Concurrent engineering principles came to the fore as a strategic set of four goals for new product development: high quality, low cost, reduced engineering change orders (ECOs) and time to market, and customer satisfaction, as presented in Figure 9.1. These goals were supported by a set of methodologies and tools such as empowered colocated cross-functional teams, integrated project management, total quality management, six sigma, design for manufacture (DFM), and quality function deployment (QFD) among many others. In addition enabling technologies such as CAE/CAD and enterprise resource planning (ERP) allowed for large improvement in performance for design and manufacturing. Typical recorded results of concurrent engineering include:
1. Faster new product development time and a corresponding reduced design effort by at least 50%. This is the most visible outcome of concurrent engineering—allowing companies to emulate the earlier Japanese model of fast product introductions and many focused products for greater customer satisfaction.
2. Increasing quality to a level of factory defects in parts per million and a corresponding improvement in reliability, with the gradual adoption of six sigma quality and its derivatives by large corporations such as Motorola, Xerox, and GE, as well as the auto industiy and many other companies.
3. Decreasing manufacturing cycles and inventory level by the application of zero inventory techniques and Kanaban (just in time) systems. The reduction of durable goods inventory ratios was from 16.3% of animal shipments in 1988 to 12% in 2000, producing a capital opportunity of $115 billion per year.
4. Although most major companies have achieved these benefits and more, their emphasis on core competency and recent trends in globalization have led to significant changes in the way business is conducted and how new products are developed and managed in most companies. The reorganization of the engineering function into distributed virtual teams, and the emphasis on keeping these teams “lean and mean,” has resulted in a decline in the need for traditional discipline experts or “gurus.” Nonproject design engineering positions such as “consulting engineers" or “Engineering fellows” are being reduced, while more emphasis is being placed on either accessing the expertise of these individuals from one of the company's locations through the Internet or purchasing needed skills from consulting individuals or companies. Concurrently, engineering analysis tools have improved greatly, allowing for design analysis and validation in a host of different electrical and mechanical disciplines, including analog and digital circuit， mechanical strength, thermal, flow, and vibrations analysis. Initial analysis can be performed by the engineering team members, whereas in-depth analysis using advanced software packages can be deferred to experts either in-house or from outside the company since these analyses do not occur frequently enough for all engineers to master them easily.
The increase in outsourcing and supply chain growth has resulted in having many companies discard their manufacturing capability, hence becoming dependent on outside suppliers for manufacturing resources. At the same time，the cost of acquiring expensive modern manufacturing equipment has become prohibitive, and the pace of new manufacturing technology has quickened，making discreet product companies or original equipment manufacturers (OEMs) reluctant to invest in their manufacturing plants, lest they become obsolete in a short time. In addition, the advent of global competition for quality and cost has increased the need for new product design teams to incorporate design and manufacturing feedback through early supplier involvement (ESI) as well as design for manufacture (DFM) into the design of new products.
This trend toward outsourcing selected portions of design and manufacturing competency has been happening at different rates, depending on the industry sector and the maturity of the product offerings in that sector. Table 9.1 is a summary of data collected from 30 companies and 50 interviews conducted by the author. It shows that manufacturing and design outsourcing correlates strongly with the time to market pressures in the particular industry. Military program development tends to be long-range and dependent on the use of proven technology. This is contrasted with increased outsourcing in the communications and electronics (C/E) industries, which are under greater pressure to reduce time to market and are early adopters of new technology. The C/E industries are also heavy users of value added manufacturing outsourcing, in which a primary manufacturing service provider delivers supply chain management for the total product ma- Trial procurement, assembly, and test cycle. The consumer and industrial sectors rely on their manufacturing competency in their own plants, which is difficult to outsource, since they are specific to each product, and not typically electronic boxes.
Manufacturing service providers are moving up and down the supply chain to provide more value to their customers. Although most suppliers are cost-driven, focusing on one type of manufacturing competency, many are adding more value for their customers either by providing design services or managing other suppliers in the supply chain. A plastic supplier indicated: “We can turn a 25 cent plastic part into a 5 dollar assembly with the additions of electronics and cabling.”
Contract design companies are also leveraging specialized core competencies in. order to offer design and manufacturing services to the their customers, such as engineering analysis and access to tooling and manufacturing outsourcing in low-cost countries. In many cases, they can provide complete design and manufacturing resources for specialized subcomponents such as printers, motors, and electronic box packaging.
These rapid changes have combined with the growth of global economy to create globally competitive companies with design and manufacturing sites in many countries, simultaneously launching world- wide products over a wide spectrum of countries and customers. These companies are partnering with global suppliers to achieve the best strategy for worldwide design and manufacturing optimization of their operations. An example of consolidation of many suppliers into a few global ones is found in the auto industry, where the parts industry will shrink from 1000 first-tier companies to as few as 25 well-financed global suppliers in the future.
The principles of six sigma have also become increasingly important as a communication tool between engineering and manufacturing, as well as companies and their supply chain. Six sigma quality levels are being specified as part of the contractual agreements with the supply chain, just as are cost and delivery information.