Symbol

US / Header

CaddiMenuBar

Core:Section

US / Footer

Explore our latest insights and strategies for procurement success. Visit now to stay ahead with valuable industry knowledge and actionable tips!

Resources

US / Resources

<a href="https://caddi.com/en-us/drawer/resources/insights/vave-value-analysis-value-engineering" rel="noopener noreferrer" target="_blank">Value Analysis / Value Engineering (VAVE)</a> initiatives aim to optimize the value of products, projects, or services. Analyzing data from technical drawings is becoming increasingly important for successful VAVE implementation.Technical drawings contain a wealth of information about a product’s materials, dimensions, assembly, and manufacturing processes. With the rise of digital drawings and 3D models, even more data can be extracted. Leveraging this data enables fact-based decision making to reduce costs, improve quality, and maximize value.For example, drawing data can reveal material usage rates for cost reduction opportunities. It can also show potential failure points or manufacturing difficulties. Applying data insights proactively during VAVE prevents issues down the line. Overall, drawing analytics provide tangible evidence to guide impactful changes while preserving functionality.As data utilization expands across industries, integrating drawing analytics into VAVE provides a competitive advantage. Companies that leverage this data will make smarter value improvements and outperform peers. The future success of VAVE relies on capitalizing on these rich data sources.

<h3>1. Material Usage Analysis</h3>One key practice is analyzing material usage from engineering drawings. By extracting material specifications and dimensions, VAVE teams can calculate the precise quantities of materials used in a product. This enables identifying opportunities to:<ul><li>Reduce material usage without compromising functionality</li><li>Substitute cheaper materials with similar properties</li><li>Optimize material allocation across components</li><li>Negotiate better prices through bulk purchasing</li></ul>For example, a vehicle manufacturer used drawing data to identify that they could reduce the thickness of a car door panel by 10% while maintaining structural integrity. This simple change saved millions in annual material costs.<h3>2. Tolerance Analysis</h3>Another valuable practice is tolerance analysis. Engineering drawings specify the acceptable range of variation for each dimension. Tight tolerances require more precise manufacturing, which increases costs. VAVE teams can use tolerance data to:<ul><li>Identify unnecessarily tight tolerances</li><li>Determine the impact of loosening tolerances on functionality</li><li>Optimize tolerances for critical vs. non-critical components</li><li>Reduce manufacturing costs through looser tolerances</li></ul>For instance, a machinery manufacturer analyzed tolerances across their product line. They found that 80% of components had tighter tolerances than necessary. By selectively loosening tolerances, they reduced manufacturing costs by 15% without affecting quality.<h3>3. Assembly Optimization</h3>Engineering drawings also provide crucial data about product assembly. VAVE teams can use this information to streamline assembly processes and reduce costs. Key opportunities include:<ul><li>Minimizing the number of components</li><li>Simplifying component designs for easier assembly</li><li>Optimizing the assembly sequence</li><li>Identifying opportunities for automation</li></ul>One electronics company used drawing data to analyze their circuit board assembly process. They identified components that could be consolidated and redesigned the board layout for robotic assembly. These changes cut assembly time by 30% and reduced defects.<h3>4. Failure Mode Analysis</h3>Drawing data can also help predict and prevent potential failure modes. By analyzing how components interact and identifying high-stress areas, VAVE teams can proactively address issues. This involves:<ul><li>Conducting finite element analysis (FEA) to simulate stresses</li><li>Identifying potential failure points from drawing geometry</li><li>Redesigning components to distribute stresses evenly</li><li>Specifying more durable materials in high-wear areas</li></ul>A medical device company used FEA on their product drawings to identify a potential failure point in a critical valve component. They redesigned the valve housing and specified a stronger material. These changes prevented costly recalls and lawsuits.<h3>5. Manufacturing Process Optimization</h3>Finally, engineering drawings contain valuable data for optimizing manufacturing processes. VAVE teams can use this information to:<ul><li>Identify components suitable for different manufacturing methods</li><li>Optimize designs for manufacturability</li><li>Reduce setup times and changeovers</li><li>Minimize scrap and rework</li></ul>For example, a furniture manufacturer analyzed their product drawings and identified components that could be produced using CNC machining instead of manual woodworking. They redesigned these components and invested in CNC equipment. This change reduced manufacturing time by 50% and improved quality consistency.

To illustrate the power of leveraging engineering drawing data for VAVE, consider the case of a leading aerospace manufacturer. The company was facing intense pressure to reduce costs while maintaining strict quality and safety standards.The VAVE team decided to focus on analyzing engineering drawings for a key component: the landing gear assembly. By extracting material specifications, dimensions, and tolerances from the drawings, they identified several opportunities:<ul><li>The team found that the current design used a high-strength steel alloy for the entire assembly. However, analysis showed that a cheaper alloy with similar properties could be used for non-critical components, reducing material costs by 20%.</li><li>Tolerance analysis revealed that several dimensions had unnecessarily tight tolerances. By selectively loosening tolerances on non-critical features, the team reduced manufacturing costs by 10% without affecting functionality.</li><li>The team also used drawing data to optimize the assembly process. They identified components that could be redesigned for easier assembly and reduced the number of fasteners by 30%. These changes cut assembly time by 25%.</li></ul>Overall, by leveraging engineering drawing data, the aerospace manufacturer’s VAVE team achieved a 15% cost reduction on the landing gear assembly without compromising quality or safety. They also developed a repeatable process for analyzing drawings that they could apply to other components and products.This case study demonstrates the tangible impact that drawing data analysis can have on VAVE outcomes. By providing objective insights and evidence-based recommendations, drawing data helps VAVE teams drive measurable results and prove the value of their efforts.

In conclusion, leveraging engineering drawing data is essential for successful VAVE initiatives. By analyzing material usage, tolerances, assembly, failure modes, and manufacturing processes, VAVE teams can identify high-impact opportunities to reduce costs and improve value.However, effectively leveraging drawing data requires the right tools and expertise. Companies need robust data extraction and analysis capabilities to unlock the full potential of their drawing assets. This involves investing in specialized software, training, and talent.One powerful tool that enables companies to fully leverage their engineering drawing data is CADDi Drawer. This innovative software platform provides comprehensive capabilities for extracting, analyzing, and managing data from both digital and physical drawings.A key feature of CADDi Drawer is its ability to automatically scan and extract data from PDF drawings. It can capture all the critical information, including dimensions, text, and shapes, even from handwritten drawings. This digitization unlocks previously inaccessible data and makes it searchable and comparable.Moreover, CADDi Drawer allows companies to easily connect their drawing data with other relevant information from across the supply chain. Users can upload CSV files to link drawings with associated data such as costs, quantities, supplier details, sales prices, and cost breakdowns. The platform also integrates with ERP systems, CAM and CAD software, quality reports, and spec sheets. This integration provides a holistic view of each drawing in the context of the broader business.<img src="https://cdn.builder.io/o/assets%2F209ee507cedf4c298e100edae4bba2df%2F53c7e8b2fcbe46d2a3f2da2f787725d2?alt=media&amp;token=4e9738e3-99a2-4d7e-817f-22d6f39009f3&amp;apiKey=209ee507cedf4c298e100edae4bba2df">Another powerful capability of CADDi Drawer is its search functionality. Users can search their entire historical drawing archive using any keyword, including material types, sizes, designer names, part names, and notes. The platform’s patented similarity search technology goes even further by identifying the shape of each part and finding similar drawings, even from handwritten records up to 30 years old. Additionally, CADDi Drawer’s image search allows users to upload a photo of a sketch or physical drawing and find the most similar drawings in their digital archive.<img src="https://cdn.builder.io/o/assets%2F209ee507cedf4c298e100edae4bba2df%2Fa5d38b462a49447fae5477821a37c10d?alt=media&amp;token=598f1745-40f0-440f-9e00-7663b776c1b7&amp;apiKey=209ee507cedf4c298e100edae4bba2df">These robust search capabilities are particularly valuable for VAVE initiatives. Small design differences can often have large impacts on production costs. By identifying similar drawings with different pricing, CADDi Drawer enables engineers to easily find opportunities for value analysis and optimization.

How to Leverage Engineering Drawing Data for VAVE Initiatives

Imagine a car manufacturer. The steel, aluminum, tires, electronic components, and other parts that go into building a vehicle are all obtained through direct procurement. Without a well-managed direct procurement process, the assembly line would grind to a halt, and the company would be unable to produce its cars.Direct procurement typically follows a multi-step process:<ul><li>Identifying requirements: Determining what materials are needed, in what quantities, and when</li><li>Selecting suppliers: Choosing the right vendors based on quality, price, reliability, and other criteria</li><li>Negotiating terms: Agreeing on pricing, delivery schedules, payment terms, and other contract details</li><li>Placing orders: Formally requesting the goods and authorizing payment</li><li>Monitoring performance: Tracking deliveries, quality, and compliance with contract terms</li></ul>The key outputs of direct procurement include purchase orders, goods receipts, and invoice payments.It’s important to distinguish direct procurement from indirect procurement, which involves purchasing goods and services that support a company’s operations but don’t go into its products, such as office supplies, telecom services, and cleaning services.Effective direct procurement is critical for ensuring a steady flow of high-quality, cost-effective materials into the production process. It can make the difference between profitable operations and constant supply chain headaches.

Managing direct procurement is no walk in the park. While it may seem straightforward to simply buy the materials needed to make your products, several challenges can make the process far from simple:1. Supply chain disruptions: Picture a game of Jenga, where removing one block can bring down the whole tower. In direct procurement, a disruption at any point in the supply chain – whether it’s a natural disaster, labor strike, or transportation delay – can have a ripple effect that brings production to a standstill.2. Quality control: Ensuring consistent quality of materials is crucial, but it’s easier said than done. Suppliers may cut corners, substitute inferior components, or fail to meet specifications. Rigorous inspections and testing are needed to catch quality issues before they lead to product defects or recalls.3. Price volatility: Prices for raw materials can fluctuate wildly based on market conditions, currency exchange rates, and geopolitical events. Budgeting and forecasting become difficult when costs are constantly shifting beneath your feet.4. Supplier relationship management: Maintaining strong relationships with suppliers is key to ensuring reliable, high-quality supply. But it’s a delicate balancing act – push too hard on price, and you may damage the relationship; be too lenient, and you may overpay or receive subpar materials.5. Compliance and risk management: Procurement teams must navigate a complex web of regulations, from environmental and labor laws to international trade agreements. Non-compliance can lead to hefty fines, reputational damage, and even legal action.6. Lack of visibility: In today’s global supply chains, materials may pass through multiple tiers of suppliers before reaching the manufacturer. This lack of visibility can make it difficult to identify potential risks, monitor supplier performance, and respond quickly to disruptions.While technology solutions like supplier portals and <a href="https://caddi.com/en-us/drawer/resources/insights/supply-chain-analysis" rel="noopener noreferrer" target="_blank">supply chain analysis</a> can help mitigate these challenges, they’re not a silver bullet. Effective direct procurement requires a combination of strategic planning, risk management, and strong supplier relationships. It’s a constantly evolving landscape that demands continuous adaptation and improvement.

While the challenges of direct procurement can seem daunting, several strategies and tools can help companies navigate these complex waters:1. Strategic sourcing: <a href="https://caddi.com/en-us/drawer/resources/insights/strategic-sourcing" rel="noopener noreferrer" target="_blank">Strategic sourcing</a> involves taking a holistic, long-term approach to procurement, rather than just focusing on short-term cost savings. By analyzing spend data, market trends, and supplier capabilities, companies can develop optimal sourcing strategies that balance cost, quality, and risk. For example, Apple’s strategic sourcing team works closely with suppliers to develop new technologies and ensure a stable supply of critical components.2. Category management: <a href="https://caddi.com/en-us/drawer/resources/insights/category-management" rel="noopener noreferrer" target="_blank">Category management</a> involves segmenting procurement spend into distinct categories, such as raw materials, packaging, or transportation, and developing specific strategies for each category. By aligning procurement strategies with business objectives and market dynamics, companies can drive greater value and innovation.3. Supplier relationship management (SRM): Building strong, collaborative relationships with key suppliers can lead to better quality, reliability, and innovation. SRM programs can include regular communication, joint problem-solving, and performance incentives. Toyota’s famous “Toyota Way” emphasizes close partnerships with suppliers to drive continuous improvement.4. Supplier diversification and consolidation: Putting all your eggs in one basket is risky, but spreading yourself too thin can also be problematic. That’s why it’s crucial to find the right balance between supplier diversification and consolidation.<ul><li>Diversification involves sourcing from multiple suppliers to mitigate the impact of disruptions and price volatility.</li><li>On the other hand, <a href="https://caddi.com/en-us/drawer/resources/insights/supplier-consolidation" rel="noopener noreferrer" target="_blank">consolidation</a> involves reducing the number of suppliers and focusing on strategic relationships with a few key partners. This can lead to better economies of scale, improved quality control, and more collaborative innovation.</li></ul>5. Procurement intelligence: <a href="https://caddi.com/en-us/drawer/resources/insights/procurement-intelligence" rel="noopener noreferrer" target="_blank">Procurement intelligence</a> refers to the use of data analytics, market research, and other tools to gain insights into supplier markets, pricing trends, and risk factors. By leveraging procurement intelligence, companies can make more informed sourcing decisions, identify opportunities for cost savings, and proactively mitigate supply chain risks.6. Supply chain visibility tools: Imagine trying to navigate a maze blindfolded. That’s what it can feel like managing a supply chain without visibility. <a href="https://caddi.com/en-us/drawer/resources/insights/supply-chain-visibility" rel="noopener noreferrer" target="_blank">Supply chain visibility</a> tools like supply chain mapping, supplier portals, and real-time analytics can provide a clear view of the entire procurement process, from raw materials to finished goods.7. Risk management strategies: Proactively identifying and mitigating risks is crucial in today’s uncertain environment. This can include conducting regular risk assessments, developing contingency plans, and purchasing insurance. During the COVID-19 pandemic, companies like General Motors and Ford quickly pivoted to producing ventilators and PPE, demonstrating the value of flexible risk management strategies.8. Sustainable and ethical sourcing: Consumers and regulators are increasingly demanding that companies source materials responsibly. Implementing sustainable and ethical sourcing practices, including <a href="https://caddi.com/en-us/drawer/resources/insights/green-procurement" rel="noopener noreferrer" target="_blank">green procurement</a> and practices such as using recycled materials or ensuring fair labor practices, can help mitigate compliance risks and enhance brand reputation.9. Collaborative planning, forecasting, and replenishment (CPFR): <a href="https://caddi.com/en-us/drawer/resources/insights/collaborative-planning-forecasting-and-replenishment" rel="noopener noreferrer" target="_blank">CPFR</a> involves sharing data and collaborating with suppliers to improve forecasting accuracy and reduce inventory costs. By working together to predict demand and optimize production, companies can reduce the risk of stockouts or overstocking. Walmart’s CPFR program has helped it reduce inventory levels while improving on-shelf availability.Implementing these solutions requires a combination of people, processes, and technology. But for companies that get it right, effective direct procurement can be a key competitive advantage, driving cost savings, innovation, and customer satisfaction.

In recent years, direct procurement has been transformed by a wave of digital innovation and shifting business priorities. Here are some of the key trends shaping the landscape:1. Digital transformation: <a href="https://caddi.com/en-us/drawer/resources/insights/procurement-department" rel="noopener noreferrer" target="_blank" class="">Procurement teams</a> are increasingly leveraging digital tools like <a href="https://caddi.com/en-us/drawer/resources/insights/e-procurement" rel="noopener noreferrer" target="_blank" class="">e-procurement</a>, e-auctions, and procure-to-pay systems to streamline processes and improve efficiency. Cloud-based solutions and mobile apps are making it easier to collaborate with suppliers and access real-time data from anywhere.2. Data-driven decision making: With the explosion of data from multiple sources, procurement teams are using advanced analytics and AI to gain insights into supplier performance, market trends, and risk factors. By integrating data from siloed systems and unstructured sources, companies can make more informed decisions and drive better outcomes.3. Emphasis on sustainability: Sustainability has become a key priority for many companies, and procurement teams are playing a critical role in driving sustainable sourcing practices. This includes using recycled materials, reducing waste, and ensuring ethical labor practices throughout the supply chain.4. Supplier collaboration: Companies are moving beyond transactional relationships with suppliers to more collaborative partnerships. By sharing knowledge, jointly developing new products, and working together to solve problems, companies and suppliers can drive innovation and mutual growth.These trends are transforming the way companies approach direct procurement, from reactive cost center to strategic business partner.Among these solutions, one that supports digital transformation and data-driven decision making is CADDi Drawer. By extracting metadata from drawings, structuring data, and aggregating data through the linkage of drawing data, purchasing data, supplier data, and related documents, it provides high searchability using features like similarity search and keyword search.<img src="https://cdn.builder.io/o/assets%2F209ee507cedf4c298e100edae4bba2df%2F8b038cb6d3994805be1d68b0003a6ce6?alt=media&amp;token=d30756d6-491f-461c-80f6-9113e4312a7b&amp;apiKey=209ee507cedf4c298e100edae4bba2df" class="">This streamlines manufacturers’ direct procurement activities and supports procurement departments in engaging in more strategic and agile initiatives.

Direct Procurement – What it is and how to manage it – Procurement 101

Procurement optimization refers to strategies and processes that maximize efficiency and value in procurement activities. With procurement making up a significant portion of expenses for many companies, optimizing procurement can lead to substantial cost savings and improved profitability.The goal is to develop best practices that:<ul><li>Reduce maverick spending</li><li>Improve supplier relationships</li><li>Increase transparency</li><li>Boost procurement productivity</li></ul>By streamlining and automating tasks, centralizing data, leveraging analytics, and instituting proper checks and balances, organizations can better control spend while enabling procurement teams to focus on strategic priorities.

The first step in optimizing procurement is to thoroughly analyze current workflows and processes to identify inefficiencies, bottlenecks, or areas for improvement.<ul><li>Gather data on all current procurement processes, from requisition through payment. Map out each granular step, documenting manual tasks, systems used, and who is responsible for each step.</li><li>Conduct stakeholder interviews with procurement team members, requestors, approvers, and other participants. Gather feedback on pain points and improvement ideas.</li><li>Analyze spend data to identify the highest-cost or most frequent procurement categories. Focus process analysis there first. Drill down to identify root causes of any lags or blockages.</li><li>Benchmark procurement metrics like cycle times, transaction costs, maverick spend rates against industry standards. Compare efficiency before and after technology enhancements.</li></ul>Thoroughly documenting and analyzing current processes provides the necessary baseline and insights to guide optimization efforts.

Effectively managing procurement requires a data-driven approach to understand spending patterns and identify potential savings. Leverage spend analytics to gain visibility across the enterprise.A thorough <a href="https://caddi.com/en-us/drawer/resources/insights/spend-analysis" rel="noopener noreferrer" target="_blank">spend analysis</a> involves:– Collecting and cleansing data from purchase orders, invoices, expense reports, etc.– Aggregating, categorizing and analyzing data to reveal insights<ul><li>Total spend by category</li><li>Spend by supplier</li><li>Spend by department/location</li><li>Spend over time</li><li>Compliance with contracts</li></ul>Analyze KPIs for suppliers such as pricing trends, service levels, risk factors, and sustainability metrics. This allows segmenting suppliers and identifying opportunities to rationalize relationships.Ongoing spend analytics provides the foundation for making data-driven decisions about procurement strategies, process improvements, and cost-reduction initiatives. Maintaining clean, comprehensive, and timely data is critical.

Supplier relationships are critical to an optimized procurement strategy. By <a href="https://caddi.com/en-us/drawer/resources/insights/supplier-consolidation" rel="noopener noreferrer" target="_blank">consolidating suppliers</a>, building strategic partnerships, and leveraging supplier innovations, organizations can achieve significant cost savings and process improvements.<h3>Consolidating Suppliers</h3>Reducing the number of suppliers can streamline operations and reduce costs:<ul><li>Conduct spend analysis to identify duplicate spending across suppliers. Consolidate volume to fewer suppliers for increased negotiating leverage.</li><li>Assess supplier performance and terminate underperforming partnerships. Focus on top-performing strategic suppliers.</li><li>Use e-procurement tools and online catalogs to aggregate purchasing and transition to preferred suppliers.</li><li>Coordinate purchasing across business units to avoid maverick spending.</li></ul><h3>Building Strategic Partnerships</h3>Develop close partnerships with strategic suppliers:<ul><li>Collaborate on process improvements, cost reductions, quality control, and new product development.</li><li>Provide incentives for performance. Strategic suppliers may offer lower pricing for increased volume.</li><li>Share forecasting data so suppliers can better plan, manage inventory, and meet expectations.</li><li>Work together to synchronize ordering, delivery, invoicing, and payment processes.</li></ul><h3>Leveraging Supplier Innovation</h3>Leading suppliers are investing in emerging technologies and innovations that buyers can benefit from:<ul><li>Communicate business objectives and challenges to suppliers. Invite them to present solutions during RFPs and <a href="https://caddi.com/en-us/drawer/resources/insights/request-for-quotation" rel="noopener noreferrer" target="_blank">RFQs</a>.</li><li>Actively source and pilot new supplier technologies like inventory management systems, e-procurement tools, AI supply chain analytics.</li><li>Give innovative suppliers preferential status. Be an early adopter of cutting-edge solutions from strategic partners.</li><li>Provide feedback to suppliers and collaborate on refinement.</li><li>Participate in supplier innovation days and visit supplier facilities to directly view new capabilities.</li></ul>Optimizing supplier relationships through consolidation, partnership, and innovation relies on constant communication and alignment with top suppliers.

Automating repetitive procurement tasks can significantly increase efficiency and reduce costs. Implement software tools and platforms to streamline key steps in the procure-to-pay cycle:<h3>e-Procurement Software</h3><a href="https://caddi.com/en-us/drawer/resources/insights/e-procurement" rel="noopener noreferrer" target="_blank">e-Procurement</a> software centralizes and automates purchasing:<ul><li>Automated workflows for purchase requisitions, POs, approvals, receipt of goods, invoicing</li><li>Integration with ERP systems</li><li>Self-service catalogs for commonly purchased items</li><li>Sourcing tools like eRFQs and eAuctions</li><li>Contract management functionality</li><li>Spend analytics and reporting</li></ul>e-Procurement eliminates manual tasks like data entry while enforcing policies and providing spend visibility.<h3>Electronic Invoicing</h3>Electronic invoices (e-invoicing) removes the need for paper invoices. e-Invoicing solutions:<ul><li>Receive invoices digitally</li><li>Validate and match them to POs</li><li>Flow data directly into payables system</li></ul>This eliminates manual data entry and speeds up invoice processing and payment.<h3>Automated Payment Processing</h3>Tools like virtual cards and ACH payments automate payment processing, saving time on issuing and reconciling checks. Payments can be triggered automatically based on invoices with pre-approved POs.<h3>Contract Management Systems</h3><a href="https://caddi.com/en-us/drawer/resources/insights/contract-management" rel="noopener noreferrer" target="_blank">Contract management</a> systems centralize:<ul><li>Contract storage</li><li>Deadlines</li><li>Obligations management</li><li>Analysis</li></ul>Many have digital signature capabilities. This eliminates physical contract handling and ensures suppliers meet obligations.Leveraging automation throughout the source-to-settle process allows procurement to focus on value-added tasks like strategic sourcing and supplier relationship management. This drives efficiency and compliance across the supply chain.

Centralizing and consolidating procurement operations is key to optimization. Traditionally handled in a decentralized way across business units, centralizing and standardizing enables economies of scale and higher performance.Approaches to centralizing procurement include:Shared services models: A centralized procurement function serves the whole organization. Shared services consolidate procurers into dedicated centers of excellence for consistency, specialized skills, and reduced duplication.Centers of procurement excellence: Procurement staff are brought together into a dedicated procurement center, focusing expertise, technology, and analytics.Global process standards: Common processes, data formats, and policies enable central oversight even with distributed teams.Centralized technology: E-procurement and P2P software connect procurement data across the organization for transparency, control, and standardized workflows.Consolidated supplier base: Reducing suppliers and channeling spend through preferred ones increases leverage and pricing power. A centralized view enables supplier base optimization.Benefits of centralizing procurement include:<ul><li>Increased visibility and control over spending</li><li>Leveraging economies of scale for better pricing</li><li>Reduced maverick and off-contract spending</li><li>Higher productivity and efficiency</li><li>Consistent processes and supplier management</li><li>Better data, analytics, and insights</li><li>Reduced costs through eliminating duplicated efforts</li><li>Increased value delivery across the organization</li></ul>A centralized, professional procurement group allows strategically tackling areas like total cost reduction, supply chain optimization, and risk management.

The procure-to-pay (P2P) process manages procurement transactions from purchase requisition through supplier payment. Streamlining and optimizing the P2P workflow is crucial for reducing costs, enhancing efficiency, and maintaining compliance:<ul class=""><li class="">Map P2P workflows to identify unnecessary complexities, delays, inefficiencies.</li><li class="">Reduce maverick spending through enforced policies, system controls, approval workflows, and training.</li><li class="">Enforce procurement policies through integrated rules to automatically ensure compliance.</li><li class="">Centralize data for visibility into spend and performance metrics.</li><li class="">Automate processes where possible to streamline manual steps (e.g. online ordering, EDI transmission, e-invoicing).</li><li class="">Optimize approvals, eliminating unnecessary or redundant ones that delay processes.</li><li class="">Improve supplier integration through P2P system onboarding, smooth data exchange, self-service portals.</li><li class="">Add dynamic reporting and real-time spend dashboards into P2P systems.</li></ul>Optimizing and digitizing procure-to-pay cuts costs, improves efficiency, provides spend insights, and maintains compliance with procurement policies.

Procurement analytics are essential for gaining insights, measuring performance, and identifying optimization opportunities:<h3>Defining KPIs</h3><ul><li>Determine important metrics based on procurement goals (e.g. spend under management, cycle times, supplier performance, savings generated).</li><li>Use specific, measurable, achievable, relevant, time-bound KPIs clearly connected to objectives.</li><li>Consider cost savings, supplier quality, contract compliance, efficiency, productivity, stakeholder satisfaction.</li></ul><h3>Analyzing Spend Data</h3><ul><li>Use spend analysis to segment expenditures, identify top categories, analyze suppliers, spotlight risks.</li><li>Gauge contract and policy compliance. Identify maverick spend outside preferred suppliers.</li><li>Pinpoint opportunities for demand management, specification improvement, strategic sourcing.</li></ul><h3>Creating Dashboards</h3><ul><li>Consolidate key metrics, KPIs, visualizations into interactive dashboards.</li><li>Enable drill-down to underlying data. Provide self-service access.</li><li>Continuously refine metrics and dashboards based on insights and evolving needs.</li></ul>Robust analytics give procurement multidimensional visibility into spending, suppliers, processes – driving data-backed decisions and ongoing improvements.And if you can elevate and evolve from procurement analysis to the level of <a href="https://caddi.com/en-us/drawer/resources/insights/procurement-intelligence" rel="noopener noreferrer" target="_blank">procurement intelligence</a>, you should be able to dramatically improve the results achieved through procurement optimization.

By leveraging these seven key strategies – process assessment, spend analysis, supplier management, automation, centralization, P2P optimization, and analytics – organizations can transform procurement into a strategic, data-driven function. Continuously refining and elevating procurement practices will drive cost savings, efficiency gains, and competitive advantage in an increasingly complex business landscape.

Procurement Optimization: 7 Key Strategies to Slash Costs

Spend analysis is the process of examining and analyzing an organization’s spending data to identify opportunities for cost savings, process improvements, and better supplier management.This guide will provide a practical overview of implementing spend analysis for manufacturing procurement. We’ll cover gathering and preparing expenditure data, using metrics and models for analysis, identifying savings opportunities, optimizing suppliers and contracts, forecasting future spend, and automating the process. Whether you’re new to spend analysis or looking to improve existing efforts, this guide will help you master this vital capability for manufacturing procurement success.

Spend analysis relies on high quality data from various sources within the organization. The first step is identifying where the procurement and spend data exists. The main data sources are:<ul><li>ERP system: The organization’s Enterprise Resource Planning system contains purchasing data, supplier records, product information, invoices, and payment data. This provides the core transactional data needed for spend analysis.</li><li>Procurement systems: These systems, which may be standalone or integrated with an ERP, contain data on supplier contracts, catalogs, and purchase requisitions.</li><li>Accounts Payable Systems: The AP system includes invoice, payment, and remittance details. Matching AP data with purchase orders and goods receipts from the ERP provides deeper insights.</li><li>Supplier databases: Maintaining a master supplier database allows linking supplier details like capabilities, locations, and performance to spend.</li><li>Maintenance, Repair, and Operations systems: MRO systems provide data on indirect spending related to facility management, equipment maintenance, and office supplies.</li></ul>Once data sources are identified, the next step is extracting the data on a periodic basis, ideally automatically. Typical extraction frequency is monthly or quarterly, as frequent refreshes allow insights into recent spend patterns.The data then needs to be checked for quality and normalized to a standard dataset. Common data issues like duplicate records, incomplete data, and invalid entries must be identified and resolved. Useful methods include statistical analysis to identify outliers, data visualization to spot gaps or errors, and consulting with system owners to understand data nuances. Investing time in quality checks dramatically improves the accuracy of spend analysis.The result is a clean spend data set from across the organization, ready for analysis and leading to data-driven procurement improvements.

Spend analysis reveals insights through key procurement metrics. Here are some of the most important metrics to track:Spend by category: Breaking down spend by product or service category helps identify areas with the highest spend and potential for consolidation or strategic sourcing.Spend by business unit: Analyzing spend by department or business unit can uncover differences in purchasing patterns and identify opportunities for standardization and economies of scale.Supplier concentration: How much of total spend is concentrated with the top suppliers? High concentration levels mean risk from supplier failure but also negotiating leverage.Purchase price variance: Are there instances where purchase prices lack consistency or deviate without justification, even for nearly identical items, depending on the buyer or supplier? Price variance for similar products is common, but these often present untapped cost reduction opportunities.<a href="/en-us/resources/insights/total-cost-ownership" rel="noopener noreferrer" target="_blank">Total cost of ownership (TCO)</a>: Analyzing the full lifecycle costs of purchases, including price, transportation, inventory carrying costs, and maintenance, provides a more comprehensive view of spending.Supplier performance: Tracking metrics such as on-time delivery, quality, and responsiveness can help identify top-performing suppliers and those that need improvement.Spend under management: What percentage of total spend is under procurement’s active management through contracts and supplier relationships? Higher spend under management indicates greater visibility and control.Payment terms: Assessing payment terms across suppliers can reveal opportunities to negotiate better terms, such as early payment discounts, to improve cash flow management.Procurement can set targets for these metrics and regularly measure progress. For example, increasing spend under management to 80% of total spend or improving contract compliance to 95% of purchases. Tracking metrics over time shows the impact of procurement initiatives and opportunities for improvement.

Data visualization is a critical component of spend analysis. By transforming spend data into graphs, charts, and other visual formats, procurement professionals can more easily identify patterns, trends, and insights.The key is choosing visualizations that allow procurement professionals to easily spot patterns and tell stories from the data. Well-designed charts make spend anomalies jump out.These are some best practices for effective data visualization in spend analysis:<ul><li>Focus visuals on key metrics and insights for your audience. Don’t overload with superfluous data.</li><li>Keep visual designs simple and intuitive. Avoid cluttered or overly complex graphics.</li><li>Structure dashboards to tell a data story from top to bottom. Visuals should flow logically.</li><li>Use descriptive titles, legends, and labels. Visuals should be self-explanatory.</li><li>Maintain consistency in design, fonts, color schemes, etc. to allow quick comparison.</li><li>Visualize data over time to identify trends and changes. Static snapshots have limited value.</li><li>Streamline data updates through automation or simplification. Avoid too complex data structures and time-consuming processes for each update or analysis.</li></ul>With compelling data visualizations, procurement can turn abstract spend data into impactful business insights. The right visuals make spend patterns crystal clear.

Spend analysis allows procurement teams to segment and categorize spending in order to gain further insights. There are two key methods for doing this:<h3>Spend Segmentation</h3>Spend can be segmented in different ways to identify areas of opportunity:<ul><li>Value segmentation: Spend is segmented by the total value of purchases in each category. This allows you to focus strategic sourcing and negotiation efforts on the largest areas of spend.</li><li>Criticality segmentation: Spend is classified based on the importance and risk associated with each category. Critical spend segments require greater supplier management and risk mitigation.</li><li>Demand segmentation: Spend is segmented by the level and variability of demand. This enables tailoring of procurement and inventory strategies based on demand patterns.</li></ul><h3>Item Categorization</h3>Properly categorizing spend is essential for actionable analysis. Items should be grouped into standard, company-specific categories such as raw materials, processing methods, applications, quality requirements, quantity ranges, etc. Within these major categories, sub-categories can be used to provide greater granularity.Careful spend segmentation and categorization enables refined insights from spend analysis. Companies can focus efforts on the largest, most critical, and most variable areas of expenditure.The spend cube model is also a powerful tool for analyzing multiple procurement metrics simultaneously across time periods. By combining dimensions such as supplier, category, business unit, and time (e.g., monthly, quarterly, or annually), the model provides a comprehensive view of spending patterns and trends. This multi-dimensional analysis enables organizations to identify cost-saving opportunities, improve supplier management, optimize procurement strategies, and track performance over time.

One of the most valuable applications of spend analysis for procurement teams is uncovering opportunities to reduce costs. There are several techniques that can help identify potential savings:<h3 class=""><a href="https://caddi.com/en-us/drawer/resources/insights/supplier-consolidation" rel="noopener noreferrer" target="_blank">Supplier Consolidation</a></h3>Consolidating spend across fewer suppliers or contracts can increase buying power and economies of scale. Analyzing spend data can reveal areas where spend is fragmented across many suppliers, and consolidating this spend into strategic agreements with fewer preferred suppliers can result in lower unit costs and reduced procurement expenses.<h3 class="">Alternative Supplier Evaluation</h3>Leveraging spend analysis to quantify purchasing volumes and specifications makes it easier to evaluate alternative suppliers and sourcing options through <a href="https://caddi.com/en-us/drawer/resources/insights/supplier-selection" rel="noopener noreferrer" target="_blank" class="">supplier selection</a>. By breaking down current spend and pricing models, there may be opportunities to identify alternate suppliers that can meet requirements at a reduced total cost. <a href="https://caddi.com/en-us/drawer/resources/insights/competitive-bidding" rel="noopener noreferrer" target="_blank" class="">Competitive bidding</a> and reverse auctions can provide comparison points to negotiate improved contracts.<h3 class=""><a href="https://caddi.com/en-us/drawer/resources/insights/procurement-benchmarking" rel="noopener noreferrer" target="_blank">Price Benchmarking</a></h3>In-depth spend analysis empowers procurement teams to negotiate better pricing with incumbent suppliers. Comparing prices paid versus internal and external benchmarks can uncover gaps. Documenting total spend volumes by product/service category also strengthens the buyer’s position during re-negotiations. By baselining prices and prioritizing categories with the largest savings potential, data-driven price benchmarking enables targeted negotiations to capture savings.Spend analysis reveals insights that lead to quantifiable cost reduction opportunities. By consolidating suppliers, evaluating alternatives, and benchmarking pricing, manufacturers can strategically optimize spend to achieve measurable savings.

Spend analysis helps optimize supplier relationships and contracts, reducing costs and improving performance. Key strategies include:<ol><li>Supplier rationalization: Consolidate spend with fewer, high-performing suppliers to create economies of scale and strategic partnerships.</li><li>Multi-year contracts: Negotiate longer-term agreements for better pricing and terms, providing suppliers guaranteed business.</li><li>Volume discounting: Leverage increased spend with preferred suppliers to secure higher volume discounts.</li></ol>Leveraging spend analysis is crucial for organizations seeking to streamline their supply base, enhance supplier collaboration, and achieve long-term cost savings.

Spend analysis can be a time-consuming manual process. However, procurement technology solutions are available to help automate parts of the analysis to gain efficiency.&nbsp;<a href="https://caddi.com/en-us/drawer/resources/insights/procurement-intelligence" rel="noopener noreferrer" target="_blank">Procurement intelligence</a> software offers capabilities to take raw relevant data, cleanse and normalize it, categorize it, and generate visualizations and insights. This eliminates many manual steps in the initial stages of spend analysis. The software can pull data from multiple enterprise systems like ERPs, generate customized reports, and reveal patterns and opportunities.Data integration is key to building a foundation for spend analytics. Rather than extracting data from different sources manually into spreadsheets, automated data integration tools can scheduled jobs to pull and consolidate relevant data into a central data warehouse. This provides clean, harmonized data for spend analytics.Ongoing analytics workflow is enabled through automation. Once the analytics environment is established, algorithms can run on regular schedules to update dashboards, generate alerts, and populate reports. Procurement teams can be notified of changes that require their attention rather than manually producing reports.By reducing the time spent on manual tasks, procurement groups can focus their efforts on strategy, supplier management, and negotiations to maximize the value delivered through spend analysis. Procurement analytics systems provide the data and insights for data-driven decision making.CADDi Drawer, a solution that fully supports procurement intelligence, data integration, and analytics workflow as a System of Insights (SoI). It leverages data from Systems of Records (SoR), such as ERPs, and extracts and structures data from drawings to support procurement processes, including supplier selection and management, RFQ creation, and quote evaluations.<img src="https://cdn.builder.io/o/assets%2F209ee507cedf4c298e100edae4bba2df%2F65d5ac74828346b697d0a2ce9f460240?alt=media&amp;token=9ee146e9-c04c-4d27-a478-42653a909f88&amp;apiKey=209ee507cedf4c298e100edae4bba2df">

Procurement 101: Spend Analysis – Practical guide to mastering it

Smart procurement is the process of leveraging technology and data to drive efficiency and value across an organization’s purchasing activities. It represents a digital transformation in how companies research, source, negotiate, purchase, receive and manage goods and services. Smart procurement delivers major benefits compared to traditional manual procurement methods.Firstly, smart procurement enhances efficiency through process automation and digitization. Online procurement portals, e-procurement software, electronic catalogs, and system integrations streamline everything from purchase requisitions to invoice approvals. This removes paperwork and manual work, speeds up cycle times, and enables employees to focus on more strategic tasks.Secondly, smart procurement improves data intelligence. Digital tools provide access to spent data analytics, supplier reports, and market intelligence. Stakeholders gain real-time visibility into budgets, trends, performance metrics, and more. This data can drive evidence-based decision making on opportunities like consolidation initiatives or competitive bidding events.Finally, smart procurement allows for value creation such as cost savings, risk reduction, and supplier innovation. Data insights uncover negotiating leverage and sourcing opportunities. Technologies like online auctions facilitate competitive bidding. Overall, smart procurement evolves procurement’s strategic role from just cost cutting to value creation across the organization.

The procurement function is undergoing a digital transformation. Organizations are adopting digital tools, automation, analytics, and cloud-based systems to modernize procurement operations.A key goal of digital transformation in procurement is leveraging data and technology to improve efficiency, transparency, and decision making. Organizations are implementing <a href="/en-us/resources/insights/e-procurement" rel="noopener noreferrer" class="">e-procurement</a> systems, supplier portals, and <a href="/en-us/resources/insights/cloud-erp-software-2024" rel="noopener noreferrer" class="">cloud-based ERP systems</a> to manage the source-to-pay process digitally.<a href="/en-us//resources/insights/procurement-intelligence" rel="noopener noreferrer" class="">Procurement intelligence</a> enables data-driven decision making in procurement. Predictive analytics and <a href="/en-us/resources/insights/spend-analysis" rel="noopener noreferrer" class="">spend analysis</a> tools provide insights into spending patterns, risks, and opportunities for cost savings. By leveraging big data, procurement teams can identify the best suppliers and prices when sourcing.Automation streamlines repetitive, manual tasks in the procure-to-pay process. Technologies like RPA can extract data, process invoices, update records, and complete transactions automatically. This improves accuracy and frees up procurement staff to focus on value-added activities.The digital tools adopted in procurement generate valuable data. Organizations are utilizing this data to gain visibility into spend, supply chain operations, and supplier relationships. Digital dashboards make it easy to monitor KPIs and metrics.Transitioning to an integrated, digital procurement function enables organizations to be more agile, efficient, and data-driven. The use of emerging technologies like <a href="/en-us/resources/insights/ai-in-procurement" rel="noopener noreferrer" class="">AI and advanced analytics</a> will continue shaping the future of smart procurement.

<a href="/en-us/resources/insights/strategic-sourcing" rel="noopener noreferrer" class="">Strategic sourcing</a> has evolved from an art to a science with the introduction of data analytics. By leveraging vast amounts of internal procurement data as well as engineering and manufacturing data, organizations can employ sophisticated analysis to derive actionable insights that optimize procurement processes.Data-driven sourcing provides full visibility into spend and suppliers, enabling businesses to identify opportunities for significant cost savings. By analyzing historical buying patterns and pricing data, procurement teams can pinpoint overspending and negotiate better contracts with suppliers. Data analytics also facilitates comparison of supplier performance on parameters like quality, delivery time and total cost, ensuring that businesses maximize value in supplier relationships.With real-time market intelligence and <a href="/en-us//resources/insights/procurement-benchmarking" rel="noopener noreferrer" target="_blank" class="">benchmarking</a>, enterprises can adopt dynamic and flexible sourcing strategies aligned with external market forces. Data-driven insights allow buyers to identify optimal inventory levels, foresee changes in demand, adapt procurement plans and avoid maverick spending. This leads to overall efficiencies and cost reductions across the complete procurement lifecycle.Advanced analytics fosters collaborative and strategic supplier relationships. By providing suppliers with actionable insights derived from data analysis, buyers can enable joint value creation and innovation. Data transparency enhances supplier management and streamlines procure-to-pay processes for a lean and agile supply chain.

<a href="/en-us/resources/insights/supply-chain-visibility" rel="noopener noreferrer" target="_blank" class="">Supply chain visibility</a> is a critical component of smart procurement. It provides purchasers with real-time tracking of orders and shipments across the entire supply chain. This enables organizations to have far greater oversight of supplier performance and identify potential bottlenecks or issues proactively.With supply chain visibility tools and technologies, procurement teams gain valuable insights such as:<ul class=""><li class="">Real-time location tracking of orders in transit</li><li class="">Up-to-date ETAs on upcoming deliveries</li><li class="">Live reporting on supplier KPIs like quality, lead times, and production capacity</li><li class="">Early notifications of potential delays or disruptions</li></ul>By leveraging supply chain visibility, purchasers can collaborate more effectively with suppliers. They can address problems quickly before they impact delivery schedules. This proactive risk management ensures continuity of supply and prevents costly delays.Overall, enhanced visibility across the supply chain is integral for smart procurement. It empowers purchasers to optimize ordering and inventory levels, minimize disruptions, and improve on-time delivery performance. This strengthens relationships with suppliers and provides the agility to thrive in today’s dynamic markets.

Collaboration is key to building strong relationships with suppliers in today’s digital procurement landscape. Effective <a href="/en-us/resources/insights/supplier-management" rel="noopener noreferrer" class="">supplier management</a> involves leveraging digital platforms and advanced AI technologies to foster much more frequent, transparent and meaningful engagement with suppliers.This two-way communication facilitates:<ul class=""><li class="">Better alignment on goals, timelines and capabilities</li><li class="">Earlier identification of potential risks or issues</li><li class="">Joint innovation and problem-solving</li><li class="">Streamlined <a href="/en-us/resources/insights/supplier-development" rel="noopener noreferrer" class="">supplier development</a> and <a href="/en-us/resources/insights/supplier-onboarding" rel="noopener noreferrer" class="">supplier onboarding</a></li></ul>In addition, digital tools provide analytics on supplier performance, enabling fact-based collaboration. Both parties can access the same data to have objective, productive discussions on improvements and opportunities. This data-driven approach also informs strategic decisions around <a href="/en-us/resources/insights/supplier-consolidation" rel="noopener noreferrer" class="">supplier consolidation</a>.The aim is to cultivate win-win partnerships built on trust and transparency. Through proactive supplier development, suppliers become valued extensions of the buying organization rather than vendors to be squeezed. This enables both sides to thrive in the long run.With improved supplier collaboration, buying organizations can expect benefits such as:<ul class=""><li class="">Higher quality products and services</li><li class="">Shorter lead times and better on-time delivery</li><li class="">More flexibility to respond to changes in demand</li><li class="">Lower costs through joint process improvements</li><li class="">Optimized supply base through thoughtful <a href="/en-us/resources/insights/supplier-consolidation" rel="noopener noreferrer" target="_blank" class="">supplier consolidation</a></li></ul>The key is to see suppliers as partners rather than adversaries. By embracing collaboration through digital platforms, procurement can foster synergistic relationships that drive value for all parties.

Supply chains face many potential disruptions, such as natural disasters, geopolitical changes, cyberattacks, and more. Smart procurement emphasizes proactive risk management to build resilient supply chains. This involves thoroughly assessing risks across the supply network to identify vulnerabilities. Steps for effective risk management include:<ul><li>Risk identification – Map the supply chain end-to-end, including tier 1, 2, and beyond. Assess risks at each stage, considering probability and potential impact. Look for single points of failure.</li><li>Scenario planning – Develop scenarios for high priority risks to game out potential outcomes and responses. Estimate financial, operational, and reputational impacts under each scenario.</li><li>Contingency strategies – Based on risk priorities and scenarios, define contingency plans to mitigate disruptions. This may involve increasing inventory buffers, securing secondary suppliers, regionalizing supply bases, or other resilience tactics. Update response playbooks continuously.</li><li>Monitoring and simulation – Actively monitor for early warning signals. Run simulations to test contingency plans. Learn from past disruptions to continually improve risk management capabilities.</li></ul>With rigorous risk management, procurement teams can rapidly detect disruptions, respond decisively, and safeguard supply chain continuity even amidst turbulence. This protects revenue, margins, and customer service levels.

Smart procurement is poised to become even more advanced in the coming years as organizations continue to adopt emerging technologies and expand the strategic role of procurement teams. Here are some key trends we will likely see:Continued Adoption of Emerging Technologies:Organizations will accelerate their adoption of AI, machine learning, and other innovations to automate more procurement processes and gain greater insights from data. This will enable more predictive analytics to mitigate risks and identify cost savings opportunities. Procurement teams will become more nimble and forward-thinking.Focus on Value Creation:There will be a shift away from a sole focus on cutting costs towards maximizing value creation. While cost control remains important, procurement leaders will be expected to identify opportunities to spur innovation, unlock new revenue streams, enhance brand reputation through sustainability initiatives, and more. Unlocking additional forms of value will become a key priority.Procurement’s Strategic Role:With their vast understanding of markets, suppliers, costs and risks, procurement professionals will play an increasingly strategic role in overall business success. They will evolve from order placers to trusted advisors with a seat at the executive table. Leading organizations will empower procurement to weigh in on new products, M&amp;A deals, expansion plans and more. Procurement’s stature will rise.By embracing technology, focusing on value and playing a strategic role, the procurement function will deliver even greater impact in the coming years as smart procurement principles become standard practice. This transformation promises to both strengthen operations and boost competitiveness across industries.

Smart Procurement: The Intelligent Way to Streamline Operations

Data was stored with inconsistent labels across many systems, leading to lengthy searches, redundant work, and over-reliance on individual expertise

Amerequip

One recurring issue involved mismatched part numbers between customers and Amerequip’s internal system. When a customer referenced a part number that differed from Amerequip’s internal numbering convention, the traditional workflow required searching the ERP for a cross-reference, navigating to a drawing server, opening multiple prints, and confirming the match manually. It was a multi-step process that depended heavily on experience and familiarity with the systems.After implementing CADDi Drawer, that workflow changed. As Bryon Nolan, Head of Quality at Amerequip, described: <h5 class="">"We don’t need to go to LX, do a ‘where used’ BOM, then open the drawing server and search the new part anymore. It’s very handy."</h5><h6 class="">Bryon Nolan Head of Quality</h6> Instead of navigating between ERP and shared drives, Bryon typed the customer’s part number directly into CADDi. Relevant drawings surfaced immediately, along with cross-referenced internal numbers embedded within the documents themselves. What previously required multiple systems and manual validation became a single search.<img src="https://cdn.builder.io/api/v1/image/assets%2F209ee507cedf4c298e100edae4bba2df%2Fd69af3a3443a41389ece1d6d157ba61b?format=webp" class="">Members of the Amerequip and CADDi teams during a recent visit.

The impact extends beyond individual part lookups. As part of the quality review process, Amerequip team focuses on understanding a component’s application within the product, which is especially important during nonconformance reviews and change assessments. Historically, this required running a “where-used” report in ERP, then separately navigating to drawing servers to validate assemblies and prints. It was accurate, but slow.With CADDi, engineers and the Amerequip Quality group can search for a part and simultaneously see the assemblies that reference it, related drawings, and embedded specifications in one view. Bryon summarized it simply: <h5 class="">“Many times, we’re working on a part and we want to understand what it goes into. With CADDi, we type in the part number we are reviewing, and in addition to seeing that part, we are also seeing drawings for assemblies that use it. One search. All the results we want.”</h5><h6 class="">Bryon Nolan Head of Quality</h6> In practice, this reduces system hopping and accelerates root-cause analysis, customer responses, and internal decision-making.

Another powerful example emerged from reviewing a customer bill of materials that listed a component with only a generic description; no drawing reference or additional specification to reference. In the past, that often led to creating a new internal part number and issuing a new purchase order (possibly a new supplier) simply because it was difficult to determine whether the component already existed.Using CADDi’s keyword search and flexible matching logic, Kyle Behrendt from the engineering team was able to identify that the component was already used in another product under a different internal description. Instead of duplicating the part, they reused what already existed. What began as a search workflow evolved into a cost-control and part-standardization opportunity.Kyle describes the ability to find these existing parts:“A large portion of our inventory never came through engineering. Now, with keyword searches in CADDi Drawer, we can finally see those parts. It’s opened up access to components we didn’t even realize we had.”Importantly, this was not driven by theoretical AI capabilities. It was enabled by structured, searchable engineering data brought into one environment. The team could finally connect information that had always existed but lived in separate silos.

The behavioral shift is becoming increasingly visible across the engineering and quality teams.. After several weeks of usage, Bryon shared: <h5 class="">“I expect CADDi to replace network drives as our go-to for searching drawings.”</h5><h6 class="">Bryon Nolan Head of Quality</h6> That change in sentiment reflects more than convenience — it reflects trust. CADDi is quickly becoming the first place people look, not an optional add‑on to an already complex workflow.As Stella Rezabek explained, “To change behavior, you first have to understand where the real pain points are, and time has always been the biggest one.” The workflow interruptions weren’t the issue; the challenge was the amount of time required to gather information each time a challenge came up.With CADDi Drawer’s ability to search part‑number data, extracted drawing text, and metadata using many combinations of filters, engineers can narrow their search far faster than before. Instead of manually checking multiple locations or running separate searches across systems, they can refine results in seconds based on the criteria they choose. Stella Rezabek described the difference directly: <h5 class="">“When you can filter by part numbers, keywords, and drawing text all at once, what used to feel like something that took ages becomes almost instant, and that speed lifts a weight you don’t realize you’ve been carrying.”</h5><h6 class="">Stella Rezabek Mechanical Designer</h6> That reduction in time is influencing how teams respond to questions, review information, and make decisions. The ability to quickly confirm details is encouraging earlier validation and reducing hesitation during daily engineering and quality work.For Tim, that adoption curve has been notable. “It’s not one of those tools where you start to learn it and it takes weeks to see the value. It’s coming on quickly. People are using it for ‘real world’ applications right away.”

As the engagement progressed, Amerequip’s view of the partnership began to shift. This was not a traditional software rollout where a tool is installed and left for the team to figure out. Instead, the implementation evolved through weekly working sessions, real-world use case discovery, and continuous iteration based on how engineers and quality leaders actually work. The focus was practical value, not feature deployment.From the project team’s perspective, one of the strongest differentiators has been the way CADDi handles follow‑through and prioritization. As Stella Rezabek explained, “Not every item can be done immediately, and CADDi is honest about that. What stands out is how thoughtfully they prioritize action items. Nothing disappears, nothing gets ignored, and every ‘Let’s do it later’ still has a clear path forward. That level of accountability is rare, and it shows.”For Tim Dorn, who has led multiple enterprise software implementations, the difference was clear:“In my experience, new software adoption and realizing a positive ROI is often challenging. What’s been different here is the level of interaction and project management during the onboarding process. Without the CADDi team’s support, Amerequip’s adoption would not have happened as quickly or with the same level of impact.”What started as an effort to improve drawing search is becoming something more strategic: a unified engineering knowledge layer that connects drawings, assemblies, specifications, and cross-referenced part numbers into one accessible system. At its core, the transformation is about reducing friction in decision-making — replacing tribal knowledge and system hopping with a single, reliable source of truth.

Data is centralized and organized in CADDi Drawer, allowing anyone to find everything they need with a single search

Amerequip: From Hunting for Drawings to a True “One-Search” Engineering and Quality Workflow

The manufacturer wanted to improve their speed in making accurate quotes. Searching for past data necessary to make an accurate quote could take upwards of 30 minutes, slowing the quotation process significantly.

A Leading Manufacturer

Our client has been manufacturing high-precision metal and plastic products across a wide variety of industries and functions for decades. They aim to be a one stop shop for customers, comprehensive manufacturing services, from prototyping to production.At the same time, the reality of the manufacturing space is that, when it comes to winning jobs, speed is the most important component. Being able to provide a quote as quickly as possible is the most reliable way to improve your win rate for new jobs. But if the quote isn’t accurate, the quality or turnaround time will suffer.In order to properly research new jobs and provide accurate quotes, the manufacturer would cross-reference new requests with old work. This is the best strategy for estimating new costs. However, if searches are slow or give incomplete or inaccurate results, the entire quotation process can grind to a halt. Our client found that each search could take up to 30 minutes to get the correct information. In trying to improve this time, they discovered CADDi.

With CADDi, search speed improved from upwards of 30 minutes to just a minute or two. Users in the manufacturer’s sales engineering team can take drawings, specifications, or any other provided information from the RFQ and instantly gather any and all similar drawings to use as reference. CADDi’s patented drawing similarity search uses bespoke AI to take one drawing and find any that overlap in shape and structure, allowing users to find the right references without needing to remember any labels, part IDs, or file locations. <h5 class="">"The similarity search has just been fantastic."</h5><h6 class="">Member Tooling Estimator Team</h6> Once reference drawings have been found, CADDi brings together all of the information needed to make an accurate quote. Over a million of the manufacturer’s past documents, including sales orders, past quotes, non-compliance reports, and more, have been loaded into CADDi and linked for instant cross-referencing. Users can get a complete picture of a previous project, allowing them to accurately estimate what the new job will ultimately cost, and giving them a starting place to plan the production work. Previous production challenges for similar projects can be proactively addressed, rather than repeated.By drastically reducing the time for each search, and making each search more accurate and impactful, the manufacturer can finish quotes faster than ever without sacrificing accuracy. Best of all, these productivity gains are available to everyone: new hires can operate just as effectively as veterans with easy access to decades of past data.As the manufacturer has come up to speed on using CADDi, they find themselves using it for more and more quotation requests. The Tooling Estimator team estimates that CADDi is being referenced for around 75% of their requests now, a number that will only increase as more team members integrate it into their workflows. The manufacturer plans on expanding its usage of CADDi further, using it to consolidate and standardize their design work.

CADDi’s capabilities allow the manufacturer to make searches in just a couple of minutes. All of the relevant data for pricing is linked together, allowing an accurate quote to be created with minimal work.

Driving faster Quotes and Accurate Estimation with CADDi

On-Demand Webinar: The Hidden Cost of Slow Quotes in Metal FabricationIn custom metal fabrication, the first credible quote usually wins the job. But when quote turnaround stretches from hours to days, you're losing bids on speed and leaving margin on the table. Marcin Zmarzly, Director of Sales at CADDi, and Sid Srivastava, Pre-Sales Manager at CADDi, walk through what actually slows quoting down in a fabrication shop, how to put a number on it, and what changes when your design and quote history becomes searchable by geometry and material instead of part number.You'll Learn:<ul><li>Where quote turnaround time actually goes, step by step, and which delays are searching instead of estimating</li><li>How to measure the cost of slow quoting using RFQ-to-quote turnaround, quote coverage, win rate by response time, and margin variance across similar parts</li><li>How similarity search surfaces comparable past parts with accepted pricing, so estimators price from evidence instead of memory</li></ul>Watch the on-demand webinar now to see what your own drawing and quote history could be telling you.

The Hidden Cost of Slow Quotes in Metal Fabrication: Mythbusters Edition

Engineers and procurement staff want to refer to past drawings when designing and procuring, but searching for drawings based on memory is time-consuming. This inefficiency cuts into the time for core tasks.

Sugino Machine

Sugino Machine is an industrial machinery manufacturer that develops, designs, manufactures, and sells equipment and technologies such as ultra-high pressure water jet cutting machines, parts cleaning machines, and small machining centers. Inheriting the founding spirit of “think for ourselves, make for ourselves, and sell and service for ourselves,” the company has been developing technologies for over 80 years, offering six “ultra-technologies” of “cutting, machining, washing, polishing, crushing, and solving.” Sugino Machine has contributed to the development of diverse industries worldwide and has received high acclaim.At Sugino Machine, there is a high occurrence of custom designs that modify standard products to meet customer requirements. During the design process, designers strive to find and utilize past drawings of parts with the same or similar shapes as much as possible. Creating new drawings not only increases design work hours but also generates additional work in other departments, such as drawing registration and processing method evaluation, leading to increased costs.<img src="https://cdn.builder.io/o/assets%2F209ee507cedf4c298e100edae4bba2df%2F6c871b889c0a4bb1b5a6e0d629df2bff?alt=media&amp;token=08f8f9e1-6635-46cb-b869-6c9c9884ec0e&amp;apiKey=209ee507cedf4c298e100edae4bba2df">Even for new development projects, designers search for past drawings and use them as is if they find the same parts, or refer to how similar parts were designed. In the procurement department, it is crucial to procure at the optimal quantity, price, and timing, so they search for past drawing data to confirm procurement history and proceed with their work.However, since drawings are managed in PDF format or on paper, the only way to find them is to rely on each person’s memory or predict based on the part name, which takes a huge amount of time to search for past records.Although a drawing management system is in place, it is used to manage drawing versions and the relationships between parts depicted in drawings, such as which parts are attached to which drawings. It is difficult to search for parts with similar shapes or search based on the text written in the drawings, making it challenging to find similar drawings from the past. The time that should be spent on core tasks is being consumed by searching for drawings.

Sugino Machine, facing the challenge of “low searchability of drawing data,” learned about the drawing data utilization cloud, CADDi Drawer, while exploring solutions. By implementing CADDi Drawer, it becomes possible to display search results as a list using keywords, part numbers, or images in about 2 seconds. Considering it optimal for improving drawing search speed and reducing work hours, Sugino Machine began considering and decided to implement the system.Yasu from the Precision Machinery Division describes the implementation process: “They devised various ways to use the system, and whenever we had questions, we received answers promptly.”“When we made requests for specific features, they were fulfilled in a relatively short period. The most challenging part of starting something new is getting it to take root. This speedy response was a significant factor in our decision to implement the system.”Within about three weeks of implementation and the start of operation, Sugino Machine completed the registration of tens of thousands of drawings, enabling immediate searching and viewing of similar drawings. The accuracy of drawing searches has also improved by using functions such as multi-condition searches. In some cases, a 50% reduction in work hours has been achieved compared to before implementation.Tak from the Precision Machinery Division describes the effects and expectations after implementation:“The most important thing in establishing a system is understanding. To varying degrees, people have a status quo bias, and they will resist if a system, no matter how wonderful, is forced upon them. From now on, I believe visible effects will emerge, whether in work hours or costs. Of course, educational activities are also necessary, but when one department seems to be doing well lately, and it turns out that CADDi Drawer is one of the reasons, it should naturally lead to increased usage.”“In the procurement department and among designers, there are often cases where designers spend time on non-design tasks without even realizing it. With CADDi Drawer, they may suddenly find that their work is finished earlier than usual, creating time that can be used for other purposes.”“I hope this will lead to the development of new technologies or other advancements.”

Sugino Machine is also considering further utilization of CADDi Drawer. First, they plan to expand and establish usage in the initial implementation departments, and eventually consider expanding to other departments. By doing so, they hope to use drawings as a common communication tool and promote information sharing between departments.“When there are many types of products, the number of design departments also increases. However, we have not quite reached the point of sharing drawings between departments. On the other hand, there is only one procurement department. Drawings come from different departments, and there may actually be something similar. If we can easily search for similar drawings and view past records, we can identify the most cost-effective options. I expect CADDi Drawer to lead to such realizations.”“We can now view drawings across the company, and I hope this will trigger innovation.”Sugino Machine not only improves operational efficiency with CADDi Drawer but also transforms drawing data into an asset to drive change and continue contributing to the development of diverse industries worldwide.

Similar drawings from the past can be found immediately, significantly reducing work hours. There is anticipation that drawing data can be transformed into an asset and used as a common communication tool.

Escaping the Inefficient Cycle and Changing How Time is Spent

Without a way to locate similar past drawings, teams designed new parts from scratch each time. Part numbers multiplied as a result. Locating past drawings heavily required veteran instinct and know-how, and with those veterans nearing retirement, preventing the loss of that expertise became urgent.

YKK's competitive edge comes from its commitment to fully integrated in-house production, handling everything from melting raw materials to manufacturing its own machinery. But Matsui, Managing Executive Officer and General Manager of the Machinery Manufacturing Department, saw that this self-reliant approach had become a drag on change. The team regularly created new drawings without referring to the existing inventory, and part numbers ballooned as a result. That approach worked in the era of mass production, but with low-cost, high-performance equipment from countries like China entering the market and demand shifting toward smaller-lot, higher-variety production, Matsui recognized YKK couldn't maintain its competitiveness without breaking from that mindset.This wave of part number proliferation and over-reliance on individual expertise created real tension on the manufacturing floor. Ogawa, General Manager of the Manufacturing Control Group, describes manufacturing's basic idea as building exactly what the drawing shows, but in practice, so much tacit knowledge lived on the floor that the team relied on veteran instinct to get the job done. Certain drawings could only be produced by certain people or certain machines, and a closed culture kept technical information from leaving the department, so the team's pace began slipping against external risks.Nishida, General Manager of Business Operations, recalls that procurement work had become so dependent on individuals that switching the person in charge would cause problems. Miyazaki, General Manager of the Production Engineering Office, saw the same dynamic at the design stage: even when a similar shape already existed, people would draw up a new one and repeat similar quote requests. Across departments, a negative cycle had taken hold in which past work simply wasn't being reused.

The catalyst for change was the disruption of the COVID-19 pandemic. With travel restricted, Matsui took a hard look at operations and was struck by how analog things still were: drawings, for instance, could only be exchanged by mail. A further push came after the pandemic eased, from an experience with an outside partner company.YKK had handed a supplier a drawing that listed 15 process steps, only to learn the supplier was completing the same work in a single step. That realization made Matsui feel the urgent need to shift the mindset across the organization.Around the same time, an organizational restructuring tightened management oversight. Nishida recalls the pressure of that period: the old approach wasn't going to cut it anymore, and the team needed a new way to visualize and standardize individual know-how, one that could eliminate the over-reliance on individuals in procurement.

Among the many products available, the department chose CADDi, the manufacturing AI data platform. The deciding factors were CADDi's startup-like speed, its technical fit for the problem, and the passion for manufacturing CADDi's staff brought to the table. Adoption wasn't without resistance on the ground. Shima, of the Production Engineering Office, admits the previous vendor's system took more than 30 seconds to search, and there was some skepticism on the floor that this would just be more of the same. What dissolved that skepticism was the speed of CADDi Drawer, CADDi's cloud application for manufacturing data utilization, and the reduction in time spent on daily tasks.Even veteran staff have told Shima's team it's easy to use, and mid-career employees are discovering things too, like realizing another department already found a cheaper procurement option, simply by using the tool themselves.Takamatsu, of the Manufacturing Reform Execution Team, drove adoption by getting directly involved on the shop floor and building trust with the team there. Being able to access information easily was essential to the goal of shortening manufacturing lead time, and Takamatsu was surprised the team could link a drawing to its past defect history within just a few days. CADDi Drawer has sped up information extraction and informed decisions on process consolidation, and now even the quality team uses it regularly.These results aligned with a broader management vision, articulated by Miyazaki, of making CADDi Drawer the go-to search entry point to accelerate parts standardization, and momentum quickly built for taking CADDi adoption to an even higher level.

CADDi also proved to be a solution to a demographic imbalance the Production Engineering Office had been facing: an age gap split between employees in their sixties and those in their twenties, with almost no one in between. Shima sees real value in accumulating, as a digital asset, the know-how that had been at risk of disappearing as veterans retired or transferred elsewhere.Shima's team brought all of its defect root-cause analysis and supplier guidance records into CADDi. New employees are now told to check with AI and CADDi Drawer first, and only ask veteran staff if they still can't find the answer, which has grown the range of work people can handle on their own.Miyazaki also praised the dramatic increase in the speed of process rationalization for parts, while pointing to what comes next: this is currently an effort within the Machinery Manufacturing Department, but true efficiency gains will require bringing the design department into the fold and driving change further upstream.Ogawa sees this shift as a major step toward turning the tacit knowledge on the shop floor into explicit, quantified knowledge through AI. Shima also praises CADDi's customer success team, noting that it responds quickly, often coming back the same day with proposals related to information extraction whenever the team raises a request, energizing everyone involved.

The project is now moving toward a fundamental transformation of the manufacturing process. Matsui wants to build an organization where people spend their time on more creative work rather than being buried in rework. Using AI to ensure the same quality fasteners can be delivered from any factory anywhere in the world is the vision the team is aiming for. Digitalization and AI adoption are essential if Japanese manufacturing is going to compete, and Matsui wants to expand this challenge beyond the department to the rest of the manufacturing industry.Nishida envisions sales planning, manufacturing, and procurement automatically connected, able to run with a minimal team.YKK's long tradition of fully integrated production, combined with AI technology, stands as a signpost for how Japanese manufacturing can break free of its self-reliant mindset and gain new competitiveness through digital transformation.

A "check with AI and CADDi first" mindset has taken hold across the team, expanding the scope of work employees can handle on their own and speeding up new-hire training and collaboration across departments. Drawing data is now searchable at scale, so the team can group parts suited for process rationalization instantly and request consolidation and review right away.

From Instinct to Insight: How YKK Is Turning Tacit Knowledge Into a Manufacturing Asset

Yanmar struggled with cost and labor-hour challenges because accumulated historical drawings and data weren't being effectively utilized. Drawing searches took so long that employees couldn't devote time to higher-value work, and knowledge became overly concentrated in a handful of specialists.

Yanmar Holdings

Founded in 1912, Yanmar successfully commercialized the world's first practical small diesel engine in 1933. Since then, the company has expanded into a wide range of businesses, including large engines, agricultural machinery, energy systems, and machine tools, establishing itself as a diversified industrial machinery manufacturer. As of 2026, Yanmar employs more than 20,000 people globally and operates over 100 sites overseas.Yanmar Holdings laid out six strategic priorities as part of its mid-term strategy beginning in 2022, one of which was building a next-generation management foundation to support digital transformation. The Digital Strategy Promotion Department was formed with this mission in mind.Seomori, Section Chief of the Digital Transformation Promotion Group within the Digital Strategy Promotion Department, explains that simply rolling out digital tools top-down doesn't lead to effective transformation. Instead, Yanmar took a bottom-up approach the team calls "grassroots digital transformation," built on strong commitment from top management. The goal is digitalization that genuinely fits frontline realities, with frontline employees themselves building the literacy and skills to use digital tools effectively.There's a common argument that digital transformation should be driven top-down through strong leadership commitment. At the same time, Yanmar Group encompasses many different business units, each facing distinct challenges with different optimal solutions, making it difficult to push a single top-down approach across the board. Results depend heavily on the motivation of the people actually doing the work on the ground, so Yanmar also made it a priority to respect and nurture that frontline motivation. Combining top-down and bottom-up approaches became a key factor in achieving the company's mission.

In today's volatile, uncertain, complex, and ambiguous business environment, many companies face pressure from labor shortages and currency fluctuations. Even under these conditions, sustainable growth requires stable earnings and reliable product and service delivery. Yanmar aims to improve quality, cost, and delivery, along with customer value, by shifting limited working hours toward higher-value tasks.Kono, who leads day-to-day execution within the Digital Transformation Promotion Group, describes the challenge Yanmar faced:Drawings in particular presented a range of challenges. During the development phase, when product costs are largely determined, it was difficult to make use of historical drawings and cost data. Yanmar also lacked the ability to search for similar drawings, which made it harder for younger employees to build expertise and led to an overreliance on veteran staff.Improving efficiency is now the baseline expectation. Rather than simply cutting time and stopping there, the goal is to redirect that reclaimed time toward more essential, creative work such as advanced analysis and negotiation. Achieving this kind of talent activation requires changing existing workflows and processes on the ground, and change often draws pushback. To realize grassroots digital transformation, Yanmar needed a partner who would do more than present an idealized vision. The company wanted a partner who would work alongside its teams.

Kono describes how Yanmar came to pilot CADDi, the manufacturing AI data platform, and its application, CADDi Drawer, a cloud tool for manufacturing data utilization:Yanmar already had strong top-level commitment to digital transformation, and the motivation among the employees actually doing the work was high as well. The pilot focused on the upstream parts of the value chain that handle drawing data, primarily development, procurement, and cost departments. The team included volunteers from each department, along with promotion leads from Yanmar Holdings and customer success support from CADDi, forming a group of roughly 50 people in total. The team held regular meetings, set KPIs and milestones, and evaluated the pilot against criteria such as whether it addressed existing pain points and whether it delivered an ROI of 100% or more.

Yanmar ran the pilot for roughly six months. The results showed strong potential for efficiency gains and standardization across the cost, procurement, development, quality control, and quality assurance departments. Search, selection, evaluation, information sharing, and training all became more efficient, with expectations for further gains through drawing standardization, reuse-based design, and greater cost awareness. Other qualitative benefits included improved skills and motivation among younger employees, as veteran expertise became documented and explicit knowledge. Keyword and similarity searches on text within drawings were used frequently, and similarity search in particular made a strong impact. The cost department had previously struggled to efficiently find similarly sized parts when preparing cost estimates. With CADDi Drawer's similarity search, the team could search across parts of different sizes linked to cost data, enabling rapid analysis of the relationship between weight and cost. This made it possible to efficiently identify whether there was a gap between expected and actual costs, and to investigate why. Analysis that had previously been difficult became achievable, freeing up time for higher-value work. In other departments, teams explored relationships such as part length versus cost, and positive feedback and new use cases continued to emerge from the field. Beyond the cost department, motivated younger employees in particular shifted toward using time saved through automation for analysis and higher-value work, a clear example of talent activation. Information registered in CADDi Drawer also became a shared language that breaks down barriers between departments, and sharing hyperlinks by email made cross-team communication more active. The impact goes beyond simple labor savings, extending to a real shift in mindset and culture among participants.

Through the CADDi pilot, Yanmar confirmed that breaking down barriers between departments allowed frontline employees to take ownership and drive change themselves. Going forward, Yanmar plans to expand these best practices to other business units and pursue optimization across the entire value chain, including global supply chain transformation and the engineering chain. These efforts are central to achieving Yanmar's mid-term strategy. Seomori closed with these thoughts on transformation and what lies ahead: every company has its own history and culture, so there's no single template that works for everyone. Rather than dismissing the analog methods the company has relied on, Yanmar wants to respect them while using digital technology to make them better, working through that process together with the people on the ground. Changing how things are done often causes a temporary dip in efficiency, so it's natural for frontline employees to feel some resistance. To keep initiatives from stalling because of that, Yanmar focuses on helping people understand the purpose behind the work as they move forward, identifying employees who want to take on digital challenges, supporting them, and connecting them across the organization to build company-wide momentum. What the company gained from this pilot is a valuable asset, one it plans to scale across other business units to maximize the impact for the group as a whole.

By cutting the time needed for drawing and data searches, Yanmar freed up hours that could be redirected to higher-value work and skill development. Overreliance on individual specialists eased, and motivated younger employees began proactively driving improvements.

Grassroots Digital Transformation: How Yanmar Holdings Is Freeing Up Talent by Unifying Drawing Data

With limited resources, the team had little time to spare for value-added proposals to customers or for developing core technology further. Their efforts were confined to surface-level efficiency gains and partial automation using in-house tools, leaving little room to address deeper structural issues.

DENSO

The depth of the conversations with CADDi was one of the key factors behind DENSO's decision to move to full adoption. Those conversations surfaced an uncomfortable truth behind the capacity problem: engineers didn't document why they made a change, so the next person couldn't build on that decision and ended up redoing the work. Without documentation, that knowledge couldn't be referenced during later design work.Confronting the issue of rework was a challenge. Employees were aware rework existed, but it had come to be seen as something that just happens rather than a problem to solve. Through the conversations with CADDi, that changed: stakeholders, including senior leadership, became motivated to solve it.Without those conversations, Oba believes DENSO might have taken the long way around, chasing surface-level fixes instead of the root cause. Once the team defined the core issue as reducing rework, the division head took ownership of the initiative himself, called for it to be division-led, and built a one-team structure together with frontline leaders.

DENSO is now running several pilots using CADDi. Results are showing in one of the harder areas to tackle: automating process FMEA (Failure Mode and Effects Analysis), which requires capturing human thought processes in structured form. The accuracy has exceeded the team's expectations, energizing them to try automating other processes as well. CADDi Drawer, CADDi's cloud application for manufacturing data utilization, played a key role in extracting and applying knowledge from documents the company had accumulated over the years. Early on, with other vendor solutions also on the table, the team debated whether it was worth consolidating data specifically on CADDi. The results mattered for reasons that went beyond choosing one tool over another.CADDi also became the foundation for converting tacit knowledge, drawings, and technical materials that had long been siloed with individual experts, into explicit knowledge accessible to everyone. That path wasn't smooth. The team ran into real challenges with how past data had been kept: missing information and gaps in context surfaced as they tried to turn existing knowledge into structured data.Oba came away with a clear realization: the reasoning behind past outcomes had never been preserved, and recognizing that gap became valuable for deciding what to do next.Now that the issue is defined, attitudes on the ground are shifting. Oba is working to encourage members of the working group to speak up and to flag when more data is needed.Together, these efforts let DENSO automate FMEA, structuring tacit knowledge into explicit, high-precision assets. By building an environment where designers can draw on past knowledge, a pattern is emerging: preventing rework before it happens while also shortening lead time.

DENSO has long had a culture of self-reliance, built on the belief that there's nothing the company can't do itself. This time, it deliberately chose to bring in outside help.Oba points to a limit on how fast purely internal development can move. Bringing in outside expertise accelerated the pilots, and CADDi's customer success team gave DENSO a consistent source of outside perspective, including objective feedback on how DENSO compares to other companies.The project drew a clear line: harder automation work and advanced problem-solving would be tackled together with CADDi, while smaller frontline improvements and tool-building would stay in-house, through what the team calls citizen development. Oba notes that tools go unused if the team doesn't build them itself, so alongside the CADDi partnership, DENSO is also nurturing the culture of self-driven improvement that has always been part of its DNA.

With the pilot underway, the goal ahead is concrete. DENSO wants to confirm the impact of the current pilot within the next fiscal year and treat the end of fiscal year 2027 as a milestone for delivering results.Beyond that, DENSO plans to take the model built in Japan and roll it out to overseas sites, starting with China, for a multiplying effect at global scale. Twenty years into his career, Oba has moved beyond the boundaries of production engineering to pursue transformation with an eye on total optimization. He used to work entirely within the boundaries of production engineering; now he thinks about the bigger picture. A straightforward KPI like cycle time used to be enough, but figuring out how to set KPIs for something as hard to measure as digitalization through AI is a new kind of challenge. Since joining DENSO, Oba has been told not to be afraid to fail and to take on challenges, and given the freedom to pursue more technology. Using the capacity freed up by CADDi, he wants to make higher-value proposals, reduce defects, and raise the quality of DENSO's manufacturing, working with DENSO's promotion team and CADDi to build that future. Oba also values the outside perspective CADDi's customer success team continues to provide on industry trends, calling that information and those insights valuable assets to DENSO.DENSO and CADDi's collaboration is working to establish a new standard for value creation: freeing up capacity and shortening lead time through AI, and the manufacturing DX that lies beyond it.

By tackling the design rework challenge head-on, the newly available capacity once spent on repetitive fixes was redirected toward higher-value work. Lead times shortened as a result.

Eliminating Rework and Freeing Up Capacity Through AI at DENSO

CADDi leverages AI to digitize drawings and procurement data, making manufacturing insights searchable by shape, text, dimensions and part names.