Engineers in many distant Fleetguard facilities contributed during the two-year development of a new line of composite-body filters. It is far from the first global design project for the auto industry supplier, but it marks a major change in the way design teams communicate.
"We're using video teleconferencing less and less," says Greg Hoverson, advanced product development manager at Fleetguard's Nashville, TN offices. "Instead, we're using more markup tools and screen sharing. With the Internet, everyone can connect in an Internet room and look at the same image while communicating in real time."
The Internet is finally delivering on one of the promises of the dot-com craze, making it easier for global design teams to work together. A recent Product Innovation study by the Boston-based Aberdeen Group found that 44 percent of companies had global design projects, with more than half of discrete manufacturers adopting this form of globalization.
Usage is broad throughout many fields. "It's generally mechanical design that's gone to a global environment, though electronics has also adopted this model," says Jim Brown, vice president of Engineering Research at Aberdeen. He noted that process manufacturing is among the fields that remain cool toward global design teams.
Though the technology has been available for years, widespread interest in global collaboration is still in its early phases. "This has really started to gear up over the last 12 to 18 months," says Michael D. Gugger, business unit manager at TechSolve, a Cincinnati-based consulting firm.
Major companies, like Fleetguard's $10-billion parent Cummins Inc., are leading the trend, but usage isn't significantly skewed to these giants, according to Brown. However, he notes there are differences in approach. "The major companies like Ford or GM have employees, smaller companies have partners," Brown says.
Smaller companies generally outsource to design houses, while larger firms use remote facilities. But these majors also work with multiple partners. That's particularly true in the automotive field, where design teams for international suppliers commonly work together to meet automakers' requirements.
"With global sourcing and global corporations, we're communicating with Japan, North America, Mexico and Europe for one design," says Dave Goff, engineering supervisor at Omron Automotive Electronics of Novi, MI.
Multi-continent design projects seem more likely to become the norm than simpler links between two remote sites. Companies may begin with one remote group, but they generally add more teams once they're comfortable with the concept. "Companies don't just go to one country, many have operations in four different geographies," Brown says.
Though outsourcing design can lead to growth in the number of partners involved in a project, observers note there are ways around that. Contract manufacturers are increasingly adding design capabilities. Oftentimes, these manufacturing service providers get their foot in the door by doing simple redesigns to cut costs. They then offer more design services, giving companies a chance to outsource without adding another vendor.
"Once the OEM is confident the electronic manufacturing services company can do a board layout, they'll give them more design work, which often grows into more difficult portions of design," says Charlie Wade, chief analyst at Technology Forecasters Inc. of Alameda, CA.
Linking design facilities scattered around the globe is taking off because it has become far easier and far more productive, in recent years. In the days of promise during the dot-com boom, the cost of bandwidth and workstations limited usage to projects that had large budgets.
Now, advances in computing and communications are helping make global design teams viable. Today's fast CPUs and high bandwidth links let engineers work with more complex models, while also letting engineers around the globe view and transmit files that are easier to understand.
"Years ago, we were moving 2D files. Now we're transferring 3D, fully-surfaced models," says Mark Chernoby, vice president of advance vehicle engineering at Chrysler.
Shorter design cycles are another driving force. Some companies are actually realizing the oft-touted benefits of passing projects off to a distant time zone at the end of the work day.
"We'll send a person in India the design, they'll work on it all day and the next morning we'll be far ahead of where we were when we left work," says Ted Loftis, director of liquid product engineering at Fleetguard.
But most observers agree that money is the key motivator. "The 24/7 approach is less about 24 hours than it is about low costs. Engineering resources in India are less expensive, but the experience and production knowledge lie in North America," says Bob Brincheck, director of Dassault Systemes' Automotive Business Unit.
Saving time and money doesn't come without challenges. One challenge, data protection, arises any time people outside the company have access to critical information, and that's exacerbated any time a message is sent over the Internet. This focus on data security is critical in the highly-competitive automotive industry.
Most automakers shun the Internet, instead establishing Intranet links between their facilities and those of their key suppliers. Even then, they strive to minimize the chance of leaks. "Normally we use fully secure, encrypted channels," Goff says.
Aberdeen's study ranks the protection of intellectual property as the number one concern. But Brown notes companies often do little to protect IP. For example, many companies use secure communications for joint technical sessions, but don't think about the key information that's often sent over the Internet in e-mails.
This lack of protection becomes particularly acute after their programs have been running a while. "Once they're involved for more than a year, the emphasis shifts to tactical fires that have to be put out, so they lose focus on protecting IP," Brown says.
Another factor is keeping remote groups working together. Any time more people and more locations are added, engineers and managers both have to expand their focus to make sure that messages are understood correctly.
"It adds complexity when you're communicating and controlling teams with different cultures, time zones and languages. Even going across corporate boundaries adds challenges," Brown says.
Managers have to be aware of these differences, and make sure the various teams don't break up into competitive groups. Managers must also be sure the members all share common goals, among other challenges. "A key element in success is the skill of the team leader to drive the team relationship," Gugger says.
Though there are challenges and problems, few observers predict any slowdown for outsourcing.
"Companies that have strategies in place are investing more. That tells you there are benefits," Brown says.