Engineering and Design Services Category Overview
The engineering and design services category is expected to grow at a CAGR of 5.34% from 2023 to 2030. Some of the key reasons anticipated for driving category expansion are the rising demand for the adoption of technology, creative business strategies utilizing enterprise architecture, and the need to meet business requirements to compete in a highly competitive environment. A significant factor driving growth in the Asia-Pacific region, such as India, China, and Japan, is the presence of several design and consulting businesses that use an enterprise architecture (EA) strategy to promote corporate growth. Low-cost labor and major financial investment in infrastructure improvement in these nations are also fueling the region's development.
There is a trend in this category for companies to incorporate new technologies such as artificial intelligence, BIM, drones, 3D printing, 3D laser scanning, augmented reality, reprographics, construction robotics, and prefabrication methods. For instance, construction industries utilize BIM software frequently because it provides 3D drafting, which goes beyond conventional 2D design. The objective of using a BIM solution is to create a 3D model that is quickly accessible. Companies can recognize the connections between different systems, materials, and locations within a physical construction using a 3D model. For instance, Excelize Software Pvt. Ltd, a US-based company, worked on an international airport terminal project by creating a BIM model. It included clash tracking and resolution, as well as crucial coordination between the architectural, structural, and services teams. For this, the supplier made use of a team of modelers and coordinators, both on-site and off-site, to establish the model resolutions and produce the model at LOD 300.
Order your copy of the Engineering and Design Services Procurement Intelligence Report, 2023 - 2030 , published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis
The cost components included in this category are design, labor and engineer hiring costs. Other costs included are manufacturing, construction, packaging, and distribution. Design plays a vital role in the cost structure as it is a prime stage of the engineering and design service category. The entire planning and execution of any project depends on this component due to the elements involved in the design stage such as the design draft, plan of action, budget estimation as well as the smallest detail like material, part components, and overall layout. Design costs also include material cost for machine design, raw material selection such as metals, polymers, ceramics, and composites, ideation stage cost, prototype cost, hardware engineering cost, and certifications cost.
The factors influencing machine design cost are cost-effective raw material selection such as mild steel, copper, aluminum, nickel, machine wear and tear capabilities, lubricant cost, certification cost (such as OHSA and ANSI required for safety measures), and material’s weight and dimension capabilities which can ease assembly. The average cost incurred to hire a mechanical engineer ranges from USD 46 to USD 50 per hour in the U.S. The pay rate varies depending on the scope of work and experience. For instance, a mechanical engineer can charge between USD 30 to USD 65 per hour, HVAC mechanical engineer pay rates range from USD 40 to USD 50 per hour whereas a nuclear engineer charges over USD 90 to USD 95 per hour. Distribution costs are one of the expenses that must be incurred for any product. The need to move goods from one country to another or from warehouse to store may occasionally be necessary, which will have an impact on the ultimate cost. For instance, the suppliers would need to evaluate and analyze the distribution costs specific to the product and location if the product were created in India and was to be shipped to Germany. This would result in different prices depending on the aforementioned aspects.
Engineering and Design Services Procurement Intelligence Report Scope
The Engineering and Design Services category is expected to have pricing growth outlook of 3% - 4% (Annual) from 2023 to 2030, with below pricing models.
- Fixed pricing model
Supplier Selection Scope of Report
- Cost and pricing
- Past engagements
- Productivity
- Geographical presence
Supplier Selection Criteria of Report
- Engineering disciplines (civil; structural; mechanical; piping; control, electrical, etc.)
- Technologies (BIM, laser scanning, drones, prefabrication techniques, etc.)
- 3D
- 4D
- 5D modeling systems
- Other (design capabilities, automation, and testing capabilities, etc.)
- Technical specifications
- Operational capabilities
- Regulatory standards and mandates
- Category innovations
- others
Engineering and Design Services Procurement Intelligence Report Coverage
Grand View Research will cover the following aspects in the report:
- Market Intelligence along with emerging technology and regulatory landscape
- Market estimates and forecasts from 2023 to 2030
- Growth opportunities, trends, and driver analysis
- Supply chain analysis, supplier analysis with supplier ranking and positioning matrix, supplier’s recent developments
- Porter’s 5 forces
- Pricing and cost analysis, price trends, commodity price forecasting, cost structures, pricing model analysis, supply and demand analysis
- Engagement and operating models, KPI, and SLA elements
- LCC/BCC analysis and negotiation strategies
- Peer benchmarking and product analysis
- Market report in PDF, Excel, and PPT and online dashboard versions
Engineering and Design Services Procurement Cost and Supplier Intelligence
India's conventional power generating and refining capacities are anticipated to double over the next decade due to a rising GDP. India is one of the top preferred destinations for engineering outsourcing for organizations engaged in engineering procurement and construction (EPC), and as a result, design and engineering work for many international projects are being completed in India. Being one of the top emerging markets, companies prefer India due to its availability of skilled workforce, second largest English-speaking population, and cost-effectiveness. Some of the other preferred destinations to source these services are Canada, China, and France. Canada is preferred due to its robust economy and high availability of natural resources for engineering purposes. These factors make it beneficial for developed countries to outsource and hire engineering from these countries.
Identifying a company that has comprehensive technology capabilities to effectively manage the EPC and operational and maintenance phases, setting up a budget for each design cost stage, evaluating the product development process, and incorporating certificates such as ASME Certification are some of the best practices considered in this category. The advantages of connecting these large-scale enterprise systems across diverse databases and diverse platforms are driving demand for an adequate and integrated technology solution. Budgets are set by companies, and then suppliers are identified who possess the necessary design and technological expertise as well as the commitment to ongoing research and development. Choosing the lowest-priced company may result in inferior products or products that are never created at all.
List of Key Suppliers
- Jacobs Engineering Group
- AECOM
- Ramboll Group
- Dar Group
- Hatch Group
- Nippon Koei Group
- Bechtel Corporation
- Fluor Corporation
- Michael Baker International
- STV Group
- Gannett Fleming
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Brief about Pipeline by Grand View Research:
A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.
Our services include (not limited to):
- Market Intelligence involving – market size and forecast, growth factors, and driving trends
- Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
- Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
- Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions
