July 05, 2004
PTC Automotive Manufacturing Study Links Product Development And Financial Performance
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Jeff Rowe - Managing Editor

by Jeff Rowe - Contributing Editor
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PTC Automotive Manufacturing Study Links Product Development And Financial Performance

PTC announced the results of a new global benchmark study of the automotive industry. The study revealed that deploying a superior product development strategy has a positive impact on financial performance. Conducted by PTC and the Aachen University of Technology in Germany -- one of the world's largest and most distinguished engineering universities, the study is based on interviews with over 200 senior executives (vice president and directors) across North America, Europe and Asia in the automotive industry.

The results indicate that automotive companies can achieve a significant competitive advantage through superior product development capabilities and execution. And while most companies share similar business objectives, the difference between leaders and laggards is ultimately in their product development capabilities -- with the top performers owning advanced product development capabilities that enable them to translate their strategies into positive financial performance.

The study highlights the best practices of the industry leaders and includes the following conclusions:
  • The Big Divide - The financial value of competitive advantage is clear within the automotive industry, as better performing companies enjoy significantly higher profit margins and revenue growth rates over lesser-performing counterparts. In addition, the profitability gap between the financially successful automotive companies and less successful ones is even larger than expected -- and it continues to widen.
  • Financial Success Linked with New Product Revenue - Looking at different measures of R&D performance, financially successful companies gain a clear competitive advantage by their ability to drive revenue from new products.
  • More Bang for More R&D Buck - No matter what stage of a company's lifecycle, the leaders tend to invest more in R&D per employee. Also, leaders in revenue growth spend 20 percent more in R&D than their peers, yet realize almost seven times more revenue from new products -- a trend that goes hand in hand with significantly higher R&D spending per employee.
  • "The study results suggest a strong connection between product development investment and corporate success -- both competitive and financial," said Dhiren Verma, director, Product and Market Strategy at PTC. "And while both the leaders and laggards in the automotive industry appear to be pursuing the same product development strategies, it's ultimately their ability to execute on those strategies that determines their success."

    The study also offers some general industry observations within the automotive industry. With forecasts of higher revenue growth in the future, there is an overall optimism within the industry, as companies are expecting to see commensurate growth in R&D budgets. In addition, the automotive industry is also seeing increasing complexity in the value chain, with a dramatic increase in outsourcing of product development and manufacturing, and significant growth in the number of sites companies must manage and coordinate in their product development process.

    It's good to see that there are no blatant mentions of PTC or its products in the course of the study (at least not in this press release, anyway, or in the associated whitepaper).

    The fact that PTC backed and took part in this automotive benchmark study points to a couple of different things:
    1. The company is once again focused on product design and engineering with what it calls its product development system (PDS). Sure, it's also pushing data management with Windchill, but PTC seems as committed to the design side of the business with Pro/ENGINEER Wildfire 2.0.
    2. It is as intent as ever in getting involved in the automotive industry on a much bigger scale than in the past. The probability of that happening seems to be better than in the past because the product line is more comprehensive for automotive needs, and the formerly infamous sales model is a thing of the past.
    3. These two things are coupled with a recent announcement that Pro/ENGINEER Wildfire 2.0 has been widely deployed at Toyota's Powertrain Division. This deployment is part of a multi- year, joint process redesign and development initiative PTC and Toyota signed in May 2003. Since standardizing on Pro/ENGINEER for powertrain in 2002, Toyota says it has achieved improvements in design cycle time, introduced new lean product development techniques, and furthered itself in the areas of continuous improvement, quality, and technical innovation. This phase introduces new PLM technology into Toyota's process in the areas of 3D engineering, analysis, manufacturing planning, drawing creation and

      Nissan Design Adopts ICEM Surf For Automotive Surface Development And Ships Latest Version Of Its Surface Modeling, Analysis And Visualization Software Suite

      ICEM Ltd. announced that Nissan Motor Corp. of Japan has recently placed a contract for the supply and implementation of ICEM Surf.

      ICEM Surf will be used in Nissan Design's surface data development on future vehicle development programs. ICEM software will enable Nissan Design to create a "digital pipeline" through the development of the accurate 3D digital surface models required for the detailed design process.

      "ICEM is enjoying significant growth in the automotive industry in the Asia Pacific region", said Lee Cureton, chief executive, ICEM Ltd. "We are particularly pleased with this contract from Nissan as it represents another major new customer committing to ICEM Surf in their future strategy. It confirms to us that we are on the right track."

      Eiji Kawashita, director of ICEM's Japanese partner, Hitachi Zosen Information Systems, said, "We are very proud that Nissan has selected ICEM Surf for its new vehicle development programs. We are looking forward to working closely with Nissan to help the company to get the most benefit from the software and to achieve its productivity and quality goals."

      ICEM Ltd. also announced that it has now begun shipments to customers of the latest version of its flagship software suite, ICEM Surf. In addition to support of a new database architecture from ICEM designed to provide enhanced design workflow facilities, ICEM Surf 4.4 introduces major new capabilities, such as feature recognition, the creation of feature libraries and the exchange of intelligent features among different ICEM Surf users. Further additions include enhanced bi-directional geometric data exchange, in particular with CATIA V5 from IBM/Dassault, enhanced safety analysis tools, extended functionality in the visualization tools and additional surface modeling and model
      manipulation facilities.

      Modeling and Visualization - In the surface modeling environment, ICEM Surf 4.4 introduces the ability to generate tube surfaces, along with feature recognition capabilities for addenda surfaces used in the mould tool and die design process. Other algorithmic and functional enhancements have been made to curve matching, facing, fillet, corner fillet, flange and profile, while enhanced surface quality analysis is provided through a range of additional criteria in the Surface Checker.

      For automotive design engineers, an enhanced "flat spot" analysis capability in ICEM Surf 4.4 pinpoints potential manufacturing problems, enabling surface engineers to make early form corrections and thereby avoid the need for later modifications that require costly re-tooling.

      Additional functionality has also been added in the visualization environment. This includes individual tessellation for improved display performance and the addition to ICEM Surf's existing visualization facilities of light color and light intensity, as well as radiosity, enabling the simulation of sunrise and sunset and more realistic shadows and shadow fade.

      Cubic texture mapping has also been added to the existing texture mapping facilities, enabling texture maps to be "warped" to the surfaces to which they are assigned to provide greater realism, for example in photo-realistic visualizations of vehicle interiors.

      Data exchange - ICEM Surf already supports geometric data exchange with a wide range of other CAD systems, both via industry-standard neutral interfaces such as IGES, VDA, STL and SET and via direct interfaces for CATIA V4 and V5, Unigraphics/NX, Pro/E, I-deas and CADDS5.

      The enhanced Surface Checker facility in ICEM Surf 4.4 helps to ensure that the highest quality of surface data is maintained when files are exchanged between ICEM Surf and CAD/CAM systems from other vendors.

      These expanded data exchange capabilities enable an enhanced workflow within the different phases of the product development process, with bi-directional data transfer with other CAD systems resulting in reduced design cycle times through improvements in the way design changes can be considered and applied in downstream processes.

      With headquarters in the UK, ICEM Ltd. is a leading worldwide developer and supplier of advanced, surface-based modeling software for use in the design and development of automotive vehicle bodies and interiors and consumer durable products. ICEM's principal market sector is the worldwide automotive industry, where it includes most of the leading manufacturers among its customers. The company also has a significant presence in the consumer durable products design market.

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      -- Jeff Rowe, MCADCafe.com Contributing Editor.


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