Implementing A CAD System TO Reduce Costs

Essay, Research Paper

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.