This article discusses that developments in communication software promise a robust future for engineering technology. Collaborative technology, the next new thing, links all aspects of a business, including ways to easily marry a company’s engineering technologies to suppliers’ and vendors’ product data management (PDM) systems. The companies selling engineering technology can expect to operate in a rich, fertile market for the next 20 years, according to one technology analyst, especially with the introduction of product process management systems. Some engineers advise caution in heeding the clarion call of collaborative product development technology. The PDM market, valued at $5.8 billion last year, could double and perhaps even quadruple within five years if pursued aggressively and supplemented with collaborative technology, according to one expert. The article also discusses that for a technology as difficult to understand, to assess the need for, and to finance as collaborative systems may prove to be, suppliers should assume some of implementation’s financial risks.
Despite a rather common perception to the contrary, companies selling engineering technology can expect to operate in a rich, fertile market for the next 20 years. The forecast, by Charles Foundyller, president and chief executive officer at Daratech, a market research and technology assessment firm, is based on new opportunities brought about by new products
"People always ask me, 'We know that the market is consolidating, so how can you say it's expanding?' " said Foundyller, whose Cambridge, Mass., company tracks the engineering technologies market. "But the products and technology are changing faster than the market can consolidate businesses."
To those seeking to establish an engineering technology company, the present business climate is more hospitable than it has been at any time during the past three years, Foundyller said. He attributed much of his optimism to what he predicts will be the growth in product process management system sales. That up-and-coming technology is rather like an enhanced product data management system and serves, in Foundyller's words, as a way to synchronize component design with other business processes, such as finance and supply-chain management
Product process management systems-often termed "collaborative technology" because they link all aspects of a business-include ways to marry a company's engineering technologies to suppliers' and vendors ' PDM systems as well as to link a company's myriad internal systems, such as financial, accounting, human resources, and the like
Foundyller described the systems as middleware that interfaces various PDM systems with other companies' technologies. In this way, engineers can be kept apprised of change orders and can communicate with suppliers as they develop designs
The PDM market, valued at $5.8 billion last year, may well more than double and could perhaps even quadruple within five years, if aggressively pursued and supplemented with this new technology, Foundyller predicted. But for now, product process management is mainly the purview of companies such as Oracle and SAP, which sell what are called enterprise resource planning systems- that is, systems that link all aspects of a company, from payroll to accounting to human resources to bill of materials. Add computer-aided design and an engineering PDM system to the mix, and you have the main elements of a product planning system.
Engineering companies will find these systems necessary in the global marketplace where nearly all of them operate today, Foundyller said. It is technologies like ERP and PDM and product process management systems that allow far-flung businesses to function as if all the employees worked in the same building
If engineers need to see a change order, they can call it up on the screen in much the same way that, a half century ago, they would have walked down the hall to pull it from a file. An ERP system lets employees carry out job-related tasks such as checking the number of sick days they have left, for instance, without dialing the main office that houses the central human resources site.
Foundyller made his comments a matter of weeks ago at the engineering technology conference in Boston that his company hosts each year. Collaboration-whether between an established engineering company and its newly purchased subsidiary or between an engineering company and its suppliers was a major theme at the gathering.
"Not very long ago it was incredibly hard to send a file between two computers," Foundyller said. "You needed two phone lines, one to send the thing on, and one to say things like 'Hit enter now. What's it doing on your end?'
"Goodness gracious, today you can send a file anywhere without talking to anyone, just as an attachment. And in those days it seemed this day would never come," he said.
Caution Over the Next Big Thing
Some engineers advise caution in heeding the clarion call of collaborative product development technology. Their words to technology vendors are: Go slow; don 't inundate us all at once.
Indeed, Gregory Harris, director of engineering systems at Black & Decker in Towson, Md., said his company is shying away from linking all employees via a system that includes CAD and other engineering capabilities. Such a system is intimidating to nonengineering employees and probably isn't useful across the board, he said. Harris asked engineering technology vendors directly at the conference to create and market a system that features a low entry cost and that-at least, at first-includes fewer features than will eventually be included.
"Using a system like this for storing knowledge is a great concept, but everyone in the company needs to be on board," he said. "You should get a customer hooked and then add more as you go. It's like, not everyone uses mail merge but they do use spell check. So you start with mail merge and you add spell check.
"When you first get these systems, you don't know what you don't know about them," he added.
Harris defined a collaborative tool as a few steps beyond manually passing disks of information back and forth between computers. Obviously, when a company functions in multiple locations, it's difficult to download information from one hard drive to the other. The company needs a way to trade information across the miles
Black & Decker, the producer of power tools and accessories, introduces 25 newly engineered products each year. The company houses 500 engineers across two major design sites, two minor design sites, and eight manufacturing sites. To assure that its engineering systems would function as a whole, Black & Decker executives chose to implement a single CAD system and a single PDM system, both from Dassault Systemes of Paris.
According to Harris, "We thought: What should be brought into the company so that we could act like everyone is in the same building? What do we need? We found we didn't need an engineering collaboration tool; we needed an enterprise collaboration tool."
That is to say, when implementing an across-the-board system accessible to all employees, Black & Decker decided the technology that includes engineering capabilities as part of the main package was not only overkill, it would turn off the nonengineers and keep them from using it.
Executives came to this conclusion by querying employees about the features they wanted included in a technology that would be accessible to all in the company, regardless of their function.
"The fear was that people would see the engineering tools and think the system was a tool developed for a highly technical group and they would back off from using it," Harris said. "We didn't need that. Collaborating can't just be for engineers. It has to be for everyone.
"Does collaboration just mean e-mail for everyone or does it include computer-aided engineering tools for the engineers?" Harris asked. "These are difficult questions companies have to answer."
And as much as the companies seeking to implement collaborative technology must ask and answer these questions, so too must the computer vendors looking to sell the technologies. These new collaborative systems can't be created or marketed in the same way that CAD and PDM systems were before them, Harris cautioned. Collaborative systems will differ from company to company, depending on needs. CAD and PDM tools aren't as varied in the way they're implemented, tending to be put in place whole-cloth.
For a technology as difficult to understand, to assess the need for, and to finance as collaborative systems may prove to be, Harris said that suppliers should assume some of implementation's financial risks. These days, CAD and PDM systems can be proved to show a quantified payback to companies that put them in place, so implementation risks are low. Not so with collaborative systems, Harris said.
"I think the technology suppliers should come in to this with some risk of their own, but I haven't found this," Harris said. " Instead, I see them saying, 'It'll be $10,000 to try this and we have none of the risks if it fails.' "
Vendors, such as Harel Beit-On, president and chief executive officer of Tecnomatix Technologies in Herzeliya, Israel, said they understood Harris's complaint. Tecnomatix sells communication software for manufacturers.
"Users of this technology need simple access to data in the system and this is different from the complex systems we vendors are used to marketing," Beit-On said.
Different Ways to the Same End
Rod Nicol, engineering systems manager at Husky Injection Molding Systems of Bolton, Ontario, said his company has found a way around the need for a system that links engineers to the rest of the company.
In May, Husky, a supplier of injection molding systems to the plastics industry, will implement an enterprise resource planning system from Baan of Barneveld in the Netherlands. The system interfaces with the company's PDM and CAD systems, which come from UGS, formerly Unigraphics Solutions, in St. Louis.
"Our engineers will work in their CAD and PDM systems, and then use the ERP system to pass information to the rest of the company," Nicol said.
By linking these two systems, Husky officials estimate the company will see a 10 percent cost savings in engineering time as engineers slash redundant tasks. Currently, the engineers place design and other information in the PDM system and then insert it a second time in the companywide planning system.
Further cost savings will come from standardizing the company's purchasing and other documents on one technology platform. Husky maintains manufacturing plants in Milton, Vt., and in Luxembourg as well as in Bolton. Ensuring all three sites' technologies work together is the true purpose of the enterprise resource planning system, Nicol said.
But, as Harris pointed out, as companies grow, engineering departments will find they'll have to standardize on some type of technology that stores company and supplier data-simply because so much of the design process takes place amid communication with suppliers. The question is not whether or not companies will implement a collaborative system, but how that system will look, he said.
"Right now, it's faster for our engineers to make something from scratch than to go into the system and try to find it," Harris said. "That's what's driving us to standardize on one system. We now have the same part stored in multiple areas across the company, and because it's been created so many times, it's impossible to find."
According to Foundyller, the market for engineering technology won't be organized around only one or two top players any time in the near future.
Foundyller pointed out that the top three players in the engineering technology sector-PTC, Auto Desk, and Dassault Systemes-control only 40 percent of the total market. Taken together, the top 10 revenue producers control only 70 percent of the total market, he said
Indeed, the engineering technology market has seen three separate companies take the revenue-producing lead in the engineering technology niche within the past decade. In the early 1990s, AutoDesk held this honor, which it relinquished to PTC in the middle 1990s. In the late '90s, Dassault Systemes served as market leader, a title that has now reverted to PTC.
"In 1988, a friend said to me, 'It looks like your industry is consolidating. You'll need to find another living,' " Foundyller said. "And I said, 'No it isn't. It's not even starting yet. This is the first chapter.' And I think that's as true today as it was then."