Determine the Real Costs of Not Using PDM at Your Company

If you are an engineer working at a small or mid-sized company, there’s a good chance that you might be working without a product data management (PDM) system in place. Many believe that implementing a data management solution would be time-consuming and just add additional work to the current ways of doing things.

There is also the misconception that PDM is too expensive to implement. The reality, however, is quite the opposite. In fact, the cost of NOT using PDM is costly indeed. The costs associated with having to recreate lost files, poor BOM management, slow engineering change orders (ECOs), and ineffective search methods all add up to monetary losses to the company.

If you’re currently managing your design data on a shared drive, you’re probably already wasting valuable time and losing critical information—problems a simple data management strategy would eliminate. All of this might be easy to say, but what if there was a way to prove to yourself—and to your boss—that implementing a quality PDM system, such as SOLIDWORKS PDM, could actually save you both money and time?

The good news is that there is an easy way. Using the PDM ROI calculator you can apply your own company’s specific data to determine exactly how long it would take to get a return on your investment in PDM. To illustrate how it works, here’s an example ROI report from a real SOLIDWORKS customer. This company uses SOLIDWORKS CAD but does not have SOLIDWORKS PDM.


In this particular example, the company has $50 million in annual revenue, 25 members on the design team, and 30 active design projects. Top challenges (chart below) as ranked by this company were: streamlining Engineering Change Orders (ECOs) processing (49%), accelerating time to market (47%), better management of BOMs (40%), and reducing scrap and rework (34%).

 

Based on the specific data provided by the company, the potential annual savings derived from using SOLIDWORKS PDM would be $689,059. Breaking that down per each area of potential savings we see that search productivity improvements alone would save the company $320,625 annually. The ability to avoid having to spend their time recreating lost files would account for another $171,000 annually, and better management of BOMs would save another $96,188 a year.

When we expand the picture to look out three years, we see that the cumulative annual benefits (three years) amount to $1,644,759, averaging out to $548,253 per year. When we look at benefit realization (accounting for time to implement, adopt and optimize), 50% of the benefits were reaped in the first year, 75% by the end of year two, and all of them fully realized by the end of the third year post-implementation.

When projecting the total investment in SOLIDWORKS PDM, for this sized company, the cumulative annual investment would be $245,750 though most of this is allocated in the first year. This figure includes the software and subscription, implementation services and labor, infrastructure, and training (both formal and independent).

So the question ultimately is how soon would we recoup our investment? For this particular company, as you can see below the answer is less than eight months with a total Return of Investment (ROI) of 569%.

Certainly every company is different and has unique requirements and challenges, so we encourage you to try the PDM ROI calculator for yourself using your company’s unique data to find out if SOLIDWORKS PDM can help your company save both time and money. While we are obviously focusing on ROI in this example, perhaps what’s most important for you, the engineer, is the ability to stop spending time using a manual, folder-based, error-prone data management system. You’ll immediately realize less time being spent searching for files and trying to determine which version is the most current one so you can get back to why you became an engineer: designing amazing new products.

 

Barbara Schmitz

Barbara Schmitz

Senior Brand Introduction Manager at SolidWorks
Loyal dog owner, travel bum, cool mom, and lover of hoppy IPAs, alternative music and new tech.