Clarity on PLM

A quick peek into some research on … the technology behind PLM applications, and what today’s CIO needs to know to support it. The research from Tech-Clarity, Enabling Product Lifecycle Management: The CIO’s Guide to Supporting a PLM Initiative,  points out unique implementation and support challenges the CIO and their team must be aware of in order to get the most business value out of PLM.

The Research Findings

The CIO’s organization is getting more involved in PLM implementations. While many Engineering IT teams have managed CAD and other engineering software and supporting infrastructure, PLM is getting more attention from the enterprise IT team because it has become – (wait for it) – an enterprise application. I know, it only makes sense. Implementing enterprise class applications has different considerations than installing design tools, and enterprise IT typically has more experience with systems that span the organization and the supply chain.

Having said that, PLM is not ERP. Nor is it CRM, SCM, or any host of other business-oriented enterprise applications. PLM, by the nature of the processes and data it addresses, comes with some unique information technology challenges. Here are some of the considerations discussed in the report:

• Protecting IP – PLM data is concurrently highly confidential, and much more valuable when shared broadly. Intellectual property is more likely to be shared as collaboration expands, and a lot of that collaboration is outside of the control of the corporate firewall.
• Huge Files – Engineering and product development data is different than large volumes of transactional data. There are some potentially significant issues arising from managing and collaborating on large files in order to support PLM.
• Scalability – PLM is expanding to more people, a broader view of the product, to more of the product lifecycle, and supports more processes. Implementations needs to plan for expansion along multiple dimensions, which could potentially create an exponential demand on IT infrastructure.
• Architecture - PLM vendors are moving to enterprise architecture, providing support for the challenges above but also introducing new challenges. The good news, though, is that these challenges are ones that the many corporate IT groups have already addressed.

PLM also brings about integration challenges. Companies have to be ready to support frequent, bi-directional, real-time integration between PLM. If not in the first phase, potentially sooner than they think. See more on ERP-PLM integration in the Evolving Roles of ERP and PLM report and Mythbusting ERP-PLM Integration post. PLM integration with ERP and the rest of the manufacturing systems ecosystem is becoming more important and more prevalent.

Implications for Manufacturers

The good news? The PLM industry has learned from large scale PLM deployments, and has developed technology and best practices to address these issues. IT professionals today are not blazing the trail when they implement PLM. PLM is becoming much more mainstream. But it is also evolving to more of an enterprise application than just product data management (PDM), and moving into the enterprise realm. There is help available, from peer manufacturers that have undergone the transiiton and experienced consultants alike.

So that was a quick peek into some recent research on getting PLM technology right, 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.

What I learned this week … was that we could use a good, common PLM definition and scope, but we will not get one. The discussion (a lot of discussion in multiple forums, actually) came from my post SAP, Too Much or Too Little Credit for PLM Efforts and another called Who Will Disrupt Entrenched PLM Vendors? Chris Williams pointed out on a LinkedIn thread that he felt maybe the confusion was due to a lack of understanding of what PLM really is, and asked for a common definition. My response? Not so much.

A Not-so-Common Defintion

Chris asked the million dollar question. But PLM is not one thing. While ERP has matured to a more common footprint across the vendors, the scope of PLM from each of the vendors differs. I define PLM as “processes and software used to improve product innovation, product development, and engineering performance.” That is (by definition, not by fault) very broad. There is no one “PLM” definition. The vision of the vendors shows consoliation over time, but today they are very different. Siemens includes MRO (maintenance, repair and overhaul) for A&D. Dassault Systemes has spent much more effort in “lifelike simulation.” PTC includes development of product documentation. Then, there are the applications that don’t come as a part of the suite, which makes each implementation different. Aras includes APQP and quality. They are all different.

Implications for Manufacturers

The lack of a common definition is also why putting in PLM without a strategy is a quagmire waiting to happen. But a common defintion won’t help. While there are standard processes in PLM, they are not as common as in ERP. There are examples of common processes, such as Stage-Gate processes for new product development (NPD) or CMII for change management. But product innovation and product development are not as standardized processes as accounting, as an example. It is not the lack of common PLM system definition at the root of this, it is the lack of common PLM processes. And as much as companies like Invention Machine are putting process orientation into innovation, it will still not be as standardized as ERP functions like human resource management.

So, manufacturers really need to think about what problems they want to solve before implementing PLM. You can’t just install the software and expect any benefits (beyond maybe simple data management). This is what I call the PLM Program, a strategy and vision for PLM that you accomplish in small, incremental steps.

So those are my thoughts on a common PLM defintion, don’t hold your breath waiting for it. I hope you found it interesting. Do you have a better one? I didn’t, if you do let us know about it.

That, by the way, is one of the reasons it is very hard for ERP to simply build another module and call it PLM. That is why SAP has a long program to develop PLM (which will be yet another variation on the PLM theme, different from the others).

What I learned this week … came from some discussions with Chris Williams yesterday about my blog post SAP – Too Much, or Too Little Credit for PLM? in combination with a conversation over breakfast with Oleg, author of PLMTwine. In both conversations I kept hearing about who is going to disrupt the big PLM vendors (Dassault Systemes, PTC, Siemens PLM). Maybe I am just a small thinker, but there seems to be a lot more talk about disruption than actual disrupting going on. Time to share my thoughts, with the expectation that I might be eating my own words on this very blog over the next couple of years.

Disrupting Giants

Maybe it is my jaded view, but I don’t see technology being the disruptor to PLM. I have drawn as many “waves of technology” charts as the next guy, and discussed how difficult it is for vendors to move from one technology to the next big wave. But two things have happened:

• Enterprise software companies have managed to gain significant scale
• Vendors have gotten smarter at riding waves of technology

Already I am sure there are people disagreeing. Let me share my experience.

The Technology Wave Argument

Let’s start with the technology waves. Who will out-technology the big vendors. Will it be a SaaS play like Arena Solutions? Will it be open source like Aras? Or a brand new technology, like Chris William’s Vuuch? Or a more generalized infrastructure technology like Microsoft SharePoint? Or the king of disruption (they are disrupting everybody, I think I heard the words “disruption” and “Google“ at breakfast with Oleg more times than I orderd another cup of coffee (that is saying a lot).

OK, let me share some history that I lived through (maybe you have too). In the ERP world, many players have come and gone. Some have crashed and burned due to their own mismanagement, some have become obsolete in technology and withered away, and others tried and failed trying to migrate to new technology. So why doesn’t this happen to the current largest enterprise software vendor, SAP? Long ago, SAP burst onto the scense with Client-Server architecture with R/3. But truth be told, that transition was a slow and deliberate one. Since that time they have moved their technology along several times. Each time slowly, methodically, and never scrapping the old solution and going for broke on the new one. Countless others tried to grab the brass ring and jump to a new architecture, and drove their companies into the ground.

So while some get frustrated by slow evolution of architecture by big PLM vendors, I say they are being prudent. They are moving deliberately. Some say that will be their downfall. I say slow evolution is the best practice they learned from SAP’s success in ERP. I have heard the “we are going to make SAP (or Oracle, or whatever) obsolete pitch hundreds of times. Some from really great ideas and technologies. But where are they now? Part of the answer lies in the next section.

The Benefit of Scale

The key question in disrupting giants is what can you do that they can’t respond to? What can you where they can’t buy or build their way to the next generation? Particularly when most vendors are several steps ahead of the majority of their customers? Current vendors need to show a vision and a path, but revolution is pretty scary to most of the manufacturs they count as customers. As Oleg points out, and here I agree, one thing they can’t compete with is “free.” But I do not forsee the day that there will be an effort of the scale it takes to develop a full, integrated, PLM system. That is not just technology – it is data model and process as well. Let’s face it, this stuff is complex. But here is the thing. If one of these technologies gets hot, won’t the vendors with scale just acquire it? We are not talking about a solution with the broad interest and potential of word processing (Google Docs) or a brand new idea like social networking (Facebook, etc.). Who except a major enterprise player would invest in disrupting the PLM market? Who would find that investment appealing?

So is it SAP PLM? Or Oracle with their Agile solutions? They have the scale, do they have the will? Is PLM an interesting enough market that they will invest enough to compete with best-of-breed? Realizing, of course, that they have the advantage of their installed base in hand? Perhaps? But I don’t see this happening overnight. I believe the big ERP vendors will get to a level where they can compete, but the big PLM vendors have enough scale to stay ahead. SAP and Oracle will be players in the market, but I don’t think they will own it.

Bottom Line

Will their be acquisitions? Mergers? Sure. The names may change (I didn’t expect UGS to become Siemens PLM), but the assets (software and customer base) are large enough to live in. In my opinion. Unless they fall to their own mistakes, I don’t see a sudden displacement coming. I hope that I am not eating these words at some point, but if I should I will. But that is the way I see it.

Implications for Manufacturers

Buy the solution that works for you. Invest in it. Markets move slowly and software takes a long time to go away. Focus on the solution that meets your business needs, and that you feel you can grow with. Buy a solution that will fit the direction of your PLM vision. Keep an eye on new technologies and see where you can apply them. But I wouldn’t lose too much sleep about disruption right about now.

So have I just grown closed minded? Have I always been a small thinker and I just didn’t know it? Or am I making some sense? I hope you found it interesting. Let me know what it looks like from your vantage point.

I had the chance to talk with … Tim Frost of Burner Systems International (BSI) about their adoption of Product Data Management (PDM) to improve engineering and new product development performance. Tim explained to me that one of the primary goals for their adoption of PLM was getting a handle on their product data. But BSI also wanted to expand collaboration outside of Engineering and improve their time to market. The case study, Tech-Clarity Business in Focus: Burner Systems International – Improving Collaboration with Product Data Management, describes BSI’s experience from recognizing the need for action due to increased complexity in their business all the way through today’s benefits and plans for the future.

What do they Do?

BSI is a supplier to the OEMs that manufacture gas appliances. Like most suppliers, they compete very aggressively with their competition. They compete based on innovation, but most importantly on agility. They need to be able to react quickly to customer needs and bring the right component to market. Due to increased competition, growth by acquisition, and globalization BSI faced a huge challenge. As Tim tells me “We ended up with plants all over the globe, and we had to integrate engineering functions and data.”

What did they Do?

Recognizing the increased complexity, BSI took action. “You can use folders and you might get away with it for a while, but with multiple revisions you can’t manage it,” Tim explains. The solution was to implement a Product Data Management (PDM) system.  Just as importantly, they wanted to improve collaboration across departments. Tim describes how they implemented a PLM system (which includes PDM) that can be used by engineers and non-engineers alike. We discussed how departments like Quality, Manufacturing, Purchasing, and Sales get involved in the product design and development process.

What are the Results?

The new PDM system has shrunk cycle times and helped them make fewer manufacturing errors. According to Tim, those errors can cost up to $100,000 each. BSI is pleased with the results. “We know that we are faster in developing new products, I would estimate 25% faster,” Tim says. “We know that we are better prepared for launching production due to better input and collaboration from Manufacturing, and we know that we are less likely to make bad parts due to out of date drawing revisions.” The project is a success, and BSI is looking to further their gains by continuing to go beyond PDM to a more full PLM solution, leveraging the infrastructure they have in place.

 Implications for Manufacturers

 Burner Systems is a great example of a smaller company that desperately needed to get product data under control. At the same time, they have managed to achieve even more strategic benefits through collaboration and improved time to market. PDM is often the first step in a broader PLM Program.

So that’s what I hear from BSI, I hope you found it useful. What do you think? What else should I have asked them? A summary of the report is available from the Tech-Clarity site, and the full report is available for free from Siemens PLM, the provider of the Teamcenter Express software that BSI uses (and the sponsor of the report). Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

What I learned this week …serves as a cautionary tale for people responsible for product compliance – PLM can help, but compliance requires a multi-pronged approachthat includes strong data gathering, analysis, and docuumentation capabilities (this is where PLM comes in) but also intelligent supply chain relationships and physical validation. This reminder came to me courtesy of AP Enterprise: US buyers must beware in China. The article is a good read, although I had some issues about their dig on 3rd party testing. Their point is you have to know what you are looking for in order to test for it – isn’t that what RoHS, REACH, the SIN list, and countless other lists of substances of concern are all about? Otherwise, some excellent points and examples.

What PLM Can Do

As my previous post discussed, PLM solutions help by Making Product Compliance Sustainable. In other words, PLM helps companies achieve product compliance without excessive compliance cost. Developing products that meet REACH, RoHS, and other compliance challenges requires manufacturers to:

• Identify Requirements
• Document Product Structures / BOMs
• Gather and Validate Component Data from the Supply Chain
• Analyze Products and Perform What If Analysis
• Mitigate Risk
• Document Compliance and Achieve Auditability

Most PLM solutions can play a significant role in documenting products and BOMs. Other, more capable PLM systems have added features to help companies collect and analyze compliance information in the context of the product design and product lifecyle. Clearly, PLM is a major benefit for compliance.

What PLM Can’t Do

What PLM can’t do is ensure that the data is accurate. As the example in the AP article shows, there are unscrupulous suppliers who are polluting supply chains with improperly identified, toxic materials. No enterprise solution alone can prevent this. Reducing exposure to these problems requires:

• Knowledgeable supply chain personnel
• Validation

PLM can still help in these regards, but it is not the primary tool. For example, PLM can be used to document physical tests in the context of the product record and analyze data for inconsistencies and potential inaccuracies. Some PLM systems also manage supplier records that can be used to document vendor audits and other supply-chain validation functions. But in the end, compliance can’t be based on blind faith in PLM data.

Implications for Manufacturers

PLM is a big part of the answer to reduce product compliance risk. Manufacturers can also leverage compliance information to reduce product and component supply risk. But in the end, having the right data is only part of the challenge. Virtual validation such as documentation and BOM analysis must be accompanied by scanning and/or destructive testing to be sure. Testing should be risk-based, but should also continue throughout the product lifecycle and supplier relationship.

So manufacturers will have to keep on guard, and not just in China. I hope you found it interesting. Let us know what this looks like from your perspective.

A quick peek into some research on … the use of business intelligence in PLM provides insight on taking advantage of the tremendous amount of product data  accumulating in today’s PLM systems. The research discusses how the maturation of manufacturers’ PLM implementations has created a tremendous volume of untapped information that can be leveraged to improve product innovation, product development, and engineering performance. As it has in previous enterprise applications (ERP, CRM, SCM, others), the time has come for manufacturers to tap into their growing information goldmines through the use of business intelligence (BI) tools.

The Research Findings

The research points out two parallel trends in PLM implementations today:

• Manufacturers have moved forward along the PLM implementation maturity curve – meaning they now have stable implementations and clean data
• PLM has evolved and expanded to incorporate more valuable, business-focused data in addition to technical information – meaning the data to be mined covers a broader spectrum of the product lifecycle, including cost, projects, sourcing, service, and more in addition to purely technical engineering data

The result of these two trends is that there is now a lot more usable business data in PLM. The report points out a number of areas of value that can be mined from the data, including savings on new product development timelines, closing the loop from service to engineering, improving product quality, analyzing sourcing, and reducing cost. In short, it shows that value can be extracted by improving pretty much any part of the product innovation, product development, and engineering processes. Please read the report for more details and examples.

Implications for Manufacturers

The message for manufacturers is that “there is gold in them hills” …. errrrrr, in those databases. The research also points out some special considerations for business intelligence in a PLM environment. For most manufacturers, applying a BI tool is not the difficult part. In fact, they probably have (at least) one tool available in their IT toolkit. But before diving in from a technical perspective, manufacturers need to be very careful to consider security, IP protection, and regulatory requirements that surround this very sensitive data. Manufacturers should also look for ways to leverage PLM vendor offerings or partnerships that give them a ready-made view into the PLM data and security model, to avoid spending time recreating the wheel and potentially making mistakes that provide misleading “facts” that people will trust. As the report says, “Developing an effective BI in PLM strategy also requires knowledge of the engineering and product development domains and the specific software applications being mined.”

So that was a quick peek into some recent research on the maturation of PLM implementations and the opportunity it provides for data mining in 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.