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Last week I started my final preparation for the PLM Innovation Congress 2012 on February 22nd and 23rd in Munich, where I will speak about Making the Case for PLM. Looking forward for two intensive days of knowledge sharing and discussion
The question came to my mind that when you make the case for PLM, you also must be clear about what you mean by PLM. And here I started to struggle a little. I have my perception of PLM, but I am also aware everyone has a different perception about the meaning of PLM.
I wrote about it last year, triggered by a question in the CMPIC group (configuration management) on LinkedIn. The question was Aren’t CM and PLM the same thing ? There was a firm belief from some of the members that PLM was the IT-platform to implement CM.
A few days ago Inge Craninckx posted a question in the PDM PLM CAD network group about the definition of PLM based on a statement from the PLMIG. In short:
“PDM is the IT platform for PLM.”Or, expressed from the opposite viewpoint: “PLM is the business context in which PDM is implemented
The response from Rick Franzosa caught my attention and I extracted the following text:
The reality is that most PLM systems are doing PDM, managing product data via BOM management, vaulting and workflow. In that regard, PDM [read BOM management, vaulting and workflow], IS the IT platform for the, in some ways, unfulfilled promise of PLM.
I fully agree with Rick’s statement and coming back to my introduction about making the case for PLM, we need to differentiate how we implement PLM. Also we have to take into our minds that no vendor, so also not a PLM vendor, will undersell their product. They are all promising J
Two different types of PLM implementation
Originally PLM has started in 1999 by extending the reach of Product Data outside the engineering department. However besides just adding extra functionality to extend the coverage of the lifecycle, PLM also created the opportunity to do things different. And here I believe you can follow two different definitions and directions for PLM.
Let’s start with the non-disruptive approach, which I call the extended PDM approach
Extended PDM
When I worked 6 years ago with SmarTeam on the Express approach, the target was to provide an OOTB (Out of the Box) generic scenario for mid-market companies. Main messages were around quick implementation and extending the CAD data management with BOM and Workflow. Several vendors at that time have promoted their quick start packages for the mid-market, all avoiding one word: change.
I was a great believer of this approach, but the first benchmark project that I governed demonstrated that if you want to do it right, you need to change the way people work, and this takes time (It took 2+ years). For the details: See A PLM success story with ROI from 2009
Cloud based solutions have become now the packaging for this OOTB approach enriched, with the ease of deployment – no IT investment needed (and everyone avoids the word change again).
If you do not want to change too much in your company, the easiest way to make PDM available for the enterprise is to extend this environment with an enterprise PLM layer for BOM management, manufacturing definition, program management, compliancy and more.
Ten years ago, big global enterprises started to implement this approach, using local PDM systems for mainly engineering data management and a PLM system for the enterprise. See picture below:
This approach is now adapted by the Autodesk PLM solution and also ARAS is marketing themselves in the same direction. You have a CAD data management environment and without changing much on that area, you connect the other disciplines and lifecycle stages of the product lifecycle by implementing an additional enterprise layer.
The advantage from this approach is you get a shared and connected data repository of your product data and you are able to extend this with common best practices, BOM management (all the variants EBOM/MBOM/SBOM, …) but also connect the market opportunities and the customer (Portfolio management, Systems engineering)
The big three, Dassault Systemes, Siemens PLM and PTC, provide the above functionality as a complete set of functionalities – either as a single platform or as a portfolio of products (check the difference between marketing and reality).
Oracle and SAP also fight for the enterprise layer from the ERP side, by providing their enterprise PLM functionality as an extension of their ERP functionality. Also here in two different ways: as a single platform or as a portfolio of products. As their nature is on efficient execution, I would position these vendors as the one that drive for efficiency in a company, assuming all activities somehow can be scheduled and predicted
My statement is that extended PDM leads to more efficiency, more quality (as you standardize on your processes) and for many companies this approach is a relative easy way to get into PLM (extended PDM). If your company exists because of bringing new products quickly to the market, I would start from the PDM/PLM side with my implementation.
The other PLM – innovative PLM
Most PLM vendors associate the word PLM in their marketing language with Innovation. In the previous paragraph I avoided on purpose the word Innovation. How do PLM vendors believe they contribute to Innovation?
This is something you do not hear so much about. Yes, in marketing terms it works, but in reality? Only few companies have implemented PLM in a different way, most of the time because they do not carry years of history, numbering systems, standard procedures to consider or to change. They can implement PLM in a different way, as they are open to change.
If you want to be innovative, you need to implement PLM in a more disruptive manner, as you need to change the way your organization is triggered – see the diagram below:
The whole organization works around the market, the customer. Understanding the customer and the market needs at every moment in the organization is key for making a change. For me, an indicator of innovative PLM is the way concept development is connected with the after sales market and the customers. Is there a structured, powerful connection in your company between these people? If not, you do the extended PLM, not the innovative PLM.
Innovative PLM requires a change in business as I described in my series around PLM 2.0. Personally I am a big believer that this type of PLM is the lifesaver for companies, but I also realize it is the hardest to implement as you need people that have the vision and power to change the company. And as I described in my PLM 2.0 series, the longer the company exist, the harder to make a fundamental change.
Conclusion
There are two main directions possible for PLM. The first and oldest approach, which is an extension of PDM and the second approach which is a new customer centric approach, driving innovation. Your choice to make the case for one or the other, based on your business strategy.
Looking forward to an interesting discussion and see you in Munich where I will make the case
Since the past six months I am involved in several discussions related to the (building) construction industry. If you look to this industry, it seems like this is one of the few industries without innovation in its processes.
Someone in the discussion even claimed that if a worker from the middle ages would come back to this century, he would be quickly adapt and understand the way people work. OK, there are some new tools and materials, but the way the building construction industry works has not changed.
And let’s look to productivity. Where in the past 60 years in all industries productivity has increased, I have seen a survey where productivity in this industry has not increased and even decreased a little.
Although the survey ends in 2003, another article caught my attention. Robert Prieto, Senior Vice President from Fluor Corporation wrote end of last year in Engineering News Record his viewpoint: Engineering-Construction Needs a New Model. Reading this article and the comments demonstrates there is a need for innovation in the building construction industry.
Failure costs up to 15 % and delayed deliveries are considered normal business in this industry, where if this would be applied to mid-market companies in the manufacturing industry, they would have gone bankrupt due to claims and lost profit.
If we look at this industry, the first excuse you hear is that every project is unique and that project execution is done by a group of loose connected suppliers, not really pushed to stay within the targeted budget. But you might ask yourself: what is the correct budget?
I noticed that in this industry when a project is estimated, suppliers are asked to deliver their bid and proposed solution based on their understanding. Usually the lowest bid wins the bid.
All participants are aware that not all requirements are clear, but no one wants to ask and invest further as to invest more in accurate cost estimation. This is not anticipated. It is about winning the bid with the lowest trouble and investment.
So who is to blame? First of all, the client who has a short term vision. By selecting the lowest bids and not pushing for in-depth analysis of the project delivery and operational costs in the long term, the situation will not change.
What if the client was using the basics of PLM – Product Lifecycle Management? For me PLM means a connection and sharing of the concept phase, the delivery phase, production phase and maintenance phase.
What I consider as strange is the fact that in the engineering and construction industry these four phases are not connected and often that the maintenance phase (operations) is not taken into account during the concept phase.
And then there is the data handover. After engineering and construction specific data is handed over to the maintenance organization. What is the quality of the data, how applicable is it to the maintenance organization and how does it support maintenance is not clear. There is a disconnect and loss of knowledge as the handover is just based on the minimum data required.
What if the engineering construction industry would use PLM best practices, like:
- Requirements Management – connecting, implementing and validating all the requirements from each stakeholder. Making sure all requirements are considered and negotiated in a structured manner – no excuse for surprises.
- Data sharing with versions and status. Instead of a handover, data becomes mature during the lifecycle of the project. It requires the maintenance organization to be involved from the start
- Standardized validation and approval processes related to requirements and data. These processes might be considered as an overhead but they are the ones that lead to quality, risk and cost management
Conclusion: I believe connecting the engineering and maintenance phase for engineering construction companies will lead to higher productivity and quality. For sure the initial engineering cost will be higher, but during the construction and maintenance phase these costs will be recovered and probable much more – here is the ROI
As my intention was to write shorter blog posts this year, I stop at this point and look forward to your comments for a further discussion.
YOUR THOUGHTS ??
Related articles
- Why PLM 2.0 – Conclusions (virtualdutchman.com)
Sorry for the delay between this post and the previous post. A break with a lot of PLM work on my side and no adverts on your side: win-win. But now I have time to continue the serial around PLM 2.0. We are in the middle.
A small recap on the agenda:
| First post | : What is PLM 2.0? – published Aug 24th |
| Second post | : Challenges in current PLM – published Sept 4th |
| This post | : Change in business – published Oct 3rd |
| Final post | : Why PLM 2.0 – conclusions |
In the first post I described the changes in PLM messaging from vendors – PLM 2.0 or similar terms. In the second post I described the current challenges of PLM, which are well known – if you have access to in LinkedIn to the PLM related groups you will find discussions around the challenges of current PLM. And they set the spirit – good or bad.
Now in this post I will bring up some trends, which to my opinion, unmistakably must lead to a new way of PLM in order to adapt to the future.
Generation Y – a new generation of workers
Generation Y: It is interesting to learn that everywhere companies are complaining or warning that their existing workforce is going to retire with all their knowledge without decent follow-up. In parallel they state it is difficult to find new employees with similar skills that will guarantee the future of the company. The new generation of workers, often identified as Generation Y, has different skills and different motivations.
Some interesting generalizations (note I am not a social anthropologist).
The older generations were raised with the concept: Knowledge is Power – You as an individual needed to have in-depth skills to be the right person for a job – a job is your life and for life. As a negative result of this approach, you see that exactly this older generation sometimes ‘sits’ on their knowledge as a kind of job guarantee – they do not like sharing information – “Come to me and I will help you” is their motto till they retire.
Generation Y does not have this job for life attitude – they look more for short term success and fulfillment and therefore they do not fit so well in the way traditional companies work. They are not the type of knowledge workers previous generations had, but they are, thanks to their skills with modern digital media, capable of finding information and combining information into knowledge. They work different.
The interesting observation from my side is that Generation Y is exactly the type of people PLM requires, as it is all about sharing and combining data. What is blocking their acceptance for current PLM is that the implementation is not architected to their work motivation. Look at:
- The way information is stored (too structured),
- The way information is presented (too structured, boring screens).
- The way information has to be entered in the system (too unfriendly – overkill)
For them PLM needs to move more to an intuitive way of presenting information, capturing data as-if it is something like serious gaming. And the new PLM needs to have a way to manage structured and unstructured data combined.
For companies that complain, they are losing skilled workers in the future, they should not complain but adapt. They should look forward and solve the problems for the future, which means a different way of doing business and implementing PLM. Do not choose what the dinosaurs did.
New styles of business management
Here I want to come back to my first post – I was intrigued by reading Steve Denning’s posts and its relation to PLM. Through the post Why Amazon can’t Make a Kindle in the USA, I found the post The Death and Reinvention of Management the best fitting with my PLM drive.
Steve describes five fundamental shifts in management that make companies ready for the 21st century.
Take time to read the post (and go more in-depth if you get as enthusiastic as me) – but come back to read the rest of this post
I summarize/quote the five shifts from Steve here (as I am sure not everyone has done the reading):
1. The company’s goal has to shift to one of delighting clients i.e. a shift from inside-out (“You take what we make”) to outside-in (“We seek to understand your problems and will surprise you by solving them”)
2. The role of the manager has to shift from being a controller to an enabler, so as to liberate the energies and talents of those doing the work and remove impediments that are getting in the way of work.
3. The mode of coordination shifts from hierarchical bureaucracy to dynamic linking, i.e. to a way of dynamically linking self-driven knowledge work to the shifting requirements of delighting clients.
4. There is a shift from value to values; i.e. a shift from a single-minded focus on economic value and maximizing efficiency to instilling the values that will create innovation and growth for the organization over the long term.
5. Communications shift from command to conversation: i.e. a shift from top-down communications comprising predominantly hierarchical directives to communications made up largely of adult-to-adult conversations that solve problems and generate new insights.
Here we see the typical PLM 2.0 targets. I will translate them into our PLM terminology.
Shift # 1 – The shift to delight clients – from which PLM vendor do we hear this statement? Which PLM vendor puts the customer in focus, instead of their “superior” technology?
Shift #2, #3 and #5 are typical PLM 2.0 capabilities which I described in my first post. See below the PLM 2.0 differentiators:
And where do we find shift #4? How do PLM vendors address this change beyond marketing?
My conclusion on this point: Both PLM and management require a change to be ready for the 21st century – It is exactly what generation Y is looking for, it is exactly what future consumers are looking for. However currently classical PLM and classical Management are dominating the thought process – and they do not like change so much as it would put past investments and achievements at risk.
The Importance of Social Media
Already described in the two previous trends, social media concepts fit exactly in the shift that we see towards the future. It impacts the way companies change their marketing and address their customer base. In parallel it affects the ways teams collaborate in the product development space, innovation teams are global product development teams.
My thoughts: Social media might look like a hype, but the basic concepts of social media will be required for future PLM
Globalization for SMB
The major trend from the past decade is that SMB’s (Small and Medium Businesses) do not longer serve and fight for a regional existence. Competition and customers come from everywhere and production is more and more outsourced. The traditional company that is #1 in their region does not longer exist. Even SMBs have to consider ways to collaborate globally – again another driver for PLM 2.0
My thought: Traditional SMBs are never the leading companies in new trends, they hang on their core knowledge and have probably a longer way to go to really adapt to the future. Startup SMBs with no historical hindrance are likely to outperform them.
Innovation, Intellectual Property & War on Patents
In a global market, innovation is the key driver to be successful combined with the point above: delight the customer. In order to delight the customer you need to innovate as delightment does not come from commodities.
And with innovation I am not only addressing the consumer market, innovation is required in all areas: green products, green production as world climate and its population forces us to change.
The successful products for the future will be those that are bringing innovation and when your company owns this Intellectual Property, your near future is going to be profitable,
Therefore the “War for Patents” will be everywhere. We currently see in the news the tablet and Smartphone patents wars, but it pops up everywhere, some more visible than others.
A “War for Patents” costs a lot of money (mainly spent to lawyers). Therefore the balance should be found between protecting your IP and to innovate faster. In this way your patents become less relevant because newer exist. To my opinion the new PLM should be the engine for innovation first and secondly the system to protect your IP
Conclusion:
Again too many words for a blog post, but the topic is huge and I hope you see the need for a different PLM (PLM 2.0): A PLM that is targeted to the change in business all around the world. The monetary crisis which is another symptom of the old business gives us a chance to change. We need to change organizations and collaboration to remain profitable in the future – don’t be an ostrich
My thoughts –looking forward to your feedback
Last week I started a small series of posts related to the topic PLM 2.0. I was hoping for more comments and discussion about the term PLM 2.0, although I must say I was glad Oleg picked it up in his posts: PLM 2.0 born to die? and Will JT-open enable future of PLM 2.0?
Oleg, as a full-time blogger, of course had the time to draw the conclusions, which will take me another two weeks, hoping meanwhile the discussion evolves. Where Oleg’s focus is on technology and openness (which are important points), I will also explain that PLM 2.0 is a change in doing business, but this will be in next week’s post.
This week I will focus on the current challenges and pitfalls in PLM. And we all know that when somebody talks about challenges, there might be problems.
| Last week | : What is PLM 2.0? |
| This week: | : Challenges in current PLM |
| Next | : Change in business |
| Final post | : Why PLM 2.0 – conclusions |
The Challenges in current PLM
First I want to state that there are several types of definition in the world for PLM, coming from different type of organizations – I listed here two vendor independent definitions:
In industry, product lifecycle management (PLM) is the process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal. PLM integrates people, data, processes and business systems and provides a product information backbone for companies and their extended enterprise.
Product Lifecycle Management (PLM) is the business activity of managing a company’s products all the way across the lifecycle in the most effective way. The objective of PLM is to improve company revenues and income by maximizing the value of the product portfolio
And there are more definitions. Just recently, I noticed on the PlanetPTC blog from Aibhe Coughlan a post where she promoted a definition of PLM published in the Concurrent Engineering blog. Here I got immediate a little irritated reading the first words: “PLM is software designed to enhance process efficiencies ……… and more …”
I do not believe PLM is software. Yes there is software used to automate or implement PLM practices, but this definition starts to neglect the culture and process sides of PLM. And as Oleg was faster – read his more extended comment here
(I am not paid by Oleg to promote his blog, but we seem to have similar interests)
Back to the classical definitions
The Wiki definition gives the impression that you need to have an infrastructure to manage (store) all product data in order to serve as an information backbone for the extended enterprise. It becomes more an IT-project, often sponsored by the IT-department, with the main goal to provide information services to the company in a standardized manner.
This type of PLM implementations tends to be the same type of implementation as an ERP system or other major IT-system. In this type of top-down implementations, the classical best practices for project management should be followed. This means:
- A clear vision
- Management sponsorship
- A steering committee
- A skilled project leader and team
- Committed resources
- Power user involvement
- Communication
- …… and more …
These PLM projects are promoted by PLM vendors and consultants as the best way to implement PLM. And there are a lot of positive things to say about this approach. For many big companies implementing cPDM or PLM was a major step forward. Most of the ROI stories are based on this type of implementations and have been the showcases on PLM events. It is true that data quality increases, therefore efficiency and product quality. Without PLM they would not reach the same competiveness as they have now.
But sometimes these projects go into extreme when satisfying users or IT-guidelines
To avoid the implementation of a ‘new IT-system’, companies often have the strategy that if we already have an ERP-system , let’s customize or extend it, so we can store the additional data and perform workflow processes based on this system.
In a recent webinar, I heard a speaker saying that in their company they had the following automation strategy defined together with IT is:
- First they will see if the needed PLM functionality exists in their ERP system or is part of the portfolio of their ERP provider. If the functionality is there (this means the ERP vendor has the capability to store metadata and a factsheet mentioning the right name), there is no looking outside.
- If the functionality is not there, there will be a discussion with the ERP vendor or implementer to build it on top of their ERP system.
I have seen implementations where the company has developed complete custom user interfaces in order to get user acceptance (the users would not accept the standard graphical interface). At that time, no one raised the flag about future maintenance and evolution of these custom environments. The mood was: we kept it simple – one single system.
I believe this closes the door for real PLM, as storing data in a system does not mean you will use it in an efficient and optimized manner. How will you anticipate on changes in business if it is just doing more with the same system?
And mid-market companies ?
The top-down approach described before is the fear of many mid-market companies, as they remember how painful their first ERP implementation was. And now with PLM it is even more unclear. PLM aims to involve the engineering department, which so far has not worked in a very procedural manner. Informal and ad-hoc communication combined with personal skills within this department was often the key for success.
And now an unfriendly system is brought in, with low or little usability, pushing these creative people to enter data without seeing any benefits. The organization downstream benefits but this will be only noticed later in time. And for the engineering department it will take more effort to change their work methodology focused on innovation. However, in general in the mid-market, the target of a PLM project is to have a Return on Investment (ROI) in a very short timeframe ( 1-2 years). Investing in usability should be even more important for this type of companies as there is less top-down pressure to accept this new PLM system.
And flexibility ?
In the past years we have seen that business is changing – there is a shift in global collaboration and manufacturing and from the recent history we can learn that those big enterprise projects from the past became a threat. Instead of being able to implement new concepts or new technology, the implementation became more and more vendor monolithic as other capabilities and applications do not fit anymore. This is against the concept of openness and being flexible for the future. I believe if PLM becomes as rigid as ERP, it blocks companies to innovate – the challenge for big companies is to find the balance between stability and flexibility (This was the title from Sony Ericsson’s presentation at the PLM forum in Sweden this year)
And again for mid-market companies who do not have the budget or resources to invest in similar projects. They have less a drive to optimize themselves in the same manner as big companies do as flexibility is often their trade mark (and capability to innovate) . So PLM for the mid-market will not work in the classical way.
This is one of the reasons why a mid-market PLM standard has not yet been found (yet ?). From the other hand many mid-market companies are dealing with PLM practices although often it is more close to PDM and CAD data management. And mid-market companies do not change their organization easily – there is more a departmental approach avoiding therefore a change in business.
To summarize the biggest challenges in current PLM described in this post:
- PLM is considered complex to implement
- PLM is a huge IT-project
- PLM requires change and structuring – but what about flexibility
- Where is the PLM value and ROI – user acceptance
- PLM for the mid-market – does it exist ?
Conclusion: I have been writing about the PLM challenges in the past, see the links below if you are interested in more details on a specific topic.
In 2008,I thought that Out-of-the-Box PLM systems and standard functionalities could bring a solution for the mid-market, perhaps future solutions based on the cloud. However I learned that if you want to do real PLM in a modern manner, you need to change the way you do your business – and this I will explain in my upcoming post.
Related links:
Recently I have been reading various interesting articles, it started with Why Amazon can’t Make a Kindle in the USA from Steve Denning and from here I followed several interesting links.
Most of the articles were business driven and not with a focus on technology. However what caught my attention was the similarity of issues that were raised in these articles as-if it was about PLM.
At the end it is a plea/cry for change to be more competitive in the future. With the current economical stand still, I believe there is a need and an opportunity for this change also in PLM. I am not pointing to regime changes all around the world, but somehow they are all connected to this new wave of globalization and openness to information.
And as my domain is PLM, I took PLM 2.0 as the vehicle to describe the change currently in the PLM world. Although PLM 2.0 is a term invented by Dassault Systems, I will use it as the placeholder to describe the changes in PLM.
In four posts I will guide you in the upcoming weeks through the thought process:
| This week | : What is PLM 2.0 ? |
| Next | : Challenges in current PLM |
| Next | : Change in business |
| Final post | : Why PLM 2.0 – conclusions |
I hope you will stay with me when going through these four steps and look forward to your immediate feedback.
What is PLM 2.0 ?
In 2006 Dassault Systems announced PLM 2.0 as the new generation of PLM implemented on their V6 platform. If you go to the 3DS website you see the following definition of PLM 2.0
Look for the header PLM 2.0: PLM Online for All
In the DS definition you will find several keywords that will help us further to understand the PLM 2.0 capabilities:
a typical Dassault Systems viewpoint, as they are coming from the world or 3D CAD and virtualization and the company’s vision is around lifelike – and life is mostly in 3D.
3D as interface towards all product related information is a paradigm shift for companies that were used to display only metadata on boring tabular screens where you navigate on numbers and text. The other major CAD-related PLM vendors of course could follow this paradigm too, as 3D visualization of information is known to them. However when coming from an ERP-based PLM system you will see 3D is something far out of reach for these vendors (at this moment).
This is what I believe is a crucial keyword for all PLM future implementations it builds upon the Business Information concepts that became in fashion 8 years ago. Online means direct access to the actual data. No information conversion, no need for import or export, but sharing and filtering. What you are allowed to see is actual data and an actual status. Imagine what kind of impact working on-line would have on your organization. Evaluation of trends, Key Performance Indicators directly available – still of course the interpretation to be done by experts.
Intellectual Property – a topic that should be on every company’s agenda. The reason a company currently exists and will exist in the future is based on how they manage their unique knowledge. This knowledge can be based on how certain processes are done, which components are chosen, which quality steps are critical and more. Working in a global collaboration environment challenges the company to keep their IP hidden for others, for sure when you talk about online data. Losing your IP means for a company to be vulnerable for the future – read in the referenced blog post from Steve Jennings about DELL.
This is currently the platform for change as technologies are now enabling people and companies to implement applications in a different manner. Not only on premises, but it could be online, Software As A Service, Cloud based solutions and through standardized programming interfaces, companies could implement end-to-end business process without a huge, monolithic impact. Also Web 2.0 provides the platform for communities.
The concept of communities opens new perspectives for collaboration. In general people in a community, have a common interest or task, and they share thoughts, deliverables back to the community across all company borders. This is the power of the community and the collective intelligence built inside such a community. Without company borders it should give the people a better perspective on their market on their business due to the global participation
The vision is there – now ….
All the above keywords are capabilities for the future and in the world of PLM you see that every PLM vendor / implementer is struggling with them. How to implement them consistently across their offering is the major challenge for the upcoming years, assuming PLM 2.0 is considered as the next step.
If you look at the PLM vendors beside Dassault Systems, you see that Siemens and PTC are closest to following the PLM 2.0 approach, without mentioning the term PLM 2.0. Other vendors even refuse to talk about PLM, but they share already similar components, for example Autodesk.
Interesting to see that the ERP-based PLM vendors do not follow this trend in their communication, they are still working on consolidating and completing their ‘classical’ PLM components
But the classical PLM vendors struggle with the change in paradigm too.
- What to do with current, huge and structured implementations ?
- Is PLM 2.0 having the same demands or can it be different ?
Here you see opportunities for new comers in this market as you can implement online collaboration, intellectual property creation/handling and communities in different manners with different types of implementation demands.
So far my introduction in PLM 2.0. Browsing on the web, I did not find too much other viewpoints on this specific terminology, so I am curious about your thoughts or and complementary comments on this topic.
In my next post I will zoom in into the challenges of PLM and relate them to the PLM 2.0 vision
My take on PLM (classical) and PLM 2.0
Referenced in this context – not directly mentioned:
- IBM visionary presentation from 2006 – Michael Neukirchen
- The future of PLM – Martin Ohly (global PLM blog)
- PLM 2.0 technology or facelift – Oleg Shilovitsky
- Social Media and PLM explained for Dummies – Jos Voskuil
- Going Social With Product Development – Jim Brown
It has been silent from my side the past – more than two months. Extremely busy and sometimes surprised to see the amounts of post some of my colleagues could produce, with Oleg as the unbeaten number one. During this busy period I was able to observe some interesting trends listed below:
Going Social
Social Media and PLM is one of the favorite topics for both bloggers and some PLM vendors at this moment. New products for community based collaboration or social engineering are promoted. Combined with discussions and statements how the new workforce (Generation Y) should get challenging jobs without doing the ‘old boring stuff’.
True arguments to initiate a change in the way we work. And I agree, must of current PLM systems are not ‘intelligent’ enough to support engineers in a friendly manner. However is there an alternative at this moment ? Below a commercial (in Dutch) promoting that elderly workers are still required for quality.
I discussed the relation PLM and Social Media some time ago in my post Social Media and PLM explained for dummies. In addition my observation from the field, gives me the feeling that in most companies the management is still dominated by the older generation, and most of the time they decide on the tools they will be using. No X and Y at this moment. Therefore I do not see a quick jump to social media integrated with PLM – yes the vision is there – but the readiness of most companies is not yet there.
Cloud
PLM and Cloud are also more and more mentioned by PLM vendors as a new solution specially for the mid-market. And with an optimistic mind you can indeed believe that with a low investment (pay per use) mid-market companies can do their PLM on-line. But why are existing on-line PLM systems not booming at this time ? (Arena / PLMplus / and the major PLM vendors) I believe that there are two key reasons for that:
- Implementing PLM is not equal to installing a system. PLM is a vision to be implemented using a system. And the difficulty is that a vision does not match function and features from a product vendor. There is a need for a driving force inside the company that will support the business change. Where are the consultants and advocates (with experience) for this type of solutions ?
- There is still a reluctance to store intellectual property somewhere on-line in a cloud without direct control and ownership of data. Mid-market companies are not known to choose solutions ahead of the mass. In this type of companies cloud based CAD tools might be an entry point, but all product data – no way they say.
PLM or ERP
Before even talking about new technologies or fundamentals for PLM, I see the biggest challenge for PLM is still to get the recognition as the system for product knowledge (IP) and innovation. In too many companies ERP rules and PLM is considered as a way to capture CAD and engineering data. The main PLM vendors are not addressing this challenge – they neglect ERP (yes we can connect). And ERP vendors like SAP and Oracle are not known for their PLM messages and strategy (yes we have PLM). As ERP is often the major IT-system historically, there is so often the (wrong) opinion that everything should be built and based on one system.
In some publications I have seen the Swiss knife as an example for the multi-functional system with all tools embedded. My question remains – who wants to work only with a Swiss knife when doing professional work ?
I like to have the right tools to do my job
The most important topic around my blog the past 3 years has been around the Manufacturing BOM – where should it be – and where is the MBOM current ?
Sweden – a reality check
Last week I attended the DS PLM forum in Gothenburg to present the vision of using a PLM system as the backbone for plant information management for owners/operators and how ENOVIA supports this vision.
But I also learned Sweden is (one of) the most innovative countries (I need to verify the criteria used but can imagine there is a source of truth). What impressed me more where the presentations from Staffan Lundgren from Sony Ericsson with the title “Living in a world of change – balancing stability and flexibility” and Magnus Olsson from Volvo Cars with the title “Driving operational excellence in a challenging business environment”. Both companies are well known for their robust image. From both speakers you could experience that they are not worried so much about Generation Y, their success is depending on a clear vision and a will to go there. And this basic drive is often missing – PLM is not a product you buy and then business continues as usual
Conclusion
PLM vendors made a lot of noise the past months (events / product announcements) and customers might get the impression that technology and software (or the price of software) are the main criteria for successful PLM. Although not unimportant, I would focus on the vision and to assure this vision is understood and accepted by the company. 
Am I old fashioned ?
In the past months, I have talked and working with various companies about the topic of Asset Lifecycle Management (ALM) based on a PLM system. Conceptual it is a very strong concept and so far only a few companies have implemented this approach, as PLM systems have not been used so much outside the classical engineering world.
Why using a PLM system ?
To use a PLM system for managing all asset related information ( asset parameters, inventory, documents, locations, lifecycle status) in a single system assures the owner / operator that a ‘single version of the truth’ starts to exist. See also one of my older posts about ALM to understand the details.
The beauty lies in the fact that this single version of the truth concept combines the world of as-built for operators and the world of as-defined / as-planned for preparing changes. Instead of individual silos the ALM system provides all information, of course filtered in such a way that a user only sees information related to the user’s role in the system.
The challenge for PLM vendors is to keep the implementation simple as PLM initially in its core industries was managing the complexity. Now the target is to keep it extremely simple and easy to used for the various user roles, meanwhile trying to stay away from heavy customizations to deliver the best Return on Investment.
Having a single version of the truth provides the company with a lot of benefits to enhance operations. Imagine you find information and from its status you know immediately if it is the latest version and if other versions exists. In the current owner / operator world often information is stored and duplicated in many different systems, and finding the information in one system does not mean that this is the right information. I am sure the upcoming event from IDC Manufacturing Insights will also contribute to these findings
It is clear that historically this situation has been created due to the non-intelligent interaction with the EPC contractors building or changing the plant. The EPC contractors use intelligent engineering software, like AVEVA
, Bentley, Autodesk and others, but still during hand-over we provide dumb documents, paper based, tiff, PDF or some vendor specific formats which will become unreadable in the upcoming years. For long-term data security often considered the only way, as neutral standards like ISO-15926 still require additional vision and knowledge from the owner/operator to implement it.
Now back to the discussions…
In many discussions with potential customers the discussion often went into the same direction:
“How to get the management exited and motivated to invest into this vision ? The concept is excellent but applying it to our organization would lead to extra work and costs without immediate visibility of the benefits !”
This is an argument I partly discussed in one of my previous posts: PLM, CM and ALM not sexy. And this seems to be the major issue in western Europe and the US. Business is monitored and measured for the short term, maximum with a plan for the next 4 – 5 years. Nobody is rewarded for a long-term vision and when something severe happens, the current person in power will be to blame or to excuse himself.
As a Dutch inhabitant, I am still proud of what our former Dutch government decided and did in the after the flooding in 1953. The Dutch invested a lot of money and brain power into securing inhabitants behind the coast line in a project called the Delta Works. This was an example of vision instead of share holder value. After the project has been finished in the eighties there was no risk for a severe flooding anymore and the lessons learned from that time, brought the Dutch the knowledge to support other nations at risk for flooding. I am happy that in 1953 the government was not in the mood to optimize their bonus ( an unknown word at that time)
Back to Asset Lifecycle Management ….
Using a PLM system for asset lifecycle management provides the economical benefits by less errors during execution (working on the right information), less human involvement in understanding the information ( lower labor costs) and lower total cost of ownership (less systems to maintain and connect by IT).
But these benefits are in no relation with risk containment. What happens if something goes really wrong ?
If you you are a nuclear plant owner, you are in global trouble. A chemical plant owner or oil company can be in regional trouble, but they also will suffer from the damage done to their brand name globally. Other types of plant owners might come away with less, depending on the damage they potential ‘embank’
The emerging visionaries
For that reason, it is enlightening to see that some companies in Asia think different. There the management understands that they have the opportunity to build their future in a more clever way. Instead of copying the old way EPC contractors and plant owners work together, they start from a single version of the truth concept, pushing their contractors to work more integrated and clever with them. Instead of becoming boiling frogs, they are avoiding to fall into the same trap of many owners / operators in European and US based companies: “Why change the way we work, it does not seem to be so bad”
It requires a vision for the long term, something that will lead to extra benefits in the long term future: more efficient management of their assets, including risk containment and therefore being more competitive. If European and US-based companies want to be dominating in this industry they will need to show their vision too ..
Tomorrow I am attending the European Chemical Manufacturing Masters conference in Berlin, where I hope to learn and discuss this vision with the participants. I will keep you updated if i found the vision …..
This week I was happy to participate in the PLM INNOVATION 2011 conference in London. It was an energizer, which compared to some other PLM conferences, makes the difference. The key of the success, to my opinion was that there was no vendor dominance. And that participants were mainly discussing around their PLM implementation experiences not about products.
Additional as each of the sessions were approximate 30 minutes long, it forced the speakers to focus on their main highlights, instead of going into details. Between the sessions there was significant time to network or to setup prescheduled meetings with other participants. This formula made it for me an energizing event as every half hour you moved into a next experience.
In parallel, I enjoyed and experienced the power of the modern media. Lead by Oleg, a kind of parallel conference took place on Twitter around the hash tag #plminnovation2011. There I met, and communicated with people in the conference (and outside) and felt sorry I was not equipped with all the modern media (iPhone/Pad type equipment) to interact more intensive during these days.
Now some short comments/interpretations on the sessions I was able to attend
Peter Bilello, president of Cimdata opened the conference in the way we are used from Cimdata, explaining the areas and values of PLM, the statistics around markets, major vendors and positive trends for the near future. Interesting was the discussion around the positioning of PLM and ERP functionality and the coverage of these functionalities between PLM and ERP vendors.
Jean-Yves Mondon, EADS’ head of PLM Harmonization (Phenix program) , illustrated by extracts of an interview with their CEO Louis Gallois, how EADS relies on PLM as critical for their business and wants to set standards for PLM in order to have the most efficient interoperability of tools and processes coming from multiple vendors
Due to my own session and some one-to-one sessions, I missed a few parallel sessions in the morning and attended Oleg Shilovitsky’s session around the future of engineering software. Oleg discussed several trends and one of the trends I also see as imminent, it the fact that the PLM world is changing from databases towards networks. It is not about capturing all data inside one single system, but to be able to find the right information through a network of information carriers.
This suits also very well with the new generation of workers (generation-Y) who also learned to live in this type of environments and collect information through their social networks.
The panel discussion with 3 questions for panelist could have been a little better in case the panelist would have had the time to prepare some answers, although some of the improvisations were good. I guess the audience choose Graham McCall’s response on the question: “What will be the Next Biggest Disappointment” as the best. He mentioned the next ‘big world-changing’ product launch from a PLM vendor.
Then I followed the afternoon session from Infor, called Intelligent PLM for Manufacturing. The problem with this session I had (and I have this often with vendor sessions) was that Venkat Rajaj did exactly wrong what most vendors do wrong. They create their own niche definition – Product Lifecycle Intelligence (is there no intelligence in PLM) , being the third software company (where are they on Cimdata’s charts) and further a lot of details on product functions and features. Although the presentation was smooth and well presented, the content did not stick.
A delight that day was the session from Dr. Harminder Singh, associate fellow at Warwick Business School, about managing the cultural change of PLM. Harminder does not come from the world of software or PLM and his outsider information and looks, created a particular atmosphere for those who were in the audience and consider cultural change as an important part of PLM. Here we had a session inspired by a theme not by product or concept. I was happy to have a longer discussion with Harminder that day as I also believe PLM has to do with culture change – it is not only technology and management push as we would say. Looking forward to follow up here.
The next day we started with an excellent session from Nick Sale from TaTa Technologies. Beside a Nano in the lobby of the conference he presented all the innovation and rationalization related to the Nano car and one of his messages was that we should not underestimate the power of innovation coming from India. An excellent sponsor presentation as the focus was on the content.
In the parallel track I was impressed how Philips Healthcare implemented their PLMD architecture with three layers. 
Gert-Jan Laurenssen explained they have an authoring layer, where they do global collaboration within one discipline. A PDM layer where they manage the interdisciplinary collaboration, which of course in the case of Healthcare is a mix of mechanical, electrical and software. And above these two layers they connect to the layer of transactional systems, that need the product definition data. Impressive was their implementation speed for sure due to some of the guidelines Gert-Jan gave – see Oleg’s picture from his slide here. Unfortunate I did not have the time to discuss deeper with Gert-Jan as I am curious about the culture change and the amount of resources they have in this project. Interesting observation was that the project was driven by IT-managers and Engineering managers, confirming the trend that PLM more and more becomes business focussed instead of IT-focused.
Peter Thorne from Cambashi brought in his session called Trends and Maximizing PLM investments an interesting visual historical review on engineering software investments using Google Earth as the presentation layer. Impressing to see the trends visualized this way and scary the way Europe is not really a major area of investment and growth.
Keith Connolly explained in his session how S&C Electric integrated their PLM environment with ERP. Everything sounded so easy and rational but as I know the guys from S&C for a longer time, I know it is a result of having a clear vision and working for many years towards implementing this vision.
Leon Lauritsen from Minerva gave a presentation around Open Source PLM and he did an excellent job around explaining where Open Source PLM could/should become attractive. Unfortunate his presentation quickly went into the direction of Open Source PLM equals Aras and he continued with a demo of Aras capabilities. I would have preferred to have a longer presentations around the Open Source PLM business model instead of spending time on looking at a product.
I believe Aras has a huge potential, for sure in the mid-market and perhaps beyond, but I keep coming back on my experiences I also have with SmarTeam: An open and easy to install PLM system with a lot of features is a risk in the hand of IT-people with no focus on business. Without proper vision and guiding (coming from ????? ) it will become again an IT-project, for cheaper to the outside world (as internal investments often are not so clear), but achieving the real PLM goals depends on how you implement.
After lunch we really reached to the speed of light with David Widgren, who gave us the insight of data management at CERN. Their problematic, somehow a single ‘product’ – the accelerators and all its equipment plus a long lifecycle (20 years development before operational), surviving all technologies and data formats requires them to think all time on pragmatic data storage and migration. In parallel as the consumers of data are not familiar with the complexity of IT-systems they build lots of specific interfaces for specific roles to provide the relevant information in a single environment. Knowing a lot of European funds are going there, David is a good ambassador for the CERN, explaining in a comic manner he is working at the coolest place on Earth.
Last session I could attend was Roger Tempest around Data Management. Roger is a co-founder of the PLMIG (PLM Interest group) and they strive for openness, standards and interoperability for PLM systems. I was disappointed by this session as I was not able to connect to the content. Roger was presenting his axioms as it seemed. I had the feeling he would come down the stage with his 10 commandments. I would be interested to understand where these definitions came from. Is it a common understanding or it it just again another set of definitions coming from another direction and what is the value or message for existing customers using particular PLM software.
I missed the closing keynote session from John Unsworth from Bentley. I learned later this was also an interesting session but cannot comment it.
My conclusion:
An inspiring event, both due to its organization and agenda and thanks to the attendees who made a real PLM centric event. Cannot wait for 2012
The past month I have been very busy in a specific area where PLM is not yet as understood. Where PLM is a ‘must have’ for companies developing and manufacturing products, in the world of Asset Development and Asset Management not many companies are yet aware of the benefits PLM can bring. I wrote about it in one of my previous posts . I will share some of my experiences here and I must thank Stephen Porter for mentioning my blog in his review (and pushing me to write today – even during the soccer championships in South Africa.
PLM benefits for Owner / Operators
I had discussions with a few owner/operators in the past week and as they all came from different industries (nuclear power generation / gas distribution / chemical processing), the details might differ but the values a PLM system can bring is for all of them the same.
When talking to Owner/Operators there are a few standard situations you observe:
- The usage of a transactional system (MRO / ERP /SCADA) which is managing the operational and financial activities as job scheduling and purchasing. Main dominant players in this area are Maximo and SAP. Most Owner / Operators believe that this is the only main system they need.This looks very similar to what we see in the typical manufacturing companies. They all have an ERP system, and specially in the mid-market these companies are not looking for another major IT-system.
The problem with only the transactional system as the core system for the company is that there is no natural storage for product or process information that can change (the Intellectual Property of the company). Transactional systems use pointers to actual product or process information that they require. But where do they store other and historical information ?
- The challenge to manage in parallel data for maintenance, rework and innovation projects. As the transactional system provides data for the operational environment, these companies are used to copy out data to their project environment avoiding not released project data can be seen in the operational environment. Another situation in relation to the engineering projects is that the owner / operator usually outsources the engineering work to EPC contractors and only coordinates the activities taking ownership of the data only after the new installation is under operation
The two owner / operators I met in the past month were in two different stages. The first one had already many years of experience in maintaining the plant operational and there they understood that the SAP PM module could not help them managing all required plant information around scheduled maintenance projects. Having already four different document management systems in place, the biggest challenge remained to coordinate the different baselines for the various projects scheduled for the annual maintenance. At the end they developed the concept where the PLM system is the owner of all plant related information, based on an Asset Structure in PLM and the PLM system ‘pushes’ the right information to SAP when the changes become operational.
The other owner / operator was in the early stage. They were planning to have a process to become operational. Their understanding is that they need only one system that provides them all the time the actual information and if needed also all the history and approvals of each of the components. For sure the actual information needs to be managed in a transactional system (SCADA) and for sure the SCADA vendor will say they can manage all information in their system. The pity for this owner / operator is that once they need historical data, or need to manage complex maintenance projects, they have lost the opportunity to do it right from the beginning.
Of course there is also a significant difference between the two owner operators.. The first owner / operator is situated in the Nordics, where the cost of labor is high. This means investing in IT-solutions to assure people are working with the right information brings a much faster ROI as compared to the owner / operator from South Europe. Sometime the labor cost can be one-third or less in comparison to the Nordic countries.
The owner/operator in the South Europe will initially not focus on efficiency and reducing labor costs. Due to the economical crisis unemployment is also high, so working with less people – improving by investments in IT are also not a popular measure.
But for all owner/operators a main consideration should be to remain competitive also over 10 – 20 years. Short term strategy is not good for this type of companies
Conclusion so far:
PLM concepts are bringing competitive benefits for Owner/Operator, despite the fact that they do not develop products. The value is based on bringing a single version of the truth (no island systems) and working in a single environment for the as-built and the to-be environment, without data conversions or transitions
next post I will talk about Asset Development and the PLM benefits
Like many people, the meditation of the dark Christmas days and the various 2009 reviews give you a push to look back and reflect. What happened and what did not happen in 2009?
And what might happen in 2010?
Here my thoughts related to:
ERP-related PLM vendors
Here I think mainly about Oracle and SAP. They have already identified PLM as an important component for a full enterprise solution. They are further pushing their one-shop-stop approach . Where Oracle’s offering is based on a set of acquired and to-be-integrated systems, SAP has been extending their offering by more focus on their own development.
If you are one of those companies that require PLM, and believe all software should come from one vendor (beside Microsoft), it is hard to decide.
As there might be real PLM knowledge in the Oracle organization as an effect of the acquisitions, but is it easily accessible for you? Is it reflected in the company’s strategy ?
With SAP I am even more in doubt; here you might find more people with ERP blood having learned the PLM talk. Maybe for that reason, I saw mostly Oracle as a PLM option in my environment and very few SAP opportunities for real PLM.
I assume in 2010 Oracle will push stronger and SAP try harder.
CAD-related PLM vendors
In this group you find as the major players PTC, Siemens and Dassault Systems. Autodesk could be there too, but they refuse to do PLM and remain focused around design collaboration. All these PLM vendors are striving to get the PLM message towards the mid-market. They have solutions for the enterprise, but to my feeling, most of the enterprises in the traditional well-know PLM markets, like Automotive and Aerospace, are in a kind of stand-still due to economical and upcoming environmental crisis.
It is sure business will not be as usual anymore, but where will the sustainable future go? Here I believe answers will come from innovation and small mid-market companies. The bigger enterprises need time to react so before we see new PLM activities in this area it will take time.
Therefore all PLM vendors move in directions outside engineering, like apparel, life sciences, and consumer packaged goods. These industries do not rely on the 3D CAD, but still can benefit from the key building blocks of PLM, like lifecycle management, program and portfolio management and quality/compliancy management. The challenge I believe for the PLM vendors is: Will these CAD-focused organizations be able to learn and adapt other industries fast enough? Where does 3D fit – although Dassault has a unique vision here.
For the mid-market, the PLM vendors offer more OOTB (Out Of The Box) solutions, mostly based on limited capabilities or more common available Microsoft components like SharePoint and SQL Server. This is not so strange as according to my observation, most smaller mid-market companies have not really made or understood the difference internally between document management and product data management, including Bill Of Materials not to be managed in Excel.
I assume 2010 the CAD related PLM vendors initially will focus on the bigger enterprises and new industries, the smaller mid-market companies require a different approach
PLM-only vendors
This is an area which I expect to disappear in the future, although this is also the area where interesting developments start to happen. We see open source PLM software coming up with Aras leading and we see companies coming up with PLM on-demand software, Arena as the first company to sell this concept.
The fact that the traditional PLM-only vendors disappeared in this area (Eigner bought by Agile, Agile bought by Oracle, MatrixOne bought by Dassault Systems) indicates that the classical way of selling PLM-only was not profitable enough.
Either PLM needs to be integrated in companywide business processes (which I believe), or there will be PLM-only vendors that find a business model to stay alive.
Here I hope to see more clarity in 2010
Smaller mid-market companies
What I have seen in the past year is, that despite the economical crisis, PLM investments by these companies remained active. Maybe not in purchasing much more licenses or implementing new PLM features. Main investments here were around optimizing or slightly extending the PLM base. Maybe because there was time to sit still and analyze what could be changed, or maybe it was planned but due to work pressure, it was never executed. Anyway there was a lot of activity in this area not less than in 2008.
An interesting challenge for these mid-market companies will be to remain attractive for the new generation. They are not used to the classical ways of structured work as most of the current workforce is used to.
Social networking, social PLM, I have seen the thoughts, discussions and benefits, still trying to see where it will become reality.
2010 is another chance.
Sustainability and going green
This is an area where I am a little disappointed and this is perhaps not justified. I would expect with the lessons learned around energy and the upcoming shortage of natural resources, companies would take the crisis as a reason to change.
To my observation most of the companies I have seen are still trying to continue as usual, hoping that the traditional growth will come back. The climate conference in Copenhagen also showed that, we as human beings, do not feel pressured enough to adapt, by nature we are optimists (or boiling frogs).
Still there are interesting developments – I assume in the next few years we will see innovation coming – probably first from smaller companies as they have the flexibility to react. During the European Customer Conference in Paris, I heard Bernard Charles talking about the concept of a Bill Of Energy (The energy needed to create, maintain and demolish a product) As PLM consultants we already have a hard time explaining to our customers the various views on a BOM, still I like the concept, as a Bill Of Energy makes products comparable.
2010 the acceptance of Bill Of Energy
Here I want to conclude my post for this year. Thank you all for reading and sharing your thoughts and comments with this community. My ultimate conclusion for 2009 is, that is was a good PLM year for the mid-market, better as expected but the changes are going slow. Too slow – we will see next year.
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