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picongressThe product innovation conference in February has become one of my favorite events, mainly for networking. Perhaps PLM vendors try to give you the impression that we are in a fast moving world. In reality, most companies are moving in a much slower pace than these vendors dream of. In general for an outsider, last year might have looked similar to what happened this year. In this post, I will describe the subtle differences that I noticed.

The event

The event was in the same location as last year with approximately. 400 participant including 60 speakers. The conference had three main streams: keynotes, PLM and design. The PLM and design sessions were most of the time parallel sessions. Great if you are interested in one domain only, a little more challenging for people who are enjoying to be in both domains. However the good news is that all participants will have access to the recorded sessions in a week or two. And from last years’ experience I can say the recordings are good, so I am looking forward to a virtual additional conference in two weeks from now.

The sessions

Some remarks about the sessions that I was able to attend

Going to Mars ?

SNAGHTML10b65892Bas Lansdorp explained us about the Mars One mission, what was the drive and challenge behind establishing a permanent human settlement on Mars. It was an inspiring opening session to make you think out of the box. Several interesting topics came up.

1. First of all that most of the mission’s materials need to be basic, proven technology instead of modern, innovative concepts. As maintenance and risks for issues need to be minimized, it is better to keep it with proven technology.

2. The crew selection is a long process – the first crew will fly in 10 years from now, so who are those individuals that want to take up the challenge to stay forever with 3 others, and every few years some more people will come. But hard to escape, and there is no way back. Amazing!

3. Part of the funding can be done by media rights. Bas explained the revenues that are related, for example, with the Olympic Games are already stunning. Imagine to have “Live on Mars” as a reality soap available all around the world. Programs like Big Brother demonstrate that it is in our nature just to watch ordinary people see how the behave. Will they fight? Will they have sex? Public voyeurism and eternal fame.

Although the keynote had no relation to PLM, I felt energized by the entrepreneurial thinking of Bas, following his passion and wanting to realize it. As Mars does not need the first centuries entrepreneurs, it was clear Bas is not part of the first crew.

Managing complexity and volume

imageNext Peter Smith from VF International presented the huge challenge his group of companies had to manage the complexity of the various products and their seasonal deliveries, up to 12 collection models per year. The group with famous brands like The North Face, Lee, Wranglers, JanSport, Kipling and Timberland has the challenge to deliver 500 Mio units/year which means 16 units/second ! For sure an execution engine. So where does PLM fit?

For Peter PLM is part of the infrastructure, a glue for the innovation process, but not driving the innovation process. They try to standardize on a single PLM system, but some of the brands have such characteristics and history that this was not possible to realize. As the business must go on, a new PLM should not be disruptive for business.

The two main challenges Peter sees for current PLM are:

  • The software models available for them as consumers. Changes go here too slow
  • Organizational change implications. How to change when change is hard?

It was clear from Peter’s experience that many of his points were from the IT-perspective. During the networking break when I spoke with others, some of them mentioned that the business value for PLM was missing in Peter’s analysis – too much tool/infrastructure.

The digital value chain

imageAn interesting session from Michael Bitzer (Accenture) and Sebastien Handschuh (Daimler). After an introduction about the German initiative Digital Industry 4.0 the remaining part of the session was around Daimler´s approach to use JT as a neutral, application independent format for their 3D data. At this time, Daimler has already over a 6 Mio JT-files and the format has been proven to fulfill their process needs.

Where possible Daimler aims to collaborate with suppliers in JT format for 3D. In this manner, their suppliers are not forced to use exclusively CATIA or NX. And the answer one question from the audience if Daimler was supporting the Siemens flavored JT or the real neutral JT format, it was clear that Daimler was aiming for the neutral format. I believe an interesting move to a more generic data approach in this case for 3D CAD data instead of original file formats. Hopefully more standardization to follow.

PLM selection: Do´s and Don’ts

questionaireI was moderating a discussion session for companies that were in the process of selecting a PLM system or that wanted to share their experience. Unfortunate the session was overpopulated with a lot of people not all necessary in the selection process. Due to the large audience not really an opportunity to have an in-depth discussion. Still it was amazing to see that there are still companies where the value of PLM is not clear at the management level and therefore the focus is on quick ROI.

In a one-to-one discussion afterwards I learned about a company where the shareholders/investors of a company forced the PLM project to fail by pushing unrealistic deadlines and not understanding the human and business change required. Unrealistic ROI expectations and lack of understanding where PLM really brings a competitive advantage is missing. Worst case due to their short-term focus the company will slowly be out of business as competitiveness and margins will reduce. For this type of situations, there is the excellent Dilbert cartoon below.

image

Source: Dilbert.com

Secure data sharing in the extended enterprise

SNAGHTML10cde882An interesting session was organized by Häkan Kårdén (Eurostep) and Kristofer Thoresson (Siemens Industrial Turbomachinery). Siemens had chosen to use the Eurostep Share-A-space environment between their internal data (their PDM system and other data sources) and the external data from suppliers, customers and field services. A pragmatic concept and interesting to see Share-A-space Found-Its-place. PLM Vendors probably would claim that their system could organize this secure and remote access without the need for a system in between. But the fact that a Siemens company decides to use Share-A-space demonstrates there is still a gap between a potential safe, single PLM based implementation and a pragmatic separation approach.

PLM is changing

imageIn my session that afternoon I focused on the visible change in PLM. From an IT infrastructure for file collaboration towards a more data-centric business driven approach. And from there looking into the future anticipate that moving towards a data-centric approach is crucial to be ready for advanced computer power and brain-matching algorithms. This will be the game changers I believe in the upcoming decade in line with the Industry 4.0 ideas. My past two post have been indicating this direction:

A Circular economy

imagePeter Bilello from CIMdata had a good presentation related to the change in business we see and must make. No longer can we afford an economy where we waste raw materials. The circular economy is about supporting the product lifecycle from cradle-to-cradle instead of the classical cradle-to-grave. This is what you could call the circular economy; This matches the trend that companies more and more will deliver services to their customers instead of selling products to them. Instead of buying a fridge you pay for cooling capacity and your supplier changes the current model with a new model after three years. The service or experience economy fitting very nicely with the new generations that seem to prefer more to live and share at the moment instead of owning property.

Your digital shadow

imageThe closing keynote from Stephanie Hankey was like the starting keynote. No relation to PLM but interesting in the context of what the effects are from digitalization and mobility. She provided some insights about the data that is already collected from each individual (or device) and how this all can be combined in profiles – your digital shadow. And of course your shadow might give the wrong impression. You can imagine that with growing trend of smart devices and the Internet of Things it will be hard to stay out of it. Companies will sell and buy data sets from their potential customers (victims). Scary as it all happens in the background and you are not fully aware of it.

(At the point, I was writing this paragraph my computer crashed with a blue screen – coincidence?)

Cultured beef ?

imageAfter a good burger and discussion in the evening, the opening keynote on day two was from Mark Post with the title Cultured Beef – changing the way we eat and think about food forever. Another interesting keynote where Mark explained how we can feed the growing world population in a more sustainable way by creating animal products through cell culture and bio fabrication instead of farming. The process is still in the early days of discovery but by using cell culture you can assure you get the right meat, even without fat, and it is real meat. Currently still expensive. Mark estimates that with current technology and up scaling of the process a price of $ 65 per kilo can be reached. Too expensive for consumers at this time but a promising number for the future. Another (Dutch) keynote speaker that made us think differently for the rest of the day.

The engine

SNAGHTML10e5e94dNext Bjarne Nørgaard from MAN Diesel & Turbo gave a good lecture for the audience, what it takes to design and build a ship. You build the engine and wrap the ship around it. The challenge for MAN is to follow, service and maintain the engine through is 30 year’s lifecycle and possibly longer. Next Bjarne went into the details of their information architecture, and it was surprising to learn that their PDM system was Siemens and that they used Aras on top of that for connecting data to the rest of the enterprise and lifecycle of the engine. You would assume two PLM systems in-house for one company is an overkill. Bjarne explained that they tried initially to achieve these goals with Teamcenter but failed due to lack of flexibility. Great marketing for Aras, bad for Siemens. Although I am sure the cultural aspect has played a role. No one likes their first PLM or ERP system, as the first implementation is this domain is the moment you have the biggest internal culture shock.

Using search and semantic technology

imageThe presentation from Moises Martines-Ablanado (Configuration Management Airbus Group) and Thomas Kamps (Conweaver) was interesting as they demonstrated one of the upcoming concepts I foresee will have a great future. Conweaver connects to existing enterprise systems (PLM, ERP, CRM, and legacy) and create a semantic mapping and linking of the data indexed from these systems. And through this network of data provide apps with a particular purpose. For example identify directly changes in the current EBOM and MBOM and potentially from there update the MBOM based in EBOM changes. A concept I have seen with Exalead too, illustrating that once you are in a data-centric environment, combining data sources for particular purposes can be achieved fast. No need for the classical approach of a single database that stores all.

A new TLA ? CLM

imageJoy Batchelor gave a clear presentation why besides PLM and ERP Jaguar Landrover (JLR) needs a third system supporting the connectivity of product configurations and sales configurations. They are able to manage 58.000.000.000 combinations for 170 different markets, which means every person on this planet could have its unique Jaguar Landrover. Joy introduced CLM (Configuration Lifecycle Management) as the third domain needed to support these configurations. The system they are using is ConfigIT, and I assume all automotive vendors have their own toolsets to manage the product and marketing configurations. I hope to learn more on that area. Will CLM be a separate domain or will it be absorbed by PLM or ERP vendors in the future ? Time will tell/

A game changer ?

SNAGHTML10f16946Henk Jan Pels from the Eindhoven University of Technology took us back in time and explained how ERP became visible on the CFO’s agenda eliminating the discussion on ROI. Where ERP is handling material flows, to develop and deliver products there is also a need for knowledge flows between requirements, functional and the physical definition of a product. Expanding these flows to a framework that covers the technology, the building blocks, the families and the individual products would be the ideal interaction Henk Jan is proposing. And a PLM system would be the environment to implement this concept. Henk Jan announced this as a game changer. I agree if management of companies spend times to understand the benefits, it will be a game changer. Somehow it remained an academic concept and I believe we are all eager to learn if companies will adapt this idea, knowing change to something that is not common or traditional is a cultural risk.

The German future ?

imageThe final presentation I could attend was from Martin Eigner, who first explained in some detail what the Industry 4.0 approach was about. From there he took us into the world of model based systems engineering. You could say an integration of PLM with more virtual system modeling and analysis as the front end of the development process. Somehow similar to last year’s presentation, but understandable as the world of PLM does not evolve so fast.

Conclusion

This is somehow also my conclusion from this year’s event. I was hoping to see some new sparks. For sure the keynotes were inspiring although less related to PLM. The case from Airbus and Conweaver was inspiring as I believe search and semantic based applications are a logical extension for the challenges companies want to address with PLM. JLR’s presentation explaining the need for Configuration Lifecycle Management strengthened my thought that in the future PLM and ERP will disappear. It is about a business platform with combined services, which might fall in one of the classical categories. I believe for many people the German Innovation 4.0 should be studied and replicated as it acknowledges exactly the future trend to remain competitive.

It was a pity for the public that Siemens PLM, Dassault Systèmes and Autodesk were not there. As the two largest PLM vendors and one of the largest PLM challengers, you would expect them be there and allow prospects and PLM consultants to compare where each of the PLM companies is different. Still it was a good conference. Well organized and as mentioned in the introduction, all presentations are recorded, giving everyone the opportunity to digest and review content again.

I am looking forward to the next Product Innovation conference with perhaps some more PLM related keynotes and big data practices.

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.

1974

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.

clip_image002My passion and trauma started that year where the Dutch national team changed the soccer game tactics by introducing totaalvoetbal.

The Dutch team at that time coached by Rinus Michels and with star player Johan Cruyff  played this in perfection.

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

image

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.

2006

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

clip_image002[6]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 ?

imagePLM 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.

imagePeople 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.

imageBecause 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.

imageThe 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

2014  McKinsey – Why every leader should care about digitization and disruptive innovation

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.

picongressDuring 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.

clip_image002[8]A final observation:
In my younger days, I celebrated many soccer championships, still I am not famous as a soccer player.

Why ?

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 !!!

statisticsDo you know the expression: “You have lies, damned lies and statistics”? Pointing to the fact that statistics are often abused to “prove” statements. A typical example from Hans Rosling, the Swedish statistics guru and entertainer: “In Sweden most of the people have an above average amount of legs!”

The proof: the Swedish average is 1.999 and as most of the people in Sweden have 2 legs, thus above average. Now it is time to share some statistics with you.

Last time, I asked readers of this blog to participate in a small survey about their PLM thoughts and experiences. Although many people have read the post, perhaps, not till the end, there are only 22 responses so far at this time. If you haven’t participated yet, please do so by answering: 6 questions – the result will be published in July. There are no rewards to win. The only thing we all will gain is the statistical insight of people who have read this blog and apparently are PLM minded.

What does it mean to be PLM-minded?

There are many discussions related to PLM. What is actually PLM? Is it A Journey ? Or is it a Vision? An IT-solution? An infrastructure? Or is it Boring or just the Opposite?

roiIt is hard to tell what the purpose is of PLM really without some numbers to guide you. And when it comes to PLM decisions, I noticed that most of the companies, I am working with, believe they make decisions based on numbers and statistics. Personally I believe in our current society it is more the emotional side that drives our decisions, not pure the rational and numbers. This is another discussion.

We always find a way to interpret the numbers. For the outside world, we pretend we make decisions based on pure, objective criteria. This would mean you can capture an organization in numbers and decide from there what’s best for the organization. An utopia we will see after some small statistics.

Some numbers

In the past year I spent most of my time in eight PLM-related discussions, most of them still on-going. Here, some of the statistics

Size

imageFour of them are large enterprises, where the power is inside the business unit. They act as one company, (one logo) but actually every business unit is focused on their own business profit and loss. They are not genuinely motivated to think about synergy with other businesses in cases it affects their work. Sometime IT believes they can bring the synergy by defining the common tools.

The other four companies are more centralized enterprises; some of them are large, with a centralized management and a single target to deliver to the market. Therefore, for a PLM project, they are easier to work with as you have more a single voice, instead of an opinion with a lot of conditions.

Type

All eight companies are not in traditional PLM industries. They are either project centric industries, where every delivery is supposed to be unique, or they are an owner/operator of a collection of assets to be managed during a long lifecycle. The reason: since 2008 I am personally interested and driven to demonstrate PLM practices and capabilities are valid for other industries too.

All eight companies involved expressed in the current engagement that PLM is essential for their future.

Vision

visionThe need for PLM comes from a vision. I believe you should start always with the vision. Before acting, you need to know what your goal is. And a goal does not mean you know what your pain is. Understanding the pains does not solve the future; it is a first step to help you shape a future with no more pains. A typical example that they are different can be found in the current economic crisis. Everyone experiences the pains and understands there is a need for change. But all we have a different opinion about that is the required change. There is no single vision?

From the eight companies, only two of them could express a clear vision where they want to be in the future. This means six of them either have not clarified their vision yet (still in work) or even do not believe there is a way to define the vision. They are more focused on solving a pain than creating a vision.

Game changer

imageIn three companies, the PLM project is considered to be a game changer. It was not about just fixing actual pains. The target is to be different from the competition and achieve a competitive advantage. Game changers are the most complex projects. The company needs to have a clear vision. It needs to have a trust in the fact that changing the game is indeed possible. And finally game changing contains the word CHANGE, which most companies try to avoid (evolution no revolution). But game changers, when successful, have the dominant companies for several years before others catch up.

NoChangeIn relation to change, two of the eight companies believe will be impossible to change the game. Although individual persons in the organization believe it is required, their ERP implementation and its related implementation scope have already taken part of the logical PLM space. This is blocking any serious PLM initiative making the implementation a PDM implementation, which has less value.

Constraints

Four companies stated upfront IT-constraints that could not be discussed. This introduced a lot of complexity. Some of the IT-constraints were emotional (we just decided a year ago to standardize on software xyz – we cannot afford to change to something else now, perhaps in the future). Other constraints were quite irrational and were based on (IT) decisions to standardize on a technology or solution, irrelevant or counterproductive to the business needs.

ROI

Only three of the eight companies require an ROI estimate to convince the management. As mentioned before, everyone is looking for reliable numbers to support a decision. Still decisions are made emotionally, and ROI numbers might be based on statistics. These three companies believe that the ROI numbers will lead to the right decision.

No_roiAnother three out of this eight companies did not need an ROI estimate. They think that what they will select as future solution is always justified: they just need PLM. The difficulty will come when they have to compare RFPs (Request for Proposal) from different vendors. Each vendor is focusing on its unique features, and from there the RFP review becomes an apples and pears comparison. Probably again the emotional decision will be made at the end. Most likely the cheapest to be sure nobody can be blamed.

PLM = PLM?

I believe the small amount of statistics provided in this post demonstrate that it is not easy to get a hundred percent common understanding of what PLM is about. Imagine what you would give as advice to one of these eight companies. This makes PLM difficult as a discipline as it is not just a collection of tools to implement. If you are selling hammers everything might look like a nail. Be aware of hammer PLM.

picongressIn addition to what is PLM, the majority of companies that claim to have implemented a PLM system do not necessary use PLM in all its capabilities. Often it is still more automation of the way the company worked before. Something you understand when attending PLM user conferences, like the product innovation conferences.

Innovation and disruption needed

I believe that in order to benefit in an optimal manner from PLM, a company needs to switch their mindset from being a departmental measured and triggered company into a customer centric company, where information flows and is shared with all relevant roles in the organization.

Sharing data, instead of owning data, is a big game changer. It requires companies to work different. In the past when you did not need to share data, you could store it anywhere and in any way you prefer to do this. It was your duty and job security to control the data. Now when an experienced person retires or leaves the company, we struggle to get this information back (or we lose it and recreate it later when needed again). Search engines become popular technology to find back data – if possible! I believe Search engines can help to connect the past to the future infrastructure, but there is more.

cloudSharing data does not mean storing data in the cloud. The cloud makes it easier to share data as the company can focus more on the business side of the solution instead of the IT-side where and how to store it at what cost. It is the awareness of the content (“Do I search for something that exists”) and the quality (“Can I trust what I have found”) that we share that needs to get the focus.

For data sharing a disruptive change is needed, which does not happen in the classical PLM environments. There we think too much in departments and a sequential (or concurrent) way of working.

Aiming for sharing is disruptive. The fact that engineers need to provide more accurate data is seen as a productivity loss instead of a gain through the whole organization – see an old post: “Where is my PLM ROI “?. Organizations normally do not like disruptions. Individuals do. If they find a cheaper and easier way to get their work done, they will grab this opportunity and not do anything more. However companies have the tendency and need to keep things more complex as it is not a single task the focus on. It is a complex network of interactions.

I had the chance to read two interesting topics in this context recently. First a relative new blog related to disruptive innovation: the Off-White papers. Although it is not about PLM, it describes the challenges related to disruptive innovation, and if you have a twisted PLM-brain you will get the message.

ProfitBeyondMeasureThe same for a book I have been reading from H. Thomas Johnson called Profit Beyond Measure . Johnson describes in his book, based on cases from Toyota and Scania, a different business model focused on customer delivery instead of internal departmental optimization. Again my twisted PLM-brain got triggered by the customer centric business model. A favorite quote:

A continuously linked and balanced organization that “works to customer order” reflects a very different management style (and organization JV) than does a decoupled and discontinuous organization that “works to schedule”

It is the difference between managing by results (MBR) and managing by means (MBM). And I believe this is the target of modern PLM too.

Conclusion

Even with some small statistics I hope it is clear that PLM is not a simple activity as there are many constraints that can influence a project. Having an understanding about these constraints and being able to remove the blocking constraints is what I believe is the job of a PLM consultant.

Do you agree? Is there an easier world? I am looking forward to your feedback through the comments or through a response in the small survey: PLM, your opinion

Last year, I read Clayton Christensen’s book “The Innovator’s dilemma – When New Technologies Cause Great Firms to Fail “. I was intrigued how his theory also applies to PLM and wrote about it in a blog posts last year.

hbrRecently, I attended an HBR Webinar “Innovating over the Horizon: How to Survive Disruption and Thrive , which raises serious implications for PLM. As presented by Clayton Christensen and Max Wessel, both professors in the Harvard Business School, I foresaw numerous consequences demanding attention.

I’d like to highlight some observations for you:

  • Disruptive innovation will hit any domain – so also the PLM domain
  • You are less impacted if your products/services are targeting a job to be done
  • ERP has a well defined job – so not much discussion there
  • PLM does not have a clear job – so vulnerable for disruption
  • Will PLM disappear?

Disruption explained

image

The above diagram explains it all. Often products come into the market with a performance below customer expectations. The product will improve in time, and at a certain moment it will reach that expectation level.  Through sustaining innovation, the company keeps improving their product(s) to attract more customers, and start delivering more than a single customer is asking for.

slideplmThis is for sure the case in PLM. All the PLM vendors are now able to deliver a lot of functionality around global collaboration, covering the whole product lifecycle. Companies that implement PLM, just implement a fraction of these capabilities and still have additional demands. Still the known PLM vendors nearly always win when a company is searching for a new PLM solution.

Disruption comes from other technologies and products. In the beginning, they are not even considered by companies in that product space as a possible solution. As these products improve in time at a certain moment, they reach that level of functionality and performance, a potential customer can use these products to address their demands.

imageAt this stage, the disrupters will nearly always win the battle. The reason is that they are more close to what the customer wants than the incumbents. Their product performance and price point are most likely to be more attractive than the incumbents´ portfolio.

Translating this to PLM it would mean: “Do not look for PLM systems as they already provide too much functionality, way above the line of customer desire”

As a PLM consultant, I need to provide some second thoughts to keep my job. There is much more behind Prof. Christensen’s theory, and I recommend before agreeing with what I write, read his books ! And although there is a horizontal time axis where the disruptive technology comes in, it does not indicate it will be this year or next year.

If you are aware that disruption can kill your business, how likely is it that it will happen in your business and when?

Professor Christensen makes two key points:

  1. Disruption will always happen, but this does not mean it is going to be fast and totally overtaking the old products. It might be a slower process as expected and incomplete. Here, I was thinking about disruptive cloud technology, which came in fast on the consumer level, but will it reach the business level too, in the same manner that it overrules the classical PLM platforms ? I am not sure about that (yet)
  2. If your company’s value is on delivering products, instead of delivering means to get the job done for your customer, you are extremely vulnerable for disruption.

As companies are looking to get their job done in the most efficient manner, they will switch at any time to new solutions that provide a better way to get the job done, often with a better performance and at a lower price point.

ERP has a well defined job

I realized that this is one of the big differences between PLM and ERP. Why is there such a discussion around the need for PLM and I do not catch the same messages from the ERP domain ?  Maybe because I am a PLM consultant?

ERP has a clear mission: “To get the job done – deliver a product as efficient and fast as possible to the customer”. ERP is an execution system.  Although ERP vendors as well are delivering more than their individual customers ask for, the job is more clear defined.

PLM does not have a clear job

For PLM, it becomes fuzzy. What is the job that PLM does ? Here, we get a lot of different answers. Have a look at these definitions from some vendors.

Quote from the Siemens website

CIMdata calls PLM “the most effective investment you can make to achieve product leadership.” AMR Research says “Companies committed to time to value in product innovation certainly cannot succeed without a sound PLM foundation.”

Quote from PTC’s website

Product Lifecycle Management, or PLM, is a driver of successful product development, and a strategic contributor to business value across the enterprise. PLM helps product manufacturers manage complex, cross-functional processes, coordinating the efforts of distributed teams to consistently and efficiently create the best possible products

Quote from the Autodesk website

For companies of any size, Autodesk PLM 360 helps to streamline your business processes for more efficient product development, improved profitability, and higher product quality.

I also reviewed the websites from the other PLM vendors, and I can confirm: None of them is talking in a clear way which job needs to be done. All PLM solutions are around technology and products.

Companies want to get the job done

And here I come back to the webinar’s conclusion. If you want to secure your future as a company, you need to focus on the job to be done. And even better, focus on the experience to do the job and the best integration of these experiences in a total framework. See the slide below:

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My interpretation is that PLM has not even reached level 1.  Still many companies are struggling to understand the fundamental need(s) for PLM.

Interesting to see is that Dassault Systemes in their messaging and approach is already targeting level 2 – the experiences. If potential customers will embrace the experience approach without passing level 1, is something to observe.

Will PLM disappear ?

2050In my December 2008 blog post PLM in 2050 and recently in The Innovator’s dilemma and PLM,  I wrote that I believe PLM as it is currently defined, will disappear. Perhaps made redundant by a collection of disruptive technologies. Main reason is that PLM does not do a single, clear job.

One of these disruptive candidates to my opinion is Kenesto. They deliver “social business enterprise software to empower teams” as stated on their website. Kenesto is not considered as a competitor of classic PLM, starting on a different trajectory. For sure there will be more disruptive candidates aiming at different pieces of the PLM scope.

What do you think: 

  • Does PLM have too many jobs ?
  • Will PLM survive disruption ?

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clip_image002[4]Last week I attended the Product Innovation Conference in Berlin, an event that revitalized the discussions and information exchange around PLM.

I have been blogging about this event since it started in London 2011, the year after in Munich and Atlanta and now in Berlin. The event has grown in size, both for the amount of speakers and participants. There were many parallel sessions per interest stream, and for that reason I cannot give a full overview of the event as I did in my previous blog posts.

This time I will describe only my personal highlights, being aware there was much more to learn. A nice service to the more than 350 attendees is that they will be able to see all sessions online soon as they were all recorded.

Some of my personal highlights

The first keynote speaker was Steve Wozniak and for me one of the guys that changed my professional life. The Apple IIe was my first personal affordable computer to explore a new world of automation, the peeks and pokes, the analog/digital converter, programming and application software, like Visicalc. I somehow feel the same excitement with 3D printing. How is this going to affect our future life?

clip_image004[4]The Apple IIe was an innovation and Steve Wozniak led us through the successes and failures he experienced within Apple. Steve´s presentation was a clear motivation for all of us to think different, to have your goals in mind. Do not focus on the common sense or be part of the organization. There will be failure but also success if you are clear about your goals. Engineers should follow their creativity and be original, instead of copying books. Creativity and Innovation are like humor (some have it and some will never have it). It was a good inspiring start for the two days, and these themes came back several times.

During the rest of the day, I learned about The Human Factor and Managing Cultural Change by Dagmar Heinrich, which can lead to damaged bike or car.

Stan Przybylinski provided interesting statistics and insights about investments in discrete manufacturing related software around the world (US, Japan, Germany, India, China) demonstrating there is still an enormous gap between the traditional economies in the west and the emerging countries.

clip_image006[4]An excellent presentation was given by Caterpillar – Beth Hinchee representing the PLM / business side, John Berg representing the IT/Infrastructure side, combined with Accenture Rüdiger Stern – Innovation and Product Development Lead.

Their presentation was a blueprint how large PLM implementations should be executed, and it was a confirmation of what I am preaching.

steppedAs a PLM implementation is always about changing the way a company works, you need to make sure you have a strong involvement from both business and IT. Without a third party that brings in the best practices, the coaching and moderation between the two disciplines it often fails due to different viewpoints and a different focus. The role of the consultancy partner is to be the glue, the motivator and source of bringing outside experience from other implementations into the discussion. As normally a company might have experience with one or two PLM implementations, a consultancy firm should be able to bring in much more experiences from all their customer engagements.

In the afternoon Michael Grieves, author of Virtually Perfect: Driving Innovative and Lean Products through Product Lifecycle Management talked about the value of innovating starting from virtual products, and how they contribute to faster mature, better validated products, benefitting from a lower overall investment for innovation. He also stated it is more important to focus on practices instead of standardized processes inside PLM. clip_image008[4]

This matched perfectly with my presentation; Innovation loves PLM, explaining the huge value that PLM brings for Innovation in relation to the company’s culture and approach towards open innovation.

The two closing keynotes sessions from the afternoon were interesting. Peter Bilello from CIMdata talked about The Future of PLM: Enabling Radical Collaboration. For me the first time I saw such a change from CIMdata, now looking forward to the upcoming generation instead of presenting more common, consolidated PLM wisdom. My blog buddy Oleg wrote about it in more detail in his recent blog post: Product Development as we have known it is dying.

The last session of the day was from Marc Chapman: Designing the World Land Speed Record. It was inspiring for all of us, demonstrating the beauty and challenges of engineering when trying to break the world land speed record. See more at bloodhoundssc.com. Not so much PLM related, but full of challenges and a need for innovative approaches.

And after a network session with drinks and a short night

clip_image010[4]The next day started with an inspiring speech, please pay extra attention to this topic. Massoud Hassani, born in Afghanistan, is striving for awareness of the global land-mine problem through his innovative decommissioning device Mine Kafon. Traditional mine discovery and detonation programs are expensive. Affected countries and the UN are not spending significant money to solve the problem as an exploding mine is no longer world news (unless it is a famous person).

Still people get injured or killed by these mines – forgotten victims. Have a look at Massoud´s project on kickstarter.com and get inspired where you can contribute. Massoud’s initial design was based on his childhood experiences, knowledge gained at the design academy and now looking for engineering support to optimize his extreme low cost, but innovative solution.

Some other sessions from the second day: The lessons learned from previous failed PLM projects by Andritz: When Things Go Wrong: How to Put Them Right. They decided not to follow the common approach that many companies try to make: one size (type of PLM) fits all, learning from their failed PLM project now rolling out several PDM systems.

clip_image012[4] This presentation somehow has a connection to what Marc Halpern from Gartner mentioned. One of my favorite opening statements he made about PLM upgrades was:

“Upgrading your PLM system, is like rewiring the house with the electricity on”.

As Gartner’s focus is more on the IT-side of the business, he explained that current PLM implementations cannot be maintained in the long term future as they become too expensive and complex to maintain. He mentioned the risk when selecting one provider for PLM, you would suffer probably from being locked-in by the vendor. This made me think what about if you would implement SAP PLM ? The SAP message is clear: one single platform for PLM and Execution!

The counter approach from this vendor lock-in is the approach to work towards open standards. Here, I attended the session EUROSTEP: Achieving business benefits by using PLM standards such as STEP and PLCS.

Currently I am involved in several projects where standardization of data for the long term and efficient data exchange between various systems is important. It is somehow a battle against all odds. Standardization is making small steps forward, but it requires companies to have a long-term vision and most of the time they chose for the short-term proprietary data formats from their software vendors. As time and less complexity is money – the problem will come later for the next generation of managers and software.
Of course this always has to be considered in the context of the dynamics of your industry – the longevity of data plays an important role.

clip_image014[4]Second last keynote speaker of the day was Prof. Martin Eigner, a long term visionary and icon when it comes to PLM. Prof. Eigner provoked the audience again that almost no company actually has implemented PLM.

Most companies are stuck with a form of PDM combined with complex customizations. They do not keep it simple – PLM is for Product Development and definition and ERP is only for execution. Companies tend to invest in their expensive ERP systems which have less impact on the future business as PLM and Innovation have.

Companies should invest much more in the design process as here it is where almost 70 % of the costs are defined and innovative products are born. To innovate better we should add Model Based engineering which includes the steps of systems engineering into the design process. Mr. Eigner was talking about a new term for PLM: sysLM. His speech was consistent and logical for all of us. But why do companies not adopt this vision?

I will come back to that in my conclusion.

clip_image016[4]The last keynote speech was from Doug McCuistion, program manager from the NASA Curiosity Mars Exploration mission. Doug guided us through all the challenges the mission went through. He shared with us the reasons for the mission, the complexity and challenges of the landing procedure and the upcoming discoveries expected. It was the last session of the congress and I feel sorry for those who had to leave earlier for their travels as it was the most inspiring session of the congress. Going for the almost impossible and such a contrast to the “boring” world of PLM.

And here comes the link between NASA´s Curiosity project and Prof Eigner´s PLM presentation.

The Curiosity project is a challenge, not on this planet, it is on the edge of what is possible and has no competition (or it must be budget cuts by the government). For most other companies, the challenge lies on this earth, and they want to stay ahead of the competition. Here it is about being able to fund your innovation and assure future funding by introducing innovative products to the market that generate enough margin to invest in the future. PLM presentations seem to be “boring” as the business value is not clear for the management (the do not attend PLM conferences), they get more enthusiastic from short-term financial figures.

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One of the (younger) attendees told me that it was impressive to see so many PLM icons at this conference, but where is the new generation of PLM to-be icons ?

Fixing this disconnect is probably related to the magic we need to find to bring Innovation and PLM to the next generations.

Who starts ???

My conclusions:

  • The conference has become a “must” for companies looking for experiences related to PLM. Why and how PLM contributes to your business
  • Companies are looking for their second PLM implementation trail. Learning from their previous mistakes they learned it is not an IT-only project, business should be leading, cloud becomes an option.
  • The awareness of a new upcoming generation of workers. Everyone is aware of it, still at PLM conferences we are waiting for the first thought leaders of this generation to speak.
  • Excitement comes from innovations that seem to be unachievable. Some go extremely fast, some detonate mines and some go to Mars, the rest has to be achieved in a competitive and global market.
    Innovation loves PLM.

observation

First of all happy new year to all of you. As there is no “End of the World”  risk anymore in the near future , we can start looking forward and set our goals for the next 5 years or is it a 7-years plan Oleg ?.

Christmas, the moment the light returns on the Northern hemisphere, plus the food , cycling and the preparations for the next Product Innovation conference in Berlin were the drivers for this blog post.

The title might give you the impression that it is an IQ-quiz: “Which word does not fit in this sequence”?  Well, It’s not, they are all related.  Let’s put them in a chronological order.

Frogs

frogFrogs existed first, and were exploring the world before us humans.  Paleontologists assume they had no notion of what was global.  In their world it was probably a few ponds in size.  For certain, they did not have anything to do with innovation.  At that time, survival depended on the slow process of evolution.

Millions of years later, the first Homos appeared on the earth surface;  Homo Sapiens, Homo Erectus, Homo Ludens and perhaps more.  They all had something in common: Instead of waiting for the evolution which was ongoing, they started in parallel to innovate.  First by walking upright, using a more advanced language to communicate and learning to have tools to achieve more.  Their world was still within a reasonable walking distance and probably they started to eat frogs.

Human evolution

This evolution continued for thousands of years.  Human beings started to spread around the world and in waves they brought innovation. They built stone temples, learned to sail, discovered gunpowder, electricity, the universe, the internet and more.  It is interesting to see that every time a major innovation was born, these innovators enriched their region in wealth and culture, using their innovation as a competitive advantage to dominate their neighbors.

In many cases 1000 years later, this innovation became a commodity and other civilizations stood up with their innovation and dominated their regional environment which became bigger and bigger in size.  Where possible they made use of the cheap resources (modern word for what was initially called slaves) to enrich their civilization.  For certain, the most civilized were eating frogs!

Market expansion – innovation pace

During the last century, the pace of innovation went faster and faster.  New ways of communication and transportation became available and affordable, which made it impossible for innovations to stay within a specific civilization. Innovation became available for everyone around the world and the domination shifted towards companies and markets.

SNAGHTML4a560dcCompanies with a strategy to innovate, discovered that there were new ways needed to respond faster than before to market opportunities.  This was the driving force behind PDM, as an first attempt to get a better grip and understanding of their fast evolving, more complex products, that require more and more global collaboration between design teams.

PDM is now accepted as critical by all manufacturing companies around the world, to guarantee quality and efficiency.  Customer focus became the next demand from the market and interestingly enough, the demand for frogs decreased.

However this wave of innovation was followed by a wave with even greater impact on the global society.  New technologies, the availability of internet and social media, suddenly changed society. Combined with the financial crisis in the US and Europe, it became clear that the way we worked in the past is no longer the way to survive in the future.

Faster and global

plm_txtPLM was introduced early this century as a new strategy to become more customer-centric, being able to respond faster and better to market demands by bringing innovation to the market before the competition. PLM requires a different approach by companies to work internally and interact with the (global) outside world.  The need to implement the PLM vision requires change and as it cannot be considered as an evolutionary process over several generations, it will be a business change. However, in general, human beings do not like rapid change.  Here the frogs come back into the picture, now as the boiling frog metaphor.

It is based on 19th century anecdote describing a frog slowly being boiled alive.  The premise is that if a frog is placed in boiling water, it will jump out, but if it is placed in cold water that is slowly heated, it will not perceive the danger and will be cooked to death.  The story is often used as a metaphor for the inability of people to react to significant changes that occur gradually.  This metaphor is very applicable for the classical approach companies bring their products to the market, where innovation is more a lucky coincidence than a result of a strategy.

Here it all comes together again.

marketleaderInnovation is the only way for companies to avoid becoming a commodity – not able to differentiate for your potential customers.  Now the title of this post should be clear: “Do not be a boiling frog, use PLM to support your innovation and become available for the global market”

As the new year has started and it is still time to extend your good intentions, add Innovation, PLM and Change to your survival list.

I look forward to your comments and hope to discuss with you the relation between PLM and Innovation during the upcoming Product Innovation event in Berlin, where I present a session with the title: “PLM loves Innovation ?”

(when you know me, you know the answer, but there are always surprises)

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Confused? You won’t be after this episode of Soap. “

Who does not remember this tagline from the first official Soap series starting in 1977 and released in the Netherlands in 1979?

Every week the Campbells and the Tates entertained us with all the ingredients of a real soap: murder, infidelity, aliens’ abduction, criminality, homosexuality and more.

The episode always ended with a set of questions, leaving you for a week in suspense , hoping the next episode would give you the answers.

For those who do not remember the series or those who never saw it because they were too young, this was the mother of all Soaps.

What has it to do with PLM?

Soap has to do with strange people that do weird things (I do not want to be more specific). Recently I noticed that this is happening even in the PLM blogger’s world. Two of my favorite blogs demonstrated something of this weird behavior.

First Steve Ammann in his Zero Wait-State blog post: A PLM junkie at sea point-solutions versus comprehensive mentioned sailing from Ventura CA to Cabo San Lucas, Mexico on a 35 foot sailboat and started thinking about PLM during his night shift. My favorite quote:

Besides dealing with a couple of visits from Mexican coast guard patrol boats hunting for suspected drug runners, I had time alone to think about my work in the PLM industry and specifically how people make decisions about what type of software system or systems they choose for managing product development information. Yes only a PLM “junkie” would think about PLM on a sailing trip and maybe this is why the Mexican coast guard was suspicious.

Second Oleg in his doomsday blog post: The End of PLM Communism, was thinking about PLM all the weekend. My favorite quote:

I’ve been thinking about PLM implementations over the weekend and some perspective on PLM concepts. In addition to that, I had some healthy debates over the weekend with my friends online about ideas of centralization and decentralization. All together made me think about potential roots and future paths in PLM projects.

imageIt demonstrates the best thinking is done during out-of-office time and on casual locations. Knowing this from my long cycling tours in the weekend, I know it is true.
I must confess that I have PLM thoughts during cycling.

Perhaps the best thinking happens outside an office?

I leave the follow up on this observation to my favorite Dutch psychologist Diederik Stapel, who apparently is out of office too.

Now back to serious PLM

Both posts touch the topic of a single comprehensive solution versus best-of-breed solutions. Steve is very clear in his post. He believes that in the long term a single comprehensive solution serves companies better, although user performance (usability) is still an issue to consider. He provides guidance in making the decision for either a point solution or an integrated solution.

And I am aligned with what Steve is proposing.

Oleg is coming from a different background and in his current position he believes more in a distributed or network approach. He looks at PLM vendors/implementations and their centralized approach through the eyes of someone who knows the former Soviet Union way of thinking: “Centralize and control”.

imageThe association with communism which was probably not the best choice when you read the comments. This association makes you think as the former Soviet Union does not exist anymore, what about former PLM implementations and the future? According to Oleg PLM implementations should be more focused on distributed systems (on the cloud ?), working and interacting together connecting data and processes.

And I am aligned with what Oleg is proposing.

Confused? You want be after reading my recent experience.

I have been involved in the discussion around the best possible solution for an EPC contractor (Engineering Procurement Construction) in the Oil & Gas industry. The characteristic of their business is different from standard manufacturing companies. EPC contractors provide services for an owner/operator of a plant and they are selected because of their knowledge, their price, their price, their price, quality and time to deliver.

This means an EPC contractor is focusing on execution, making sure they have the best tools for each discipline and this is the way they are organized and used to work. The downside of this approach is everyone is working on its own island and there is no knowledge capitalization or sharing of information. The result each solution is unique, which brings a higher risk for errors and fixes required during construction. And the knowledge is in the head of experience people ….. and they retire at a certain moment.

So this EPC contractor wanted to build an integrated system, where all disciplines are connected and sharing information where relevant. In the Oil & Gas industry, ISO15926 is the standard. This standard is relative mature to serve as the neutral exchange standard of information between disciplines. The ideal world for best in class tools communicating with each other, or not ?

imageImagine there are 6 discipline tools, an engineering environment optimized for plant engineering, a project management environment, an execution environment connecting suppliers and materials, a delivery environment assuring the content of a project is delivered in the right stages and finally a knowledge environment, capitalizing lessons learned, standards and best practices.

This results in 6 tools and 12 interfaces to a common service bus connecting these tools. 12 interfaces as information needs to be send and received from the service bus per application. Each tools will have redundant data for its own execution.

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What happens if a PLM provider could offer three of these tools on a common platform? This would result into 4 tools to install and only 8 interfaces. The functionality in the common PLM system does not require data redundancy but shares common information and therefore will provide better performance in a cross-discipline scenario.

In the ultimate world all tools will be on one platform, providing the best performance and support for this EPC contractor. However this is utopia. It is almost impossible to have a 100 % optimized system for a group of independent companies working together. Suppliers will not give up their environment and own IP to embed it in a customer´s ideal environment. So there is always a compromise to find between a best integrated platform (optimal performance – reduced cost of interfaces and cost of ownership) and the best connected environment (tools connection through open standards).

And this is why both Steve and Oleg have a viewpoint that makes sense. Depending on the performance of the tools and the interaction with the supplier network the PLM platform can provide the majority of functionality. If you are a market dominating OEM you might even reach 100 % coverage for your own purpose, although the modern society is more about connecting information where possible.

MY CONCLUSION after reading both posts:

  • Oleg tries to provoke, and like a soap, you might end up confused after each episode.
  • Steve in his post gives a common sense guidance, useful if you spend time on digesting it, not a soap.

Now I hope you are not longer confused and wish you all a successful and meaningful 2013. The PLM soap will continue in alphabetical order:

  • Will Aras survive 21-12-2012 and support the Next generation ?
  • Will Autodesk get of the cloud or have a coming out ?
  • Will Dassault get more Experienced ?
  • Will Oracle PLM customers understand it is not a database ?
  • Will PTC get out of the CAD jail  and receive $ 200 ?
  • Will SAP PLM be really 3D  and user friendly ?
  • Will Siemens PLM become a DIN or ISO standard ?

See the next episodes of my PLM blog in 2013

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A week later after the PLM Innovation conference in the US, I have time to write down my impressions. It was the first time this event was organized in the US, after having successful events the past years in Europe. For me it was a pleasure to meet some of my PLM friends in reality as most of my activities are in Europe.

With an audience of approximate 300 people, there were a lot of interesting sessions. Some of them in parallel, but as all session are recorded I will soon catch up with the sessions I have been missing.

My overall impression of the event: Loud en Positive, which is perhaps a typical difference between the US and Old Europe.

Here some impressions from sessions that caught my attention

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Kevin Fowler, Chief Architect Commercial Airplanes Processes and Tools from The Boeing Company presented the PLM journey BCA went through. Their evolution path is very similar to the way Siemens and Dassault Systemes went through (driven by Boeing’s challenges).

Impressive was the amount of parts that need to be managed aircraft (up to a billion) and with that all its related information. Interesting to see that the amount of parts for the 787 have strongly decreased.

After PLM Generation 1 based on Teamcenter and Generation 2 based on Dassault Kevin demonstrated that functionality and cost of ownership increased due to more complexity, it was evident that usability decreased.

And this will be a serious point of attention for Generation 3, the PLM system BCA will be selecting for 2015 and beyond. Usability has to increase.

And as we were among all the PLM vendors and customers, during the breaks there was a discussion, which PLM vendor would be the preferred next partner for PLM.  I had a discussion related to PLM vision and visibility with one of the SAP partners (DSC software Inc.). He is convinced that SAP provides one of the best PLM platforms. I am not convinced as I see SAP still as a company that wants to do everything, starting from ERP. And as long as their management and websites do not reflect a PLM spirit I am not convinced. In 2015 I might be wrong with my impression that PLM, Usability and SAP are not connected.

Note: browse to this SAP PLM rapid-deployment solution page and view the Step by Step guide. Now the heading becomes SAP CRM rapid-deployment solution. A missing link, marketing or do they know the difference between PLM and CRM ?

imageNext Nathan Hartman from Purdue University described his view on future PLM which will be model-based and he presented how PLM tools could work together describing a generic architecture and interfaces. This is somehow the way the big PLM Vendors are describing their platform too, only in their situation more in a proprietary environment.

  • Nathan gave an interesting anecdote related to data sharing. He mentioned as example a 3D model that was built by one student and he asked another student to make modifications on it. This was already a challenge and even working with the same software lead to knowledge issues, trying to understand the way the model was built. Demonstrating  PLM data sharing is not only about having the right format and application, but also the underlying knowledge needs to be exposed

imageMonica Schnitger, as business analyst presented her thoughts on PLM justification. Where in Munich I presented Making the case for PLM session,  Monica focused on a set of basic questions that you need to ask (as a company) and how you can justify a PLM investment. It is not for the big kids anymore and you can find her presentation here (with another PLM definition).

I liked the approach of keeping things simple, as sometimes people make PLM too complex. (Also as it serves their own businesses). Monica presented that a company should define its own reasons for why and how PLM. Here I have a slight different approach. Often mid-market companies do not want PLM, they have pains they want to get rid of or problems that they want to solve. Often starting from the pain and with guidance from a consultant companies will understand which PLM practices they could use and how it fits in a bigger picture instead of using plasters to fix the pain.

imageBeth Lange, Chief Scientific Officer from Mary Kay presented how her organization, operating from the US (Texas), managed a portfolio of skin care products sold around the world by an independent local sales force all around the world. In order to do this successfully and meet all the local regulatory requirements, they implemented a PLM system where a central repository of global information is managed.

The challenge for Mary Kay is that from origin a company with a focus on skin care products and an indirect sales force, where sometimes the sales person has no IT skills, this project was also a big cultural change. Beth explained that indeed the support from Kalypso was crucial to manage the change. Something which I believe is always crucial in a global PLM project where the ideal implementation is so different from current, mainly isolated practices.

As regulatory compliance is an important topic for skin care products, Beth explained that due to the compliancy rules for China, where they have to expose their whole IP, the only way to protect their IP was putting a patent on everything, even on changes.

Would NPI mean New Patent Introduction in the CPG market ?

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Ron Watson, Director, PLM COE and IT Architecture
from Xylem Inc. presented their global PLM approach. As the company is is relative young (2011) but is a collection of businesses all around the world, they have the challenge to operate as a single company and sharing the synergy.

Ron introduced PDLM (Product Data Lifecycle Management) and he explained there was first a focus getting all data under control and make it the single source for all product data in a digital format, preferably with a minimum of translation needed.

Here you see xylem has chosen for an integrated platform and not the best of breed applications. After having the product data under control the focus can be on standardizing processed overall the company. Something which other companies that have followed this approach, confirm it brings huge benefits.

As it was a PTC case study, Graham Birch, senior director of Product Management from PTC did the closing part. Unfortunate by demoing some pieces of the software. A pity as I believe people do not get impressed by seeing some data on the screen they recognize. Only when there is a new paradigm to demonstrate related to usability I would be interested.

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And as-if they have read my mind, Daniel Armour from Joy Global demonstrated the value and attractiveness of 3D Visualization tools in their organization. Joy Global is manufacturer of some of the biggest mining equipment and he demonstrated how 3D Visualization can be used in the sales and marketing process, but also during training and analysis of work scenarios.

His demonstration showed again that 3D as a communication layer is attractive and appeals to the user (serious gaming in some cases).

As it was a SAP case, I was surprised to hear the words from Brian Soaper, explaining the power of 3D for SAP users and how SAP users will benefit from better understanding, higher usability etc. Iw as as-if a 3D-CAD/PLM was talking, was this a dream ?

I woke up out of this dream when someone from the audience asked to Daniel how they would keep the visualizations actual, is there a kind of version management ?  Daniel mentioned currently not but you could build a database to perform check-in/checkout of data. Apparently all the 3D we have seen is not connected to this single database SAP always promotes.

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Peter Bilello, CIMdata’s president had a closing session with the title: Evaluate the tangible benefits from PLM can prove complex, which indeed is true.  Peter’s presentation was partly similar to the presentation he gave early this year in Munich. And this is what I appreciate about CIMdata. Some people in the audience mentioned that many times it is the same story and many of the issues Peter was presenting are somehow known facts. And this is what I like about CIMdata, PLM is not changing per conference or new IT-hype. If you want to understand PLM, you need to keep to the purpose and meaning of PLM. And these known facts apparently are not so known, a majority of PLM projects are executed or lead by people that decided to invent the wheel,as inventing the wheel seems cheaper than renting a wheel, and this lead again to issues later that every experienced consultant could foresee.

imageThe evening with a champagne reception on the paddle boat making a tour around the lake and a dinner at the lake side concluded this first day.
The combination of presentations, scheduled network meetings and enough network time made it a successful first day

observationNext day I started with a BOM management Think Thank were in the target was to come to some common practices and understanding of BOM management.  As the amount of participants was large and the time was short we only had a chance to touch the surface of the cases brought in.

What was clear from this session to me is that most challenges reported were due to the fact that the tools were already in place and only afterwards the PLM team (mostly engineering people) had to struggle to make it into a consistent process. They do not get a real help from PLM vendors or implementers, as their focus is on selling more tools and services.

What is missing for these organizations is a PLM for Dummies methodology guide, which is business centric instead of technology centric. For sure there are people who have published PLM books, but either they are not found of relevant. And as nothing comes for free, these companies try to invent the wheel again. PLM is serious business.

imageThe first keynote speech from the second day was from Dantar Oosterwal, Partner and President of the Milwaukee Consulting Group, who inspired us with Lean and PLM: Operation Excellence and this all related to his experiences with Harley Davidson.

It was interesting how described the process of focusing on the throughput to get market results. There are various parameters how you can influence market share, by a price strategy, by increased marketing , but the most impact on Harley Davidson sales result was the effect of innovation. More model variants being the choice for more potential customers. By measuring and analyzing the throughput of the organization an optimal tuning could be found.

Dantar also shared an interesting anecdote about an engineer that had to study the impact of ethanol as fuel for a certain engine. And after a certain time the engineer came back with the answer: yes we can. He answered the question but left no knowledge behind. Where a similar question was asked about performance to a supplier and he came back with an answer and graphs explaining where the answered was based upon. This answer created knowledge as it could be reused for similar questions. It is a good example how companies should focus on collecting knowledge in their PLM environment instead of answers on a question.

imageThe second keynote speaker was from the world biggest brand, Christopher Boudard, PLM Director from the Coca Cola Company. With its multiple brands and global operations it is a challenge to work towards a single PLM platform. He explained that at this stage they are still busy loading data into the system, where a lot of time is spent on data cleansing as the system has only value when the data is clean and accurate.

And this requires a lot of motivation for the PLM team to keep the executive management involved and sponsoring a project that takes five years to consolidate data and only then through the right processes make sure the data remains correct.

Christopher demonstrated in a passionate manner that leadership is crucial for such a project to be successful and implemented. For me as an European it was interesting to see that the world biggest brand PLM Director is a French citizen inspiring the management of such an American company.

imageMonica Schnitger conducted an interesting session about the state-of-the-state of multi-platform PLM.
If you cannot understand this tittle, it was a debate between the PLM vendors ( Aras, Autodesk, Dassault Systemes, PTC, SAP and Siemens) about openness, interoperability, cloud and open source.

After the first question from Monica about the openness of each of the vendor’s systems, it was clear there are no problems to expect in the future. All systems were extremely open according to the respondents and I lost my attention for the debate somehow as I had the feeling I was listening to an election debate. Monica did her best to make it an unbiased discussion, however I feel when some people want to make a specific point and use every question to jump on that it becomes an irritation.

imageChad Jackson, this time dressed up as the guy that is always killed in the first 5 minutes of a Star Trek episode, shared with us the early findings of the 2012 State of PLM. Tech4PD followers, and who is not a follower, understood he lost the bet of the second episode.

Chad let me know if this picture needs to be removed, as it can kill your future career.

The preliminary findings Chad was sharing with us that manufacturing and service where significant interested and consumers of PLM data, but do not consider it as their data, where they have to contribute too also. The fact that it is available makes them involved in using the data, still these departments do not show active participating in PLM. Somehow this confirms the observation that PLM is still considered as an engineering tool, not as an enterprise wide platform.

As the initial group of participants (n = 100) is small and not random selected from an overall population, the questions remains what the state of PLM is in 2012. I assume Chad will come back on that in a later time.

The last plenary sessions, David Karamian from Flextronics and Michael Grieves, a Virtual Perfect Future, had the ungrateful position being the last two speakers of this event. I have to review  David’s presentation again as it was not easy to digest and recall a week later what were his highlights. Michael’s presentation was easier to digest and I also believe with the new upcoming concepts and technology the virtual perfect future is there.

Looking back on a successful event, where I met many of my PLM peers from across the ocean, I will take the upcoming weeks to review the sessions I missed. Final good news for all PLM mind sharers, is the fact that CIMdata and MarketKey announced the coordination of their upcoming events next year – more content and more attendees guaranteed.

tacit_logoThe brain has become popular in the Netherlands in the past two years. Brain scientists have been publishing books sharing their interpretations on various topics of human behavior and the brain. Common theme of all: The brain is influencing your perceptions, thoughts and decisions without you even being aware of it.

Some even go that far by claiming certain patterns in the brain can be a proof if you have a certain disorder. It can be for better or for worse.

“It was not me that committed this crime; it was my brain and more…”

Anyway this post will be full of quotes as I am not the  brain expert, still giving the brain an important role (even in PLM)

“My brain? That´s my second favorite organ” – Woody Allen

It is good to be aware of the influence of the brain. I wrote about this several times in the past, when discussing PLM vendor / implementer selection or when even deciding for PLM. Many of my posts are related to the human side of justifying and implementing PLM.

As implementing PLM for me primary is a business change instead of a combination of IT-tools to implement, it might be clear that understanding the inhibitors for PLM change are important to me.

In the PLM communities, we still have a hard job to agree between each other what is the meaning of PLM and where it differs from ERP. See for example this post and in particular the comments on LinkedIn (if you are a member of this group): PLM is a business process, not a (software) tool

And why it is difficult for companies to implement PLM beside ERP (and not as an extension of ERP) – search for PLM and ERP and you find zillions of thoughts and answers (mine too).

Charles_RoxburghThe brain plays a major role in the Why PLM we have ERP battle (blame the brain). A week ago I read an older publication from Charles Roxburgh (published in May 2003 for McKinsey) called: Hidden flaws in strategy subtitle: Can insights from behavioral economics explain why good executives back bad strategies. You can read, hear and download the full article here if you are a registered user.

The article has been written long before the financial and global crises were on the agenda and Mr. Roxburgh describes 8 hidden flaws that influence our strategic decision making (and PLM is a strategy). I recommend all of you to read the full article, so the quotes I will be making below will be framed in the bigger picture as described by Mr. Roxburgh. Note all quotes below are from his publication.

Flaw 1: Overconfidence

We often make decisions with too much confidence and optimism as the brain makes us feel overconfident and over optimistic about our own capabilities.

Flaw 2: Mental accounting

Avoiding mental accounting traps should be easier if you adhere to a basic rule: that every pound (or dollar or euro) is worth exactly that, whatever the category. In this way, you will make sure that all investments are judged on consistent criteria and be wary of spending that has been reclassified. Be particularly skeptical of any investment labeled “strategic.”

Here I would relate to the difference in IT-spending and budget when you compare ERP and PLM. ERP spending is normal (or strategic) where PLM spending is not understood.

Flaw 3: The status quo bias

People would rather leave things as they are. One explanation for the status quo bias is aversion to loss—people are more concerned about the risk of loss than they are excited by the prospect of gain.

Another reason why adapting and implementing PLM in an organization is more difficult than for example just automating what we already do.

Flaw 4: Anchoring

Anchoring can be dangerous—particularly when it is a question of becoming anchored to the past

PLM has been anchored with being complex and expensive. Autodesk is trying to change the anchoring. Other PLM-like companies stop talking about PLM due to the anchoring and name what they do different: 3DExperience, Business Process Automation, …..

Flaw 5: The sunk-cost effect

A familiar problem with investments is called the sunk-cost effect, otherwise known as “throwing good money after bad.” When large projects overrun their schedules and budgets, the original economic case no longer holds, but companies still keep investing to complete them.

I have described several cases in the past anonymously; where companies kept on investing and customizing their ERP environment in order to achieve PLM goals. Although it never reached the level of acceptance and quality a PLM system could offer, stopping these projects was impossible.

Flaw 6: The herding instinct

This desire to conform to the behavior and opinions of others is a fundamental human trait and an accepted principle of psychology.

Warren Buffett put his finger on this flaw when he wrote, “Failing conventionally is the route to go; as a group, lemmings may have a rotten image, but no individual lemming has ever received bad press.”

A quote in a quote but so true. Innovative thinking, introducing PLM in a company requires a change. Who needs to be convinced? If you do not have consensus (which usually happens as PLM is vague) you battle against the other lemmings.

Flaw 7: Misestimating future hedonic states

Social scientists have shown that when people undergo major changes in circumstances, their lives typically are neither as bad nor as good as they had expected—another case of how bad we are at estimating. People adjust surprisingly quickly, and their level of pleasure (hedonic state) ends up, broadly, where it was before

A typical situation every PLM implementation faces: users complaining they cannot work as efficient anymore due to the new system and their work will be a mess if we continue like this. Implementers start to customize quickly and we are trapped. Let these people ‘suffer’ with the right guidance and motivation for some months (but this is sometimes not the business model the PLM implementer pushes as they need services as income)

Flaw 8: False consensus

People tend to overestimate the extent to which others share their views, beliefs, and experiences—the false-consensus effect. Research shows many causes, including these:

  • confirmation bias, the tendency to seek out opinions and facts that support our own beliefs and hypotheses
  • selective recall, the habit of remembering only facts and experiences that reinforce our assumptions
  • biased evaluation, the quick acceptance of evidence that supports our hypotheses, while contradictory evidence is subjected to rigorous evaluation and almost certain rejection; we often, for example, impute hostile motives to critics or question their competence
  • groupthink, the pressure to agree with others in team-based cultures

Although positioned as number 8 by Mr. Roxburgh, I would almost put it as the top when referring to PLM and PLM selection processes. So often a PLM decision has not been made in an objective manner and PLM selection paths are driven to come to the conclusion we already knew. (Or is this my confirmation bias too Smile)

Conclusion

As scientists describe, and as Mr. Roxburgh describes (read the full article !!!) our strategic thinking is influenced by the brain and you should be aware of that. PLM is a business strategy and when rethinking your PLM strategy tomorrow, be prepared to avoid these flaws mentioned in this post today.

observationThe past three weeks I had time to observe some PLM Vendors marketing messages (Autodesk as the major newbie). Some of these message lead to discussions in blogs or (LinkedIn) forums. Always a good moment to smile and think about reality.

In addition the sessions from PLM Innovation 2012 became available for the attendees (thanks MarketKey – good quality).  I had the chance to see the sessions I missed. On my wish list was “The future of PLM Business Models” moderated by Oleg as here according to Oleg some interesting viewpoints came up. This related to my post where I mentioned the various definitions of PLM.

All the above inspired me to write this post, which made me realize we keep on pushing misconceptions around PLM in our customer’s mind, with the main goal to differentiate.

I will address the following four misconceptions. The last one is probably not a surprise, therefore on the last position. Still sometimes taken for granted.

  1. PLM = PLM
  2. On the cloud = Open and Upgradeable
  3. Data = Process Support
  4. Marketing = Reality

1. PLM = PLM

It is interesting to observe that the definition of PLM becomes more and more a marketing term instead of a common definition which applies to all.

plm_shareLet me try to formulate again a very generic definition which captures most of what PLM Vendors target to do.

PLM is about connecting and sharing the company’s intellectual property through the whole product lifecycle. This includes knowledge created at the concept phase going through the whole lifecycle till a product is serviced in the field or decommissioned.

Experiences from the field (services / customers / market input) serve again for the other lifecycle phases as input to deliver a better or innovative product.

Innovation is an iterative process. It is not only about storing data, PLM is also covering the processes of managing the data, especially the change processes. Sharing data is not easy. It requires a different mind set, data is not only created for personal or departmental usage, but also should be found and extended by other roles in the organization. This all makes it a serious implementation, as aligning people is a business change, not an IT driven approach.

Based on this (too long) high-level PLM definition, it does not imply you cannot do PLM without a PLM system. You might also have a collection of tools that are able to provide a complete coverage of the PLM needs.

DIYOleg talks about DIY (Do It Yourself) PLM, and  I have seen examples of Excel spreadsheets managing Excel spreadsheets and Email archives.  The challenge I see with this type of PLM implementations is that after several years it is extremely difficult for a company to change. Possible reasons: the initial gurus do not longer work for the company, new employees need years of experience to find and interpret the right data.

A quick and simple solution can become a burden in the long term if you analyze the possible risks.

Where in the early years of PLM, it was mainly a Dassault Systemes, Siemens and PTC driven approach with deep CAD integrations,  the later years other companies like Aras and now Autodesk, started to change the focus from classical PLM more to managing enterprise metadata. A similar approach SAP PLM is offering. Deep integrations with CAD are the most complex parts of PLM and by avoiding them, you can claim your system is easier to implement, etc., etc.

myplmA Single version of the truth is a fancy PLM expression. It would be nice if this was also valid for the definition of PLM. The PLM Innovation 2012  session at the future of PLM models demonstrated that the vendors in this panel discussion had a complete different opinion about PLM. So how can people inside their company explain to the management and others why the need PLM and which PLM they have in mind ?

2. On the cloud = Open and Upgradeable

cloudDuring the panel discussion Grant Rochelle from Autodesk mentioned the simplicity of their software and how easy it will be upgradeable in the future. Also he referred to Salesforce.com as a proof point.They provide online updates from the software, without the customer having to do anything.

The above statement is true as long as you keep your business coverage simple and do not anticipate changes in the future. Let me share you an analogy with SmarTeam, how it started in 1995

At that time SmarTeam was insanely configurable. The Data Model Wizard contained several PDM templates an within hours you could create a company specific data model. A non-IT skilled person could add attributes, data types, anything they wanted and build the application, almost the same as Autodesk 360. The only difference, SmarTeam was not on the cloud, but it was running on Windows, a revolution at that time as all serious PDM systems were Unix based.

The complexity came however when SmarTeam started to integrate deeply with CAD systems. These integrations created the need for a more standardized data model per CAD system. And as the SmarTeam R&D was not aware of each and every customer’s implementation, it became hard to define a common business logic in the data (and to remain easily upgradable).

warningI foresee similar issues with the new cloud based PLM systems. They seem to be very easy to implement (add what you want – it is easy). As long as you do not integrate to other systems it remains safe. Integrating with other and future systems requires either a common data definition (which most vendors do not like) or specific integrations with the cost of upgrading.

In the beginning everything is always possible with a well-defined system. But  be aware looking back in history, every 10 years a disruptive wave comes in, changing the scope and upgradability.

And to challenge the cloud-based PLM vendors: in the generic definition of PLM that I shared above, PLM integrates also design data.

3. Data = Process Support

Another misconception, which originates from the beginning of PLM is the idea that once you have support for specific data in your system, you support the process.

PDM_ERP_2000First example: Items defined in ERP. When engineers started to use a PDM system and started to define a a new item there were challenges.  I had many discussions with IT-departments, that they did not need or wanted items in PDM. ERP was the source for an item, and when a designer needed a new item, (s)he had to create it in ERP. So we have a single definition of the item.

Or the designer had to request a new item number from the ERP system. And please do not request numbers too often as we do not want to waste them was the message.

Ten years later this looks like a joke, as most companies have an integrated PDM/ERP process and understand that the initial definition of a new item comes from PDM and at a certain stage the matured item is shared (and completed) by the ERP system.  It is clear that the most efficient manner to create a new item is through PLM as the virtual definition (specs / CAD data) also reside there and information is handled in that context.

capaA second more actual example is the fact that compliancy is often handled in ERP. It is correct that in the case you manufacture a product for a specific target market, you need to be able to have the compliancy information available.

However would you do this in your ERP system, where you are late (almost at the end) of the design lifecycle or is it more logical that during your design stages at all time you verify and check compliancy ? The process will work much more efficient and with less cost of change when done in PLM but most companies still see ERP as their primary IT system and PLM is an engineering tool.

Finally on this topic a remark to the simplified PLM vendors. Having the ability to store for example requirements in your system does not mean you have support for a complete requirements management process. It is also about the change and validation of requirements, which should be integrated for a relevant role during product definition (often CAD) and validation. As long as the data is disconnected there is not such a big advantage compared to Excel.

4. Marketing = Reality

plm_modelsIn the future of PLM Business Models
Oleg showed a slide with the functional architectures of the major PLM Vendors. In the diagram all seems to be connected as a single system, but in reality this is usually not the case.

As certain components / technologies are acquired, they provide the process coverage and only in the future you can imagine it works integrated. You cannot blame marketing for doing so, as their role is to position their products in the most appealing way customers will buy it. Without marketing perhaps no-one would buy a PLM system, when understanding the details Smile

Autodesk as a newcomer in PLM has a strong background in marketing. This is understandable as similar to Microsoft, their main revenue comes from selling a large volume of products, where the classical PLM vendors often have a combination with services and business change. And therefore a different price point.

When in the eighties Autodesk introduced AutoCAD, it was a simple, open 2D CAD environment, able to run on a PC. Autodesk’s statement at that time: “We provide 80 percent of the functionality for 20 % of the price”.
Does this sound familiar nowadays ?

As AutoCAD was a basic platform allowing customers and resellers to build their solutions on top of it, this became the mid-market success for Autodesk with AutoCAD.

The challenge with Autodesk PLM 360 is that although the same logic seems to make sense, I believe the challenge is not in the flexible platform. The challenge is in the future, when people want to do more complex things with the system, like integrations with design, enterprise collaboration.

At that time you need people who can specify the change, guide the change and implement the change. And this is usually not a DIY job.

pinoAutodesk is still learning to find the right PLM messages I noticed recently. When attending the Autodesk PLM session during PLM Innovation 2012 (end of February), one of their launching customers ElectronVault presented their implementation – it took only two weeks !!! Incredible

However reading Rob Cohee’s blog post the end of March, he mentions ElectronVault again. Quote:

ElectronVault was searching for something like this for over two years and after 6 weeks they have implemented Project Management, EBOM, MBOM, and starting on their APQP project. Six Weeks!!!

As you see, four weeks later the incredible two weeks have become six weeks and again everything is implemented. Still incredible and I am looking forward to meet ElectronVault in the future as I believe they are a typical young company and they will go through all of the maturity phases a company will go through: people, processes and tools (in this order). A tool driven implementation is more likely to slow down in the long term.

Conclusion: Misconceptions are not new. History can teach us a lot about what we experience now. New technology, new concepts can be a break through. However implementing them at companies requires a change in organizations and this has been the biggest challenge the past 100 years.

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