Large automotive OEMs don’t switch CAD software. It’s just too expensive to change. That’s why it was such a big deal when Daimler AG, the parent of Mercedes-Benz, chose to make this dramatic move in late 2010.
The company announced that it would replace Dassault Systèmes’ CATIA with its toughest competitor, Siemens PLM’s NX. This was a heavy blow for Dassault Systèmes, but nothing could prevent the phase-out. Obviously, Daimler had reached a level where the benefits of implementing a new system outweighed the complexity of improving an existing one.
And so the migration process was initiated in the summer of 2011. The goal is to be finished with the bulk of the migration in 2015 for cars and vans and in 2016 for trucks and buses, said Daimler’s PLM (product life-cycle management) project manager, Dr. Peyman Merat.
So what’s the current status of this huge project? New information has emerged from sources at Mercedes stating that the migration is going according to plan and that the project “PLM 2015″ has entered a critical phase. The plan is to be done on the automotive side by April next year.
In total, more than 6,000 employees are affected by the change, and to date over 2,000 have undergone the necessary training. The remaining 4,000 are to complete the training program in 2014.
Let’s take a closer look at the reasons for Daimler’s CAD switch.
Bernard Charles: An Air of Confidence
Many things can be said about Bernard Charles, the CEO and president of Dassault; he has an air of confidence and perhaps more, at least according to some of his competitors. But it’s also true that few in the industry have done so much to proselytize for PLM as this charismatic visionary. The same thing goes for his latest passion: the company’s 3D Experience concept. According to Charles, this is the next evolutionary step in IT for product realization, as he says it is “the step beyond PLM — a next-generation system.”
Given the “beyond PLM vision,” it is perhaps a little surprising that Dassault today is primarily a CAD company, at least in terms of revenues. According to figures from PLM analyst CIMdata, direct sales of CAD software represented approximately $1.6 billion (60 percent) of the company’s total revenue of $2.6 billion in 2012. This was made up of CATIA (about $1.1 billion) and SolidWorks (about $0.5 billion).
The German automotive industry is one of the world’s most important market clusters for PLM software. The blow was not only the large OEMs; the supply chain related to the automotive giants is of equal, if not greater, importance. Companies in this supply chain consume even more PLM software than the OEMs. And if Daimler wants NX instead of CATIA, manufacturers in the OEM’s supply chain may be driven to change, as well.
A Change Driven by Compatibility
So why did Daimler switch systems? Naturally, there were several reasons, but one of the most important ones was the coupling requirements between CATIA V6 and ENOVIA. Add to that the fact that Daimler’s proprietary product database, SMARAGD (based on Siemens PLM’s cPDM (collaborative product definition management) solution, Teamcenter), was incompatible with CATIA V6. Thus, the decision to switch was made.
When I spoke to him during PLM Europe in Linz, Germany, Merat, the PLM project manager, was reluctant to go into detail about the reasoning, but he confirmed that “our change is driven by compatibility issues between CAD and PDM (product data management) software.” He also said that the migration of product data began in July 2011, and that 2012 was about developing methodology and getting real about using NX in projects.
Merat said that to enable compatibility between NX and CATIA, Daimler created a multi-CAD data model in its product database, SMARAGD (12.1), with an interface that solves the format problems. Merat also said that it created an “NX package for subcontractors” and that the distribution of these started as early as 2011.
Organization-wise, the rollout of NX is being conducted through a sophisticated project plan. The German auto manufacturer has appointed special “rollout managers,” who ensure that the migration process is executed. The training programs are role-based and tailored to the different departments’ needs.
Long-Term Commitment Tied Up
There’s no doubt that Daimler’s NX commitment is long-term; it has signed a 10-year agreement with Siemens PLM. Dassault also received orders for new software (CATIA, ENOVIA, and the digital manufacturing solution Delmia) from Daimler during the transitional period, but a qualified guess is that this revenue stream for the French CAD maker will slowly dry up. The fact that Siemens PLM has both NX and the Teamcenter suite in place at Daimler makes its already-strong position in the German automotive industry even stronger. With Teamcenter customers like Daimler and Volkswagen AG, Siemens PLM is as dominant on the cPDM side as Dassault is on CAD.
Both Volkswagen and BMW are up for CATIA contract renewals in the coming couple of years, and Siemens PLM’s chief executive, Chuck Grindstaff, seems confident. He said that the increasing complexity of vehicle design and development has forced many automotive companies to evaluate their existing data systems to ensure that they use the premier technology solution. Daimler was no exception…