Engineering Outsourcing 4

[bradpa77]

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.

 

[RacingAZ]

"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.

 

[cranky108]

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.

 

[seymours2571]

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

http://www.seymourecg.com

 

[SNORGY]

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.

 

[cranky108]

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.

 

[moltenmetal]

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.

 

[KENAT]

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

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(probably not aimed specifically at you)
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[RacingAZ]

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.

 

[cranky108]

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".

 

[GregLocock]

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

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[cranky108]

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.

 

[davefitz]

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.

 

[ScottyUK]

"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!

 

[moltenmetal]

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.

 

[cranky108]

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.

 

[ScottyUK]

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!

 

[KENAT]

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.

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(probably not aimed specifically at you)
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[GregLocock]

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

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[TheMasterMechanic]

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....

 

[GregLocock]

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

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.