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Chapter 03

Industry Profile

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Indian Engineering Services Industry Profile:

Every economy consists of three sectors. They are primary sector (extraction such as mining, agriculture and fishing), secondary sector (manufacturing) and the tertiary sector (service sector). Economies tend to follow a developmental progression that takes them from a heavy reliance on primary, toward the development of manufacturing and finally toward a more service based structure. Historically, manufacturing tended to be more open to international trade and competition than services. As a result, there has been a tendency for the first economies to industrialize to come under competitive attack by those seeking to industrialize later. The resultant shrinkage of manufacturing in the leading economies might explain their growing reliance on the service sector. However, currently and prospectively, with dramatic cost reduction and speed and reliability improvements in the transportation of people and the communication of information, the service sector is one of the most intensive international competition. The service sector is the most common workplace in India. The service sector consists of the soft parts of the economy such as Technology, insurance, government, tourism, banking, retail, education, and social services. In soft-sector employment, people use time to deploy knowledge assets, collaboration assets, and process-engagement to create productivity, effectiveness, performance improvement potential and sustainability. Service industry involves the provision of services to businesses as well as final consumers. Services may involve transport, distribution and sale of goods from producer to a consumer as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. Goods may be transformed in the process of providing a service, as happens in the restaurant industry or in equipment repair. However, the

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focus is on people interacting with people and serving the customer rather than transforming physical goods. Service Sector in India today accounts for more than half of India's GDP. According to data for the RBI, the share of services contributes to 55.1 per cent of the GDP, where as industry, and agriculture in shares 26.4 per cent, and 18.5 per cent respectively. This shows the importance of service industry to the Indian economy and as service sector now accounts for more than half the GDP marks a watershed in the evolution of the Indian economy and takes it closer to the fundamentals of a developed economy. Indian service industry covers a wide gamut of activities like trading, banking & finance, infotainment, real estate, transportation, security, management and technical consultancy among several others. The major sectors that combine together to constitute service industry in India are listed below Information Technology Trade Education Financial services Media Hospitality, accommodation and food services Entertainment, culture and recreation Transportation and warehousing Storage

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The IT & ITes sector includes IT services, engineering design and R&D services, ITES (IT-enabled services) or BPO and hardware. Today IT and ITeS sectors lead the economic growth in terms of employment, export promotion, revenue generation and standards of living. As per NASSCOM estimates, IT/ITeS sector (excluding hardware) revenues are estimated at USD 87.6 billion in FY 2011-12; and the industry is expected to grow by 19 per cent during FY 2012-13. ER&D contributes 16.7 Billion USD to Indian economy. For the purpose of this study an engineering process is defined as a complete engineering design cycle activity for a product or a service from the conceptualization stage till the pre-manufacturing cycle including the design of the prototype. It also extends beyond the manufacturing stage: this includes application like Product Life cycle management (PLM) solutions and product reengineering solutions, etc. Engineering processes also entail design and R&D activities across industry sectors. Besides the design elements of a product or service the engineering process also include the infrastructure, equipment and processes used in delivering the service. The service offerings in this study are divided into three groups: 1. Product engineering and R&D 2. Engineering /Industrial design 3. Process engineering and R&D The decision on what to outsource is based on the company strategies, perceived market capabilities and costs.

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Product engineering and R&D Product design Product devlopment

Engineering /Industrial design Industrial design services Structural design services Mechanical Electrical Plumbing services

Process engineering and R&D Process design Process devlopment

The value chain of EPO services indicates that engineering process outsourcing is done at various level of complexity. According to the chart below, the complexity is highest when outsourcing the core design and lowest in modeling and drawing. Recently, with increasing globalization and growing engineering expertise of the suppliers, outsourcing has risen remarkably. As consequent to shrinking product life cycles, and increasing pressure to lower costs and retain engineers involved in core engineering activities, global engineering outsourcing has been moving up the value chain over the years. Overall less complicated engineering process work is still being outsourced in higher volumes. However, what is essential to the companies, it not to look at the volumes of outsourcing of a certain application (such as 3D modeling), but rather to concentrate on the drivers, which are changing along with the company/product strategies. Companies who have decided to outsource their services to India have normally more

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than one driver to backup the decision. Thus it is essential to have ER&D activities constitutes of CAD, CAM, CAE, Automation services enough experience from the own product development processes, comprehensive and updated knowledge of the markets and availability of skill level, and finally, a company should have clear idea what they want to do and what they expect from the outcome. Organizations can provide needed market information and background checks (of the vendors), and assist firms to find out the best models for outsourcing.

Core Design/ Consept/Idea

High end Engineering Testing and analysis like FEA/CFD Embedded Software PLM solution Product design Design Analysis Test Simulation 2D/3D modeling Engineering Chage Order Documentation and Control

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Engineering analysis

Design automation

Mechanical CAD/CIM/CAE
Surface modeling 3D modeling, geometric design Reverse engineerin g 2D drafting & drawing detailing

CAM, process planning

Product Life Cycle Management

Legacy data conversion Conceptual & eng. design CPE Integrated product design & PDM solutions

SERVICE OFFERING: 1. CAD:

Concept Development Product design Solid and Surface Modeling Engineering Data Porting Manufacturing Drawing Reverse engineering Engineering Change Management Plant Layout engineering

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2.

CAE:
Finite Element Meshing Static Analysis Dynamic Analysis Thermal Analysis Motion Analysis Sampling simulation Computational Fluid Dynamics

3.

Plant Engineering:
Feasibility Study and Facility Audit Basic and detail engineering Procurement support Commissioning Support Plant Optimization Post project report Factory Acceptance Test Vendor Co-ordination

4.

Design Automation:
Application development Application Migration Software re-engineering Software customization

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Consultancy.

5.

Plant Asset Management:

Asset Information Management Document Management System.

6.

CIM:
Jigs/Fixture Design Tool/Die/Mold Design NC Code Generation Robotic/Human Simulation Work cell Design Offline Programming.

Software Technologies:
CAD: Pro-E/Wildfire, CATIA V4, V5,iDEAS,Unigraphics, CADDS 5, Inventor Series, Solid Designer, Microstation, ME 10, SolidWorks CIM: Delmia, FIDES, emWorkplace, ROBCAD, Pro/NC, Unigraphics, Delcam CAE: ANSYS, iDEAS Simulation, Pro/Mechanical, ABAQUS, LS DYNA, Hypermesh, Nastran, FEMAP, SOFY, CFX Plant Assessment Management: Visual Studio, Oracle, SmartPlant P&ID, INTools Design Automation: CATIA V4 IUA/GII, CATIA V5 CAA VC++, Pro-Toolkit

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The ER&D services is divided in to 10 major verticals, where each verticals are distinguished depending on the type of products, manufacturing, application, technology used. The list is as shown below,

Automotive
Telecom Consumer Electronics Heavy Machinay Semiconductor Computer Systems

Aerospace
Medical Devices Energy