Developing a Supplier Scorecard and Performance Management Process
Wednesday, March 25, 2009
A Vantage Partners Case Study
The Challenge
Lack of clarity around supplier performance (especially for suppliers of services related to clinical trials and other complex projects) made it impossible to identify the best suppliers with whom to create preferred relationships, to award specific projects to the most qualified supplier, or to work jointly with suppliers to improve performance.
Prior efforts over the course of a year failed to produce a viable scorecard or gain sufficient buy-in from business stakeholders to enable successful implementation. Meanwhile, previous investments in supplier relationship management (e.g., quarterly business reviews, annual executive summits, and the like) showed little return due to the lack of meaningful performance data.
The Solution
A structured scorecard, focused on the most critical measures of performance and value, combined with a comprehensive performance measurement and management process – one comprising clearly defined activities, and roles and responsibilities, for measuring both supplier and customer performance.
Diagnosing the Failure
▪ Because the scorecard included many dozens of metrics, the cost of gathering and analyzing supplier performance data was too high. In particular, busy clinical research staff who worked with suppliers claimed they did not have enough time to gather and report the data required to score suppliers.
▪ Not only did the scorecard include far too many metrics, they were not organized in natural or useful categories. Little thought had been given to how data would be used by individuals in contracting, project management, or senior management, and hence little attention had been paid to how best to structure and report supplier performance metrics.
▪ Consequently, it was difficult for anyone to make sense of the data that was (at least initially) collected.
▪ Moreover, in many cases, metrics were defined at too high a level of abstraction to be useful, e.g., “cycle time” or “contract adherence.”
▪ All of these flaws meant that senior management, who initially had requested supplier scorecards, did nothing with the results that began to be collected. Consequently, those who were being asked to shoulder the burden of increased measurement and reporting came to believe that it was a waste of their time to do so, and that since senior management didn’t care anyway, there would be no accountability for failing to comply. Testing this theory validated its correctness, at which point there was no incentive for busy people to take the time to gather data to enable scorecard reporting.
▪ Finally, despite useful thinking about supplier metrics, the project team spent very little time thinking about and defining the process (including specific roles and responsibilities for completing process steps and activities) associated with data gathering, analysis, reporting, and remediation or other actions suggested by performance data. This further undermined perceptions of the usefulness of data gathering and reporting (since no one had any idea how the data would be used), and left unaddressed issues of accountability for supplier performance measurement or management.
Background
The Strategic Sourcing Group at “MegaPharma,” a Fortune 500 pharmaceutical company, spent over a year trying to develop a scorecard to accurately assess their suppliers’ performance. Unfortunately, the initiative was a failure. Despite a great deal of good thinking and hard work, the cross-functional team who led the effort ended up producing an unwieldy scorecard that, within a few months of completion, was no longer used by anyone.
Approach
Vantage Partners partnered with MegaPharma to try again to develop a comprehensive, and consistent approach to supplier performance measurement and management. Working with a cross-functional team with representation from the Supplier Management Group in Strategic Sourcing, from clinical teams in all the therapeutic areas, from Finance, and from the Contracts group, Vantage first began by helping MegaPharma clarify the objectives for the overall performance management system in which the scorecard would be situated.
Overview of supplier performance management system objectives
▪ Gather and report data to enable effective selection of preferred suppliers
▪ Gather and report data to enable effective, and efficient, decision-making about project awards
▪ Solicit feedback from suppliers on how MegaPharma could improve its own operations, be a more desirable customer and business partner, and enable its suppliers to be more
effective
▪ Identify and diagnose performance problems, and do so as early as possible, in order to enable effective remediation
▪ Build stronger, more committed relationships with suppliers
By clarifying and explicitly articulating performance management objectives, MegaPharma was in a better position to prioritize across hundreds of potential metrics and focus on what was most important to measure. Moreover, clarifying when and how performance metrics would be used helped the team determine the frequency of measurement and reporting (e.g., monthly, quarterly, end of project, and so on) for various metrics. Through a series of workshops, Vantage helped the MegaPharma team to hone a list of over 200 different metrics to a subset of the most critical and actionable. Each metric was evaluated based on the time and effort it would take to gather and report data, compared to the expected benefit to supplier performance and relationships, and ultimately to driving improved clinical research performance.
A holistic, and structured approach to scorecard design
The MegaPharma-Vantage team developed a scorecard designed to provide a holistic view of supplier performance on individual projects, of the health of its overall relationships with suppliers, and of the total value delivered by those relationships. The scorecard was organized around four key dimensions: operational performance, financial value, strategic value, and relationship quality.
Each dimension of the scorecard comprised several categories of metrics, such as innovation (as an element of strategic value) or level of trust (as an element of relationship quality). These categories were further broken down into three to five sub-categories, each of which might in turn be composed of anywhere from approximately one to five discrete metrics. A common scorecard framework, along with broad and consistent performance categories, allowed simple, high-level reports to be created for senior management across different kinds of suppliers, while at the same time ensuring that individual metrics (which often varied for different kinds of suppliers) were defined at a meaningful level of specificity. (See Figure 2) In addition, each dimension of the scorecard included metrics against which suppliers were invited (and expected) to provide feedback to MegaPharma. Such two-way feedback was aimed at soliciting improvement opportunities from suppliers, at enabling more effective diagnosis of complex performance problems that were the result of how MegaPharma and its suppliers worked together (rather than a simple failure on the supplier’s part), and at building stronger relationships characterized by both accountability, and collaborative joint problem-solving.
Developing, and building buy-in to, a process for performance measurement and management
Recognizing that even the most carefully constructed metrics are useless without clearly defining how data will be gathered, analyzed, reported, and used, Vantage and MegaPharma developed a detailed process for performance measurement and management (a summary of the process is described below). To ensure that the process could actually be implemented, and that the wide range of stakeholders upon whom successful implementation would rely would support it, Vantage and the MegaPharma used a procedure called “blueprinting.” Over a series of about three months, the team iteratively developed and refined a series of drafts articulating, in concrete detail, specific activities and roles and responsibilities. Each iteration was reviewed with a broad cross-section of stakeholders who were asked for their concerns and suggestions, which were then incorporated into the next iteration of the blueprint draft.
Overview of supplier performance measurement and management process
Performance measurement and management activities occur at both the individual project level, and at the overall relationship level. The five activity streams that make up the supplier performance management process are:
1. Customize Scorecard — This activity occurs annually with each preferred supplier. The MegaPharma Supplier Relationship Manager (SRM) and the supplier’s relationship manager for MegaPharma review the standard supplier scorecard template, and jointly agree upon the specific metrics that will be used in light of the supplier’s specific capabilities, the projects the supplier will be working on, and the nature of the business arrangement with the supplier. (Note that some metrics are required for certain categories of suppliers, and some metrics are required across all suppliers.)
2. Gather Data — In this activity stream, three types of data are gathered in the following ways:
a. Objective, quantitative performance data about the supplier’s (and MegaPharma’s) performance on specific projects is captured from MegaPharma and supplier systems.
b. Subjective, project-level performance data (both quantitative and qualitative) is collected at regular intervals through surveys filled out by key stakeholders at MegaPharma and its suppliers.
c. Subjective data (both quantitative and qualitative) about overall supplier performance (not tied directly to specific projects), as well as data about relationship quality, is collected through periodic surveys filled out by key stakeholders at MegaPharma and its suppliers.
The MegaPharma and supplier relationship managers are responsible for managing the data collection process for both project-level and relationship-level performance information.
3. Analyze Performance — This activity occurs at two levels:
a. Project-level performance reports, focused on operational metrics, are created following the completion of each project (or every six months for those projects lasting longer than a year). Relationship managers and key team members from each project meet to develop project-specific remediation plans (if appropriate), and identify and document systemic improvement opportunities.
b. Reports on overall relationship quality (how well MegaPharma and its suppliers work together), and total value delivered by each supplier relationship, are created and jointly analyzed on a semi-annual basis by relationship managers and key executives on both sides.
4. Jointly Review Performance and Conduct Joint Planning — MegaPharma and supplier relationship managers meet quarterly to review cross-project operational performance. Semi-annually, they hold a strategic review and joint planning session to review overall relationship performance, develop corrective action plan(s) as needed, recognize and reward outstanding performance, capture and disseminate best practices, and identify and evaluate potential new value-generating opportunities for both MegaPharma and the supplier. Other stakeholders, in addition to the relationship managers, are involved in these meetings as appropriate (e.g. clinical research scientists, project managers, representatives from other functions at MegaPharma, etc.). After completion, the relationship managers communicate outcomes to the appropriate stakeholders in their respective organizations, oversee the execution of corrective action plans, and track progress on new opportunities.
5. Hold Supplier Portfolio Review Meeting — On an annual basis, a committee composed of senior executives at MegaPharma meets to review performance data and conduct comparative analysis of all preferred suppliers. Based on this analysis, the committee makes decisions to retain or replace specific suppliers on the preferred list, and develops long-range plans for the strategic use of suppliers, focused on new services or technologies they might provide, and also new business models that might be employed to structure arrangements with them. Finally, the committee evaluates internal improvement opportunities highlighted by the supplier performance measurement system.
Lessons Learned
▪ Don’t try to measure too much. Measurement is a costly activity, trying to measure too much is a recipe for non-compliance.
▪ Consider imperfect, subjective or qualitative metrics (e.g., using surveys) that (often) provide 80% of the insight, with only 20 % of the data collection cost, versus more objective metrics (e.g., extracting and aggregating data from various electronic systems).
▪ After iterative development and refinement of scorecard metrics, sanity test the entire scorecard. Will the benefits outweigh the costs? What needs to be further pruned to make the system practical?
▪ Define exactly how data will be used. If there is not a compelling reason to have a metric to enable solving complex problems or making important decisions, don’t bother measuring it. This requires constructively challenging senior management or others who would “like to see a report that shows…” Such inclinations must be subjected to respectful scrutiny. “What decisions would such information enable you to make more effectively? Why? What actions would you take or not take based on different reported values for such metrics?”
▪ Define metrics with maximum specificity, including the unit of measure, where data will come from, and any calculations that need to be performed on raw data to generate the metric. “Cycle time” is not a meaningful metric. “Number of days from contract signed to first patient recruited” is.
▪ Don’t focus only on defining metrics. Spend as much or more time defining the process, not only for how data will be gathered and analyzed, but also for how data will be used, internally and with suppliers, to identify, diagnose, and address performance problems and improvement opportunities.
▪ Involve key suppliers in defining metrics, as well as designing the performance measurement and management system. They are an excellent source of insight. Moreover, their commitment is critical to success, and they are much more likely to be committed if you consult with them on development, than if you simply subject them to what you’ve decided on.
▪ Define and utilize metrics that focus on the value your key suppliers are getting out of the relationship. If you can’t easily replace a supplier, and even more so, if you expect them to innovate in various ways (which requires some level of investment on their part) then you need to pay attention not only to the value you are realizing, but what your suppliers are getting of the relationship as well. Otherwise the value you realize will be short-lived.
▪ Invest in behavioral skills training for those who will be involved in supplier performance management. At the end of the day, as important as data measurement is, continually improving performance depends critically on the ability of individuals to communicate effectively in the face of disagreement, and to diagnose and solve complex problems together.
______________
Vantage Partners, LLC
Article provided by PLM World
www.plmworld.com
at 7:13 AM Link to this Article 0 Comments
The Challenge
Lack of clarity around supplier performance (especially for suppliers of services related to clinical trials and other complex projects) made it impossible to identify the best suppliers with whom to create preferred relationships, to award specific projects to the most qualified supplier, or to work jointly with suppliers to improve performance.
Prior efforts over the course of a year failed to produce a viable scorecard or gain sufficient buy-in from business stakeholders to enable successful implementation. Meanwhile, previous investments in supplier relationship management (e.g., quarterly business reviews, annual executive summits, and the like) showed little return due to the lack of meaningful performance data.
The Solution
A structured scorecard, focused on the most critical measures of performance and value, combined with a comprehensive performance measurement and management process – one comprising clearly defined activities, and roles and responsibilities, for measuring both supplier and customer performance.
Diagnosing the Failure
▪ Because the scorecard included many dozens of metrics, the cost of gathering and analyzing supplier performance data was too high. In particular, busy clinical research staff who worked with suppliers claimed they did not have enough time to gather and report the data required to score suppliers.
▪ Not only did the scorecard include far too many metrics, they were not organized in natural or useful categories. Little thought had been given to how data would be used by individuals in contracting, project management, or senior management, and hence little attention had been paid to how best to structure and report supplier performance metrics.
▪ Consequently, it was difficult for anyone to make sense of the data that was (at least initially) collected.
▪ Moreover, in many cases, metrics were defined at too high a level of abstraction to be useful, e.g., “cycle time” or “contract adherence.”
▪ All of these flaws meant that senior management, who initially had requested supplier scorecards, did nothing with the results that began to be collected. Consequently, those who were being asked to shoulder the burden of increased measurement and reporting came to believe that it was a waste of their time to do so, and that since senior management didn’t care anyway, there would be no accountability for failing to comply. Testing this theory validated its correctness, at which point there was no incentive for busy people to take the time to gather data to enable scorecard reporting.
▪ Finally, despite useful thinking about supplier metrics, the project team spent very little time thinking about and defining the process (including specific roles and responsibilities for completing process steps and activities) associated with data gathering, analysis, reporting, and remediation or other actions suggested by performance data. This further undermined perceptions of the usefulness of data gathering and reporting (since no one had any idea how the data would be used), and left unaddressed issues of accountability for supplier performance measurement or management.
Background
The Strategic Sourcing Group at “MegaPharma,” a Fortune 500 pharmaceutical company, spent over a year trying to develop a scorecard to accurately assess their suppliers’ performance. Unfortunately, the initiative was a failure. Despite a great deal of good thinking and hard work, the cross-functional team who led the effort ended up producing an unwieldy scorecard that, within a few months of completion, was no longer used by anyone.
Approach
Vantage Partners partnered with MegaPharma to try again to develop a comprehensive, and consistent approach to supplier performance measurement and management. Working with a cross-functional team with representation from the Supplier Management Group in Strategic Sourcing, from clinical teams in all the therapeutic areas, from Finance, and from the Contracts group, Vantage first began by helping MegaPharma clarify the objectives for the overall performance management system in which the scorecard would be situated.
Overview of supplier performance management system objectives
▪ Gather and report data to enable effective selection of preferred suppliers
▪ Gather and report data to enable effective, and efficient, decision-making about project awards
▪ Solicit feedback from suppliers on how MegaPharma could improve its own operations, be a more desirable customer and business partner, and enable its suppliers to be more
effective
▪ Identify and diagnose performance problems, and do so as early as possible, in order to enable effective remediation
▪ Build stronger, more committed relationships with suppliers
By clarifying and explicitly articulating performance management objectives, MegaPharma was in a better position to prioritize across hundreds of potential metrics and focus on what was most important to measure. Moreover, clarifying when and how performance metrics would be used helped the team determine the frequency of measurement and reporting (e.g., monthly, quarterly, end of project, and so on) for various metrics. Through a series of workshops, Vantage helped the MegaPharma team to hone a list of over 200 different metrics to a subset of the most critical and actionable. Each metric was evaluated based on the time and effort it would take to gather and report data, compared to the expected benefit to supplier performance and relationships, and ultimately to driving improved clinical research performance.
A holistic, and structured approach to scorecard design
The MegaPharma-Vantage team developed a scorecard designed to provide a holistic view of supplier performance on individual projects, of the health of its overall relationships with suppliers, and of the total value delivered by those relationships. The scorecard was organized around four key dimensions: operational performance, financial value, strategic value, and relationship quality.
Each dimension of the scorecard comprised several categories of metrics, such as innovation (as an element of strategic value) or level of trust (as an element of relationship quality). These categories were further broken down into three to five sub-categories, each of which might in turn be composed of anywhere from approximately one to five discrete metrics. A common scorecard framework, along with broad and consistent performance categories, allowed simple, high-level reports to be created for senior management across different kinds of suppliers, while at the same time ensuring that individual metrics (which often varied for different kinds of suppliers) were defined at a meaningful level of specificity. (See Figure 2) In addition, each dimension of the scorecard included metrics against which suppliers were invited (and expected) to provide feedback to MegaPharma. Such two-way feedback was aimed at soliciting improvement opportunities from suppliers, at enabling more effective diagnosis of complex performance problems that were the result of how MegaPharma and its suppliers worked together (rather than a simple failure on the supplier’s part), and at building stronger relationships characterized by both accountability, and collaborative joint problem-solving.
Developing, and building buy-in to, a process for performance measurement and management
Recognizing that even the most carefully constructed metrics are useless without clearly defining how data will be gathered, analyzed, reported, and used, Vantage and MegaPharma developed a detailed process for performance measurement and management (a summary of the process is described below). To ensure that the process could actually be implemented, and that the wide range of stakeholders upon whom successful implementation would rely would support it, Vantage and the MegaPharma used a procedure called “blueprinting.” Over a series of about three months, the team iteratively developed and refined a series of drafts articulating, in concrete detail, specific activities and roles and responsibilities. Each iteration was reviewed with a broad cross-section of stakeholders who were asked for their concerns and suggestions, which were then incorporated into the next iteration of the blueprint draft.
Overview of supplier performance measurement and management process
Performance measurement and management activities occur at both the individual project level, and at the overall relationship level. The five activity streams that make up the supplier performance management process are:
1. Customize Scorecard — This activity occurs annually with each preferred supplier. The MegaPharma Supplier Relationship Manager (SRM) and the supplier’s relationship manager for MegaPharma review the standard supplier scorecard template, and jointly agree upon the specific metrics that will be used in light of the supplier’s specific capabilities, the projects the supplier will be working on, and the nature of the business arrangement with the supplier. (Note that some metrics are required for certain categories of suppliers, and some metrics are required across all suppliers.)
2. Gather Data — In this activity stream, three types of data are gathered in the following ways:
a. Objective, quantitative performance data about the supplier’s (and MegaPharma’s) performance on specific projects is captured from MegaPharma and supplier systems.
b. Subjective, project-level performance data (both quantitative and qualitative) is collected at regular intervals through surveys filled out by key stakeholders at MegaPharma and its suppliers.
c. Subjective data (both quantitative and qualitative) about overall supplier performance (not tied directly to specific projects), as well as data about relationship quality, is collected through periodic surveys filled out by key stakeholders at MegaPharma and its suppliers.
The MegaPharma and supplier relationship managers are responsible for managing the data collection process for both project-level and relationship-level performance information.
3. Analyze Performance — This activity occurs at two levels:
a. Project-level performance reports, focused on operational metrics, are created following the completion of each project (or every six months for those projects lasting longer than a year). Relationship managers and key team members from each project meet to develop project-specific remediation plans (if appropriate), and identify and document systemic improvement opportunities.
b. Reports on overall relationship quality (how well MegaPharma and its suppliers work together), and total value delivered by each supplier relationship, are created and jointly analyzed on a semi-annual basis by relationship managers and key executives on both sides.
4. Jointly Review Performance and Conduct Joint Planning — MegaPharma and supplier relationship managers meet quarterly to review cross-project operational performance. Semi-annually, they hold a strategic review and joint planning session to review overall relationship performance, develop corrective action plan(s) as needed, recognize and reward outstanding performance, capture and disseminate best practices, and identify and evaluate potential new value-generating opportunities for both MegaPharma and the supplier. Other stakeholders, in addition to the relationship managers, are involved in these meetings as appropriate (e.g. clinical research scientists, project managers, representatives from other functions at MegaPharma, etc.). After completion, the relationship managers communicate outcomes to the appropriate stakeholders in their respective organizations, oversee the execution of corrective action plans, and track progress on new opportunities.
5. Hold Supplier Portfolio Review Meeting — On an annual basis, a committee composed of senior executives at MegaPharma meets to review performance data and conduct comparative analysis of all preferred suppliers. Based on this analysis, the committee makes decisions to retain or replace specific suppliers on the preferred list, and develops long-range plans for the strategic use of suppliers, focused on new services or technologies they might provide, and also new business models that might be employed to structure arrangements with them. Finally, the committee evaluates internal improvement opportunities highlighted by the supplier performance measurement system.
Lessons Learned
▪ Don’t try to measure too much. Measurement is a costly activity, trying to measure too much is a recipe for non-compliance.
▪ Consider imperfect, subjective or qualitative metrics (e.g., using surveys) that (often) provide 80% of the insight, with only 20 % of the data collection cost, versus more objective metrics (e.g., extracting and aggregating data from various electronic systems).
▪ After iterative development and refinement of scorecard metrics, sanity test the entire scorecard. Will the benefits outweigh the costs? What needs to be further pruned to make the system practical?
▪ Define exactly how data will be used. If there is not a compelling reason to have a metric to enable solving complex problems or making important decisions, don’t bother measuring it. This requires constructively challenging senior management or others who would “like to see a report that shows…” Such inclinations must be subjected to respectful scrutiny. “What decisions would such information enable you to make more effectively? Why? What actions would you take or not take based on different reported values for such metrics?”
▪ Define metrics with maximum specificity, including the unit of measure, where data will come from, and any calculations that need to be performed on raw data to generate the metric. “Cycle time” is not a meaningful metric. “Number of days from contract signed to first patient recruited” is.
▪ Don’t focus only on defining metrics. Spend as much or more time defining the process, not only for how data will be gathered and analyzed, but also for how data will be used, internally and with suppliers, to identify, diagnose, and address performance problems and improvement opportunities.
▪ Involve key suppliers in defining metrics, as well as designing the performance measurement and management system. They are an excellent source of insight. Moreover, their commitment is critical to success, and they are much more likely to be committed if you consult with them on development, than if you simply subject them to what you’ve decided on.
▪ Define and utilize metrics that focus on the value your key suppliers are getting out of the relationship. If you can’t easily replace a supplier, and even more so, if you expect them to innovate in various ways (which requires some level of investment on their part) then you need to pay attention not only to the value you are realizing, but what your suppliers are getting of the relationship as well. Otherwise the value you realize will be short-lived.
▪ Invest in behavioral skills training for those who will be involved in supplier performance management. At the end of the day, as important as data measurement is, continually improving performance depends critically on the ability of individuals to communicate effectively in the face of disagreement, and to diagnose and solve complex problems together.
______________
Vantage Partners, LLC
Article provided by PLM World
www.plmworld.com
at 7:13 AM Link to this Article
###
How to Start Becoming "Green" in 2009
Long before PDM and PLM became acronyms in our daily professional vocabulary, managing product data was once a paper intensive process that required a lot of energy and raw material to do. For many companies, both large and small, it still remains the case today.
Think of a typical scenario when you requested an engineering change. Most likely you started with a form which you filled out, placed it in a manila folder or plastic sleeve. Then you added more forms, perhaps a drawing or two. It gets passed around, and probably mailed with a bunch of other manila folders to another location where more reviews are done and information is added. Drawings get marked up, new ones made and added. Old drawings are trashed or shredded adding to the million cubic feet of land fill trash that don’t always make it to the recycling bin. Like an orchestral performance, papers, folders, plastic sleeves, ink and lead pens and pencils, erasers, either electric or done by hand, all combine together in a long symphony, playing over and over again just to make this one engineering change.
Multiply this by millions of engineering changes that happen every day across America in all types of industries where products are designed and manufactured.
Then think of all the items used in making an engineering change. The plastic wrapping and tapes, cardboards containers and tubes, staples, pens and pencils, chemicals in the ink and the white-outs to remove or correct errors, the toner and inkjet printer cartridges, the reams and rolls of copying and printing paper, the industries that manufacture the raw materials and the energy required to extract, refine, finish, process, print, fold, package and store these materials. This results in a higher rate of carbon footprints in our environment. Carbon footprint is a measure of the amount of carbon dioxide caused by the burning of fossil fuels for energy and transportation and indirect emissions focus on the whole lifecyle of products from procuring raw materials to waste management.
Multiply that by the millions of engineering changes that happen every day.
The change gets released and parts are made starting out as prototypes or pre-production samples. They are tested, validated, measured, inspected and ultimately destroyed. Making and destroying parts for the purpose of verifying that they meet the specifications consumes a lot of energy and raw materials. Think of the injection molding, milling, drilling, reaming, casting and stamping of the components, heat treating and chemical processing or plating, cleaning and then the assembly of these components into the finished part or assembly. Then of course the tools required, the molds, drills, reamers, cutters, cutting fluids, oil and grease and along the way - the packaging and the shipment of these tools to the factory where the parts are made. Don’t forget the diesel trucks that come in to pick up the scrap metal and waste from the production and processing of these parts.Multiply that by the hundred of thousands of production and prototype model shops that do this every day.
What happens if the change fails validation testing, does not meet customer requirements or improperly incorporated into the design. The whole process has to be repeated, expending more energy, consuming more raw materials and adding more carbon footprints in the environment.
Multiply that by the countless numbers of errors and mistakes made daily by humans.
This process could be repeated several times until the product is finally approved and then released into production. That’s not all as more paperwork is needed to certify the parts, document lab results, send out forms to customers for approvals, filling looseleaf plastic and cardboard binders with certification and approvals, inspection reports and required regulatory documents and new shelves or rows of bookcases are filled taking up floor space and requiring energy to maintain temperatures and provide security to protect.
So how can you help make your company “green”? With Teamcenter Engineering’s Unified Platform and applications including multi-CAD Integration, Engineering Process Management, Compliance Management, Bill of Materials Management, Document Control and Content Management, Mechatronics Process Management, Manufacturing Management, Community Collaboration, Lifecycle Visualization, Maintenance, Repair and Overhaul, Portfolio Program and Project Management, Simulation Process Management, Systems Engineering and Requirements Management and Supplier Relationship Management.
Of course you don’t need all of them to get started, but moving away from paper intensive processes and using a lot of the simulation tools available can drastically reduce wasteful energy consumption and cut down on landfill waste. The amount of carbon foot prints could be cut by more than half every year as more and more companies start using electronic product data management like Teamcenter. The energy saved by catching mistakes before they leave engineering, or the cost of scrap and raw material waste reduced by using simulation software to get the product designed right the first time and reducing the amount of testing and validation required.
Want to know how you can get started? Help make your company green with cost savings and helping our environment by attending the annual Siemens Connection PLMWorld Conference in Nashville, Tennessee, June 1st to 4th 2009.
__________________
Richard P. Meagher
Article provided by PLM World.
www.plmworld.org
at 7:11 AM Link to this Article 0 Comments
Think of a typical scenario when you requested an engineering change. Most likely you started with a form which you filled out, placed it in a manila folder or plastic sleeve. Then you added more forms, perhaps a drawing or two. It gets passed around, and probably mailed with a bunch of other manila folders to another location where more reviews are done and information is added. Drawings get marked up, new ones made and added. Old drawings are trashed or shredded adding to the million cubic feet of land fill trash that don’t always make it to the recycling bin. Like an orchestral performance, papers, folders, plastic sleeves, ink and lead pens and pencils, erasers, either electric or done by hand, all combine together in a long symphony, playing over and over again just to make this one engineering change.
Multiply this by millions of engineering changes that happen every day across America in all types of industries where products are designed and manufactured.
Then think of all the items used in making an engineering change. The plastic wrapping and tapes, cardboards containers and tubes, staples, pens and pencils, chemicals in the ink and the white-outs to remove or correct errors, the toner and inkjet printer cartridges, the reams and rolls of copying and printing paper, the industries that manufacture the raw materials and the energy required to extract, refine, finish, process, print, fold, package and store these materials. This results in a higher rate of carbon footprints in our environment. Carbon footprint is a measure of the amount of carbon dioxide caused by the burning of fossil fuels for energy and transportation and indirect emissions focus on the whole lifecyle of products from procuring raw materials to waste management.
Multiply that by the millions of engineering changes that happen every day.
The change gets released and parts are made starting out as prototypes or pre-production samples. They are tested, validated, measured, inspected and ultimately destroyed. Making and destroying parts for the purpose of verifying that they meet the specifications consumes a lot of energy and raw materials. Think of the injection molding, milling, drilling, reaming, casting and stamping of the components, heat treating and chemical processing or plating, cleaning and then the assembly of these components into the finished part or assembly. Then of course the tools required, the molds, drills, reamers, cutters, cutting fluids, oil and grease and along the way - the packaging and the shipment of these tools to the factory where the parts are made. Don’t forget the diesel trucks that come in to pick up the scrap metal and waste from the production and processing of these parts.Multiply that by the hundred of thousands of production and prototype model shops that do this every day.
What happens if the change fails validation testing, does not meet customer requirements or improperly incorporated into the design. The whole process has to be repeated, expending more energy, consuming more raw materials and adding more carbon footprints in the environment.
Multiply that by the countless numbers of errors and mistakes made daily by humans.
This process could be repeated several times until the product is finally approved and then released into production. That’s not all as more paperwork is needed to certify the parts, document lab results, send out forms to customers for approvals, filling looseleaf plastic and cardboard binders with certification and approvals, inspection reports and required regulatory documents and new shelves or rows of bookcases are filled taking up floor space and requiring energy to maintain temperatures and provide security to protect.
So how can you help make your company “green”? With Teamcenter Engineering’s Unified Platform and applications including multi-CAD Integration, Engineering Process Management, Compliance Management, Bill of Materials Management, Document Control and Content Management, Mechatronics Process Management, Manufacturing Management, Community Collaboration, Lifecycle Visualization, Maintenance, Repair and Overhaul, Portfolio Program and Project Management, Simulation Process Management, Systems Engineering and Requirements Management and Supplier Relationship Management.
Of course you don’t need all of them to get started, but moving away from paper intensive processes and using a lot of the simulation tools available can drastically reduce wasteful energy consumption and cut down on landfill waste. The amount of carbon foot prints could be cut by more than half every year as more and more companies start using electronic product data management like Teamcenter. The energy saved by catching mistakes before they leave engineering, or the cost of scrap and raw material waste reduced by using simulation software to get the product designed right the first time and reducing the amount of testing and validation required.
Want to know how you can get started? Help make your company green with cost savings and helping our environment by attending the annual Siemens Connection PLMWorld Conference in Nashville, Tennessee, June 1st to 4th 2009.
__________________
Richard P. Meagher
Article provided by PLM World.
www.plmworld.org
at 7:11 AM Link to this Article
###
Recap of what President Obama is Proposing in his 2010 budget
One of our goals at the firm is to keep you up-to-date on any important tax information. Below is a recap of what President Obama is PROPOSING in his fiscal year 2010 budget from a tax standpoint. As you review the tax changes for business and individuals, in each case, the year in parenthesis is when the change is proposed to begin.
Tax Changes for Business
▪ Make the research tax credit permanent
(2010).
▪ Expand the net operating loss carryback
(2011).
▪ Eliminate capital gains taxation on small
business (2014).
▪ Repeal LIFO (2012).
▪ Codify the economic substance doctrine
(2009).
▪ Require information reporting for rental
payments (2010).
▪ Tax carried interest as ordinary income
(2011).
▪ Reinstate Superfund Taxes (2011).
▪ Repeal all of the following oil and gas tax breaks: expensing of intangible drilling costs; deduction for tertiary injectants; passive loss exception for working interests in oil and gas properties; manufacturing deduction for oil and gas companies; and percentage depletion (2011).
Tax Changes for Higher Income Individuals
These changes would be proposed to apply to taxpayers earning over $250,000 (married) and $200,000 (single)
▪ Reinstate the 36% and 39.6% top tax rates
(2011).
▪ Reinstate the personal exemption phase
out and limitation on itemized deductions
(2011).
▪ Impose a 20% tax rate on capital gains
and dividends (2010).
The Administration’s document separately discusses a proposal to limit the tax rate at which higher-income individuals can take itemized deductions to 28%, with no indication of when this change would take effect. Additionally, the Administration is widely expected to propose keeping the estate tax at some level. Under current law, the estate tax won’t apply for 2010, but will be reinstated, at 2001 levels, in 2011.
Other Tax Changes for Individuals
▪ Make permanent the Recovery Act’s
refundable $400/$800 “making work
pay” tax credit for 2009 and 2010.
▪ Make permanent the Recovery Act’s liber-
alized child tax credit rules, which under
current rules apply for 2009 and 2010
only.
▪ Make permanent the Recovery Act’s “new
American opportunity tax credit” for higher
education expenses, which under current
rules applies for 2009 and 2010 only.
▪ Eliminate the Advanced Earned Income
Tax Credit (2010).
▪ Expand the saver’s credit and automatic
enrollment in IRAs and 401(k)s (2011).
The Administration’s document also separately discusses a proposal to establish “automatic workplace pensions, on top of and clearly outside Social Security…” Employees would automatically enrolled in the workplace pension plans (unless they opt out). Those employers not offering retirement plans would be required to enroll their employees in a direct-deposit IRA (but employees apparently would be given an opt-out option).
________________
by Larry Brodnik, CPA
Sr. Tax Partner, Greenwalt Sponsel & Co.
www.gscocpa.com
at 7:08 AM Link to this Article 0 Comments
Tax Changes for Business
▪ Make the research tax credit permanent
(2010).
▪ Expand the net operating loss carryback
(2011).
▪ Eliminate capital gains taxation on small
business (2014).
▪ Repeal LIFO (2012).
▪ Codify the economic substance doctrine
(2009).
▪ Require information reporting for rental
payments (2010).
▪ Tax carried interest as ordinary income
(2011).
▪ Reinstate Superfund Taxes (2011).
▪ Repeal all of the following oil and gas tax breaks: expensing of intangible drilling costs; deduction for tertiary injectants; passive loss exception for working interests in oil and gas properties; manufacturing deduction for oil and gas companies; and percentage depletion (2011).
Tax Changes for Higher Income Individuals
These changes would be proposed to apply to taxpayers earning over $250,000 (married) and $200,000 (single)
▪ Reinstate the 36% and 39.6% top tax rates
(2011).
▪ Reinstate the personal exemption phase
out and limitation on itemized deductions
(2011).
▪ Impose a 20% tax rate on capital gains
and dividends (2010).
The Administration’s document separately discusses a proposal to limit the tax rate at which higher-income individuals can take itemized deductions to 28%, with no indication of when this change would take effect. Additionally, the Administration is widely expected to propose keeping the estate tax at some level. Under current law, the estate tax won’t apply for 2010, but will be reinstated, at 2001 levels, in 2011.
Other Tax Changes for Individuals
▪ Make permanent the Recovery Act’s
refundable $400/$800 “making work
pay” tax credit for 2009 and 2010.
▪ Make permanent the Recovery Act’s liber-
alized child tax credit rules, which under
current rules apply for 2009 and 2010
only.
▪ Make permanent the Recovery Act’s “new
American opportunity tax credit” for higher
education expenses, which under current
rules applies for 2009 and 2010 only.
▪ Eliminate the Advanced Earned Income
Tax Credit (2010).
▪ Expand the saver’s credit and automatic
enrollment in IRAs and 401(k)s (2011).
The Administration’s document also separately discusses a proposal to establish “automatic workplace pensions, on top of and clearly outside Social Security…” Employees would automatically enrolled in the workplace pension plans (unless they opt out). Those employers not offering retirement plans would be required to enroll their employees in a direct-deposit IRA (but employees apparently would be given an opt-out option).
________________
by Larry Brodnik, CPA
Sr. Tax Partner, Greenwalt Sponsel & Co.
www.gscocpa.com
at 7:08 AM Link to this Article
###
Turnkey race car turns heads in Daytona
Flawless performance of race car designed in Solid Edge wows Grand Am racing fans.
When the Grand Am organization wanted to take sports car racing in a new direction, Fin-el worked with FABCAR to create a new class of car.
Small teams, big tools
Top-of-the-line design technology is commonplace around the facilities of Formula 1 and NASCAR teams, those enviable organizations with lots of sponsors and plenty of money. But in the garages of smaller teams, such as those around Indianapolis, in the shadow of the city’s famed motor speedway, CAD, CAM and CAE are still pretty unusual. Jeff Berger, director of an Indianapolis-based engineering firm called Fin-el, recently teamed up with race car manufacturer, FABCAR, on a project that may change all that. “I hope our success with the Grand Am Daytona Prototype will help convince smaller teams that this technology can be useful to them, too,” Berger says. The Daytona Prototype is a new class of Grand Am racing car that debuted in the 2003 season of the Rolex Sports Car Series, the series that sponsors the Rolex 24 At Daytona and other endurance races. Berger assisted Carmel, Indiana-based FABCAR, one of sport’s top car builders, in developing the Daytona Prototype. What’s unusual about this project is that the entire vehicle, including composite body surfaces, was modeled in Solid Edge by auto racing veterans who wouldn’t normally turn to high tech. On March 1, the Brumos Racing #59 FABCAR scored its maiden win in the Nextel Grand Prix of Miami at Homestead-Miami Speedway. Veteran driver Hurley Haywood and rookie J.C. France piloted the victory in the 250-mile Rolex Sports Car Series race.
Parametrics simplify surface changes
FABCAR got involved when Grand Am was still deciding on what type of car it wanted. The organization had determined that the new car would have a closed cockpit “to make it look more like a regular car that fans could identify with,” Berger says. But it wanted input from manufacturers such as FABCAR about the rest of the car’s appearance. FABCAR had recently purchased Solid Edge from Berger’s company, Fin-el, and asked him to assist with the work for Grand Am.
Berger mocked up several body styles in Solid Edge. “It wasn’t like I just sat down and whipped out a car,” he says. “I’d spent weeks beforehand setting up the workflow. Once I had that, I could come up with variations of the car body in just a day or two.” Berger used the software’s rendering tools to create realistic images of his designs. These were sent to Grand Am to help officials visualize his work and later, to the series’ other car manufacturers to promote the new concept.
Once Grand Am had settled on the overall look of the car, FABCAR asked Fin-el to stay on and help make the new concept a reality. While engineers from both FABCAR and Fin-el worked on the mechanical design Berger concentrated on the body. Everyone shared Solid Edge files electronically to coordinate their efforts. During this time a key advantage of modeling body surfaces in Solid Edge became apparent. “As we were designing the car, Grand Am was still evolving the rules,” Berger says. “If we’d been working with drawings, or even a traditional surfacing program, it would have been difficult to evolve the design as the rules changed. With drawings, it would have meant starting from scratch. In surfacing software, it would have involved modifying each surface and reattaching it to the surrounding surfaces. With Solid Edge’s parametric modeling capabilities, we could just type in a change to the underlying sketch and all affected surfaces were automatically updated.”
Many uses for models
Berger exported body models in .stl format to a rapid prototyping facility that made a one-eighteenth scale model of the car. He performed computational fluid dynamics (CFD) analysis on some body componentto fine-tune their aerodynamics. Berger imported files of the suspension and roll bar from FABCAR into the finite element analysis program, CAEFEM (a Solid Edge Voyager Program from Concurrent Analysis Corporation), to test the functionality of these parts before they were built. And when it came time to build the car, Solid Edge files were used in the CAM program, Virtual Gibbs (from Voyager Program member Gibbs and Associates), as the basis for machining instructions.
How did the new car turn out? Three have been sold. One was purchased by Brumos Racing, whose crew and drivers celebrated the March 2003 victory at the Nextel Grand Prix of Miami. They also had celebrated in the pits of Daytona International Speedway on December 7, 2002 after the Porsche-powered vehicle crossed the finish line to conclude a hugely successful 28-hour test run. “The Brumos Racing Daytona Prototype performed close to flawless throughout the entire weekend of testing,” proclaims the Grand Am web site (www.grand-am.com). The second car set the fastest time in pre-race qualifying. The third is also a competitive force and running trouble-free. “It’s a real testament to Dave Klym and FABCAR,” said David Donohue, one of the eight drivers who piloted the car during the 28 hours. People behind the scenes of the car’s development knew that its flawless performance was a testament to Solid Edge and Fin-el as well. If Berger’s mission is as successful as the first Solid Edge-designed race car, he is going to change the way things are done around Indianapolis.
_______________
Article provided by Siemens PLM
www.plm.automation.siemens.com
at 7:06 AM Link to this Article 0 Comments
When the Grand Am organization wanted to take sports car racing in a new direction, Fin-el worked with FABCAR to create a new class of car.
Small teams, big tools
Top-of-the-line design technology is commonplace around the facilities of Formula 1 and NASCAR teams, those enviable organizations with lots of sponsors and plenty of money. But in the garages of smaller teams, such as those around Indianapolis, in the shadow of the city’s famed motor speedway, CAD, CAM and CAE are still pretty unusual. Jeff Berger, director of an Indianapolis-based engineering firm called Fin-el, recently teamed up with race car manufacturer, FABCAR, on a project that may change all that. “I hope our success with the Grand Am Daytona Prototype will help convince smaller teams that this technology can be useful to them, too,” Berger says. The Daytona Prototype is a new class of Grand Am racing car that debuted in the 2003 season of the Rolex Sports Car Series, the series that sponsors the Rolex 24 At Daytona and other endurance races. Berger assisted Carmel, Indiana-based FABCAR, one of sport’s top car builders, in developing the Daytona Prototype. What’s unusual about this project is that the entire vehicle, including composite body surfaces, was modeled in Solid Edge by auto racing veterans who wouldn’t normally turn to high tech. On March 1, the Brumos Racing #59 FABCAR scored its maiden win in the Nextel Grand Prix of Miami at Homestead-Miami Speedway. Veteran driver Hurley Haywood and rookie J.C. France piloted the victory in the 250-mile Rolex Sports Car Series race.
Parametrics simplify surface changes
FABCAR got involved when Grand Am was still deciding on what type of car it wanted. The organization had determined that the new car would have a closed cockpit “to make it look more like a regular car that fans could identify with,” Berger says. But it wanted input from manufacturers such as FABCAR about the rest of the car’s appearance. FABCAR had recently purchased Solid Edge from Berger’s company, Fin-el, and asked him to assist with the work for Grand Am.
Berger mocked up several body styles in Solid Edge. “It wasn’t like I just sat down and whipped out a car,” he says. “I’d spent weeks beforehand setting up the workflow. Once I had that, I could come up with variations of the car body in just a day or two.” Berger used the software’s rendering tools to create realistic images of his designs. These were sent to Grand Am to help officials visualize his work and later, to the series’ other car manufacturers to promote the new concept.
Once Grand Am had settled on the overall look of the car, FABCAR asked Fin-el to stay on and help make the new concept a reality. While engineers from both FABCAR and Fin-el worked on the mechanical design Berger concentrated on the body. Everyone shared Solid Edge files electronically to coordinate their efforts. During this time a key advantage of modeling body surfaces in Solid Edge became apparent. “As we were designing the car, Grand Am was still evolving the rules,” Berger says. “If we’d been working with drawings, or even a traditional surfacing program, it would have been difficult to evolve the design as the rules changed. With drawings, it would have meant starting from scratch. In surfacing software, it would have involved modifying each surface and reattaching it to the surrounding surfaces. With Solid Edge’s parametric modeling capabilities, we could just type in a change to the underlying sketch and all affected surfaces were automatically updated.”
Many uses for models
Berger exported body models in .stl format to a rapid prototyping facility that made a one-eighteenth scale model of the car. He performed computational fluid dynamics (CFD) analysis on some body componentto fine-tune their aerodynamics. Berger imported files of the suspension and roll bar from FABCAR into the finite element analysis program, CAEFEM (a Solid Edge Voyager Program from Concurrent Analysis Corporation), to test the functionality of these parts before they were built. And when it came time to build the car, Solid Edge files were used in the CAM program, Virtual Gibbs (from Voyager Program member Gibbs and Associates), as the basis for machining instructions.
How did the new car turn out? Three have been sold. One was purchased by Brumos Racing, whose crew and drivers celebrated the March 2003 victory at the Nextel Grand Prix of Miami. They also had celebrated in the pits of Daytona International Speedway on December 7, 2002 after the Porsche-powered vehicle crossed the finish line to conclude a hugely successful 28-hour test run. “The Brumos Racing Daytona Prototype performed close to flawless throughout the entire weekend of testing,” proclaims the Grand Am web site (www.grand-am.com). The second car set the fastest time in pre-race qualifying. The third is also a competitive force and running trouble-free. “It’s a real testament to Dave Klym and FABCAR,” said David Donohue, one of the eight drivers who piloted the car during the 28 hours. People behind the scenes of the car’s development knew that its flawless performance was a testament to Solid Edge and Fin-el as well. If Berger’s mission is as successful as the first Solid Edge-designed race car, he is going to change the way things are done around Indianapolis.
_______________
Article provided by Siemens PLM
www.plm.automation.siemens.com
at 7:06 AM Link to this Article
###
