InformationWeek

"We're becoming a virtual engineering organization," says David Guidette, VP of engineering and manufacturing at Group Schneider North America in Nashville, Tenn. "We're being pressed to develop faster, and our requirements for development are growing. I just can't hire mechanical and electrical engineers fast enough."

Driven by shrinking product cycles and pressure to reduce overhead, companies are beginning to embrace a virtual approach to product design enabled by a new breed of Internet-based design, project management, and product data-management tools.

The vision: expedite and improve the development process by sharing design data at all phases of a product life cycle with a company's purchasing, sales, manufacturing, and supply-chain groups. With better access to product data, those groups should be better able to plan resources to meet design requirements.

Another goal is to share data with customers, suppliers, and subcontractors outside a company to better use external resources, meet customer expectations, and quickly identify new product opportunities. "It's taking intellectual capital that's been bottled up in computer-aided design systems and enabling engineers at original equipment makers and subcontractors to collectively drive product innovation and go after new product opportunities," says Gartner Group analyst David Burdick.

That vision is catching on in industries characterized by continuous product innovation and multivendor product fabrication. Consumer electronics and high-tech companies, particularly PC makers and mobile phone manufacturers, are taking the lead. Automotive, aerospace, and heavy-equipment industries are also starting to do business this way. Analysts predict apparel and consumer-product manufacturers could be next. "It's inevitable that anyone building complex products with a number of suppliers has to be all over this," says Barry Wilderman, an analyst at Meta Group.

The concept is awash with buzzwords, including product life-cycle management, collaborative product development, and collaborative product commerce. For every moniker there are dozens of software vendors that claim to deliver the solution, but in fact no single vendor does it all. Analysts segment the market into several software categories. At the foundation are computer-aided design applications, which let engineers create and store designs, and product data management applications, which provide a database for storing drawings and product information, including bills of material. Popular vendors in this area include Agile, Enovia, MatrixOne, Parametric Technologies, and Structural Dynamics Resource (SDRC). Several dominant business application vendors, such as i2 Technologies, Oracle, and SAP, also offer product data-management tools (see sidebar story, "SAP Tries Its Hand At Collaborative Development Package").

While product data-management and CAD tools are important, they've been available for years. So what's shining a new spotlight on this back-room engineering process? "At the heart of it, it's the Web," Burdick says. "What's changed is we have a common information highway. Supporting that are Web technologies that help capture, manage, and manipulate information."

The Web has spawned a new generation of packaged applications that enable collaboration with design partners and give access to design data beyond the engineering department. Many of the traditional product data-management vendors offer Web extensions to their core products, and several new vendors, including Engineering Animation Inc. and NexPrise Inc., focus their efforts exclusively on the Web. Also hot are applications that actually link designs to a database of standard suppliers that furnish the parts to build a product. The leader in that category is Aspect Development, which i2 recently acquired. Adjunct applications such as resource scheduling packages from Adexa, i2, and Syncra Systems, and project-management applications from Artemis Management Systems, Microsoft, and Primavera Systems, and can also aid in simplifying product development.

In many cases, companies are deploying a combination of software tools. Data-storage device manufacturer Seagate Technology Inc. in San Jose, Calif., uses product data-management apps from SDRC, called Metaphase, to store, secure, and organize design data from around the world. The company, which was split up and acquired last month by Veritas Software Corp. and a group of private investors, also uses collaborative Web tools that it developed in-house and a supplier data-management package from IQXpert Inc. to provide worldwide access to data. Together, the systems ensure accurate and consistent product data, and provide version control, change management, traceability, and automated product release processes.

Tight management of the product-development process is imperative at Seagate, which releases 3,000 new design documents a month. Making those documents readily accessible to people in field service, design, and purchasing, who collectively access the system an average of 10,000 times a month, saves the company a lot of hassle. "We don't do file cabinets and faxes anymore," says Doug Speidel, director of engineering information systems at Seagate. "When you have all these documents on microfilm and secure storage, your intellectual knowledge just collects dust. Now if someone leaves or the structure of the company changes, the crown jewels of information are under control, and we can move them along."

Seagate's next project is to improve electronic links to suppliers and customers during the product-configuration process to respond more quickly to customer requests. Seagate's largest customers, such as PC manufacturers, play an integral role in shaping future designs of the Seagate disk and tape drives that go inside their products and are included in the engineering change-approval process. While the company uses electronic processes today, it's evaluating applications such as SDRC's new Accelis collaboration tool to eliminate human intervention, which can slow down processes and introduce errors. The goal is to eliminate all obstacles and enable a 24-hour design cycle, letting development occur around the clock and around the world. "Everything around disk drives is time to market," Speidel says.

Under a shrinking federal budget for defense spending, Lockheed Missiles and Fire Control, a division of Lockheed Martin that supplies combat and missile systems to the U.S. government, was looking for ways to cut waste out of the project bidding and management process with its suppliers.

The Dallas division uses an application from NexPrise called ipTeam that lets it electronically manage bids from suppliers on government projects online by securely posting bids and complex engineering documents, often thousands of pages long, on a Web server hosted by NexPrise. After the bidding process, ipTeam functions as a collaborative medium in which Lockheed, its suppliers, and its customers review, negotiate, and track changes to designs. Roger Moorehead, materials manager at Lockheed Missiles, says the tool, which replaces burdensome manual processes and print documents, has cut in half both the labor required to develop and distribute documents and design decision cycles during development. "Material costs of missile development are 80% of the cost of a contract," Moorehead says. "Anything you can do to reduce those costs makes a huge impact."

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