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Two weeks ago I attended the Nobletek PLM forum in Belgium, where a group of experts, managers and users discussed topics related to my favorite theme: “Is PLM changing? “
Dick Terleth (ADSE) lead a discussion with title “PLM and Configuration Management as a proper profession” or "How can the little man grow?". The context of the discussion was related to the topic: “How is it possible that the benefits of PLM (and Configuration Management) are not understood at C-level?” or with other words: “Why is the value for Configuration Management and PLM not obvious?”.
In my previous post, PLM is doomed unless …., I quoted Ed Lopategui (www.eng-eng.com), who commented that being a PLM champion (or a Configuration Management expert as Dick Terleth would add) is bad for your career. Dick Terleth asked the same question, showing pictures of the self-assured accountant and the Configuration Management or PLM professional. (Thanks Dick for the pictures). Which job would you prefer?
The PLM ROI discussion
A first attempt to understand the difference could be related to the ROI discussion, which seems to be only applicable for PLM. Apparently ERP and financial management systems are a must for companies. No ROI discussion here. Persons who can control/report the numbers seem to have the company under control. For the CEO and CFO the value of PLM is often unclear. And to make it worse, PLM vendors and implementers are fighting for their unique definition of PLM so we cannot blame companies to be confused. This makes it clear that if you haven´t invested significant time to understand PLM, it will be hard to see the big picture. And at C-level people do not invest significant time to understand the topic. It is the C-level´s education, background or work experience that make him/her decide.
So if the C-level is not educated on PLM, somebody has to sell the value to them. Oleg Shilovitsky wrote about it recently in his post Why is it hard to sell PLM ROI and another respected blogger, Joe Barkai, sees the sun come up behind the cloud, in his latest post PLM Service Providers Ready To Deliver Greater Value. If you follow the posts of independent PLM bloggers (although who is 100 % independent), you will see a common understanding that implementing PLM currently requires a business transformation as old processes were not designed for a modern infrastructure and digital capabilities.
PLM is about (changing) business processes
Back to the Nobletek PLM forum. Douglas Noordhoorn, the moderator of the forum challenged the audience stating that PLM has always been there (or not there – if you haven´t discovered it). It is all about managing the product development processes in a secure way. Not talking about “Best Practices” but “Good practices." Those who had a proper education in the aerospace industry learned that good processes are crucial to deliver planes that can fly and are reliable.
Of course, the aerospace industry is not the same as other industries. However, more and more other industries in my network, like Nuclear new build, the construction industry or other Engineering, Procurement and Construction companies want to learn from aerospace and automotive good practices. They realize they are losing market share due to the fact that the cost of failure combined with relative high labor costs makes them too expensive. But from where to they get their proper good practices education?
The PLM professional?
And this was an interesting point coming up from the Nobletek forum. There is no proper, product agnostic education for PLM (anymore). If you study logistics, you will learn a lot about various processes and how they can be optimized for a certain scenario. When you study engineering, there is a lot of focus on engineering disciplines and methods. But there is no time to educate engineers in-depth to understand the whole product development process and how to control it. Sometimes I give a guest lecture to engineering classes. It is never an important part of the education.
To become a PLM professional
For those who never had any education in standard engineering processes, there is Frank Watts Engineering control book, which probably would be a good base. But it is not the PLM professional only that should be aware, of the good practices. Moreover, all companies manufacturing products, plants or buildings should learn these basics. As a side step, it would make a discussion around BIM more clear. At this time, manufacturing companies are every time discovering their good practices in the hard way.
And when this education exists, companies will be aware that it is not only about the tools, but it is the way the information is flowing through the organization. Even there is a chance that somewhere at C-level someone has been educated and understands the value. For ERP everyone agrees. For PLM, it remains a labyrinth of processes designed by companies learning on the job currently. Vendors and implementers pushing what they have learned. Engineering is often considered as a hard-to-manage discipline. As a SAP country manager once said to me: “Engineers are actually resources that do not want be managed, but we will get them …..”
And then the future ……
I support the demand for a better education in engineering processes especially for industries outside aerospace or automotive. I doubt if it will have a significant impact although it might create the visibility and understanding for PLM at C-level. No need anymore for the lone ranger who fights for PLM. Companies will have better educated people that understand the need for good practices that exist. These good practices will be the base for companies when discussing with PLM vendors and implementers. Instead of vendors and implementers pushing their vision, you can articulate, and follow your vision.
However, we need a new standard book too. We are currently in the middle of a big change. Thanks to modern technology and connectivity the world is changing. I wrote and spoke about it in: Did you notice PLM is changing?
This awareness needs to become visible at C-level.
Who will educate them ??
Now back to soccer – 4 years ago Spain-The Netherlands was the last match – the final. Now it is the first match for them – will the Dutch change the game ?
Human beings are a strange kind of creatures. We think we make a decision based on logic, and we think we act based on logic. In reality, however, we do not like to change, if it does not feel good, and we are lazy in changing our habits.
Disclaimer: It is a generalization which is valid for 99 % of the population. So if you feel offended by the previous statement, be happy as you are one of the happy few.
Our inability to change can be seen in the economy (only the happy few share). We see it in relation to global climate change. We see it in territorial fights all around the world.
Owning instead of sharing. ?
The cartoon below gives an interesting insight how personal interests are perceived more important than general interest.
It is our brain !
More and more I realize that the success of PLM is also related to his human behavior; we like to own and find it difficult to share. PLM primarily is about sharing data through all stages of the lifecycle. A valid point why sharing is rare , is that current PLM systems and their infrastructures are still too complex to deliver shared information with ease. However, the potential benefits are clear when a company is able to transform its business into a sharing model and therefore react and anticipate much faster on the outside world.
But sharing is not in our genes, as:
- In current business knowledge is power. Companies fight for their IP; individuals fight for their job security by keeping some specific IP to themselves.
- As a biological organism, composed of a collection of cells, we are focused on survival of our genes. Own body/family first is our biological message.
Breaking these habits is difficult, and I will give some examples that I noticed the past few weeks. Of course, it is not completely a surprise for readers of my blog, as a large number of my recent posts are related to the complexity of change. Some are related to human behavior:
Ed Lopategui, an interesting PLM blogger, see http://eng-eng.com, wrote a long comment to my PLM and Blockers post. The (long) quote below is exactly describing what makes PLM difficult to implement within a company full of blockers :
“I also know that I was focused on doing the right thing – even if cost me my position; and there were many blockers who plotted exactly that. I wore that determination as a sort of self-imposed diplomatic immunity and would use it to protect my team and concentrate any wrath on just myself. My partner in that venture, the chief IT architect admitted on several occasions that we wouldn’t have been successful if I had actually cared what happened to my position – since I had to throw myself and the project in front of so many trains. I owe him for believing in me.
But there was a balance. I could not allow myself to reach a point of arrogance; I would reserve enough empathy for the blockers to listen at just the right moments, and win them over. I spent more time in the trenches than most would reasonably allow. It was a ridiculously hard thing and was not without an intellectual and emotional cost.
In that crucible, I realized that finding people with such perspective (putting the ideal above their own position) within each corporation is *exceptionally* rare. People naturally don’t like to jump in front of trains. It can be career-limiting. That’s kind of a problem, don’t you think? It’s a limiting factor without a doubt, and not one that can be fulfilled with consultants alone. You often need someone with internal street cred and long-earned reputation to push through the tough parts”
Ed concludes that it is exceptionally rare to find people putting the ideal above their own position. Again referring to the opening statement that only a (happy) few are advocates for change
Now let´s look at some facts why it is exceptionally rare, so we feel less guilty.
Although it was not the easiest book to read during a holiday, it was well written considering the complexity of the topic discussed. Jeff describes how the information architecture of the brain could work based on the neocortex layering.
In his model, he describes how the brain processes information from our senses, first in a specific manner but then more and more in an invariant approach. You have to read the book to get the full meaning of this model. The eye opener for me was that Jeff described the brain as a prediction engine. All the time the brain anticipates what is going to happen, based on years of learning. That’s why we need to learn and practice building and enrich this information model.
And the more and more specialized you are on a particular topic, it can be knowledge but it can also be motoric skill, the deeper in the neocortex this pattern is anchored. This makes is hard to change (bad) practices.
The book goes much further, and I was reading it more in the context of how artificial intelligence or brain-like intelligence could support the boring PLM activities. I got nice insights from it, However the main side observation was; it is hard to change our patterns. So if you are not aware of it, your subconscious will always find reasons to reject a change. Follow the predictions !
Thinking Fast and Slow
And this is exactly the connection with another book I have read before: Thinking Fast and Slow from Daniel Kahneman. Daniel explains that our brain is running its activities on two systems:
System 1: makes fast and automatic decisions based on stereotypes and emotions. System 1 is what we are using most of the time, running often in subconscious mode. It does not cost us much energy to run in this mode.
System 2: takes more energy and time; therefore, it is slow and pushes us to be conscious and alert. Still system 2 can be influenced by various external, subconscious factors.
Thinking Fast and Slow nicely complements On Intelligence, where system 1 described by Daniel Kahneman is similar to the system Jeff Hawkins describes as the prediction engine. It runs in an subconscious mode, with optimal energy consumption allowing us to survive most of the time.
Fast thinking leads to boiling frogs
And this links again to the boiling frog syndrome. If you are not familiar with the term follow the link. In general it means that people (and businesses) are not reacting on (life threating) outside change when it goes slowly, but would react immediately if they are confronted with the end result. (no more business / no more competitive situation)
Conclusion: our brain by default wants to keep business in predictive mode, so implementing a business change is challenging, as all changes are painful and against our subconscious system.
So PLM is doomed, unless we change our brain behavior ?
The fact that we are not living in caves anymore illustrates that there have been always those happy few that took a risk and a next step into the future by questioning and changing comfortable habits. Daniel Kahneman´s system 2 and also Jeff Hawkins talk about the energy it takes to change habits, to learn new predictive mechanisms. But it can be done.
I see two major trends that will force the classical PLM to change:
- The amount of connected data becomes so huge, it does not make sense anymore to store it and structure the information in a single system. The time required to structure data does not deliver enough ROI in a fast moving society. The old “single system that stores all”-concept is dying.
- The newer generations (generation Y and beyond) grew up with the notion that it is impossible to learn, capture and own specific information. They developed different skills to interpret data available from various sources, not necessary own and manage it all.
These two trends lead to the point where it becomes clear that the future in system thinking becomes obsolete. It will be about connectivity and interpretation of connected data, used by apps, running on a platform. The openness of the platform towards other platform is crucial and will be the weakest link.
The PLM vision is not doomed and with a new generations of knowledge workers the “brain change” has started. The challenge is to implement the vision across systems and silos in an organization. For that we need to be aware that it can be done and allocate the “happy few” in your company to enable it.
What do you think ???????????????????????????
The past month I had several discussions related to the complexity of PLM. Why is PLM conceived as complex ? Why is it hard to sell PLM internal into an organization ? Or to phrase it differently: “What makes PLM so difficult for normal human beings. As conceptually it is not so complex”
So what makes it complex ? What´s behind PLM ?
The main concept behind PLM is that people share data. It can be around a project, a product, a plant through the whole lifecycle. In particular during the early lifecycle phases, there is a lot of information that is not yet 100 percent mature. You could decide to wait till everything is mature before sharing it with others (the classical sequential manner), however the chance of doing it right the first time is low. Several iterations between disciplines will be required before the data is approved. The more and more a company works sequential, the higher costs of changes are and the longer the time to market. Due to this rigidness of this sequential approach, it becomes difficult to respond rapidly to customer or market demands. Therefore in theory, (and it is not a PLM theory), concurrent engineering should reduce the amount of iterations and the total time to market by working in parallel in not approved data yet.
PLM goes further, it is also about sharing of data and as it started originally in the early phases of the lifecycle, the concept of PLM was often considered something related to engineering. And to be fair, most of the PLM (CAD-related) vendors have a high focus on the early stages of the lifecycle and strengthen this idea. However sharing can go much further, e.g. early involvement of suppliers (still engineering) or support for after-sales/services (the new acronym SLM). In my recent blog posts I discussed the concepts of SLM and the required data model for that.
The complexity lies in the word “sharing”. What does sharing mean for an organization, where historically every person was awarded for the knowledge he/she has/owned, instead of being awarded for the knowledge this person made available and shared. Many so-called PLM implementations have failed to reach the sharing target as the implementation focus was on storing data per discipline and not necessary storing data to become shareable and used by others. This is a huge difference.
Some famous (ERP) vendors claim if you store everything in their system, you have a “single version of the truth”. Sounds attractive. My garbage bin at home is also a place where everything ends up in a single place, but a garbage bin has not been designed for sharing, as another person has no clue and time to analyze what´s inside. Even data in the same system can be hidden for others as the way to find data is not anticipated.
Data sharing instead of document deliverables
The complexity of PLM is that data should be created and shared in a matter not necessary the most efficient manner for a single purpose, however with some extra effort, to make it usable and searchable for others. A typical example is drawings and documents management, where the whole process for a person is focused on delivering a specific document. Ok for that purpose, but this document on its own becomes a legacy for the long-term as you need to know (or remember) what´s inside the document.
A logical implication of data sharing is that, instead of managing documents, organizations start to collect and share data elements (a 3D model, functional properties, requirements, physical properties, logistical properties, etc). Data can be connected and restructured easily through reports and dashboards, therefore, proving specific views for different roles in the organization. Sharing becomes possible and it can be online. Nobody needed to consolidate and extract data from documents (Excels ?)
This does not fit older generations and departmental managed business units that are rewarded only on their individual efficiency. Have a look at this LinkedIn discussion where the two extremes are visible.
“The sad thing about PLM is that only PLM experts can understand it! It seems to be a very tight knit club with very little influence from any outside sources.
I think PLM should be dumped. It seems to me that computerizing engineering documentation is relatively easy process. I really think it has been over complicated. Of course we need to get the CAD vendors out of the way. Yes it was an obvious solution, but if anyone took the time to look down the road they would see that they were destroying a well established standard that were so cost effective and simple. But it seems that there is no money in simple”
And a the other side Kais stating:
“If we want to be able to use state-of-the art technology to support the whole enterprise, and not just engineering, and through-life; then product information, in its totality, must be readily accessible and usable at all times and not locked in any perishable CAD, ERP or other systems. The Data Centric Approach that we introduced in the Datamation PLM Model is built on these concepts”
Readers from my blog will understand I am very much aligned with Kais and PLM guys have a hard time to convince Joe of the benefits of PLM (I did not try).
Making the change happen
Beside this LinkedIn discussion, I had discussions with several companies where my audience understood the data-centric approach. It was nice to be in the room together, sharing the ideas what would be possible. However the outside world is hard to convince and here it is about change management.
I read an interesting article in IndustryWeek from John Dyer with the title: What Motivates Blockers to Resist Change?
John describes the various types of blockers and when reading the article combined with my PLM twisted brain, I understood again that this is one of the reasons PLM is perceived as complex – you need to change and there are blockers:
Blocker (noun) – Someone who purposefully opposes any change (improvement) to a process for personal reasons
“Blockers” can occupy any position in a company. They can be any age, gender, education level or pay rate. We tend to think of blockers as older, more experienced workers who have been with the company for a long time, and they don’t want to consider any other way to do things. While that may be true in some cases, don’t be surprised to find blockers who are young, well-educated and fairly new to the company.
The problem with blockers
The combination of business change and the existence of blockers are one of the biggest risks for companies to go through a business transformation. By the way, this is not only related to PLM, it is related to any required change in business.
A company I have been working with was eager in studying their path to the future, which required more global collaboration, a competitive business model and a more customer centric approach. After a long evaluation phase they decided they need PLM, which was new for most of the people in the company. Although the project team was enthusiastic, they were not able to pass the blockers for a change. Ironically enough they lost a significant part of their business to companies that have implemented PLM. Defending the past is not a guarantee for the future.
A second example is Nokia. Nokia was famous for they ways they were able to transform their business in the past. How come they did not see the smartphone and touch screens upcoming ? Apparently based on several articles presented recently, it was Nokia´s internal culture and superior feeling that they were dominating the market, that made it impossible to switch. The technology was known, the concepts were there, however the (middle) management was full of blockers.
Two examples where blockers had a huge impact on the company.
Staying in business and remaining competitive is crucial for companies. In particular the changes that currently happen require people to work different in order to stay completive. Documents will become reports generated from data. People handling and collecting documents to generate new documents will become obsolete as a modern data-centric approach makes them redundant. Keeping the old processes might destroy a company. This should convince the blockers to give up
I will be attending the annual Product Innovation conference again in Berlin next week. Looking forward to this event, as it is one of the places where you have the chance to network and listen to presentations from people that are PLM minded. A kind of relaxation, as strangely enough, most of the companies I am visiting, considerer PLM still considered as something difficult, something related to engineering, not so much connected to the future of their business.
I believe one of the reasons is that people have founded their opinion on the past. An expensive implementation horror story, an engineering focuses implementation or other stories that have framed PLM in a certain manner.
However PLM has changed and it significance has grown !
During the Product Innovation conference, I will present in more depth this topic related to the change of PLM.,with more examples and a surprising projection to the future. Later, when time permits, I will share the more in-depth observations in my blog, hopefully extended based on discussions during the conference. And if you attend the conference, don’t miss my session.
the term PLM (Product Lifecycle Management) was introduced as a logical extension to cPDM (collaborative Product Data Management). Where the initial focus was of global file sharing of mechanical CAD data, PLM extended the scope with multidisciplinary support, connecting manufacturing preparation and providing an infrastructure for change management.
In the nineties product data management was in transition.
In the early 90s, UNIX dominated, and installing a PDM system was the work of IT-experts. Large enterprises, already operating globally, were pushing for standardization, and control of data to connect their engineers in a more efficient manner. Connectivity was achieved through expensive lease lines; people like me, had to connect to the internet through dial-up modems and its usage was limited, providing static web pages with minimal graphics.
It was obvious that cPDM and the first PLM projects were extremely expensive. There was no experience; it was learning on the job. The costs were high and visible at the management level. Giving the management the impression that PLM is potentially the same challenge as ERP, but with a less clear scope. And the projects were executed by IT-experts, end-users were not really in the game.
At the end of the 90s, a small revolution started to take place. The power of the PC combined with Microsoft technology provided a much cheaper and flexible alternative for a complex UNIX based implementation.
Affordable 3D CAD emerged in the mid-market, leading to the need for Windows-based PDM systems and with Windows came Excel, the PDM/PLM killer application.
A person with some rudimentary Visual Basic skills could do magic with Excel and although not an IT-expert would become the champion of the engineering department.
At that time, PLM conferences provided a platform on which industry could discuss and share their tips and tricks on how to implement in the best manner a system. The focus was mainly on the IT-side and large enterprises. The scope was engineering centric, connecting the various disciplines including mechanical, electrical and simulation, in a database and connecting files and versions.
most large enterprises had already started to implement a PLM system. The term PLM became an accepted acronym associated with something that is needed for big companies and is complex and expensive, a logical statement based on the experiences of early adopters.
PLM was the infrastructure that could connect product information between disciplines and departments working from different locations. The NPI (New Product Introduction) process became a topic pushed by all enterprise PLM vendors and was a practice that demonstrated the value of providing visibility on information across a large, dispersed company, to better decision-making.
As this process was more data-centric instead of CAD-centric, these capabilities promoted the recognition and introduction of PLM in non-traditional manufacturing industries like Consumer Packaged Goods, Pharmaceuticals and Apparel where planning and coordination of information leads, instead of a Bill of Material.
In large enterprises, PLM still lay with the IT-architects as they were the ones deciding the standards and software to be used. PLM and ERP connectivity was an expensive topic.
For the mid-market, many PLM vendors were working on offers to standardize a PLM implementation; this usually involved a stripped-down or limited version from the full PLM system, a preconfigured system with templates or something connected to SharePoint. Connectivity was much easier then 15 years ago, thanks to a better internet infrastructure and the deployment of VPN.
For me at that time selling PLM to the mid-market was challenging; how do you explain the value and minimize the risk while current business was still running well? What was so wrong with the existing practices based on Excel? In summary, with good margins and growing business, wasn’t everything under control without the need for PLM? This was the time I started to share my experiences in my blog: A Virtual Dutchman´s introduction
Mid-market PLM projects focused on departmental needs, with IT providing implementation support and guidance. As the number of IT-staff is usually limited in these companies and often organized around ERP and what they learned from its implementation, it was hard to find business experts for PLM in the implementation teams.
the financial crisis had started, and globalization had started to become real through world-wide connectivity – better infrastructure and WEB 2.0. The world became an open space for consumers and competitors; the traditional offshore countries became consumers and began to invest in developing products and services for their domestic market but also targeted the rest of the world. Large enterprises were still expanding their huge PLM implementations though some were challenged because of a change of ownership. Capital investors did not come from the US or Europe anymore but from the BRIC (Brazil, Russia, India, China) countries, forcing some established companies to restructure and refocus.
In response to the crisis, mid-market companies started to reduce costs and focus on efficiency. Lots of discussions related to PLM began as it appeared to be THE strategy needed to survive, though a significant proportion of the investment in PLM was cancelled or postponed by management due to uncertainty and impact on the organization.
PLM conferences showed that almost all of the big enterprises and the mid-market companies still using PLM for connecting departments without fundamentally integrating them in one complete PLM concept. It is easier to streamline the sequential process (thinking lean) instead of making it a concurrent process with a focus on the market needs. PLM conferences were being attended by a greater mix of IT and Business representatives from different businesses learning from each other.
everyone in the world is connected and consequently, the amount of data is piling up. And now it is more about data than about managing document. The introduction of smart devices has had an impact on how people want to work; instead of sharing files and documents, we start sharing and producing huge amounts of data. In addition the upcoming “Internet of Things” demonstrates we are moving to a world where connectivity through data becomes crucial.
Sharing data is the ideal strategy for modern PLM. PLM vendors and other leading companies in enterprise software are discovering that the classical method of storing all information into one database does not work anymore and will not work in the future.
In the future, a new generation of PLM systems, either as an evolution of existing systems or as a disruption from the current market, will come. No longer will the target be to store all information in one system; the goal will be to connect and interpret data and make the right decisions based on that. This is similar to what the new generation of workers are used to, and they will replace the (my) older generation in the upcoming decade
Combined with more and more cloud-based solutions and platforms, the role of IT will diminish, and the importance of business people driving PLM will become ever more crucial.
PLM has become a business-driven strategy and requires people that are strong enough to develop, justify and implement this approach in their companies. New champions are needed !
The value of communities, blogs and conferences
is bringing together the global brainpower in social environments. Complemented with presentations, opinions and discussions from all different industries and domains the ideal environment to grow new ideas. Here you can associate the information, question its relevancy for your business and network with others – the perfect base for innovating and securing your future business.
Therefore, do not use communities or conferences to stick to your opinion but be open and learn.
One of my favorite quotes
Everyone wants to be a game changer and in reality almost no one is a game changer. Game changing is a popular term and personally I believe that in old Europe and probably also in the old US, we should have the courage and understanding changing the game in our industries.
Why ? Read the next analogy.
With my Dutch roots and passion for soccer, I saw the first example of game changing happening in 1974 with soccer. The game where 22 players kick a ball from side to side, and the Germans win in the last minute.
My passion and trauma started that year where the Dutch national team changed the soccer game tactics by introducing totaalvoetbal.
Defenders could play as forwards and they other way around. Combined with the offside-trap; the Dutch team reached the finals of the world championship soccer both in 1974 and 1978. Of course losing the final in both situations to the home playing teams (Germany in 74 – Argentina in 78 with some help of the referee we believe)
This concept brought the Dutch team for several years at the top, as the changed tactics brought a competitive advantage. Other teams and players, not educated in the Dutch soccer school could not copy that concept so fast
At the same time, there was a game changer for business upcoming in 1974, the PC.
On the picture, you see Steve Jobs and Steve Wozniak testing their Apple 1 design. The abbreviation IT was not common yet and the first mouse device and Intel 8008 processor were coming to the market.
This was disruptive innovation at that time, as we would realize 20 years later. The PC was a game changer for business.
Johan Cruyff remained a game changer and when starting to coach and influence the Barcelona team, it was his playing concept tika-taka that brought the Spanish soccer team and the Barcelona team to the highest, unbeatable level in the world for the past 8 years
Instead of having strong and tall players to force yourself to the goal, it was all about possession and control of the ball. As long as you have the ball the opponent cannot score. And if you all play very close together around the ball, there is never a big distance to pass when trying to recapture the ball.
This was a game changer, hard to copy overnight, till the past two years. Now other national teams and club teams have learned to use these tactics too, and the Spanish team and Barcelona are no longer lonely at the top.
Game changers have a competitive advantage as it takes time for the competition to master the new concept. And the larger the change, the bigger the impact on business.
Also, PLM was supposed to be a game changer in 2006. The term PLM became more and more accepted in business, but was PLM really changing the game ?
PLM at that time was connecting departments and disciplines in a digital manner with each other, no matter where they were around the globe. And since the information was stored in centralized places, databases and file sharing vaults, it created the illusion that everyone was working along the same sets of data.
The major successes of PLM in this approach are coming from efficiency through digitization of data exchange between departments and the digitization of processes. Already a significant step forward and bringing enough benefits to justify a PLM implementation.
Still I do not consider PLM in 2006 a real game changer. There was often no departmental or business change combined with it. If you look at the soccer analogy, the game change is all about a different behavior to reach the goal, it is not about better tools (or shoes).
The PLM picture shows the ideal 2006 picture, how each department forwards information to the next department. But where is PLM supporting after sales/services in 2006 ? And the connection between After Sales/Services and Concept is in most of the companies not formalized or existing. And exactly that connection should give the feedback from the market, from the field to deliver better products.
The real game changer starts when people learn and understand sharing data across the whole product or project lifecycle. The complexity is in the word sharing. There is a big difference between storing everything in a central place and sharing data so other people can find it and use it.
People are not used to share data. We like to own data, and when we create or store data, we hate the overhead of making data sharable (understandable) or useful for others. As long as we know where it is, we believe our job is safe.
But our job is no longer safe as we see in the declining economies in Europe and the US. And the reason for that:
Data is changing the game
In the recent years the discussion about BI (Business Intelligence) and Big Data emerged. There is more and more digital information available. And it became impossible for companies to own all the data or even think about storing the data themselves and share it among their dispersed enterprises. Combined with the rise of cloud-based platforms, where data can be shared (theoretically) no matter where you are, no matter which device you are using, there is a huge potential to change the game.
It is a game changer as it is not about just installing the new tools and new software. There are two major mind shifts to make.
- It is about moving from documents towards data. This is an extreme slow process. Even if your company is 100 % digital, it might be that your customer, supplier still requires a printed and wet-signed document or drawing, as a legal confirmation for the transaction. Documents are comfortable containers to share, but they are killing for fast and accurate processing of the data that is inside them.
- It is about sharing and combining data. It does not make sense to dump data again in huge databases. The value only comes when the data is shared between disciplines and partners. For example, a part definition can have hundreds of attributes, where some are created by engineering, other attributes created by purchasing and some other attributes directly come from the supplier. Do not fall in the ERP-trap that everything needs to be in one system and controlled by one organization.
Because of the availability of data, the world has become global and more transparent for companies. And what you see here is that the traditional companies in Europe and the US struggle with that. Their current practices are not tuned towards a digital world, more towards the classical, departmental approach. To change this, you need to be a game changer, and I believe many CEOs know that they need to change the game.
The upcoming economies have two major benefits:
- Not so much legacy, therefore, building a digital enterprise for them is easier. They do not have to break down ivory towers and 150 years of proud ownership.
- The average cost of labor is lower than the costs in Europe and the US, therefore, even if they do not do it right at the first time; there is enough margin to spend more resources to meet the objectives.
The diagram I showed in July during the PI Apparel conference was my interpretation of the future of PLM. However, if you analyze the diagram, you see that it is not a 100 % classical PLM scope anymore. It is also about social interaction, supplier execution and logistics. These areas are not classical PLM domains and therefore I mentioned in the past, the typical PLM system might dissolve in something bigger. It will be all about digital processes based on data coming for various sources, structured and unstructured. Will it still be PLM or will we call it different ?
The big consultancy firms are all addressing this topic – not necessary on the PLM level:
2012 Cap Gemini – The Digital advantage: …..
2013 Accenture – Dealing with digital technology’s disruptive impact on the workforce
For CEOs it is important to understand that the new, upcoming generations are already thinking in data (generation Y and beyond). By nature, they are used to share data instead of owning data in many aspects. Making the transition to the future is, therefore, also a process of connecting and understanding the future generations. I wrote about it last year: Mixing past and future generations with a PLM sauce
This cannot be learned from an ivory tower. The easiest way is not to be worried by this trend and continue working as before, losing business and margin slowly year by year.
As in many businesses people are fired for making big mistakes, doing nothing unfortunate is most of the time not considered as a big mistake, although it is the biggest mistake.
During the upcoming PI Conference in Berlin I will talk about this topic in more detail and look forward to meet and discuss this trend with those of you who can participate.
The soccer analogy stops here, as the data approach kills the the old game.
In soccer, the maximum remains 11 players on each side and one ball. In business, thanks to global connectivity, the amount of players and balls involved can be unlimited.
Because the leagues I was playing in, were always limited in scope: by age, local,regional, etc. Therefore it was easy to win in a certain scope and there are millions of soccer champions beside me. For business, however, there are almost no borders.
Global competition will require real champions to make it work !!!
This year I had several discussions with persons working for construction companies. They shared their BIM dreams and tried to explain them the PLM benefits and basics as they are much alike. The challenge in these discussions was that each of us comes from a complete different background. The word PLM does not resonate well outside product-centric companies. In project-centric companies, people tend to focus more on the tools they are using, instead of the overall business process. Construction companies and EPC companies in Oil & Gas always had a project-centric approach, and for them every project is unique.
Ten years ago
AECbytes.com published in 2004 the chart below, demonstrating the construction industry is lagging behind in productivity compared to other industries.
You find a link to the full article here.
Now it is BIM
It is an old graph, and I haven’t seen a more recent one. However, I guess the trend has not changed significantly. What has changed is that construction companies are now talking about BIM. BIM meaning Building Information Model, a term which has a history with Autodesk. Read the wiki news about BIM. There are many interpretations of BIM. One of the formal definitions is:
Building Information Modeling (BIM) is a digital representation of physical and functional characteristics of a facility. A BIM is a shared knowledge resource for information about a facility forming a reliable basis for decisions during its life-cycle; defined as existing from earliest conception to demolition.
This is a high-level definition, and BIM is characterized as a shared knowledge resource. Is it a 3D Digital model ? Is it a kind of DMU (Digital Mock-Up) ? Is it a Building Lifecycle environment ? There is the word “life-cycle” in the definition.
I noticed many vendors and consultants in this industry talk about what is BIM. It is rare to find quantified values for implementing BIM. You find exactly the same values as PLM brings to manufacturing companies. Better decisions, managing complex constructions and projects, early decisions that save costs later, etc.
Governments have been pushing BIM to the construction industry (both for the civil and building industry) as they believe this is a way to improve quality and better manage time and costs. And as they are usually the big spenders, the leading construction firms have to adapt to these standards to get these contracts.
Would any construction company begin with BIM without being pushed?
In product-centric companies, the global competition and the consumer are driving the need for PLM. Margins are under pressure, and they need to be competitive to stay in business. The construction industry is not (yet) that much driven by global influence and the choice of consumers.
The chart below illustrates the BIM ambition in the UK. At this time, companies are entering level 2, and they struggle to understand what is the impact for them to be at BIM Level 2. I am sure other countries have their own and similar roadmap.
The diagram illustrates the same path which other industries have been going through in the past twenty years.
BIM Levels and PDM / PLM
BIM level 0 is focused on managing CAD, in the other industries this was the time that single disciplines managed their own CAD data. There was no sharing at that time.
Level 1 is focusing on managing 2D and 3D CAD together much similar to what in other industries is done with a PDM system. The PDM system manages in one environment the 2D and 3D data. This is still as a departmental solution but could provide in one environment information from different disciplines. Here, you find all suppliers from 3D CAD systems having their PDM solution, not focusing on a core 3D Model
Level 2 is about sharing 3D BIM models for different disciplines to support 4D (construction planning based on 3D) and 5D (construction planning based on 3D planning and costing integrated). This is what in other industries, primarily automotive and aerospace, was considered as the early days of DMU (Digital Mock Up) and PLM. Dassault Systemes and Siemens are leading here and historically CATIA has been the base for the 3D Model.
BIM Level 3 is what can be found currently in the asset centric industries (Energy, Nuclear, Oil & Gas) where working from a virtual plant model all disciplines are connected through the whole lifecycle. This is the domain that I have been advocating in previous posts, promoting PLM concepts and capabilities.
For example read: PLM for Asset Lifecycle Management.
Apparently the construction industry is still in the early phases of BIM Level 3. I would compare it to teenage sex; they all talk about it, but nobody does it. Or Hollywood BIM as Antonio Ruivo Meireles calls it in his AECbytes article: “Say “NO!” to Hollywood BIM”.
Antonio talks about the BIM implementation at Mota-Engill. Briefly touching a common topic for PLM implementations: “People and Cultural Change”. However, most of the implementation report was focused on tools, where even Excel and Visual Basic play a role.
Tools or Platform ?
And this is the point where construction companies could learn from other industries. They have discovered (or are still discovering) that Excel and Visual Basic are like soft drugs. They take away the pain, but they do not provide the solution in the long term. Instead of that, legacy Excels start piling up in directories, and the Visual Basic code becomes the domain of an enthusiastic expert (till this expert moves to another company or retires). The risk is ending up with a legacy environment so hard to change that a costly revolution is needed at a certain moment.
Construction companies are still investing in selecting a set of tools/applications, each with their own proprietary data and format. And they use customizations or standardized information carriers, like the COBie spreadsheets, to exchange information between partners and disciplines. This is already a giant step forward, as COBie forces companies to focus on mandatory and standard content, required at specific stages of the lifecycle instead of searching for it when it is actually needed.
Somehow the COBie approach is similar to the early days of PLM, where companies forced their disciplines to save information in the PLM system (as it became imperative). In these departments and disciplines the work and interaction did not change so much as before they had the PLM system. The cultural change here was that designers and engineers had to enter more data upfront for higher quality downstream.
An intermediate conclusion might be that construction companies follow the same direction as early PLM. Standardizing the data (model) to have a common understanding between stakeholders. Construction companies might not want to implement a PLM system as ownership of data is unclear as compared to manufacturing companies every discipline or department in PLM might be another company in the construction industry.
Now let’s look into the future
The movie below from Airbus describes the current way of working in a multidisciplinary, multi-partner, multi-location online system. Airbus calls it their DMU. Please before continuing reading look at this movie as the concept is crucial
I want to highlight two statements in this movie.
Russ Brigham @ 5:39 talking about suppliers not participating to the DMU:
“They will be making decisions on out of date data or even incorrect data”
And @ 7:11
“DMU is a mind-set …….”
I am aware that the aerospace industry is not directly comparable to the construction industry, there are commonalities from which the construction industry can learn:
- Working on a single, shared repository of on-line data (the DMU)
A common data model – not only 3D
- It is a mind-set.
People need to share instead of own data
- Early validation and verification based on a virtual model
Working in the full context
- Planning and anticipation for service and maintenance during the design phase
Design with the whole lifecycle in mind (and being able to verify the design)
Data ownership ?
For the construction industry, the current difficulty might be that none of the parties involved wants to invest in owning the data. For Airbus, it is clear. As the manufacturer of the airplane, they remain responsible for the information throughout the whole lifecycle.
For a construction, this might be different. The owner might be totally disconnected from the construction and the operations, therefore, not willing to promote or invest in the DMU approach.
However, the owner should realize that it is not about ownership but about facilitating on-line collaboration around a construction from the initial concept phase till maintenance and even decommissioning, connecting all the stakeholders. The benefits better decisions at each stage of the lifecycle leading to lower failure costs and waste in materials, resources and time. The construction industry still accepts too high failure rates compared to the manufacturing industry. And as at the end the owner/operator spends most of these costs, they should be interested in this approach.
Major construction companies responsible for the project execution and control might want to invest in a PLM platform, allowing them to execute projects better, learn from other connected projects and create a solid base for maintenance contracts
My dream and wish for 2014 for the construction industry: Focus on the next step of integrating data on a PLM backbone instead of standardizing interfaces between applications. It is the future mind-set proven in other industries.
I wish you all a happy, healthy and successful 2014 full of change for the best
May BIM, BAM, BOOM become true
The last month I haven’t been able to publish much of my experiences as I have been in the middle of several PLM selection processes for various industries. Now in a quiet moment looking back, I understand it is difficult for a company to choose a PLM solution for the future.
I hope this post will generate some clarity and may lead to some further discussion with other experts in the audience. I wrote about the do’s and don’ts of PLM selection in 2010, and most of it is still actual; however, there is more. Some of the topics explained:
Do you really need PLM ?
This is where it starts. PLM is not Haarlemerolie, an old Dutch medicine that was a cure for everything since the 17th century. The first step is that you need to know what you want to achieve and how you are aiming to achieve it. Just because a competitor has a PLM system installed, does not mean they use it properly or that your company should do it too. If you do not know why your company needs PLM, stop reading and start investigating.
If you are still reading this, you are part of the happy few, as justifying the need for PLM is not easy. Numerous of companies have purchased a PLM system just because they think they needed PLM. Or there was someone convinced that this software would bring PLM.
Most of these cases there was the confusion with PDM. Simply stating: PDM is more a departmental tool (engineering – multidisciplinary) where PLM is a mix of software, infrastructure to connect all departments in a company and support the product through its entire lifecycle.
Implementing “real” PLM is a business change, as people have to start sharing data instead of pushing documents from department to department. And this business transformation is a journey. It is not a fun journey, nicely characterized in Ed Lopategui’s blog post, the PLM Trail.
Although I believe it is not always that dramatic, Ed set the expectations right. Be well prepared before you start.
Why do companies still want PLM, while it is so difficult to implement?
The main reason is to remain competitive. If margins are under pressure, you can try to be more efficient, get better and faster tools. But by working in the old way, you can only be a little better.
Moving from a sequential, information pushing approach towards an on-line, global information sharing manner is a change in business processes. It is interaction between all stakeholders. Doing things different requires courage, understanding and trust you made the right choice. When it goes wrong, there are enough people around you to point fingers at why it went wrong – hindsight is so easy.
Doing nothing and becoming less and less competitive is easier (the boiling frog again) as in that case the outside world will be blamed, and there is nobody to point fingers at (although if you understand the issue you should make the organization aware the future is at stake)
Why is PLM so expensive?
Assuming you are still reading, and you and your management are aligned there is a need for PLM, a first investigation into possible solutions will reveal that PLM is not cheap.
When you calculate the overall investment required in PLM, the management often gets discouraged by the estimated costs. Yes, the benefits are much higher, but to realize these benefits, you need to have a clear understanding of your own business and a realistic idea how the future would look like. The benefits are not in efficiency. The main benefits come from capabilities that allow you to respond better and faster than by just optimizing your departments. I read a clarifying post recently, which is addressing this issue: Why PLM should be on every Executive’s agenda !
From my experience with PLM projects, it is surprising to learn that companies do not object to spend 5 to 20 times more money for an ERP implementation. It is related to the topic: management by results or management by means.
PLM is not expensive compared to other enterprise systems. It can become expensive (like ERP implementations) if you lose control. Software vendors have a business in selling software modules, like car resellers have a business in selling you all the comfort beyond the basics.
The same for implementation partners, they have a business in selling services to your company, and they need to find the balance between making money and delivering explainable value. Squeezing your implementation partner will cause a poor delivery. But giving them an open check means that, at a certain moment, someone will stand up and shutdown the money drain as the results are no longer justifiable. Often I meet companies in this stage, the spirit has gone. It is all about the balance between costs and benefits.
This happens in all enterprise software projects, and the only cure is investing in your own people. Give your employees time and priority to work in a PLM project. People with knowledge of the business are essential, and you need IT resources to implement. Do not make the mistake to leave business uncommitted to the PLM implementation. Management and middle management does not take the time to understand PLM as they are too busy or not educated / interested.
Make business owners accountable for the PLM implementation – you will see stress (it is not their daily job – they are busy), but in the longer time you will see understanding and readiness of the organization to achieve the expected results.
We are the largest – why select the largest ?
When your assignment is to select a new enterprise system, life could be easy for you. Select a product or service from the largest business and your career is saved. Nobody gets blamed for selecting the largest vendor, although if you work for a small mid-sized company, you might think twice.
Many vendors and implementers start their message with:
“…. Market leader in ABC, though leader in XYZ, recognized by 123”
The only thing you should learn from this message is that this company probably has delivered a trustworthy solution in the past. Looking at the past you get an impression of its readiness and robustness for the future. Many promising companies have been absorbed by the larger ones and disappeared. As Clayton Christensen wrote in The Innovators Dilemma:
“What goes up does not go down”.
Meaning these large companies focus on their largest clients and will focus less on the base of the business pyramid (where the majority is), making them vulnerable for disruptive innovation.
Related to this issue there is an interesting post (and its comments), written by Oleg Shilovitsky recently: How many PLM vendors disappear in disruption predicted by Gartner.
Still when selecting a PLM vendor it is essential to know if they have the scale to support you in the future and if they have the vision to guide you into the future.
The future of PLM is towards managing data in a connected manner, not necessary coming from a single database, not necessary using only structured data. If your PLM vendor or implementer is pushing you to realize document and file management, they are years late and not the best for your future.
PLM is a big elephant
PLM is considered as a big elephant, and I agree if you address everything in one shot that PLM can do. PLM has multiple directions to start from – I wrote about it: PLM at risk – it does not have a single job
PLM has a huge advantage compared to a transactional system like ERP and probably CRM. You can implement a PLM infrastructure and its functionality step by step in the organization, start with areas that are essential and produce clear benefits for the organization. That is the main reason that PLM implementations can take 2 – 3 years. You give the organization time to learn, to adapt and to extend.
We lose our flexibility ?
Nobody in an organization likes to be pushed in a cooperate way of working, which by definition is not as enjoyable and as flexible as they way you currently work. It is still an area where PLM implementations can improve: provide the user with an environment that is not too rigid and does not feel like a rigid system. You seen this problem with old traditional large PLM implementations for example with automotive OEMs. For them, it is almost impossible to switch to a new PLM implementation as everything has been built and connected in such a proprietary way, almost impossible to move to more standard systems and technologies. Late PLM implementations should learn from these lessons learned.
PLM vendor A says PLM vendor B will be out of business
One of the things I personally dislike is FUD (Fear, Uncertainty and Doubt). It has become a common practice in politics and I have seen PLM vendors and implementers using the same tactics. The problem with FUD is that it works. Even if the message is not verifiable, the company looking for a PLM system might think there must be some truth in this statement.
My recommendation to a company that gets involved in FUD during a PLM selection process, they should be worried about the company spreading the FUD. Apparently they have no stronger arguments to explain to you why they are the perfect solution; instead they tell you indirectly we are the less worst.
Is the future in the cloud ?
I think there are two different worlds. There is the world of smaller businesses that do not want to invest in an IT-infrastructure and will try anything that looks promising – often tools oriented. This is one of my generalizations of how US businesses work – sorry for that. They will start working with cloud based systems and not be scared by performance, scalability and security. As long all is easy and does not disturb the business too much.
Larger organizations, especially with a domicile in Europe, are not embracing cloud solutions at this moment. They think more in private or on-premise environments. Less in cloud solutions as security of information is still an issue. The NSA revelations prove that there is no moral limit for information in the sake of security – combined with the fear of IP theft from Asia, I think European companies have a natural resistance for storing data outside of their control.
For sure you will see cloud advocates, primarily coming from the US, claiming this is the future (and they are right), but there is still work to do and confidence to be built.
PLM selection often has a focus on checking hundreds of requirements coming from different departments. They want a dream system. I hope this post will convince you that there are so many other thoughts relevant to a PLM selection you should take into account. And yes you still need requirements (and a vision).
Your thoughts ?
- CIMdata Publishes PLM Geography Report (detroit.cbslocal.com)
When you are in a peaceful holiday accommodation close to the sea, it is about swimming, reading sleeping and food. I read two books this time Profit Beyond Measure from H. Thomas Johnson (2000) and Fast Future from David Burnstein (2013).
In a earlier post, PLM Statistics, I already referred to Johnson´s book. Now I had the time to read the whole book. Johnson is an advocate for MBM (Manage By Means) as compared to the most practiced MBM (Manage By Results) approach.
In Fast Future, Burnstein explains why his generation of Millennials (Generation Y) is not lazy and egocentric (etc. etc.) but different and ready for the future. Different from the Boomers, generation X and
These two books on two different topics have nothing in common you might think. But all you need is a PLM twisted brain, and it will be connected.
Let’s start with Profit Beyond Measure
Johnson in his introduction explains how manufacturing companies were gradually pushed into a MBR approach (Manage By Results). The Second World War was the moment that companies started to use accounting information to plan business activities. The growing presence of accountants in business started due to more regulations and financial regulations. Corporate executives were educated by professors of accounting and finance how to use their accounting information to plan and control business activities.
The result (quoting Johnson):
“..teaching a new generation of managers to put aside understanding the concrete particulars of how business organizes work. They taught them instead to focus exclusively on abstract quantitative generalizations about financial results”
And as he writes a little later:
“The unique feature of the multidivisional organization was the introduction of a level of managers that had not existed before. Managers at this level ran what appeared to be self-standing, fully articulated multifunctional companies known as divisions. The manager of a division, however, reported to a top management group that represented in effect, the market for capital and the market for managers”
The PLM-twisted brain understands that Johnson is describing one of the major inhibitors for PLM. PLM requires departments and individuals TO SHARE and work CONCURRENT on information. Meanwhile, department and division leaders are trained, pushed and measured to optimize their silo businesses to deliver the right financial results. Executives above the management monitor the consolidated numbers and have the slightest understanding of the real business challenges PLM can solve. Here, innovative ways of working are not discussed; numbers (costs /ROI) are discussed.
To proceed with Johnson, he believes in MBM (Manage by Means). Manage by Means could be compared with the way an organic life system is behaving. Johnson describes it as:
“Every entity is focusing on doing work, not on manipulating quantitative abstractions about work. In a company this would mean every person’s activity will embody that most fundamental condition of natural life systems – namely that all knowing is doing and that all doing is knowing”
Although Johnson is focusing on manufacturing companies (Toyota and Scania as two major examples of MBM), the PLM-twisted mind reads this as a concept that matches the PLM vision.
Everything and everyone is connected to the process and having the understanding how to interpret the data and what do to. This is how I imagine PLM implementations. Provide the right information to every person not matter where this person is in the lifecycle of the product. Too much automation prevents the system to be flexible and adapt to changes an in addition, it does not challenge the user anymore to think.
Enough about Profit Beyond Measure, ending with a quote about Manage by Means:
“…. which will bring a change in thinking for the next generation of managers more revolutionary than that which every previous generation has ever experienced”
Now the Fast Future
In Fast Future, David Burnstein talks about his generation, the Millennials, and how they are different. The Millennials are people who are now between 20 and 35. They grew up with one foot in the old analogue world and came to full wisdom in a digital, social connected manner during several shocking crises that formed their personality and behavior ( 9/11 – financial crisis – globalization – huge unemployment) according to Burnstein. People also referred to them as Generation Y.
In the context of this post we have the need to imagine four generations:
- The Pré-boomers, who build up the economy after the second world war, and as we learned from Johnson who introduced the mechanical thinking for business (MBR – management by results)
- The Boomers (my generation) who had the luxury to study and discuss the ultimate change for the world (make love not war), idealistic to change the world, but now most of us working in an MBR mode
- Generation X, they introduced punk, skeptics. They are supposed to be cynical, very ego-centric and materialistic. I am sure they also have positive points, but I haven’t read a book about them and you do not meet Generation X in the context of a particular change to something new (yet)
- Generation Y, the Millennials, who considered by the Boomers, is another lazy generation, all the time surfing the internet, not committing to significant causes, but seem to enjoy themselves. Burnstein in his book changes the picture as we will see below.
According to Burnstein the Millennials are forced to behave different as the traditional society is falling apart due to different crises and globalization. They have to invent a new purpose. And as they are so natural with all the digital media they can connect to anyone or any group to launch ideas, initiatives and build companies. The high unemployment numbers in their generation force them to take action and to become an entrepreneur, not always for profit but also for social or sustainable reasons.
They understand they will have to live with uncertainty and change all their lives. No guaranteed job after education, no certain pension later and much more uncertainty. This creates a different attitude. You embrace change, and you do not go for a single dream anymore like many of the boomers did.
Choosing the areas that are essential for you and where you think you can make a significant impact become important. Burnstein points to several examples of his generation and the impact they already have on society. Mark Zuckerberg – Facebook founder is a Millennial, many modern social apps are developed by Millennials, Obama won the elections twice, due to the impact and connectivity of the Millennials generation, the Facebook revolutions in the Middle East (Tunisia / Egypt/Libya) al lead by desperate Millennials that want to make a change.
When reading these statements, I wondered:
Would there also be Millennials in Germany?
As in Germany the impact of 9/11, the financial crisis and unemployment numbers did not touch that much. Are they for that reason the same as generation X? Perhaps a German reader in the millennial age can provide an answer here?
What I liked about the attitude described by Burnstein is that the Millennials network together for a better cause, a meaningful life. This could be by developing products, offer different types of services all through a modern digital means. The activities all in the context of social responsibility and sustainability, not necessary to become rich.
As noticed, they think different, they work different and here Johnson’s quote came to my mind:
“…. which will bring a change in thinking for the next generation of managers more revolutionary than that which every previous generation has ever experienced”
And the PLM-twisted brain started drifting
Is this the generation of the Millennials Johnson is hoping for? The high-level concept of Management by Means is based on the goal to have every entity directly linked to the cause – a customer order, flexibility, ability to change when needed. Not working with abstract mechanical models. I think the Millennials should be able to understand and lead these businesses.
This culture change and a different business approach to my opinion are about modern PLM. For me, modern PLM focuses on connecting the data, instead of building automated processes with a lot of structured data.
Current the modern PLM system as I described is does not exist (or I haven’t seen it yet). Also I have not worked with Millennials in a leading role in a company. Therefore, I kept on dreaming during my holiday – everything is possible if you believe it –even standing on the water:
And although after reading these books and seeing the connection, you can have the feeling that you are able to walk on the water. There are also potential pitfalls (a minute later) ahead to be considered as you can see below:
My PLM-twisted mind as you noticed combines everything.
What do you think?
Did I hallucinate or is there a modern future for business and PLM.
I am looking forward to learning your dreams.
Some weeks ago PLMJEN asked me my opinion on Peter Schroer´s post and invitation to an ARAS webinar called: Change Management: One Size Will Never Fit All. Change Management is actually a compelling topic, and I realized I had never written a dedicated post to such an essential topic. The introduction from Peter was excellent:
Change management is the toughest thing inside of PLM. It’s also the most important.
For the rest, the post elaborated further into software capabilities and the value of having templates processes for various industry practices. I share that opinion when talking to companies that are starting to establish their processes. It is extremely rare that an existing company will change its processes towards more standard processes delivered by the PLM system when implementing a new system. The rule of thumb is People, Processes and Tools. This all is nicely explained by Stephen Porter in his latest blog post Beware the quick fix successful plm deployment strategies. As I was not able to attend the webinar, here are my more general thoughts related to change management and why it is essential for PLM.
Change Management has always been there
It is not that PLM has invented change management. Before companies started to use ERP and PDM systems, every company had to deal with managing changes. At that time, their business was mostly local and compared with today slow. “Time to market” was more a “Time to Region” issue. Engineering and Manufacturing were operating from the same location. Change management was a personal responsibility supported by (paper) documents and individuals. Only with the growing complexity of products, growing and global customer demands and increasing regulatory constraints it became impossible to manage change in an unstructured manner.
Survival of the fittest change organization
I have worked with several companies where change management was a running Excel business. Running can be interpreted in two ways. The current operation could not stop and step back and look into an improvement cycle, and a lot of people were running to collect, check and validate information in order to make change estimates and make decisions based on the collected data.
When a lot of people are running, it means your business is at risk. A lot of people means costs for data (re)search and handling are higher than the competition if this can be done automatically. Also in countries of low labor costs, a lot of people running becomes a threat at a certain moment. In addition, running people can make mistakes or provide insufficient information, which leads to the wrong decisions.
Wrong decisions can be costly. Your product may become too expensive; your project may delay significant as information was based on conflicting information between disciplines or suppliers. Additional iterations to fix these issues lead to a longer time to market. Late discoveries can lead to severe high costs. For certain, when the product has been released to the market the cost might be tremendous.
From the other side if making changes becomes difficult because the data has to be collected from various sources through human intervention, organizations might try to avoid making changes.
Somehow this is also an indirect death penalty. The future is for companies that are able to react quickly at any time and implement changes.
The analogy is with a commercial aircraft and a fighter plane. Let’s take the Airbus 380 in mind and a modern fighter jet the Joint Strike Fighter (JSF). The Airbus 380 brings you comfortable from A to B as long as A and B are well prepared places to land. The flight is comfortable as the plane is extremely stable. It is a well planned trip with an aversion to change of the trajectory.
The JSF airplane by definition is an unstable plane. It is only by its computer steering control that the plane behaves stable in the air. The built-in instability makes it possible to react as quickly as possible to unforeseen situations, preferable faster than the competition. This is a solution designed for change.
Based on your business you all should admire the JSF concept and try to understand where it is needed in your organization.
Why is change management integrated in PLM so important?
If we consider where changes appear the most, it is evident in the early lifecycle of the product most of the changes occur. And as long as they are in the virtual world with uncommitted costs to the product they are relative cheap. To my surprise many engineering companies and engineering departments work only with change management outside their own environment. Historically because outside their environment connected to prototyping or production costs of change are the highest. And our existing ERP system has an Engineering Change process – so let’s use that.
Meanwhile, engineering is used to work with the best so far information. At any moment, every discipline stores their data in a central repository. This could be a directory structure or PDM systems. Everyone is looking to the latest data. Files are overwritten with the latest versions. Data in the PDM system shows the latest version to all users. Hallelujah
And this is the place where it goes wrong. A mechanical engineer has overlooked a requirement in the specification that has been changed. Yes, the latest version of the 20 page document is there. An electrical engineer has defined a new control system for the engine, but has not noticed that the operating parameters of the motor have been changed. Typical examples where a best so far environments creates the visibility, but the individual user cannot understand the impact of a change anymore (especially when additional sites perform the engineering work)
Here comes the value of change management in PLM. Change Management in PLM can be light weighted in the early design phases, providing checks on changes (baselines) and notifications to disciplines involved. Approval processes are more agreements to changes to implement and their impact on all disciplines.
PLM supports the product definition through the whole product lifecycle, change management at each stage can have its particular behavior. In the early stages a focus on notifications and visibility of change, later checking the impact based on the maturity of the various disciplines and finally when running into production and materials commitment towards a strict and organized change mechanism. It is only in a PLM system where the gradual flow can be supported seamless
Change Management and ERP
As mentioned before, most manufacturing companies have implemented change management in ERP as the costs of change are the highest when the product capabilities are committed. However, the ERP system is not the place to explore and iterate for further improved solutions. The ERP system can be the trigger for a change process based on production issues. However the full implementation of the change requires a change in the product definition, the area where PLM is strong.
NOTE: on purpose I am not mentioning a change in the engineering definition as in some cases the engineering definition might remain the same, but only the manufacturing process or materials need to be adapted. PLM supports iterations, not an ERP execution matter.
Change Management and Configuration Management
So far we have been discussing how the manufacturing system would be able to offer products based on the right engineering definition. As each specific product might not have an individual definition checked at any time, there is the need for configuration management (CM). Proper implemented configuration management assures there is a consistent relationship between how the product is specified and defined and the way it is produced. Read a refined and precise explanation on wiki
In one of my following posts I will focus on configuration management practices and why PLM systems and Configuration Management are like a Siamese twins
Storing your data in a (PLM) system has only value if you are able to keep the actual status of the information and its context. Only then a person can make the right decisions immediately and with the right accuracy. The more systems or manual data handling, the less completive your company will be. Integrated and lean change management means survival !