manufacturing

drive innovation, quality

and growth

industry business issue overview

In the face of intense competition and the complexity of interacting and collaborating with an extended
supply chain, manufacturers need strategic solutions for product development. New product lifecycle
management techniques can be the key to a faster time to market and increased revenue and profits.
EDS Industry Business Issue Overview Manufacturing

Balance product innovation with profitable growth

Every player in manufacturing today faces a similar global challenge: balancing the
need to grow and rapidly take new products to market while lowering costs in an open
trade environment.

Strategic priorities
• Aberdeen Group survey
results show that 82 percent
of manufacturers place a high
emphasis on growing product
revenue.* Simultaneously, 93
percent say they must reduce
product costs. To do both, they
must improve performance in
product innovation, development
and engineering. By 2007, new
products introduced in the
preceding three years will
generate 34 percent of revenue,
up from 21 percent in 1998.**
• Most new product development
processes are estimated at
being only about one on the
Six Sigma scale of quality.***
The dynamics required to do this are complex. Customers are punishing manufacturers that
offer commodity products, and they demand increasingly more innovation. Manufacturers
must shorten the time it takes to design new products and give customers what they want –
or risk major losses to competitors.
At the same time, competition is getting more intense. Lowered trade barriers enable more
manufacturers to compete on a global basis. This creates an advantage for those that
established a lower-cost, global strategy to manage labor, material and transportation costs.
How are leading manufacturers coping? They are exploring new product development
practices to strategically improve product lifecycle management. In a recent survey done
by the Aberdeen Group, more than half of all manufacturing respondents said the largest
issue they faced was shrinking product development times to increase profitability.*
With resources globally dispersed, manufacturers must interact efficiently and collaborate
in real time with an extended supply chain. And original equipment manufacturers (OEMs)
are relying more on suppliers to increase quality while reducing costs.
The increasing complexity of this environment has spotlighted the need to eliminate
inconsistencies in product design, creation and production. Enormous amounts of
information must constantly change hands on a global basis, and protecting intellectual
property has become increasingly difficult.

By taking advantage of the latest product lifecycle management techniques, manufacturers

are finding opportunities to not only decrease their time to market but also increase
revenue and profit.

* Aberdeen Group, “The Product Innovation Agenda Benchmark Report,” September 2005.
** Deloitte Research, “Mastering Innovation,” 2004.
*** AMR Research, “Trends in New Product Development and Introduction Processes,” 2004.

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 Manufacturing EDS Industry Business Issue Overview

Trying new solutions

Enterprises today are using a variety of approaches to change their product development
practices. Much of this change focuses on four key areas.

Collaboration – Manufacturers are exploring ways to enable design teams in multiple

locations to work together more effectively and interactively, and to better manage
individuals and increase their productivity.

Leveraging knowledge – Manufacturers are establishing best-practice methods to ”The common thread across
replicate component design. The design and actual product then become part of a all manufacturers is getting
catalog – shared with the extended enterprise – for reuse. the right innovative products
to market faster than the
Design tool integration – Manufacturers are finding new ways to integrate the information
competition, with sufficient
used by CAD, CAM, and electrical, mechanical, and embedded-technology design tools.
supply and at an attractive profit.”
Better connection and automation of design and testing tools ensure a smoother
AMR Research
production process. “The Product Lifecycle Management
Applications Report”
2003-2008
Digital simulation and visualization – Manufacturers are looking for new ways to
simulate how products will be manufactured to save time and money. Visualization and
simulation are enabling them to identify flaws and change design characteristics to
improve the plant efficiency and their ability to manufacture products quickly. By using
new product lifecycle management techniques and technologies, manufacturers are
changing how they do business. They are taking a holistic approach that involves
changing people’s habits and behaviors, aligning functions, reusing knowledge and
products, and creating global visibility of information in a consistent, structured form.

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EDS Industry Business Issue Overview Manufacturing

Product lifecycle management Create an environment for success

yields results Supporting your engineering environment with improved information management can
• Reduce costs and increase
drive more effective product development and help you design smarter, faster, better
speed to market by integrating
market intelligence and product and more economically.
development data.
Do you have a clear picture of how your current product development environment stacks
• Develop more products, more
up against the challenges causing slowdowns in your organization? If you’re seeing poor
quickly, by increasing engineering
productivity up to 15 percent. collaboration, low profit margins and inefficient processes, it may be time for a tune-up.
• Cut product development
Achieving your strategic goals involves aligning the product development environment
cycles in half by using digital
prototypes that can be shared with your business goals:
and easily revised. • Understand the business context of how your organization wants to change
• Reduce manufacturing-related
and how open the organization is to transformation.
costs by 30 to 60 percent by
reducing the need for retooling. • Identify tangible business results you want to achieve and put the operational
• Boost engineering capacity improvements in place to turn them into reality.
and eliminate redundant parts
• Create a governance system to manage the change by assigning a senior
by increasing component reuse
executive to measure performance gains on a global basis.
by up to 75 percent.
• Use a team approach by involving suppliers and global employee teams to
identify the key types of knowledge and processes to work on.

• Put a plan in place to inventory the applications and tools used to support
Digital Maturity Model Example
business processes, and determine how the technology infrastructure will
Product Test
Manufacturing connect, respond and transform.
& Quality
Production
Manufacturing
Engineering LAUNCH • Divide and conquer by choosing the right steps to take for short-term
Sales & improvements along the path to total alignment.
Product Distribution
Engineering
An enterprise can assess its own environment or work with a skilled resource that has
Concept Maintenance the expertise, templates and tools to speed up the process. EDS uses a digital maturity
Engineering & Repair
model to measure an organization’s maturity score for each area (see example at left).
Disposal &
Requirements
Recycling
This will identify strengths and weaknesses, and enable you to develop an action plan to
& Planning
reach an ideal state for your organization.

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 Manufacturing EDS Industry Business Issue Overview

Step into transformation

In working with top manufacturers, EDS developed best practices to implement a product
lifecycle strategy. We recommend using a holistic business approach to develop an ongoing
program that continually expands and improves product management. But that doesn’t
mean manufacturers have to wait for results.

You can implement short-term improvements that take only six to 12 months to complete.
Improved product innovation
These steps create direct, measurable impact to accelerate product launches, improve
nets big impact:
profitable growth for mature products and extend product life.
• Increases product revenue by
In a step-by-step approach, investment and change are synchronized and connected to 19 percent
• Decreases product costs by
make visible business improvements. These short-term improvements build credibility
15 percent
for product management and support for continued funding. Right away, you’ll be able
• Decreases development costs
to speed up new product manufacturing. by 16 percent

And, best of all, overall product quality will improve because of better design and
production processes. This reduces the risk associated with design work handled by Source: “The Product Innovation
Agenda Benchmark Report,”
teams in multiple countries. Aberdeen Group, September 2005

We have helped our manufacturing clients achieve results such as these:

• Accelerate time to market and add 30 days of revenue to the bottom line

• Eliminate redundant parts and reduce inventory by 5 percent to save

top-line expense

• Reduce R&D spend through engineering productivity

• Increase the number of new products developed by 50 percent

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EDS Industry Business Issue Overview
Manufacturers save millions, speed time to market
Increased plant flexibility
Results:
• Product development times cut
almost in half
• Sizable savings in time and costs
The right business strategy
for the market
Results:
• Vehicle development time reduced
by six months
• Engineering system costs cut by
approximately $15 million
• New product development increased
by 50 percent
Streamlined engine
development
Results:
• Time to bring new engine to market
reduced by two months
• Time spent converting data redirected
to proactive engineering
Manufacturing
EDS works with leaders throughout the manufacturing industry, helping them achieve
the benefits of effective product lifecycle management. We’ll show you how they are
making it work.
Lowering overall product development costs and significantly reducing development time
were primary objectives for one EDS client. The solution was a digital manufacturing
strategy, including a highly flexible planning and production system that’s helping the
client use its plants around the world to their full capacity. Now, computers and
procedures such as computer simulation and digital mock-ups are speeding product
development. The client can simulate and optimize processes, production lines and
individual assembly operations on the computer and then analyze results from cost
and feasibility points of view. In only three years, product development times were cut
almost in half, and the manufacturer is realizing sizable savings in cost and time. An
upcoming goal is having the flexibility to produce various models in any of its plants.
Surviving in an extremely competitive, highly regulated and volatile market was another
EDS client’s challenge. It wanted to be able to adapt more quickly to market trends and
adopted a project lifecycle management strategy to streamline its global product
development process. EDS helped create a multifaceted strategy for boosting productivity:
to speed access to information, to replace physical prototypes and basic digital mockups
with advanced digital validation, and to increase the reuse of existing product information.
The bottom-line results have been impressive. Vehicle development time is reduced by up
to six months as a result of increased knowledge reuse and faster access to production
information. Engineering system costs were cut by approximately $15 million. And the
manufacturer has increased its new product development by 50 percent.
Diesel engine design time was sluggish for a third EDS client. Too much time was spent
converting design data into a completely different format for analysis and testing. That was
until EDS helped develop an integrated digital simulation environment to add horsepower
to the automaker’s processes. Today, leading-edge modeling and analysis tools, within a
single integrated environment, digitally evaluate multiple design concepts.
Using computer-aided engineering, the manufacturer can perform modeling and evaluate
other design alternatives. The results? The time to bring a new engine to market has
been reduced by two months, and the time previously spent converting data has been
redirected to proactive engineering.
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 Manufacturing EDS Industry Business Issue Overview

Gain control of quality and costs

Solution showcase
Updating and improving business processes that are so fundamental to the success of
your operation may seem overwhelming. Product lifecycle management is so complex, EDS offers these solutions and
others to help manufacturers
manufacturers can sometimes get trapped when they take on too much at one time.
achieve measurable business
Most companies are looking for an experienced partner that can help them objectively results in product development
assess the situation and come up with a workable plan to get the best business results. and management:

EDS is working with more than 220 manufacturers and understands the pitfalls in this EDS Product Lifecycle
process. We can help you build the right road map to get to your desired destination. Management Solution
Maximize people, technology
EDS founded the IT services industry more than 40 years ago. Today, our portfolio is
and processes across the
built around innovative offerings in application maintenance and development, business
extended supply chain to
process outsourcing, and infrastructure, including desktop services, hosting, storage manage design, development
and networking. and production. Improve
product quality, increase speed
Not only does EDS have more than four decades of experience in the manufacturing to market and reduce costs
industry, but we also understand the process from beginning to end. EDS works with clients with tools for change and
on strategy, implementation and technology management. No other company can claim configuration management,
a better working knowledge of how to implement and manage these improvement plans. digitalization, technical writing
and visualization.
Better still is EDS’ ability to look for innovative ways to deliver and finance these
Digital Manufacturing
improvements. We are exploring shared cost and delivery models that will help our clients
Improve your ability to
move and store large amounts of information throughout their global supply chains,
manufacture your product
making it easier to maintain and manage their lifecycle management solution costs.
designs. Create a virtual
No one is better equipped to help you find the right solution for your enterprise and version of a factory online,
simulate the manufacturing
implement and manage it on an ongoing basis. With EDS, you can drive product quality up
process and visualize problems
while keeping your costs in check through best-practice product lifecycle management.
before releasing a product
design for assembly.

Aftermarket Services
Reduce costs and create new
revenue streams from
aftermarket operations, as you
improve quality and service.
Reduce fill rates and inventory
costs by 20 to 35 percent, and
capture new revenues by
completing service contracts
and renewals on a timely and
profitable basis.

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 Contact us About EDS
Corporate Headquarters EDS (NYSE: EDS) is a leading global technology services company delivering business
United States solutions to its clients. EDS founded the information technology outsourcing industry
5400 Legacy Drive
45 years ago. Today, EDS delivers a broad portfolio of information technology and
Plano, Texas 75024
USA business process outsourcing services to clients in the manufacturing, financial services,
1 800 566 9337 healthcare, communications, energy, transportation, and consumer and retail industries
and to governments around the world. Learn more at eds.com.
Regional Headquarters
Asia
36F, Shanghai Information Tower
211 Century Avenue
Pudong, Shanghai
China 200120
86 21 2891 2888

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Electronic Data Systems Corporation. All
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