The computer industry always moves fast, but the pace is picking up even more in Detroit as Ford Motor Co. implements a massive change in its companywide product development processes and Silicon Graphics Inc. (SGI) announces plans to merge with legendary -- but troubled -- supercomputer producer Cray Inc.
Neither event comes as a surprise to industry insiders, but the Ford move in particular represents big new challenges to those charged with developing new designs almost entirely on computers.
Hammered by Wall Street for spending too much to develop new vehicles, Ford has quietly announced it intends to chop $11 billion out of its new product development processes over the next several years.
Part of this initiative is Ford's C3P strategy, which aims to restructure the automaker's computer-aided design, manufacturing, engineering (CAD/CAM/CAE), and product-information management systems into a global system of common data.
Neil Ressler, Ford's vice president of Advanced Vehicle Technologies, says "C3P is the most significant retooling of the design automation environment ever undertaken at Ford."
It's major surgery to Ford's central nervous system," adds Paul Blumberg, Ford's director of Product Development Systems. Yet he says that by 1997 the changes should improve engineering efficiency 35% and reduce prototype costs by 35% to 40% compared with levels established in the 1990-'94 period. Investment efficiencies also should be improved by about 25%, says Mr. Blumberg.
At the heart of the change is Ford's decision to scrap PDGS, it's aging in-house graphics software, in favor of new software developed by Structural Dynamics Research Corp. (SDRC).
Worth more than $200 million over the next five years, the deal includes not only software license revenue but also consulting and training services for Ford and key suppliers. It is believed to be one the largest contracts ever in the CAD/CAWCAE industry.
The software will be phased in over the next five years -- at all of Ford's vehicle centers -- starting with new programs scheduled to debut in 2001. The first to use the new software will be at Ford's vehicle center in Europe. Vehicle programs developed with PDGS and scheduled to debut earlier will likely remain in PDGS files.
Almost everyone agrees that PDGS has become outdated. Large units of Ford, such as its powertrain operations, already have abandoned PDGS for other commercially available products.
But suppliers, who are steadily taking on a larger share of CAD/ CAM/CAE work from OEMs, complain this change adds yet another level of cost and complexity to their operations. Suppliers now have to accommodate different computer engineering systems at each automaker with separate software and workstations costing up to $90,000 each. Adding SDRC software means suppliers have to add yet more workstations and training.
Mr. Blumberg says Ford is sensitive to supplier concerns. They will be able to purchase SDRC software for the same volume price Ford gets, and licensing fees paid to Ford,for PDGS use are waived after suppliers switch to SDRC. Once word gets around how good the new software is, says Mr. Blumberg, suppliers might not mind the switch because it will enhance productivity.
Even so, he admits it will take a typical PDGS user three to five weeks to get, trained and "a month or two" to get fluent with the new system. Mark Goldstein, SDRC's Ford product manager, says sites are being set up in Dearborn, MI, and Europe to train engineers and designers on the new software. He emphasizes that training is a large portion of SDRC's contract with Ford.
Less disruptive, but still significant, is SGI's bid to merge with Cray, well-known producer of high-end supercomputers: super-fast machines capable of 60 billion calculations per second and costing as much as $35 million each. Every major automaker in the world has at least one, and many have several. They use them for their most data-intensive number-crunching operations, such as crash-test simulations and aerodynamics research. Ford recently ordered three more.
Although Cray's technology and customer service is highly regarded, cutbacks in U.S. government and military spending -- plus other problems -- have had the company struggling financially in recent years.
Insiders say the merger with SGI -- not yet finalized -- has companies with huge investments in Cray equipment heaving a sigh of relief.
SGI, a fast-growing producer of high-end workstations and low-end supercomputers used to create many spectacular Hollywood special effects, is seen as a strong partner. It's worth noting that Chrysler President Robert A. Lutz now sits on the SGI board.
SGI is the leader in supercomputers costing $1 million and less, while Cray is the leader in supercomputers costing $3 million and more, says Joseph E. Dinucci, vice president-automotive industries at SGI.
Mr. Dinucci, a Jaguar aficionado, likens the merger to Ford's purchase of Jaguar -- without the overspending. Future Jaguars will share some common elements with Ford vehicles where it makes sense, but they will remain distinctively different products. The same will likely be true for SGI and Cray computers, Mr. Dinucci says.
