remotely? From what im seeing in the US, the offshoring craze seems to be stalling, businesses are finding out that work is not to standard and some are bringing back their engineering (re-shoring). Some say its ok because offshored work to certain countries is never good quality. I think this is farcical in the long term, because eventually the quality will come in to line with that of any western country because business will demand it. They're not opening up multi million dollar "technical centres" for nothing.

Im curious how engineers now and into the near future can adapt to such a change in the jobs market, and what does one do to stay attractive to an employer.

Regards
Sam
Brisbane, Australia

Young Engineer. American old west enthusiast

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Instead of taking German or Russian while in engineering school, perhaps Spanish or Mandarin would be a better deal.

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Tagalog or Hindi would have been even better.

My former employers (I'm retired) availed themselves of these "high value" design centers. I want to make clear these engineers/designers were NOT stupid, but very unfamiliar, especially if US domestic standards were required. For a long time management felt that they were so inexpensive they could redo work three or four times if necessary. What they finally realized is they could never recover the time from that level of rework and schedules were routinely lost (time really is money in the engineering/construction world)

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Hindi's a waste, most of the people that I met on one of my dozen or so trips to India could speak English just fine.

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Australia and the US both have historically low consumer prices for methane. What I'm starting to see is energy intensive companies are re-doing their economics based on these very low prices and seeing that the $100/hour for 8-10 workers in an highly automated plant with fuel costs at $6/MMBTU are markedly better than the economics of paying 100 workers $5/hour and paying $30/MMBTU for fuel.

The trend has started, but the news media hasn't noticed yet. I think the future is incredibly bright in the US and Australia and anyone else who is a net exporter of energy.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

I worked at a structural office that tried to outsource the calculations to an office in China. China would send the calcs to us, and we would comb them over for mistakes.

The time difference, language barriers, vastly different working culture... It was a mess. The China office didn't last more than a year.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Quote (zdas04)


The trend has started, but the news media hasn't noticed yet.

You really need to get out more...

http://www.usatoday.com/story/money/business/2013/...

http://nation.foxnews.com/2013/09/20/boom-natural-...

http://www.roundupweb.com/story/2013/09/25/energy/...

http://www.fool.com/investing/general/2013/09/29/s...

Those were all published within the last few weeks, but here's one from better than a year and half ago...

http://business.financialpost.com/2012/02/23/north...

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

John
Those stories were all about the shale gas boom. Interesting. Important. Not what I was talking about. What I'm seeing the beginnings of is the next level of trickle down benefit to the economy. Actual manufacturing industries returning to the rust belt because of cheep fuel and the possibility of automation in new factories far in excess of what anyone was willing to retrofit to level the total employment costs.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

While it's not the 'rust belt', isn't this why there has been such an explosion (excuse the poor taste in puns) of fertilizer plants recently in Texas and Oklahoma, cheap raw material? Also, our sister division of Siemens (the American plant is located in North Carolina) who make gas turbines for power plants, have been doing quite well for the last several years.

http://www.youtube.com/watch?v=ilzoLdXtJ2E

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Errors in currency valuations that will inevitably reset.

I think of it this way.

Why would a guy in the developing world work for dollars that 'if' respent in the United States would not
buy him enough food to live on.
Of course it may buy much where he lives but this just means someone else has an unwarranted appetite for US dollars.

The balance is out of whack somewhere, I dunno where but the earned dollars are overvalued somewhere.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

The currency has always been out of whack. A larger percentage of world currencies are in sync today than ever before, but it is still a pretty small number. The bread and milk trick that I described above really highlights imbalances (if it takes 20,000 gallons of milk to buy a luxury car in the U.S. and 150,000 gallons of milk to buy the same car in Jakarta, there is a serious imbalance). Exchange rates are manipulated too much to be a decent measure.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

I think the next progression is toward "expert systems" displacing engineers significantly, both offshore and local. The confluence of very much faster computers plus the lack of qualified new generation engineers in some western countries will drive a demand for such "expert systems", and the end result will be a viable ( and very much competitive) alternative to staff/ design engineers.

"Whom the gods would destroy, they first make mad "

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

It's all about moving toward equilibrium. China is beginning to realize they're working very cheaply. I've been seeing labor-related costs creep up in the factories that I do business with. Is India the new China? I've heard a lot of people allude to this, but I'm not so sure about that.

Parts of developed Africa are beginning to come into their own, as well.

It is better to have enough ideas for some of them to be wrong, than to be always right by having no ideas at all.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

I saw something a few days ago about China is advancing twards robotic factories. Maybe as an additional source of labor, or to keep factories compettive. Either way there costs are attempting to balance with the rest of the world.

The problem with expert systems is the same thing that computers did to acturaterals (those people who develop insurance stats), that there will be fewer experts required, and the ones that survive will need PHD's. More people with higher mental capacity will be forced into common jobs, and lower mental capacity (or social issues) will be pushed into the vast expance of manual labor or homeless.

This is not a prediction, but a concern. To keep sales of iphones up in the future, we will be needing to make more "Hi Welcome to Walmart" jobs.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

cranky

That is exactly what I have been thinking for a while.
As an example from music. Before recordings musicians could make money playing, but then came recordings and the very best of the best of the best could be heard by nearly anyone very cheaply. This made the game only a paying gig for those at the very top.

Same has been happening to engineering for a while. Factory automation is getting so plug and play that staff do not need to know
much to make it run. If they have trouble the technical support can help them online.
So now the very best engineers write the software and design the systems that are mass produced and can be used by many low level staff.

Power engineering may be somewhat protected because it takes some intuition to formulate the problem and as of yet computers do poorly at formulating exactly what needs to be solved.

I am really concerned that the middle skilled jobs like BS engineering are going to continue to go down.
Then top it off with what will a creative and moderately intelligent person do for a living, can we stand to sack groceries.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

2dye4, perhaps music is not the example you intended it to be.

With the advent of PC based editing software etc. and online file distribution (including iTunes, UTube etc.) then it can be argued that music is heading back to where many artists make a lot of their money from performing and less from recordings, and that the barrier to entry for new artists is lower than it has been for a long time.

Is there any kind of analogy with Engineering and some of the additive manufacturing techniques and other technologies? (FYI, I tend to be in the camp that 3D printing is being a little over sold right now but things do change.)

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: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

In the extreme case, where all work is provided by robots or other automated systems, the fraction of the polulace that needs to be employed will drop, yet the need to distribute the basics of food ,clothing and shelter to the populace remains. The current western concept of linking work =>> salary==>purchasing power==>consumption of products would need to be modified,and likely include a move toward socialism, but it is not clear how the upper elite would be determined.

120 yrs ago 60% of the polulace were farmers, now less than 5% provide all agricultural products . One can imagine a similar transformation across the board to all sorts of employment- it would effect more than distribution of goods, but would likely impact political systems, and religion as well.

"Whom the gods would destroy, they first make mad "

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

As a friend of mine said, no matter what, things will still break, even robots. Maintenance is the place to be.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

If socialism is where we are headding, with a large part of the population dependit on the goverment for money, then an ever larger share of taxes must come from the few of us who remain employed. The only way for those of us who are not the elite to maintain our level is for us to move off of purchacing food, and things. I.E. grow or produce more of our food, fuel, and things, or move more purchases to the black market (no taxes).

Even the illusion of bartering is part of the black market according to the IRS, as they expect you to pay the equivlent taxes.

So to me it is looking like back to the farm is the only way to keep off the goverment net. I don't exactly want that, but it is a possibility.

Maybe we can do offshore work for other countries.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

2
The whole notion that you can continuously grow an economy on a percentage basis is a pyramid scam, albeit one which had a pretty good run. That good run has made people believe it without question, even though anybody with a basic understanding of mathematics should know better. Any geometric series has to come up against some real, physical constraints at some point. Technology has been good at removing some of the major ones we ran into in past- food and energy production- but even those are coming up against real physical limits.

Increases in productivity per worker inevitably mean lower employment. And in my view, fewer people truly participating in the economy creating goods and services of real economic value has to mean a decline in the standard of living for everyone on average.

To me, the solution has to be a smaller population. Once you're up against physical scarcity of resources, you can either have too many people scratching and biting for those limited resources, or a smaller number living in comparative abundance. And although the world's population is still growing, the rate of growth has greatly slowed. Development seems to do that pretty well- better than anything else that has ever been tried. The only question I have is whether or not we'll find ourselves hard up against one of those physical constraints before population peaks and starts to fall. The results could be really, really ugly.

If your question is where the best place to hide in a so-called developed "western" nation to get through this unscathed, then don't ask me- I have no idea. Every profession and white-collar job is potentially vulnerable to competition from people who have comparative economic advantage, either real or manufactured by a government like China's which deliberately manipulates the value of their currency. Suck it up- that's life in a globalized economy. Yeah, you can narrow your focus to stuff that will always need to be done locally (maintenance, local construction), but you'll be competing with lots of people for those jobs too.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

I don't think resources are that much in short supply, except for green pieces of paper. And to me the problem is in the goverment control of those green pieces of paper. Maybe we need the free market, and not goverment control.
However printing money is not an answer. Bank lending will increase money supply faster than goverment printing, however at these interest rates, why would they want to lend money?

We should have known that trading with China will at some level drag us lower as they rise up. What needs to happen is manufacturing here. And we are seeing some of that happen in small business, and with new ideas. But we are at the same time trying to kill it with excessive taxes and paperwork.

Some small manufacturing can be done in your extra bedroom. All it takes is a computer, 3D printer, and some marketing (I don't have the last part). And with our countries appitite for new and improved you should be able to make some money.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Quote ((Moltenmetal))

To me, the solution has to be a smaller population.

Bingo! There isn't a problem we face (energy, food, water, pollution, etc.) that is not directly and immediately mitigated (and at no cost) if you knock the population down 20 - 30%. This is nowhere more apparent than in the sub-saharan African continent. For some reason, this is a topic that has fallen out of public discourse?!

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

True, but the reason it has done so is that there is no morally acceptable way to limit population involuntarily, and the best way we've found so far that is acceptable and effective ata large scale is to raise 3rd world living standards.

I'm not entirely doom and gloom about this approach as I think that first world technology is getting more efficient as time goes on. However as I've said before, if our current state is 1 billion first worlders using say 5 units of resources per capita, and there are 6 billion third worlders using 1 unit per capita (that ratio is probably on the low side), then a future equilibrium state with everyone using the same amount of resources per capita using 11 billion units of resources demands we firstworlders somehow manage on 31% of our current resource load, or we reduce the number of people, or we use more resources. There is no other option I think.

Now, can we get an acceptable standard of living on 31% of our current resource usage within say 50 years?

It sounds a lot but it is 'only' 2% per year, which is not ridiculous in a planned economy but we don't have one. An easy example is that if I take one plane flight around the world every 3 years instead of two that reduces my oil usage by 17%, so that's the next 8 years of oil sorted there. That is of course a reduction in standard of living, that may be acceptable. Switch to diesel instead of gasoline in my car, that's another 15%, so that's another 7 years (that ones already gone though). There will, of course be unforeseen consequences.



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: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Some how you seem to miss the fact that some locations require more energy to live at the same level as other locations. Also different activities can use different fuels then what we currently use. The production of fuels creates lower skilled jobs which seem to be in short supply. I.E. to heat my home, I can use coal, electricty, natural gas, propane, diesel, wood, solar, oil or some combonition provided I can install the proper appliances, however in some places they don't need to heat there homes. However, I don't need AC like those people who live in Death Valley.

So saying everyone need to reduce there energy consumption by some amount is not true, or even doable.

Another aspect that can be argued is poorer countries need to increase there useage of solar panels, or wind, or etc. We can also increase our production of bio-natural gas, but there are no tax incentives like that of solar and wind.

Undeveloped countries mean just that. The poeple, energy production, and the land have not been developed. Not that we have to cut back so we can provide them with energy.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Quoting P.J. O'Rourke on overpopulation: "just enough of me, way too many of you".

Regards,

Mike

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Quote ((Cranky108))

The production of fuels creates lower skilled jobs which seem to be in short supply.

Having just driven thru the oil patch, I beg to differ. Towns that were drying up and all but ghost towns are thriving, throughout the panhandle and lower plains. Same story overseas, I know an Aussie who is making $200k a year on a drilling ship. Coal mining? If you can find a job, they pay well, although maybe not considering the health impacts.

But I agree with your statements about it being impractical to equally reduce consumption, based on geographical differences. But the numbers of old houses with minimal or even no insulation in the US is shocking. Short of the gov't paying to knock them down and replace them with energy efficient homes, I don't see any possibility of them being replaced until they fall apart or burn down.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

I don't remember saying it would be painless or easy. I said there would be unintended consequences, and perhaps we'd have to stop living in energy intensive habitats as if they were extensions of the temperate zones. Incidentally we seemed to have jumped onto energy, I think the same applies to many other resources, energy is just the easiest to think about.

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: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Back to the original poster.

I worked at one company that used a lot of design engineers in India. They were on the corporate payroll as employees of our Indian company. They used our same software and in my case, I sent them our customization files to get parameters into the files so we could process them into our system when they returned the work. The labor cost quoted for a job was about 20% of what an engineer was being bnilled at in our plant. The hours to do the job was 2-3 times more than what we estimated the job would take. Lower overall cost right? No way. They did not run our customized programs for the drawing title blocks, everything was hard text, not parameters. Work comes back and one of the in plant engineers has to review and redo every drawing because they don't meee our requirements. So, cost is back to where it would have been if we had done it in house plus we are now 3 times the amount of time from start to completion since they took 2X and we had to redo it all.

After that major design project, the company decided to change the way they did the outsourcing to India. We brought 4-6 engineers on a work visa to our facility and trained them in our procedures and how to use the customized software tools. After their 6-9 months here, they went back and another group was brought over and the training repeated. This eventually got us engineers in India who would do things the way we wanted them done. Expensive, maybe, but as I have said, Training is an investment in your resiurces, not an expense that can be cut first.

"Wildfires are dangerous, hard to control, and economically catastrophic."

Ben Loosli

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Would it be worth learning arabic? I am in the oil and gas industry and I have not seen that language mentioned. My fiance knows a little arabic and is willing to teach me so she can relearn it as well.

Future PE Engineer
Pet project I am working on to help other engineers, not much yet hoping to get it grow as I learn more
http://www.peexamquestions.com

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

33 years in Oil & Gas. I can speak several dialects of English (i.e., "Arkansas", "Navy", "Oil Field") and that is about it. I have zero skills with languages and have worked pretty much everywhere that Oil & Gas is produced. I've taught classes with interpreters and done field technical audits with "native guides" (usually PhD Petroleum Engineers with lots of skills and good English). I haven't found a lack of Arabic, Spanish, French, Italian, Farsi, Tagalog, or Brit to be a hindrance. Americans are so insular that every office in another country in this industry has more than a few American-English speakers just to cope with our failings. Many of my colleagues made the effort to learn the local language (one guy spent a year learning Arabic just before being transferred to Argentina), and seemed to get less cooperation from the locals than those of us that throw ourselves on the mercy of the local populace.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Quote (looslib)

Training is an investment in your resources, not an expense that can be cut first.
Tru dat. smile So is quality control.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

As much of a concern is where you purchase equipment from. I've seen equipment that would not perform to spec. not because of the engineers and programmers, but because they could not do full power testing at 60 Hertz. Had they had that capability they would have seen the problems.

The other side of it is we were not allowed to visit the factory during construction, so we could not see the quality in the construction. And years later, the problem with over seas factory visits limits us to US products, or unseen factories.

And I think there is another alternitive to insourcing, and outsourcing, and that is automating, which can replace all engineers, but can leverage workload.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Can't. Thanks.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

There's a neat, complex, saying which I heard from Toyota "The only one who will always have a job is the one who can succesfully eliminate his own job". There's the rather less neat one I heard at company X, "X is a company that employs a few smart people to design systems so that dumb people can design cars".



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: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Judging from what I have seen of the new cars, the auto manufacturers have quite a few dumb people designing cars. Or maybe the designs fit the type of people who buy them.

I sort of see it like a popcorn machine I had the recent pleasure to repare recently. The complex elements were cramed into the amount of space the astetic elements allowed.

I see it as assemblies will be designed, and reused over several years/models/brands, and the engineering will be juggling assemblies togather. The problem is because no one is looking at the whole product, no one will see that you can't change the oil filter with out removing the right frount tire.

I am not trying to pick on the automotive industry, because this translates to other industries, but because I believe the auto industry builds a complex product. I see that simple products may not be engineered in the future, like popcorn machines. At most they maybe run by a consultant, but the more complex products will still be engineered.

The shame here is the number of engineers that are not employed as engineers, and the shortage of engineers in some fields. The university's are not prepairing the students to the right job openings.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Tesla seems to be building a nice product - no need to remove the tire to reach the oil filter either!

Heck, they can now swap out the entire battery pack in a matter of a few minutes.

Of course, they have an engineer running the company, not an MBA.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

It's the trend one often sees in design cycle. Things start out big, robust, over-built, plenty of maintenance access. Occam's razor inevitably goes to work as each revision trims and prunes at inefficiencies. Maintenance is a secondary consideration in design because the primary design consideration is the intended use and functionality of the article. Why sacrifice efficiencies in 1000 instances of use over convenience in 1 instance of maintenance? This is the root cause of goods trending toward disposability rather than durability and repairability.

Little comfort for us "weekend mechanics", though.

It is better to have enough ideas for some of them to be wrong, than to be always right by having no ideas at all.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

My 1973 ford escort had plenty of room for maintenance, which was just as well since it needed it quite often.

My 2013 ford fiesta is physically shorter, yet has aircon, 5 speed transmission, slightly bigger engine, catalytic converters, EFI, ABS and so on. Now given that not many of the big items have got smaller, exactly how do you propose we package all this stuff without cramming it all together, or making the car bigger?

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: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Greg,
You missed the basic law of human interaction--The definition of "easy" is "someone else has to do it".

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

It reminds me of the same issue with lawn mowers. Why in the world do I need two speed controllers, and a clutch? Speed of blade, and speed of travel, and a clutch in case I let go of the handle.

I agree that we maybe asking for too much under the hood of a car, however, I am not asking for all those things, they are being mandated. So don't you feel safer in a car with half the size, and about the same gas millage as my 25 year old pickup? Of corse what I don't have is power brakes, power stearing, and automatic transmission (and maybe some smog stuff).

Some how we have taken the add on route to cars because like the $6 million man, we can make it better. But the question is:is it better? Does it go faster (no), is it cheeper, or cheeper to operate? Can we build them faster?

And why do cars need to be reengineered every year? Why can't the only changes be seat covers?

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Production numbers used to be high enough that the body dies wore out in a year, so it cost little extra to replace them with something a little different.

The other justification for re-doing things every year or two is that you need to keep your engineers busy to keep them from starting up a competitive outfit on the side, and to keep their skills current.

Or, lay them off when you don't need them, and suffer the learning curves of recruiting and starting up with a new crew on every new project.


Mike Halloran
Pembroke Pines, FL, USA

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

You may or may not have noticed but making and selling cars is not an especially profitable exercise, the margin to the manufacturer is often quoted as falling in the range -2 to +10%, which I think would cause Mr Dell or Mr Gates to have a heart attack. RoC is laughable, I don't buy auto shares for much the same reason I don't buy airlines.

The reason is competition. There's nothing wrong with a 25 year old truck if it suits you, but for a manufacturer to sell large numbers of cars (or trucks) at a reasonable profit means making them attractive to buyers. You can buy a 25 year old truck brand new, a Toyota series 70. Be prepared for sticker shock. Then drive it against a truck launched in the last 5 years. Sure if you are a large mining company and your maintenance infrastructure is based on series 70 trucks then you might buy some more, but newsflash, those days are going.

Meanwhile, that Fiesta sells for about 33% of the median wage in Australia. The Escort when new cost pounds 4000 in the UK in 1980. Median wage was pounds 6000. So in real terms my new car is half the price of the 1980 one. It uses 30% less fuel. It is rather smaller inside, but more comfortable. It uses 30% less fuel. I don't know how the emissions compare. It is twice as powerful. It is on tires that are 50% wider.

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: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

What keeps engineers busy (in the auto industry) are the legislation changes regularly made by those who don't really understand how hard they are making things to meet them. But I suppose it feeds the tier 1's, who get to sell many more replacement high-tech parts when the originals fail well before the life of the simpler parts of the car. My last car required oil changes, (infrequent) cam belt changes, exhaust changes, the odd spark plug changes, but not a lot else. And as it was pre-cat, none of that stuff. Enough space under the bonnet to do a cam belt change without removing much. I couldn't fit new headlamp bulbs in my Focus and the guy at my local garage took a few things off first.

- Steve

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

But their is major shortage for controls engineers. I must get like 5 calls a week people looking for controls engineers.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

One of the things that was emphasized when my son was in college (chemical engineering and metallurgy) just a few years ago was that, of course, you have to be technically competent, but in addition if you want to insure a job in the future you also had to master communication skills, leadership skills (not necessarily management but the ability to guide and inspire others in the course of your projects), and the other so-called "soft" skills. They recognized that the engineer who is ONLY technically competent, no matter how skilled, is easily replaced in the long term. The engineer who can think, plan, and develop those plans will always be in demand.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

It's like in my senior of engineering school, back in 1970/71, they suddenly altered the curriculum adding a class in what was called at the time 'Report Preparation' and they made it mandatory for graduation, even it you were in your senior year. Now this was back before the days of PowerPoint but we did learn to prepare overhead projection slides, poster-board charts and graphs, and other multimedia 'props'. We also had to give stand-up presentations which were videotaped (this was also fairly new technology) so that peer-reviewed critique sessions could be held afterwords.

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

It's not just controls engineers that are in short supply. Also Power engineers are in short supply, but some how the laws of economics don't seem to apply to engineers. Positions go empty, but pay dosen't go up.

What is also amazing is no one seems to be offering training positions.

Sort of like business types refuse to allow engineers to be paided more. Talk about a glass roof.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

The MBA Human Resource model shows people as a commodity. Any Engineer can replace any other Engineer. Any Machinist can replace any other Machinist. Any Surveyor can replace any other Surveyor. etc. With that outrageous model, there is no supply shortage so there is no reason to adjust compensation. The homogeneous model sets the wages, the reality of human differences keeps the seats from being filled. When I had a role in hiring, HR would send me 200-300 resume's for any opening I was looking to fill. In that list I'd usually find a half dozen people who actually appeared to be qualified for the opening, with at least one of them getting in the door with a falsified resume, and 3 more that had "interesting" definitions of experience (one time "extensive pipeline design experience" meant that one of the groups in their Senior Design class had presented a pipeline project and the individual whose resume I was reviewing had sat through the other group's presentation).

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

4
Control engineers may be in short supply, but a control engineer buddy of mine said it best when he complained that he was "highly employable but without job security". Companies like to hire experienced control engineers on contract rather than hiring contractors to do the work, but then ditch them when the project is done.

Cranky has it correct: most of the so-called "shortages" in engineering are shortages without evidence- succession planning problems masquerading as labour shortages for the most part. A shortage without steeply rising wages isn't a shortage, it's bullsh*t.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

moltenmetal, well stated :)

Regards,

Mike

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

are control engineers mechanical or electrical engineers?
SCADA, PLC and such or something else?

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

At one time they were mechinical engineers, now they are more electrical.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Electrical. Just went to open house with my youngest son, and their eee program is very heavy into controls.

It is better to have enough ideas for some of them to be wrong, than to be always right by having no ideas at all.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

I know this is an old topic but I recently heard a representative from the Cato Institute give a speech that gave me an entirely new perspective on outsourcing. His position was that outsourcing is actually a positive sign of growth for an economy. Essentially, outsourcing indicates that the skill of the workers has elevated beyond menial tasks to more advanced knowledge and this should be embraced. Higher skilled labor raises the standard of living, lower skilled labor does not promote growth.

It seemed like an interesting perspective and one that made me think. I had always considered outsourcing a signal of a struggling economic outlook, however, if his arguments are to be believed, then it isn't that case.

PE, SE
Eastern United States

"If a builder builds a house for someone, and does not construct it properly, and the house which he built falls in and kills its owner, then that builder shall be put to death!"
~Code of Hammurabi

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

2
kylesito: yep, that sounds like typical CATO trash to me.

Rubbish: outsourcing is a natural part of the functioning of a free market, made more free by liberalized trade policy and the elimination of tarrifs, and extended from competition for goods alone to competition for services too by virtue of communications technology improvement. It's not that workers in the developed world are so skilled that they don't want to get their hands dirty any more! That's horsesh*t, pure and simple!

Businesses are algorithms which exist to maximize profit and value for shareholders. The employees are mere parts the algorithm uses to accomplish its goals. Businesses are not people- they have no "morality" and cannot reasonably be expected to be "moral actors". As a business, if you can make a part and make a profit selling it, you make it. If you can buy an acceptable part for vastly less from someone else, wherever in the world they may be, and still sell it for the same price, or for a lower price so that you capture more market share, you make more profit- and you can get rid of the cost and risk associated with running a manufacturing operation, including those troublesome employees. Same goes if you can replace employees with automation, a better manufacturing process etc. It's natural capitalistic "creative destruction", though the creation is going on where the costs are lowest.

Yes, it's easy to suboptimize and to make the wrong business decisions in that insource/outsource decision making process. It's only cheaper to pay someone else to make something your own staff can make if you intend to fire the staff when they're not making those parts for you. Businesspeople frequently do the economic calcs incorrectly when they consider the in-source versus outsource decision. Here, we only outsource tasks we can do or products we can make competently when work in hand takes us over 100% utilization, because we know we're going to keep our staff. And before you consider that some kind of a moral decision, I caution you that it isn't: it's a business decision pure and simple. Those people are valuable to us and required to do tasks that we cannot outsource, and we've invested time and money in training them, so we're keeping them so they can make money for the business. Doesn't matter how you do the calcs, commonsense tells you that it never pays to have your own staff idle while paying someone else their cost AND profit to do work those people could do competently.

RE: Offshoring, outsourcing, inshoring, reshoring, Where are we really headed?

Moltenmetal,
I had several of the same thoughts, but not the time to write them out. Your explanation covered my points.

A controlling factor in the in-source/out-source decision is total life cycle costs (including the cost to hire, train, and replace staff). We are starting to see energy-intense industries moving back to the US, but the new plants being built tend to be highly automated (small labor staff). With our energy costs about 1/5 of the world price, and our labor costs about 20 times the world price it makes sense to minimize labor while taking advantage of plentiful energy.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

Red Flag This Post

Please let us know here why this post is inappropriate. Reasons such as off-topic, duplicates, flames, illegal, vulgar, or students posting their homework.

Red Flag Submitted

Thank you for helping keep Eng-Tips Forums free from inappropriate posts.
The Eng-Tips staff will check this out and take appropriate action.

Reply To This Thread

Posting in the Eng-Tips forums is a member-only feature.

Click Here to join Eng-Tips and talk with other members! Already a Member? Login



News


Close Box

Join Eng-Tips® Today!

Join your peers on the Internet's largest technical engineering professional community.
It's easy to join and it's free.

Here's Why Members Love Eng-Tips Forums:

Register now while it's still free!

Already a member? Close this window and log in.

Join Us             Close