Manufacturing Simulation Software for Vehicle Development

Craig McLeod: Hello, my name is Craig McLeod and I am a senior sales director with aPriori, responsible for our Automotive Business Unit, and I’m very excited today to share a presentation that we have around how EV OEMs and their suppliers are really transforming their sourcing processes to improve their time to market.

I’m also very thankful to be joined by Andy Doyle, one of our outstanding customers. Andy is vice president of Sourcing and Logistics at Eaton, and gives an outstanding perspective in terms of what they’re doing to really make a difference.

And then I’ve also got one of my colleagues, Patrick O’Brien, from aPriori’s Application Engineering Team, and he’s going to give you a bit of an overview to show you a little bit about how this works in aPriori.

Electrification and Sustainability

CM: Let’s jump into a little bit about EV and sustainability. Alright, so we’re all living in this crazy digital world, and there’s really a lot of pressure to act right now. Some of the recent statistics we’ve seen, 85% of CEOS say that COVID-19 has only accelerated their digital transformation.

Companies are seeing as much as a seven-year acceleration in their digitization, and that was a stat from McKinsey. And these other stats here, 20-40% reduction are all from Accenture. So that reduction in overall time to market, reduction in R&D cost, reduction prototyping.

So there’s really been a strong move, if you will, in all these spaces. And our digital competition is only increasing, there’s new competitors being born today that didn’t exist two, three years ago. And so the expectation that we have from our customers is to innovate and be connected and react quickly.

Maybe another way of looking at this in terms of what’s fueling all this growth in the electric vehicle space. Certainly, sustainability is probably the leader in that group of things that are driving growth.

If you look at the United Nations, they’ve actually formed sustainable development goals, and what they like to call it, refer to it as a blueprint to achieve a better and more sustainable future for all. And the automotive industry is really leading that. Back in 2017, 38% of companies saw this as a priority. 80% in 2020, and those numbers continue to increase.

And then looking at the electric vehicle market specifically, and this is kind of a combination effect, if you will, the perfect storm between some of the new EU CO2 targets, what’s happening in China and their roadmap, and also the plan here in the US.

If you look at it, the statistic is showing nearly 40% market share of EVs, that’s a combination really of BEVs and PHUVs, but again, looking at those two together, we’re almost 40% by 2033. And I bet if you look at a state like this or a chart like this, let’s say a month from now or two months from now, that number is gonna be even higher. It seems like every time I look at one of these stats it’s only going up. Right?

And even with all of this growth and what’s happening in this market, if you look at it at a pretty high level, there’s this group of things that have to change, and then there’s this other group of things that cannot change. And in that must change bucket are really some of these historic models of revenue and profit, and especially as that can extend through the supply chain. And then some of the new brands, this is one of the things that we’ve seen and I read a recent statistic that there are currently 600 EV players in China. Now certainly, there’s gonna be some consolidation in that space. But even if let’s say half of those or a third of those go away, they’re still gonna be hundreds of them, and that’s only gonna continue to change.

In the Real World, EVs Are the Primary Vehicle Models: Case Study

I have a friend who is an executive at one of the OEs in town, and three years ago roughly 80% of the power train team was focused on combustion engines and 20% for electric vehicles. Now, 80% are electric vehicles and only 20% are ICEs.

Things are changing very fast, but the things that can change still, reaching profitability, right? You can’t just launch a great new product and lose money, you gotta still make profit, you’ve gotta achieve your growth targets, your shareholders are always expecting that. And the responsibility that you have to your customers to continue to supply a great product and make it of a high quality and deliver on time.

Traditional Vehicle Development Workflows

Let’s talk a little bit about some of the traditional tools, workflows, methodologies and processes that we see in traditional sourcing. Certainly, product design cycles have been siloed in serial in many cases. When you look at the introduction of a product and it starts in the design phase, they use tools like PLM to manage that information. And on a limited basis, we see some companies share something of that information in terms of maybe kicking off prototypes or maybe having a cost engineer do some review of those products. And some limited capability to maybe give DFM or design for manufacturability feedback.

But again, these iterations are really based on a limited number of experts being involved in the product design cycle, and they’re all using traditional tools, right? Death by Excel or Microsoft Word or email. And then as you continue down the product development cycle where sourcing and manufacturing get involved, but again, pretty much a serial process and using those old school tools that we’ve had around forever like email and Excel. And then ultimately we hand it over to folks in sourcing, doing the RFQ process, collaborating with suppliers with again traditional tools and then a very serial method. So that process, when you look at it at the highest levels, it’s very serial and very siloed.

So with that, I’d like to start this off with a bit of a survey to have you folks have a little bit of involvement. I’m gonna send the survey here to the audience, and then we’ll let you read through it here as you should be receiving it here shortly.

But the question is, have you started using a digital thread to connect to your product development teams? Option A, “Yes.” Option B, “No, I haven’t thought about that yet.” Option C, “Some parts are connected, but we could do a better job.” And then option D, “What is a digital thread?”

So we’ve got results coming in here, we’ve got roughly 50% of you are saying that there’s some parts are connected, but there’s even a 16… Pardon me, 17, 18% of folks that don’t know what a digital thread is. So not uncommon, and this is very typical what we see in the market.

So I’m gonna end that survey and continue on, but again, those results. Roughly 24% of you said yes, you have started using a digital thread, 14% said no, 38% to some degree or some, and then about 20 now 22%, not sure what a digital thread is. So certainly a conversation or opportunity for another day, but I’d like to send those results to you now and continue to move on here.

Simulation Software Will Help You Keep up with Ever-Changing Vehicle Dynamics

Embracing new business models is really a must to improve time to market and increase profitability. And I think when you look at the innovative manufacturing leaders like Eaton and others, the opportunity to collaborate with teams through the cloud is just something that does not exist in traditional tools.

The vast majority of our new customers are moving to the cloud, leveraging this digital information based on roles. So this is not the siloed environment where people are using different databases along the product development process, it’s one consistent database that leverages this information and presents it in different ways depending on people’s roles. And then also the opportunity to connect all these phases of the product development cycle, ’cause we know that these are not individual events, it’s a continual flow of process through the product development cycle. And all of this really works to drastically accelerate your overall business productivity.

The opportunity to use simulation solutions is a big part of what it’s all about. We’ve had simulation in many of our cycles and many of the elements, if you will, of our practical cycle, like FEA or final element analysis, or CFD as an example. But in most cases, there’s not been a lot of simulation done that through the sourcing process that connects to manufacturing and design.

So what is the opportunity really is to be able to understand the geometry, run that through simulation models that also connect digital factories, or do your whole representation of customer facilities using simulation tools like aPriori.

The other aspect here is certainly creating a flexible and resilient supply chain. Just asking Andy to be a part of this presentation was something that is difficult to achieve for anybody and the executives in source and supply chain because it’s so prevalent right now with shortages, but being able to quickly understand the impact of design to the supply chain. Also early manufacturability insights during design to mitigate manufacturing issues or surprises. And then ultimately embracing the new models, the new business models that are available, as far as one of our customers are actually moving to what they call a Zero RFQ, where they stop doing RFQs of their supply chain. They’ve pre-agreed or pre-negotiated on what it looks like for labor and overhead rates, so that they can skip that process completely, and basically ship purchase orders to suppliers and have them bring parts on demand.

So with that, we’ll talk a little bit about Eaton and aPriori, and I will turn it over to our honored guest, Andy Doyle.

Case Study: Electric Vehicle Supplier and The Importance of Vehicle Simulation Software

AD: Thanks, Craig. I appreciate it. And thanks for the opportunity to be with the group here today. I’ll give just a general overview on Eaton and our eMobility business, where the majority of the partnership really lies today, ’cause I didn’t wanna assume that the audience really knew who we were or the businesses that we play in.

But Eaton is a premier power management company, roughly $18 billion in sales in 2020, about 90,000 employees in 175 different countries. The history of the company going back over 100 years, really is an automotive supplier, starting by manufacturing axles, but really over the last 20 to 25 years, the company’s undergone a dramatic transformation and truly becoming a premier power management company playing in a number of different industries.

We have two main sectors, our electrical sector at just over 11 billion in sales, and our industrial sector, our aerospace, our hydraulics, vehicle eMobility and filtration businesses is really in that industrial sector representing just over 6 billion in sales.

And we’ve a tremendous relationship with aPriori. The relationship really started I think with Craig and I about four years ago in 2017, really focused on cost engineering, delivering should-cost, using some of the digital tools that Craig just talked about.

Not only to help our engineering team and design for manufacturability and engineering simulation ability and design for cost, but also to help our supply chain organization, as we’re on this digital journey that Craig talked about, really making an investment in digital tools and trying to provide better visibility and more speed to market, so to speak, in terms of the ability to iterate and run simulations and run different design cycles in the cloud type environment, as opposed to the traditional method of spreadsheets and CAD and all the traditional ways that that occurs.

And as you pivot to what we’ve all been through with COVID, the ability to have access to the data in the cloud and the ability to run those simulations and to collaborate together digitally, has allowed our organization in partnership with aPriori really to be much more effective in the way we think about managing the supply chain, much more effective in the way we think about design in general, and we think about total cost of ownership as a part of that process.

So historically, we would have had the ability if we had a challenge to hop on a plane and go meet with our colleagues and grind through and work through a problem face to face in a conference room. Unfortunately, we have not had the luxury of doing that for the last year and a half, and have had to really pivot. And this digital partnership between the two organizations has really allowed us to do that quickly and effectively.

Talk a little bit about our eMobility business, it’s really relatively new business for the company, and it’s a fantastic partnership between those two sectors that I talked about, the 100-plus year history, and the automotive industry, and understanding the needs and the demands of the customer base in that particular space.

But also the fantastic products that we offer in our electrical sector and the ability to truly understand power management, very, very high voltage automotive systems in very tough environments, when you think about wind and solar and micro-grids and other areas that the business really plays.

The eMobility business is really a fantastic marriage of those two different groups together and allows us to really bring innovative products to the market that are gonna help our customers quickly and effectively. When you think about power electronics, power distribution and protection. Through our Bussmann business, we have a fantastic line of fuses and other products at play in the EV space. And then we have the ability to support integrated areas with traction motors, thermal management, and certainly energy stores as well through our power quality business in our electrical sector. So again, really a fantastic marriage of Eaton’s 100-plus year history in the automotive industry and many, many, many years, decades of experience in effectively managing high voltage and power applications in our electrical sector.

As we think about the partnership between the two organizations, it really helps us from an NPI standpoint and existing products as well, really think about automation, reducing cost and driving profitable growth.

Should Cost Modeling Software Solution

AD: We use aPriori’s should-cost modeling simulation software, we have a lot of the digital modeling that Craig showed at the very beginning, in terms of new product introduction and design for manufacturability, we can run simulations for dimensional and mechanical modeling.

In general, these tools partnered together with our engineering and our supply chain organizations, really working hand-in-hand, have allowed the company to be much more effective, to bring products to the market faster, and to go through those design simulations almost in real time, so we can get the product right as we try and get it to the market quickly and very efficiently.

Again, in general, I talked about this relatively new business combining the history of the organization and really bring in two powerhouse organizations in our electrical sector and our vehicle business together. And then in general as a supply chain function, the group that I represent at Eaton, we are on a digital journey. Our chief supply chain officer really talks a lot about the digital journey that our function is on and that the company is on in general.

And Craig talked about this a little bit at the beginning, but it really allows us to drive a much more efficient and effective supply chain through the use of digital tools, and in particular, the partnership here with aPriori, it’s improved our flexibility. I talked about the speed of innovation, the digital modeling, and the way we’re able to approach and attack that.

It has allowed us to think about standardization and reuse. Certainly, as Craig mentioned, in today’s market there’s not a minute that goes by that we’re not dealing with parts shortages of some kind or another. So that enhanced resiliency, the visibility to what we’re using, where we’re using it, how we’re using it, the ability to partner in the cloud-based environment with engineering to quickly model and make decisions on potential replacements. In general, very, very powerful.

The other thing it has done, think about the digital mindset of our supply chain staff, it has really helped the team really get a deeper product knowledge within the organization quickly, because they’re using their should-cost modeling, they’re using some of these digital tools to get deep into what’s in the design and how things are manufactured, in the processes that are used to build our products. It has really helped to educate the team. And at the end of the day, I’d be remiss if I didn’t talk about the ability to reduce cost. As a supply chain leader in the organization, that enhanced resiliency and reduced cost kinda go hand-in-hand with the metrics in terms of what we look at and manage every single day. So in general, the organization really we partner quite well together, and looking forward to many years of continued partnership with Craig and the aPriori team.

AD: So I think with that, I’m gonna turn it over to Patrick.

Demo: Manufacturing Simulation Software for the Automotive Industry
Patrick O’Brien: Alright, sounds great, thank you. Thanks Andy, for jumping on and the overview there, we really appreciate the time you’re able to able to spend with us today and give some insight there.

PO: So I am pulling up my screen right now ’cause I’m gonna do a demonstration here of some of the simulation software technology that we have to offer, how we can integrate with your existing systems and really kind of just talk about this product life cycle digitalization, the digital thread of information, when we’re referring to these kind of cash phrases, if you will, in modern times.

So what you’ll see up on the screen here, first and foremost, is really where this digital thread begins. I’m actually in a CAD system here currently. So the primary focus of this product digitalization is to basically remove the need to push information through, I don’t wanna call them archaic, but tools that have been in existence for a long time. Do I have a 3D model in which I then generate 2D prints to then send to sourcing and then manufacturing, and it’s really, as Craig mentioned earlier, this very serialized process.

So if we have a digital twin of this product in our modern CAD systems now, how can we then leverage both that geometry and really all of the data that could be extracted directly from that digitalized product? That’s really where aPriori can come in and play a large role in all of your organizations and really connect the dots between some of these departments.

So first and foremost, I do like to showcase that right, you can see that right up top here, aPriori is an integral part to these modern CAD platforms, you have the ability to data straight from that design engineer’s tool right into aPriori.

We can do this both in sort of a manual version, such as clicking on a button and physically launching an application, and we can take this all the way to the extent where the aPriori tool is actually just interacting in the background with specific triggers, meaning that your team can actually generate manufacturing information, should-cost information, ideal routings for particular components, in virtually a completely automated state.

Now, from this CAD system, I’m gonna shift gears a little bit right to the aPriori platform itself. So this digital thread, this digitalization of the product life cycle really starts with that CAD file, and now I just need more information.

So moving into looking at this product from both the design engineering standpoint as well as a sourcing standpoint, how is it that aPriori can play a role here?

So as I mentioned, we directly integrate with that file, so from here I can immediately look at things like assemblies and dig right down into individual products found within the product being developed.

Now, the aPriori model, it only needs a few user inputs to generate a lot of data-rich content. In this particular example, we’re looking at potentially di-casting this component, we’re going to source this at really whatever region we’re interested around the world, aPriori is able to overlay local data such as labor rates or overhead rates, even available machine types for specific regions around the world.

We’re then coaching the tool as to what is this product made from and what’s that annual volume. With just a couple of these basic inputs from the user, aPriori does a couple of things. It actually extracts the geometry of this part and predicts an optimal routing.

So we can actually see explicitly how this part is going to be manufactured, we can see that complete start-to-finish inclusive of the machining of that component, and then we can even see things relative to the actual cost roll-up of the component.

We can see that the material’s playing a really significant role in this particular part, over 70% of the cost is simply driven at the raw material level.

Now, because aPriori is again, this digitalized version of this model and the digital thread’s still intact, we haven’t actually taken this 3D CAD file that lives in our computers, we haven’t generated a 2D print and then sent an email for an RFQ. We’re basically able to replicate a should-cost model right within the tool, and the biggest benefit here is we can now iterate on this as well.

So for sake of example, if we’re focused on material for this particular item and we’re looking to reduce the cost here, what are some things that could play a large role in the overall cost of a product?

Well, in this particular case, materials number one, and then things that are downstream of that, things like the overhead rates or the labor portion that are going into that product, and in turn maybe trying to optimize something like cycle time.

Within aPriori we can save scenarios of items and basically iterate through different potentials from a manufacturing standpoint. In this case, I wanted to look at a couple of different materials that this part could potentially be made from, so we’re looking at a few different versions of aluminum, magnesium and a couple of zinc options here.

And because aPriori has all of the calculations really in the background that it’s doing, we can actually sort this and say, “Okay, I wanna understand what is the overall cost of this component in these other materials.”

But I’m also interested in the cycle time performance here. I don’t necessarily want to go to a particular material that’s gonna take longer to cool from an injection or a die casting standpoint, and I certainly don’t wanna increase my machine cycles because I’m already up against the fence here from a throughputs perspective. So I really wanna optimize not only cost, but things like cycle time as well.

Stepping into another part on this particular assembly, just looking at specific items and then iterating through not just materials and things relative to cycle time, but really allowing your teams to ask, “What if?” more often. If I back up and we look at this first image here, this original cover was actually designed as just an aluminum plate, we’re just simply machining this from a solid stock. But having a tool-like aPriori allows your design engineers and even your sourcing teams to simply say, “I’ve got a part in question, I think there may be a better way to manufacture this, but I don’t have a way of quantifying it.” So what we can see here is rather than having to again, redesign the component, send it out for RFQ and really play the traditional game that we play today, what if we just were to look at a digital simulation of this?

So I wanna take this part and I wanna cost this as a plastic injection-molded component rather than a stock machine component. Just by doing that, again, aPriori is going to re-assess that from a manufacturing standpoint and come up with not only cost estimates, but things relative to cycle time, design guidance, right down to the tooling cost associated with that part. We can then immediately stack these things side by side. We can again, we can start to iterate in many different ways, in the sense that this particular cover, we first looked at a stock machine component, now we’re looking at a plastic injection-molded part, and we can see that we’re able to not only reduce cycle, but we’re able to dramatically reduce the cost here.

Right out of the gate, this could potentially just be a directional exercise. Maybe we wanna cost this component as a stock machined component from billet, versus die cast versus plastic. Help our design engineers understand which would be the optimal process to focus on, and then start to shift the design of that component to best align with that particular process. One additional thing that I do like to highlight is I pointed out those digital factory locations, areas around the world that we’re able to cost components in. So just as I was illustrating, we can iterate through alternatives. From a material standpoint, we can do the exact same thing for different regions around the world.

So what I’ve done here is I’ve looked at actually identifying the cost of these components through five different tier suppliers that we have, sort of our primary go-to low-cost regions and supply base, and for the components in question, we can quickly see that we are basically at total cost here, but we can quickly see that Thailand, Vietnam and China are pretty well aligned for an overall cost standpoint, and that might be where we wanna focus our efforts here.

But we can quickly see due to the present tariffs that we’re seeing over in China right now, that this logistics cost is just simply making this component non-competitive in that region. So not only are design engineers and sourcing teams able to look at iterations on material types or even just entire process group types, in this particular example, we can matrix cost these parts through virtually as many regions around the world as necessary.

Or getting more specific with some of your strategic supply base to best understand where is the optimal place, the optimal supplier to source this part today, right now. Not six months ago, not two years ago, based upon our historical data, I need some real-time data to help you react to the changing markets here.

Now, the last thing I do like to showcase is what we were just kind of going through was an individual assembly made up of individual components, and looking at the 1 x 1 details relative to those parts. Something that aPriori does is because we’re able to look at all of this data and we are tied to that digital thread, once we step this up a notch and we start looking at actually automating some of these results, we can produce a tremendous amount of data in the background for your teams to then effectively filter through and understand where some of the pain parts for whether that’s product development or whether it’s in the sourcing field. This particular example here is actually taking a current project and letting aPriori basically do its thing. It’s gonna analyze components for what are we currently paying today for these components? We’re cutting POs for parts right now. Versus, after doing that mechanistic costing, what does aPriori think these components should cost based upon various inputs such as material and region and volume. And then finally, highlighting the potential for our sourcing teams to go after.

Now, this example here, I personally work with a lot of pre-sales customers and clients, and I will say that this is an extremely common result. What we typically see is there’s a few parts over here to the right where we’re effectively saying the price you’re paying today is actually really well aligned with that should-cost. You’re getting a very fair deal for that component.

And it’s encouraging to see some of them under the line, and it’s really encouraging to see a nice flat trend line here, because it just means that you’re well aligned with your supply base.

But something that we always see when we look at a large group of components, assemblies, product lines or even commodity groups, is we are going to have some outliers. These particular components here to the left, we’re paying around $35,000 for the purchase lot here. We should be paying no more than $16,000 according to aPriori’s mechanistic cost model.

What this really helps your sourcing teams do is pinpoint those outliers and think of this as a fish binder, right? We don’t need to spend our time on these components down here. The overall spend is relatively high, but there’s really not a lot of wiggle room for what we could be purchasing that part for. So this really lets us kick things up a notch, filter through large arrays of data and really help us understand where the opportunity is from a sourcing standpoint. We actually have very similar tools that are used on the design engineering side as well, that filter through things like manufacturability issues. I’m looking at 150 stock machine components, I want aPriori to flag the components that are most challenging for my team to manufacture, and really help either drive that NPI cycle to a more effective part right out of the gate from a sourcing standpoint, or even a VAV standpoint, where are some of the opportunities on the current products that we’re making today.

Summary: The Benefits of Simulation Software for EV Suppliers

The way Eaton leverages aPriori is really in several folds. And Andy, phenomenal job. Thank you so much. To reiterate that, certainly fact-based negotiations is one aspect. Because aPriori simulates the entire process, we can lead into a great fact-based negotiation with their suppliers. Certainly, also giving feedback to their customers on how they can maybe consider design changes and improvements to better make a cost-effective part.

And then alternatives are, I like to call ’em “what ifs”, all the what if scenarios that Eaton does on a regular basis. They do hundreds to them in terms of different design alternatives and sourcing alternatives. You know, “Do we make half the volume here and half in Mexico?” All those what if scenarios.

And then tracking and managing the cost of engineering changes, it’s been a, I’ll say a lifelong challenge for many people, but being able to do that effectively in an aPriori environment.

And then as Andy alluded to, we know they’re saving millions of dollars, and we love to see customers attain that value. And that’s really our objective, is ultimately having a great ROI and seeing customers get great value out of our tools. And really the differentiator here becomes really three aspects, or four in this slide here, just to talk about, but first of all, understanding the geometry, recognizing that the model that we build in every case is unique based upon the geometry of the part.

The second factor here is these digital factories, being able to quickly and easily take our out-of-the-box factories, calibrate or configure them to be representative of your environment, and then being able to leverage that in your use case, both from a manufacturing cost model perspective, and also from a regional suppliers perspective, so that you can understand the impacts of different labor rates and overhead rates in all the reasons of the world.

And then again, this whole idea of simulation, very prompt simulations in all aspects of the organizations, except now being able to offer that through the supply chain. And understanding the impact, both in time to market and margin, and doing that across this common cloud-based platform, so that whether you’re a cost engineer or a designer or a sourcing professional, you’re leveraging the exact same data, just using it in different views, depending upon that role.

And in summary, really digitally transforming this electric vehicle sourcing environment to improve margin and time to market. It starts at the conceptual design phase, being able to use that information even before CAD, and understanding the impacts and cost and manufacturability, optimizing through the design phase in even automated methods so that, let’s say upon check-in, a designer can get impact on cost and manufacturability.

Sharing that information through the quoting and negotiation phases of the sourcing executives, and ultimately being able to provide VABE or value engineering tools through improvement of the production process, and ultimately lowering the cost of a product through the total life cycle.

CM: Alright, excellent. Great job, Andy and Patrick. Again, I wanna say thank you to you both, especially Andy and your partnership for being one of our outstanding customers.