We may have grown into a global economy, but orchestrating product development and engineering practices on a global scale is no small feat for any company — no matter what size. Yet while some of the largest manufacturers are still trying to iron out the organizational and cultural challenges surrounding global product development, one small U.S. design shop has mapped out a strategy and is well on its way to making the practice less myth and more reality.
The 40-plus person Acorn Product Development develops mechanical and electro-mechanical products for a roster of marquee clients — Siemens Medical, Apple Computer Inc. and Nortel Networks, among them — in industries such as communications, medical devices, computers and communications. Unlike most small design firms that are primarily U.S.-based, Acorn's engineering team is spread across offices in Fremont, CA, Boston and Dongguan, China. This far flung business model gives Acorn an edge among the smaller players, company executives maintain, while helping it better compete with contract manufacturing giants which are changing the game by adding design capabilities to their arsenal of outsourced manufacturing services.
“Contract manufacturers designing product use labor engineering talent from Asia,” explains Ken Haven, Acorn's principal. “That was one of the drivers to go global — we had to develop manufacturing relationships and tap design engineering talent that more closely modeled and matched what the contract manufacturers use.”
Matching that global business model meant Acorn would have to confront the same set of challenges the big guys are grappling with. High on the list of hurdles for Acorn, and any company pursuing global development: Creating business models that support a multi-site approach, putting processes in place to enable round-the-clock development across time zones, embracing tools to foster collaboration and file sharing across remote engineering sites and last, but certainly not least, addressing the cultural differences between geographic regions.
“People work and think differently depending on their personal and organizational cultures — using the same words does not always mean the same thing and that can cause confusion,” notes Ken Amann, director of research for CIMdata Inc., an Ann Arbor, MI, market research firm specializing in CAD and product design. “Helping workers in different organizations, time zones and cultures understand how others work and what they need to accomplish improves communication, the proper setting of expectations and collaboration.”
Design for Manufacturability: Acorn's Original Value Proposition — it's Focus
While a differentiator today, going global wasn't Acorn's original value proposition — it's focus on design for manufacturability was — and still is — a major strong suit. Haven, who spent years in engineering roles at companies such as NeXT Computer and Hewlett-Packard Co., had first-hand experience with outside firms that produced strong front-end mechanical designs that often ended up requiring last minute and expensive tweaks when it came time for manufacturing. From its inception in 1993, Acorn put processes in place to ensure that kind of scenario wouldn't happen. Its entire mechanical engineering staff is trained in thermal and structural analysis. There is always an engineer as the point person for each client, and there are a variety of other checks and procedures in place to ensure the designs are conceived from the ground up with production in mind, Haven says.
Beyond those internal procedures, Acorn's efforts to expand globally over the last few years have bolstered its ability to manufacture for design. Since a sizeable percentage of manufacturing is outsourced to China, it made perfect sense, Haven contends, to open an Acorn office in that region. There, Acorn could take advantage of low-cost manufacturing expertise available in the region, gain access to local clients as well as deliver a service to customers by having the manpower to oversee clients' manufacturing efforts, allowing them to cut back on international travel.
Acorn's approach of integrating its remote offices as opposed to mirroring operations at each location is part of its pitch around globalization and customer value. As opposed to providing a “cookie-cutter” palette of services in each region for mechanical engineering, human factors or industrial design, Acorn instead tailors the primary services it offers geographically based on the level of expertise available and the local need. “The danger of a cookie-cutter approach is that each area of the world operates very differently and the way you perform services might not be required in that marketplace,” says Mike DiMartino, Acorn's vice president of business development. “Making the argument that CAD work has to be done in China doesn't create a value proposition to a major customer. But telling a company that their guy in Austin [Texas] doesn't have to fly over to China for two weeks when the first article comes off the line — that's how you can establish a successful office.”
Whether you set up in China or Boston, there is still a significant amount of formal communication and operating procedures that must be established in order to make a remote office a success. Of primary concern is where to set up shop—a requirement that Acorn bases on the needs of the market and its current (and potential) customer base. Once the market is chosen, picking the right office environment is equally important, especially in Acorn's case, where the remote sites are small — generally between five and 10 employees.
In Boston, for example, Acorn choose a location at the Cambridge Innovation Center, a facility that has all the infrastructure in place for an office (including IT and administrative support), but also offers a community of other innovation-focused businesses to draw on. China presented greater challenges. There, Acorn found a manufacturer looking for an engineering partner, enabling it to trade its engineering expertise to defray some of the costs associated with office and administrative overhead. Haven and his partner also serve as sponsors for each of the remote sites and travel to each accordingly. “Remote offices can feel like out of sight means out of mind,” Haven says. “By each of us managing one site, they feel like they're not orphans and it splits up the travel burden.”
One of the more pressing issues has been how to handle cultural differences between how product development is done in the United States compared with China. In China, for example, following instructions in a direct fashion is sacrosanct, while in the U.S., people are encouraged to speak up if there are problems, explains DiMartino. “In the United States, it's OK for someone to stand up and say, `we're not ready,' but in China, that would be a face losing proposition,” he says. “We've had to work on making our China team members realize that it's acceptable to make those kinds of comments. If you do it enough times, the process takes over the cultural imperative of not identifying things that could serve to embarrass higher ups.”
Cross pollination among internal people and processes is another imperative. Acorn has instituted formal procedures for communication — English is the main language, and daily communications are replicated in e-mails, conference calls, sketches and design markup sessions. Employees also spend time in the other offices, to forge relationships and gain a sense of what the other sites do. Finally, Acorn puts a priority on promoting internal people from headquarters to serve as the remote site managers so they have inherent experience with the company's culture and values and can easily impart that knowledge to the rest of the group, Haven explains.
Technology is also playing a role in helping Acorn collaborate on a global basis. The firm several months ago starting using the Windchill PDMLink Product Data Management tool from PTC to serve as a central repository for all product-related materials and CAD files, which allows anyone with access from any remote site to get at the data. Previously, the teams would perform FTP file transfers of large CAD files to share designs — a process that ate up a significant amount of time, requiring someone to manually initiate the downloads, watch for errors and restart if something went amiss.
More widespread use of PDMLink will also help Acorn facilitate continuous work across time zones, Haven says. “After 5 p.m. California time, anything we do overlaps with [China's] work day so if we want to collaborate, we have to stop work and freeze it otherwise it's not consistent,” he explains. “With Windchill [PDMLink], we'll have a lot more flexibility with sharing work.” Having a central repository for designs with revision control will also eliminate any problems that engineers have encountered working on designs without full knowledge of the history tree associated with a particular model, he adds.
To ensure the quality of the data being stored, Acorn has put a number of procedures in place, including a process called CAD check, in which multiple teams check the entire database associated with a design for parts, assembly and engineering content. “They comb through the database to make sure there are no interferences or no design errors,” he explains. “It can take a couple of days work, but in the end, it saves a lot of time in the development process.”
Having these kinds of formalized processes in place to foster collaboration on a global basis has already paid off, and Haven says more opportunity lies ahead. A recent redesign of an ultrasound medical imaging system for Siemens Medical underscores Acorn's progress. The redesign needed to be done in short order so Acorn was really looking to perform as close to 24/7 development as it could achieve. The U.S. team worked on the surfaces and models during the day and handed off to the China team at night, which then sent back their efforts by morning. By achieving close to 20-hour design days, Acorn met its deadlines and a prototype of the Siemens imaging system was ready for its trade show debut.
“Global product development is not trivial to implement because there are so many aspects to it,” Haven says. “You hear a lot about teams working around the clock, but in practice, it rarely happens. In reality, we've done that.”