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.
Eng-Tips is the largest engineering community on the Internet
Intelligent Work Forums for Engineering Professionals
-
Congratulations waross on being selected by the Tek-Tips community for having the most helpful posts in the forums last week. Way to Go!
Engineering Outsourcing 4
- Thread starter bradpa77
- Start date
seymours2571
Mechanical
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
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
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.
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.
seymours2571
Mechanical
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
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
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.
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.
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.
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?
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 (probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484
What is Engineering anyway: faq1088-1484
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
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
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.
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.
-
3
- #50
SivaEastman
Mechanical
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...
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...
mauricestoker
Mechanical
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.
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.
- Status
Similar threads
- Locked
- Question
- Locked
- Question
- Locked
- Article
- Locked
- Question