Why manufacturers must innovate through the downturn

Tuesday, 2 June 2009

By Richard Blatcher, head of manufacturing marketing Northern Europe, Autodesk
 
The current economic downturn has sent the UK’s manufacturing output into a downward spiral. A recent CBI employers’ group survey revealed that 67 per cent of manufacturers say that their order books are below normal while only 8 per cent say they are above normal, equalling the record low reached during the manufacturing-led recession of the early 1980s.
 
Yet, despite the prevailing doom and gloom, we are now seeing some notes of optimism. Even though UK manufacturing output is likely to contract by around 11 per cent this year, the Engineering Employer’s Federation (EEF) recently stated that “the worst is behind us”. May saw further hopeful signs emerge with the announcement that the Manufacturing Purchasing Managers' Index (PMI) had risen to an eight-month high of 42.9 in April 2009 from 39.5 in March, better than the 40 level expected by many economists.
 
If anything is certain in the world of economics, it is that the recession will ultimately come to an end. Manufacturers need to prepare themselves for this coming upturn and at the same time help to accelerate its onset.  In doing this, the primary challenge they face is to achieve process efficiencies while at the same time maintaining a focus on product innovation to address the issue of declining output.
 
Survive and thrive
 
There are two broad ways to deal with adverse economic conditions and the steep rise in the cost of raw materials. The first is to keep your head down, dig your heels in and wait for things to improve. The mantra is ‘Don’t spend any more than is absolutely necessary, stick with the tried and tested, be cautious and remain safe’.
 
The second approach is to be bold, think strategically and continue to invest in innovation in order to get the best designed products to market as quickly and as cost-effectively as possible.  This means protecting key assets such as the latest technology to ensure you can continue to deliver new products to your customers – even when others cannot because they have cut back too much on staff and resources.
 
The decision on which path to take is particularly pivotal for UK manufacturers at the moment.  And there’s no doubt that the current global climate favours the second plan.  International markets are fickle, demanding a continuous stream of creative new products and, after all, it seems that this is what the British do best.
 
However, if innovation is at the very cornerstone of survival during a downturn – how can manufacturers cope without escalating costs?  One of the answers is to do as much work as possible on screen rather than on paper, or ‘in the real world’. 
 
Digital prototyping comes of age
 
The latest design technology allows users to do this from the very beginning of the process – the ideas stage.  Intuitive and easy-to-use software solutions enable designers to capture ideas as they come into their head - without necessarily having a finished product in mind.
 
The use of parametric change technology will allow them to hone and refine the design in 3D over as many iterations as necessary without clocking up an excessive time overhead as would typically have been the case with 2D drawings.
 
These images can be discussed with colleagues and clients, enabling immediate feedback and subsequent tailoring of the design.  Multiple alternatives can be considered and decisions made at an early stage.   Sticking closely in this way to client needs and expectations brings fewer expensive changes downstream.
 
The digital model can even be used for marketing purposes before the end product is actually made – images can be added to brochures or sales material without necessitating the use of expensive photography or inaccurate artist’s impressions.
 
When the model goes into engineering, the latest software functionality enables the team to not only check for clashes and interferences, but to also carry out stress analysis and other necessary testing.  Engineers can experiment with different design alternatives here too –trying different materials, including more economic alternatives to help keep prices low, but still maintaining realistic profit margins.
 
All this can be done before a physical prototype is created.  Consequently, when a real prototype is made – it is likely to be a final check rather than the first of many.
 
When a definitive digital model has been passed on to manufacturing, and the design data carefully managed and stored – the design team can use parts or the whole design to build new ideas and innovate further.  As high-tech consumer products, such as MP3 players and mobile phones demonstrate, product innovation does not necessarily mean starting afresh every time. Making continuous enhancements to existing successful designs can also be a rich source of revenues.
 
Not only do digital prototypes enable design engineers to work freely and creatively without huge overheads, they also accelerate the entire process, ensuring products reach the market while demand is still keen and before competitor solutions are launched.  A recent report by Aberdeen Group stated that best-in-class manufacturers typically build just half the number of physical prototypes, and so halve development costs too.  As a result, they get products to market 58 days faster.
 
So, it seems that if a firm is already using 3D design software, innovation does not necessarily mean huge new investment.  Rather, it is all about adopting best practices and optimising the use of existing products – and being proactive by meeting the economic storms head-on.

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