Aerospace Engineering Off-Shore Outsourcing; Benefit or Blunder

by Randy Speed, © 2009

Imagine for a moment that you are foreigner with a degree from an accredited institute in your own country. You are ambitious, but your country’s economy is a mere fraction of the U.S. economy. Let’s take it a step further and say that you have 7-10 years experience in your area of training.

If you were offered 20x your annual salary to perform the same job you are doing right now, to what lengths would you go to petition for that job? Think about the great things you could provide for your family.

What if you had only 50% of the necessary skills for that job, but the employer was willing to hire you anyway? Knowing that you do not have all of the required skills or experience; would you be willing to settle for 10x your annual salary? Could you make up for the difference with pure enthusiasm?

If you could offer your services to an existing market at half the going price, surely you could find clients that would recognize your enthusiasm and give you a chance. It’s a win-win, right? Easy sell it would seem. Not so fast.

EYE-CANDY HOURLY RATES

Let’s apply this discussion to the use of off-shore labor for aerospace engineering and design services. Can this sector of services be out-sourced off-shore?

If cost reduction is the bait, then the hook is hourly rate. Corporations looking to increase profits, it seems, could surely overlook small issues like language barriers, or time zones, or lack of practical experience. Reason with me here for a moment. If you have the necessary college degree, then you have the required skills for the job, right?

This is a predicament many corporate executives find themselves in. They have a fiduciary duty to try all possible legal methods to pursue increased profits for their company owners. They must try to take advantage of the seemingly abundant supply of low-cost labor. After all, it is legal. So what’s the catch?

Real-life examples are not easy to cost analyze up front. That’s the difficult part of the executive decision. Before charging ahead, one should pause for a moment and look at the risks involved.

LESSONS LEARNED

You don’t have to look too far for the answer. What often looks too good to be true usually is. Many aerospace companies have in fact gone down this road before you. The more people you talk to in the industry, the more you hear this same recurring theme. A common false assumption was that aerospace engineering was a “box job” – the type of job that anyone with the proper degree could do.

On the cover this may come across as protectionism.  But could poor language skills and lack of experience alone account for these bad experiences? Could there be more to it?

REGIONAL DIFFERENCES

Education and culture play a role as well. These subtle aspects were studied by a highly-regarded research organization with the following conclusions.

 “Job candidates from Russia are well-educated but often lack a grounding in practical skills from their university education, while in India the overall quality of the educational system, apart from the top universities, could improve significantly. In China and Brazil, language deficiencies are the most pressing issues.” – McKinsey and Company Executive Summary, The Emerging Global Market Part II, June 2005

Aerospace engineering and philosophy is itself regional. That is, it is organic to a specific culture and country. For example, Russian airplanes seem to have a propensity for multi-bladed propellers. The load path philosophy of Airbus cabin floor structures is quite different than that of Boeing commercial aircraft.

Observation: The fundamental assumptions and intellectual doctrine of aerospace design is culturally unique. This interesting fact compounds other seemingly innocuous issues. Perhaps there is a cumulative effect.

WHEN DOES IT WORK?

In fairness, it may in fact be advantageous for large stable companies to open an office in a foreign country and devote U.S. management and training resources to invest in the available low-cost labor pool in any particular country. Many large corporations are doing this, and it is a huge undertaking. However, usually they have other reasons for “going global”, like perhaps to reach untapped markets.

Is your company in this category? If not and you still want to try and use low-cost foreign labor on you program, then you certainly do have the right to employee legally available foreigners with a VISA allowing them to legally work in the U.S. Sooner or later you will have to decide whether to include off-shore labor in your engineering department.

What will you do? Will you be willing to experiment and place your company and your reputation on the line? Let’s look at what others have learned.

There are exceptions to everything, but generally speaking, off-shore outsourcing lessons learned by the aerospace industry are:

• The endeavor drained existing management resources due to various factors including lack of experience, difference in language, and cultural issues
• Often the work had to be redone and in the end took longer
• The work had to be done in the end by experienced engineers
• The work was late and cost more due to overtime at the highest rates
• The endeavor became an engineering-in-training experiment
• Schedule was missed and embarrassment ensued
• Inferior work was provided to customers and corporate images were damaged
• Future business potential and the company image was risked

In the end, management was under the mistaken assumption that aerospace engineering services can be successfully performed with book knowledge alone. They ignored the business advantage gained by using experienced individuals.

TEAMING WITH EXCELLENCE

Speed Aerospace believes that it pays to do the work right the first time, on time. We believe that you will be better off to pay for the best engineers and team leaders the first time, than to believe that enthusiasm can replace experience. We employ smart people with overwhelming experience and insight in the field of aerospace engineering.

Our business model does not exclude people from foreign countries. We are a culturally diverse, best-in-class, people-oriented company. We also employ mentoring programs. This strategy ensures the stability of our future by holding our human resources in high regard. Most importantly, we are customer-driven and do not place the quality of our services at risk for the sake of increasing profit.

Our goal is to come away knowing that we have helped your bottom line. That you have been made more profitable, more efficient, and more impressive to your own clients than you would have been without us. Your product quality and your profits are our primary concern. Your future is our future. If we do not help you succeed, then we don’t succeed.