Supply & Demand Chain: The Sum is Greater Than the Parts

January 31, 2011 — Over the last two years there has been a fundamental shift in the way engineers are designing products. The need for lower product costs and faster time to market has placed a great deal of demand on product designers to work faster and smarter to produce designs that are more easily, quickly and cost-effectively manufactured.

As a result, most manufacturers have adopted a PLM strategy centered on an integrated product model that incorporates manufacturing data. While the rationale is based on collaboration, a chasm continues to exist between Engineering and Procurement. Fortunately, by making data available to all engineers earlier in the product lifecycle, 3D part catalog technology can serve to help bridge this gap.

The Value of Value-added Design

3D part catalog management solutions provide product designers and engineers with direct access to catalog and custom parts directly from within their design (CAD) environment. Repurposing components — regardless of the CAD system or version — has a profound impact on time to market and on total product costs.

What’s more, the ability to leverage design data across the extended enterprise brings together design engineers, manufacturing engineers, maintenance engineers and non-engineering personnel, as well as the departments that manage material requirements.

In other words, the ability to deliver standard parts in any native CAD format or version allows a single standard part catalog to support multiple product programs within a company, which may be using different CAD systems or different versions of the same CAD system. This avoids having to create duplicate libraries of standard parts in different CAD formats and reduces the amount of management required to maintain standard parts. It also eliminates the migration and translation of standard parts data with each update to CAD or PLM solutions.

In fact, 3D part catalog management complements PLM by enabling parts or commodity reuse. By enabling configuration of 3D parts in native CAD formats within a larger PLM context, it also allows designers the confidence to find, reuse and control standard parts more effectively. The reuse provided by CAD-native 3D part catalogs can be expected to reduce both IT management costs and overall product costs, including design, manufacturing and support costs.

The ability to accomplish “value-added” design, rather than “non-valued design,” eliminates the need for designers to model purchased parts that their supplier should provide accurately and up to date.

According to PLM consultancy CIMdata, Inc., there are many ways that companies can benefit from using 3D part catalog management in the product development process. The business value enhancement includes opportunities to:

• Avoid rework
• Improve quality
• Improve product design
• Support faster design
• Shorten time-to-production
• Value-added design versus non-value-added design

Bridging the Gap between Engineering and Procurement

Even with a 3D part catalog in place, Engineering still may not know which parts are preferred, leading designers to specify duplicate components in their designs that are not approved by Procurement or that are introduced in a way such that they become new components (in other words, new part numbers) that have to be sourced. The net result is an increase in direct material spending, adding not only to the cost of product development, but ultimately to the overall cost of goods sold (COGS) for the business.

Manufacturers need to utilize a single source of part data for standard part geometry and allow automatic standard parts model creation “just in time” instead of “just in case.” A formal policy of parts standardization and emphasis on use of parts from an approved parts list (APL) for certain commodities allows for stability in the ongoing cataloging of parts, and gives designers the ability to find approved standard parts fast and with confidence. Not only does this reduce product development time, it also provides direction to the designer and eliminates a constant need to “reinvent the wheel” or redesign. It also affords suppliers and partners with the ability to easily cross-reference this information.

As a design is created, each part must meet both physical and functional requirements. Often it can be challenging for the designer to choose the best, most efficient path amongst many alternative ways to design a product. While the selection of a custom part may be the optimal approach from the designer’s point of view, chances are that it’s not the best overall approach for the company. Consequently, product cost and quality may be negatively affected by an increase in the number of specialized items that require specific capabilities and that thwart efficient production and procurement. As a result, decreasing the number of active or approved parts through standardization simplifies product design.

Driving Savings through Procurement

The value of part standardization to engineers is clear. And while everyone senses that reusing parts can save a lot of money, few people understand the cost of creating new parts.

Parts standardization offers the ability to put more controls in place between Purchasing (buyers) and Engineering (specifiers). It integrates the silos within a company in order to negotiate volume prices with strategic suppliers from which a company buys. This can have a particularly significant impact when considering that a 400 percent delta between high and low price for the same part is typical. Additionally, it eliminates the introduction of parts that cannot be sourced in a timely manner, or prices for “one-off” purchases, and enables Procurement to maintain a list of items that can be standardized around the world in order to avoid as much downtime as possible. What’s more, engineers don’t need to become experts on part number schemas. Rather, they can find their parts based on geometric and performance data.

For these reasons, the use of standard catalog parts and the reuse of components across designs are having a profound impact on time to market and on total product costs. In fact, next-generation solutions that optimize how “standard parts” are managed and procured are allowing manufacturers to reduce their direct material spend by an average of 2 percent in the first year, while leveraging the ongoing benefits of a leaner inventory and the introduction of a formal parts standardization program that makes the designer’s job easier and more effective as well.

It’s no wonder companies like Phillips, Bosch, Airbus and Boeing have all adopted the technology in order to “make standard and buy standard.”

The De Facto Standard

3D part catalog technology, combined with part standardization, is quickly becoming the de facto standard in manufacturing design thanks to the efficiencies it delivers company-wide. The integration of product and process design through improved business practices, management and technology results in a better product that exceeds customer needs, as well as a faster and smoother transition to manufacturing with a lower lifecycle cost.

At the end of the day, it’ll be the product design and customer service that a customer remembers. By enhancing the development of high quality, highly functional products, part standardization can be the key to achieving both competitive advantages.

About the Author: Tim Thomas is CEO of PARTsolutions, a provider of product lifecycle management and parts catalog management solutions.