MCAD Modeling Methods-Outsourcing Options

30 Sep, 2005 By: IDSA ,Mike Hudspeth Cadalyst

Watch for these pitfalls when you outsource design and analysis.

It's Feast Or Famine in the design world. You either have too little to do, like the downtime right after you finish a project and before a new one begins, or you're so swamped that your kids don't recognize you when you go home at night. I hope you're usually in the second category—it certainly beats the alternative. Let's assume you have too much work. How do you deal with it? One answer is to outsource.

In the Old Days

In the old days, companies outsourced to save money. They didn't have to invest in capital or materials, and they didn't have to train people. I've heard of companies that take outsourcing to the ultimate level. An outside vendor designs and builds each part, then another company assembles and ships the product. The main company ends up as a small one- or two-person operation. If everything is set up correctly, the company can make a lot of money, although it will have its problems, too.

One of the first things these ultimate outsourcers find is that they are no longer in control of their destiny. If one vendor raises its prices, they're faced with some hard decisions. They can eat the increase and watch margins fall or pass the increase to consumers, who are notorious for not liking that. To top it off, they better have multiple sources for each component just in case a vendor proves unreliable or goes out of business.

After a while, these companies tend to bring some of what they can't get vendors to do (or do inexpensively enough) in-house. They find they can produce things cheaply that way, so they bring other tasks in-house. Soon, they aren't outsourcing much of anything anymore.

Then, as costs increase, the pendulum swings back in the other directione. Companies discover that overhead is high and it costs money to keep good employees. Eventually they find another company that will do the work cheaper than they can in-house, so they return to outsourcing. This process is very cyclical.

Around the Block

One of the interesting things about having been around the block a few times is that it's easy to step back and see what patterns emerge from the seemingly random actions of an industry intent on making as much money as it can. I've seen outsourcing spawn whole cottage industries of talented engineers who discover that they can earn more by consulting and charging by the hour. I've seen them make millions, then slowly lose it all as the industry swings the other way.

When considering your options, keep a few things in mind. First, what's it going to cost to outsource? Don't just think about the hourly rate for drafting. I'm referring to security, accuracy and aggravation costs.

When you contact an outside design firm, generally it requires you to sign all kinds of paperwork having to do with intellectual property rights—and you should require such forms, too. Some firms or individuals work for hire and by doing so waive any rights they have to their designs in exchange for the remuneration they receive. Most do this because there are no guarantees that the work they do is worth more than their hourly wage.

If you're dealing with trade secrets, nondisclosure agreements are important to have in place. For example, a nondisclosure agreement protects your design if you hire an outside engineering firm to design a widget and down the road your competitor hires that same firm. Another concern to keep track of is your design information. Whenever design data goes outside your company, there's a possibility that it could be intercepted by your competition. Make sure you have proper firewalls and encryption technology in place.

Accuracy is an issue because everyone has a slightly different way of designing. If you've dealt with tooling vendors, you know that if you ask five toolmakers to design something, you get five different ways to tool it.

Dimensioning schemes can vary in a model and in a drawing. You must work closely with your vendors to make sure they detail the model the way you want it done. Also make sure the outside firm understands what you want and that they have the appropriate tools and experience using them.

Aggravation can be one of the major reasons people don't outsource work. All kinds of situations can make outsourcing a frustrating experience. Will vendor work ethics meet your expectations? Will vendors meet your deadlines? Will they do quality work? Will they interpret your instructions correctly? There are hard lessons to be learned in that last question.

In working with foreign vendors who have entirely different cultural assumptions, I've been both pleased and disappointed. If you don't like the work that has been done, understand that from the vendor point of view there is no problem. As long as what the vendor did is technically correct, you might not have an argument. It all comes down to communication and constant updates. I recommend that you require weekly updates on any design and analysis outsourcing. If something is wrong, catching it early will save time and money.

On the Positive Side

At this point, you might assume that I am against outsourcing. Nothing could be further from the truth. There are many positive reasons to outsource. No company can hope to employ experts in every field needed. You may have an engineer on staff who has basic knowledge of FEA or other specialties, but he or she can't hope to use these tools as well as someone who works with them all day, every day.

It's important to cultivate professional partnerships with outside firms that can do what you need. It takes commitment, though. No company, however small, can wait for the occasional job. They must keep busy or they'll have to close their doors. That means they need your business. Feed them as much work as you can, and it'll pay off in the end—when you need something done, they're there for you. Also, by working consistently with particular outside vendors, you can train them on how you want things done.

Rapid prototyping firms are a great example of effective outsourcing. Even if you have your own in-house capability, there will come a time when the machine is busy with a high-priority job and you need to run another high-priority job. What do you do? If you've kept the lines of communication open with outside vendors, you have a place to go. They may not be cheap, but they usually can comfortably meet your deadlines.

There are many trained and certified engineers who have worked for the biggest names in whatever industry you might care to name. They know what they are doing, and their experienced insight covers more than you can imagine.

Depending on what you need done, these independent engineers can work at your site or on their own. Some have facilities that are more well-equipped than your company, so judge this on a case-by-case basis.

In the Long Run

In the long run, outsourcing is a valuable tool for those who wield it well. When you don't have the manpower—and in these days of corporate downsizing, who does?—or the technical expertise, outsourcing can be the answer. Be careful and keep the lines of communication open. The more you talk to your outside sources, the better the results will be. That's the bottom line, isn't it?

Mike Hudspeth, IDSA, is an industrial designer, artist and author based in St. Louis, Missouri.

About the Author: IDSA

About the Author: Mike Hudspeth

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