Increasing competition is compelling manufacturers to offer feature-rich products that deliver unique capabilities to meet the requirements of specific market niches. As customers demand more personalized products, manufacturers are responding with a dramatic increase in product diversity and variability. A survey by strategy consultant Roland Berger shows that the variety of products – along with the components they contain — has more than doubled in the past 15 years. At the same time, product lifecycles have shortened by about 25 percent. What’s more, increasing product variety has driven up costs throughout the value chain, as evidenced by higher raw material stock levels, smaller purchasing lot sizes, increasing number of manufacturing changeovers, higher stock levels of finished products, increasing logistics complexity, higher planning complexity and lower service levels.
Manufacturers thus find themselves at the nexus of exploding product variants, rising costs, and reduced development cycles. It’s useful to ask ourselves, how did we get here? What are the implications? And how are leaders responding to these market forces?
First let’s look at the macro-economic forces driving this transition. In the past, product differentiation was primarily achieved through mechanical and electronic innovations. Today, however, manufacturers frequently use software to drive the user experience. For example, today’s automobiles contain more computer chips and lines of software code than the first vehicles launched into space. Presently software and electronics account for about 25 percent of a vehicle’s value and that figure is expected to climb to 40 percent or more in the next 5 to 10 years. Similar trends are occurring in a wide range of industries such as medical devices, appliances, consumer electronics, heavy equipment, machinery, etc. Every change in the function of the software used to operate each sensor, actuator or processor introduces, in essence, a new product variant. The result is a dramatic increase in product variability which involves not only creating a new design but also managing the requirements, testing, documentation, maintenance, etc. of the variant.
What are the implications of this evolution towards software-intensive products? Consider that many tools are available for handling different aspects of the design process for mechanical, electronic and software components. The challenge is that companies are typically managing each component with disconnected systems that require manual transfer of information from one to another. This results in extra work and bottlenecks that can impede the development process. Also important to note is that most manufacturers have more mature methods for managing the mechanical aspects of product variability, typically through computer aided design systems. Variations of the increasingly important electronic and software components often handled with spreadsheets.
How are market leaders addressing these challenges? Manufacturers are increasingly investing in the development of common platforms that enable re-use of requirements, designs, components, tests, etc. to support fast and economical release of product variants.
The integration of Application Lifecycle Management (ALM) with Product Lifecycle Management (PLM) makes it possible to manage mechanical, electrical and software variability in a single cohesive platform. This enables companies to address variability at the systems engineering level at a much earlier stage of the development process, when the product architecture is being defined. For example, a manufacturer of off highway vehicles could establish requirements for and design a braking system with a common architecture and components that could be re-used across a wide range of vehicles. Not just the mechanical aspects of the design but also the software and electronics can be seamlessly integrated so that each requirement and block of code is allocated to the product variant and its requirements. Visibility and control spanning ALM and PLM assets enables companies to manage and propagate changes in a controlled manner across product families.
Let’s explore how variant management works in practice. Users typically start by writing a set of base requirements that are common for all functional variants of the product. Each product variant points to these base requirements, which eliminates the need to have a new physical copy and keeps the variants in sync with the common requirements. Once the common base is certified, it does not need to be re-certified every time a new variant points to it. Only the requirements unique to the variant need to be certified. Likewise when the common base changes, it only needs to be recertified once as opposed to once per variant. Significant savings in time and cost occur if a change request targets something in the common requirements. In this case, the change is made only once rather than in many copies of the common base. The changes are saved in a new version of the common base. Future variants can point to this new version but current variants will not automatically point to the new version. This preserves the certification that was conducted for each of the current variants.
Manufacturers can reduce the difficulty of managing increasing product complexity by implementing a systems engineering approach that makes it possible to architect products for commonality and re-use. At PTC, we have optimized the Integrity ALM solution to support easy and quick releases of variable products. Specifically, we’ve designed a solution that supports an advanced – and parameterized — re-use paradigm that efficiently isolates changes and ensures full traceability across the variant lifecycle. By replacing costly and complex “clone and copy” models with an efficient alternative, manufacturers can speed product development cycles, lower costs, and more efficiently deliver the right products to the right market.
Learn more about the PTC Systems Engineering Solution.