October 13, 2008
Status Quo is Not a Winning Strategy
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Competition is fierce, on a level never imagined before. Among many things, winning requires split second reaction to customer demand and competitive pressures. Why then does it so often seem to take forever for organizations to make decisions? Teams of well-intentioned managers labor over cost, product feature mix, market conditions and countless other factors – while the clock ticks. All too often, indecision is the default decision, reductionary thinking trumps empowerment, and the competition speeds ahead. The cost of non-performance has never been higher.
Indecision wreaks havoc in many areas of the PLM process, but few more so than time-dependent processes like change management. Rapid response to change is a critical success factor in any business. And at its most elemental level, effective change management depends on people working together efficiently and effectively – on collaboration.
Many studies have shown effective collaboration to be a crucial element of any global product development and supply chain process. And in turn, people cannot work together if they can’t share information, quickly and seamlessly. Without good interoperability of product knowledge and associated data, PLM simply cannot happen. Poor interoperability between CAD systems has been a hot topic for many years. It continues to plague innovation and crush productivity. Poor interoperability results in huge amounts of waste, cost and delay.
So you would think managers and executives would be giving these issues a relatively high priority on their radar screens, right?
For the most part, collaboration and interoperability are topics that management doesn’t want to hear about. They assume someone is dealing with it, and simply choose to ignore the huge productivity and cost impact on their global organization. Very often, these costs are forced upon suppliers, who pass them back in their pricing (usually in someone else’s budget!).
All this leads to indecision - sticking with the status quo. Regardless of the obvious cost and waste caused by interoperability problems, it’s incredibly common to see management delay any decision to do anything about it, often for years.
The direct cost of indecision consists of wasted time and lost opportunity for innovation. You can help management understand these costs by analyzing the volume and complexity of your CAD data, along with the level of quality you expect your designs to maintain over time and through your product development process. Simple multiplication will yield a metric you can use to represent your direct cost of indecision. Then there are the less obvious, but perhaps more damaging, indirect costs of indecision.
Many companies maintain CAD licenses and experts for each CAD platform they support. This means they are incurring the cost of the licenses, maintenance, IT staff, and people many times over. A decision NOT to implement an effective interoperability strategy sooner rather than later means continued monthly costs and fees associated with this practice. Leading companies have developed processes for deriving/delivering product data from a single digital repository. Additional savings will be found by reducing the complexity of your global IT environment.
One of the biggest is the cost of losing the knowledge your experienced designers have built into your product designs. The features, design intent and manufacturing information that could be included in your product data is an extremely valuable asset that is usually not available to anyone else, even other members of the same CAD department. What is your cost of lost product knowledge?
How much of your product data do you actually reuse? How much does management believe you reuse? These are not usually the same number. The cost of poor CAD data reuse is huge. Designing products multiple times carries with it multiple times the cost of designing it once and deriving it for other uses. In addition, errors are inevitably introduced each time CAD data is re-worked or re-mastered. What is the associated cost of lower quality, especially when it causes a problem downstream? A decision NOT to implement an effective interoperability strategy sooner rather than later means continued poor data reuse and lots of rework and re-creation of CAD data.
Do you protect your intellectual property when you share it with others? How well? If you don’t share your 3D data with others due to fear of loss of IP, you need to change your thinking around. Implement intellectual property protection and enable people to use your 3D data assets to their fullest. Either way, a decision to maintain the status quo is the wrong decision.
At the end of the day it all comes down to competitiveness, and its dependence on split-second decision making. The biggest cost of indecision is the jobs that are lost because your competition has decided to take bolder steps faster than you, while your management thinks about.
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-- David Prawel, MCADCafe.com Contributing Editor.
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