CIMdata PLM Industry Summary Online Archive
30 June 2004
Company News
PTC Study: Product Development Practices Positively Impact Corporate Performance in the Industrial Equipment Manufacturing Industry
PTC announced the results of a new global benchmark study of the industrial equipment manufacturing industry that reveals product development to have a significant positive impact on corporate performance. The study also shows that real competitive advantage is created through superior product development capabilities and execution. While some of these capabilities are always relevant for both industry leaders and laggards, companies with the best PLM tools and capabilities have better product development performance, including faster time to market, lower engineering change order (ECO) cycle times, and fewer ECOs after design release.
The study, conducted by PTC and the Aachen University of Technology in Germany is based on interviews with senior executives (vice president and directors) across North America, Europe and Asia in the industrial equipment industry. Study highlights include the following conclusions:
Value Chain Complexity Increasing-Industry-wide, product development activities are increasingly being distributed across multiple teams and sites, a trend that is likely to continue. Companies experiencing the highest gains in profitability have dramatically increased their rate of outsourced R&D, with industry leaders outsourcing nearly 50 percent more R&D activities than less successful companies.
Platform Focus Wins-Successful companies launch more new products and generate more revenue from each new product. And though it is often the case than an increase in product variety has a negative impact on profitability, the top-performing companies in the industrial equipment industry minimize that affect by launching six times more new product variants per platform than their competitors.
Leveraging Diverse Platforms Drives New Product Revenue-Industrial equipment leaders are most apt to invest in smaller, more numerous product development projects than their peers-creating a more predictable development pipeline. This practice indicates that leaders have an established portfolio strategy that relies on regular product line extension. The strategy aligns closely with the platform focus, together creating a solid foundation for better product development process management.
"We've found a number of product development practices and capabilities shared among the industrial equipment industry leaders-as well as commonalities shared by the under-performers in the industry," said Abraham Chaves, director, Industrial Equipment Market Development at PTC. "Our study shows companies with high adoption of PLM tools and capabilities complete development projects both on time and on budget more than twice as often as companies with less mature PLM tools and capabilities."
The research study also shows a growing gulf between top and bottom-tier industrial equipment companies in earnings growth, with the leaders enjoying 47 percent growth on average, while trailers have seen a decrease in earnings by and average of 35 percent.
To learn more and to become a participant in the ongoing study, which is measuring how an industrial equipment company's product development practices and capabilities measure comparatively to the top performers in the industry, visit http://www.ptc.com/solutions/industry/industrial/index.htm
RWTH-The Aachen University of Technology in Germany, is one of the world's largest and most distinguished engineering universities. Founded in 1870, RWTH today enrolls more than 30,000 students.
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