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Considering that the amount of technical information grows exponentially throughout each successive phase of a product life cycle, savings can easily accumulate when the inefficiencies of paper are eliminated. This can provide a substantial return for the maintenance, archiving, and revision of drawing assets. Document management costs are some of the more difficult company expenses to quantify, but they are very real and very expensive. Add together the financial considerations of the data from the diagrams below and it is easy to justify a hard look at scanning and electronic document management options. And this does not take into consideration the cost benefits that are derived from eliminating manual drawing revisions. Creating an open environment for drawing archives requires a one-time cost for scanning paper drawings into an electronic environment. Once implemented, savings are realized throughout all phases of the product life cycle.

Cost Benefit of Raster Based Engineering Change Order Cycles

A simple cost-benefit example in which a company has 100 drawings with 20 Engineering Change Order’s (ECO) to perform each month can be used to illustrate how cost savings can grow by scanning the drawing. Various labor rates are used for each discipline. Actual numbers should be determined for individual organizations.

Raster Editing/Digitizing/Vectorization Cost Analysis

With reduced labor costs and improved usage of CAD, the benefits of revising drawings electronically are clear. What may not be clear is the trade-off between investing in the upfront conversion to raw vector CAD, converting to intelligent variational models, or taking advantage of a lower cost hybrid raster CAD system.

Revision Life-Cycle Cost Savings

The costs associated with revising drawings are dependent on the method and solution used. The methods evaluated here include manual, CAD digitize, hybrid raster CAD, full vectorization, and conversion to intelligent models.

Costs are incurred with each individual revision and include the cost associated with capturing the document to a digital form unless the manual method is used. Therefore, the true revision cost is calculated by combining the labor rate and the projected time spent on each edit plus the digital transformation expense.

A key driver for determining the costs and benefits is the labor savings realized for each method. Any drawing will have a unique labor saving factor based on drawing quality and the revision method used.

In an article first appearing in Document Management Magazine, the inherent cost to recreate and revise a complex drawing, using each of these methods were compared. This comparison considered both the initial capture time, various labor rates, and the time associated with making revisions to the drawing once it had been captured. The results are shown above.

The hybrid Raster/CAD approach, which eliminates the redraw, clean up, and verification process, offers the greatest immediate cost benefit for the first revision.

A break even analysis can help you understand what method is best for you. The first point is when the hybrid raster CAD approach becomes beneficial over manual methods (n2) and is usually attained with the first revision. This is due to the tremendous savings attained with a hybrid raster CAD system as it allows the modification of old drawings as if they have CAD intelligence. These raster CAD systems can move, copy, or add selected raster entities fast and accurately with rastermsnapping features. The next break even is attained when conversion to full CAD begins its' cost benefits over the manual process. This point is highly dependent on image quality, operator training, and tools used. It can be reached in as few as 1-3 revisions.

A final break even is realized between the hybrid raster CAD approach and converting to full vector CAD. This is where selective conversion tools have a significant place allowing companies to incrementally convert to CAD as changes become necessary.

Cost justification for the various technologies described here is most measurable when based on labor savings in the revision process and improved information access and management.

Payback and ROI

An estimate of the payback period can be found by dividing the net investment in capture equipment and costs by the annual savings. The return on investment is the annual savings divided by the net investment.

An example: if a company has 500 active drawings and makes an average of 2 revisions (taking 3.5 hours to complete each) per year per drawing. The drafting burden rate is $35/hour. That adds up to (500 x 3.5 hrs x $35/hr x 2) $122,500 per year on drawing revisions.

We can examine this same situation using the hybrid raster editing approach without conversion. Handling, scan time, and enhancement will take about 10 minutes, the burdened operator charge is $70 including equipment amortization resulting in capture costs of (500 x 10/60 hrs x $70/hr) $5,834. There is no vectorization or clean-up time and revisions take 30 minute per drawing. Revision costs associated with this approach are (500 x 30/60 hrs x $70/hr x 2 revs = $35,000). This is calculated using $70/hour including the hardware & software costs for a fully burdened CAD operator. This adds up to a potential savings of $81,666 per year.

This example can also be calculated using the vectorization approach. Scan time and burden costs remain the same ($5,834). Typical conversion time (capture costs) for a large portion of the drawing would take approximately 15 minutes for initial vectorization and 1.5 hours for post processing and QA/clean-up, resulting in a cost of (500 x 1.75 hrs @$70/hr = $61,250). Revision time is reduced to half an hour as CAD functionality would mainly be used (500 x .5 hrs x $70/hr x 2 revs = $35,000). This adds up to $102,084 -- a potential savings of $20,416 after two revisions. Now that the drawings are fully in CAD, all future revisions would add up to greater savings.

If the total system costs $30,000 (scanner and software) per year, these examples have a technical payback time of just a few months and the investment is easily justifiable.

Keep in mind that although the payback and ROI figures will vary, the cost of manual revisions are already being realized and will only increase.

Intangible benefits

The direct benefits of integrating paper within EDM/PDM and CAD are based on labor savings in the revision cycle. However, there are many intangible benefits which include:

Market/Lead Time Benefits

• Manufacturing companies often survive based on getting quality products to market sooner than its competition. Doing so helps increase mind share and hence market share.
• Project oriented companies, such as utility and construction companies develop a product at a greater scale. Contracts are awarded based on accurate and detailed proposals which must include cost and time estimates. A paper-enabled and intelligent modeling system at the front end yields faster design times and more accurate bidding efforts.

CAD System Benefits:

• An increase in the value of CAD by eliminating its use for tedious redraw. CAD can now be used for productive design and analysis functions.
• A common electronic database.
• Reduced retrieval and print times for documents with a document management solution.
• Improved information flow with work-flow and E-mail tools.
• Improved conformance to the ISO 9000 or OSHA regulations by instituting better document control procedures.
• Increased value of paper drawings through integration with CAD and EDM/PDM tools.
• Fewer lost, damaged, and misfiled documents.
• Immediate availability of accurate information.
• Streamlining of the change process.
• Increased quality.

Business Reinvestment

Companies already spend 7-10% of their expenditures on manual document management processes. A business reinvestment strategy involving the technology presented here can help reduce the incurred costs of managing, revising, and distributing information.

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