|
|
|
|
 |
 |
|
How Product Lifecycle Management makes a difference in your industry: 
AEROSPACE
AUTOMOTIVE
CONSUMER
CONSUMER ELECTRONICS
DEFENSE
EDUCATION
INDUSTRIAL EQUIPMENT
HIGH-TECH ELECTRONICS
LIFE SCIENCES
PLASTICS
SHIPBUILDING
TELECOM
|
|
Value Opportunity Eight: Lowering Lifecycle Cost By Kevin P. Hopkins The ongoing success of South Korean manufacturer Keyang demonstrates that intelligent, strategically focused reductions in product lifecycle costs can generate significant financial returns. Few South Korean companies have won as many industrial awards as Keyang Electric Machinery, Ltd. Although it was founded in only 1977, the $100 million manufacturer of electric power tools, D.C. motors, engines, and other industrial and consumer components has been honored with many of the prestigious industrial recognitions that the South Korean government and industrial trade associations have to offer. Despite Keyang's position as the market leader in many of its product segments, Keyang President Sang Ik Lee speaks of continuous growth and development, supplying the best-quality products, and "incessant innovation." To accomplish these goals, the company is transitioning from its traditional product development processes to those facilitated by the Internet and other digital technologies. But Keyang's sights are set on more than operational improvements. Within the next few years, Keyang seeks to dramatically triple sales and profits to 340 billion and 30 billion Korean won, respectively, and to more than double its export volume. In addition, the company has vowed to significantly increase its customers' satisfaction levels by ensuring the highest feasible product quality across Keyang's 100+ product line. Analyzing the Problem This challenge is great, but Keyang's management team is focused and methodical. Their strategy for attaining these demanding goals draws directly on the systematic cost-control techniques envisioned by what product development software maker PTC calls its eighth Value Opportunity, "Lowering Lifecycle Cost." (As discussed in previous columns, PTC's Product First Roadmap defines paths and strategies that companies can take to create and capture value for their firms.) As this careful methodology would prescribe, Keyang began its assault on process-oriented product costs by determining that it could lower product development costs by focusing on two main factors: lead times for moving products from design to market, and the initial costs of developing many of the company's core products. Keyang also examined the quality problems that some of its largest customers were experiencing, and discovered that these problems usually were the result of a lack of consistency in the information flow between the company's engineering and manufacturing teams. Too often, the latest product specifications were not being communicated in a timely fashion, which led to manufacturing problems. Choosing a Proven Platform Armed with this knowledge, Keyang undertook a comprehensive corporate information technology initiative entitled K-KIMS (Keyang Knowledge & Information Management System). The initiative's purpose: to create an integrated collaborative development environment that would focus on improving the product development process in three key ways: • Reducing development cycle time by better managing product status and manufacturing progress data. • Reducing overall development costs through a common development information environment and more systematic component and design re-use. • Improving product quality through better coordination of information between the engineering and manufacturing teams. Perhaps the most important factor in the success of Keyang's K-KIMS initiative was its decision to build the new information system on a proven product management platform rather than starting from ground zero. After extensive research into its alternatives, Keyang chose PTC's Internet-based Windchill Product Lifecycle Management system as the backbone of K-KIMS. The accelerated implementation timetables that the use of Windchill enabled Keyang to deploy a complete centralized product data, document and process management and component search and retrieval system in January 2001 at a fraction of the time and cost that would have been required for a from-the-ground-up effort. Immediate Benefits The benefits started flowing almost immediately. Over the course of the following months, Keyang achieved a stunning 49% reduction in development cycle time through improved development process control, better management of product revisions, and increased reusability of component designs and product design data. And today, the company is achieving significant improvements in product quality due to the Windchill-facilitated exchange of product information between engineering and manufacturing teams. The success experienced by Keyang Electric Machinery, Ltd., demonstrates that focusing attention on lowering product lifecycle cost can be well worth the challenge, and that such cost reductions can generate tremendous financial advantage, both now and for years to come. That's a key premise of PTC's Product First strategy--reducing product lifecycle costs--and it's an important reason why Keyang remains one of South Korea's leading manufacturers as it moves full speed into the digital age. PTC's Product First Roadmap highlights this and eight other Value Opportunities. We have covered the first seven in preceding columns, and will cover the ninth in the next column. |
|
|
|
|||||||||||
|
Copyright 2003, by The McGraw-Hill Companies, Inc. |
