Does Simulation Save Product Development Dollars?
It’s not a Capital Expenditure, It’s an Investment in Your Organization
For many companies, the monetary benefit of introducing simulation software into their product development structure is difficult to quantify. Many interpret simulation’s payoff to occur years down the line of implementation and are hesitant to consider it “valuable” unless physical test data is correlated to the model. While correlating models is indeed desirable and what would be considered a best practice within a mature simulation group over potentially several years of model validation, the immediate benefits in the here and now are often overlooked, missed, or ignored. These benefits include targeted preliminary design focusing and rough evaluations of initial prototype performance. Simulation doesn’t just focus on robust product development. It cascades monetary savings throughout the product development pipeline.
Reframing the Argument In Favor Of Simulation
A common thread I’ve seen over the years is that simulation is at odds with physical testing. It’s a curious idea because simulation is never meant to fully replace physical testing in all cases. Certifying bodies across various industries will often require some form of physical testing, while some have fully migrated to accepting simulation as a viable alternative. When properly integrated within the product development organization, simulation works together with physical testing by mitigating repeat testing or “nice to have” physical tests.
In return, physical testing provides a feedback loop to simulation by providing data to validate simulation models. As this dance continues, both organizations become better. Test engineers turn their attention to value-adding physical tests as opposed to putting out the latest fire on a product that has failed physical testing for the third time. Simulation engineers focus on the front-end of product design to ensure that if a product makes it to the test cell, it has a high probability of passing the first time.
This Is All Great, But How Does It Save Money?
For the sake of discussion, let’s say your product has a test schedule that involves the following:
- 6 physical tests required
- 2 days to run a single test (16 hours)
- Engineering labor to support a single test
- 2 test engineers (billable at ~$85/hr)
- Require 1 day after testing to report findings (8 hours)
- Total Engineering Labor Cost Per Test: $4,080
- Material required for 6 tests
- 6 prototypes (cost of $100 each)
- Total Material Cost Per Test: $100
- Total Test Plan Cost: $25,080
- Total Test Plan Days: 18
Not cheap, right? These are estimated costs, but it gives you an understanding of how quickly the costs can add up. On top of this cost, we didn’t even include the rework a design engineer would likely have to complete before retesting (and therefore incur further time delays). Now, imagine if a single simulation engineer could reduce the number of physical tests down to 3 instead of 6. How would that test schedule and the associated costs change?
- 3 physical tests budgeted
- 2 days to run a single test (16 hours)
- Simulation support
- 1 simulation engineer (billable at ~$95/hr)
- Completes simulation work in 2 days (simulation and report writing)
- Total Simulation Labor Cost: $1,520
- Engineering labor to support a single test
- 2 test engineers (billable at ~$85/hr)
- Require 1 day after testing to report findings (8 hours)
- Total Engineering Labor Cost Per Test: $4,080
- Material required for 3 tests
- 3 prototypes (cost of $100 each)
- Total Material Cost Per Test: $100
- Total Test Plan Cost: $14,060
- Total Test Plan Days: 11
In this sample case, simulation was able to reduce the total physical test plan cost by approximately 44%.This was a conservative example where we assumed 3 tests were still required to fine tune a design. In many cases, simulation can point to a design that passes the first time in physical testing, leading to an estimated total test plan cost of $5,900 (assuming we kept 3 prototypes on-hand just in case). On top of these benefits, you’ll notice that we’ve saved 7 days of labor by leveraging simulation. This is 7 days that you can:
- Launch your product earlier than your competitors
- Creates a strategic advantage being first-to-market
- Improved brand perception among customers as your product is on shelves longer
- Redeploy your engineering labor to other business-critical projects
- Lowers development cost per product line
- Eliminates waste caused by emergency redesigns
- Kick off new project work that was waiting in your product pipeline
- Increases revenue velocity
- Reduced product development cycle duration
I believe it’s safe to assume your company isn’t making just one product, but rather has a portfolio of products it is working on over the next few years. Start compounding these time savings across your entire product line. Using our example above, we saved 8 days on one product. What if you were able to save those 8 days across 5, 10, or even 25 different products? What if you were able to repeat that time savings over several years? That begins to snowball into a lot of engineering hours that can be spent (and saved) elsewhere. Start converting that time into money using simulation.
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