Global Engineering

Global Product Engineering & the “Core to Business” debate…

Thu, 18 Mar 2010 05:27:52 +0000

In a recent discussion with a panel of clients and industry experts on Global engineering trends & growth, the conversation about Product development being at the core, and hence challenges in globalization, once again found some interesting views. This topic has popped up in many conversations and debates that that I have had in various forums on adoption of global engineering strategies.

The answer to this debate is not so obvious, given that the Products have been at heart of revenue generation for most of the last century. But as the last two decades have shown us, global engineering has found more and more acceptance across industries in product development strategies.

The reasons for this change are multi dimensional -

Accelerating product value realization with Product Effectiveness

Thu, 25 Feb 2010 15:26:28 +0000

Rapid introduction of reliable, compelling products is the lifeblood of product companies. Also, successful new product launches are highly rewarding in terms of higher margins they promise. However, the reality of product innovation is that the failure rate of new products is high. This is not affordable or sustainable, given the pressure on scarce resources. Imagine the impact if the new product success rate were to increase only a few percentage points – benefits would flow straight to the bottom line.

PLM solutions have been offered by technology vendors as a panacea for all product development ills. However, these solutions have seen limited adoption compared to enterprise applications for a variety of reasons:

While there are many systems available today, organizations still lack a direction on what solution to choose and how to implement across global extended enterprise to address their specific needs, accelerate value realization and provide sustainable governance
Implementation is done at a departmental level, typically at engineering design centers, rather than managing the product information at an enterprise level
Solutions until recently have not contained portfolio management and product intelligence capabilities, with linkage to financials and dynamic resourcing functionality
Product development process maturity is not as mainstream as areas like supply chain, and correspondingly has not received appropriate management attention
While individually the process may be well defined for each product function, there are significant areas of ambiguity across groups that are not effectively addressed under the conventional stage-gate process

Part of the problem with traditional approaches has been an emphasis on process, without considering other dimensions of change. There needs to also be robustness, collaboration, repeatability, and synchronization of effort by all product functions. Companies need a broader, perhaps transformation view to the product development process. The term Product Effectiveness has been coined to describe this multi-dimensional framework and approach. Business leaders seek to go beyond conventional product development to create better product value through multiple dimensions – new product introduction capabilities, dynamic management of products to generate profitable portfolio, ironing out post-sales product performance issues, and most importantly, Voice of the Customer. Some refer to this as Extended PLM, since it can be implemented in organizations with or without a PLM implementation in place.

The Product Effectiveness framework is made up of 12 components Product Effectiveness incorporating industry operations references models from the Supply Chain Council, PDMA, and leading academic institutions. The framework address a matrix of process (product management, product development and product sustenance) and domain (customer needs management, NPDI program management, product portfolio, and product performance). The following 12 components comprise the framework:

Product strategy
Product value management
Portfolio decisions
Product intelligence
Product requirements
Lifecycle management architecture
Product innovation management
R&D testing and laboratory management
NPD knowledge management
Process harmonization
Diagnosis and root cause analysis
Compliance

These 12 components are not meant to be all inclusive – rather, they are the areas to ‘get right’ when describing the product lifecycle and offer a starting point when defining and planning improvement initiatives.

Beyond the components, it is also useful to consider tools and aids for performance improvement. Tools can provide the rigor and consistency to drive change throughout the enterprise, and tools are needed to make the change permanent by enabling maintenance as things change over time. Following are standard tools that leaders should consider for performance improvement:

Capability maturity profiles
Data models
Product roadmaps
Process reference models
Metrics libraries
Workflows
Business intelligence and reporting

To bring these ideas together, companies should take a holistic approach. Many failed improvement initiatives have been caused by a piecemeal approach and lack of the bigger picture. Here are some leading practices for improvement initiatives in the area of product development and management:

-    Assessment to determine NPDI maturity level to develop an initiatives roadmap
-    Adhere to industry standard process models, product data models and KPI
-    Reduce decision making time by enabling quick go-kill-hold decisions
-    Improve enhance productivity through accelerators embedded as part of the new process model
-    Determine product value and track portfolio profitability over periods of time
-    Provide executive window into broader dynamics of cross-functional product development cycle

The ideas above may not be the total story. However, they should provide leaders in product companies a starting point to refine their existing approach or perhaps shape planned improvement initiatives. One thing is for sure: with the intense pressure to simultaneously increase innovation and reduce cost, anything that can improve product effectiveness will help companies compete more effectively and reward their stakeholders.

Accelerating New Product Launch

Mon, 25 Jan 2010 08:00:05 +0000

Companies look for New Product Introduction (NPI) to expand their current market and to gain share within existing markets they operate. Generally large companies are divided into multiple Business Groups, which are further divided into multiple Business Units. A Business Unit (BU) spends most of its' time and resources in designing, and testing a product -- ensuring a robust and unique in demand product is launched, but doesn't stay connected closely with product launch.

Idea management could make the difference between surviving the recession or not

Fri, 15 Jan 2010 19:54:13 +0000

Recessions are a key part of the business cycle as they can eliminate the waste in an industry by forcing less efficient companies out of business, or by trimming a company’s waste to focus on core competencies. How a company reacts during a recession can impact if they will be around for the next one. Survival is one thing, but the best companies in the world win in these economic turns by being more innovative than their competitors. The less optimal method to innovate is to to increase R&D spend and place more bets, however the more effective method is to make a company’s R&D machine more efficient. The largest opportunity to do this is in idea management.

2009 - The year of "prudence" in journey of Global engineering

Thu, 24 Dec 2009 04:01:57 +0000

The year gone by was greeted by "financial crisis" and the CXOs across industries were strategizing to deal with this unprecedented challenge at the beginning of the year - focus was on financial prudence and achieving operational efficiency.

...But as we end the year, the mood has changed, there is greater hope and some early signs of turnaround...the conversations again are shifting to view this downturn as an opportunity and capitalize on impending growth, prepare to launch new products, adopt more agile and lean business models...

The impact of recession was more in the developed economies. India and China as markets continued to register good growth. In fact this year auto sales in India were defying the economic crisis and bloodbath faced by Detroit, sales have been rising through February this year and recorded 61% growth in November. This all only went to prove that companies will always find new opportunities in this globalized economy.

"Global engineering" concept gained further ground in the recessionary times. I choose to call this year,a year of "prudence" in journey of global engineering, as it put to test the claims and helped to reign unrealistic expectations.

The cost of being Green

Wed, 16 Dec 2009 07:37:25 +0000

While travelling down from LA to Dallas after presentation the Infosys GreenPLM offering at the GlobalTex conference, I had a chance to browse the greenbiz.com". website . The good thing about this website is the news section dedicated on Green information & updates across the globe.

Read the article "Recovery Act Adds 6,500 Greener Vehicles to USPS Fleet". And was quite excited to see the big step taken by USPS. This shows the commitment of US Government towards Green. The agency USPS ordered 14,105 fuel-efficient vehicles last month at a cost of $210 million. Quite an amount to be spent and this kept me thinking how much does it cost to be Green?

In addition to automobiles, the common gadgets that we use in our daily life like mobiles, mp3 players, DVD players, camcorders and so on are all also built using materials which are currently under green compliance radar. Now, it makes me wonder that how much of compliance can we actually bring in to develop green components and will it be cost effective? Having experience of various manufacturing process my personal opinion is that we can actually make greener products however we may not be able to produce something completely environmental friendly. And that would be too hypothetical statement.

I thought about it and came to the conclusion that there are various ways where one can actually reduce cost and still develop a green product or rather I should say a cost effective green product. For example, while take back and dismantling the product it is easy to identify the components which can directly be reused, some other could be re-manufactured ( well trade-off has to be decided on cost i.e. whether it is cost effective to produce new one or re-manufacture the old one) and some can be disposed off responsibly.

This was at the end of life and the best part is if one can consider greener aspects while designing the end becomes more friendly and easy. That again re-instate the fact that trade-off at the beginning can actually give leverage at the end.

Bottom line: More responsible the producer is, the more greener and cost effective products can be expected from them.

Role of "Domain knowledge" in Global Engineering

Fri, 20 Nov 2009 09:28:24 +0000

I was at the Nasscom Global Engineering Leadership Summit held at Mumbai last week. The amount of interest the topic - "Importance of Domain Knowledge in global engineering" generated was noteworthy. The Summit was attended and addressed by leaders from engineering fraternity. The gathering debated the opportunities and challenges that are faced in globalization of engineering. Also discussed were trends and views on India emerging as Global Engineering hub

What was apparent is that the the potential role for India in Global engineering is very significant. The analysis by Booz consulting puts the number of 50 Billion USD by 2020 for Engineering services from India. Given this context, it is important to understand the dominant factors that will drive this new wave.

Provided the emphasis on "Domain knowledge" as one of the crucial parameters for accelerating the growth of Engineering in India, it is imperative to delve into the topic to understand it better.

Knowledge Based Solutions can keep the Aviation industry afloat…

Thu, 29 Oct 2009 08:14:59 +0000

At an average the net profit margin of the airline industry stands at around 2-3%. How can this profitability be enhanced further for long term sustenance of the industry? The key lies in the current cost structure of airlines. According to various statistics, the cost contribution for the airlines is projected as fuel cost 49%, aircraft cost 18%, crew cost 14%, maintenance cost 14% and others 5%. Costs like fuel and aircraft are beyond the control of airlines and are driven by many external factors. The next biggest cost is maintenance and airline industry can directly control this cost by improving its effectiveness and efficiency. Typically maintenance of air fleet consists of both scheduled and unscheduled maintenance activities. Scheduled maintenance involves daily checks, A, B, C, D checks. There is about 60% chance of having damages found in these checks which require repair. The unscheduled maintenance include repair of unforeseen damages caused by events like bird hit, hail storm, lightening strike etc. It is essential to shorten the repair cycle time and increase the availability of aircrafts for operations. This is evident from the fact that each aircraft on the ground cost is estimated to be about $100k per day.

Further introspection and analysis would help to address this problem. The cost of maintenance includes both material and labor cost. In this labor cost can be reduced to sizable extent by using advanced technologies like knowledge based engineering (KBE). Let us look at more carefully the entire repair and maintenance cycle of airframe. Through knowledge based solutions, costs involved in activities given below can be reduced drastically
–        Managing manuals like Structural repair manuals (SRM), Component Maintenance Manuals (CMM), Aircraft Maintenance Manuals (AMM) etc
–        Finding and following the instructions given in manuals
–        Diagnosing and assessing the damage
–        Identifying repair solution from manuals
–        Preparation of repair procedure and documentation
These activities consist of about 22% of the total labor costs of airframe maintenance. A conservative estimate shows that this can be reduced to about 5% by using knowledge based solutions. Hence, about 17% savings can be realized.

Knowledge based solutions and Knowledge Based Engineering (KBE) in particular is based on capturing repair and maintenance knowledge and embedding this knowledge into a web based systems (KBE system) and utilize such system in the repair and maintenance of aircraft. For example, if we look at the SRM manuals alone, there are voluminous documents. It is also not easy to interpret them to identify a repair solution for a typical damage. The situation is even more complex for composite based aircrafts whose documents will be much more voluminous compared to metallic aircrafts. Think of an equivalent web enabled, knowledge based system which can provide repair solution based on certain queries from the users. This will replace static voluminous documents with an expert system. In earlier days technology was not matured enough to create such advanced systems. Now this is certainly possible. There are many such scenarios where we are collaborating with our customers to leverage technology and in particular knowledge based solutions for enhancing effectiveness and efficiency of engineering and maintenance activities towards driving up the profitability of the industry.

Do you see any such trends in the industry you operate?

Portfolio Management has many benefits one of which is reducing executives’ time wasted in budget battles

Thu, 01 Oct 2009 02:32:26 +0000

At least once a year executives go through the painful process of budget allocation and project planning. Many times an organization has clear corporate level objectives that guide the budgets and projects to be worked on over a given time horizon. However, there tends to be a weak connection between corporate strategies and the business units’ project or portfolio list, resulting in a debate among executives between dollars/projects near the cute line.

For lean implementations, Value Stream Mapping (VSM) is good… but Value Stream Simulation (VSS) is certainly better

Fri, 25 Sep 2009 06:10:05 +0000

Be it a shop floor or an engineering office or a call center or even a hospital or any other operations, the primary objective behind lean implementations is to identify and eliminate non-value added (waste) elements continuously. Making waste elements visible in a value stream is not so simple and straight forward. On the other hand, automating or replicating (for implementing at multiple locations) processes without improving (leaning out) it can accelerate the inherent waste creation that could lead to disastrous outcomes.

One of the prominent techniques adopted by lean experts to capture and analyze operations for improving is Value Stream Mapping (VSM). In brief, VSM is a process of mapping out the entire process flow, material and information flows along with details about value added and non-value added elements, with inputs from the stakeholders. VSM is a proven technique applied by many lean experts across the industry verticals. However, VSM evolved many decades ago when there were not many easy to use, computer assisted solutions existed. VSM works pretty well for simple processes. However, deeper understanding of the process dynamics and inter dependencies for more accurate insights and decision making through VSM can be cumbersome. Capturing a complex process in a static two dimensional VSM representation is too difficult to achieve. For example, a manufacturing process involving multiple product mix, multiple cycle times, process variability, infrequent operations (e.g loading the raw material every 500 cycles or setting a tool every 1000 cycles), shared resources, exception handling (like minor & major repairs, minor & major break downs, buffer run outs, dynamic prioritizing etc) can become too laborious and error prone to capture and analyze through VSM alone.

Value Stream Simulation (VSS) models built leveraging discrete event simulation tools provide closer to real-life representation of complex operations (and processes) enabling deeper insight into the process dynamics and interdependencies. This provides the lean implementation teams with more accurate representation of the physical system for better analysis and decision making. The ability to quickly run what-if scenarios with simulated stochastic variability as per real-life probability distributions provides close to real life mathematical model of the system for evaluating multiple scenario outcomes. Enhanced visualization capabilities of space and time (3D) help the users to quickly understand the behavior of the system. VSS helps in arriving at dynamically validated lean model of operations with very high confidence levels on proposed modifications and outcomes.

Hence, be it upfront planning of lean operations or lean implementation in existing operations, certainly Value Stream Simulation (VSS - dynamic VSM) approach provides deeper insights into the operations enabling better decision making than 2D, static VSM approach. We have recently applied the VSS approach for dynamic VSM and simulation of manufacturing shop floors; business processes (call center operations) of a fleet management company and the outcomes are very impressive. Of course, it involves additional tools and expertise for modeling through VSS. But, customers can leverage Global Engineering teams (like Infosys) for building the VSS model of their operations for their lean implementation initiatives, with minimum involvement during initial data collection and value stream understanding.

A picture (VSM) is worth thousand words but a Dynamic Value Stream Simulation (VSS) is worth thousand pictures…

Global Engineering and Product Operations – The Strategic Imperative

Fri, 28 Aug 2009 12:30:18 +0000

How can companies compete in an environment of excess supply while preparing for a market upturn? This is a strategic question facing companies today, and effective product operations and engineering are fundamental to address the challenge.

Global Engineering – “Develop anywhere and Manufacture anywhere”

Wed, 26 Aug 2009 02:49:57 +0000

As we continue our efforts in Demystifying Global Engineering, it is heartening to note that leading analysts are increasingly acknowledging the true essence of Global Engineering. It is even more gratifying to note that Infosys’ strategic global engineering relationships are part of the key examples for such stories. A recent research report by Michael Burkett of AMR Research Inc has captured one such story. An excerpt from the report is given below:

“Another aerospace company has set up a virtual engineering center at Infosys facilities in India. The relationship expanded from 15 Infosys engineers on a single project to a team of 220 four years later that are used on multiple programs. Management of design collaboration between the companies includes three team components. The customer has an outsourcing director that oversees their project leads and teams. Infosys then provides an on-site engagement manager that oversees the on-site Infosys team. Finally, there is an offshore team in the engineering center with its own leadership and program managers.

Flexible engineering capacity is the main goal for creating this engineering center, and the re-use of trained resources across programs makes the company more productive. The teams support design activities, including structural design and analysis and knowledge-based engineering. For manufacturing, they support tool design and methods development.”

Source: Develop and Manufacture Anywhere To Reach Global Markets and Optimize Product Supply Networks, Tuesday, August 04, 2009, Michael Burkett, AMR Research Inc.,

Even today, many organizations believe that Global Engineering is about ‘engineering off-shoring’ and the primary focus is to reduce costs through labor arbitrage. But this is NOT the case. The real benefit of global engineering comes from breaking down and distributing large complex tasks. Global engineering allows organizations to innovate better through access to a vast pool of global talent, which ultimately results in overall program effectiveness.

By demystifying Global Engineering, many leading organizations realize reduction in Total Cost of Ownership (TCO) that is many times higher than the mere labor arbitrage benefits. On the other hand, unfortunately, many global engineering initiatives fail due to the excess focus on labor arbitrage benefits. Some of the key factors organizations should focus on to be successful with their Global Engineering journey are:
·         Strategy alignment and well defined road map definition
·         Measurable performance milestones and Key Performance Indicators (KPI)
·         Focusing on continuous value ascendency and innovation
·         Openness to re-engineer legacy processes and methodologies
·         Encouraging cross-pollination of ideas from multi-industry backgrounds
·         Leveraging lean engineering practices for effective and efficient Global Engineering
Let us know your views…