Clarity on PLM

A quick peek into some research on enabling service organizations with the right product information from Tech-Clarity Insight: Better Service from Better Product Information: Evolving to Visual, Product-Centric Service Communication. Service has become a higher strategy priority for manufacturers focused on keeping customers satisfied and taking advantage of higher profit margins in the service lifecycle. Providing technicians and customers with the right product and service information, particularly in a visual formats including 3D and animations, has become more important – and more attainable – over the last few years. The report highlights interviews with General Atomics, Nikon, and Whirlpool to understand the issue and how manufacturers take advantage of PLM tools to enable better service.

Backdrop: Strategic Importance of Service on the Rise

Ten years ago service was an afterthought for most manufacturers. In fact, most companies would call it a necessary evil. But even in the early 2000′s, The Service Lifecycle Management Approach: Strong Customer Relationships Result in Profit in the Service Industry indicated a shift toward a more strategic view. As one of the participants in that research explained, manufacturers were starting to realize that “Customer satisfaction is extremely important to building long term relationships. It is also good business, because it leads to greater profitability through customer retention and repeat business.” In other words, good service is just good business.

Service may be good business, but it is also a big challenge. This is even more true in today’s global marketplace where service techs may be located anywhere in the world and speak any number of languages. Product complexity has also risen, as explained by Nikon in the report and evidenced by Tech-Clarity’s The Five Dimensions of Product Complexity. Products are now more complex due to new materials, miniaturization, smarter product capabilities, and other trends. Without the right information at hand – or perhaps worse having the bad information – service techs are likely to waste time, incur higher service cost, and end up disappointing customers with machine downtime. See the report for more, but for now let’s talk about how to address the challenges and achieve better service.

The Research Findings

Customers want their equipment serviced quickly and accurately. To do this in a complex service environment, techs need to be enabled with the right product information and service instructions. They need to be able to access and use that information quickly, and it should be the most up to date information possible. As Debra West-Maciaszek for Nikon explains in the report, “Looking for information doesn’t help the field service engineer, and the customer is in their face saying ‘fix my machine’.” The report highlights a number of key factors that can help manufactures develop better, more timely service information at lower cost:

• Use visual illustrations to improve communication and cut through language barriers
• Leverage existing assets (including CAD) to develop illustrations faster and more accurately
• Move to 3D to provide a more realist representation of products
• Incorporate animation to demonstrate service procedures clearly
• Provide rich product data behind the graphics to give service techs the details they need to do their jobs
• Take a product-centric approach to service information and illustrations, including specific documentation for different configurations
• Manage service documentation and illustration change holistically with product change

One of the key points is that visual communications offers tremendous advantages. First and foremost, it just fits the world we live in. I like to ask people to try to write text instructions for tying a shoe. It takes a lot of steps, and is very difficult to comprehend without pictures (do I hear some of you reciting “the bunny goes into the bunny hole” as you think about it? Even in native language text-based instructions miss the mark, and with variable language and reading skills in the global workforce the problem only gets worse. Graphical communication for products is the way to go. This is valuable for service and beyond, see Showing Off Your Products – 3D Technical Product Communications for more.

Another aspect of the findings is that there is a great opportunity to leverage PLM for service information. PLM has the right product-centric approach and houses the CAD and product specification assets that companies need to develop effective service communication. It also offers the opportunity to include service information as part of the product lifecycle, incorporating graphics and instructions into the umbrella of change management and allowing information to be tailored to specific product configurations. As the report concludes, “It is a natural extension for PLM to manage product-centric service information in the service lifecycle such as illustrations and documentation.”

Implications for Manufacturers

So what can manufacturers do with the information in this report? First, they can review (or develop) their service information strategy to ensure that it is providing the most up to date, graphical, tailored service information it can. Evaluate what technicians need to get their jobs done, and look for ways to leverage existing CAD and PLM assets to deliver it. The service lifecycle is getting a lot of attention in corporate strategies, and PLM solutions are now extending their capabilities further into the lifecycle. The time has come to see how PLM can improve service performance and profitability.

So that was a quick peek into some recent research on providing service technicians and customers with better product and service information, I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective. Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

How can social computing solve product lifecycle management (PLM) problems? Here’s a peek into some research, Issue in Focus: Social Business Collaboration and the Product Lifecycle: Combining the Power of Social Media with PLM, that helps clarify things a bit. I’ll start with some of my thoughts on the value of social computing for product innovation and product development and then poke some fun at myself for totally missing something in regards to social computing in PLM (again).

Some Thoughts on Social Computing in PLM

First, let me step back. For those of you that follow my blog, have seen me present, had a drink with me, or passed me in a hallway you have probably heard me wax on about how Facebook fails for product development. I have probably overused it, but it was a powerful moment when a COFES attendee in my presentation on social computing and PLM said “We will not design an airplane on Facebook!” It was a passionate, and brilliant, statement. What that led to was the basis for my views on social computing and PLM. In short – the concepts behind social media sites like Facebook can provide a lot of value for product development, but sites like Facebook, twitter, Dropbox, and others are not the right approach.

There are major gaps that would need to be filled, but one of the primary issues is that social media sites don’t have any connection with the context of product development – the product. They also have no domain expertise (or interest) in PLM. See the post for more details, including a clever (if I don’t say so myself) chart on the differences in using social media for personal use versus product development.

A Bit of Mythbusting – Why I Might be Wrong

So I had my ideas set. I believed that the only possible way that companies could get to a socially enabled PLM solution was by integrating social computing techniques into PLM. In fact, vendors like Siemens PLM, Dassault Systemes, and PTC have been hard at work doing just that. But something happened recently that made me ask the question. What if I was wrong!? Now I have been wrong before, and I like to confess to it. In fact, to be fair, I missed the impact that social computing would have on product innovation processes in my 2010 Predictions for PLM. My crystal ball failed me, I didn’t even ask the question in my 2009 survey. I just didn’t think it would happen so quickly. But I am a firm believer that the use of social computing in PLM is both highly valuable, and entirely inevitable. It just makes too much sense.

A new company came along that made me think differently. No, it’s not Facebook or anyone like that. It is a new company called Nuage. They have a lot of PLM and product development expertise, and decided to come at the problem differently. They are building a platform for companies to collaborate first, and then adding in proven PLM capabilities. I have to admit I was surprised that they would do that, and I promise to follow up more on them over time. What they convinced me was the a social computing platform could be socially enabled as opposed to an existing PLM solution “going social.” My myth that the only path was for PLM solutions to add social capabilities was busted. There is a bit more to the story, but that is for a different time. For now, back to the research.

The Research Findings

The research reiterates findings from previous Tech-Clarity research, including Tech-Clarity Insight: Going Social with Product Development and Tech-Clarity Insight: Product Collaboration 2.0 – Using Social Computing Techniques to Create Corporate Social Networks in regards to the value that social computing in PLM can offer. In addition, it defines what a social business collaboration platform requires to become a socially capable PLM solution, including the ability to:

• Manage business processes
• Put conversation in the context of products and projects
• Integrate effectively with underlying data and documents
• Provide security for IP
• Allow people to easily share and discuss product development information
• Understand the complex relationships between product data
• Provide the right level of control

Of course the main finding from the research was that there are two potential paths to achieve socially capable PLM, not just one. In fact, there are probably three:

• Add social computing capabilities to existing PLM solutions (or wait for your vendor to do it)
• Implement social business collaboration solution and implement PLM capabilities into it (or find a vendor doing it, now an option)
• Some combination of the two

This is a pretty interesting development, for sure.

Implications for Manufacturers

So what does this mean to product developers? The concept of adding PLM capabilities to a social business collaboration platform is worth investigating. There are four things to remember from the report that I believe are important for manufacturers to take away from the research (but go ahead and read it yourself, you might find more):

1. New product development is an inherently social, team-oriented, collaborative process that can be significantly improved with social computing.

2. The greatest benefit will come from combining the collaborative power of social computing with the control provided by PLM.

3. To realize the potential business value of social product development, the next generation of solutions will need to combine both social computing techniques and proven PLM best practices in a seamless way.
4. New market entrants lead to the possibility that social business collaboration software can be enabled with best practice PLM capabilities.

So that was a quick peek into some recent research on social business computing and PLM, I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective. Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

Note for frequent readers: I typically do not mix research results with mentions of specific vendors, however without mentioning a credible new market entrant I didn’t think the post would make sense. If it weren’t for somebody willing to take this new approach, I would still be sitting back believing that PLM would have to go social and that the other option wasn’t viable (due to lack of focus and interest by the social media sites, for the most part).

You have probably heard by now that Autodesk has announced that they are entering the PLM market with the announcement of Autodesk 360 Nexus. I had the opportunity to hear about this in a “behind the scenes” look a while back and attended Autodesk University this week to take in the launch. Autodesk put a lot of emphasis behind the announcement, with CEO Carl Bass bringing up his famous anti-PLM rap where he said the only companies with a PLM problem were Dassault (Sytemes), PTC, and UGS (now Siemens PLM). His message now is that “we did not want to do PLM until we could do it right” and that the time has come. So welcome to the PLM community Autodesk!

What’s the Big Deal? Who Cares?

Autodesk promised that “everything would change” in PLM when the announcement was made. You can read Evan Yares’ view on what has (or hasn’t) changed. I believe that Autodesk meant that everything changes because they offer PLM in the Cloud. It is a software as a service (SaaS) and will offer a different way to buy PLM. The other reason they say things will change is that, as Steve Bodnar says, the solution is “insanely configurable” so manufacturers will not need to change their existing business processes. Those are both very interesting and potential game changers. For more of my thoughts on those, see the questions section below.

Whether you believe that cloud and configurability will really change PLM, one fact it clear. Autodesk has one of the biggest engineering user bases on the planet, and this will change the PLM market. They are serious about PLM. Having another player with the size, user base, and ability to deliver that Autodesk has will have an impact on the market. Will it take away business from competitors? I am not sure how much of that will happen in the near term. But will it get more Autodesk customers started down the path with PLM (with a lower risk model and a vendor they already know)? You bet. Will there be responses by other vendors? Of course, and the response will be based on what kind of traction Nexus gets.

So What will they Offer?

First, the solution is not available yet. You can learn more from Autodesk’s official PLM press release. Second, I will tell you that the solution looks really good based on some limited views. The interface is clean and modern, there are some benefits from starting a design from the ground up for use on the cloud (and on different devices over time). Third, for some more details I don’t want to recreate what others have already posted, so for a nice overview (with screenshots and all!) take a look at Al Dean’s take on D3D. Note that viewing the AC/DC video at the end is entirely optional.

So with that backdrop, let me share my thoughts on Autodesk’s PLM entrance. They are taking a different approach. They believe PLM has been too difficult and too expensive (see Steve Bodnar’s PLM Non-Starter Picture) and believe that a cloud offering is the answer. Applications designed and built for the cloud are very different, although there are others (including their largest competitors) that are also figuring cloud out. Autodesk sees themselves more like Salesforce.com competing with PLM vendors that are more like Siebel.

Autodesk also believes that changing business processes is a big challenge for companies, and develop Nexus to be highly configurable. I believe this is a double-edged sword. On one hand a company that has well-defined processes can simply model their existing processes in Nexus’ workflow. That sounds great to me. The problem with a lot of companies is that they either don’t have processes, they have poor ones, or they have lots of them. The difficulty in standardizing on a process is an organizational change issue, not a software issue. In fact, from my experience too much flexibility can lead to some really hairy problems for vendors and customers alike. I am not going to get too far up on my soap box right now, but there is a lot more to be said here and I have some learning to do first. I have some follow up planned with Autodesk to understand how much Nexus is application and how much is infrastructure on which you can build a process. For now, let’s just say that Excel and SharePoint are highly configurable too – and what most companies end up with is a lot of non-integrated islands of information and process that don’t fit well together. Flexibility works well for those with very small companies or good information architects to oversee design. Wait, I thought I said I wasn’t getting up on my soapbox? OK, stepping off it now. I even delete another paragraph I wrote while I was up there.

Some Open Questions

The bottom line is that we all have a lot to learn about what Autodesk really delivering and how it will perform. The announcement will clearly have an impact, but also raises some interesting questions:

• Autodesk has a lot of architect and construction customers. The “AEC” industry (E for Engineering) is evolving to BIM (Building Information Modeling) – what are the positives and negatives of sharing ideas and capabilities between PLM and BIM users? It’s interesting to note that their link for lifecycle management solutions is the same but with two tabs – one for PLM and one for BIM. Of course their are other solutions in the suite than Nexus (Vault for one, which is the PDM solution), and those still appear differently. This is not a concern for me, in fact I think it opens up some interesting opportunities. It will be interesting to watch.
• Autodesk is known for shrink-wrapped tools, not enterprise applications. How will their business model and partner network adapt to this new paradigm? Clearly they will need some new partners with PLM expertise. These partners will also need to know how to implement enterprise change and not just tools.
• What will an integrated PDM system behind the firewall look like with a PLM system in the cloud? I think this opens up some interesting questions on its own. There are some advantages and disadvantages of this model, and it will be interesting to see how Vault evolves.
• Where is the support for software-driven (mechatronic) and systems-oriented products? Vault is primarily for mechanical designs, to my knowledge. Does an integrated (versus a single solution) PLM-PDM open up opportunities to add an application lifecycle management (ALM) tool to the suite to manage software development? Kinds of likes my model from Software and Systems Driven Innovation below. Hmmmmmmm.

This is the fun part, watching and wondering what comes next. From what I hear from Autodesk a big part of their plan is to watch how customers adopt the solution and use that to help guide direction and strategy. Autodesk realizes they are on a journey and that they (and their customers) have a lot to figure out. That recognition and a willingness to listen to customers gives me some comfort that Autodesk will be a real player in PLM. Time will tell.

So those are my thoughts. Agree? Disagree? Think I am just stating the obvious? Think I am an idiot? Let me know what you think. OK, but if you think I am an idiot please be gentle with your criticism. Stay tuned for more, the Autodesk PLM story is just beginning to unfold.

Hear Jim Brown share his views on … efficiently and effectively meeting product environmental compliance demands using PLM software. This episode shares some interesting findings from Tech-Clarity’s Understanding Product Development Tradeoffs: Designing Products for Sustainability, Cost, and Compliance.

This is the latest edition of Tech-Clarity TV, let us know what you think.

The topics included in this episode include:

• Continued regulatory pressure from multiple sources
• Top 10 environmental regulations faced by global manufacturer
• Common negative business impacts from difficulty designing products for compliance, cost, and sustainability (including time to market and missed shipments)
• Increasing frequency (trend data) of these damaging business impacts
• Framework for environmental product compliance that shows the steps and capabilities required to design for compliance
• Discussion of how PLM meets the Tech-Clarity Compliance Framework

Let us know what you think. Do you agree? Disagree? Have a great example to share? Please see the related post, download the report, or review more free research and white papers about PDM, PLM and other enterprise software for manufacturers from Tech-Clarity.

Podcast: Play in new window | Download

I had the chance to talk with … Prashant Jagtap, CEO of Trayak, about designing products for sustainability. Prashant is a veteran of the PLM industry, and he and I had a great discussion about how design for sustainability fits into PLM. This post will share a bit of that discussion as well as a bit about Trayak.

Why is PLM the Place for Sustainable Design?

First, I want to share some of my discussion with Prashant on a general basis. I am a big proponent of getting compliance and sustainability right during product design. Why? Because like so many other product attributes, sustainability is really hard to accomplish once the design is locked in. Material choices and manufacturing process decisions clearly have a significant influence on the environmental impact of a product. They are also very difficult to change after a product has bee designed because late product changes often sub-optimize a lot of previous design decisions which can increase cost, degrade product performance, or at a minimum cause a lot of disruption through engineering changes (ECOs).

So earlier is better. But why in PLM?  Simply put, PLM is where the product data is. PLM has the bill of material (BOM) early in the product lifecycle. As PLM has matured it has extended to capture the manufacturing processes in a bill of process (BOP) as well. That is the right core of information required to conduct an effective lifecycle analysis (LCA). As the Tech-Clarity compliance/sustainability diagram above shows, making the right decisions requires a combination of product information and impact data. To me, this is an obvious extension of PLM. In fact, environmental compliance and sustainability is the example I use most frequently when I discuss the four dimensions of PLM expansion.

What does Trayak Do?

So other than sharing some common philosophy about how manufacturers can design more sustainable products, Prashant was excited to tell me about the progress Trayak is making. Their goal is to “make sustainable product design mainstream.” The idea is to put the right tools and information into engineers’ hands (or at least their desktops) so they can understand the environmental impact of their design decisions. Trayak believes that the current LCA tools are too complex, too expensive, require experts, and are too separated from the design process. I believe changing that could have a profound effect. Engineers would love to make more eco-friendly products, but face a myriad of tradeoffs and typically don’t have the right information at hand. How can you optimize what you don’t understand? How can you design for sustainability when you don’t know the impact of your decisions until after the fact? To me, solving those problems is the value Trayak has to offer.

What do they Offer?

Trayak offers three products:

• EcoDesigner – helping engineers design for compliance using LCA techniques
• EcoLabel – a tool to help grade BOMs and provide labeling information for compliance (for EPEAT regulations)
• EcoScore – a broader solution that collects a wide range of factors/criteria about environmental impact (which could include LCA results) which could also be used to create scoring mechanisms to rate their product portfolio as they evaluate greener design options

Who do they Work with?

Here, to me, are two valuable facts about Trayak:

• They understand CAD and PLM, and have integrated into Siemens PLM tools (including Teamcenter and Solid Edge) – Prashant’s history and experience play a big role here
• They are LCA agnostic – Trayak does not believe that there is one right way to do LCA. In fact, they believe that some companies may already have a source of LCA information. Trayak is partnering with EcoInvent for data, but is built with the expectation that they will work with multiple sources of information. A very interesting approach. As more OEMs start to demand LCA information, what are the chances that suppliers will have to support more than one set of LCA calculations? Pretty good, I bet.

So that’s what I hear from Trayak, I hope you found it useful. What do you think? What else should I have asked them? Do you think the open approach to LCA will make a difference?

I had an opportunity to share ideas and experience about product cost management and product profitability with Eric Hiller. Eric responded to my post on PLM and Product Cost Management (PCM) and we have shared some great dialogue following that. Eric has some great experience in this area and I asked him if he would like to share it. I hope you enjoy it!

The following is a guest post from Eric Hiller:

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Sure, cost is important… but I have a lot of other things to do, too.

I’ve been fascinated by the problem of product cost since 1996. I did my graduate work on the subject, I considered it when I was a young engineer at Ford Motor Company, I started a company that makes product that helps companies make their products more profitable, and I have been a consultant to executives in Fortune 500 companies on the subject of product cost management. I’ve learned a lot of lessons in those endeavors, but one of the most interesting is:

Product Profit is NOT as Important as One Might Think

I know that’s pretty shocking to say, especially for a guy who is fascinated by the subject of Product Profit.  But it’s true… or at least it’s true in a relative sense versus other product attributes that the product development team must meet.

The statement above also seems surprising given that we have been taught for years that the purpose of business is to make money for the owners, and money for the owners comes from free cash flow, and free cash flow comes from profit, and profit comes when expenses are less than revenue, and in most manufacturing companies, Product Cost (roughly equivalent to Cost of Goods Sold for the finance types reading this post) is 70-90% of revenue.

Considering my rough Aristotelian logic in the last sentence, why wouldn’t we assume that product cost is, indeed, the most important thing to business? (I’m being a bit facetious in my rhetorical question to prove a point here.) The point is that there are many other things that go into making a successful business, even from the product development-only standpoint.  These include:

• product performance
• time-to-market
• quality
• safety/compliance
• number of features of the product
• product profitability
• development cost

In product development, most teams have to balance all these goals.    We can see this from Tech Clarity’s 2011 report on product development tradeoffs in Figure 1.  When you ask the average executive in product development, they are concerned with a multitude of issues.   Even the least important category below (Product Sustainability/Green Initiatives) has almost 50% interest from executives.  (Note that I consider manufacturability to be a concern that is very closely aligned and/or drives product cost.)

Figure 1 – What Product Development Executives are Concerned About

But, which of these goals is that the MOST important goal.  Michelle Boucher at Aberdeen Group gauged the sentiment of product development executives in November 2010 on this question. Here are the results that she found (Figure 2), when she asked 312 respondents to pick “The top business pressure driving their company to have better insight into decision-making during product development.”

Figure 2 – What is the MOST important concern to product development managers?

Source: Aberdeen Group

I particularly like this survey question, because it forces the respondents to pick the most important. There’s a couple of interesting things here. First, if we look at the results of this survey versus similar questions asked in the past, we will see that the focus on product cost and profitability is less than it was a year or two ago. Hopefully, this is indicative that the economy might just be starting to show little signs of recovery. Second, notice that when the survey forced the respondents to rank the importance of goals in an ordinal way, the focus of PD executives is still fairly balanced across the different goals that we discussed in the bullets above. In fact, if we combined “customer demand for lower product costs” and “need to lower development costs” together, the total focus on cost or profitability of the organization is about 27%, which makes it almost identical to the other four focuses.

This data matches my own experience in talking to hundreds of customers over the last eight years. In the highly unscientific and intuitive statistics cruncher in my brain, if I combined all the feedback (direct and implied) that I have gotten to the same question, I would say the ordinal ranking of the average product development organization, whether spoken or unspoken, is as follows:

• Safety/compliance (required to sell product at all!)
• Time-to-market
• Quality
• Product performance
• Number of features of the product
• Product profitability
• Development cost

In fact, when I asked the question directly to several product development executives, this is almost exactly the order they gave me, although often they will not list every one of these attributes in their answer.

So what does this mean?

Does it mean that product cost and profitability are unimportant things? No. It simply means that sometimes they may be less important than other goals. So how do we make progress in product development and delivery of corporate profitability, given that product cost is the least favorite subject of many design engineers?

I suggest the following simple framework:

1. Set the required level needed for each of the other attributes, except for product cost / profitability
2. Set a minimum level target for product profitability, but think of product profitability in your mind as the variable you are optimizing.
3. Execute on meeting the goals for the non-product cost attributes actively first, while monitoring product profitability and evaluating each choice made about a non-cost attribute, asking “Will this decision make my product profitability go up or down?”

Those of us who come from a background of optimization probably remember that it is very hard to optimize on more than one variable at a time. Therefore, the typical way to make progress practically on a optimization problem with multiple goals (which is exactly what product development is), is to set some hard constraints (Attribute Targets) for all the variables but one, and then run the optimization to maximize or minimize that last variable of interest (in this case product profit or cost, respectively).

A simple conceptual graphic of this framework is shown below.  In the green ovals we show lines of equal product profit.  We’d like to climb the hill to maximum profit, but there are real world constraints on the level of our other product attributes (e.g. time-to-market). This leaves us a tan shaded region where all our non-cost targets are met.  In my suggested framework, the team first works to get into the shaded region and then starts making choices to meet (and optimize) the last target of product profitability.  The axes represent two choices the team is making, but we know that the team will really be making thousands of choices (it’s just hard to represent that in 2D).

Figure 3 – Graphical Representation of meeting product development targets as constraints, while optimizing product cost and profit

This approach may sound like common sense to some people, and if so, great!  However, don’t let the point pass you by without internalizing it a bit.  One of the blinding flashes of the obvious from David Allen’s book Getting Things Done is that the human brain just can’t let go of something important until it is written down or handled.  So, one of his first rules is that you have to “write it down.”  Similarly, instead of letting Product Profitability be that nagging voice that keeps distracting everyone, companies can simply “write it down,’ too.  That is, they should set a maximum product cost target and keep checking it in the rear view mirror, while keeping the immediate goals of Safety/compliance, Time-to-market, Quality, and Product performance, etc. in the front windshield view.

This may sound like a nuance, but I still often get the question “How do I balance my product cost targets with all the other targets I have in product development?”  Years ago, I was perplexed what to tell the questioner other than “Make product cost your top priority.”  That was not a realistic solution to the real concern.  Eventually, after thinking through the problem and observing the culture of product development, I came up with the simple framework we are discussing.  When I have explained this framework to product development teams at past clients and customers, it seems to make people feel much more at ease and helps people regain a sense of control.

Obviously, one could change the framework to make any product development attribute or target the ‘to be optimized’ variable, just as easily.  But given the immediacy of the challenges of program timing, quality, and performance, it seems that making product cost the optimization variable works best for most product development teams.  Sometimes, we just have to learn by experience.

Eric

(p.s. I still think Product Cost Management is really important!)

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So that is what Eric has to say, I hope you found it interesting. Are we really too busy to care about cost? Do we just believe that profitability is more about top-line issues by having the right product? Let us know how you feel about it.

One of my favorite parts of going to conferences is learning what cool projects, products, and other cool accomplishments manufacturers have leveraged PLM for. In addition to sharing some very positive news on the market (see PLM Keeping up Momentum: Siemens PLM Analyst Conference 2011)  the recent Siemens PLM analyst event showcased a number of Siemens’ customers getting real business value from PLM. I thought I would share a few examples with you. And if you want, you can hear for yourself how excited I was in this interview with Dora Smith of Siemens PLM.

Aerojet

One of the great things about PLM is that it can solve a wide variety of problems. In Aerojet‘s case, PLM is helping improve product quality. I blogged about Siemens Dimensional Planning and Validation (DPV) solution in Circling Back on Quality with Siemens PLM and more generally about the significant benefits available from integrating Quality Lifecycle Management (QLM) in PLM. It was great to hear a first hand example of how a company is bringing quality and engineering together, or “closing the loop on quality.” One of the really cool things – which unfortunately we didn’t actually see an example of because Aerojet serves the defense industry – is that they now display quality information (SPC data) in the context of the product – in this case graphically displaying it against a JT model of the product. John Hodur, Principle Quality Engineer explained how Aerojet is integrating inspection results with tolerance results to develop tolerance stackups using actual data. A great example of how PLM is expanding into new areas, and integrating new people and processes into Engineering.

Edison2

Sometimes at conferences you not only get to hear about cool projects, you get to hear from really cool people. Yes, this is a conference focused on the intersection of engineering and software and I said cool. Really cool. The presenter was not only an engineer that worked on a really cool project to design a ground-breaking, record setting light car, but also a race car driver. So we have gone from rocket scientists to race car drivers in one post. He explained how Edison2 won the Progressive Insurance X Prize contest to build the most fuel-efficient and  safe car that can carry four passengers and luggage. The results were impressive. What was also impressive was how excited he was at the toolset he used, Solid Edge. He explained how the new Synchronous  Technology in Solid Edge helped them rapidly design (and more importantly redesign) the car as they went through multiple design iterations.

Rolls Royce

Another great PLM facet highlighted at the conference was integration of PLM into other systems and the positive impact it has on quality. Gordon McKechnie expressed that Rolls Royce is critical to their customers and that its products “work in industries where if a product fails it is no OK.” What an understatement! He explained that to pursue high quality – yet still maintain a very competitive cost – Rolls Royce wants to have one system managing the product across the enterprise. He explained that they have lots of point systems, but are driving to a single source of data. This is not just for PLM as most people think of it – they believe in “totally integrated PLM” that expands from product design all the way into manufacturing. In his words, “integration is key, and integration is a problem today.” A problem that Rolls Royce is leading the charge to overcome. To that end, Rolls Royce is on the leading edge of ERP-MES integration and uses both Siemens’ Teamcenter PLM and Simatic IT MES solutions. Oh and just so you don’t think we went from rockets to cars and didn’t include anything else cool, Rolls Royce makes aircraft engines – another pretty cool (and highly complex) product. Just in case you thought they made cars…

So that’s what I hear from Siemens PLM’s customers. There were other stories as well, but these were the ones that I decided to share. What do you think? Pretty cool stuff? What have you done with PLM?

I had the opportunity to talk with the team at Siemens PLM at their recent analyst conference in Boston. Every time I attend one of these events, I come back and ask myself “what can I share with people that will help them understand all that I learned in two days of presentations, demonstrations, interviews, and side conversations?” There is so much to share and so much detail it is hard to know where to start and there is not enough time to share it all. So I am going to share my key takeaways from the event in regards to the PLM Market, Cool Things Manufacturers are Doing with PLM, and My Take on how Siemens PLM is doing in furthering the PLM vision and roadmap. Fair enough? I hope so.

Note: Part 2 Cool Customer Tricks – Presenting Business Value from PLM at Siemens Conference is up now

The PLM Market

In short, the PLM market is alive and well. PLM, and Siemens PLM in particular, has made it through the economic downturn and is enjoying recovering spend. Interestingly, even with the current uneasiness in the market, PLM license revenues continue to grow. As Siemens reported at the conference, Siemens PLM has:

• Had 6 quarters of steady growth
• Enjoyed double-digit license growth
• Exceeded all of their profitability and cash flow targets

Other recent news from Siemens’ competitors also point towards a strong recovery for PLM software. Siemens PLM also gave some strong competitive updates including significant wins in automotive and claim to be having great success against the competition (although I am sure we will hear dissenting opinions from said competitors shortly).

Another important takeaway from the conference (and an indicator of PLM market health in my mind) is continued industry specialization. As I have been saying for years, including my soapbox on PLM is an Industry Affair, or Is It? going back to 2003 and revisited in 2010 with Mythbusting PLM is an Industry Affair – different industries need different things from PLM. But, and this is important, they also have common needs that transcend industry. I have seen PLM follow ERP in verticalizing offerings as it matures. At this point, Siemens PLM has re-aligned their organization to put greater industry-specific emphasis on their business. I think this is an important change, and was impressed at the well thought-out strategy that provides industry-focused solutions while still maintaining commonality across the industry offerings. This is an important balancing act so industry solutions can still leverage all of the core enhancements being added to the products. Well done.

At this point, I realize that this is going to be a long post even though I am summarizing. I think it’s time to take a break. Look for more on Cool Things Manufacturers are Doing with PLM and My Take on Siemens PLM’s Progress shortly.

Implications for Manufacturers

A healthy PLM market and Siemens PLM business is a good sign for manufacturers. This will ensure that Siemens will continue to invest in their PLM products to maintain growth. Interestingly, Siemens PLM President Chuck Grindstaff pointed out during the conference that Siemens does not believe in cutting R&D in a downturn anyway to ensure innovation, which is welcome news for customers I am sure.

So that’s what I hear from Siemens PLM, I hope you found it useful. What do you think?

A quick peek into some research on … designing mechatronic products. The research, Tech-Clarity’s Issue in Focus: Systems and Software Driven Innovation: Complexity and Opportunity in the Mechatronic Era covers both sides of the software driven products coin – the complexity it places on engineering and product development teams and the opportunity it offers to drive more innovative products.

The Research Findings

The report first describes the trend toward more software in products. An increasing amount of product functionality is now driven by software algorithms rather than mechanics, even for mechanically-intensive products like transmissions and suspensions. In fact, many traditional manufacturers now have a lot more software engineers working on product development than they do in their IT departments, and more software engineers than mechanical engineers. Clearly, times are changing.

The report covers two aspects of mechatronics – complexity and opportunity:

• Complexity: As discussed in the Five Dimensions of Product Complexity with PLM, designing products that cross engineering disciplines adds complexity. For example, changes to mechanical designs might require changes in the control software. In fact, managing requirements, configurations, and change across disciplines are some of the more significant challenges companies face.

• Opportunity: The report also describes how software driven capabilities allow manufacturers to tailor products to customer or market needs, increase reuse, change products in the field, reduce product cost, and lower product development cost.

Implications for Manufacturers
The trend toward more software driven capabilities will likely continue and perhaps accelerate. The benefits are just too compelling, and traditional products will continue to have a hard time competing against “smarter” products. Mechatronics is here to stay, so Engineering and product development teams have to learn systems engineering approaches and how to manage the complexity of multi-discipline design. But while fighting the complexity, manufacturers shouldn’t lose sight of the potential benefits ranging from more innovative and flexible products to cost savings.

The key to success is integrating designs and product development processes into a systems view. I believe that systems engineering approaches hold the answer, and that PLM solutions will evolve to manage the full systems engineering process. PTC clearly believes this based on their acquisition of MKS as announced at PlanetPTC. Other PLM vendors are also actively at work trying to solve this problem (and create new opportunities for themselves and their customers).

So that was a quick peek into some recent research on innovating with software driven products, I hope you found it interesting. Does the research reflect your experiences? Are you including more software functionality in your products? Do you see it differently? Let us know what it looks like from your perspective.

Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

Hear Jim Brown share his views on … mobile PLM applications in engineering, product management, and program management.
The main topics covered include:

• The advantages of mobile PLM to Engineering
• How mobile PLM helps in product and program management
• Key considerations every CIO should know when taking PLM mobile

Let us know what you think. Do you agree? Disagree? Have a great example to share?

Please see the related posts PLM Hits the Road – and the Plant – and the Service Depot… and Mobile PLM – What the CIO Should Know or download the underlying reports, PLM Goes Mobile, Product and Program Management Goes Mobile, and Enabling Mobile PLM for free to learn more. Please also feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

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