Six Key Trends and Takeaways that Affect Profitability and Time to Market
We recently conducted a survey of Industry Week’s and Machine Design’s discrete manufacturing audience. The primary goal of the survey was to better understand product lifecycle trends and their impact on profitability. Many of the questions were related to the cost management function within the organization – so that we could better understand who typically owned that function and what that ownership looked like.
The respondents of the survey came from a number of industries including automotive, aerospace and defense, industrial equipment, and heavy machinery. Primary functions of respondents include design engineering, product management, operations and production, and research and development.
Some interesting trends were revealed by the survey, the highlights of which we’ve identified as the six “key trends” found in this infographic.
Survey Result Highlights
- Lead Times – Sixty eight percent of product cost estimates from suppliers take a week or more to generate. This puts extreme pressure on the design-to-delivery lifecycle and minimizes the innovation window.
- Communication – Fifty percent of companies surveyed say they have inadequate communications around product cost and manufacturability between design and manufacturing.
- Subsystems and Materials – Fifty two percent of product teams are experiencing an increase in the costs of outside purchases for components and subsystems. And sixty eight percent of respondents report that their product design-to-delivery costs increased over the past three years due to material costs.
- Manufacturability – Sixty seven percent of respondents say they only identify potential manufacturing issues while running through a prototype sequence for evaluation. While sixty three percent of respondents say they only identify potential manufacturing issues during regular manufacturing reviews.
- Responsibility – Forty one percent of respondents report that cost management is a function of design engineering. But twenty nine percent of respondents say cost management is a function of business strategy. And even still, eighteen percent say cost management is a function of the manufacturing evaluation function.
- Simulation Software – Seventeen percent of respondents say they never use simulation software. Twenty three percent report using simulation software ten percent of the time, and ten percent of respondents use simulation software all of the time.
So who owns the cost management function in your organization? Where would you fall within this survey? Do you believe that there is room for improvement in regards to identifying costs earlier to increase product profitability?