America & Europe have seen a steady decline in manufacturing job creation and the jobs moving to low-cost countries such as China & Taiwan. The cost arbitrage has been extremely lucrative over the years. But the things seem to be changing from last few years. Rising labor costs, shipping, dwindling government incentives and newer environmental regulations are making manufacturing expensive in the low-cost countries. A new study by the consulting firm AlixPartners estimates that by 2015 the cost of outsourcing manufacturing to China will be equal to the cost of manufacturing in the U.S. Apart from the direct cost, intellectual property risk and lack of reliable suppliers for specialist manufacturing processes pose a big challenge.
As product designs get more complex, they need a lot of tweaking to get the product right and reliable manufacturing processes to produce. It is preferred to have the manufacturing location close to the design centers to have a tight control. But then, the cost of production needs to be competitive at that location. So the focus then shifts to increasing productivity of manufacturing employees & processes. Companies have traditionally been taking measures to improve manufacturing productivity using statistical methods to keep the costs competitive as compared to low-cost countries. But considering the global scenario as of now, a new approach to the problem is required.
It has been historically observed that 80% of the cost of the product gets decided in the design stage itself, while the actual cost incurred is just 10% of the entire product life-cycle. So it is crucial to focus at the design stage of the product in order to avoid costly manufacturing and quality issues downstream. Companies have been traditionally using manual ‘Design for Manufacturability checks which are dependent on the skill & competency level of the checker. The manual checking methods being repetitive in nature are prone to errors. In case of errors, design iterations happen which can take up to 30% of the total design time. If the defective design goes till the manufacturing stage undetected, it leads to generation of scrap. In the worst case, the product reaches in the hands of the customer and the defect is detected then. This leads to costly product recalls and damage to the perception of quality of the brand. If we analyze all this, we can see that the problems can be nipped in the bud at the design stage itself.
Automation of DFM checks can help get rid of the errors which become defects at the manufacturing stage. There are standard DFM guidelines specific to manufacturing process used. Also, significant knowledge about best practices resides in the minds of experienced design & manufacturing engineers. If these are captured in a central location and made accessible to design engineers on their CAD platforms, design checks become accurate and standardized. It frees up the time of experienced manufacturing employees which is spent of checking and can be utilized more productively in solving problems at the shop floor. This ultimately helps in bringing down the cost of manufacturing which may eliminate the need to shift production to low-cost countries. As better designed products reach customers, it leads to reduction in warranty costs and better brand equity.
Geometric Ltd. has developed a DFX solution called ‘DFMPro’ which helps you get your designs right the first time! DFMPro is a CAD integrated tool and integrated with the PLM system for better collaboration.
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