The Cost of Indecision Ultimately Means Lost Jobs

by David Prawel, Longview Advisors, Inc. | Published September 1, 2008

Poor interoperability between CAD systems has been a hot topic for many years. It continues to plague innovation and crush productivity. Any manager can hear the frustration throughout their global design, engineering, and manufacturing teams and in their supply chain — if they listen. And the more global their operation, the louder the cry.

Many studies have shown that effective collaboration and interoperability are crucial elements of any global product-development and supply-chain process. Without it, PLM simply cannot happen. And weak practices in these areas carry with it huge costs and waste.

There have been numerous reports over the years of the cost of poor interoperability. Most often cited is the 1999 National Institute of Standards and Technology study wherein data shows a cost of $1 billion annually in the U.S. automotive supply chain. The real cost to global industry is far higher.

So you would think managers and executives would be giving these issues a relatively high priority on their radar screens, right?

Wrong.

Lately, more attention is being given to the problem, but most often because some motivated individual has taken it on, recognizing the negative impact to the organization (and his or her job!), and is willing to fight uphill to deal with it.

Most often I hear of indecision — sticking with the status quo. Regardless of the obvious cost and waste caused by interoperability problems, it’s incredibly common to see management delay any decision to do anything about it, often for years.

The direct costs of indecision consist of more obvious time lost in correcting poor data translations and recreating lost data. Simple multiplication will yield a metric you can use to represent your direct cost of indecision. Then there are the less obvious, but perhaps more damaging, indirect costs of indecision.

One of the biggest is the cost of losing the knowledge your experienced designers have built into your product designs. The features, design intent, and manufacturing information that could be included in your product data is an extremely valuable asset that is usually not available to anyone else, even other members of the same CAD department.

How much of your product data do you actually reuse? How much does management believe you reuse? These are not usually the same number. The cost of poor CAD data reuse is huge. Designing products multiple times is very costly. Imagine the savings in designing it once and then deriving it for other uses. In addition, errors are inevitably introduced each time CAD data is re-worked or re-mastered. What is the associated cost of lower quality, especially when it causes a problem downstream? The decision not to implement an effective interoperability strategy will — sooner rather than later — mean continued poor data reuse and lots of rework and re-creation of CAD data.

At the end of the day it all comes down to competitiveness. The biggest costs of indecision are the jobs that are lost because your competition has decided to take bolder steps faster, while your management thinks about it.

David Prawel is founder and president of Longview Advisors, Inc., a global consulting firm focusing on 3D and CAD software business and applications in the manufacturing industry (longviewadvisors.com). To send comments about this subject, send e-mail to DE-Editors@deskeng.com.

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