Global product design has become the reality for many companies. Recent
Aberdeen Group benchmarks indicate that fully 59% of manufacturers have a strategy in place to pursue global design, and one-quarter of companies are already outsourcing some design processes.
Aberdeen's just released "Global Product Design Benchmark" report* reveals that the level global design will increase over the next two years. Over one-half of manufacturers indicated they will increase product design in third-party or company-owned offshore design locations. Despite this, companies are not adequately addressing operational concerns raised by global design strategies.
Overcoming Global Design Challenges
As more companies set up design centers in geographically dispersed areas and outsource design to third parties, the challenges they face in bringing product innovations to market intensify. While global design often yields attractive costs benefits, the process adds new communication, control, and collaboration challenges, while complicating the art and science of managing product innovation, product development, and engineering.
Nearly two-thirds of respondents to our study indicated strategic challenges concerning the protection of intellectual property (IP); one-third pointed to challenges related to retaining corporate knowledge of product design in addition to more commonplace concerns tied to the execution of design across a remote network of individuals.
Despite the concern over IP protection, most of the companies surveyed are not adequately pursuing corrective actions. Instead, most companies rely on e-mail, documents, and spreadsheets for at least some of their design collaboration efforts, which can put intellectual property at risk in global design environments. PDM and other collaboration approaches can help to minimize this risk, along with other approaches such as reducing the sharing of detailed, native CAD files by leveraging lightweight design representations.
Further, new solutions to promote digital rights management -- from Adobe Systems Inc. and Microsoft Corp. -- aim to add control to less formal collaboration methods such as e-mail communication.
Slightly less than half of all respondents said they are using PLM technologies such as PDM and collaboration tools to more effectively synchronize distributed designs and manage change across teams. One-third of respondents said they are using such tools to facilitate tighter collaboration with partners. They are also leveraging standardization of product development processes and design tools to reduce the negative impacts of remote development teams. PLM tools are offering solutions to global design's tactical challenges.
For companies to reap strategic objectives from global product design, they must overcome these challenges. Although most companies are pursuing global design for tactical goals such as reduced product development costs, some companies also place equal importance on decreasing development lead times and increasing design capacity. Leading companies are also pursuing such strategic goals as "follow the sun" and "closer to market" approaches that are intended to grow revenue in addition to controlling product development costs.
Recommendations for Action
Regardless of competitive maturity or depth of technology experience, all manufacturers can take specific actions to improve the performance and reduce the unintended complications from their global design strategies. Companies pursuing global design should consider the following recommendations for success:
* In November 2005, AberdeenGroup examined the global design strategies, challenges, and approaches of more than 125 enterprises across multiple manufacturing industries to benchmark their global product design strategies, the challenges they face, and the actions they take to address the complexities of global design.
- Ensure a solid data and process foundation;
- Measure product development performance internally and with partners;
- Measure performance more frequently, including global design networks;
- Evaluate low fidelity approaches to sharing designs instead of sharing native CAD files, when full detail is not required;
- Look for ways to enhance lightweight forms of design collaboration;
- Look beyond standardization of design tools to take full advantage of expertise and available global design resources without the limitations of common tools;
- Continue to monitor attainment of global design objectives, and extend the value beyond cost savings.
Jim Brown is Vice President of the Global Product Innovation and Engineering service at AberdeenGroup, a market research firm in Boston. He can be reached at jim