I read a recent article in the Wall Street Journal about the increasing trend of automotive manufacturers to export an increasing amount of engineering. Vietnam has become the latest "export du jour". The wall street journal reported that engineers in Vietnam earn approximately $200.00 per month or $2,400 per year. Per the Wall Street Journal "In downtown Hanoi, Nissan has assembled a team of 700 Vietnamese engineers who are designing basic auto parts such as fuel pipes and nozzles at a fraction of the cost of doing the work in the automaker's main engineering facility in Japan."
Recent reports indicate that an average entry level US engineer earns about 20 times what these Vietnamese engineers earn in a year. Granted that the economies of the US and Vietnam are on a different scale, but given the world economy, can the US engineer compete? My experience says absolutely!
There are many hidden costs in outsourcing to developing markets. Management and technical oversight is a key concern and cost that often is neglected. However, when a financial analysis is performed, I am confident that one will find the "overhead" burdens added to the lower direct cost will show at least a cost neutral position. As the emerging market develops, engineering prices in that market will rise as well. As the technical capability develops, oversight costs will decrease, however, the overall burdened cost will remain the same or possible increase. At the same time, US companies will enable foreign entities to compete both economically and technically with the US.
However, there is a more significant cost involved that are missed by the accountants. Loss of engineering capability will put us at the mercy of foreign companies as our industries enable foreign replacements of our engineering work force. Without practice of engineering in the US, eventually the US will lose it's technical edge.
Comments? Please post! All opinions are welcome!
Tuesday, February 12, 2008
Thursday, January 24, 2008
Engineering Shortage?
By Paul Kumler
During the latter part of my career with The Boeing Company and Lockheed Martin, our engineering leadership spent many hours trying to understand the impact the growing number of engineering retiree's would have on the Aerospace Industry. Aviation Week and Space Technology reported in February 2007 that the industry continues to anticipate a large “brain drain” as the baby boomers retire. Even so, engineering school applicants and enrollment are in decline. Since founding KTM Solutions, it has become apparent to me that the aerospace industry is not the only business sector affected by this trend. Why the decline in engineering interest of high school students and graduates? What is happening to the engineering profession? Why is it predicted that the US engineering schools will not be able to keep up with demand? How does all this impact the US technical edge? What happens when we loose this to foreign competition? The answers to these questions are disturbing.
Engineering excellence and technical achievement are key contributors to the standard of living that we enjoy in the United States. However, in recent years, it appears that there is a public and scholastic lack of appreciation for engineering. Technical excellence has taken a back seat to profits. In larger corporations, engineering creativity is stifled by an endless amount of bureaucratic paperwork and an approval process that is more complex than the engineering creation process. Furthermore, engineers are treated as hourly employees, emphasizing the hourly wage over the value of creativity and innovation. Engineers are treated as commodities rather than as salaried professionals that are uniquely gifted and qualified.
Engineering is a blend of art and science where science is applied to address daily needs. Innovation and creativity grounded in the fundamental laws of physical science are developed and complimented by natural talent and years of experience. When applied correctly, engineering blends all requirements to develop the best product that meets the needs of the user, at the appropriate price. Engineers are not “line replaceable units”. One engineer is not the same as another as much as an author or artist is different from another. As our senior engineers leave the industry, a wealth of experience and natural talent goes with them. Experience can be documented and passed on to the next generation. But, what about the innovation and artistic talent that makes the application of the sciences appealing? Can that be captured? Can the next generation be energized and empowered to release its creativity? In my opinion, too many companies are stifling creativity and the spirit of the engineer. Hence, the younger generation loses interest.
Unless industry changes and encourages engineering innovation and development, the US will lose its technical advantages to markets like China, India, and Russia. The short term attraction of bargain price engineering (which in reality isn’t the bargain it appears to be) will be overcome by a balancing in the world economy. At that point, the technical talent in these foreign markets, provided by US industry and universities will be on par with or above that of the US. When this occurs, industry will have no choice but to purchase technology abroad and pay whatever the market brings.
During the latter part of my career with The Boeing Company and Lockheed Martin, our engineering leadership spent many hours trying to understand the impact the growing number of engineering retiree's would have on the Aerospace Industry. Aviation Week and Space Technology reported in February 2007 that the industry continues to anticipate a large “brain drain” as the baby boomers retire. Even so, engineering school applicants and enrollment are in decline. Since founding KTM Solutions, it has become apparent to me that the aerospace industry is not the only business sector affected by this trend. Why the decline in engineering interest of high school students and graduates? What is happening to the engineering profession? Why is it predicted that the US engineering schools will not be able to keep up with demand? How does all this impact the US technical edge? What happens when we loose this to foreign competition? The answers to these questions are disturbing.
Engineering excellence and technical achievement are key contributors to the standard of living that we enjoy in the United States. However, in recent years, it appears that there is a public and scholastic lack of appreciation for engineering. Technical excellence has taken a back seat to profits. In larger corporations, engineering creativity is stifled by an endless amount of bureaucratic paperwork and an approval process that is more complex than the engineering creation process. Furthermore, engineers are treated as hourly employees, emphasizing the hourly wage over the value of creativity and innovation. Engineers are treated as commodities rather than as salaried professionals that are uniquely gifted and qualified.
Engineering is a blend of art and science where science is applied to address daily needs. Innovation and creativity grounded in the fundamental laws of physical science are developed and complimented by natural talent and years of experience. When applied correctly, engineering blends all requirements to develop the best product that meets the needs of the user, at the appropriate price. Engineers are not “line replaceable units”. One engineer is not the same as another as much as an author or artist is different from another. As our senior engineers leave the industry, a wealth of experience and natural talent goes with them. Experience can be documented and passed on to the next generation. But, what about the innovation and artistic talent that makes the application of the sciences appealing? Can that be captured? Can the next generation be energized and empowered to release its creativity? In my opinion, too many companies are stifling creativity and the spirit of the engineer. Hence, the younger generation loses interest.
Unless industry changes and encourages engineering innovation and development, the US will lose its technical advantages to markets like China, India, and Russia. The short term attraction of bargain price engineering (which in reality isn’t the bargain it appears to be) will be overcome by a balancing in the world economy. At that point, the technical talent in these foreign markets, provided by US industry and universities will be on par with or above that of the US. When this occurs, industry will have no choice but to purchase technology abroad and pay whatever the market brings.
Friday, December 7, 2007
CATIAv5 and Solidworks
KTM Solutions On Demand Engineering utilizes Dassault Systemes CATIAv5 and Solidworks to perform our design services. How can we help you with your design needs? Have questions about CATIA or Solidworks? Ask our "instructor level" experts.
Engineering in the 21st century
What is happening to engineering in the US? With fewer students choosing the engineering path and every growing push to move work overseas, will the US lose it's technical edge?
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