Purchasing's Role in a Concurrent Engineering Environment

Purchasing's Role in a Concurrent Engineering Environment In this article, early purchasing involvement in the design and development of a product is examined. Purchasing impacts are effective when they are an integral part of a concurrent engineering environment. In this environment, planned purchasing contributions, along with a number of other factors, are included in the early stages of new product design. The article proposes and explores potential areas of collaboration between purchasing and design. The areas of collaboration include, but are not limited to, developing specifications, interchangeable parts, part standardization and simplification, value analysis, part substitutions, part exclusions, and a variety of other miscellaneous areas. INTRODUCTION The concept of concurrent engineering, in its broadest sense, is viewed as a manufacturing strategy capable of providing the American manufacturing system with a competitive advantage in the world marketplace. Concurrent engineering has been defined in various ways. Each definition is largely the reflection of an individual's background and experience. Vasilash suggests terms such as simultaneous engineering, life cycle engineering, process driven design, team approach, and design for manufacture.[1] Other terminologies, such as concurrent design, Unified Life Cycle Engineering (ULCE), and parallel engineering, have also been used. Whatever the definition, the concept concentrates on the simultaneous consideration of the downstream product development activities, as opposed to their consideration on a sequential and isolated basis. Concurrent engineering, therefore, calls for the consideration and inclusion of product design attributes such as manufacturability, procurability, reliability, maintainability, schedulability, marketability, and the like in the early stages of product design. The Role of Product Design in Concurrent Engineering The natural focal point of concurrent engineering is product design. A decision concerning product design tends to have a number of significant manufacturing and non-manufacturing impacts on the life cycle of the product. The following examples signify such an importance. * A study at Rolls Royce revealed that design determined 80 percent of the final production cost of 2,000 components.[2] * According to General Motors executives, 70 percent of the cost of manufacturing truck transmissions is determined in the design stage.[3] * Ford Motor Company has estimated that among the four manufacturing elements of design, material, labor, and overhead, 70 percent of all production savings stem from improvements in design.[4] * A study revealed that the product design is responsible for only 5 percent of a product's cost; it can, however, determine 75 percent or more of all manufacturing costs and 80 percent of a product's quality performance.[5] * Yet another study shows that 70 percent of the life cycle cost of a product is determined at the design stage. The life cycle cost here refers to the cost of materials, manufacture, use, repair, and disposal of a product.[6] Advantages of Concurrent Engineering The proper consideration and inclusion of design attributes early in the design process yields these advantages: * Reduction in product development cycle time * Avoidance of costly future redesigns * Reduction in duplication of effort * Better communication and dialogue * More efficient operation and higher productivity * Overall cost savings + Reduction in the number of parts manufactured + Better machine utilization time + Easier manufacturable parts + Fewer reworks and scraps + Greater use of standard features, thereby reducing tooling costs + Fewer changes in process planning * Avoidance of product recalls * Lower maintenance costs * More reliable products * Better customer satisfaction * Improved bottom-line earnings A SYSTEMS APPROACH TO CONCURRENT ENGINEERING There are two issues at the core of successful implementation of concurrent engineering. …