0203 588 5889

Discuss your needs with a Consultant today

outsourcing work – Sucking the Sound of the Economic Cash Register



For two or three decades, U.S. companies had a good deal going with the rest of the world. They'd keep all of the high-pay technical jobs such as product design and development, and ship the low-pay unpleasant work off to China, Mexico, and Eastern Europe. But something has started happening to threaten that deal with the manufacturing countries of the world. They have educated their own young too, and now a new generation of engineers in China and India want the American engineering jobs - and they're willing to work for $ 10,000 per year. A good portion of American industry finds this prospect very attractive, especially coming off the tech talent dearth of 1999 and 2000. This is the result of outsourcing work.


Not all engineering jobs, however, are fit for product design and development outsourcing. "The engineering jobs that are most affected are those that are most closely related to manufacturing," says Robert Fried, president of Bellevue, WA-based Contract Manufacturing Consultants Inc. (www.cmc-inc.net), which helps companies manage their overseas outsourcing. "The engineers affected are equipment engineers, test engineers, industrial engineers, quality engineers and materials engineers."

And there's plenty of engineers to fill the jobs. The number of engineering graduates in India doubled in the past years. In China, the number tripled in the past ten years. But even with the growth of graduating engineering students, the U.S. still graduates four times as many engineers per 100 students (6) than China (1.5).

CoCreate Software (www.cocreate.com), which uses design collaboration tools to help its customers communicate with outsourced design, is outsourcing its own software development. "We currently outsource software development to Eastern Europe and India because of the lower cost," says Irv Christy, director of marketing. "Through this outsourcing, we learned how to communicate effectively so there are no ambiguities or conflict.



Though most of the "form, fit and function" design jobs remain here in the U.S., contract manufacturers (CMs) abroad are eager to compete for the work. "They want to secure the eventual manufacturing of these products, and if they can secure the product design, it's highly likely they will be awarded the manufacturing," says Fried. Some CMs such as Flextronics International Ltd. (www. flextronics.com) do their design services here in the U.S. in order to be close to their OEM customers.

But with the growing domestic market in emerging economies such as China, eventually U.S. companies will need to use designers who are close to the swelling markets. "The Asian market is very different from the U.S., due to its cultural diversity and various consumer tastes," says Raymond Tsang, president of Avnet Electronics Marketing Asia. "A lack of breadth of the product offering in the U.S. will be a drawback."


One area of form, fit, and function that is drifting overseas is outsourcing product design work by automotive suppliers. Both first and second tier suppliers are outsourcing work for designs across the globe. "Some of our customers are moving design projects to countries such as Australia, New Zealand, and Brazil," says Christy.

One of the determining factors on whether or not engineering jobs are candidates for outsourcing conies down to a company's view of its core competencies. "The majority of design is still done stateside because OEMs want to control the design of their products," says Jim Schaeffer, senior vice president of Avnet Design Services, a unit of Avnet Inc. (Phoenix, AZ). Schaeffer notes that OEMs may choose to outsource some of this design, but they will look for nearby design firms. "They want good crisp communication, which is difficult overseas."

So far, a good amount of the outsourced engineering is typically tied to high-volume manufacturing. "In Taiwan and Korea, they don't do original design; they do copy and modify," says Richard Timmons, senior vice president of engineering and design services at Arrow Electronics Inc. (www.arrow.com). "Original design will always be done in the U.S., Europe, or Japan."

Most of the product design work that is presently safe from outsourcing involves new innovative product development and small manufacturing runs. "Small design will always be the innovator," says Timmons. "As it comes to volume, it could be copies in Asia for specific volume production," he adds.



The Cost of outsourcing work for Short Term Cost Reductions...Read More
40 - outsourcing work is No Longer In...Read More
44 - outsourcing work May Lead to Failure During Tough Times… and Even In Good...Read More



it-outsourcing-web-developer it-outsourcing-data-entry it-outsourcing-smm
it-outsourcing-call-centers it-outsourcing-internet-marketing it-outsourcing-seo



Back Office Fields IT Fields General Fields

Book Keeping
Data Entry
Virtual Assistant
Call Center Agents
Email Chat and Support
Help Desk
Human Resources
Proof Reading

Web Design
Website Developer
I.T Support

SEO Internet Accounting
Social Networking
Blogging & Forums
PPC Internet Marketers
Technical Support
Financial Analyst
and many more...
Please enquire