0
MSC.SuperForge: Simulating for Profitability
Today’s forging simulation software may be more valuable to the forging company’s finance department than to its design group.
Controlling costs in the forging industry
Table of Contents
The Incredible Shrinking Margin
Firing for Effect
Cliché du Jour : Time is Money
Cleaning Out the Attic
Putting Your Forgings on a Diet
Don’t Use an Elephant Gun to Shoot a Butterfly
Doing the ROI Math
How Do You Catch a Cloud and Pin It Down?
The Bottom Line Might Be the Top Line
The Incredible Shrinking Margin Like gravity itself, a universal truth in all manufacturing operations is the constant and unrelenting downward pressure on prices, and, by extension, margins. Unfortunately, the forging industry is no exception. Even in good times, price pressure seems as much a part of the industry landscape as a 500-ton screw press, but market realities both within and external to the forging industry are accelerating that pressure. Custom forging shipments from North American suppliers decreased between 7% and 8% between 1998 and 1999 - the first time that’s occurred since the early 1990s1. Further, an impending end to the nearly unprecedented economic expansion of the 90’s2, higher oil prices, and other factors have the potential to exacerbate that trend in the coming quarters. Meanwhile, operational and personnel costs continue to rise, as the price for an ever-shrinking skilled labor pool increases3. Even pro-active efforts by the US Government may contribute to the cost pressure on America’s forging companies, as OSHA’s proposed Ergonomics Program Standard would, in the words of the Forging Industry Association’s reply to the proposed
1 Forging Industry Association press release; May 19, 2000; “1999 Annual Forging Industry Sales Released by Forging Industry Association.”. 2 As this paper was written, for example, Ford Motor Company announced an earnings shortfall and plans to cut production in 2001. (CBS Marketwatch, December 22, 2000). 3 Respondents to the Forging Magazine 1999 Business Outlook Survey ranked the cost of medical insurance, foreign competition, and the “general labor shortage” as the top three problems facing forging operations in the coming quarters.
regulation, “negatively impact the viability of several domestic forging operations…”4 The margin pressures on forging operations are not limited to North America. A survey of the economic conditions in several European countries predicts forging selling prices will fall between 1% and 3.5% in most European nations5. At the same time, energy costs are expected to rise upwards of 80% in Europe, while forging labor costs continue to increase as much as 8% in the coming quarters.6 Even experienced managers might view these storm clouds as strong reason to consider substantial decreases in capital investment, drafting retrenchment plans to weather the coming storm. The opposite view, however, may be more fitting when viewed with an open mind and longer horizon. It’s true that the typical forging business is unable to affect the global market factors that dictate prices and demand for forging products. On the other hand, controlling internal costs, increasing the operation’s differentiation through time-to-market and manufacturing flexibility, and improving the utilization of expensive equipment are all very much within the control sphere of each forging company. Moreover, the increases in maturity and user-friendliness of state-of-the-art computer simulation software products render them a highly attractive investment option. Forging operations that have made those investments in simulation software are reporting unambiguous reductions in operational costs, decreases in time to market and
4 Forging Magazine; Jan/Feb 2000; Page 30. 5 Exceptions to this prediction are the Czech Republic and Belgium where forging selling prices are expected to rise 2% and 1.5%, respectively. 6 Euroforge Economic Report, October 2000.
improved operational flexibility and competitiveness. From an advanced technology perspective, few doubt that simulation software will be a key element in the modernization of forging industry operations in years to come, but the industry has yet to fully embrace the compelling story of computer simulation software’s financial value in the forging industry, especially in light of its never-ending battle to control costs and maintain its margins. As of late 1999, for example, only about 1/3 of the respondents to Forging Magazine’s Annual Business Outlook used computer simulation software, while, the second most common reason for not deploying simulation software was “cost concern”.7 In this paper, we’ll discuss the tangible, quantifiable benefits forging operations can achieve when deploying computer simulation software packages like MSC.Software’s MSC.SuperForge product, and we’ll base those benefits on the real-world experiences of forging operations using such products today. In this discussion, the reader will find that state-of-the-art simulation packages are no longer expensive toys used by a select group of designers, but rather key elements of the forging “toolbox”, as critical and potentially financially beneficial to a successful operation in the coming years as a hydraulic press. Firing for Effect Old artillerymen and fighter pilots understand the notion of sighting in a strike by firing around the target and adjusting their aim appropriately before 7 Forging Magazine: Nov/Dec 1999; Page 39.
“firing for effect”, or aiming directly at the target with the most potent shells. At times, it seems like the process of developing the die and tooling for a new forged part can be equally as iterative, often requiring the initial die design to be reworked 2 and even 3 or 4 times before the final production die is finalized. Needless to say, eliminating any of those iterations can not only save cost, but also greatly improve time to market, and with it the competitive advantage of a superior forging operation. German forger Otto Fuchs discovered that the use of state-of-the-art simulation software could not only reduce tool and die iterations, but literally eliminate them. Using MSC.SuperForge, they’ve reduced the number of new die iterations from 3 to 1 for certain parts, saving precious resources and time on expensive presses. In a recent Forging Magazine interview, Otto Fuchs head of design Jorg Ihne explained:
“In 3 weeks we can do the simulation for three different geometries of a complex part, optimizing the final geometry. And by using the same die design for production, development time can be reduced by a factor of three times, because the die doesn’t have to be changed three times and doesn’t have to be set up on the forging machine three times.”8
A Japanese forging company using MSC.SuperForge for nearly 4 years has enjoyed similar reductions in design iterations and their associated costs.
8 Forging Magazine: July/Aug 2000; Page 51.
Table 1: Conventional Tooling Development Cost Estimates for Three MSC.SuperForge Customers (man-hours)
Although one project leader estimated that they typically conduct only one or two tooling cycles for new designs, he has seen that process stretch up to seven iterations at times. After deploying MSC.SuperForge, he describes their revision expenses as being reduced “considerably”, with an accompanying improvement in product quality.9 Certainly no one would argue with the assertion that elimination of die process steps is desirable, and a quick analysis of potential real savings achievable by eliminating tool/die iterations demonstrates how compelling the quantitative benefits can be. Using generalized estimates for “typical” tool development from three MSC.SuperForge customers interviewed for this white paper, Table 1 provides a window into the range of man-hours required to develop tooling for new forging projects. The forging companies noted in Table 1, one in the US and two located in Europe, forge turbine blades for jet engines (US), blades for land turbines (Europe I), and primarily automotive parts (Europe II)
9 1/25/01 email interview with MSC.SuperForge Japanese customer.
respectively; their estimates provide useful outer bounds for typical forging industry tooling costs. Their tooling man-hour estimates are shown in Table 1, along with translations to dollar figures based on industry average salaries in the United States. In the case of the US forging operation, typical rework costs for the initial die cut are an incremental 40% of the initial cost, or an additional $2,000 per new tool design. The European I forging company highlighted above, however, finds that they typically require two rework iterations for a new tool
10 Interview with MSC.SuperForge customer on December 13, 2000. 11 Interview with MSC.SuperForge customer on December 18, 2000. 12 Interveiw with MSC.SuperForge customer on December 20, 2000. 13 Low-end Mechanical Engineer II salary from www.salary.com used ($55,832); 2,080 work hours per year assumed. 14 Low-end Tool and Die Maker III salary from www.salary.com used ($39,712); 2,080 work hours per year assumed. 15 Bureau of Labor and Statisics; Annual median salary for “Forging Machine Setters and Set-Up Operators, Metals and Plastic”; ($39,600); 2,080 work hours per year assumed.
Development Phase
Southeast US MSC.Software
Customer10
European MSC.Software
Customer I11
European MSC.Software Customer II12
Tool Design13 120 ($3,221) 192 ($5,153) 240 ($6,442) Machining14 80 ($1,527) 2,000 ($38,184) 120 ($2,291) Set-Up/Test15 16 ($304) 400 ($7,616) 32 ($608) Total 216 ($5,052) 2,592 ($50,953) 392 ($9,341)
Figure 1: Potential New Tooling Design Iteration Cost Savings Achievable Using Advanced Forging Simulation Software before it is production ready, and their costs for each additional iteration run approximately 50% of the previous design. Thus, the European land turbine forger would spend an additional $25,476 on the second cut of the new tool, and another $12,738 for the final version in a typical design cycle, or over $38,214 to rework the initial tool and die. European II’s rework results were similar to both the US customer and European I, but they also emphasized that tooling engineers and technicians typically represent their most experienced and skilled employees, underscoring the importance of minimizing the burden on their time. Using MSC.SuperForge, European I has eliminated one or both of the iterations in many of their new designs, saving tens of thousands of dollars each time MSC.SuperForge is applied successfully to a new design. Using the experience of these three companies, Figure 1 illustrates how these per part tooling iteration savings can add up to hundreds of thousands of dollars annually in return on the company’s
investment in computer simulation software. The four lines in Figure 1 plot the annual savings a forging operation might achieve depending on a per-part tooling savings bounded by our three MSC.SuperForge customers discussed above. The Figure underscores the powerful cost savings that can be achieved if tooling iterations can be reduced. Indeed, Figure 1 shows that if only $10,000 per part savings is achieved by eliminating iterations, $200,000 can be saved annually if the forging operation develops only 20 new designs each year. As the number of new parts produced annually increases, and as the per-part savings does as well, the annual cost savings for the forging operation can be measured in the millions of dollars.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
10 20 30 40 50 60
New Parts Per Year
Po
ten
tial
An
nu
al C
ost
S
avin
gs
$2,000 Savings Per Design $10,000 $25,000 $50,000
Table 2: Typical Press Downtime for Prototype Testing – 3 Examples Cliché du Jour : Time is Money
Without question, removing tooling iteration steps from the design process is desirable. As we discussed above, labor savings is achieved in all three phases of the tool’s development, and the delivery schedule also shrinks, rendering the operation more competitive, and customers more satisfied. But overlooked in the analysis to this point is the reduction in press off-line time, or the non-production time that results from fewer tool prototype iterations. Forging operators don’t need to read a white paper to understand that every day a press is off-line directly translates into lost revenue, but the degree to which computer simulation software can reduce that loss might not be so obvious. How long a press is tied up in prototype testing clearly depends on the
kind of press, size and complexity of the part, and a number of other factors, but few would disagree that downtimes are measured in days, not hours, for each new prototype. Table 2 presents some general estimates provided by MSC.SuperForge customers that participated in the development of this white paper. Translating the cost of lost press time can encompass everything from spare parts to the opportunity cost of not producing margin-generating products.. One MSC.SuperForge customer, for example, estimates that it costs between $200/hour and $1,300/hour to run its hydraulic presses ranging in capacity from 800 to 30,000 tons. A more generic, conservative estimate is provided in Figure 2 below, however. The chart provides an approximation of the cost per day to own an operating press, accounting for maintenance and depreciation costs only. Not taken into
MSC. SuperForge Customer
Typical Prototype
Press Downtime (Per Part)
Typical Prototype Iterations (Per Part)
Total Press
Downtime (Per Part)
Number of New Designs Annually
Total Annual
Downtime
SouthEast US Forger
2 Days 2 4 Days Data Not Available
Data Not Available
European Forger I
5 Days 3 15 Days 20-30 300-450 Machine-
Days
European Forger II
1 Day 3 3 Days 200 600 Machine-
Days
Figure 2: Estimated Cost Per Day to Own and Operate Forging Presses Assumptions:
• Equipment depreciated over 10, 15, and 20-year periods.
• Annual maintenance costs equal to 10% of equipment purchase price.
• Equipment available 6 days per week, 52 weeks per year.
• Equipment available 24 hours/day. account in this assessment is the opportunity cost mentioned above, equipment finance costs, nor are substantial refurbishment, rebuilding or repair costs included. Figure 2 clearly illustrates that it is somewhat of an understatement to assert that bringing forging equipment off-line is an expensive proposition, and thus underscores the financial impact of reducing the number of tooling iterations and therefore prototype set-up time on critical production equipment. MSC.SuperForge users are enjoying
these considerable downtime savings, and expect to achieve further savings as their operations fully integrate MSC.SuperForge. We’ve already cited the example of Germany’s Otto Fuchs operation reducing tooling iterations from 3 to 2 and sometimes to a single prototype using MSC.SuperForge. In another example, one Central US forging operation has been using MSC.SuperForge for only a few months, and, based on their results thus far, fully expect to reduce their prototype testing time by 50% when fully operational with the simulation software in the coming
$0
$5,000
$10,000
$15,000
$20,000
$1,00
0,000
$2,50
0,000
$5,00
0,000
$7,50
0,000
$10,0
00,00
0
$15,0
00,00
0
$20,0
00,00
0
$30,0
00,00
0
Equipment Purchase Price
Dai
ly O
per
atio
ns
Co
st
10-Year Dep.15-Year Dep20-Year Dep.
Figure 3: Potential Annual Cost Savings Resulting From Reductions in Production Line Downtime for Prototype Testing. Assumptions:
• 25 New Tool Designs Per Year • 5 Days for Prototype Press Set -Up and
Test Each Iteration • Equipment Depreciation Timetable of 20
Years • Annual maintenance costs equal to 10% of
equipment purchase price. • Equipment available 6 days per week, 52
weeks per year. • Equipment available 24 hours/day.
months.16 Figure 3 offers a translation of this simulation-driven prototype savings to dollar savings resulting from reductions in press downtime due to prototyping operations.
Figure 3 demonstrates that the collective savings resulting from the use of simulation software to reduce the number of prototype iterations and therefore press downtime is considerable. Using the conservative assumptions of Figure 3, the savings can run into the hundreds of thousands of dollars if only modest downtime savings of 20% are assumed, a very plausible figure in light of the examples already discussed here that 16 Interview with MSC.SuperForge customer on Decemb er 13, 2000.
showed iteration reductions of 2/3 in certain applications. Finally, the inclusion of prototype runs into normal production lines can have other unforeseen financial consequences as well. In a recent installment of the Forging Magazine Column “Ask Jim”, one writer related a problem his forging operation had with its local power company. The company operates mechanical presses off induction heaters, and are forced to run their die trials during off-peak power times or the power company will charge them a “large demand fee” for only a few minutes of heater time. The resulting question posed to Jim by the forging operation: “What can you recommend for us to develop our
$0$200,000$400,000$600,000$800,000
$1,00
0,000
$2,50
0,000
$5,00
0,000
$7,50
0,000
$10,0
00,00
0
$15,0
00,00
0
$20,0
00,00
0
$30,0
00,00
0
Equipment Purchase Price
An
nu
al C
ost
Sav
ing
s D
ue
to
Dec
reas
ed D
ow
nti
me
20% Savings 30% Savings 50% Savings
tooling more quickly?”17 As we have seen in this discussion, the forging operations using simulation software today have some ideas as to how best to answer that question. Cleaning Out the Attic Without question, the most common use of forging simulation packages is the optimization of new designs, but forging operations would be wise to consider taking a fresh look at existing production-stage parts to wring additional margin from those products. One European forging operation did just that. After deploying MSC.SuperForge, the company decided to review some of its existing production parts, leveraging the 3-D models that already existed for the bulk of these older forgings. In one particular case, the company used MSC.SuperForge to reduce the number of forging process steps for one of its turbine blade designs from 3 to 2, shaving nearly 1/3 off the total cost to produce the part. Given that turbine blade manufacturing costs can exceed thousands of dollars per copy, this particular European customer was able to save several hundred dollars per part, generating hundreds of thousands of dollars per year in additional product margin.18 Given the effort inherent in the development of forging tools, it would have been impossible for this forger to re-evaluate their existing designs, especially given the reality that not all simulations will necessarily result in new, more efficient tool designs. With MSC.SuperForge,
17 Forging Magazine; May/June 2000; Page 70. 18 Conversation with MSC.SuperForge customer on December 18, 2000.
however, considerable margin can be recouped out of mature production parts with limited investment, and the effect on the company’s bottom line can be extraordinary. Figure 4 provides an estimate of the margin gains potentially achievable if - like the European company cited above – a single step can be eliminated from the forging process of a production-forged part.
Figure 4: Margin Gains Resulting From Applying Design Simulation Software Packages to Existing Production Parts Assumptions:
• Annual Production Rate = 2,000 Pieces • Removal of a single process step reduces
overall part cost proportionally • Analysis Excludes One-Time Re-Tooling
and Analysis Costs
As illustrated in Figure 4, the removal of a single step from the forging process can translate into hundreds of thousands of dollars in annual margin savings for forging operations constantly fighting the dual challenges of downward price pressure and increasing internal costs. Although this limited analysis does not account for the costs to modify existing production lines (and recognizes that process steps can by no means be eliminated from all existing designs), it does highlight a latent opportunity for mature forging operations for non-trivial bottom line improvements, achievable in relatively short order by taking advantage of state-of-the-art simulation technology available off-the-shelf today.
Putting Your Forgings on a Diet It might sound a bit like the cost-obsessive accountant issuing a memo on excessive paper clip use in the office, but forging operations that employ extensive use of titanium and nickel-based alloys, for example, can realize significant material cost savings by giving attention to billet sizes and tool designs in an effort to reduce scrap. One European MSC.SuperForge customer with a number of clients in the aerospace industry reveals that about one fifth of its parts use titanium. The company simulates the bulk of its new part designs using MSC.SuperForge, and, among other benefits of simulation, has
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$100 $500 $1,000 $1,500 $2,000 $2,500 $3,000
Original Cost Per Part
An
nu
al M
arg
in In
crea
se
3 Process Steps 4 Process Steps 5 Process Steps
Figure 5: Potential Material Cost Savings Resulting From Improved Forging Designs Developed Using Simulation Software Packages Assumptions:
• Titanium price/kg = $30 • Nickel Alloy price/kg = $50 • Material weight savings = 10% • Number of designs per year = 5 • Average annual part production rate = 100
discovered that it is not uncommon for them to save 10% or more in material usage by experimenting with different tool designs using computer simulation. In one example, a tool for a titanium part with an annual production rate of 400 pieces and part weight of approximately 20 kg was developed using MSC.SuperForge. The company was able to estimate a 10% weight savings as a result of simulation-based tool development. Although at first blush a 10% material savings may not appear striking, the arithmetic suggests a different conclusion. Titanium can run as high as $40 per kg for this company, and
the total weight of the example production run discussed here runs about 8,000 kg annually (40 kg x 400 parts). A 10% savings therefore translates into a potential $32,000 annual cost reduction for just this one product line. This concept is expanded and generalized in Figure 5. Although not a critical issue for forgers employing mostly aluminum and other inexpensive materials, Figure 5 illustrates how relatively modest material usage savings can translate into tens and even hundreds of thousands of dollars for forging companies that commonly use expensive metals in their operations. . This same argument would hold for forgers who use relatively inexpensive materials like steel, but in high volume production runs.
$0
$50,000
$100,000
$150,000
$200,000
5 10 15 20 25 30 35 40 45 50Part Weight - Kg - (Before Trimming)
An
nu
al M
ater
ial C
ost
S
avin
gs
Ti-5% Savings Ni-5% Ti-10%Ni-10% Ti-15% Ni-15%
Don’t Use an Elephant Gun to Shoot a Butterfly
Optimizing forging designs for maximum production efficiency not only means reducing process steps, reducing expensive material scrap, and eliminating costly prototype testing iterations, but it can also include the judicious use of smaller, less expensive presses in lieu of larger ones. Using simulation software, forging design engineers can easily experiment with trial designs that can be run on smaller presses, resulting ultimately in lower production costs. The savings resulting from the use of a smaller press is directly applicable to its cost, and the savings is not always trivial. For example, the difference in deployment price between a 1,000 ton and 3,000 ton screw press might be as much as $500,00019. Assuming that maintenance and depreciation costs are proportional to the original cost of the equipment, and employing the same assumptions used previously in Figure 2 (with a worst-case, 20-year depreciation schedule), Table 3 illustrates the estimated annual operational cost difference between differently priced press machines.
19 Conversation with screw press manufacturer on 1/8/01.
Table 3: Estimated Annual Operational Cost Differences Between Differently Priced Presses
Original Equipment Price
Difference
Approximate Annual Operational
Cost Difference $200,000 $30,000 $400,000 $60,000 $600,000 $90,000 $800,000 $120,000
$1,000,000 $150,000 Thus, if a particular part can be manufactured using a smaller press, the annual production run savings can be many tens of thousands of dollars, enhancing the profitability of the part for the forging operation. The ability to easily and inexpensively experiment with multiple design options and techniques provided by simulation software allows forging designers to truly optimize not only the design, but its production methodology and equipment usage as well. Doing the ROI Math We’ve looked at a number of ways in which the users of simulation software have realized cost savings, and even if only one or two of these cost benefits are considered, the return on investment forging companies are realizing can be compelling. Sometimes, the ROI of simulation software deployment can be striking, as in the case of the European forger that used simulation to re-evaluate its manufacturing process for an existing production part. Saving one complete process step in a three-step manufacturing process, the company saved approximately $500 in manufacturing costs per part on a 2,000 piece-per-year production run. A basic
ROI calculation suggests that forging operation realized an approximately 400% return on its total investment in simulation software deployment. Although not all forging operation ROIs are that dramatic, they are nonetheless often compelling. By reducing tooling iterations, another European MSC.SuperForge customer is saving $25,000 or more each time it develops a new tool design using simulation software. The company develops about 200 new designs each year, but only uses simulation software on the most critical parts, about 20 per year. Even with this limited application, the company’s return on its investment in simulation software was roughly 200% in its first full year of use.
It is obvious from these few examples that realized savings will vary in quantity and type from forging operation to forging operation, but the likely return on the investment in simulation software is clear if only modest improvements in designs and production processes can be realized. This reality, coupled with the increased top line revenue improvements (discussed later) that simulation software can contribute to, yields an outstanding overall return on even a worst-case investment in simulation software deployment.
How Do You Catch a Cloud and Pin It Down? Ironically, what may be the most compelling reason to deploy advanced simulation software is the most difficult to quantify. Forging company operators, however, will fully appreciate that design
knowledge and insight comes not from a simulation software solution, but rather from the minds of its most experienced engineers and designers. Capturing, preserving, and successfully transferring this accumulated knowledge base in the face of retirements, job changes and other workforce disruptions is not only an extraordinary challenge, but absolutely critical to the continued successful operation of the business. It is undeniable that simulation software’s value is not limited to the reduction of prototype iterations, materials savings, improved quality, etc., but extended most importantly to capturing and retaining the design knowledge and insight of the organizations most senior and experienced designers. The core competency of a typical forging operation depends a great deal on a few, very experienced engineers, and it is no surprise that those valuable employees feel a strong pull from competitive forging operations. Indeed, the Managing Director of one of the European forging operations interviewed for this white paper identified knowledge capture and retention as the number one reason for the deployment of simulation software. An engineering manager at one US forging operation struck a similar conclusion:
“The forging industry is something of a black art. Lots of designs are still done by people with a lot of information and experience. Products like MSC.SuperForge can capture the knowledge and experience from people…into a simulation tool. This allows fewer trials, fewer errors…MSC.SuperForge captures what we already know and
helps forging move from an art to a science.”
Similarly, in the previously referenced December 1999 issue of Forging Magazine, Otto Fuchs’ Joerg Ihne also highlights the knowledge capture benefits of simulation software:
“…the extensive knowledge our team uses to develop forged parts needs to be documented and made available throughout our company. Our on-site experts have years of experience with forging processes and have developed detailed knowledge of the ideal material flow needed to manufacture our high quality parts. Because developing this understanding takes a long time and is very difficult, we decided upon simulation software.”
So, what does knowledge or the loss of it cost? Indeed, this is the $1M question, and a difficult one to answer. Certainly the cost of recruiting and training new designers is part of the equation. More importantly, however, the cost of poor or non-optimized designs is the most persuasive. A poor design can cost a company its reputation and customers, while a cleverly designed part can result in just the opposite. A part designed inefficiently can cost forging companies hundreds of thousands of dollars in manufacturing costs over the life of the production run, while a well-designed process can add that same sum to the company’s margins. A US Supreme Court justice once said in a famous opinion that he could not define obscenity, but “I know it when I see it.” In that same vein, it may be difficult to quantify the costs of lost design
knowledge, but forging operation mangers undoubtedly know it when they see it. The Bottom Line Might Be the Top Line We’ve spent the bulk of these pages discussing primarily the cost savings that can be directly attributable to the deployment of forging simulation software, but a more compelling, albeit less tangible, benefit may lie in the considerably increased competitiveness of the forging operation after deployment of state-of-the-art simulation tools. Though not necessarily trivial to quantify directly, there is little doubt that marked improvement in bringing new designs to market on tighter schedules helps retain customers, and attract new ones. Moreover, more creative, higher quality designs do so as well. Simulation software allows designers to experiment with new and innovative design and forging techniques, all without burdening the production operation with live prototype development and testing. Eventually, the forging operation that fails to innovate and continues to deliver proposals exactly the way all previous jobs were envisioned will find itself victim to the innovators capturing the attention of their previously loyal customer base. Forging simulation software also allows sales and marketing organizations to enhance the competitiveness of their RFP responses. Not only can proposals be submitted more quickly when design simulation software is employed, but the proposal can incorporate multiple design options and project a “high-tech” image of the proposing company that can serve as a powerful intangible during close competitions, or in cases where the
prospect is evaluating the forger at least partially on the basis of a long term relationship, with the forger’s ability to “grow with the customer” an element of the decision criteria. From a more practical perspective, employing simulation software during the proposal development process can enhance the accuracy with which the quote is developed, removing some of the guesswork typically left to the actual design effort after the project has been awarded. Thus, in an industry in which gross margins can be as low as 5%, the excess cost incorporated into the proposal as a “safety factor” to cover unforeseen design issues can often be the difference between a winning and losing bidding effort. Any tool that can increase the confidence with which the proposing forging operation can forecast actual design and production costs greatly improves the effectiveness of their proposal effort, and state-of-the-art simulation software might be the best tool available to fill that bill.
The new e-conomy demands that businesses do more of their business digitally, leveraging new technology to easily exchange electronic designs, tooling concepts, and subcontract work quickly without compromising quality. Further, as discussed above, as the global economy’s relentless appetite for highly skilled workers places more and more pressure on the forging industry to retain its veterans and quickly train young designers, the ability to access and leverage the collective knowledge base of the organization as turnover increases is also imperative. Today’s state-of-the art design simulation software is helping forward-looking forging operations enhance their competitiveness by
reducing design cycles, improving design quality and flexibility, capturing and transferring design “art” knowledge, and providing a digital basis for the exchange of information.
The bottom line: greater differentiation from competitors, more success in the pursuit of new business, and ultimately a higher revenue stream. As the substantial cost savings detailed in this paper, coupled with the not-so- subtle contribution to increased competitiveness and revenues becomes obvious to the industry as a whole, state-of-the-art simulation packages will no longer be a good idea, but rather a forging operation staple as common as a forging press. About MSC.Software Corporation To find your local MSC.Software office or to learn more about our company and our products, please contact:
Corporate MSC.Software Corporation 2 MacArthur Place South Coast Metro, California 92707 USA (714) 540-8900 Fax: (714) 979-2990
Information Center (800) 642-7437 ext. 2500 (USA) (978) 453-5310 ext. 2500 (International)
Worldwide Web - www.mscsoftware.com On-line Purchases - www.engineering-e.com On-line Simulation - www.simulationcenter.com
MSC is a registered trademark of MSC.Software Corporation. MSC.SuperForge is a trademark of MSC.Software Corporation. All other trademarks are properties of their respective owners. All specifications are subject to change without notice.
©2001 MSC.So f twa r e Co rp o ra t i on ZZ*3/2001*Z*Z*Z*LT-WPS-SFORGE
