OUTSOURCE, OFFSHORE AND EVERYTHING IN BETWEEN.

​Should you offshore, outsource or keep your There is no right or wrong answer to the question as to whether you should off-shore, outsource or keep your engineering in-house.  As with many things in life, it depends on your specific situation.  There is a place for each of these approaches so let’s look at some of the advantages and disadvantages of each.

​Offshoring:  We define offshoring as taking your engineering work out of the country, to let’s say to India or China.  The typical reason for off-shoring has to do with cost, due to drastically lower labor rates in certain foreign countries.  Simple repetitive work is a very good candidate for off-shoring where cost is the driving factor.  You may also want to offshore highly specialized work where it is difficult or unlikely to find a local specialist.  Another likely scenario is where local knowledge and understanding of your product target population is important.  An example would be if you want to sell a product in the Australian market, then it would make sense to consider using engineers/designers local to Australia for some or all of the design work.

In business, distance matters.  Though foreign labour rates may be lower, the impact of language, culture, and different time zones should not be underestimated.  Engineering and design involves the communication of ideas and concepts.  Communicating such ideas face to face could be a challenge, let alone trying to do it using online sharing tools, phone calls and emails.  Many, if not most design projects, require some type of physical contact with the project.  Let’s say you are a manufacturer with an existing product line, and you are introducing another product line based on the existing.  In such a case a factory visit should be considered by the designer, perhaps more than once, to get a better understanding of how you do things.  Understanding how you do things, could help the designer tweak the design to fit in with your existing processes.

Outsourcing:  We define outsourcing as taking your engineering and design work out of your company, but to a fairly local engineering firm within an hour or two’s drive from you.  Companies typically outsource their engineering and design when they have sporadic engineering needs, need to load balance the work load, have trouble getting to those important project ideas your team just don’t get time to do, for specialist engineering needs and so forth.  We can break outsourcing into two broad categories:  1) You cannot justify having your own engineering team or 2) you have a team but need to manage spiking demand or you require specialized expertise.

The great value of outsourcing is access to a team of professionals, often with years of experience, who could help you rapidly move forward, when needed.  As per our definition of outsourcing, these professionals should be readily available to visit with your company to access problems at hand.  Firms that offer engineering services are also typically very well connected with other firms, thus they are able to find answers quickly and they can source team members that will drastically improve your confidence in the engineering work done. we help transfer knowledge to our client engineering teams, empowering them with knowledge and an improved ability to execute.
​
Another advantage is load shedding using an outside firm.  Good outside firms will have the proper infrastructure and software setups so they can jump on a job and get it done quickly.  This is a valuable benefit where there is a long term relationship between the client and the engineering firm.
Engineers are expensive.  There is value for a company to outsource when they cannot justify a fulltime engineer.  Additionally if they hire a fulltime engineer they are likely to get someone who worked in a narrow field.  Innovative companies like people who can think outside the box.  Using an engineering firm with a broad base of experience could be a tremendous asset for those who want to be innovative and think outside of the box.

Outsourcing does come with its own price tag.  Hourly rates engineering firms charge are substantially higher than the hourly rate of a fulltime employee.  It comes down to balance and good management to determine the most cost effective approach.

In-House:  We define in-house engineering as a team, employed by a company on a fulltime bases who is responsible for engineering and design.  Most companies should have some in-house technical expertise.  Benefits include continuity, quick access to data and team members, facilities and so forth, closely working teams and the ability to communicate very effectively.
Small companies with limited engineering needs are often not willing to hire engineering staff due to costs that cannot be justified.  Engineers working for manufacturers tend to end up helping to run the business.  They are constantly required to be on the production floor.  This limits their availability and focus to make design improvements and to be innovative.

Conclusion: There is a definite need for companies who manufacture some tangible product to have a technical person on their team.  The larger the company, the larger the technical team.  However, for most small and medium enterprises there is a need to outsource some of their engineering and design requirements.  Such outsourcing can bring valuable experience to the table, expand their horizons and empower their teams.  Off-shoring should be considered with great care, but there are legitimate occasions where it is certainly justified.  WE not only provides outsourcing services, as company we also help enterprises to look strategically at their needs and how to meet them.
READY TO ENGAGE? CALL 713-232-0455