August 09, 2004
At 25% of PLM Market, CAE Is Big Business
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Jeff Rowe - Managing Editor


by Jeff Rowe - Contributing Editor
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At 25% of PLM Market, CAE Is Big Business

Daratech research reveals investment in CAE software and services will top $2.1 billion in 2004, a substantial year-over-year increase of 12%. Considering that spending on product lifecycle management is forecast to top $8.6 billion in 2004 and grow 8% each year through 2008, a picture of CAE's rising prominence begins to emerge: approximately 25% of PLM investments will come from digital simulation in 2004. Over the next five years, Daratech predicts digital simulation will be the growth engine of PLM, rising 12% annually over that time. Driving growth will be a combination of advances in high performance computing along with the growing recognition of digital simulation's ability to
generate higher quality and more innovative products faster and at lower costs than is possible with traditional methods. Though given the integral role played by digital simulation in many of today's superior products, we think CAE should be enjoying even higher rates of growth. The prospects for broader usage seems to rest on the shoulders of developers who must more effectively communicate the benefits of digital simulation to top management.


Software and Services Sales

Digital Prototyping and Simulation (CAE)

For years, data drawn from digital simulation was viewed with skepticism but the long-held axiom that the physical test results are the data of record is starting to erode. Manufacturers are gaining more confidence in analysis software as their experience and understanding of CAE grows, and as increasing numbers of successful products emerge as a result of heavier reliance on CAE. In addition, the software has become easier to use and implement in conjunction with physical test, enabling practitioners to better correlate results and increase confidence in digital methods. The steady maturation of analysis software coincides with the availability and affordability of high performance
computing architectures, making faster CAE possible and desktop CAE a reality. Indeed, analyses that used to take a week to run can now be run overnight. Analyses that would take two shifts to run can now be run over a lunch break.


Software and Services Sales

Digital Prototyping and Simulation (CAE)

While 12% growth is solid, we believe the market should be growing at an even faster pace, given the enormous product development benefits attributable to CAE. Today, CAE is promising much more than increased productivity. It promises faster time-to-money, lower warranty costs and above all, products that outperform, work better, are safer and fail less often. At forward-thinking manufacturing organizations, CAE is a priority, and is finding its way into the mainstream of product creation. But for the vast majority of manufacturers, CAE is still inexplicably on the backburner, or on no burner at all. Technologists worldwide know that CAE offers an unprecedented opportunity to revolutionize
product development, yet at most manufacturers, it's not to be found on top management's radar. Why?


Management reluctance has its roots in a failure on the part of CAE suppliers to engage top management and make them aware that CAE has created for its adopters a tsunami of competitive advantage in terms of product market dominance and the cost of doing business. However, with top-management disengaged, middle managers remain nervous about injecting CAE into mainstream product development processes because of the initial disruptions it may cause. Naturally, the adoption of any new technology means the accepted way of doing things must change, and this poses risks: How do we know that our people will correctly interpret the results? How can it be more reliable than our true and tried ways
of developing new product? Can it take the place of physical test? Does our workforce possess the skills and education to use CAE? Will the workforce accept new roles? All good questions. Of course, at some companies, many of these questions have already been answered by successful CAE implementations and resultant killer product launches.


While digital simulation is the future of product development, it is instructive to look to the past for similar technological sea changes. Once upon a time, 35 years ago, Computer-Aided Design or CAD was touted by the National Science Foundation as having the greatest potential to improve productivity since the advent of electricity. The visionary executives of the day pushed through the adoption of this emerging technology against enormous odds because they recognized and believed in CAD's potential. People with no familiarity of computers were asked to change their ways and set aside a lifetime of training. A highly unionized work force was persuaded to adopt technologies that promised
to eliminate jobs. And a re-education was necessary that did not get people up to full speed for close to a year, and sometimes more. Nonetheless, top management was sold on the big picture and this made it easy for people in the middle to take on challenges inherent in any revolutionary change. This is not yet happening with CAE, but Daratech predicts that it will.


The electronics industry went through a similar enlightenment. The first commercial uses of CAD were for the design of printed circuit board layouts. But as CAD technology evolved, basic CAD took a back seat to products that provided not only physical layout, but also simulation and analysis. Today, CAE rules the electronics industry, with CAD in the background, although it is tightly integrated with CAE. It is not unreasonable to expect that one day the same will be true in the mechanical engineering domain.


These issues and more will be addressed at Daratech's executive conference, daratechDPS2004 Digital Product Simulation & PLM, to be held on October 4-5 in Novi, Michigan. For more information, an updated list of speakers and the most up-to-date program schedule, visit


We've thought for some time now that CAE (in its many forms and guises) was going to become a bigger and bigger component of the overall product development process, and it is proving to be doing just that. Some companies call it virtual product development, while others simply call it digital prototyping and simulation. Whatever it's called, CAE is increasingly impacting how many types of products, especially complex ones, are designed and engineered. In many instances, these digital methods are minimizing (although not completely eliminating, yet) the need for physical prototyping, thus accelerating development cycles and lowering development costs. Although many of the software
applications used for performing CAE are still the realm of highly-trained specialists (many at the PhD level), there are also an increasing number of CAE tools that can be used by mere mortals with a lot less formal training, but are obtaining very impressive and useful results.



Analysis-Driven Design Becoming The Standard For Major Japanese Manufacturers

During the fourth fiscal quarter of 2004, Moldflow Corp. a producer of software and enabling hardware solutions for optimizing the design and manufacture of plastic products, saw significant purchases of its flagship design products to a number of Japanese manufacturers.


Major industries such as electronics and automotive have been driving the inclusion of analysis and manufacturing simulation into the design process, evidenced by the major investments made by companies such as Mazda Motor, GP Daikyo, Nissin Kogyo, Yuka Denshi and Kumano Seiko. These investments, which range from $150,000 to $270,000, will allow these companies to bridge the gaps between their design and production disciplines, providing a greater understanding and control of the variables that affect their part's performance, quality and cost.


Ken Welch, executive vice president and general manager of Moldflow's Design Analysis business noted, "The momentum for Moldflow products in Japan is part of a worldwide recognition that analysis, as a required step in the product design process, provides tangible benefits to a manufacturer's bottom line. Companies that invest in and deploy Moldflow tools not only reap the financial benefits of an optimized design-to-manufacture process today, but they also put in place a product development procedure that will help keep them competitive into the future as well."


This announcement kind of goes hand in hand with the previous item in that in many circles, design is becoming increasingly analysis driven. This trend is becoming evident in both product and tooling design. Analysis and simulation are finally becoming recognized as integral parts of the product (and tooling) development process, up-front where they belong, and not just an afterthought as was often the case in the past.


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-- Jeff Rowe, MCADCafe.com Contributing Editor.


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