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Implementing a cad system to reduce costs

IMPLEMENTING A CAD SYSTEM TO REDUCE COSTS

Introduction

This report will analyze a proposal on how Woodbridge Foam could become more competitive

through improvements in technology. This includes the saving of the companies money,

shortening the design time for new products, decreasing quoting time and improving quality

overall. By implementing a company wide CAD system, which would be networked together with

each customer and all plants, these improvements could be achieved. Research will include

interviewing various employees as to how business is done and what influences the winning or

loosing of a contract. Research will also include study of both customer and competitors

systems.

Project Scope & Current Evaluation

Goals Supported by CAD Initiative:

In converting to a completely independent CAD system, there are a few aspects of operation

which would be greatly improved. The first of the improvements would be the elimination of

paper communication. The need to transfer large drawings using mylars would cease to be,

thus helping provide a paper less environment. Another improvement as a result of CAD would

be that of achieving much tighter tolerances in building new products. Using a CAD system,

part designs could be received in an electronic format such as a math model. These models

are currently in use by customers such as GM, BMW and Mercedes. The effect of having math

models of all new products would enable a quicker turnaround in both quoting and production

of products. CAD Vendors & Hardware Suppliers: Upon observing the various systems used by

several customers and suppliers, the major CAD vendors worth consideration have been

identified. Manufacturers of high quality workstations which have been distinguish are:

Hewlett Packard (HP) IBM Silicon Graphics (SGI) SUN Premium, fully functional CAD solutions

are: CATIA (Dassault / IBM) Computervision (Computervision / TSI) SDRC (SDRC / CAD

Solutions) Unigraphics (EDS) Current System Description Success Factors: In implementing a

new, otherwise foreign system into an established habitual way of doing things, there are

several success factors which must be examined. If these factors are carefully thought

over, a favorable shift from old to new may be obtained. Some critical success factors are

as follows: Vendor availability - Will the chosen system supplier be readily available for

technical support? Product engineering acceptance - Will those who are set in their ways be

willing to abandon their habitual manner of operating? Training - Thorough training of all

related employees must be completed before introduction of the new system. Data management

- A new manner of recording all vital information must be established and proper procedures

documented. Customer interface - Will the chosen system be compatible with those used by our

customers and will needed data be easily convertible?

Company Weaknesses:

Currently, there are many aspects of our situation which present problems in coping with

changing times, which in turn affect the development of technology. Some weaknesses in the

company which curtail our affiliation with the developmental progress of our customers and

suppliers are: We cannot easily accept electronic data; We must deal in manual drawings; We

have many copies of similar drawings; We have multiple ECN levels; We have minimal CAD

knowledge; We must perform manual volume calculations.

Threats to Business:

If procedures are not taken in order to improve on the present company weaknesses, there are

bona fide threats which could potentially harm future progress and business. Once the

weakness in the company have been effaced, the following threat to our business may be

eliminated or greatly reduced. The immediate threats are: Suppliers may assume the design

role; Competitors able to accept electronic input; No business with new products;

Deterioration of communications; Lost productivity Process Description: As in most large

corporations, our process generally follows a standard order of operations. There are

several departments or areas which have functions. Based on the function of a department or

area, a focus area is established and followed. Department/Area Function Focus Area

Customer

Designs seat

Product Engineering

Designs tool to manufacture seat

Supplier

Builds tools and supplies components needed to manufacture and construct seat

Product Evaluation & Costing

Costs seat based on foam and components used, manufacturing costs and assembly

Purchasing

Locates seat component suppliers and oversees development and manufacture of components

Plant

Manufactures and assembles seat

Quality Control

Ensures that products meet our own and customer standards

Sales / Marketing

Processes orders and manages overall customer relationships

New System Requirements

CAD System Requirements:

The CAD system which is chosen must be capable of performing several specific tasks. In

order for a new system to be of any use to the company and an aid to its advancement, it

must present an improvement in various areas. Some of the short term requirement of a new

CAD system are: Capable of 3D modeling including solids; May be used for simple or complex

drafting applications; Suited to quickly perform volume calculations; Apt to translate

various forms of math data.

Product Evaluation & Costing (P.E.C.) Requirements:

With respect to all the various areas of the company, the role of the P.E.C. department is

one of the most important in the area of profit. Once the costing department receives a

part request from a customer, it is the responsibility of the costing department to ensure

that the life cycle of the part development is managed cost efficiently. When a current

product undergoes an engineering change, it is the responsibility of the Costing team

members to note the changes. The product must be re-costed, accounting for variances in

foam and components. If an increase in foam is noted, the change must be calculated. Using

manual calculations, the new part volume is derived and the customer is charged accordingly.

Because foam variances are obtained manually, customers may at times, not be fully charged

for the added cost of foam. Using a CAD system to perform a volume calculation, the answer

would be definitive. The time needed to ship a print is approximately two days. If math

models of products were sent via E-mail, the information needed by the costing department

would be obtained two days earlier. Once complete, a costing package would in turn, arrive

at a plant, also two days earlier from costing. In effect, a total of four days could be

eliminated from the time needed to begin manufacturing a product. Solution Evaluation &

Recommendation Benefits of CAD System In utilizing a CAD system, there are many areas of

operation which are directly or indirectly affected. Because of the speed and accuracy with

which a professional CAD system operates, time, and thus money, may be saved. Potential CAD

project benefits include: Improved accuracy in quotes and design; Reduction in copying and

courier costs; Faster and more accurate calculations of complex volumes; Management of

expanding drawing database; Improved electronic communication with customers and suppliers.

Recommended Vendor/Supplier

Based on thorough presentations made to executives of Woodbridge Foam by each candidate and

the penetration of these amongst key Woodbridge customers, it is recommended that

Unigraphics be implemented as the solution. The Unigraphics system is currently used b 40%

of Woodbridge customers. This system is also capable of performing all of the previously

mentioned tasks such as 3D modeling, drafting, volume calculations and translating different

forms of math data.

Justification of CAD & Unigraphics

CAD justification includes:

Elimination of Mylars;

Encouragement of a paper-less environment;

Reduction in copy and reproduction costs;

Reduction in courier costs;

Faster and more accurate part volume calculations.

Unigraphics justification includes:

Used by key customers such as Chrysler and GM;

Ability to convert data used by all customers;

Extra commitment and availability for technical support;

Extensive research into company prior to presentation.

Work Station Cost:

One time costs for one Workstation:

Unigraphics Software License

$30 000

Hewlett Packard Workstation

$45 000

EDS Assistance (Assessment/Help)

$ 5 000

Training (UG Education)

$10 000

Consulting Assistance

$ 7 500

Printer and Plotter

$30 000

Hummingbird/Exceed PC Access Software

$10 000

One time total costs

$137 500

Annual Maintenance Costs: $3 750

Cost Reductions:

As previously mentioned, the implementation of a CAD system will reduce costs in several

areas. By eliminating the need for physical prints, the cost of reproducing and shipping

prints will be eliminated. Some potential cost reductions in dollars are: Prints: 35,000

Mylars:

75,000

Courier:

5,500

Travel:

16,000

Plants (saved travel):

90,000*

Productivity Improvement

75,000*

TOTAL SAVED:

296,500

Productivity Improvements:

There are some improvements in productivity which do not present a monetary value. These

improvements however; will benefit the company and customer relations. These non-monetary

productivity improvements are: Improved accuracy; Improved customer satisfaction; Support

for higher tolerance of products; Improved on-line access to information; Improved internal

communication between Woodbridge departments.

Conclusion:

As advancements in technology continue to be the norm, it is essential that those who wish

to remain competitive, adhere to these advancements. In the case of the Woodbridge Foam

Corporation, maintaining and equal standing with technological advancements will allow for

improvements in the company as a whole. Cost saving may be incurred in the areas of print

and courier costs; while the need for paper transference is eliminated. Tolerances, quoting

time and an overall improvement in quality will in turn improve the satisfaction of our

customers. Because of these advancements in technology within the company, the saying "a

satisfied customer is a return customer" may be brought to life.

4

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Source: Essay UK - http://www.essay.uk.com/coursework/implementing-a-cad-system-to-reduce-costs.php



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