@plasticmaker: I have to agree about the role of both methodologies. You can never fully replace the physical prototype. Yet as you mentioned, by reducing the number of physical prototypes to one or two greatly takes cost, time, and late-stage workarounds out of the process, which ultimately leads to better products in a shorter timeframe.
I think there's a place for both virtual and physical prototyping, especially in the product manufacturing arena. During the design phase, virtual prototyping and finite analysis cut down on the cost of multiple physical prototypes by requiring the designer to make only one...maybe two actual renditions of what he's inventing. This also cuts down (in a big way) the amount of time it takes to complete a project!
I actually think virtual prototyping is used pretty extensively in manufacturing organizations today--particularly ones in the automotive, aerospace and heavy machinery sectors that have made significant investments in PLM and digital prototyping tools.
Most forward-thinking engineering organizations are pushing for more virtual prototyping and virtual simulation far earlier on the process because it is so much cheaper to iron out design flaws then before "bending metal," as they'll tell you. I think the cost of these tools has come down greatly, they have become far more accessible and easy to use, and I think usage is definitely on the rise. That said, clearly virtual prototypes will ever completely replace physical prototyping or even the rapid prototyping stuff. But using the digital world to reduce the number of physical prototypes built is definitely where it's heading.
Beth, what's the status of virtual modeling as a replacement for acual physical prototypes? It seems like virutal got a tremendous buzz a few years back, and now I don't hear much about it. I know virtual modeling is a huge success at P&G, but a lot of their modeling is process modeling and not product modeling. My own gut feel is that the tremendous advances in inexpensive, great-looking 3D-printed prototypes have pushed all-virtual modeling to the background. It seems I've been in many engineering departments where I asked the all-virutal question, and I get a kind of pained look on the face of the chief engineer, and a comment that begins: "We tried it on X, but......" What's your take?
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