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Organic

Outsourcing CAD work to lower cost centres

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Organic

This might be a controversial topic on this forum perhaps although I would like to hear your thoughts and experiences on design companies outsourcing CAD work to lower cost centres such as India, Pakistan or the Philippines.

 

I am also interested in hearing if anyone has successfully done this and the problems encountered along the way.

 

Personally I am not a huge fan of this based on the principle and am not sold on the concept yet although the push is coming from senior executives and I am tasked with investigating it and trying to make it work (although without setting up our own office in those cost centres). I would like to hear from other CAD managers and users who have been through this. :unsure:

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Aftertouch

I know some colleagues that did this in the past at there previous empolyer.

The biggest challenge is to explain what you want, and its always a suprise what youll get back.

With very very very good communication, and some work experience with one and the same person, then it might be a solution.

 

Personaly, i would never use external 'people'. Quality over Quantity.

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tzframpton

My last company did this, and I know another business owner that went this route. First off, these guys can certainly use CAD programs. It's just the communication. As Aftertouch has already mentioned, very very very VERY VERY good communication is key.

 

In the US, people have a hard time understanding them over a phone call, and you have to to stay up to take phone calls at 1-2am sometimes. Time differences may not be as bad for you guys.

 

-TZ

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ReMark

I'd rather hire a couple of interns and call the job "entry level" than send work out of country.

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Dana W

I freelanced a contract a couple of years ago to re-draw a $220,000 (just for Millwork) restaurant bar. I got paid 5 grand to re-do all of it because the general contractor had sub'ed the drawings out to some drafting company in a country that used to be part of the Soviet Union. These guys in Lower Slobovistan got 2 grand to basically regurgitate the architectural drawings and add some finish, and hardware callouts. We all know how much architects know about actually producing custom woodwork and cabinetry right? The worst part was that the dimensions on the supposed shop drawings were whatever they scaled off the architectural drawings, (I love how architectural drawings don't commit to any dimensions that are not measured off a column center line.) so EVERY stinking line needed to be moved. They obviously had no clue what ADA compliance meant either. This particular G.C. that came to me to save them is a LARGE company, and were following the bean counters wishes nationwide. They don't do it any more. The G.C. wanted the drawings turned around in 48 hours so I told him it would cost him 100 dollars an hour. He didn't bat an eye. Gave them to him in 38 straight sleepless hours, he paid me for 50 hours.

 

That is not the only job I have redone that was first done in the third world. I am trying to come up with a business card slogan with that theme.:twisted:

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BIGAL

I know of one project think petrol and hundreds of dispensers and a face lift, they sent the cad manager to Hong Kong to supervise, whilst a great experience the living costs for him and his family killed his earnings.

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maratovich

It all depends on the technical task.

If the task is written correctly and understandable, then you will get a good result. Otherwise, you will redo it.

And it does not depend who performed. In the countries of the "third world" there are people who know as well as you, and sometimes more. But they do not understand what the customer wants, because he can not write the text correctly. And in this case the customer is a "third world" country.

Dana W - the order you described was made in the office next door to you. The country you specified does not exist. Someone from your neighbors got good money by deceiving the customer.

About personal communication on the phone - a very bad idea.

English is not well known by all, communication will be wrong.

Here is an example of how this communication will be:

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RobDraw

It's hard enough to get people who are familiar with a standard to follow it. I've worked with "consultants" on a few jobs and most of them were good but not worth the cost and effort to teach and then clean up their work. Huge waste of money.

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Dana W

Hmmmph!! (message too short)

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nukecad
It all depends on the technical task.

If the task is written correctly and understandable, then you will get a good result.

Spot on (I didn't quote the rest because those two lines makes the point).

 

I worked on design engineering for a nuclear site, we did not outsource but we did look at it a few times.

The results from India just beat China and Asia (and I'm sorry to say the submissions from the USA and Russia were pretty useless).

 

We put it down to Customer service.

Companies in 'Developing' countries ask what you need and then work to give you what you want.

Companies in 'Developed' countries try to tell you that they know what you need and sell you their product.

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Organic
I know some colleagues that did this in the past at there previous empolyer.

The biggest challenge is to explain what you want, and its always a suprise what youll get back.

With very very very good communication, and some work experience with one and the same person, then it might be a solution.

 

Personaly, i would never use external 'people'. Quality over Quantity.

 

As you said, it will likely come down to communication and it is going to be chinese whispers also. Apparently the process is we send stuff to their outsourcing project manager in the low cost centre, they then pass the instructions on to someone in their CAD farm/team, then it gets passed back to the project manager for checking in theory. Then it gets sent back to us to review. We then review it and send markups back and the process repeats.

 

My last company did this, and I know another business owner that went this route.

 

Did it work out for them and was it worth it do you know?

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Organic
I'd rather hire a couple of interns and call the job "entry level" than send work out of country.

 

So would I. By the time we have all the back and forwards with the outsourcing firm I am not sure it is going to end up much cheaper either. (assuming they can do the work just as fast as we can).

 

If it takes them longer to do the work than we normally do internally then it might actually cost us more.

 

I know of one project think petrol and hundreds of dispensers and a face lift, they sent the cad manager to Hong Kong to supervise, whilst a great experience the living costs for him and his family killed his earnings.

 

I think I know exactly which one you mean :)

 

I did receive some CAD drawings from them (or one of their their competitors if I've got the wrong company) recently. The plans looked fine in PDF although in the CAD file it turns out every single layer and block name was in chinese characters and the file was an atrocious mess.

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Organic
they sent the cad manager to Hong Kong to supervise, whilst a great experience the living costs for him and his family killed his earnings.

 

I know of a major engineering firm which has done this. They sent some of their staff to a country north of us and they run the local office over there. I can see that working once you train the local guys and given they would be working on your projects all day every day.

 

It all depends on the technical task.

If the task is written correctly and understandable, then you will get a good result. Otherwise, you will redo it.

 

It is of a technical engineering nature and every project is different...

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tzframpton
Did it work out for them and was it worth it do you know?
As is everything in life, there are no ultimate solutions, only trade-offs. These two scenarios did produce an end product that met certain expectations, but it did come with trade-offs. Mainly, communication barriers, lack of detailed industry knowledge, time zone differences, and not having someone in-office always has its issues.

 

But, ultimately, both scenarios got the job done. Both times were a first, so I think (as it was already mentioned) if you go with a crew, stick with them for a while and the loose ends will tighten up pretty quickly. These people in these countries are very talented at CAD software, no doubt. That's the first step. The rest is you managing them.

 

-TZ

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Cad64

One of my clients outsources a lot of their work. They have to go back and forth, back and forth, until they get something that is acceptable, then they send it to me to fix problems and make sure everything works and adheres to company standards. I have spoken with the people in the office and they don't like dealing with the communication issues, time zone issues and all the back and forth, but I guess at the end of the day, it's still cheaper for them to get the work done this way than for them to sit there and work on it themselves.

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WPerciful

The intended impact is for labor hours to increase, to offset profit lost from labor cost reduction. On mega($5 billion +)/large projects the project is bid as time and material. Profit is accessed as a margin on top. Typically if milestones are met despite labor hours exceeding budget, the engineering firm will take the client to arbitration to get even more compensation. This is standard practice by many EPCMs (Engineering Procurement Construction Management).

If you’re witnessing this type of situation with your large company, or with a large vendor, just know that suggesting automation or opportunities to overcome common problems will all be ignored. It is best to either just row the boat or find other employment. Inevitably output quality is impacted such that the clients, when markets are better, are willing to pay more for better work. So the work comes back. Like a tide.

If it’s a small vendor who is offshoring work there is no defendable business case for bidding time and material, thus it’s a sign of poor management. Drag up at first opportunity.

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Zan

You can outsource CAD modeling work just as various companies outsource any other work. And of course, the savings would be reflected just the same way as other outsourcing work.

 

Think of it as the manufacture of jeans as an example. You can produce jeans in-house but for that, you need labor, machinery, input raw materials and input costs to run the whole operation. The total input (total of labor, machinery etc) can be saved if the manufacturing amount is in bulk. Read Economies of scale to know why.

 

So basically you get the same amount of work at lower costs when you carry it out in bulk or when you give it to someone else who is doing it in bulk already. Other cost savings are also implemented when your jeans are manufactured in India or Eastern Europe because then they would have cheaper labor costs, larger availability of skilled labor etc.

 

The same concept follows for CAD modeling work as well. Not only do some places do it in bulk, they also have a larger pool of less paid workers doing it. The problem comes because your required work isn't as simple as a pair of jeans. You need to diligently work towards setting standards for the work you wish to receive, as well as specify each project in good detail. There also need to be several back and forths before the product is finalized. And since many would find outsourcing at a difference of many time zones, your coordination work might turn out to be 24 hours. The contract and schedule of payments might also differ greatly according to the amount and type of work.

 

That said, you also have to make sure whether your company actually needs to outsource work or not. If the work is really small and similar to a prototype, you might not want all that headache in outsourcing it. There are also considerations regarding classified material. Similarly, very large companies might also find that they have the scale required to work it out within the company and even if there are some advantages to geographically placing your work in India or China, they just might open a back-office there instead of sending work to another company.I strongly recommend reading this article https://diceus.com/software-development-companies-ukraine/ where you can get a lot of useful information on this topic.

Only mid-sized companies are in a position to economically benefit from outsourcing from CAD modeling and similar work (in my experience).

Hope this helps.

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