Saturday, July 22, 2006

Why Malaysian Companies Arent Investing In Simulation?


When we speak of computer simulation, the thought that comes into most people's mind is some kind of 3D graphic animation and they wonder if this can actually help them in their business.

I started my career in computer simulation, specifically Finite Element Analysis (FEA) in Malaysia in 1999 with a company that resells Ansys, a general purpose finite element software. Only the foreign owned MNC's were using engineering simulation tools like ANSYS, MSC.Software, LMS and Abaqus. In fact, it was the MNC's that were driving the business for the local FEA vendors. The only local Malaysian company using simulation was Proton, but that was only limited to components and not the whole assembly.

That was in 1999. What about 2006? We can add Petronas to the list, but who else?

So the question begs, why arent Malaysian companies using simulation to help push their business onto the next level?

To the contary to what most people would think, money is not the main issue. Money is a close second but its not the stumbling block. The stumbling block seems to be the perception that simulation is only a toy, it's not 100% accurate and the ROI (Return on Investment) is too long. SMI's (Small & Medium Industries) do not want to invest the money, time and effort if they cant recoup their investment within a few months.

SMI's always cite that when investing RM200k into a machine, they can see the ROI immediately. But RM200k into a software will only yield a proper ROI after several years, the least. Within money being scarce, a CEO or MD weighing the option of spending a considerably large sum of money into something concrete and well accepted (machinary) or simulation, will always put his money down on hardware. His job is same, the company sees a return on investment immediately; everyone is happy.

And what happens when products fail?

Read more here....

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