Adapting to a changing world

Global Product Development (GPD) is transforming the motor industry. Automotive Industries discusses some of the changes with Jim Heppelman, Executive Vice President, Software Products, and Chief Product Officer of PTC.

Heppelman: The environment in the Automotive Industry is very challenging. Experts have used the term “Perfect Storm” to characterize the gravity of the situation. The connotation is that a confluence of factors is causing an unprecedented level of hardship. Broadly speaking, these can be categorized as (a) innovation pressures, wherein the consumer desires a higher level of functionality while the manufacturer is faced with ever-increasing safety and environmental regulations and (b) cost pressures, wherein prices are deflationary and the consumer is unwilling to pay a premium for new technologies.

Automotive Industries: (AI): What strategies are your customers adopting to combat these pressures?
Heppelman: One is the expansion of distribution into emerging and fast growing markets such as Eastern Europe, China and India. Another is to improve their productivity, thereby freeing up resources for introducing exciting innovations and yet not demanding a large price premium from consumers. This strategy is applicable from both a sourcing components and an engineering perspective, and our customers are turning to the same countries above for such activity. Specifically, we see many of our customers adopting a Global Product Development (GPD) model to access talented engineers wherever they reside, modify designs for new, rapidly growing markets, re-balance their product development costs and activities, and drive higher levels of innovation, and improve time-to-market. This globalization of product development follows the same trend as manufacturing about a decade ago.

AI: What is PTC doing to adapt to the trend of moving into low cost regions?

Heppelman: There are three issues that any customer needs to address before embarking on a GPD initiative.
The first one is how to globalize their product development activities. This includes deciding what and where to outsource and also a consideration for re-aligning processes and modularizing products to both support and leverage GPD. PTC itself has been executing a GPD model since 1994 with more than 50% of its software development now located in India and Israel. Based on this and experience with other customers, PTC provides consulting services to assist organizations in establishing a GPD strategy, defining products in a digital manner, developing modular product architectures and establishing collaboration systems

The second issue is deciding on a technology infrastructure. Modern infrastructure, like PTC?s integrated Product Development System (PDS), provides a digital backbone that enables manufacturers to deploy Global Product Development in an orderly and productive fashion. PTC?s PDS marries three core capabilities into a single IT architecture: Pro/ENGINEER to ?create? high fidelity digital product data; Windchill ProjectLink to enable ?collaboration? across virtual teams; and Windchill PDMLink to facilitate ?control? of product development data and processes.

Finally, the organization also has to consider means to implement and drive adoption of GPD. PTC has been working with numerous customers to help in this regard and has developed services specifically targeted towards ensuring that the real value of GPD is realized in a timely manner.

AI: There is a current sensitivity around GPD and IP security. What is your opinion on this?

Heppelman: There are measures that can be taken to mitigate it. These measures include a thoughtful and strategic up-front assessment of which IP to send and which to keep, as well as using information technology, organizational, and physical deterrents to control access to sensitive information, or portions thereof. Technology such as Windchill allows for secure, pre-approved access to critical design data, allowing only authorized users to access the information. Additionally, a number of low-cost countries recognize IP protection as a requirement to grow their services businesses and they are working on legislation and enforcement.

AI: In closing, what advice do you have for Automotive Companies as they prepare for the future?

Heppelman: Firstly, prepare yourself for a completely global value chain for both products and skills. Correspondingly develop your processes and infrastructure early to take advantage of these, rather than adopting a reactive approach.

Secondly, consider establishing pilot projects that demonstrate the clear value of GPD and encourage adoption.

Finally, engage with a trusted partner such as PTC that has the experience and technology to make this a successful endeavor.