Silos changing: Invest in the NPI process

This week, Mike Evans, Cambashi's research director, discusses potential software applications deployments that respond to business initiatives to invest more in New Product Introduction.

Experts at industry analyst and market consulting firm Cambashi contribute a regular blog for TM titled Silos Changing exploring how new software applications enable manufacturers to implement business initiatives for the new economy.

One business initiative in our last blog suggested that management teams should bite the bullet and change their business models to invest a higher percentage of sales in R&D. 

As a marker, note that many pure software companies spend 20% of revenues on R&D. ABB, a company with a range of initiatives to deliver more software value in a largely hardware revenue stream, believe they need to increase R&D spend from 3% of revenues in 2009, to 4% in 2015. 

A business initiative to spend more seems perverse in the current economic climate. However, software has a low marginal unit production cost. For a general manufacturer adding more software to the mix, the objective of increased spend will be to improve the price performance of each production unit. 

The remorseless advance of Moore’s Law means that sensors, processors, networking and memory are all improving their price performance year by year. There are new nanotechnology silicon artefacts including novel materials and miniature machines with similar cost advantages.

A business initiative to change the design and new product introduction workflows should have the objective of improving overall product life revenues and profit.

One action would be to replace as many components as possible with software and silicon. Another would be to generate more after-sales revenue. A good example of that is Apple’s royalties when consumers download a third party App. 

Smart products make design more complex. There are more disciplines in systems: mechanical; electrical; electronic; hydraulic; thermal; control; electric power; or process-oriented. That means more options, more variants, more interfaces between designers and other organisational units. 

The challenge manufacturer’s face is for management to maintain control of a dynamic product development process.  Programme and Portfolio management is an important initiative. So is Requirements Management which we wrote about last December

However, we would argue that management teams trying to get the most value from this increased investment should focus on systems engineering and model based design.  There are several software solutions.

The MathWorks’ MATLAB and Simulink. Simulink, is a modelling tool that can simulate and analyse multidomain dynamic systems. Its primary interface is via diagrams using a set of block libraries. It can either drive MATLAB or be driven from it. Simulink supports model based design.

The Systems Modeling Language (SysML) is a general-purpose modelling language. It is an extension of a subset of the Unified Modeling Language (UML), oriented towards model based software development. 

It supports the specification, analysis, design, verification and validation of a broad range of systems and systems-of-systems.  SysML was originally developed by an open source specification project, and includes an open source license for distribution.  As well as open source, commercial firms sell tools such as Atego’s Artisan Studio.

Modelica is an object-oriented, declarative, multi-domain modeling language for component-oriented modelling of complex systems.  The Modelica language and the Modelica Standard Library are free and developed by the non-profit Modelica Association.  Several commercial firms, notably Dassault Systèmes, sell products based on this environment.

National Instruments LabVIEW (short for Laboratory Virtual Instrumentation Engineering Workbench) is visual programming language that acts as a system design platform and development environment for a range of science and engineering applications.

For real control there needs to be linkage between requirements; models that decompose those requirements into functions; and test cases that verify that designs as they progress meet requirements.  While most suppliers have some kind of solution most of them rely on manual tagging and it is still a problem to get test and usage cases to link automatically to functions and requirements.

In future blogs, we will go on to write about other potential deployments that respond to these business initiatives to address consumer and business demand for smart products and devices.