CAD/CAM tools have proved more versatile than anyone could have anticipated. Once used only by large industrial and automobile manufacturers like the Tatas and Bajaj, today small and medium enterprises have taken to CAD/CAM as these tools help reduce design cycle time, number of errors in the initial stages of production and help cut time to market. Akhtar Pasha and Pankaj Mishra delve into CAD/CAM usage, acceptance and trends in the Indian market and find that India is fast emerging as a hub of design outsourcing services for the likes of Boeing, GM and Ford

Yves Dehouck of Autodesk feels that with world class communication infrastructure that meets industry standards, India can market itself as a reliable hub for outsourced mechanical design

Manufacturers today use Computer Aided Design (CAD), Computer Aided Manufacturing (CAM) and Computer Aided Engineering (CAE) tools to design pens, jewellery, TV sets, shoes, phones, pressure cookers, watches, sanitaryware and even the doors of your house. Industry pundits estimate the market for CAD/CAM/CAE to be in excess of Rs 250 crore, growing at a healthy 30 percent CAGR. It is estimated that there are about 2,500 to 3,000 Indian companies using CAD/CAM software. IDC says that companies are now shifting their attention to Product Lifecycle Management (PLM)—primarily to manage the data generated during the design process. Product definition resides not just within an individual company, but also across an extended enterprise, including suppliers, partners and customers.

Says Vivek Marwaha, marketing manager, EDS PLM Solutions, “The total market for PLM software solutions in India (only license, excluding services revenue) would be in the range of $20 million. This market has grown consistently at 20-25 percent over the last few years, though growth was slower last year due to depressed market conditions.”

Yves Dehouck, regional sales development manager, Asia Pacific, Autodesk says, “The manufacturing segment accounts for 25 percent of the total IT spending in India, which makes it the largest segment. Together, the process and the discrete manufacturing segment spent a total of more than Rs 3,000 crore on IT in 2000-2001. Of this Rs 300 crore is being specifically spent on CAD/CAM/CAE related software and services initiatives. CAD/CAM/CAE is a major focus area for the manufacturing sector. Since about 70 percent of international trade is through the process manufacturing segment, global competency in manufacturing and delivery is very crucial.”

According to the Quick Estimates of IIP released by the Central Statistical Organisation (CSO), the manufacturing sector grew by 3.7 percent compared to 1.8 percent last May. And industrial production increased by 3.8 percent in this year, compared to 1.7 percent in May 2001. Dehouck says, “This would lead to an increase in demand for CAD/CAM/CAE products as business improves.”

50 percent of PTC’s 750 customers in India belong to the SME segment. Bhupesh Lall, director-marketing, PTC India says, “SMEs are facing stiff competition within the country and outside to reduce their development cost and time and produce better quality products.”

Bhupesh Lall hopes that PTC India will be able to spread product design to each and every manufacturing company in the country

Key drivers
Companies are realising that it is the product that makes the company, and not the other way round. We associate Nike with shoes, Boeing with aeroplanes, Hawkins with pressure cookers and Titan with watches. Very clearly, a product is at the core of every company. At the end of the day, a company is remembered or associated with only its products. Companies realise that while efficiency and savings affect the bottom line, new products drive top-line revenue growth. CAD/CAM helps in the following ways:

Time and cost savings: By using CAD/CAM tools, manufacturers are able to reduce their time-to-market by over 40 percent, which gives them a competitive advantage.

Availability of trained manpower is rising. Many engineering colleges have included CAD in their curriculum. There are premier institutions like the National Institute of Design (NID) that offers professional courses in solid modelling using CAD/CAM tools. Many NID students are placed in companies engaged in mechanical design, such as Tata Elxsi, Infosys and Hero Honda and many automobile companies.

Collaboration: As companies move towards an e-business environment, the exchange of information becomes essential for business partners. The Web has created a huge opportunity for productivity enhancements and collaborations, creating an environment where every manufacturer is able to share documents with every supplier and client online. Hosted collaboration services let the extended design team share information, giving access to the most up-to-date design and product information quickly and easily, helping the team engage earlier in the design process with greater accuracy and fewer mistakes.

Quicker to manufacture: CAD software can accurately simulate a prototype. This reduces costly mistakes on the production floor. In project Emblem Versa for Maruti, Polyplastics was able to reduce the number of prototypes, saving Rs 75,000 in the process.

Vendor strategies

EDS, PTC and Autodesk are the heavyweights of the CAD/CAM/CAE/PLM market.

EDS
EDS has benefited from the merger of Unigraphics and SDRC. EDS now has CAD/CAM/CAE and PLM solutions under one roof. Marwaha says, “Our strategy will be to consolidate our leadership position in the Indian market. We will help our existing customers augment their deployments, covering more users, functions and locations—adding newer applications and integrating them all. At the same time, with the broad portfolio of products that we have, subsequent to the merger of SDRC and UGS, we will expose the Indian PLM community as a whole to applications like requirements management, project management, visualisation and collaboration. Visual collaboration is one of our main focus areas for this year. We will continue to focus on the mid-range market with our Solid Edge product, which provides full 3D CAD capabilities at an affordable price.”

EDS has a two-fold strategy — one to consolidate its presence and expand its product offerings through Teamcenter. EDS has more than 2,000 seats of Product Development Management (PDM) in India. The most commonly used products are deployed in HAL, Mahindra & Mahindra, Maruti, Swaraj Mazda, Hero Honda, Bajaj Auto, Ashok Leyland. NTPC, BHEL, LMN, L&T and the Indian Navy. The new applications and features will be now available to these companies to decrease time-to-market and expand their capabilities.

The second part of EDS strategy is to expand its reach to new customers who are using competing CAD/CAM products like those from PTC. Marwaha says, “We have an 80 percent share of the PDM space in India. About 60 to 70 percent of automobile manufacturers are outsourcing components from tier-I and tier-II suppliers. Both existing and new customers want collaborative and visualisation tools to analyse, share and edit their designs and components across multiple geographies using the Web and chat. Teamcenter will help us in increasing our market share further and in providing a better value proposition to our customers.”

This apart, EDS software tools are widely used in educational institutes across India. The company has formed alliances with the IITs, RECs, polytechnics, and numerous private training establishments.

EDS has Tata Technologies, TCS and Siemens as its Indian implementation partners. Marwaha adds, “Infosys, Wipro and Satyam could be the future partners for EDS as they have invested resources in building product development.”

PTC
PTC India believes in working closely with customers to meet their specific needs. Recently, the company launched Pro/Desktop Xpress—a free downloadable version of its CAD/CAM software.

Lall says, “Our vision is to spread product design to each and every manufacturing company in the country, irrespective of the size and nature of products manufactured by them.” About 40 to 50 percent of PTC sales come from the automotive sector, of which around 30 percent are sales to OEMs and 60-70 percent to component manufacturers. Consumer appliances constitute another 35 percent of the company’s sales.

PTC’s flagship products: Pro/ENGINEER mechanical design automation covering the entire product development lifecycle from concept design to manufacturing. Windchill is a Web-based suite of software applications for product development. It provides a secure environment for product lifecycle management that allows enterprises to integrate business processes and product data with dispersed divisions, partners, and customers. The company has 20 customers in India who are using Windchill, including names like Lucas-TVS, Sona Steering, Hi-Tech Gears, Pricol, L&T and Jyoti.

As a part of the global strategy, PTC is trying to solve the interoperability of tools. Customers expect that a drawing created on Catia can be modified using Pro/E or EDS. To address this issue PTC has formed a worldwide alliance with EDS. Under the agreement EDS and PTC will enable interoperability between their respective product lifecycle management (PLM) solutions. The agreement focuses on driving down the interoperability cost for global manufacturers, which runs into billions of dollars. Lall says, “To survive in this industry, all other vendors will need to join us.”

Autodesk
This fiscal, Autodesk is pinning its hopes on the recently launched Autodesk Inventor Series (AIS). The AIS is a combination of 2D (AutoCAD and AutoCAD Mechanical) and 3D (Autodesk Mechanical Desktop and Autodesk Inventor) design applications. AIS gives Autodesk customers the flexibility to continue using AutoCAD products along with the flexibility of designing in 3D. Dehouck says, “We are currently running promotions at a very attractive price to encourage users to upgrade to AIS.” AIS is priced at Rs 2,44,630 per license. Bharat Electronics and L&T Demag are two customers in India who are currently using AIS.

Autodesk also works closely with Indian PSUs. Last year the company implemented its collaborative product engineering solution at Bharat Earth Movers (BEML). Autodesk is also focusing on creating awareness in design collaboration with its flagship product iDesign. It conservatively estimates that the collaborative design market in India would be 10 percent of the world market and it is expected to mature in 2-3 years. According to CIMdata, collaborative product development expenditure will be $2.2 billion in 2000 and will grow at 20 percent per year to reach $4.4 billion by 2004.

Benefits of using CAD/CAM/CAE tools

India is now a mature market for CAD/CAM/CAE. Organis-ations, irrespective of their size, recognise the critical role that IT-based product development solutions play in reducing time-to-market and costs while improving quality and facilitating innovation. Here are a few instances of the design revolution that is sweeping India and the quantum of saving involved:

Recently, Titan Industries designed the world’s thinnest water-resistant watch using PTC’s tools under a project code-named ‘Golden Rectangle Ultra Slim watch’. The company says that by using these tools, Titan has cut design time by 78 percent and saved Rs 2,24,000 on labour costs. In addition, Titan achieved a reduction in prototypes by 60 percent and lowered scrap or material space by 25 percent.

Ace Jewels has been able to reduce its labour cost by Rs 1,000 on its Cluster Ring project. The company benefited from a 62 percent increase in quality, 65 percent faster delivery, a reduction in prototypes by 65 percent and 64 percent increase in productivity per employee.

Collaborative Product Commerce

Collaborative Product Commerce (CPC) defines a class of software and services that use Internet technologies to let individuals collaboratively develop, build and manage products throughout their life cycle, irrespective of where they are located and what system tools they are using. Using a Web browser, an authorised CPC user can review information systems.

The CPC revolution has already swept the nation to a limited extent—within the manufacturing segment. Says Lall, “In the last two years, we have bagged 20 customers in India for our CPC product, Windchill. Companies such as Lucas-TVS and Sona Steering are using Windchill. In India the use of CPC products has been limited within the company. CPC isn’t connecting the extended enterprise—suppliers, partners and customers. Connectivity and bandwidth needs to improve for this market to grow.”

The benefits: More frequent and detailed collaboration lets companies cut time needed for some steps in the design process by a third or more. When one design partner makes a change in an engineering plan, it no longer takes hours or days for the information to flow to the dozens of people inside and outside the company who have to update their own plans. When the change is posted to the Web-based virtual workspace, everybody involved is informed of the change instantaneously and can access the latest version. Design-collaboration tools help companies cut the time taken to finish a design, typically by about 30 percent.

Adds Marwaha, “Our collaborative commerce solution is derived from the various components of the Teamcenter product suite. The PDM (Product Data Management) component of Teamcenter, the erstwhile Metaphase and iMAN, is being used extensively by organisations like Maruti, M&M, HAL, L&T and NTPC. Many organisations are also seriously evaluating the Teamcenter Visualisation and Community (Vis products) for establishing a real-time workspace for the design supply chain to collaborate on an online basis.”

Business trends

India has the potential to become a design-outsourcing hub. A lot is being written about how India has emerged as an offshore hub for software services outsourcing, but apart from the usual application development there are niche areas like CAD/CAM design services that are capable of positioning India as a favoured destination. Industry observers believe that companies like General Motors, Ford and other auto majors have started outsourcing work to some of the little known start-ups such as Virtual E3D and eCAD. The primary markets for these companies are US, Europe and now APAC as well.

Opportunities

The worldwide market for design services is pegged at $11 billion and analysts believe that India’s share is a mere 1 percent. But the road ahead for this segment is definitely bright as players like Autodesk seek to outsource design services to third- party vendors. “India has a long history in the manufacturing industry, with a strong domestic market. It is known for its expertise in IT and many USA-based MNCs have set up their development centres in India. There is no reason why India cannot market itself as a reliable hub for outsourced mechanical design. The challenge is to ensure that its communications infrastructure is world class and meets

industry standards,” says Dehouck of Autodesk. Some Indian biggies like TCS, Rolta and Satyam have ongoing outsourcing agreements with clients worldwide. “Outsourcing of engineering design services is a big opportunity for India. Almost all major auto companies in the country like Maruti, Escorts, Swaraj, Bajaj Auto, Eicher and LML, auto components companies like Sona Steering and Hi-Tech gears, are using 3D software engineering design tools to create designs for tier-1 suppliers and OEMs to customers internationally. Indian design offshoots are already doing quite a bit of work for companies in UK and US, but this process still has a long way to go,” says Lall of PTC India. Some of the Autodesk clients who undertake these activities include Satyam-GE Engineering Services, L&T Information Technology and GE Power Controls.

The bottlenecks

However, on the flip side there are several bottlenecks for Indian firms in this segment. Most of these start-ups lack the capacity to undertake a large project and margins are the same as that of a typical software services project. “There are two types of players in this space—technology start-ups like us and recent entrants like Infosys and Wipro. The rates are $20-$30 for offshore and $50-$60 for onsite projects,” says Prasad M D R, managing director and CEO, Virtual E3D. He also laments that most Indian firms lack the initiative to forge technology alliances with global leaders. Some of the auto majors based out of India like Hero Motors and Escorts have established their own design centres.

S L N Murthy, CEO, ECAD Technologies, believes that bridging the gap between academy and the industry remains a daunting task. “There is an immediate need to form an industry consortium with participation from the private sector.” According to a report, Apple has recently approached the National Institute of Design for designing a handheld computing device. This will definitely endorse the talent pool available in the country.

Murthy adds that the VC community in the country has to play an instrumental role by understanding the technology in niche areas like CAD/CAM design services. “Today most VCs are looking at fast returns, but in a niche business like this it takes time to develop business relationships,” he says.

“The global BPO market, particularly for CAD/CAM/ CAE outsourcing offers a huge outsourcing opportunity, and companies in India offering IT and engineering expertise at a relatively lesser cost, are extremely well placed to capture this. This includes companies like Infosys, Onward, Quest, Paradigm Global and Plexion,” says Marwaha of EDS PLM Solutions. However, the ‘cost-effective’ tag might not be the best strategy to position India as the outsourcing hub.

Analysts believe that in hi-tech, niche areas like design services, apprehensions regarding Intellectual Property (IP) misuse is a bottleneck. “Most clients have the fear of losing an IP, especially if they are outsourcing to any of the South Asian countries because piracy levels are high in this region,” says Murthy. Therefore outsourcers are seeking exclusive alliances and not a ‘multiple vendor’ approach for minimising risks. India offers more than 20 percent cost reduction to any client, and therefore clients like GE and Boeing are tempted to outsource. “A typical CAD project in the US will cost about $60 per man-hour, while in India it can be done at less than $35,” says the CEO of a Bangalore-based firm. MNCs like GE, Snecma, Whirlpool, Pentair and Emerson have established their own design centres in the country.

Murthy of ECAD believes that design services worth over $50 million are outsourced to India annually and this number can rise exponentially. “Things are looking bright now, this week I am expecting business visitors from Israel and more deals are in the pipeline from the US.”

What needs to be done

There are a few issues that need to be resolved before India can emerge as a hub for design outsourcing. The formation of an industry body comprising CEOs and academicians is one such step that is needed to ensure that India has a substantial number of professionals every year. Indian companies need to get involved in worldwide forums that are responsible for establishing standards. Biggies like TCS, Rolta and Wipro may also consider sub-contracting some of the work to tier-III start-ups. This will fuel the growth of the industry. Indian players can leverage the presence of product vendors like PTC, Autodesk and EDS PLM by forging alliances with them. Unlike software services, which has now been commoditised and where there is hardly any room for ‘value pricing’, CAD/CAM services offer tremendous scope for Indian companies to move up the value chain and carve out a niche based on quality and not merely cost effectiveness.

PTC and EDS to improve interoperability

Says Marwaha, “EDS PLM Solutions and PTC have agreed to exchange our technology to allow either party to develop and provide interoperability solutions between our products.” The agreement provides access to the respective MCAD software products. This ensures that interoperability between the MCAD systems and respective PDM systems can be achieved. For EDS PLM Solutions, this agreement means that EDS can incorporate Pro/E and Pro/Desktop data into Unigraphics, Solid Edge, I-deas, Visualisation, and eFactory products. It can also manage Pro/E data within the Teamcenter products.

He adds, “Most customers, be it in India or elsewhere, have some need for interoperability. Improving interoperability between systems removes quality problems due to information lost in incomplete translations and ensures timely and accurate response to changes as they occur.”

Information exchange

Most engineering information exchange taking place between manufacturing OEMs and their large suppliers is based on CAD generated data, leading to demand for Product Lifecycle Management. Large to mid-sized corporations, who have already deployed CAD, have started looking at other related solutions like PDM. Catia, PTC and EDS PLM Solutions have their own products in this category.

Visual collaboration

Organisations have started evaluating and adopting Internet-enabled solutions that enable real-time, dynamic visual collaboration amongst geographically dispersed team members (within the organisation or outside) to collaborate on product development projects online.

Migrating from 2D to 3D

A large number of 2D users are migrating to 3D CAD. With the availability of full functional, yet affordable 3D CAD software packages like Solid Edge from EDS, and a painless migration path from 2D to 3D, large numbers of 2D users are now choosing to work with 3D CAD instead.

CAD/CAM training and education

One of the factors responsible for putting India on the global design-outsourcing map is the presence of MNCs like Autodesk, PTC and others. Having realised the need for trained manpower, these companies started partnering with local institutions for imparting training to students. “PTC has partners all over the country to open training institutes for CAD/CAM. We presently have six such training institutes, our partners being Dynamatic Technologies, Videocon, Rico, Esquire (Chennai), L&T (Baroda) and ProDevelop,” says Lall of PTC. PTC has an initiative to partner with customers to set up certified training centres to enable engineering professionals to specialise in Pro/ENGINEER, a software solution for product development. A training of 16 days certifies students as trained Pro/ENGINEER professionals.

“Though we do not have any training centres of our own, our software is the preferred choice for engineering colleges and polytechnics to provide CAD exposure to students. This ensures a readily available resource pool for the industry to source trained manpower. This apart, there are numerous centres run by independent agencies, which use our software for imparting CAD education. Since I-Deas has the largest installed base in India, the demand for trained manpower for the same is therefore the largest,” says Marwaha of EDS PLM. Most of these training programmes are aimed at imparting Solid Modelling skills to students, though many centres have also started offering advanced programs on CAM and CAE as well.

The Autodesk Training Centres (ATC) programme is for private entrepreneurs who wish to train students and professionals exclusively on Autodesk software solutions. There are over 100 ATCs in India. There is an increased thrust on reaching out to the students by these product vendors. “By tapping the students’ segment these vendors are able to woo future designers, which gives them a competitive edge,” says an analyst.

ATC training providers are authorised by Autodesk to deliver hands-on, instructor-led training to design professionals using Autodesk software. ATC is supported by the latest versions of AutoCAD, 3-D Studio, and GIS which are a part of the Autodesk comprehensive suite of solutions for building design, manufacturing, CIVIL and GIS.

Apart from the product vendors, even the design services companies will have to play a role in CAD/CAM education. This can only be done by a combined effort of the product vendors, service providers and the educational institutions. “There is a dearth of qualified professionals in design services, a right person can earn up to $80 per hour in the US,” says Murthy. According to him, design professionals are in great demand in the US and Europe.

The final word

Manufacturing companies that are under pressure to reduce design cycle time, cost and cut time-to-market, are seriously investing in CAD/CAM tools. Product vendors are supporting these companies by providing the new tools at an affordable cost.

The last few years have definitely seen increased activity in the Indian CAD/CAM space with MNC product vendors realising the importance of India as a cost-effective destination for outsourcing CAD/ CAM work. Even local services firms have started looking at design outsourcing in a big way. With MNCs also taking an active interest in CAD/CAM education in the country, India can replicate its ‘software services’ success in this space as well.