Management

Editor's Window

1 Jul, 2006 By: Sara Ferris

The Productivity Problem: Pressure to produce more will only get worse as resource costs rise




SolidWorks CEO John McEleney is optimistic about the future, and not just because his company continues to generate healthy profits. At a press event last month to announce SolidWorks 2007, he pointed to indications that job loss rates in the United States appear to be leveling off. He also made the case that the decline (around 3 million) in the number of manufacturing jobs in the past few years is attributable more to increased productivity than to migration of jobs overseas. Per-unit output per employee has nearly doubled in the past ten years, and there's been an 11-fold improvement in manufacturing output since 1940. In 1940, 32% of U.S. jobs were in manufacturing, but today only 14% fall into that category.

Sara Ferris
Sara Ferris

Instead of trying to hang onto jobs that will disappear anyway, the focus should be on maintaining and creating new jobs through innovation. McEleney cited various examples of how companies can succeed through innovation, from carving a niche in commodity markets (Toyota, for example) to commanding a price premium (Trek Bikes, Starbucks). Some companies can create entire new markets—the Apple iPod, for example, or the nascent commercial space travel industry.

McEleney expects lower-level manufacturing and even design job migration to increase. This migration is also starting to accelerate in the AEC area, which in the past had seemed somewhat immune because of the need to design and build to suit a specific location. More offshore companies are soliciting AEC firms, and we're even seeing builders adopt practices such as mass fabrication of components that are then simply assembled at the building site.

The pressure to improve productivity will also persist as prices for fuel and raw materials continue to increase (as McEleney predicted would happen two years ago). Manufacturers have few options when facing greater costs for goods. The simplest solution—raising the price of the finished product—often isn't feasible, especially in a commodity market. That leaves manufacturers to look for economies in the design and manufacturing process by seeking alternative materials and finding ways to optimize material use, all without reducing product quality.

CAD comes into the picture by enabling product designers to work toward these goals. Increased access to analysis tools in particular allows designers to evaluate different materials and fine-tune designs to shave material costs without affecting performance. COSMOSXpress, the analysis tool that comes with SolidWorks, includes a part-optimization tool that helps designers hit, but not exceed, certain performance standards.

SolidWorks 2007 also introduces a suite of SWIFT (SolidWorks Intelligent Feature Technology) tools designed to automate mundane tasks such as filleting and dimensioning, and free up time for more valuable work.

McEleney stands by a further prediction from two years ago: If a company is not using 3D in five years, it will not be in business, or it will be in a very different business. SolidWorks continues to add tools to aid in migrating from 2D. SolidWorks 2007 can use AutoCAD blocks as well as create its own from sketches.

SolidWorks 2007 appears to contain plenty to appeal to both current and new customers. We'll do a full hands-on review in an upcoming issue.




About the Author: Sara Ferris


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