April 18, 2005
PTC And The Center For Automotive Research Forecast The Future Of Automotive Product Development
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by Jeff Rowe - Contributing Editor
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PTC And The Center For Automotive Research Forecast The Future Of Automotive Product Development

PTC has announced the results of its most recent study of the automotive industry. The study, conducted by the Center for Automotive Research (CAR) of Ann Arbor, Michigan, identifies major trends and changes in product development and provides a five-year forecast which addresses business philosophy, product design tools, communications and engineering efficiency. CAR is involved in the research of significant issues that relate to the future direction of the global automotive industry.

The CAR study is a continuation of PTC's 2004 benchmark study "Best Practices in the Automotive Industry" which identified the capabilities necessary for success in the current automotive environment. The CAR study looks five years into the future and utilizes the Delphi forecast methodology, which offers the ability to successfully investigate industry trends utilizing a small panel of industry experts. The study panel included 21 experts representing 11 companies. The panelists identified the following major changes and trends in product development:
  • Using a more disciplined process - the current focus on increasing design process discipline will reduce the number of resources required for continued process improvement, enabling redeployment of those resources to focus on other strategic issues.
  • Transitioning to greater use of virtual prototypes - computer-based tools are forecasted to eliminate the need for physical prototypes.
  • Outsourcing more to global suppliers - outsourcing to tier one suppliers is predicted to increase dramatically, especially for interior systems product development with only ten percent of the development being conducted by Original Equipment Manufacturers (OEMs) in ten years.
  • Focusing on design for manufacturability, reliability and durability - increased outsourcing to offshore and lower labor cost countries will increase the importance of design for manufacturing in reducing costs.
  • The need for close collaboration and improved communications between organizations is a pervasive theme throughout the study. Researchers conclude that electronic communication is considered the most significant factor for successful product design and will continue to grow in importance. Email is replacing print communications and while in-person communication is being replaced by video conferencing and web based collaboration, it will remain an effective tool in situations requiring relationship building and the exchange of subjective information.

    "As product development becomes increasingly more important, companies are focusing on their product design processes to identify ways to increase efficiencies and reduce costs," said Dr. Richard J. Gerth, Research Scientist, Center for Automotive Research. "Product solutions that foster communication and support collaboration between geographically and organizationally dispersed teams will play a key role in optimizing the development process. Simultaneously, companies need to develop new processes that take advantage of the new communication technology across the entire value chain."

    "PTC's continued investment in research to understand the issues transforming the industry underscores the importance of the automotive industry to the company's overall corporate strategy," said Dr. Dhiren Verma, director, product and market strategy, PTC. "This study provides important insights into the future of product development and reinforces the need for leading edge collaboration solutions like Windchill to help customers deploy standard and repeatable processes and facilitate global information sharing."

    A copy of the study report is available at:

    The Center for Automotive Research assists the global automotive industry's competitiveness and technological advancement by conducting unbiased economic, manufacturing and transportation systems research; forecasting industry futures; advising on public policy; and conducting industry conferences and forums. CAR achieves this through strong working relationships with industry, government agencies, labor organizations and other major stakeholders of the international automotive community and its multidisciplinary research and conference activities. For more information on CAR,

    It's certainly no secret that the automotive industry, especially in North America, is under tremendous pressure to perform from many different angles - from functional to economic to environmental. Because of these pressures and the manner in which they are being responded to by the automotive manufacturers, the industry as a whole is realizing that it must radically reinvent itself if it is to survive. This is harder to accomplish than you might think, because North American automotive companies have not exactly been renowned for effecting change quickly, much less wholeheartedly embracing massive change.

    While manufacturing has historically played the dominant role in automotive product development, primarily because of the huge capital investment involved, product development is increasingly seen as a differentiator and vital component for automotive companies to not just survive, but thrive.

    This study is a continuation of PTC's 2004 benchmark study "Best Practices in the Automotive Industry" which identified the capabilities necessary for automotive companies to succeed in the current hyper-competitive environment. The study looks five years into the future and employs the Delphi forecast methodology that combines quantitative and qualitative opportunities to explore the future. It's a relatively old method, dating to the 1950s, and today businesses, governmental agencies, and organizations are using Delphi methods to predict or forecast future events and relationships in order to make appropriate and reasonable plans or changes.

    Delphi is a group process whose goal is to help a group reach consensus. Rather than gathering people together for verbal discussion, individuals provide written responses to questions. This is advantageous when persons with knowledge and expertise to address a problem are not geographically near each other. Email has really facilitated the process. Anonymity of the respondents during the process is an important aspect of the Delphi method and the quality of the results it generates.

    The 140+ page report stresses throughout that some of the most important factors for future success revolve around improved collaboration and communication within and between organizations. While these two factors are not surprising, they are not inherently part of the psyche of automotive manufacturers, or at least haven't been. However, OEMs are accepting that collaboration and communication are essential pieces of the product development and manufacturing puzzle, and not just with their suppliers, but in some cases, with their competitors, as well.

    Jeffrey Rowe is the editor and publisher of MCADCafé and MCAD Weekly Review. He can be reached here or 408.850.9230.

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