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An Independent Report on Achieved Benefits and Return onInvestments with DELMIA Solutions

The Benefits of Digital Manufacturing

MARCH 2003

Copyright © CIMdata, IncAll rights reserved. No part of the contents of the CIMdata reportmay be reproduced without prior written permission of CIMdata.

Copyright © DELMIA Corp. All rights reserved. “The Benefits ofDigital Manufacturing” reproduced with permission of CIMdata.

MARCH 2003

• The Report

• The Benefits

• The Return

In this independent survey conducted by CIMdata confirmed that the digital manufacturingtechnology is a key component for today’s manufacturing industry, thus providing OEM's theproper tools to achieve real savings.

The results within this report are based on research conducted on the value the digital manu-facturing technology. The information obtained by CIMdata is based on real benefits achievedfrom successful implementations of DELMIA solutions at companies in the automotive, aero-space, and shipbuilding industries in the United States, Europe, and Japan.

CIMdata concluded that the digital manufacturing software provided by DELMIA, is a core technology that is desired by companies seeking to save time, reduce cost, and optimize theirreturn on investment.

C o n t e n t s

The Benefits of Digital Manufacturing

5

7

10

An Independent Report on Achieved Benefits and Return on Investments withDELMIA Solutions

The Benefits of Digital Manufacturing 5

Overview ••

Digital manufacturing is an emerging soft-ware technology that has become a key com-ponent of Product Lifecycle Management orPLM. It is an initiative to define and optimizemanufacturing processes, manage manufac-turing process information, and support effec-tive collaboration among engineering disci-plines by using full digital product and plantdefinition. It facilitates a holistic view of prod-uct and process design as integral compo-nents of the overall product lifecycle, andenables product design to be sensitive toprocess constraints and capabilities.

Digital manufacturing supports process plan-ning, factory modeling, visualization and col-laboration, simulation of operations,ergonomic and human factor analysis, andprovides other tools necessary to develop andoptimize the manufacturing process design. Itincludes software support for several func-tional areas, including:

• Translation of design data to manufacturing• Process planning• Production operations planning and

machining process planning• Assembly definition and sequencing• Detailed line, cell, station, and task design• Quality measurement and reporting• Manufacturing documentation, shop floor

instruction, and collaboration

It is typically implemented to mitigate risk,provide virtual plant tours, establish proof ofconcept, deploy machinery sooner, validateprocesses before release to manufacturing,reduce floor space and redesign of equip-ment, identify bottlenecks, collisions, andworker issues before they happen, improveresource utilization, program machines andcells offline, eliminate prototypes, and reducerework or scrap.

Digital manufacturing solution providers oftencombine individual functional capabilities toprovide full industry-oriented solutions formanufacturing operations. Currently, full solu-

tions are most commonly employed in auto-motive "body in white" and automotiveassembly operations, but solutions are alsobeing implemented for automotive power-train, airframe assembly, shipbuilding assem-bly, and electronics.

Research ••

This CIMdata white paper is based onresearch sponsored by DELMIA Corporation,a subsidiary of Dassault Systèmes. CIMdataobtained information on benefits achievedfrom digital manufacturing implementationsat twelve companies in the automotive, aero-space, and shipbuilding industries in theUnited States, Europe, and Japan. The infor-mation, considered confidential by most com-panies, was obtained using a combination ofpersonal interviews, responses to a surveyquestionnaire, use of material presented at aDELMIA User Conference, and review of pub-lic documents. Although the statistical data isbased on a relatively limited set of responses,CIMdata is confident that the conclusionsdrawn, estimated benefits, and expectedreturn on investment in digital manufacturingpresented in this document are valid.

T h e R e p o r t

Entire operations canbe represented digi-tally, from processplans to entire factorylayouts. This allowsmanufacturers to analyze their entireoperation from thedesktop

The Benefits of Digital Manufacturing6

Observations ••

Most of the significant digital manufacturingimplementations have been in major automo-tive and aerospace companies and are in theearly stages. As such, a few companies arenot yet beginning to receive a return on theirinvestment. However, all users responding tothe survey stated they are achieving orexceeding both their initial objectives and thebenefits expected from digital manufacturing.Overall, users are very satisfied with thistechnology.

Throughout the design and manufacturingprocess, users are deriving substantial quantitative and qualitative benefits fromtheir investment. In some cases, digital manufacturing technology is helping organi-zations complete tasks that could not other-wise be accomplished. For example, one userstated that, "Elements of a spacecraft that weproduce could not have been completedwithout digital manufacturing software." Insome cases, the cost or time associated witha specific task is being reduced by orders ofmagnitude.

Based on results from this limited sample,organizations adopting digital manufacturingtechnologies can expect an exceedingly highrate of return on their investment. Experienceshows that users can expect annual returnsof 5 to 10 times their annual investment. Inone case, the U.S. Navy publicly reportedthat modeling and simulation processes andother innovations used during design by BathIron Works contributed to over $370 millionin total cost of ownership savings on a sur-face ship program.

On average, organizations using digital manu-facturing technologies can reduce lead timeto market by 30 percent, the number ofdesign changes by 65 percent, and timespent in the manufacturing planning processby 40 percent. Production throughput can beincreased by 15 percent, and overall produc-tion costs can be cut by 13 percent.The greatest gains in digital manufacturingare typically achieved in large scale, complex,and/or difficult environments. To gain maxi-mum benefit, digital manufacturing softwareshould be implemented as a component inan end-to-end, comprehensively integratedPLM solution. It should be based on aprocess orientation and include re-engineer-ing of processes as part of the softwareimplementation. If it is implemented asstand-alone point solutions, significantlylower payback can be expected.

It is clear that the technology is solid, andorganizations are achieving substantial bene-fits and return on investment. Implementa-tions are most successful when there is acorporate vision, strategy, and managementcommitment to widespread and effectiveautomation of manufacturing operations.CIMdata believes that digital manufacturingis a required core technology for those com-panies seeking to establish a leadership posi-tion in the highly competitive worldwidemanufacturing marketplace. It is an essentialcomponent of PLM and an enabling technolo-gy for firms to digitally plan and validate pro-duction processes.

All areas of manufac-turing can be createdand analyzed in thedigital manufacturingenvironment, includ-ing worker perform-ance and interaction.


T h e B e n e f i t s

Product and Tool Design ••

Within product and tool design, users of digi-tal manufacturing technologies can expect asubstantial reduction in the number of designchanges, greater effectiveness in communica-tions and collaboration, a savings in tooldesign, and a reduction in overall productdesign time. Digital manufacturing is oftenimplemented in conjunction with design soft-ware such as CATIA, wherein the design sys-tem is employed for digital mockup. Figure 1summarizes the average percent improve-ment reported by our sample firms.

Using digital manufacturing technologies,organizations can dramatically reduce thenumber of design changes. Through simula-tion, designers can see how a product is tobe produced and assembled prior to actualphysical production. They can explore designalternatives and assess impacts on produc-tion effectiveness. This permits designers todetect potential problem areas earlier in theprocess. Since the cost of design changesincreases dramatically as a product movesfurther into production, these early virtualchanges can result in significant cost avoid-ance. Further, more design iterations can bemade in a shorter time, enabling firms to pro-duce higher quality products. As one usercommented, "With digital manufacturing,benefits were obtained from more effectiveproduct planning and increased innovations."

Tool design savings result from using digitalrepresentations of the part in the manufactur-ing environment. This improved visualizationpermits tool designers to more clearly under-stand the tools required for production.Moreover, the solution supports more effec-tive training of both product and tool design-ers on manufacturing processes andmethods.

Digital manufacturing enables increased andimproved communication and collaboration,both of which are essential to effective prod-uct design. The software supports both inter-nal and external collaboration. Internal col-

laboration allows engineers to visualize theeffects product design decisions have on themanufacturing process. By using digital mod-els as a rich specification, firms can bettercommunicate with their suppliers. Reviewingaccurate visual representations of the desiredparts makes communication more effectiveand speeds problem resolution.

Process Planning ••

Process planning is critical to effective manu-facturing operations. Historically, manufactur-ing process planning was manual, based pri-marily on the experience and knowledge ofindividual process planners. They typicallydeveloped manufacturing process plans afterproduct planning. The failings of this sequen-tial approach contributed to the advent ofconcurrent engineering, where product andprocess planning could occur in tandem.Most digital manufacturing technology suitesare built around this core manufacturingprocess function. Software tools, such as theDELMIA Process Engineer, support processplanning in a concurrent engineering environ-ment. Based on CIMdata's research, Figure 2summarizes the key benefits achieved fromusing digital manufacturing software to sup-port concurrent engineering.

Using digital manufacturing software to sup-port coincident product and process designsignificantly reduces the time required for

Reduction in overall product design time

Savings in tool design

Greater effectiveness in communicationand collaboration

Reduction in number of design changes

0% 50% 100%Average Percent of Improvement

10%

30%

35%

65%

Figure 1 - BenefitsAchieved in Productand Tool Design


manufacturing planning. Achieving this bene-fit requires both technology and businessprocess improvements. These include using amore systematic and structured approach,introducing process automation, improvingvisualization and collaboration, and enablingmanufacturing operation simulation. By hav-ing access to shared data, the informationsearch time can be reduced by as much as80 percent. Product and process planners getfeedback much earlier, reducing the timerequired for problem resolution. One userstated that "because of digital representation,problem resolution was reduced from oneweek to two days."

An inherent benefit of digital manufacturing isto establish proof of concept and validateprocesses. By digital modeling and processplanning, users can define digital manufac-turing operations as a basis for process simu-lation. With simulation, a user can both visu-ally and analytically verify that a manufactur-ing operation will perform as planned. Anypotential mishaps or inefficiencies can bequickly discerned and corrected.

The lessons learned from process simulationscan be incorporated into a set of best prac-tice processes for subsequent re-use in simi-lar situations. Using these verified processesassures that the most appropriate methodolo-gy is being employed. Best practice proce-dures provide consistency and improvedproduct quality, and can significantly reduceprocess planning time. Firms such asDELMIA now assist users in establishing andimplementing manufacturing processes basedupon best practices.

Operations Planning andProduction ••

The implementation of digital manufacturingtypically results in substantial benefits inoperations planning and production. Figure 3(shown on page 9) summarizes these benefits and estimated operational improvements.

Organizations can achieve substantialimprovements by modeling the shop floorand simulating production and assemblyoperations. For example, simulation can helpminimize collision and assembly problems.Collisions can be detected and users canassess whether an assembly will fit togetherbefore it is physically attempted. Simulatingassembly operations can help validate orchange operation sequences to improve oper-ating efficiency.

In automotive assembly, the production loadcan be leveled across multiple assemblylines. In the traditional method, firms pro-duced a single vehicle type in a batch modeon dedicated lines. Today, some automobilemanufacturers use these manufacturing simu-lation tools to help plan the production ofmultiple vehicle types, one by one, on a sin-gle assembly line. This added flexibilityresults in major benefits in assembly. Forexample, companies can meet productionrequirements on a timelier basis. In addition,they can often shrink the size of the line,reducing floor space and increasing workerefficiency.

Establishing weld points and the number ofwelding guns required is one of the key oper-ations in automotive "body in white" opera-tions. Using traditional methods, determiningif weld points can be reached by a gun hasbeen a time consuming task. Digital manu-facturing software can automate this task. Indetermining the number of guns required,one user stated that, "through simulation thenumber of welding guns was reduced from180 to fewer than 20."

Savings due to improved quality fromvalidation of processes prior toproduction

Time savings by shortening themanufacturing planning process


15%

40%

Figure 2 - BenefitsAchieved in ProcessPlanning


With a factory model and process visualiza-tion, users can improve communicationsabout factory layout. Line changes can bevalidated before production begins. Thesesoftware tools also make it practical forassembly workers to become part of thereview process, allowing firms to gain thebenefit of their knowledge. As one user com-mented, "We used simulation to model thecurrent production line as compared to alter-native approaches. We found a more stream-lined approach that doubled the output inhalf the space."

Realized Results ••

On an overall basis, organizations can antici-pate substantial benefits from implementingdigital manufacturing, as part of a total digi-tal process in an end-to-end, integrated PLMsolution, including process re-engineering.Based on CIMdata's research, Figure 4 sum-marizes expected improvements in time tomarket, increased production throughput,and lower production costs.

A key to success in digital manufacturing liesin comprehensive integration, process re-engineering, and worldwide availability ofdata. Point solutions are less effective.

Organizations can achieve significant benefitsby examining the most difficult element in aprocess and then re-engineering that aspectof process. One individual stated that, "Withdigital manufacturing and process re-engi-neering we went from a 13 week manufac-turing process to a 10 week process."

By verifying processes in advance, physicalprototypes may no longer be required.Production throughput can increase throughbetter resource utilization and improvedmaterial flow. As one manager in a majorautomobile manufacturer commented, "Dueto digital manufacturing and implementationof standards, we cut production time by 40percent and overall production costs by 13percent."

As these digital manufacturing tools becomemore accepted, some customers are encour-aging or forcing their suppliers to implementthis technology. One user stated, "digitalmanufacturing is a necessary tool to win andundertake new business; our customersdemand this capability."

Cost savings due to reduction in inventory

Facility savings from optimized plant layouts

Cost savings due to improved laborutilization in product manufacturing

Cost savings due to optimized materialflow


10%

25%

30%

35%

40%Reduced number of machines, tools,and work centers

Figure 3 - BenefitsAchieved in OperationsPlanning andProduction

Reduction in overall production cost

Increased production throughput

Reduction in overall time-to-market


13%

15%

30%

Figure 4 - OverallBenefits from DigitalManufacturing


T h e R e t u r n

Firms can achieve substantial return oninvestment by implementing digital manufac-turing software. The overall benefits notedabove are substantial, and in combination,could result in an extremely large return oninvestment.

The initial implementations in digital manu-facturing typically cost from $100K to$300K range, as most companies elect tostart with a pilot project etc.

However, some are much larger. Based ontheir experience with digital manufacturing,one implementer believes that "annual sav-ings of $50 million to $100 million can beachieved with an investment of $5 million insoftware and a 50 person development group($5 to $10 million in expenses)."

Initial investments

Annual investment

Annual savings

Estimated Return on Investment

Annual return on on annual investment

Implementation Size

Small Medium Large

$200K

$200K

$1M

5 to 1

$1M

$1M

$8M

8 to 1

$5M - $10M

$5M - $10M

$50M - $100M

10 to 1

estimated in $ USD

This is a 10 to 1 return on the annual invest-ment. This user assessment was used as theROI estimate for large implementations.Figure 5 lists CIMdata's estimated return oninvestment for small, medium, and largeimplementations.

In conclusion, CIMdata believes that it is rea-sonable to expect substantial quantitative andqualitative benefits from investment in digitalmanufacturing. Returns in the range of 5 or10 to 1 are realistic when it is implementedin combination with digital mockup, processre-engineering, and as a component of anintegrated PLM solution. ••

The reference below are just a sample of therecent customer news on success with digitalmanufacturing.

Figure 5 - estimatedreturn on investment

U.S. Navy reportedthat the use ofDELMIA tools andother processes con-tributed to over $370million in total cost ofownership savings theLPD17 surface shipprogram.

“DELMIA Solutions Help Sumitomo WiringSystems Slash Product Development Timeby 67%...Cuts Product DevelopmentCycles, Improves Internal Collaboration”

“Mayflower Questions the Need forPrototypes Thanks to DELMIA...saving itsclients' time and money.”

“Renault Vehicle Division to StandardizeFinal Assembly Simulation and StampingLines Optimization on DELMIA Solutions”

“No More Physical Cars Without DigitalValidation...Audi will use DELMIA softwarefor digital vehicle assembly planning intoreality at its Ingolstadt and Neckarsulmplants.”

“DELMIA enables Whirlpool to transpar-ently share product and manufacturingdata...greatly improving their concurrentengineering work and up-front develop-ment time.

About DELMIA ••

DELMIA, a subsidiary of Dassault Systèmes,designs and markets a comprehensive suiteof digital manufacturing software. DELMIA'smission is to provide the manufacturing com-munity with digital manufacturing solutionsto define, plan, create, validate and controlmanufacturing systems geared towards build-to-order and lean production. DELMIAenables companies to bring products to mar-ket faster with lower manufacturing costswhile encouraging innovation. As part of theDassault Systèmes’ PLM (Product LifecycleManagement) offering, DELMIA provides theprocess planning and 3D environment forconcurrent engineering of the manufacturingprocesses and resources in parallel with theproduct design.

DELMIA positions itself as a leading providerof digital manufacturing solutions, targetingindustry segments where continuous transfor-mation and optimization of the manufacturingprocesses are critical, including automotive,aerospace, fabrication and assembly, electri-cal and electronic, consumer goods, andshipbuilding. The DELMIA suite of computer-aided process planning and engineering solu-tions is designed to enable companies toachieve many benefits, including maximiza-tion of production efficiency and factory uti-lization; optimization of investment; supportof reuse, derivation and carryover of processengineering and production resources; reduc-tion of time-to-market and manufacturingcosts; and reduction of production ramp-upand cost.

About CIMdata ••

CIMdata, a leading and independent worldwidestrategic consultancy is dedicated to maximiz-ing an enterprise’s ability to design anddeliver innovative products and servicesthrough the application of PLM solutions.CIMdata works with both industrial organiza-tions and suppliers of technologies and servicesseeking competitive advantage in the globaleconomy.

CIMdata helps industrial organizations establisheffective PLM strategies, assists in the identifi-cation of requirements and selection of PLMtechnologies, helps organizations optimize theiroperational structure and processes to imple-ment solutions, and assists in the deploymentof these solutions.

For PLM solution suppliers, CIMdata helpsdefine business and market strategies, deliversworldwide market information and analyses,provides education and support for internalsales and marketing teams, as well as overallsupport at all stages of business and productprograms to make them optimally effective intheir markets.

CIMdata provides world-class knowledge,expertise, and best-practice methods on PLMsolutions. These solutions incorporate bothbusiness processes and a wide-ranging set ofPLM enabling technologies including productdata management (PDM), visualization, collab-oration, digital manufacturing, computer-aideddesign/manufacturing (CAD/CAM), and numeri-cal control (NC). CIMdata also provides expert-ise in the integration of PLM with other busi-ness solutions such as customer relationshipmanagement (CRM), supply chain management(SCM), and enterprise resource planning (ERP).

In addition to consulting, CIMdata providesindustry education through international confer-ences in the US, Europe, and Japan that focuson PLM. The company also conducts research,provides PLM-focused subscription services,and produces several commercial publications.CIMdata serves clients worldwide from loca-tions in North America, Europe, and AsiaPacific.

DELMIA Corp., World Headquarters900 N. Squirrel Road, Suite 100Auburn Hills, Michigan48326 USATel: +1 248 267 9696Fax: +1 248 267 8585Website: www.delmia.com

CIMdata, Inc.3909 Research Park DriveAnn Arbor, Michigan48108 USATel: +1 734 668 9922Fax: +1 734 668 1957Website: www.cimdata.com

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