Strategy To End Tyranny Of Distance
The Age
Monday December 18, 2000
We've all heard of "e-commerce", but stand by for the new buzz word "e-engineering".
It heralds a revolution that is unfolding in manufacturing as designers, graphics experts, illustrators, engineers and IT specialists collaborate in developing new products, courtesy of the computer screen and the online world.
As manufacturers outsource work, specialised engineering firms are working more for large manufacturers, particularly the big car makers, following a trend in the United States.
Appropriately, the new ``hired gun" on the Victorian scene is the American company MSX International, which has set up in Melbourne.
The company's South Melbourne office is the centre of not only the Australian business but the headquarters of its planned Asia-Pacific operations.
MSXI, a private Michigan-based company, is a $1.3billion global provider of technology-driven outsourced business and engineering services.
The company's Australian manager, Chris Curran, said: ``Our clients manage the strategy and we manage the process."
Victoria will complement MSXI's US and western Europe operations, making the Melbourne office the final piece in the company's strategy.
Under its ``follow the sun" world technology strategy, MSXI can have three teams working on the same equipment over 24 hours by using three different time zones - Europe, America and the Asia-Pacific region - and computer-aided design technology.
Mr Curran said e-engineering could cut costs and time out of the supply cycle.
In the past, if changes were made to a design, for example, there were delays in letting others know what was going on, and waiting while they made their input.
With the new technology, several participants could simultaneously view the design and be involved in any changes.
``It is a quantum leap, a new industrial revolution," he said. ``For Australia, it means the end of the `tyranny of distance'."
The new approach has been dubbed ``collaborative product commerce".
Mr Curran said follow-the-sun technology could cut production time by two-thirds, giving a company a competitive edge.
Previous attempts to shorten design and production time had involved doubling staff working on a project or using multiple shifts in one location.
``The pressing issue when using these methods, particularly in car design, is availability of labor," he said. ``The follow-the-sun technology effectively eradicates the labor scarcity issue."
MSXI's background in car making is appropriate for a company setting up in Victoria, which is home to the three big car makers: Holden, Toyota and Ford.
Last week Holden announced that its new $700million six-cylinder engine plant would be built in Melbourne.
MSXI chief executive Thomas Stallkamp was vice-chairman of Chrysler but left after Daimler-Benz took over the company.
MSXI has since diversified into a range of industries including aerospace, marine, consumer durables and consumer goods.
Its activities in Victoria were boosted by the acquisition of the innovative local engineering company Radial Pacific.
Radial designed and built the Axcess 2 concept car, a project that showed the capabilities of more than 100 Australian companies.
After 10 years Radial had a turnover of about $7million, but director David Martin said it had come up against a funding brick wall in trying to get into the big time.
``Small companies can't afford the infrastructure needed in the collaborative product commerce environment," he said.
Mr Martin, who is now marketing manager of MSXI engineering services, said it was exciting to be able to tap into the international market through the parent company. This approach offered exciting opportunities for Australian engineers, he said.
MSXI operates in more than 60 places in 23 countries and has 15,000 professional and contract employees. Engineering services, which make up about $550million of its turnover, are growing 10 to 15per cent a year.
Formed in 1996, the company has grown through performance and acquisitions.
Its biggest project has been the design and most of the development of the award-winning Ford Ka mini-car in Europe. The development team consisted of 150 MSXI engineers and 35 Ford engineers.
MSXI (Australia) has two parts: engineering, and business and technology services.
MSXI Engineering concentrates on vehicles and other highly engineered, durable products.
B&TS offers services that include purchasing agreements, information management and systems, training, and document imaging and management.
© 2000 The Age