Quantifying the Impact of Collaborative Engineering

Murugan Krishnaswamy May 11, 2015

Quantifying_the_Impact_of_Collaborative_EngineeringWhen it comes to terms like engineering collaboration, there’s only so much you can describe without hard data. For many manufacturers with complex operations, spread across multiple sites and with many teams involved, the benefits of collaboration truly become clear when its impact is displayed in numbers. 

How much exactly can collaborative initiatives, like integrated product development (IPD), offshore engagement and system standardization, help you reduce product cost? What is there to gain from engineering collaboration, and what are the numbers to support that?

We know how important raw data can be when companies make decisions that can change the very way they do business. Quantifying collaboration’s impact largely comes down to three overarching things:

  • Product quality
  • Cost
  • Time-to-market

Together, these three factors add up to the most important impact of all: your profitability. Keeping product costs low and revenues high, despite complicated operations.

Measuring the Impact

Collaborative engineering, as a product cost optimization (PCO) initiative, is about as complex as the manufacturing operations it serves to help. Collaboration simplifies how manufacturing and engineering teams handle tasks in an array of ways, which differ in each case. 

Perhaps Company A uses collaboration to improve communication between plants, and thus sees reduced manufacturing error; Company B could be pursuing collaboration in the form of overseas engagements, to reduce production costs, like labor and overhead. It’s collaboration’s large scope that makes it tricky to quantify anything universally. The benefits and progress made via collaboration changes depending on each company’s strengths and weaknesses.

The following are the most common contributors to cost that engineering collaboration has been known to reduce:

  • Engineering costs; less development effort required, and improvements in cycle time
  • Cost of quality; product predictability is maximized, and defects are largely avoided
  • Service costs; increased customer satisfaction, due to better requirement management
  • Operational costs; automated review process and data synchronicity between all involved teams
  • Supply costs; reduced number of product changes and iterations

Consider your own engineering teams, line equipment and data systems. How efficiently do all of these components interact across sites, and with various product lines? It’s in these areas that often the largest portion of product cost derives. Collaborative measures, like offshore engagements, standardized systems and communication frameworks, help in reducing these ancillary costs, while also pushing products to market faster.

How These Factors Impact Cost

All of these reductions build up ROI in short time, and help manufacturers largely simplify their operations for the long term. Not only does collaboration lower the cost of resources and production, but it also expands revenue streams to fuel higher annual returns. 

For example, if a manufacturer with relatively standard operations invested around $670,000 in collaboration, the above factors would give implementation an ROI of 56% in a timeframe of only six months. They’d save well over $1 million in resources, and see other revenues expand for an estimated $50,000 return.

Barry-Wehmiller International once helped a European leader in the printing accessories industry implement collaborative engineering practices to correct disconnect between systems and plants. By assessing their operations and strategizing to lower costs in areas like supply and operation, B-WI was able to help the company save approximately $2 million in a single year following project completion. 

Collaborative engineering practices serve to simplify how manufacturers handle the triple constraint of time, quality and cost. As complex operations, multiple variant product lines and offshore plants complicate these factors, implementing collaborative efforts is almost key to sustaining profitable growth. 

In highly competitive industries, the pressure is always on to introduce new products to market cheaper and faster; a carefully structured engineering collaboration framework, in these instances, makes doing so much easier.

PCO_Through_Process_Optimization

Topics Globalization Product Development Solutions Engineering Collaboration