Welding guns 101: light- or heavy-duty?

Welding guns 101: light- or heavy-duty?

Which semiautomatic GMAW gun is right for the job?

By David Bellamy

October 4, 2010

From tacking operations that require short arc-on times to completing long, continuous welds on thick plate, the welding gun needs to offer the appropriate welding capacity for the job.

Figure 1Light-duty GMAW guns work well for applications requiring tacking or short arc-on times.

When it comes to choosing welding equipment, welding operators may find themselves contemplating which power source to use—and rightly so. The power source significantly affects weld quality, productivity, and overall costs of welding. But having the correct semiautomatic gas metal arc welding (GMAW) gun for the job is equally important.

From tacking operations that require short arc-on times to completing long, continuous welds on thick plate, the gun needs to offer the appropriate welding capacity for the job. For example, welding operators may not need a GMAW gun that is the same amperage as the power source. That is because often they weld only 30 to 50 percent of the time, making the use of a lower-amperage gun an appropriate option. Conversely, an overworked light-duty gun could fail prematurely. Or if a welding operation involves varied applications, the gun must be able to address the needs of all of them.

On the Lighter Side

For welding applications that require short arc-on times, such as tacking or small-part welding, a light-duty GMAW gun may be the best choice (seeFigure 1). A light-duty gun is typically considered one that provides from 100 to 300 amps of welding capacity. Like all guns, light-duty ones are rated according to their duty cycle, or the number of minutes in a 10-minute period that the gun can be operated at its full capacity without overheating. Generally, gun manufacturers rate their products at 60 to 100 percent duty cycle.

For applications such as welding sheet metal, general hobbyist projects, and auto repair and autobody work, a light-duty gun works well. Because light-duty guns typically have low amperage capacity, they also tend to be smaller and lighter than higher-duty ones, making them easy to maneuver even in tight areas. Most have small, compact handles that are comfortable for most operators.

Such guns often use light- or standard-duty consumables, including nozzles, contact tips, and retaining heads (or gas diffusers). These consumables generally have less mass and are less expensive than their heavy-duty counterparts. Designed for short arc-on times, the necks (or goosenecks) are made of lightweight materials such as polymer, rubber, or light aluminum armor.

The gun's strain relief usually consists of a flexible rubber component or in some cases may be absent altogether. These features reduce the gun's weight, but it also makes it susceptible to kinking, which may lead to poor wire feeding and gas flow. Damage to the crimped connections on some unicables can be especially problematic. If a crimped connection becomes damaged, the cable or possibly the entire gun may need to be replaced.

Generally, light-duty guns offer standard features at a low price and typically need to be replaced more frequently.

Figure 2Heavy- duty GMAW guns provide the necessary durability to accommodate continuous and multiple-pass welding.

Guns for Tougher Jobs

Some jobs require long arc-on times or multiple passes on thick sections. Such jobs are found in heavy-equipment manufacturing for the agriculture, construction, trucking, and mining industries. For these applications, heavy-duty guns are the best choice, as they can weld continuously on 1-inch or thicker material and in harsh environments typical in such industries (see Figure 2).

Heavy-duty guns generally are rated between 400 and 600 amps and are available in both air- and water-cooled models. The choice between a water- or air-cooled heavy-duty gun largely depends on the welding application, operator preference, and cost considerations. Water-cooled systems are more expensive and often require more maintenance. Specially treated coolant solution, rather than tap water, is necessary for a radiator cooling system because tap water can cause algae growth or scale (mineral buildup) on the gun's internal surfaces and cable assembly.

Over time water can leak from hoses, the gun neck, or head, requiring immediate repair to prevent weld discontinuities and gun failure. However, despite the additional cost, when welding on very thick plate that requires high deposition and good weld penetration, a water-cooled gun may be required.

Heavy-duty guns—both air- and water-cooled models—often have larger handles than their light-duty counterparts to accommodate large cables designed to carry high amperages. Such guns often use heavy-duty front-end consumables that can withstand high amperages and long arc-on times.

The goosenecks on these guns are often long as well, which puts more distance between the welding operator and the hot arc. Most goosenecks have aluminum armor that protects them from damage from high temperatures and day-to-day wear and tear. An optional heat shield protects the welding operator from the heat coming from the high amperage and longer arc-on time. The shield provides a barrier between the arc and the welding operator's hand. Adding a unicable cover also can help protect the power cable from a harsh environment.

Locking triggers help prevent operator fatigue when welding multiple passes or long, continuous joints. Other heavy-duty guns feature dual- or multischedule triggers that mount on the top or bottom of the gun, whichever the operator finds most comfortable.

In many cases, heavy-duty guns can be customized to meet the needs of the application and welder preference, including preferred handle styles, gooseneck length and angle, and unicable length.

Parting Thoughts

Just like any part of the welding process, GMAW guns play an important part in obtaining the quality and performance desired. Overusing a light-duty gun can result in poor performance, while using a heavy-duty gun without cause adds unnecessary cost. If a company has multiple power sources, one gun usually can be standardized to fit them through the addition of a feeder adapter. Doing so allows for one common gun to be used throughout the operation, lessening the need to inventory multiple styles of guns and consumables.

The goal is to accommodate both the amperage and duty cycle of the application in the best way possible. Moreover, proper welding gun selection can conserve resources and help welders achieve high productivity.

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The value chain: No longer just for task-related processes

The value chain: No longer just for task-related processes

By Debbie Zmorenski • on September 13, 2010

Would you like to maximize the value impact of your talent management process? Consider conducting a value chain analysis of your organization's logistical activities for recruiting, hiring, retaining and growing your human capital.

Companies most often think of the value chain as it relates to manufacturing and technical processes. Seldom do companies think about their value chain when designing talent management processes. Yet, to maintain competitive advantage – especially during hard times – managing the human resources value chain is a critical component of an organization's future success.

The term "value chain" was first introduced by Michael Porter in the book "Competitive Advantage: Sustaining Superior Performance" (1985). Typically associated with manufacturing firms in the past, value creation and subsequently competitive advantage through value chain analysis and management provides an effective strategy for all businesses seeking streamlined, efficient operational processes that contribute to overall competitive strategy and, therefore, the bottom line of an organization.

Simply put, a value chain refers to the chain of activities within a firm's operations. Constructed at the business unit level, the value chain is a horizontal look at a firm with a process-product perspective versus the departmental view used for the budget. Products and services pass through all activities of the chain and ideally, at each activity, the product or service gains value. Porter's value chain model describes the components of the model as having primary activities and support activities, with the human resource management functions of recruiting, hiring, retaining and growing right-fit human resources as a key part of the support component.

Value chain analysis

Value chain analysis refers to the activities within and around the organization and relates them to an analysis of the organization's competitive strengths. Capturing the value generated along the chain is an approach popular with management strategists and can be looked at from an external and internal perspective. The external perspective, often referred to as the "value system" includes, in addition to internal factors, all external factors that impact the chain (e.g. vendors, vendors to the vendors, external corporate partners, outsource partners, etc.). A value chain analysis from the internal perspective looks only at the in-house processes and policies of the value chain, with consideration for how external factors may impact the internal activities.

Analyzing your talent management value chain

The purpose of analyzing the value chain of your talent management process is to identify how each business activity within the process contributes to your overall competitive strategy and where there may be efficiencies and cost savings to be gained within the process. An organization may create a cost advantage through value chain analysis by reducing the cost of the individual activities within the value chain or by reconfiguring the value chain.

Steps in the talent management value chain analysis:

1. Identify or clarify your overall competitive strategy: This may mean revisiting your vision and/or mission, or reiterating the firm's short-term and long-term goals, ensuring that everyone within all departments in the organization is on the same page.
2. Activity analysis: Identify each activity undertaken in the talent management process (recruiting, hiring, retaining and growing of human capital). This can be accomplished by conducting a brainstorming session or a business process review (BPR) with key individuals who are responsible for carrying out these activities and those who are impacted by these activities.
3. Value analysis: For each activity, assess the value that the activity brings to the process. Evaluate the pros and cons of making changes to the process. You must also consider how the changes may affect other departments within the organization and evaluate the overall impact of proposed changes.
4. Planning: Design and implement a strategic plan to reduce the costs of the activities within the talent management value chain or the cost to reconfigure the value chain.

As an example, we can apply these steps to the recruitment component of the talent management value chain. The first step is to ensure that the recruitment process supports the activity of attracting right-fit employees who will deliver on the competitive strategy of the organization. This may mean, for example, attracting people to the organization who have proven, exceptional customer service skills.

How the organization attracts right-fit employees is directly related to the recruiting activities. During the activity analysis, consideration must be given to the activities within all departments that are or should be involved in recruiting efforts (e.g., marketing, operations and communications).

Marketing may determine the types of ads to be placed, such as print ads for magazines and newspapers, electronic ads posted online, radio ads, etc. The marketing or communications departments may individually or collaboratively determine the verbiage and the aesthetics of the ads, ensuring that the culture of the organization is clearly represented to potential candidates. Operational departments may communicate their labor needs to HR, clearly outlining the particular requirements of the candidates, such as educational level, experience requirements, physical requirements, etc.

Further activity analysis involves dissecting each step within each activity. Below is a hypothetical example for a recruitment process utilizing print ads:

1. Designing the ad:
   • Marketing Identifies pictures or artwork, if any, to be used
     • Solicit input from the hiring manager within the operations department
     • Solicit input from the general manager of the operations department
   • Marketing and communications collaboratively identify verbiage to be used: key words or culture-related nomenclature
     • Solicit input from the hiring manager within the operations department
     • Solicit input from the general manager of the operations department
     • Submit for approval to the vice president of the marketing division
   • Marketing and communications collaboratively determine the layout of the ad – the placement of verbiage in relationship to the artwork or pictures, prominence and placement of the company's logo
     • Solicit approval from the marketing director
     • Solicit approval from the communications director
2. Choosing the appropriate print media for the ad
   • Magazines
   • Newspapers
   • Trade publications
3. Final proofing of the ad
   • Submit to the operations manager for final approval
   • Submit to the general manager of operations for final approval
   • Submit to the marketing director for final approval
   • Submit to the communications director for final approval
4. Determining the run time for the ad
   • Submit to the finance manager for approval
   • Submit to the general manager of the operations department for approval
5. Printing and distribution of the ad
   • Send to the printer (outsourced)
   • Printed materials returned to the marketing department
   • Marketing distributes the final copy to the predetermined publications for printing

The value analysis involves analyzing the value impact of each of the activities identified during the activity analysis. In this example, the value analysis reveals cost savings opportunities by streamlining various activities. In the first step of designing the ad, it is not necessary to solicit input at each step from the hiring manager and the general manager of operations.

While it is critical to solicit input from the hiring manager at the beginning of the process to ensure that the recruitment ads will attract candidates with the skills, experience and education to fulfill all job requirements, it is not necessary to solicit input at every step in the process. Cost savings can be realized by streamlining the activities to solicit input from the hiring manager in the beginning and end of the process. Additionally, if the organization has a culture of trust, the general manager of operations can be eliminated entirely from the approval process, trusting the hiring manager to make good decisions regarding her recruitment needs.

There are also potential cost savings related to time efficiencies by allocating one place in the process, say the at the activity step of final ad proofing, for executive approvals, if it is determined that executives must approve ads before they go to print. Again, a culture of trust can reduce the list of approvals needed to send an ad to print. If the marketing manager and the communications manager are competent and right-fit for their jobs, is it necessary to send the ad to the marketing and communications director for final approval?

Measurements may be available that show certain print publications have not generated positive results in attracting right-fit candidates. Savings can be realized by determining which publications have yielded the best results and choosing only those publications with which to advertise.

An analysis of the printing activity may reveal cost saving opportunities if it is faster and less expensive to print the ad in-house. If the organization does not have in-house printing capabilities, the questions should be asked, "How long since we have sourced this function? How long since we have negotiated with the provider for a better price? Are there potentially other companies from which a better price can be negotiated?"

Once the value analysis of the value chain activities is complete, a secondary evaluation must be done before implementing changes. This evaluation process scrutinizes the cost to make changes, not only in monetary terms, but also in terms of the impact on other departments outside of the talent management value chain.

One thing to remember is that all internal value chains have a relational effect on all other value chain processes within the organization. The secondary evaluation may show that while cost savings can be realized within the talent management value chain process, making these changes may create hardships or additional monetary costs to the departments it impacts. By its very title, the word "chain" is a clue that all departments within an organization are interconnected and that for organizations to operate effectively as an entity, no decisions can be made in a vacuum.

The last step involves the development of the strategic plan to reduce the costs of the activities within the value chain or the cost to reconfigure the value chain once the cost savings opportunities have been identified. Minimally, the strategic plan must include:

• Assurance that changes will deliver on the competitive strategies for the organization
• Involvement of key players from all departments impacted by the changes
• A realistic time line for implementing changes
• A dispersal of responsibilities based on the talents and skills of the team
• A measurement process for measuring the impact of changes made within the value chain process
• A process for continuous improvement and ongoing management of the talent management value chain process

A value chain analysis is a strategic tool that, when conducted effectively, gives the organization the ability to identify how each business activity within an internal value chain contributes to the organization's competitive strategy, creating synergy between departments and making the strategy more systemic overall. The ability to identify and improve the logistical components of the talent management process allows an organization to leverage its top asset, the people within the organization. The overarching result is cost savings in the forms of process efficiency, reduced employee turnover, and excellent customer service leading to increased market share and customer loyalty.

I would be very interested in any ideas that you have for future topics. Please feel free to contact me by commenting below, sending an e-mail to debbiez@lsapartners.com or calling me at 407-497-0075. You may also want to visit our Web site at http://www.lsapartners.com for the latest and greatest on leadership and workforce development, operational effectiveness and other topics.

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Successful Management - 10 Simple People Skills

Successful Management - 10 Simple People Skills

By Martin Haworth

Getting the best from your people is vital if you are to make the best progress in your business or organization. Much comes from the way you interact personally and here are just ten key actions to take to build great, fulfilling and productive relationships...

This might be a bit of a no-brainer for you.

If you have any role at all in managing people, you need to ensure that you develop great people skills.

By building rapport, you will develop ongoing, productive relationships with all of your people, which will give you an enormous return on the efforts you put in.

Here are ten things you can do, all of them easy, which will remarkably change the response you get from your people, the key asset you have in your business or organization:-

1. Just Have Conversations About anything! Talking to and more importantly, listening to your people regularly and informally is a great asset. It doesn't matter what it's about, Your understanding of them and their trust in you will magnify if you devote priority time to this each and every day.
2. Listen & Show you are Listening Take the time to really listen to each of your people, rather than just tell. If you truly hear, they will respond. Hearing is more - it is about what you do with the stuff you've listened to. And by using your face, your body language, eye contact and what you say (see 3 below), you will go a long way to showing that you are listening closely.
3. Ask Another Question Such a simple tactic. Ask secondary questions about what you've been told. Nothing, but nothing builds rapport and relationships like this. It shows that what they have been telling you is valuable, is interesting and builds their confidence. And you have been there to make that happen.
4. Support Your people need you to help them along the way. With your support, they will flower and grow. Support is what they hear from you - it works both ways.
5. Coach Don't get bogged down with technicalities. Coaching is about helping them see where they want to get to from where they are now. It's about exploring the possibilities - their possibilities, not yours and calling to action. Simple as that.
6. Clear Expectations By ensuring that all your people know exactly what you expect of them, they will tune in to delivering it. Confusion over performance is demoralizing and saps energy. Take the time to be clear.
7. Pay attention In any conversation with your people, take the time to give your full attention. Do your utmost to avoid being interrupted or distracted and truly value them for what they are saying to you - or the message you are giving them.
8. Show an Interest in Them These are real people and if you delve a little, it will show up. Having a real interest in who they are, their hopes and fears, their passions and what's important to them makes a big, big difference to how they perceive you. Get to know the name of their dog, if their dog is their most prized possession!
9. Follow Through During conversations you may offer actions that will be of value to them. Responses to what they have said to you. Make sure that you deliver these. Follow up and report back. Take actions you say you will. If you can't, tell them why.
10. Remember Conversations When you have subsequent conversations, recall something that was said previously and bring it up. This is hugely rewarding for them and lets them know that they said something of value.

Great managers really understand their people and work out ways to get the best out of every one of them.

Maximizing value from the most valuable asset you have in your business.

Your people.

(c) 2008 Martin Haworth is the author of Super Successful Manager!, an easy to use, step-by-step weekly development program for managers of EVERY skill level. Source

The Mythical 50% Resource

The Mythical 50% Resource

 

By Dave Nielsen, PMP

Most managers of software development projects have had an encounter with a resource who is committed to their project some percentage of the time. The most common approach to splitting a resource between two tasks is to assign them 50% to both, although other percentages can occur. It's even been known to have a resource assigned to more than two tasks 50% of their time! Sharing a resource with another project or functional manager would not be a problem in a perfect world, but ours is never a perfect world and sharing a resource with another manager can present some challenges for the project manager. Here are some tips and tricks you can use to make the best of the situation.

When Sharing a Resource Won't Work

Never plan to employ a resource whose time is more than 100% accounted for. Your grade school math isn't wrong; there are still only 2 halves in a whole! It may seem like I'm stating the obvious here, but this situation does happen and the math gets explained away with excuses such as "Joe works a lot of overtime, so you can expect him to spend 20 hours a week on your project", or "Jane is very productive, she can easily deliver 50% more than any of the other programmers." Don't fall for it! Joe may work 20 hours of overtime one or two weeks, or even one or two months, but you can't expect him to keep up that pace throughout your project. Jane may be every bit as good as they say, but as the effort estimate for the work she will be performing is likely to come from her, you would have to factor in a 50% buffer to have a chance of meeting deadlines and that 50% buffer is going to be difficult to explain to your stakeholders. The chances of you getting one third of her time are also pretty remote.

Beware of situations where your partner manager is not in control of the amount of time the resource spends on their work. Help desk work is a perfect example. A developer who is scheduled to spend 50% of their time answering customer calls and resolving issues won't be able to guarantee they will only spend 4 hours of the day on that activity because they can't simply drop an issue which they are in the middle of resolving for a customer.

You have 3 choices when faced with a sharing arrangement that won't work: Negotiate a split to 100% of that resource's time, delay engaging the resource until you can get 100% of their time, or engage a resource to replace the one to be split.

When Sharing a Resource Will Work

There are times when a critical resource must be shared across multiple projects or operational activities. For example, when you need a resource for a task on the critical path and no other resource will do, you will have to compromise. Even when the task isn't on the critical path, postponing it may put it on the critical path before you identified an alternative solution.

Sharing a resource in an organisation which has experience with resource sharing, and with other managers who are experienced in sharing them, gives you more chance of success, but even if you're sharing a resource in an organisation unused to such arrangements and with other managers without experience in this area, there are tips and tricks you can use to improve your chances of success.

The key to successful resource sharing is teamwork between the sharing managers. To work successfully as a team, the managers must realise that the objectives of the projects or operational activities must be considered equally. If this weren't the case, the resource wouldn't be shared; they would go to the highest priority project or operational task. Teamwork here means that the sharing arrangement is planned between collaborating managers and a successful plan is one that supports both sets of objectives. Teamwork will also mean that the manager, or managers, you share resources with are now stakeholders in your project and should be treated accordingly in terms of project communications and any changes or risks that impact the shared resources.

Time Share

Time sharing is common practice now when customers share a vacation property and the same things that make this workable for vacation properties can facilitate sharing a resource. The "Time Share" approach plans the resource 100% on the activities of the first project. Once those activities have been completed the resource moves to the second project 100% of their time. This can be repeated as many times as necessary. Use common sense when determining the duration of the resource's stay on either project; the longer the resource spends on one task the more efficiently they will work. One day should be the absolute minimum block of time, with one week being the preferred minimum.

Compare project plans with the manager you plan to share the resource with to determine when the resource is needed on both projects. If the times at which you both require this resource clash, examine both plans to determine if activities can be juggled so that the resources activities can be sequenced in such a way that the resources time can be planned from start to end 100% on the first project, 100% on the second project, etc. until the resource can be released from both projects. Be flexible when planning this with your partner manager; you will both have to make some sacrifices in order to make this arrangement work. Working with an operational manager to achieve a time sharing arrangement will work the same way, but the operational manager may have more constraints which prevent them from re-scheduling activities.

Once you've reached an agreement on time sharing, update your project plan accordingly. MS Project provides calendars for individual resources. These calendars allow you to set aside time for the resource for individual activities such as training or vacations. Define the times the resource will be working on the partner project or operational activity as "unavailable." This will prevent you from accidentally scheduling your shared resource during a time when they are working on the other project. Remember that any schedule changes that involve the shared resource will have to be discussed with your partner manager. Acquisition and release dates become contracts between you and the other manager. You must honour your release date and expect the other manager to do likewise. Avoid any schedule slippages that impact the start or finish date of your shared resource's tasks. Slippages that can't be avoided need to be discussed with your partner manager. Your partner manager may be able to give you some extra time at end date, or utilise the resource after their start date if you give them enough notice. Remember that this arrangement works both ways so be prepared to accommodate your partner PM should the need arise.

The 50% Solution

There are situations where it is impossible to sequence the work of a shared resource, for example when a resource is responsible for ongoing support work which requires a few hours daily. The only possible solution in this case is to divide the resources time between your project and your partner manager's work.

The 50/50 split (or some other configuration) depends on a good working relationship with your partner manager and that manager's ability to control the resources time when they are working on their project or operational tasks. Define the terms of the sharing agreement with your partner. An arrangement which has the resource working on your project in the morning and the other project in the afternoon is the arrangement with the most chance of success so try to arrange the split so that the transfer happens at some natural break during the day - lunch break, or coffee break.

Terms of sharing should be formally documented, an e-mail or memo will do, but the document needs to capture the details of the arrangement, including start and stop dates, percentage split, how the resource's time is to be scheduled, and when the resource should be working on your project and when they should be working for the partner manager. This is your contract for sharing the resource. Hold your partner manager (and the resource) to the terms of this agreement and make sure you honor all your obligations.

Conclusions

There are some situations where resource sharing won't work and these must be worked around. If all else fails, escalate the issue to your sponsor explaining your need for the resource and why the sharing arrangement won't work for your project. In those situations where sharing can work, the easiest arrangement is the sequencing of the resource's activities between the two projects and when that can't be done, define the sharing arrangement in a formal document. Remember that there are 2 criteria for a workable sharing arrangement: the feasibility of the arrangement and the agreement between the two managers. Lastly, don't forget that when you share a resource with another manager that manager becomes a stakeholder in your project and you need to keep them in the loop.

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The tips and tricks described in this article are intended to help the project manager using the best practices promoted by the PMI. Project managers who are certified have already implemented those best practices. If you haven't been certified as a PMP (Project Management Professional) by the PMI and would like to learn more about certification, visit the three O Project Solutions website at: http://threeo.ca/pmpcertifications29.php. three O Project Solutions also offers a downloadable software based training tool that has prepared project managers around the world to pass their certification exams. For more information about this product, AceIt©, visit the three O website at:http://threeo.ca/featuress8.php
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Top 10 Risks of Offshore Outsourcing

Top 10 Risks of Offshore Outsourcing

Dean Davison | December 9, 2003 12:00 AM PST

Offshore outsourcing is growing 20%-25% per annum, with little evidence of slowing. Indeed, while most enterprises experience initial resistance, most technical issues are readily resolved and geopolitical risk is deemed insignificant after careful evaluation. Even the current political fervor about jobs being moved offshore via outsourcing is not impacting the demand or strategy of IT organizations. Offshore outsourcing will continue to grow as a "labor arbitrage" model until 2008/09.

META Trend: During 2004/05, outsourcing will divide into commodity and transformational services. Infrastructure services will mirror grid-computing structures and develop consumption-based pricing (a.k.a., "utility services"). Through 2006/07, transformational services (e.g., application development maintenance and business process outsourcing) will segment along horizontal (function commonality) and vertical (specialized) business process/services outsourcing functions. Although vendors will attempt to bundle infrastructure with "value" services, clients will demand "line item" pricing by 2008/09.

Through 2004/05, IT organizations will outsource discrete projects/functions offshore (e.g., from application development projects to specific call center support). Growth will continue at 20%+. Offshore strategies by domestic vendors will shift business from large, integrated outsourcing contracts, but most IT organizations will still develop strategies that focus on pure-play offshore vendors. The top 10 risks of offshore outsourcing are as follows.

1. Cost-Reduction Expectations
The biggest risk with offshore outsourcing has nothing to do with outsourcing - it involves the expectations the internal organization has about how much the savings from offshore will be. Unfortunately, many executives assume that labor arbitrage will yield savings comparable to person-to-person comparison (e.g., a full-time equivalent in India will cost 40% less) without regard for the hidden costs and differences in operating models. In reality, most IT organizations save 15%-25% during the first year; by the third year, cost savings often reach 35%-40% as companies "go up the learning curve" for offshore outsourcing and modify operations to align to an offshore model.

2. Data Security/Protection
IT organizations evaluating any kind of outsourcing question whether vendors have sufficiently robust security practices and if vendors can meet the security requirements they have internally. While most IT organizations find offshore vendor security practices impressive (often exceeding internal practices), the risk of security breaks or intellectual property protection is inherently raised when working in international business. Privacy concerns must be completely addressed. Although these issues rarely pose major impediments to outsourcing, the requirements must be documented and the methods and integration with vendors defined.

3. Process Discipline (CMM)
The Capability Maturity Model (CMM) becomes an important measure of a company's readiness to adopt an offshore model. Offshore vendors require a standardized and repeatable model, which is why CMM Level 5 is a common characteristic. META Group observes that approximately 70% of IT organizations are at CMM Level 1 - creating a gap that is compensated for by additional vendor resources on-site (see Figure 1). Companies lacking internal process model maturity will undermine potential cost savings.

4. Loss of Business Knowledge
Most IT organizations have business knowledge that resides within the developers of applications. In some cases, this expertise may be a proprietary or competitive advantage. Companies must carefully assess business knowledge and determine if moving it either outside the company or to an offshore location will compromise company practices.

5. Vendor Failure to Deliver
A common oversight for IT organizations is a contingency plan - what happens if the vendor, all best intentions and contracts aside, simply fails to deliver. Although such failures are exceptions, they do occur, even with the superb quality methodologies of offshore vendors. When considering outsourcing, IT organizations should assess the implications of vendor failure (i.e., does failure have significant business performance implications?). High risk or exposure might deter the organization from outsourcing, it might shift the outsourcing strategy (e.g., from a single vendor to multiple vendors), or it might drive the company toward outsourcing (if the vendor has specific skills to reduce risks). The results of risk analysis vary between companies; it is the process of risk analysis that is paramount.

6. Scope Creep
There is no such thing as a fixed-price contract. All outsourcing contracts contain baselines and assumptions. If the actual work varies from estimates, the client will pay the difference. This simple fact has become a major obstacle for IT organizations that are surprised that the price was not "fixed" or that the vendor expects to be paid for incremental scope changes. Most projects change by 10%-15% during the development cycle.

7. Government Oversight/Regulation
Utilities, financial services institutions, and healthcare organizations, among others, face various degrees of government oversight. These IT organizations must ensure that the offshore vendor is sensitive to industry-specific requirements and the vendor's ability to: 1) comply with government regulations; and 2) provide sufficient "transparency" showing that it does comply and is thus accountable during audits. The issue of transparency is becoming more significant as requirements such as the USA PATRIOT Act and the Sarbanes-Oxley Act place greater burdens of accountability on all American corporations.

8. Culture
A representative example: although English is one official language in India, pronunciation and accents can vary tremendously. Many vendors put call center employees through accent training. In addition, cultural differences include religions, modes of dress, social activities, and even the way a question is answered. Most leading vendors have cultural education programs, but executives should not assume that cultural alignment will be insignificant or trivial.

9. Turnover of Key Personnel
Rapid growth among outsourcing vendors has created a dynamic labor market, especially in Bangalore, India. Key personnel are usually in demand for new, high-profile projects, or even at risk of being recruited by other offshore vendors. While offshore vendors will often quote overall turnover statistics that appear relatively low, the more important statistic to manage is the turnover of key personnel on an account. Common turnover levels are in the 15%-20% range, and creating contractual terms around those levels is a reasonable request. Indeed, META Group has seen recent contracts that place a "liability" on the vendor for any personnel that must be replaced. The impact of high turnover has an indirect cost on the IT organization, which must increase time spend on knowledge transfer and training new individuals.

10. Knowledge Transfer
The time and effort to transfer knowledge to the vendor is a cost rarely accounted for by IT organizations. Indeed, we observe that most IT organizations experience a 20% decline in productivity during the first year of an agreement, largely due to time spent transferring both technical and business knowledge to the vendor. Many offshore vendors are deploying video conferencing (avoiding travel) and classroom settings (creating one-to-many transfer) to improve the efficacy of knowledge transfer. In addition, employee turnover often places a burden on the IT organization to provide additional information for new team members.

Business Impact: Offshore outsourcing can reduce IT expenditures by 15%-25% within the first year. Longer term, process improvements often make great impacts on both cost savings and the quality of IT services delivered.

Bottom Line: As IT organizations consider the vast benefits and allure of offshore outsourcing, they must balance the risks and uncertainties with the potential for labor arbitrage.

META Group originally published this article on 14 November 2003.

The Perils Of Unskilled Labor

 

The Perils Of Unskilled Labor 

For years, American workers have grown increasingly angry over the exodus of U.S. jobs to fast-industrializing India. Think auto parts manufacturing, call centers, computer help desks, or software programming jobs. So it's not without a bit of irony that we note this week that employers on the Indian subcontinent -- many of whom have built their business models on offering lower-cost labor to Western companies -- are now experiencing labor shortages that are pushing their own wages up.

It seems that all the foreign demand for India's bargain-priced manufacturing and high-tech labor -- plus a boom in construction and consumer services jobs sparked by India's heady internal growth -- has left skilled workers at a premium across the subcontinent. Wages for some semi-skilled textile factory workers have jumped 10% this year, while supervisors' salaries have risen by 20%. And overall Indian salaries will rise 12.3% this year, Mercer Human Resource Consulting figures, more than double the nation's inflation rate.

While many U.S. workers might view this as a fitting comeuppance for Indian industry, that would be wrong for several reasons. The developed nations look increasingly to the Third World to provide them with ever-cheaper items to maintain high living standards. Call that the Wal-Mart (WMT ) effect. But too-rapid wage inflation in developing countries puts that symbiotic relationship at risk. Likewise, rising wages could fuel general inflation in India, slowing its economic growth and making Indian companies less able to buy high-value goods and services sold by First World companies. That eventually hurts Western workers as well.

The real problem for India isn't a lack of workers. In a nation where the population has tipped 1 billion, there's no shortage of warm bodies. Instead, India's ability to train new workers can't keep pace with its rapidly expanding economy's demand for manpower. For example, India's world-class elite universities boast fewer than 100,000 graduates each year. But its high schools graduate about 14 million students annually -- so nearly all go on to lesser universities or trade schools providing training beneath global standards.

The lesson here is that education, training, and development of intellectual infrastructure are every bit as important as low wages for today's global trading powers. (China recognized this early on; Mexico didn't.) Interestingly, that same message also offers hope for the more mature economies (and expensive workforces) of the U.S. and Europe. Continued investment in human capital may be their best hope to remain truly competitive in a world full of faster-growing, low-wage competitors. As India's current predicament shows, wages matter -- but skilled workers matter more.

Avoid the ‘Bloom and Doom’ Cycle

Many Lean Six Sigma programs start out strong, but not all stay that way. Leaders must make special efforts to ensure their deployment ends up a success.

By Jason M. Morwick

Over the past decade, the success of Lean Six Sigma has been highly publicized. The widespread adoption of the process improvement methodology across many different business sectors is one indicator of success. However, little is written about companies that fail in their Six Sigma deployments, or at least scale back their support over time. For obvious reasons, companies are reluctant to air their dirty laundry, but the phenomenon is serious enough to warrant public discussion.

Although limited reliable data exists on companies that abandon, phase out or replace Six Sigma programs, only minimal digging is necessary to find anecdotal cases of deployments gone wrong. By having conversations with peers across various industries, sifting through the blogs of frustrated participants or reading the few negative reports on a company's Six Sigma experience, common warnings and patterns begin to emerge. The astute practitioner will notice that many companies that have had problems with their deployments face similar challenges and will see their programs move along the same rising and falling arc. This can be described as the "bloom and doom" curve, shown below.

The Six Sigma Deployment Bloom and Doom Curve
 

The Three Phases of Bloom and Doom

The Rise: This first phase of bloom and doom can be characterized by lots of excitement and initial support. Certification targets are published by organizational leaders (e.g. "X percent of the population must be Green Belt certified"). Ratios of Black Belts or Master Black Belts to employee base are standardized. Managers push to get their people certified. Employees are quick to realize how obtaining Six Sigma credentials will benefit their careers. Training classes are filled to capacity. Six Sigma can be found everywhere in the company. A myriad of projects are launched.

The Plateau: After certification targets are met, things start to slow down. Many of the company's employees have completed their obligatory certification projects and never complete another. Managers have been rewarded for reaching certification goals and only have to maintain current levels. Training classes begin to thin out because most employees are now trained. 

The Decline: Finally, the Six Sigma program goes down a slippery slope. Managers give the program lip service at best or – at worst – completely disregard it. Leaders have already moved onto whatever initiative is the "next big thing." Employees don't attend training and initiate Six Sigma projects only if coerced. Training stats may not even be reported at this point. Projects don't follow the DMAIC roadmap, but are still labeled as Six Sigma projects. Project tollgates are nonexistent or done sporadically with limited attendance. Black Belts and Master Black Belts begin their mass exodus to other companies that are just starting Six Sigma or are still in the Rise phase. At this stage, Six Sigma exists at the company in name only.     
    
The time period to go through all three phases can vary from organization to organization. The Rise can last from one to five years, the Plateau may be slightly shorter and the Decline can drag on indefinitely.

Five Ways to Defeat the Decline

This rise-and-fall pattern, however, is not inevitable. By following these five steps, practitioners can ensure that the path of their program will continue in a continuous upward arc.

1.    Select the right metrics. Remember that Six Sigma is not an end unto itself. The business results delivered through Six Sigma are what matters most, whether they are measured in hard or soft dollar savings, increased revenue, or improved customer satisfaction and loyalty. Beware when companies use metrics such as certification rates or the number of Belts as the primary indicators of success. Belt certification does not guarantee year-over-year business value. Once organizations have reached certification targets, there may be little incentive to continue their focus on Six Sigma without more relevant success metrics. The primary metrics to measure Six Sigma success should always be based on the business value returned to the company.   

2.    Value the organization over the individual. Understandably, employees desire certification for many reasons, the most obvious of which is that certification will help them advance their careers. However, the importance of Green Belt or Black Belts diminishes over time if the only results they deliver are part of their certification projects. In terms of the number of Belts, more is not better if continued value is not delivered year after year. After all, what is the value of a Belt who does not complete a project? Zero. Six Sigma leaders should never be driven by an individual's desire for certification. Rather, organizational goals should be the focus, with individual certification as a positive byproduct of the process of achieving those goals.   

3.    Select the right projects. Closely linked to the idea above, project selection is a key component to Six Sigma longevity. Projects should never be selected merely to get someone certified or to wrap DMAIC around a problem that is clearly not a Six Sigma project simply to gain visibility. Meaningful, impactful projects help keep momentum. Leaders should be very selective when applying Six Sigma. Additionally, project benefits should be validated by leaders outside the deployment, such as finance representatives, to avoid reporting inflated results that will eventually erode credibility.

4.    Build the right infrastructure. Who is ultimately accountable for the success of Six Sigma within an organization? Not the Belts. The organization's leadership determines success or failure. Too often, Belts are expected to carry a Six Sigma deployment. Instead, the organizational leaders that act as project sponsors or Champions should be the keystones to success. From communicating expectations and responsibilities to selecting projects and training leaders, management must provide the program with a strong foundation. Additionally, deployment leaders must evaluate foundational components of the business before implementing Six Sigma. For instance, does the organization exercise basic process management skills? Are processes documented and routinely maintained? Are metrics used to drive decision making? If not, leaders may have some more planning work to do before rolling out Six Sigma training and projects.    

5.    Continually evolve the program. Despite what some will say, process improvement and quality are evolutionary, not revolutionary, endeavors. At the beginning of this decade, Lean was sometimes seen as a competing methodology to Six Sigma before people got smart and combined the two. The infusion of Lean tools and ideas helped to reinvigorate Six Sigma. Likewise, organizations should prevent Six Sigma from becoming stale. Six Sigma professionals can help by searching for ways to expand the skill sets of employees and keep the initiative fresh. Whether it involves the implementation of Design for Six Sigma (DFSS) to complement DMAIC, or the introduction of new tools, ideas or concepts, there is no reason to impede the growth of the continuous improvement body of knowledge. 

Six Sigma practitioners all aim for continuous gains over time. The challenge is to maintain momentum after the initial surge and excitement wears off. The above actions, if taken at the beginning of the deployment, can create the right environment for sustainability. With these five elements in place, Six Sigma professionals can keep an eye on the warning signs to avoid the dreaded Plateau and prevent Decline. 

About the Author: Jason M. Morwick is a Master Black Belt currently working for Cisco Systems Inc. He has a bachelor's degree from the U.S. Military Academy and an MBA. He can be reached at morwickj@aol.com .