Outsourcing Or Offshoring?
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BUSINESS To stay up to date with premium news from the commercial aircraft finance sector, subscribe to flightglobal.com/pro ENGINEERING DAN THISDELL LONDON Outsourcing or offshoring? Good week Quest Global does some of both, and cutting costs is only part of the attraction OIL Five months of steady increase took oeing’s well-chronicled diffi- QUEST GLOBAL 2007-2012 Brent Crude to $125- Bculties in achieving its vision plus, back to where it of decentralising much of the de- Headcount ($ million) 350 was a year ago and a tail engineering on its 787 pro- 3,500 Headcount Revenue ($ million) mere Iran crisis or two gramme has highlighted the chal- 3,000 300 from its all-time $140s lenges inherent in such a scheme: 2,500 250 high in the summer of even when partners are guided by 2008, which had airline a well-defined conceptual frame- 2,000 200 bosses in conniptions work and networked through 1,500 150 before prices, and the computer-aided design systems global economy, crashed. that allow real-time collaboration, 1,000 100 But now the International the goals of faster working and re- 500 50 Energy Agency says in duced costs can clearly be elu- 0 0 February Saudi Arabia hit sive. However, the technical and 2007 2008 2009 2010 2011 2012* a post-crash output peak financial scale and tight timeta- SOURCE: Quest Global and then prices edged bles of modern new aircraft pro- back as the Kingdom grammes probably point to more ity” and specialist capabilities. In this way, a business built on hinted it would work to widely spread risk-sharing in fu- Most – but not all – conceptual providing temporary extra capac- suppress prices. ture rather than greater in-house work is kept in-house. ity or specialist expertise is also control of the engineering. Quest’s business model is to becoming an ideas factory. In this context, it is interesting focus on all three client needs Quest’s “local global” approach to consider the December 2011 and, crucially, to operate close to makes this possible, says Prabhu, sale by GKN – itself a typical tier the client. “We believe in that,” but it takes years to build such a 1 risk-sharing partner – of its En- says Prabhu, who adds that the relationship and if Quest comes Rex Features gineering Services outsourcing GKN deal followed naturally after up with 20 ideas, it might see unit to Quest Global Services. about four years working with it three taken up by a client. “We Quest, founded in 1997 by India- as a client. know where we can help them and US-trained engineers Ar- Ultimately, the Quest business more than they do,” he adds. avind Melligeri and Ajit Prabhu, is about meeting clients’ needs Highlighting the proactive na- describes itself as a “pioneer in quickly, so, says Prabhu: “Hiring ture of Quest’s client relations, a offshore product development is our core competence.” recent ideas forum the firm held Rex Features engineering”. Quest hires a lot of engineers in for its own staff in Singapore will their 40s and 50s, he says, and be repeated in the UK, he says. BARBADOS These trans- TAPPING TALENT lures many out of retirement. Cli- The ultimate goal is to become atlantic rowers didn’t But although Quest does have a ents face a scarcity of engineering a strategic partner, and Prabhu need REDjet to reach the large pool of talent in India, off- talent, particularly in engines and reckons the client appeal of such a Caribbean island para- shoring is just part of its formula. aerostructures, and often cannot relationship is that it is better than dise but others might not The GKN deal added 200 UK and cope with the demands of con- relying on the normal supply get there now that the Australian engineers to take current programmes, so they chain to retain technical knowl- carrier has ceased flying Quest’s headcount to nearly 3,500 need to outsource some of the edge. For example, Quest has 600 after less than a year, people in the US, Europe, India work. In the absence of big new engineers dedicated to Rolls- blaming state-subsidised and the Asia-Pacific region. And civil aircraft programmes, that Royce and in 2011 won a similar rivals for slashing prices as soon as the GKN deal closed, trend is likely to intensify over contract with Airbus to act as an to drive it out of busi- the company needed to hire 120 the next decade as companies offshore development centre. ness before raising their more – so it is now recruiting in seek to hold down costs while The key to establishing that fares. The Boeing MD-80 Filton and Weston-super-Mare in staying competitive in an envi- sort of relationship is to under- operator had promised the UK. Quest generates 40% of ronment characterised by contin- stand the value of outsourcing. to turn Barbados into a its revenue in the US (down from uous product development. As Quest vice-president Raman major hub linking the 100% at start-up), 50% in Europe Prabhu also sees opportunities Subramanian puts it, the sales ap- Americas and Europe, and 10% in Asia-Pacific. in defence. Government spend- proach is to help a client identify but now it’s just hanging Speaking to Flight International ing cuts are putting pressure on its “crown jewels” that must be on hoping for some gov- in London, Prabhu – who serves contractors, but contractors are kept in-house and then convince ernment help of its own. as chief executive from global still being asked for new product them to optimise everything else. headquarters in Singapore – notes ideas. So a company like Quest “Engineering is not a commod- Bad week that firms like to keep engineering can – by working closely with ity,” he says. O in-house, but typically need to and locally to its clients – take To find out who the rising stars outsource some work for three rea- part even in conceptual design of aerospace are, visit sons: cost reduction, “surge capac- and research and development. flightglobal.com/top100 30 | Flight International | 27 March-2 April 2012 flightglobal.com.