Strategies to Maximize Manufacturing Profitability in a Changing Landscape

Key Takeaways:

• All members of an organization have a stake in profitability
• Manufacturing insights reveal what cost should be as well as what it can be

The Full Article:

What’s the best way for manufacturers to instill a culture of cost optimization and profitability across the organization? One central element includes seamless collaboration across product design, cost engineering, sourcing, and production.

When one department lags or lacks critical information to advance product development, it affects the entire product development lifecycle. An Airtable/Forrester report found employees can lose as much as 12 hours per week due to data siloes forcing them to hunt for information. It also noted that 79% of knowledge workers reported that their organizations’ teams are siloed, with 68% revealing negative impacts due to a lack of visibility of cross-functional projects.

Understand What Cost Should Be and Can Be

The first step is providing manufacturing insights that enable design engineers, cost engineers, sourcing, and quoting to identify cost savings. It should clearly illustrate where their costs should be but also what they can be.

aP Pro enables each of these teams to identify and eliminate cost drivers at the point of origin. Design engineers can ensure a cost-effective, high-value product with design to cost early in the development process. Production can simulate the manufacturing processes via the digital factory to assess feasibility.

Cost engineering can use more than 440 automated cost models to simulate physical production. Sourcing can run geographic costs to determine the best prices. Manufacturing cost model updates are automatic whenever the design is changed. Importantly, collaboration and cost are optimized across all product development teams in a single database architecture.

Want to learn more? Read “6 Metrics That Will Help Improve Your Engineering Productivity.”

Overcome Traditional Product Development Collaboration Hurdles

Many manufacturers are saddled with disconnected systems that don’t enable teams to use the same product design and manufacturing data in real time. Instead, teams rely on spreadsheets and department-specific systems to find information that may be old or incorrect when shared with other stakeholders.

aPriori’s co-working and project management application, aP Workspace, enables cross-functional teams to create and manage scenario tasks in real time. By centralizing product design and manufacturing data in a single environment, teams have up-to-date information readily available to make fact-based decisions regarding product cost, sourcing, manufacturability, and sustainability quickly and confidently.

For example, a cost engineer can use aP Workspace to comment directly on a 3D model regarding a specific component. And the engineer can assign procurement to research alternative options based on the scenario’s overall cost and weight specifications. The entire team can review procurement’s findings either as part of a review call or by reading the decision history for this task (e.g., sourcing identified a lighter-weight alternative at a slightly lower cost). Adding context to data insights enables teams to validate manufacturability and cost assumptions quickly.

Learn how aP Workspace can accelerate product development.

Empower Procurement to Contain Supply Chain Costs

If a procurement team relies on a few suppliers for a component, how can they be sure that the price quotes are in line with the market? And how can they see where other regions’ prices stack up to their own?

A manufacturing insights solution like aPriori provides accurate data to analyze and consider costs. aPriori’s nearly 90 Regional Data Libraries (RDLs) is a prime example. It provides crucial insights into standard manufacturing practices and costs in a specific region or a comparison of several. As a result, sourcing can work with design and cost engineers to ensure that the required parts are cost-effective.

It also provides valuable information to determine where they might be overcharged or where they can gain relevant data to better negotiate supplier prices. Quoting can respond to RFQs faster, more accurately, and with higher win rates. And sales can justify pricing models.

The best manufacturing insights solution will provide value for each department and enable them to drive future improvements. Consequently, each department is more likely to embrace such technology when they understand that they own a piece of the cost and ultimately, profitability.

Boosting Profitability is Possible…Just Ask our Customers

“Our customers rely on us to provide solutions that deliver more productivity and cost less. aPriori helps us meet that need. It automates much of the cost optimization that we currently do manually, helping us bring designs into production faster to support critical product schedules and lead times.” – Sam Freesmeyer, Vice President, Engineering, AGCO

 Find out how other manufacturers are cutting costs and increasing profits with aPriori:

• 40% Reduction in Supplier Costs
• $21M Annual Savings
• $312K Parts Annual Savings in First Two Months, Using aPriori
• 68% Quoting Win Rate with aPriori, Up From 15%
• 1 Week Timeline for Quoting Parts with aPriori, Down from 10 Week Quoting Timeline

Gain Cost Efficiencies with Digital Twins in Real Time

The increasing complexity of product development and manufacturing requires a holistic solution that addresses all design, cost, sustainability, sourcing, and production. aPriori’s digital twin technology provides the framework to address new requirements across product design, manufacturing processes, and production – and connect teams throughout the product development life cycle.

Using end-to-end digital twins, product development teams can conduct “what if” analysis to evaluate the impact of design changes on key product goals for cost and more. And teams can gain insights to understand how changes in design, raw material selection, manufacturing process, and factory location can impact production costs, profit margins, and other key performance metrics.

Importantly, this new approach to digital twins enables manufacturers to capitalize on their existing systems. By utilizing aPriori with their existing CAD and PLM systems, product development teams can gain insights beyond conventional methods and help them optimize costs and product value.

Want to learn more? Read “Actional Digital Transformation Strategies to Improve Manufacturing Profitability.”

Achieving Profitability Through Integrated Collaboration

Manufacturers require the flexibility to adopt new strategies to meet today’s production demands. Doing so also will recalibrate the way they cost products, thereby improving profitability.

In addition to ensuring that organizations meet design for manufacturability as well as should costs, there also is stiff competition for original equipment manufacturers (OEMs) to win in an electrified business space. It then requires manufacturers to consider what technologies to implement that will meet design for manufacturability and equally important, keep costs in line. This requires a total team effort and a manufacturing insights platform to facilitate information sharing, collaboration, and greater cost insights for greater profitability.

Using new technologies empowers new product teams to apply their know how to optimize the production process to remove bottlenecks and improve the bottom line. Deploying digitalization capabilities can enable automated workflows, support lean manufacturing initiatives, and provide new levels of cost control and continuous improvement.