Life in the fast lane
High-tech manufacturers, including Pliant Systems and MSL, turn to collaborative solutions for engineering change, lifecycle management
By Paul Mann Contributing Editor -- Manufacturing Business Technology, 1/1/2001 12:00:00 AM
Nowhere is the dizzying pace of technology change more evident than in the electronics industry. Leading the way is the consumer electronics segment where, increasingly, product life cycles are measured in months. The top-of-the-line cellular phone you received for your last birthday is already yesterday's news. More than likely, it's been replaced by a new, more compact version that offers more features and a lower retail price.
This rapid pace of change is good news for buyers of high-tech products, but the news isn't quite as clear cut for manufacturers. For many, it's a classic good news/bad news story.
The good news is that the company that brings a new product to market first typically reaps major benefits. "The company that's first to market establishes itself as an innovator," says Winnie Paauw, managing director with the collaborative commerce practice of KPMG Consulting, McLean, Va. "This marks them as a company that you want to partner with if you want to leapfrog your competition. This reputation also translates into greater sales and repeatable sales. In other words, the innovative manufacturer is the one you want to collaborate with again on your next big project."
Another core benefit for innovators is improved profit margins. "There used to be a huge emphasis on the cost of technology," Paauw notes. "But, when you're talking about leading edge technologies, I don't run into that concern as much. Most buyers recognize the value and are willing to pay for it." Those extra margins can be taken as profit. Or they get rolled back into research and development to produce the next big innovation.
The bad news is that with product life cycles of three to six months, there is frequently no way for companies to get back in the contest. Delays of just a few weeks during design, prototyping, or production can easily mean the difference between first-to-market rewards and missing an entire product generation.
Compounding the challenge of delivering innovative new products is the move to contract manufacturing. With design and production frequently separated by multiple time zones, it's no longer practical to get all affected parties in a room to collaborate on product upgrades or new product designs. That's why many high-tech manufacturers are investing in Web-based solutions to manage the critical front-end design process. Two key elements of that solution include collaborative engineering systems, and functionality that automates the engineering change order (ECO) process.
These solutions used to be the province of product data management (PDM) and other niche software vendors. Not anymore. Increasingly, enterprise resources planning (ERP) vendors are buying, building, or partnering to bolster their solutions with the necessary functionality. Additionally, manufacturing execution system (MES) software also plays a role in managing the production impact of the ECO process, and in compressing the production cycle time.
High-tech manufacturers such as Pliant Systems and Manufacturers' Services Limited are benefitting from systems with collaborative capabilities for managing product lifecycles. Electronics manufacturers that can smooth the ECO process, and work closely with partners in a virtual manufacturing environment, stand to gain a big advantage, according to software vendors.
Setting new standards
"When you get to market faster, not only can you justify charging higher prices, but you may also capture market share," says Ken Boyd, industry marketing director at ROI Systems, a Minneapolis-based provider of extended ERP solutions.
"In fact, you may establish the defacto standards that others will follow," Boyd says. "Plus, you're getting a leap ahead in terms of starting development on your next new product."
But before fast-forwarding to embrace collaborative engineering, Boyd urges building a strong foundation. "Unless you have solid functionality in the area of bill of materials (BOM) management, you'll never get to the point of doing the collaborative piece," he says. "The first step is to be able to manage the bill of materials and all the changes that happen along the way."
Failure to efficiently manage the ECO process can have several consequences-none of them good. "Warning signs include seeing manual revisions taking place and high levels of rework," Boyd says. "This can lead to longer cycle times. And, you might see procurement buying the wrong stuff or manufacturing not using up the right materials. Sales might not know what they can sell and what they can't sell, and service might not know how to fix what's being sold."
Collaborative engineering
To meet the challenge, ROI Systems offers its Manage 2000 extended ERP solution. "We have always had good engineering change order functionality, but now we've combined that with workflow management," Boyd says. "The combination has incredible power to manage multiple revisions and effectivity dates. The system uses alerts to inform everyone who needs to know about an engineering change."
Once the manufacturer has established strong ECO processes, ROI recommends embracing collaborative engineering. Toward that end, the company signed an agreement last spring with San Jose, Calif.-based Agile Software to offer that company's well-known family of Web-centric product content management solutions. These are said to help manufacturers improve communications, accelerate time-to-market and increase competitive effectiveness.
"What we've found is that when clients use technology to support a time reduction strategy, they're seeing improvements that are rarely under 50 percent," Boyd reports. "Often, the improvements are 80 percent or better."
Next up for ROI is a new release of the MANAGE 2000 product in first quarter of 2001. This version is primarily a technology release designed to build a foundation for incorporating e-collaboration technologies into the product.
Virtual realities
"Manufacturers are becoming more virtually integrated across their entire value chains," says Janice Pearce, Point.Man marketing director at MAPICS, of Atlanta. "The collaboration we're seeing isn't just between engineering groups across the enterprise. It's also taking place with customers and suppliers. Getting multiple people, in multiple organizations discussing and approving designs and changes is the real challenge."
To meet that challenge, MAPICS offers several solutions. At the foundation, the company offers Point.Man, an extended enterprise system solution that incorporates a high degree of electronics industry functionality. That's not surprising since approximately 65 percent of Point.Man customers come from that market.
"In the basic Point.Man product, we offer the ability to automate the entire engineering change control process-both inside the company and outside the company," Pearce says. "We can transfer the documents and track every change to the BOM at a very detailed level. The system offers full cradle-to-grave traceability for both engineering and manufacturing BOMs.
"Without traceability, you can potentially be building the wrong revision of a part," Pearce says. "Or, if you have the wrong copies of documents, you may be buying parts for a product that is about to become obsolete. With a tightly integrated product, purchasing and manufacturing are warned about potential changes."
To further streamline the design process, MAPICS recently introduced a new Web-based solution. The new product, called MAGIK!, leverages workflow technology and the Internet to streamline the product development process.
Using this tool, engineers across the value chain can simultaneously view CAD drawings and related documents, redline changes, and obtain on-line approvals.
Combined solution
One company that's using both Point.Man's ECO functionality and a best-of-breed collaborative commerce application is Pliant Systems, of Research Triangle, N.C. Pliant designs, manufactures, and markets integrated access platforms for the telecommunications industry.
"The ideal is to have everyone looking at the same page," says John McCarley, director of information services at Pliant Systems. "Our challenge is to give visibility to everyone that touches the engineering change process. That task becomes more challenging when you have external suppliers involved at the development stage or at the prototype stage. They may be 100 miles or 10,000 miles away."
Time and distance are no problem for the Web-based systems Pliant uses to collaborate on engineering and manage the ECO process. The company implemented the Agile collaborative engineering product in July 1999 and upgraded to the new Web-enabled Point.Man Extended Enterprise Edition in October 1999.
The investment in the new systems has already paid substantial dividends for the company during the development of the new Pliant 3000 Integrated Access Platform. This sophisticated access device expands the potential reach of high speed asymmetric digital subscriber line (ADSL) services from approximately 50 percent of North American households to nearly 90 percent.
"Our goal was to be first to market with this design, so we were on a very aggressive engineering development schedule," McCarley says. "A lot of larger companies were also working on a similar technology. With the investments we made in Point.Man and Agile, and hooking them together, we easily cut months off the development schedule. We saved significant development dollars and introduced the Pliant 3000 to the market in September 2000."
Link to manufacturing
Another software vendor with a strong focus on the electronics industry is GenRad. The Westford, Mass.-based company takes a wholistic approach to speeding up new product introductions that includes MES software.
"Among high-tech manufacturers, we're seeing ever-increasing pressures to shorten the product life cycle," says Andrew Robbie, product marketing manager at GenRad. "Processes like product introductions have to be handled faster and faster and faster. Time-to-volume, time-to-profit, and time-to-ramp also have to be handled faster."
GenRad targets both original equipment manufacturers and contract manufacturers. "We're unique in having an array of both on-line and off-line tools to manage the total manufacturing process," Robbie says. "We can take the CAD data from the designer, manipulate it, optimize it, get the manufacturing line set up, and then manage the manufacturing process."
While getting a product into production quickly is a key benefit of the GenRad solution, getting a product out of production is equally important. "If you get an engineering change notice, somebody, somewhere has to decide if production continues,"" Robbie says. "This is typically a manual process, deciding when to stop production, what to rework, and what to scrap. But to make good decisions, you have to have good on-line solutions that provide you with visibility about what's in production today."
GenRad's answer to that challenge is its MES package called Shop Floor Data Manager (SFDM). The company says SFDM provides visibility of the entire product build cycle.
Another useful tool in evaluating various changes is the Producability Analyzer. "This product looks at the CAD data and simulates a manufacturing environment," Robbie explains. "This helps determine if manufacturing a product will give you problems on the line. Manufacturers want to know if they're going to get good yields from a design or if they'll end up doing a lot of rework."
End-to-end benefits
One happy GenRad customer is Manufacturers' Services Limited (MSL), now ranked as the eighth largest contract manufacturer in the world. The Concord, Mass.-based company has been using GenRad solutions to streamline a variety of internal processes.
"What we're doing is creating a virtual factory for our customers," explains Brian Coll, director of business development at the Athlone, Ireland, plant. "We strive to be an extension of our customer's operation. That means providing our customers with visibility of all key metrics and working to shorten product development cycles."
Toward that end, MSL invested in an array of GenRad solutions to help streamline the engineering process. Today, MSL can accept CAD drawings from its numerous customers in a host of different file formats.
"We moved from a completely manual system at the drawing level," Coll says. "We were hand coloring the documents to show how all the pieces fit together and then photocopying and distributing them. Whenever there was a change in the process, we had to recreate everything.
"This is probably the biggest single advantage of the GenRad system," Coll continues. "In the old days, it took approximately three to four days to get a new set of drawings and now it takes just a few hours. Across the organization, we're literally introducing three or four new products a week. Five or 10 years ago, due to system limitations, it would have been impossible to keep pace with that."
The company reports similar improvements in the time to convert these designs into assembly operations. What used to take several days has now been slashed to several hours.
"Today, the bar has been raised at the top tier," Coll says. "If you don't have tools like this to manage the engineering change process, you're gone. These tools allow us to manage the process more efficiently and make each person more productive. Our new product introductions have gone up five fold, while our engineering department has stayed the same."
Five-fold increase
While most high-tech manufacturers haven't yet adopted sophisticated systems for managing engineering change orders and collaborative product commerce, the direction is clear. "For manufacturers dealing with multiple suppliers and contract manufacturers, you need all partners working in one system," counsels KPMG's Paauw. "That system collects all the data in real time to track progress and all changes. The best systems have interfaces or can be integrated with associated systems such as ERP. So, if you have a change to a BOM, the information flows to manufacturing."
Collaborative systems will likely be part of that single system as well. Key to that is the rapid payback in terms of reduced time to market. But Paauw sees an equally important driver-design reuse.
"Before, the engineers never saw what was happening in Timbuktu," she says. "With the collaborative tools, they can now look at related projects all over the world and find solutions to similar challenges."
Taken as a whole, these tools help manufacturers not only streamline the engineering change process, but also develop products tailored to meet customer requirements. "We've come a long way in high tech from just building to stock," Paauw says. That's not a bad summary.
FOR MORE INFO:
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KPMG Consulting |
www.kpmgconsulting.com |
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ROI Systems |
www.roisysinc.com |
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Agile Software |
www.agilesoft.com |
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MAPICS |
www.mapics.com/index-ie.html |
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GenRad |
www.genrad.com |
