PLMSoftware...Jeff Nercesian Subject White paper describing co-design process between suppliers and...

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Automotive manufacturers and their suppliers must be able to apply their best resources and their innovations to new automotive programs in order to compete globally. This requires a new way to co-design vehicles,in which suppliers can function independently of their OEM customers and sub-suppliers while maintaining compliance with each OEM’s unique engineering requirements. white paper Siemens PLM Software www.siemens.com/plm Customer-supplier co-design PLM Software Answers for industry.

Transcript of PLMSoftware...Jeff Nercesian Subject White paper describing co-design process between suppliers and...

Page 1: PLMSoftware...Jeff Nercesian Subject White paper describing co-design process between suppliers and their customers. Includes JT as the design deliverable, asynchronous exchange manager,

Automotive manufacturers and their suppliers must be able to apply their bestresources and their innovations to new automotive programs in order to competeglobally. This requires a new way to co-design vehicles, in which suppliers canfunction independently of their OEM customers and sub-suppliers whilemaintaining compliance with each OEM’s unique engineering requirements.

w h i t e p a p e r

Siemens PLM Software

www.siemens.com/plm

Customer-supplier co-design

PLM SoftwareAnswers for industry.

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Table of contentsExecutive summary 1

Introduction 2

RFP response – 4Can you provide the most compellingresponse to RFPs?

Product and processdevelopment – 5Are your global customer andsupplier design teams collaboratingin real time?

Change management – 7Are you effectively quoting, resolvingand executing change requests?

Optimize the designenvironment – 8Are you using best practices andlessons learned in your design process?

Summary 9

Customer-supplier co-design

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Executive summary

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In order to compete in dynamic global markets, automotive OEMs and suppliers must collaborateeffectively in the design and manufacture of innovative new products. At the same time, each musthave the autonomy to continuously improve its business while supporting its customers’ engineeringenvironment and product development process requirements. Efficiency, quality and time-to-market arecritical factors driving the automotive industry today. To address these drivers successfully, OEMs andsuppliers must change the way they co-design vehicles. This includes the core processes that supportproduct development – from the initial OEM request for proposal (RFP) to product design andmanufacture, change management and data exchange among all parties in the development cycle.When these processes are streamlined, all organizations can contribute to the successful launch of newproducts while transforming their business.

The primary barriers to effective customer-supplier collaboration in automotive product developmentinclude:

• Inability to leverage expertise and best practices across multiple programs• Lack of an effective mechanism for product and process data exchange• Insufficient visibility into the product-development process across a complex, global supply chain• Reduced organizational flexibility to shift design resources across multi-CAD systems• Increasing expense related to maintaining a multi-CAD infrastructure• Inability to optimize the design environment

In order to remove these barriers, automotive OEMs and suppliers are adopting the industry-standardJT™ file format and implementing a mechanism for asynchronous product and process data exchangeboth within and among their organizations.

Once these two actions are in place, suppliers can begin to optimize their own operations – byimplementing a robust, knowledge-driven design environment and by leveraging product lifecyclemanagement (or, PLM) technology to promote collaboration throughout their organizations. PLM thencan become the platform on which suppliers can launch business process improvement initiatives –such as commonization and re-use – and drive best practices and common processes through theirentire global operation. In turn, OEMs can establish more efficient data exchange among their supplybase at the same time that they reduce internal resources dedicated to data translation, exchange andmanagement. OEMs are assured of maintaining accurate and timely product information updates andsuppliers can meet all of their customer requirements while still having autonomy to run their business.

Adopting the JT neutral file format and asynchronous data exchange protocol allow both OEMs andsuppliers to more effectively:

• Meet customer requirements while reducing costs• Improve product design with rapid iteration and increased engineering change throughput• Minimize program delays• Reduce bandwidth and infrastructure costs• Optimize design productivity through improved knowledge management capabilities and

commonization and re-use strategies

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Introduction

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To continue to grow and improve their competitive advantage, automotive manufacturers mustfind ways to reduce nonvalue-added overhead, redundancy and inefficiencies that often resultfrom the demands of multiple and restrictive design environments.

A high level of interaction and coordination is required among many functions within the OEMorganization, parts suppliers, tool vendors and equipment manufacturers during vehicle designand production in order to successfully integrate the thousands of systems, subsystems andcomponents that make up a vehicle.

Concurrent engineering and globalization have elevated the importance of high-quality data andefficient methods for the timely exchange of product and process information. Data fromcomputer-aided design, engineering and manufacturing software systems is routinely exchangedwithin companies as well as across the extended value chain of component, sub-system andtooling suppliers. These suppliers currently develop, build, test and deliver a growing proportionof the average vehicle to the OEM’s assembly plant. A recent report by Mercer projected that,as global production of light vehicles increases over the next 10 years, the portion of thatincrease that supplier and service providers are responsible for will also increase. This willresult in 283 billion euros of opportunity to the supply base as suppliers assume moreengineering and production responsibility. [Mercer Added Value Model 2015,Mercer/Fraunhofer]

The OEMs have tried to improve the efficiency of product and process data exchange, in part,by mandating specific software systems for their extended program teams. In an effort to makesure that everyone is working with the most current data, OEMs require frequent data uploads.However, this approach poses a number of challenges. For example:

• Suppliers must mirror each customer’s CAD environment, down to the revision and patch,or invest heavily in translation to the OEM’s CAD system of choice. Significant time andresource is spent in preparing for and reconciling product and process data exchange.

• Bandwidth constraints can limit the scope and frequency of data exchange, introducing delaysinto the process and creating data quality issues. As organizations extend their global reachand search for low-cost alternatives, they increasingly do business with quality suppliers thatoperate in countries where the infrastructure is less developed.

• Concern over exposure to sensitive intellectual property (IP) hinders the free flow ofinformation. Traditionally, data exchange methods have not provided protection for acompany’s IP. As a result, companies have restricted information sharing which has dampenedinnovation.

• Costs associated with software training, upgrades and infrastructure must be controlled.Information technology (IT) support requirements in a multi-CAD environment can quicklyget out of control as suppliers try to keep up with each customer’s latest software patch orupgrade. According to Cyon Research Corporation, suppliers can end up supporting over100 releases of CAD software in order to be compatible with different customers. Supplierscould realize estimated cost savings of $500 to $800 million annually through the expandeduse of a lightweight data-transfer format [Estimated supplier cost-savings due to expandeduse of a lightweight data format, November 2006]. OEMs also are likely to benefit fromquality and time-to-market improvements, as well as greater flexibility in selecting suppliers.

Production and addedvalue of light vehicles

(worldwide): 2015 forecast

Production (units)

57 million

Source:Mercer/Fraunhofer

Suppliersincludingserviceproviders

76 million

2002 2015

OEMs

903

645

417(65%)

700(77%)

228(35%)

203(23%)

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In order to speed product development and optimize the design environment across theextended value chain, OEMs and suppliers need to be able to insulate their internal systemsand processes at the same time that they provide timely, relevant and accurate data exchange.They need to eliminate nonvalue-added activities and costs typically associated with a multi-CAD environment while increasing the quality of the information they share. This requires astandard, neutral file format for data exchange that lets engineers readily share pertinentinformation with their global teams while protecting internal processes and IP. To streamlinethe data exchange process, companies also need a rules-based solution that automatically filtersdata to determine what is needed and maps data elements between disparate CAD systemsprior to transferring files. Only in this way can the automotive industry transform the processof innovation through greater collaboration.

Effective customer-supplier co-design improves key interrelated processes throughout theautomotive product-development cycle. This paper discusses those processes, including:

RFP Response• Providing complete and compelling responses to your customers RFPs

Product and Process Development• Promoting timely and efficient collaboration among suppliers and their OEM customers’design and engineering teams

Change Management• Quoting change requests quickly and accurately• Managing and tracking changes to verify their implementation and traceability

Optimize the Design Environment• Harvesting and implementing knowledge-driven best practices throughout the design process

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RFP response

JT provides a proven, effective mechanismfor data manipulation and exchange

Established more than ten years ago, JT is the mostwidely used 3D data format for productvisualization and collaboration. The JT file formatprovides a true engineering definition of the part,including accurate surface geometry andconstraints, tolerance and manufacturing data, CADparameters and attributes. Users control the levelof detail to be included in a JT file, tailoring it tothe end user’s requirements – from 2Drepresentations for technical documentation, topart attributes for purchasing, to high performancevisualization of complex assemblies for designcollaboration.

“Establishing JT as the global industry standard for3D will provide tangible business benefits for notonly Bosch, but for the entire automotive sector,”

Gerhard Felten, Executive Vice PresidentApplied Research and Production Technology,Robert Bosch GmbH.

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Can you provide the most compelling response to RFPs?

Automotive suppliers are asked to prepare responses to OEM requests for proposals duringthe early stages of the vehicle program. These responses serve as suppliers’ primary inputs totheir customers’ vehicle content and sourcing decisions. When completing these RFPs, suppliersmust have access to information about past programs in order to continually improve the waythey serve their customers. In addition, suppliers must coordinate their own distributedengineering and manufacturing teams and extended supply chains to deliver a final proposal totheir customer.

To date, suppliers have had to maintain development environments and access accountsaccording to each OEM’s requirements. Maintaining users who are knowledgeable in more thanone development environment and able to maintain multiple accounts with OEMs is limited dueto OEM disparate compliancy requirements. This creates an increased burden and expense fora new supplier, severely limiting their ability to participate which reduces the OEM’s potentialpool of viable candidates. When trying to prepare a timely response to an RFP, suppliers faceadditional challenges such as:

• The information required to build a compelling response is fragmented across disparatesystems and is difficult to find. Suppliers typically manage their information in the OEM-mandated PDM environment. By contract, access to these systems cannot be shared withdesign teams working on other programs for other OEMs.

• It is difficult to adequately communicate requirements inside and outside the organization.OEM-aligned internal business practices and systems prevent effective communication andcollaboration among design engineering teams. The unique design environments and systemsused by the extended supply chain add to the difficulty of communicating and sharinginformation.

• Innovations, best practices and lessons learned that have been developed across the supplychain from other programs cannot be readily applied to win new business. Many times theonly people who understand an approach that was used on a specific program are those whowere on the team. Companies lack an effective way to communicate these best practicesacross the organization for use on other programs and for other customers.

Automotive OEMs and suppliers that want to facilitate this process are adopting the industry-standard JT file format for data exchange. JT is a mature, lightweight 3D data format thatprovides a natural platform for geometric data exchange among suppliers, OEMs and theirpartners. With this neutral format, independent of any CAD system, the design engineer,

Supplier processes OEM processes

Web-basedcollaboration

Prototyping

Designcontext

Cost andweight rollup

Manufacturing processesdefinition

Manufacturing processesdefinition

Virtual realityrender

Digital validation

Supplierexchange

Authornew design

Supplierexchange

Authornew design

RFx RFx

JT

Designvalidation

JT digitalbuck

Styling

Prototyping

Servicemanuals

Servicemanuals

Marketingmaterial

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manufacturing engineer, buyer, account manager, supplier partners and others can view thequoted part directly without specific CAD capability at their work stations. Its use lets theextended team evaluate the product concept, functional requirements, manufacturing feasibility,packaging and other pertinent information to quickly establish what will be required to designand manufacture the part. In this way, the first- and sub-tier suppliers can develop accurate andtimely bids.

JT also frees the supplier to apply its best talent and resources to the job. A robust, neutralgeometric file that provides a full engineering definition of the part can be viewed andinterrogated on any CAD system, regardless of its system of origin. Translation to and from theOEM’s CAD system is eliminated, saving time and reducing errors. When OEMs and supplierscan readily share data without constraint, the entire product-development process can becompressed while quality is improved at every stage.

Use of the JT file format is an important step toward enhancing OEM/supplier processes.Of the 18 Tier One suppliers that have standardized on a visualization platform for productgeometry, 100 percent have chosen JT. In addition, the Automotive Steering Group, anorganization of 17 premier, global automotive companies, has validated numerous times overthe past two years the validity of JT as a design exchange medium.

Product and process development

Are your globalcustomer andsupplier designteams collaboratingin real time?

In today’s marketplace,OEMs and suppliersdesign, develop andmanufacture componentsand systems and assemblevehicles around the world.In many cases, full servicessuppliers have complete design responsibility for major systems and components, often referredto as “black box” suppliers. Keeping design and manufacturing data current and aligned betweenthe OEM and supplier as well as between the supplier and its extended value chain is vital tosuccess. Typically, OEMs require first-tier suppliers to deliver their data in a specific 3D CADformat. Suppliers work through the challenge of data exchange at enormous cost in time andresource.

The process of preparing product and process data for exchange in a multi-CAD environmentis cumbersome and time-consuming. Unless the supplier’s CAD system is identical to the OEM’sCAD system – right up to the latest update or patch – some level of translation andreconciliation is required. Each time data is exchanged, the underlying data must be translatedinto the proper CAD format – including CAD type, nomenclature, revision schemes and other

Table 1: Manufacturers’ top strategiesto address multi-CAD dilemma

Source:AberdeenGroup,December 2006

Design in one CAD format and delivery in many 70%

Deliver designs in neutral CAD format 52%

Increase internal competencies 52%

Standardize CAD to pursue software volume purchase discount 50%

Partner to translate design into specific CAD format 21%

Strategic actions

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key criteria. A black box supplier will often translate data originated in the compliant CADformat to ensure that important engineering knowledge has been removed to protect theorganizations intellectual property. In addition, the need to sift through vast amounts of data toidentify what is relevant and what needs to be shared dramatically reduces productivity. Inparticular, companies are challenged to:

• Control nonvalue-added time and cost associated with sharing critical product and processdata. Both suppliers and OEMs must allocate resources to the process of selecting,translating and validating data – a process they often undertake several times a day.

• Streamline the product design process. Unnecessary delays are added as a result of datatranslation and exchange. OEMs and suppliers must deal with variations in communicationinfrastructure in the countries where they do business, making it difficult to sharecomprehensive information needed to make good design decisions in a timely manner.

• Optimize team work to develop innovative new products. Without the ability to visualize theend product, or to see the context of a given part or component, the designer, designengineer, manufacturing engineer, buyer, supplier partners and others in globally dispersedteams are limited in their ability to design in context, evaluate manufacturing and toolingfeasibility and make early sourcing decisions.

• Protect the specific engineering knowledge and manufacturing know-how that the supplierprovides as their value in the product. This intellectual property has become extremelyimportant in an innovation driven economy and suppliers must be very diligent in securing itwhen collaborating on a vehicle program.

• Re-use common, proven designs and processes. Without access to successful designs andprocesses that were created in earlier programs or on different CAD systems, companiesmiss the opportunity to significantly improve cycle time and quality while lowering costs.

Creating a digital environment using asynchronous data exchange meets these challenges headon, allowing OEMs and suppliers to share, view and manipulate data without having to mirroreach other’s design environment or co-locate engineers at each other’s facilities.

Asynchronous data exchange automates data model mapping and conflict management, makingit possible to establish rules for automatically filtering data and mapping it to the correctproduct nomenclature, revisions, specifications and structure for any CAD system. It empowersengineers to exchange data in the context of their design task, when needed and withoutcontinuous connection to the customer’s design environment. Internal team members workingon different CAD systems can share files and contribute their expertise to the program. Datais automatically synchronized with the bill of material (BOM) and the database is updated withexplicit information on all changes made since the last data transfer.

The independence gained through asynchronous data exchange makes it possible for eachsupplier to standardize its operations on one internal CAD environment while improvingcollaboration up- and down-stream. In addition, suppliers can optimize their IT infrastructureand maintenance efforts. Design and manufacturing engineers can collaborate on feasibilitystudies without involving the designer. Other departments that rely on design information (suchas purchasing, marketing and plant managers) can work with one consistent data set.

The opportunity now exists for the supplier to insulate its product development from theCAD requirements of multiple OEMs and other tier suppliers, while improving the flow ofinformation required to collaborate in the design process, protect their IP during data exchangeand achieve internal engineering efficiencies.

Best in class manufacturers insulate theirproduct development process

According to AberdeenGroup, “when it comes todelivering designs to customers and suppliers,employing an insulated product developmentprocess makes sense. In fact, the best in class[companies] are 63 percent more likely to use thisapproach with customers and 90 percent morelikely to use it with suppliers.” This strategy helpsminimize the disruption that typically occurs in amulti-CAD environment while delivering greaterflexibility to enhance innovation. Indeed,AberdeenGroup found that top performers “hitengineering product development targets 93percent of the time or better, on average.”

[Multi-CAD design chain benchmark report,December 2006.]

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Are you effectively quoting, resolving and executing change requests?

Change is a fact of life in the product development process. Whether a change is requested byan OEM customer or a downstream sub-supplier, or initiated within their internal engineeringor manufacturing operations, first-tier suppliers must manage the complex, time-sensitiveprocess of developing a proposed solution in collaboration with multiple departments andpartners. They must assess the potential impact of the change on other projects or programsthat use the same part; confirm feasibility to manufacture at their in-house operations or attheir sub-supplier’s facility; determine service and regulatory implications; and make sure thatthe solution is financially sound. If and when a change has been approved, they must take carethat the change is properly translated across all instances.

This iterative process requires effective communication of the design intent and functionalrequirements, as well as a rapid analysis of implications for engineering, manufacturing, packaging,purchasing, warranty, service and outsourcing. This challenge is compounded by the sheervolume of change requests (which can number in the thousands per month) across multiplecustomers. First-tier suppliers must be able to:

• Quickly analyze alternative design and manufacturing scenarios to identify an optimal solution.Design needs to make sure that part integrity is maintained and proper performance isdelivered in the field. Manufacturing needs to verify that the tool and manufacturing processcan meet production cycle time and quality requirements. Typically, design and manufacturingengineers perform their work in separate, un-related toolsand systems.

• Identify dependencies and potential ripple effects across the product’s lifecycle, as well asother projects or programs. Many products have service requirements that can extend 10 ormore years after regular production of the part stops. Other programs or developmentprojects may already be using this part or planning its use in the future.

• Accurately assess the cost of change throughout the value chain. If the change affects a partthat is outsourced, the sub-suppliers need to assess their operations to verify manufacturingfeasibility, on-going delivery of product at volume and profitability. In turn, the Tier 1 supplierwants to maintain or improve margin on the product it delivers to its OEM customer, as doesthe OEM on products it delivers to the end consumer.

• Manage the impact of multiple changes across the product-development process, includingthose changes that do not get approved. On a given part, multiple changes can be underanalysis, approved for implementation or rejected due to timing, cost or quality concerns.Keeping product design information and revision levels up to date requires coordinated datauploads to make sure that everyone is working with the correct level of data.

The degree to which effective change management is executed across the participants in theproduct-development process can have a significant impact on profitability and competitiveness.In order to respond in a timely manner with an optimal solution, suppliers need to assess theimpact of change and evaluate alternatives. JT creates a common digital environment thatsupports the many different CAD systems and design tools used over the product lifecycle,while PLM provides a centrally managed repository for product and process information.

With this PLM capability and 3D visualization tools supported by JT, suppliers can readilyidentify all projects that could be affected by the change and accurately communicate changerequirements across all team members. When part changes are represented in the JT format,design engineers, manufacturing, purchasing and product support teams can review them in theirown systems in the context of their jobs and arrive at realistic solutions. Various alternativescan be iterated and evaluated in a digital environment faster than was previously possible – andbefore final decisions are made. Workflows in PLM keep all affected activities informed of thechange status. Data management capabilities make certain that everyone is working with thecorrect product and process information. As a result, suppliers can accurately and rapidlyestimate the cost of change, minimizing launch delays and protecting program profitability.

Change management

Product and engineering changemanagement is a critical issue for suppliers

The Automotive Industry Action Group, as recentlyas June of last year, released a report confirmingthat the suppliers’ burden of maintaining multiplesystems to interact with their different OEMcustomers represented significant costs. The resultis that Product and Engineering Change as a domainrepresents their highest pain point…and theproblem is growing with globalization.

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Optimize the design environment

Are you using best practices and lessons learned in your design process?

In order to remain competitive, suppliers need to reap the benefits of their investments – notonly in technology but also in design and manufacturing expertise, partner relationships, bestpractices and lessons learned from prior programs.

This is extremely difficult to do when multiple design environments and formats for dataexchange exist across the value chain. In these situations, most suppliers opt to:

• Purchase and maintain multiple CAD systems to match the revision or upgrade level of eachcustomer’s system. The total cost of ownership for multiple CAD systems reduces budgetavailable for investment in product and process improvements.

• Develop teams with competency in each CAD system. Since competency in one CADsystem does not translate to another, suppliers lack the flexibility to move their design talentto new projects or programs. Product information and knowledge becomes siloed or remainsin the heads of the experts, limiting efficiency and improvement in operations. Should theyinvest in training resources to be knowledgeable in multiple CAD systems, anAberdeenGroup study indicates that companies find these CAD generalists are not asefficient in any one CAD tool [Multi-CAD design chain benchmark report, December 2006].

• Invest heavily in data translation and reconciliation. Teams of people are involved in thetime-consuming process of data translation, ensuring that precisely the right information isbeing provided, and that changes are reconciled among systems and programs.

When suppliers can optimize their own internal design environment and still providedeliverables to their OEM customers and sub-suppliers in the required format, they canmaximize their investments to become more streamlined and efficient in delivering qualityproducts at an optimal price. An open digital environment based on PLM technology providesthe infrastructure needed to leverage legacy systems, manage multiple design environments, andput in place a common global infrastructure for collaboration. This infrastructure also providestools to capture best practices and expert knowledge gained over the product lifecycle, so thatthese can be re-used in future designs. Now, companies can turn data into actionableinformation by linking related elements – from part geometries to design intent and multi-disciplinary validations – into a meaningful context.

The ability of a PLM system to manage multi-CAD work products and JT files gives the designcommunity the flexibility to complete their work in their company’s preferred CAD systemwhile meeting the data exchange requirements of their customers and sub-suppliers. Thesecapabilities make sure that stakeholders across the value chain have access to one centralizedand coordinated set of information. Suppliers can invest more in transforming key businessprocesses enabled by PLM that are critical to their success, such as commonization and re-useand knowledge-driven engineering. Through a global PLM infrastructure, best practices andcommon processes can be driven across the extended organization as automotive OEMs andsuppliers collaborate in the process of developing innovative new products.

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Automotive OEMs and suppliers need better solutions to compete globally with innovative newproducts. Open, digital customer-supplier co-design enabled by PLM solutions that leverage theJT data format and asynchronous data exchange can help suppliers and OEMs achieve theirindividual business objectives while collaborating more closely during the design process.

A standard data-exchange format leveraged within an enterprise-wide digital environmentresolves many of the issues introduced by the hyper-competitive global automotive marketplaceand complex, multi-CAD environments, including:

• Inability to leverage expertise and best practices across multiple programs• Lack of an effective mechanism for product and process data exchange• Insufficient visibility into the product-development process across a complex,global supply chain

• Reduced organizational flexibility to shift design resources across multi-CAD systems• Increasing expense related to maintaining a multi-CAD infrastructure• Inability to optimize the design environment

With JT, suppliers are able to meet customer requirements for data creation and delivery whileretaining the autonomy to improve their processes and grow their businesses. Overhead andredundancy required by the multi-CAD environment are reduced, while design teams are freedto leverage best practices and innovations among their members, as well as with other designteams and programs.

For OEMs, customer-supplier co-design answers a growing need to establish more efficient dataexchange among global employees and partners. It also facilitates many of the businessimprovement requirements that they share with their suppliers.

Suppliers and OEMs should leverage JT and rich PLM functionality to conduct efficientconcurrent engineering. These technologies make it possible to automate asynchronous dataexchange across all CAD environments and to share timely data in the context required tokeep design ideas grounded in the reality of each product’s complete set of requirements. Withthese capabilities, suppliers and OEMs can:

• Meet customer requirements while reducing costs• Improve product design with rapid iteration and increased engineering change throughput• Minimize program delays• Reduce bandwidth and infrastructure costs• Optimize design productivity through improved knowledge management capabilitiesand commonization and re-use strategies

PLM is fundamental to accomplishing the above advantages through an interoperable,automated design environment that allows automotive companies to manage customer-supplierco-design and then press forward to adopt key business process improvement initiatives suchas change management, commonization and re-use and knowledge-driven engineering. All ofthese capabilities in one PLM solution lets companies increase innovation and fully leverage thegains available through an effective customer-supplier co-design strategy, including fasterinnovation, increased revenues and accelerated business growth.

For more information on how global automotive OEMs and suppliers are maximizing thecollaborative design process through PLM and the JT file format, visit:www.ugs.com/synergy

Summary

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