7 ms·

The paper from 2001 by Dr. LJ Hart-Smith, referenced in the article is just as interesting as the article itself https://www.documentcloud.org/documents/69746-h

by rdtsc 3y ago

The paper from 2001 by Dr. LJ Hart-Smith, referenced in the article is just as interesting as the article itself https://www.documentcloud.org/documents/69746-hart-smith-on-outsourcing https://www.documentcloud.org/documents/69746-hart-smith-on-... If you squint, could apply some of those observation to the world of software. For a TL;DR just skip to Hart-Smith's recommendations list at the end of the paper. Here are the ones I liked: > Look continuously at the entire activity. Do not minimize costs in isolation. Understand that one global cost minimization is worth far more than even 20 sub-optimum cost reductions. > Retain sufficient in-house production manufacturing that it is possible for future engineers to acquire the skills needed to develop new products, without which all businesses will fail. Even the work that is out-sourced requires internal expertise to write the specifications. > Acknowledge that cost-saving techniques that work in other high-volume industries are often quite inappropriate for low-volume industries like aerospace. > Listen more to your own employees about how to save cost than to any outside business consultants who have never run a factory producing your kind of product. In any event, if the advice they offer changes every year, it cannot possibly be correct.

baby 3y ago
> Retain sufficient in-house production manufacturing that it is possible for future engineers to acquire the skills needed to develop new products, without which all businesses will fail. Even the work that is out-sourced requires internal expertise to write the specifications. Damn, that really reminds me of a previous company I worked for, that wanted to replace important core internal libraries with open source libraries. My argument was always that we should always have in-house knowledge of the core technologies. I think a lot of companies fail to think long-term. > Listen more to your own employees about how to save cost than to any outside business consultants who have never run a factory producing your kind of product. In any event, if the advice they offer changes every year, it cannot possibly be correct. This one is the difference between management-driven company and engineers-driven company.
- groestl 3y ago
  Open source is different, in that you as a company can become maintainer and therefore expert of that component _and_ profit of other work being upstreamed. In case the library is not your USP, I think it's not that clear cut.
  - paulryanrogers 3y ago
    USP?
    - Swenrekcah 3y ago
      unique selling point is my guess
      - groestl 3y ago
        Exactly
    - groestl 3y ago
      Unique Selling Proposition. If the thing the library implements does not substantially differentiate your company from others, it's a candidate to be maintained as open source project. For example, just become an expert ffmpeg user if you're a live streaming service. Your USP is your content, transcoding just needs to work. In contrast, if you're Dolby, that would probably not be the right strategy.
  - dehrmann 3y ago
    Or in the context of Boeing, Boeing shouldn't be in the business of making its own bolts. An internal lack of bolt expertise isn't what caused the door plug to fly out.
- hinkley 3y ago
  I can hire people who have expertise in oss libraries. I have to build people who have expertise in our in house stuff. Importantly, we can sit around and bond over bitching about how bad one of those libraries is. If the authors are or were internal, we are now being divisive and unprofessional.
- AmericanOP 3y ago
  Its the fundamental flaw of outsourcing manufacturing abroad. You cede all growth from innovation.
  - struant 3y ago
    Yeah, but the numbers for this quarter and next quarter look great on paper. The future is just someone else's problem to these assholes.
ChrisMarshallNY 3y ago
> Retain sufficient in-house production manufacturing that it is possible for future engineers to acquire the skills needed to develop new products, without which all businesses will fail. Even the work that is out-sourced requires internal expertise to write the specifications. That's the biggie. I think the entire US tech industry has done a gigantic face-plant, when it comes to this. We have not only outsourced the work, but we have interrupted the transfer of knowledge and expertise. I have friends that run manufacturing businesses, and they explained how they believe that the US will never regain what it has given away, in the last couple of decades.
- josho 3y ago
  I've seen a variation of this problem firsthand. Working at a cable company where they contracted out to vendors most of their software development. They had a few internal systems that they developed in-house and would only hire 'senior' developers. I was curious how they expected to have a steady supply of 'senior' skills without ever hiring, training, and promoting a junior. I also saw they had no idea how to manage their vendors, partly because they didn't have in-house skills to serve as a sanity check on what vendors were charging. As a result, their vendors profited hugely from the company's ignorance (I know because I also switched to work for one of the vendors).
  - stalfosknight 3y ago
    This has been my pet peeve for a long time now. Just about every job listing insists on seniors only and they companies complain there aren't enough developers.
    - ChrisMarshallNY 3y ago
      > seniors only But under 35 (they don't usually say that part, out loud, though). That's my pet peeve.
    - ploxiln 3y ago
      In software in particular, thresholds have fallen. Maybe "Senior" today is like a junior 15 years ago. (Some interns out of college are really sharp, and some can basically work at the "senior" level immediately. Basically, they think logically, and they know how to write software, which they've been practicing through high school and some college.) Put another way ... most companies just really suck at hiring software engineers, and the ones they hired before weren't good enough, so it seems they need to hire at a higher level ...
Aloha 3y ago
Whats most interesting to me, is he's a former DAC person not a former Boeing one, and he saw first hand how outsourcing harmed DAC/MDC - particularly this section which caught my attention: "The correctness of the author's position' on these matters is easily confirmed by two facts. It was the suppliers who made all the profits on the extensively out-sourced DC-10s, not the so-called systems-integrating prime manufacturer. (The same thing has happened on aircraft assembled by Boeing, in Seattle, too.) Also, when plans were being formulated for the proposed MD-12 very large transport aircraft, almost all potential suppliers indicated a preference for being subcontractors rather than risk-sharing "partners". Could they have known more about maximizing profits, minimizing risk, etc., than the prime manufacturer who sought their help even though it could borrow money at lower rates of interest than potential suppliers could? The DC-8 was manufactured and assembled almost entirely within the Long Beach plant, with only the nose coming from Santa Monica. That policy was changed after the acquisition of the former Douglas Aircraft Company by the former McDonnell Aircraft Company, but the change did not improve the company's profitability. It is time for Boeing to reverse this policy." This closing also caught my eye - "The fate of the former Douglas Aircraft Company, which was reduced to a systems integrator in the early 1970s by excessive outsourcing of DC-10 production, is a clear indicator of what will happen to other companies which fail to sustain the conditions under which it is possible to launch new products. It is hoped that this sacrifice can save the new and expanded Boeing from a similar fate." Boeing in the end took the track that led to DAC functionally going out of business, putting thousands out of work in the end. It's not too late to undo it however - buying Spirit back would be one way to go about doing it - but I dont know if the Boeing management is aware enough being that the headquarters is in Arlington, VA, far away from any engineering or manufacturing centers that this is what must be done. Whats even more astounding to me, this made the Seattle Times in 2003(!), https://archive.seattletimes.com/archive/?date=20030309&slug=boeingcritique09 https://archive.seattletimes.com/archive/?date=20030309&slug...
- panick21_ 3y ago
  The problem is that Spirit is much bigger then it was, and Boeing doesn't really have the money to buy Spirit. And in addition, Spirit is supplier to Airbus as well, and they wouldn't want Boeing to have it. They might even buy Spirit themselves.
mckn1ght 3y ago
I saw another one of his gems the other day in another thread: > “The performance of the prime manufacturer can never exceed the capabilities of the least proficient of the suppliers,” Hart-Smith wrote. “These costs do not vanish merely because the work itself is out-of-sight.” https://news.ycombinator.com/item?id=38980098 https://news.ycombinator.com/item?id=38980098
- hencq 3y ago
  That line is quoted in the article (and in fact the comment cites the article)
mschuster91 3y ago
> Retain sufficient in-house production manufacturing that it is possible for future engineers to acquire the skills needed to develop new products, without which all businesses will fail. Even the work that is out-sourced requires internal expertise to write the specifications. This x1000 is what has led so many large government projects - no matter if in IT, construction, healthcare, military - go completely nuts. When there is no one to write the specifications, the "consultants" writing the specifications instead will write them in a way that allows their closely related industry friends to deliver bullshit, and since the government doesn't have experts any more (because they are "too expensive" for shoestring budgets), it can't realize that it's being led by the nose. When there are no experts to audit a project, no one can detect bullshit being designed, built or delivered until it's such a colossal failure that it cannot be hidden any more. When there are no experts to maintain a project that miraculously got completed and delivered after years of delays and billions of overruns, eventually even the best project will go and rot. And even in the private sector, this same concept holds. Just ask any F500 employee whose company "outsourced" their IT or anything else not "core of the business" to India or Pakistan to the cheapest bidder, or their building cleaning service or facility management, about what service quality they receive and how much upper management cares about that. The general ideology of outsourcing everything that's not "core of the business" is the single utter scourge of modern ultra-capitalism.

by rdtsc 3y ago

baby 3y ago

groestl 3y ago
Open source is different, in that you as a company can become maintainer and therefore expert of that component _and_ profit of other work being upstreamed. In case the library is not your USP, I think it's not that clear cut.
- paulryanrogers 3y ago
  USP?
  - Swenrekcah 3y ago
    unique selling point is my guess
    - groestl 3y ago
      Exactly
  - groestl 3y ago
    Unique Selling Proposition. If the thing the library implements does not substantially differentiate your company from others, it's a candidate to be maintained as open source project. For example, just become an expert ffmpeg user if you're a live streaming service. Your USP is your content, transcoding just needs to work. In contrast, if you're Dolby, that would probably not be the right strategy.
- dehrmann 3y ago
  Or in the context of Boeing, Boeing shouldn't be in the business of making its own bolts. An internal lack of bolt expertise isn't what caused the door plug to fly out.
hinkley 3y ago
I can hire people who have expertise in oss libraries. I have to build people who have expertise in our in house stuff. Importantly, we can sit around and bond over bitching about how bad one of those libraries is. If the authors are or were internal, we are now being divisive and unprofessional.
AmericanOP 3y ago
Its the fundamental flaw of outsourcing manufacturing abroad. You cede all growth from innovation.
- struant 3y ago
  Yeah, but the numbers for this quarter and next quarter look great on paper. The future is just someone else's problem to these assholes.

ChrisMarshallNY 3y ago

josho 3y ago
I've seen a variation of this problem firsthand. Working at a cable company where they contracted out to vendors most of their software development. They had a few internal systems that they developed in-house and would only hire 'senior' developers. I was curious how they expected to have a steady supply of 'senior' skills without ever hiring, training, and promoting a junior. I also saw they had no idea how to manage their vendors, partly because they didn't have in-house skills to serve as a sanity check on what vendors were charging. As a result, their vendors profited hugely from the company's ignorance (I know because I also switched to work for one of the vendors).
- stalfosknight 3y ago
  This has been my pet peeve for a long time now. Just about every job listing insists on seniors only and they companies complain there aren't enough developers.
  - ChrisMarshallNY 3y ago
    > seniors only But under 35 (they don't usually say that part, out loud, though). That's my pet peeve.
  - ploxiln 3y ago
    In software in particular, thresholds have fallen. Maybe "Senior" today is like a junior 15 years ago. (Some interns out of college are really sharp, and some can basically work at the "senior" level immediately. Basically, they think logically, and they know how to write software, which they've been practicing through high school and some college.) Put another way ... most companies just really suck at hiring software engineers, and the ones they hired before weren't good enough, so it seems they need to hire at a higher level ...

Aloha 3y ago

Whats most interesting to me, is he's a former DAC person not a former Boeing one, and he saw first hand how outsourcing harmed DAC/MDC - particularly this section which caught my attention: "The correctness of the author's position' on these matters is easily confirmed by two facts. It was the suppliers who made all the profits on the extensively out-sourced DC-10s, not the so-called systems-integrating prime manufacturer. (The same thing has happened on aircraft assembled by Boeing, in Seattle, too.) Also, when plans were being formulated for the proposed MD-12 very large transport aircraft, almost all potential suppliers indicated a preference for being subcontractors rather than risk-sharing "partners". Could they have known more about maximizing profits, minimizing risk, etc., than the prime manufacturer who sought their help even though it could borrow money at lower rates of interest than potential suppliers could? The DC-8 was manufactured and assembled almost entirely within the Long Beach plant, with only the nose coming from Santa Monica. That policy was changed after the acquisition of the former Douglas Aircraft Company by the former McDonnell Aircraft Company, but the change did not improve the company's profitability. It is time for Boeing to reverse this policy." This closing also caught my eye - "The fate of the former Douglas Aircraft Company, which was reduced to a systems integrator in the early 1970s by excessive outsourcing of DC-10 production, is a clear indicator of what will happen to other companies which fail to sustain the conditions under which it is possible to launch new products. It is hoped that this sacrifice can save the new and expanded Boeing from a similar fate." Boeing in the end took the track that led to DAC functionally going out of business, putting thousands out of work in the end. It's not too late to undo it however - buying Spirit back would be one way to go about doing it - but I dont know if the Boeing management is aware enough being that the headquarters is in Arlington, VA, far away from any engineering or manufacturing centers that this is what must be done. Whats even more astounding to me, this made the Seattle Times in 2003(!), https://archive.seattletimes.com/archive/?date=20030309&slug=boeingcritique09 https://archive.seattletimes.com/archive/?date=20030309&slug...

panick21_ 3y ago
The problem is that Spirit is much bigger then it was, and Boeing doesn't really have the money to buy Spirit. And in addition, Spirit is supplier to Airbus as well, and they wouldn't want Boeing to have it. They might even buy Spirit themselves.

mckn1ght 3y ago

I saw another one of his gems the other day in another thread: > “The performance of the prime manufacturer can never exceed the capabilities of the least proficient of the suppliers,” Hart-Smith wrote. “These costs do not vanish merely because the work itself is out-of-sight.” https://news.ycombinator.com/item?id=38980098 https://news.ycombinator.com/item?id=38980098

hencq 3y ago
That line is quoted in the article (and in fact the comment cites the article)

mschuster91 3y ago

> Retain sufficient in-house production manufacturing that it is possible for future engineers to acquire the skills needed to develop new products, without which all businesses will fail. Even the work that is out-sourced requires internal expertise to write the specifications. This x1000 is what has led so many large government projects - no matter if in IT, construction, healthcare, military - go completely nuts. When there is no one to write the specifications, the "consultants" writing the specifications instead will write them in a way that allows their closely related industry friends to deliver bullshit, and since the government doesn't have experts any more (because they are "too expensive" for shoestring budgets), it can't realize that it's being led by the nose. When there are no experts to audit a project, no one can detect bullshit being designed, built or delivered until it's such a colossal failure that it cannot be hidden any more. When there are no experts to maintain a project that miraculously got completed and delivered after years of delays and billions of overruns, eventually even the best project will go and rot. And even in the private sector, this same concept holds. Just ask any F500 employee whose company "outsourced" their IT or anything else not "core of the business" to India or Pakistan to the cheapest bidder, or their building cleaning service or facility management, about what service quality they receive and how much upper management cares about that. The general ideology of outsourcing everything that's not "core of the business" is the single utter scourge of modern ultra-capitalism.