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Three weeks ago there was the Product Innovation conference in Düsseldorf. In my earlier post (here) I described what I experienced during this event. Now, after all the information is somehow digested, here a more high-level post, describing the visible change in business and how it relates to PLM. Trying to describe this change in non-academic wording but in images. Therefore, I described the upcoming change in the title: from linear to circular and fast.
Let me explain this image step by step
In the middle of the previous century, we were thinking linear in education and in business. Everything had a predictable path and manufacturing companies were pushing their products to the market. First local, later in time, more global. Still the delivery process was pretty linear:
This linear approach is reflected in how organizations are structured, how they are aligned to the different steps of the product development and manufacturing process. Below a slide I used at the end of the nineties to describe the situation and the pain; lack of visibility what happens overall.
It is discouraging to see that this situation still exists in many companies.
At the end of the nineties, early 2000, PLM was introduced, conceptually managing the whole lifecycle. In reality, it was mainly a more tight connection between design and manufacturing preparation, pushing data into ERP. The main purpose was managing the collaboration between different design disciplines and dispersed teams.
Jim Brown (Tech-Clarity) wrote at that time a white paper, which is still valid for many businesses, describing the complementary roles of PLM and ERP. See the picture below:
Jim introduced the circle and the arrow. PLM: a circle with iterations, interacting with ERP: the arrow for execution. Here visual it became already clear an arrow does not have the same behavior as a circle. The 100 % linearity in business was gone.
Let´s have a closer look at the PLM circle
This is how PLM is deployed in most organizations:
Information is pushed in the ERP system as disconnected information, no longer managed and connected to its design intent.
Next, the ERP system is most of the time not well-equipped for managing after sales and services content. Another disconnect comes up.
Yes, spare parts could be ordered through ERP, but issues appearing at the customer base are not stored in ERP, often stored in a separate system again (if stored beyond email).
The result is that when working in the concept phase, there is no information available for R&D to have a good understanding of how the market or customers work with their product. So how good will it be? Check in your company how well your R&D is connected with the field?
And then the change started …
This could have stayed reality for a long time if there were not a huge business change upcoming. The world becomes digital and connected. As a result, local inefficiencies or regional underperformance will be replaced by better-performing companies. The Darwin principle. And most likely the better performing companies are coming from the emerging markets as there they do not suffer from the historical processes and “knowledge of the past”. They can step into the digital world much faster.
In parallel with these fast growing emerging markets, we discovered that we have to reconsider the ways we use our natural resources to guarantee a future for next generations. Instead of spilling resources to deliver our products, there is a need to reuse materials and resources, introducing a new circle: the circular economy.
The circular economy can have an impact on how companies bring products to the market. Instead of buying products (CAPEX) more and more organizations (and modern people) start using products or services in a rental model (OPEX). No capital investment anymore, pay as you go for usage or capacity.
The digital and connected world can have a huge impact on the products or services available in the near future. You are probably familiar with the buzz around “The Internet of Things” or “Smart and Connected”.
No longer are products depending on mechanical behavior only, more and more products are relying on electrical components with adaptive behavior through software. Devices that connect with their environment report back information to the manufacturer. This allows companies to understand what happens with their products in the field and how to react on that.
Remember the first PLM circle?
Now we can create continuity of data !
Combine the circular economy, the digital and connected world and you will discover everything can go much faster. A crucial inhibitor is how companies can reorganize themselves around this faster changing, circular approach. Companies need to understand and react to market trends in the fastest and adequate way. The future will be probably about lower volumes of the same products, higher variability towards the market and most likely more and more combining products with services (the Experience Model). This requires a flexible organization and most likely a new business model which will differ from the sequential, hierarchical organizations that we know at this moment.
The future business model ?
The flexibility in products and services will more and more come from embedded software or supported by software services. Software services will be more and more cloud based, to avoid IT-complexity and give scalability.
Software development and integration with products and services are already a challenge for classical mechanical companies. They are struggling to transform their mechanical-oriented design process towards support for software. In the long-term, the software design process could become the primary process, which would mean a change from (sequential – streamlined) lean towards (iterative – SCRUM) agile.
Once again, we see the linear process becoming challenged by the circular iterations.
This might be the end of lean organizations, potentially having to mix with agile conepts..
If it was a coincidence or not, I cannot judge, however during the PI Conference I learned about W.L. Gore & Associates, with their unique business model supporting this more dynamic future. No need to have a massive organization re-org to align the business, as the business is all the time aligning itself through its employees.
Last weekend, I discovered Semco Partners in the newspaper and I am sure there are more companies organizing themselves to become reactive instead of linear – for sure in high-tech world.
Linearity is disappearing in business, it is all about reactive, multidisciplinary teams within organizations in order to support customers and their fast changing demands.
Fast reactions need new business organizations models (flexible, non-hierarchical) and new IT-support models (business information platforms – no longer PLM/ERP system thinking)
What do you think ? The end of linear ?
I have talked enough about platforms recently. Still if you want to read more about it:
Engineering.com: Prod. Innovation Platform PlugnPlay in next generation PLM
Gartner: Product Innovation Platforms
VirtualDutchman: Platform, Backbone, Service Bus or BI
A PLM-twisted mind never rests. Not even during these Xmas seasonal holidays, when everything else comes to rest. The dark Christmas days, here in the Netherlands, are the days to share with your family and with others who need your support. For a short time, we focus on being kind, charity and what matters for humanity.
Back to our purpose you might say. This year Pope Francis brought this message very aptly to his cardinals – read it here if you have not heard about it yet.
Next my PLM-twisted mind started ringing all kind of Xmas bells. The pope is talking about PLM! Instead of focusing on your business silo, your personal kingdom, we have to focus on what is the original purpose of our company, not of the individual person. Forget politics, back to the mission !
Then I realized there is a paradox within PLM. PLM is a must-have or must-do in a capitalistic world as through PLM companies can become be more competitive than others, win market share and become the market leader.
Nothing social. It is the base for survival in this global world. When your company is not funded by the government, you have to be competitive to survive. Your business needs to make enough money to keep on innovating and stay in business. This is why companies need PLM..
The paradox however is that effective PLM implementations are all based on the concept of sharing. Sharing data in the early ideation phases, through crowd-sourcing, open innovation, internal sharing with partners and potential customers. Next the development, delivery and maintenance phases of the lifecycle are all performing in an ideal way if information is shared and flowing across the value chain without being locked in silos. The current hype of IoT (Internet of Things) is about sharing data.
So to be a successful, profitable company, inside your business you need to go back to the roots of sharing (data). Interesting paradox isn’t it?
Therefore, I wish you all to have a PLM Pope in your company who will explain the mission and break down the holy houses. You need a PLM pope in your company to make sure it gets implemented successful.
I wish you all a happy and successful 2015
with a lot of sharing
p.s. Should I see a shrink for my PLM-twisted brain?
In the past two years, I have been heavily involved in PLM Proof of Concepts sitting at both sides of the table. Supporting companies in their PLM selection, supporting a vendor explaining their value to the customer and supporting implementers assisting them with industry knowledge, all in the context of a PLM selection process.
The Proof of Concept is crucial in a PLM selection process as it is the moment where the first glimpse of reality comes to the table.
Different size of companies, different consultants all have a different view on the importance of the Proof of Concept. Let me share you my thoughts after a quick recap on the PLM selection process.
The PLM selection process
1. Build a vision
It is important that a company understands what they want to achieve in the next five to ten years, before starting a PLM selection process. Implementing PLM means a business transformation, even if you are a small company. If the management does not understand a vision is required, there is a potential risk upcoming, as PLM without a change in the way people work, will not deliver the expected results.
2. Issue an RFI to potential candidates
Once you have a PLM vision, it is time to get in touch with potential suppliers. The RFI (Request for Information) phase is the phase where you can educate yourself better by challenging the suppliers to work with you on the future solutions.
3. Discuss with selected candidates
From the RFI responses you understand which companies are attractive because they match your vision, your budget or industry. Have a first interaction with the selected companies and let them demo their standard environment targeted to your vision.
In this stage, you check with the preferred companies their ability to deliver and your ability to work together. The POC phase should give you the understanding of the scope for the upcoming PLM project and help you to understand who and how the project can be executed. More details about this step below.
Although some companies start with an RFP before the POC, for me it makes most sense to verify the details after you have a proper understanding of the To-Be solution. The RFP is often the base for the contractual scope and therefore should be as accurate as possible
In the past, I wrote in more detail about the PLM selection process. Two posts: PLM selection: Don’t do this and PLM selection: Do this. Have a read if you want to understand this part in more depth. Now let´s focus on the POC .
- As described before, the target of the Proof of Concept should be to get a better understanding of the potential To-Be processes and obtain an impression of the capabilities of the implementer and the preferred PLM software.
The result should be that you have more realistic expectations of what can be achieved and the challenges your company will face.
- From there, you can evaluate the risks, address them and build an achievable roadmap to implement. It is important that the focus is not just on the cost of the implementation.
- To sell PLM inside your company, you need to realign with the vision and explain, to all people involved,the value of “Why PLM”.
Explaining the value is complex, as not everyone needs the same message. The management will focus on business benefits where users will focus how it impacts their daily life. If you forget to explain the value, the PLM projects, it is considered again as just another software purchase.
Make sure the Proof of Concept is driven by validating future business scenarios, focusing on the To-Be solution. The high-level scenarios should be demonstrated and explained to the business people. In this stage, it is important people realize the benefits and the value of the new processes.
The POC is also an internal sales event. The goal should be to get more enthusiastic and supportive business people in your company for the upcoming PLM project. Identify the champions you will need to lean on during the implementation.
Test the implementer. To my opinion the critical success of a PLM implementation depends on the implementation team, not on the software. Therefore, the POC phase is the best moment to learn if you can work with the implementer. Do they know your business? Do they have experience with your business? The more you are aligned, the higher the chance you will be successful as a team
Show commitment to engage. Often I have seen POC engagements where the company demanded the implementer or vendor a Proof of Concept for free. This creates an unbalanced situation during the Proof of Concept as the vendor or implementer can not invest time and resources in the process as expected without any commitment from the company. By paying a certain fee for the POC, a company can demonstrate to the implementer /vendor that this POC is valuable for you and you can request the same response from them.
The Proof of Concept is not a detailed function/feature check to identify each mouse-click or option in the system. During the implementation, these details might come up. It is important in a Proof of Concept to understand the big picture and not to get lost in the details. As human beings we tend to focus on what does not work, not realizing that probably over eighty-ninety percent works according the needs
Do not expect the ultimate To-Be scenario demonstrated during the Proof of Concept. The Proof of Concept is a learning stage for both the company and the implementer to imagine the best possible scenario. PLM systems are generic and likely they will not provide a similar configuration and functionality matching your environment. At this stage validate if the primary capabilities are there and if there are gaps.
Do not run a POC with a vendor (only). This might be one of the most critical points for a POC. A PLM software vendor’s target is to sell their software and for that reason they often have dedicated presales teams that will show you everything in a smooth manner, overwhelming you with all the beauty of the software. However after the POC this team is gone and you will have to align yourself again with the implementation partner, trying to match again your business needs and their understanding.
Realize – you get what you are asking for. This is more a Do-and-Don’t message packed together. A Proof of Concept phase is a point where companies get to know each other. If you are not focused, do not expect the implementer / vendor to be committed. A PLM implementation is not product. It is a business transformation supported by products and services. Do not treat PLM implementers and vendors in the same way, as your customers treat you (in case you deliver products).
There are still many more thoughts about the Proof of Concept . Ideally you run two POCs in parallel, either with two implementers of the preferred software (if possible) or with two different implementers representing different software.
Ideally, as I know it is a challenge, especially for small and medium-sized businesses, where people are running to keep the business on-going.
Still remember, PLM is a business transformation, targeting to improve your business in the upcoming five to ten years, avoiding you are running out of business.
Your thoughts ?
As a bonus a short anecdote that I posted in 2010 still relevant:
Some time ago a Christian PLM Sales professional died (let’s call him Jack) and according to his believe he faced Saint Peter at the gates of Heaven and Hell.
Saint Peter greeted Jack and said: “Jack, with the PLM Sales you have done good and bad things to the world. For that reason, I cannot decide if you should go to Heaven or to Hell. Therefore, I allow you to make the choice yourself”.
Jack replied: “But Saint Peter, how can I make such an important decision for the rest of my eternal life. It is too difficult!”
Saint Peter replied: “No problem Jack, take a look at Heaven and Hell, take your time and then tell me your decision.”
Jack entered Heaven and he was surprised about the quietness and green atmosphere there. Angels were singing, people were eating from golden plates with the best food ever, people were reading poetry and everything was as peaceful as you could imagine. In the distance, he could see God surrounded by some prophets talking about the long-term future. After some time, Jack had seen it and went to Hell to have a view there.
And when he opened the gates of Hell, he was astonished. Everywhere he looked there were people partying, having fun. It reminded him off these sales kick-offs, he had in the past, exotic places with lots of fun. In the distance, he could see the Devil as DJ playing the latest dance music – or was it DJ Tiësto?
Jack did not hesitate and ran back to Saint Peter, no time to lose. “Saint Peter,” he said “I want to go to Hell, no doubt. And pity I did not know it before”
“So be it, ” said Saint Peter “go for it.”
And then once Jack entered Hell, it was suddenly all fire around him, people were screaming of pain and suffering and also Jack felt the first flames.
“Devil!!” He screamed “what happened to what I have seen before?”
With a sarcastic voice, the devil replied: “That? That was a proof of concept.”
Everyone wants to be a game changer and in reality almost no one is a game changer. Game changing is a popular term and personally I believe that in old Europe and probably also in the old US, we should have the courage and understanding changing the game in our industries.
Why ? Read the next analogy.
With my Dutch roots and passion for soccer, I saw the first example of game changing happening in 1974 with soccer. The game where 22 players kick a ball from side to side, and the Germans win in the last minute.
My passion and trauma started that year where the Dutch national team changed the soccer game tactics by introducing totaalvoetbal.
Defenders could play as forwards and they other way around. Combined with the offside-trap; the Dutch team reached the finals of the world championship soccer both in 1974 and 1978. Of course losing the final in both situations to the home playing teams (Germany in 74 – Argentina in 78 with some help of the referee we believe)
This concept brought the Dutch team for several years at the top, as the changed tactics brought a competitive advantage. Other teams and players, not educated in the Dutch soccer school could not copy that concept so fast
At the same time, there was a game changer for business upcoming in 1974, the PC.
On the picture, you see Steve Jobs and Steve Wozniak testing their Apple 1 design. The abbreviation IT was not common yet and the first mouse device and Intel 8008 processor were coming to the market.
This was disruptive innovation at that time, as we would realize 20 years later. The PC was a game changer for business.
Johan Cruyff remained a game changer and when starting to coach and influence the Barcelona team, it was his playing concept tika-taka that brought the Spanish soccer team and the Barcelona team to the highest, unbeatable level in the world for the past 8 years
Instead of having strong and tall players to force yourself to the goal, it was all about possession and control of the ball. As long as you have the ball the opponent cannot score. And if you all play very close together around the ball, there is never a big distance to pass when trying to recapture the ball.
This was a game changer, hard to copy overnight, till the past two years. Now other national teams and club teams have learned to use these tactics too, and the Spanish team and Barcelona are no longer lonely at the top.
Game changers have a competitive advantage as it takes time for the competition to master the new concept. And the larger the change, the bigger the impact on business.
Also, PLM was supposed to be a game changer in 2006. The term PLM became more and more accepted in business, but was PLM really changing the game ?
PLM at that time was connecting departments and disciplines in a digital manner with each other, no matter where they were around the globe. And since the information was stored in centralized places, databases and file sharing vaults, it created the illusion that everyone was working along the same sets of data.
The major successes of PLM in this approach are coming from efficiency through digitization of data exchange between departments and the digitization of processes. Already a significant step forward and bringing enough benefits to justify a PLM implementation.
Still I do not consider PLM in 2006 a real game changer. There was often no departmental or business change combined with it. If you look at the soccer analogy, the game change is all about a different behavior to reach the goal, it is not about better tools (or shoes).
The PLM picture shows the ideal 2006 picture, how each department forwards information to the next department. But where is PLM supporting after sales/services in 2006 ? And the connection between After Sales/Services and Concept is in most of the companies not formalized or existing. And exactly that connection should give the feedback from the market, from the field to deliver better products.
The real game changer starts when people learn and understand sharing data across the whole product or project lifecycle. The complexity is in the word sharing. There is a big difference between storing everything in a central place and sharing data so other people can find it and use it.
People are not used to share data. We like to own data, and when we create or store data, we hate the overhead of making data sharable (understandable) or useful for others. As long as we know where it is, we believe our job is safe.
But our job is no longer safe as we see in the declining economies in Europe and the US. And the reason for that:
Data is changing the game
In the recent years the discussion about BI (Business Intelligence) and Big Data emerged. There is more and more digital information available. And it became impossible for companies to own all the data or even think about storing the data themselves and share it among their dispersed enterprises. Combined with the rise of cloud-based platforms, where data can be shared (theoretically) no matter where you are, no matter which device you are using, there is a huge potential to change the game.
It is a game changer as it is not about just installing the new tools and new software. There are two major mind shifts to make.
- It is about moving from documents towards data. This is an extreme slow process. Even if your company is 100 % digital, it might be that your customer, supplier still requires a printed and wet-signed document or drawing, as a legal confirmation for the transaction. Documents are comfortable containers to share, but they are killing for fast and accurate processing of the data that is inside them.
- It is about sharing and combining data. It does not make sense to dump data again in huge databases. The value only comes when the data is shared between disciplines and partners. For example, a part definition can have hundreds of attributes, where some are created by engineering, other attributes created by purchasing and some other attributes directly come from the supplier. Do not fall in the ERP-trap that everything needs to be in one system and controlled by one organization.
Because of the availability of data, the world has become global and more transparent for companies. And what you see here is that the traditional companies in Europe and the US struggle with that. Their current practices are not tuned towards a digital world, more towards the classical, departmental approach. To change this, you need to be a game changer, and I believe many CEOs know that they need to change the game.
The upcoming economies have two major benefits:
- Not so much legacy, therefore, building a digital enterprise for them is easier. They do not have to break down ivory towers and 150 years of proud ownership.
- The average cost of labor is lower than the costs in Europe and the US, therefore, even if they do not do it right at the first time; there is enough margin to spend more resources to meet the objectives.
The diagram I showed in July during the PI Apparel conference was my interpretation of the future of PLM. However, if you analyze the diagram, you see that it is not a 100 % classical PLM scope anymore. It is also about social interaction, supplier execution and logistics. These areas are not classical PLM domains and therefore I mentioned in the past, the typical PLM system might dissolve in something bigger. It will be all about digital processes based on data coming for various sources, structured and unstructured. Will it still be PLM or will we call it different ?
The big consultancy firms are all addressing this topic – not necessary on the PLM level:
2012 Cap Gemini – The Digital advantage: …..
2013 Accenture – Dealing with digital technology’s disruptive impact on the workforce
For CEOs it is important to understand that the new, upcoming generations are already thinking in data (generation Y and beyond). By nature, they are used to share data instead of owning data in many aspects. Making the transition to the future is, therefore, also a process of connecting and understanding the future generations. I wrote about it last year: Mixing past and future generations with a PLM sauce
This cannot be learned from an ivory tower. The easiest way is not to be worried by this trend and continue working as before, losing business and margin slowly year by year.
As in many businesses people are fired for making big mistakes, doing nothing unfortunate is most of the time not considered as a big mistake, although it is the biggest mistake.
During the upcoming PI Conference in Berlin I will talk about this topic in more detail and look forward to meet and discuss this trend with those of you who can participate.
The soccer analogy stops here, as the data approach kills the the old game.
In soccer, the maximum remains 11 players on each side and one ball. In business, thanks to global connectivity, the amount of players and balls involved can be unlimited.
Because the leagues I was playing in, were always limited in scope: by age, local,regional, etc. Therefore it was easy to win in a certain scope and there are millions of soccer champions beside me. For business, however, there are almost no borders.
Global competition will require real champions to make it work !!!
Last week I attended the Product Innovation Apparel conference in London organized by MarketKey.
Having participated in the previous more traditional PLM conferences, I was not sure what to expect from the audience and the perception of PLM in the apparel business.
Someone told me PLM in Apparel should be very mature as it exists for more than 10 years in that industry; others said it is still an immature market as there are more than 400 Apparel solutions available. No consolidation so far, which is a sign of an immature market.
My conclusion after attending the event:
The focus was on business. PLM consultants dealing with the traditional PLM implementations should go to such a conference to learn the business side from PLM, in particular the needs for mid-market companies. There was (almost) no talk about functions and features; the focus was on the value PLM brings to the business, instead of all the IT issues related to the implementation.
In that context, the word “cloud” was of course mentioned more often.
So what did I learn?
There are some stunning technological innovations upcoming. Daan Roosegaarde as keynote speaker gave us some insight in how technology can become our second skin and interact with the environment. Interactive materials making the person connected to his/her environment. Similar in that direction was the performance and appearance from CuteCircuit (Ryan Genz and Francesca Rosella) demonstrating the use of smart textiles and use of micro-electronics.
“Make sure your dress is loaded when going to a party”
In addition, the panel discussion around 3D printing brought some of the inspiring thoughts for the future. In particular, the enthusiasm of Nicholas O’Donnell Hoare was comparable to the energy you could see from Daan Roosegaarde and the CuteCircuit team.
When you see these people speaking and shining, explaining their ideas there is no place for a “Yes, but …..” These people give the inspiring moments each conference must have.
The above movie is a good impression of the inspiration. Look at Daan’s expression and his reaction to the “Yes but culture” at 7:28 and beyond
Selling PLM inside the company
PLM at the board level
Every PLM experts knows selling PLM to your management and implementing PLM as a significant business change is a challenge. I noticed some different approaches here that opened my eyes. Elle Thomson from Marc Jacobs talking about how to get rid of the silos in an organization. In an organization where 98 % of the products is new every season. She got the job of VP of PLM in the company. The first time I hear there is a PLM voice at the board level! Many other companies could learn from that.
Excellent implementation blueprint
Next Pasquale Coppolella who explained how he transferred the Chicco from local into an international brand, understanding that PLM is crucial. Next he had to fight against the classical board remark: “Why do you need PLM we have SAP”. But he fought his way through with a perfect combination of alignment between IT and Business, transparency, education and a little bit dictatorship: “Listen to the users but at the end tell them where to go”. Again a PLM blueprint that could be a model for many mid-market companies.
Know how to sell PLM internal
Pam Buckingham and Jamie Tantleff explained their PLM journey through an “edutainment” session, an excellent combination of educating the audience about their PLM journey at Deckers Outdoor Corp, but also entertaining the audience with humor and alternation in their presentation. Through this approach, the upcoming upgrade for 9 months did not come as a depression. In my review from PLM Innovation in Berlin, I mentioned that I was missing the dynamics and energy – see the quote below:
Well for certain, Pam and Jamie took up the challenge and brought the potential boring PLM story in a modern way. Again so many others in traditional PLM could learn from.
While many others shared their experience related to PLM selection and implementation, I gave an overview session sharing the lessons learned from traditional PLM implementations, with a focus on mid-market challenges. As part of this session, I had to develop some new graphics I want to share with you as they might be also the graphics for future PLM
On the left the traditional PLM that can be found everywhere. Although there is a centralized system for Product Lifecycle information, the departments are still working sequential in the process, and at the end it is not always clear that the field experience (After Sales / Service) reaches the marketing & new development teams.
The right image is how I understood the conceptual PLM environment for apparel (and probably for all industries). Here, the focus is on collaboration in real-time between all disciplines. Data sharing is essential for apparel due to their extreme short go-to-market time (3 to 4 seasons per years – hundreds of SKU to be handled per line/brand). The sequential/departmental approach would be killing their business. And as reacting on trends and consumer moods is so crucial, the social environment needs to be part of the process. Without social connectivity again the brand would probably lose their customers.
The right image introduces the need for platform thinking, instead of system thinking. What I mean by that is when you observe implementations in the traditional PLM industries, you see many different systems (PDM, ERP, SCM, CRM, … (any TLA will do) and they all have their own data storage and interfaces with other systems.
I believe the future is in platforms where data is shared instead of exchanged between systems. Combined with embedded search technology that combines information from other platforms and environments (the web, your legacy), the platform will provide each user with the information needed at that time, either structured and under control or context sensitive. Apps instead of systems will be the way to reach the users.
Following this thought process it is clear that PLM will disappear in the future as a separate system. The focus will be on business execution using data sharing and data connectivity. And this trend might be even faster in Apparel as in this industry IT does not have such a prominent role and IT departments are small.
Again something companies from other industries could learn from.
There is so much to learn from experiences in the apparel industry. The PLM market for apparel might be immature, the people implementing are not. They have picked up the modern way of PLM thinking in the context of business, instead of a focus on IT. Combined with the fact that it is less a male-only business, it opened my eyes, and other PLM consultants should do the same.
WordPress indicated that this is my hundredth blog post since I started in 2008. A notorious PLM blogger would say: “Why did it take you so long to reach 100 posts? “ PLM blogging has been a journey for me, but in this post I want to focus on how PLM implementations should be perceived by companies: As a journey.
My previous posts might suggest that I am cynical about PLM because titles as “How come PLM is boring?” and “PLM at risk. It does not have a clear job” might give the impression that PLM is at the end of its lifecycle.
Let me be clear, I think it is not. We, PLM passionate people, are still trying to find the right method to promote the value of PLM to the minds of the management in companies. You would assume that the value PLM brings would make it a no-brainer. However for successful implementing PLM there is no standard approach (and definition). Often people believe PLM is an IT-solution. And the common sense is that you buy an IT-solution, you implement it and continue working in a better mode. That’s where the implementation fails as PLM is different. So let’s start our journey
A journey starts with a reason / target
Once you have decided you are going to make a journey there are several things to consider and some of them are obvious.
- Where do you start from ? The easiest part, but crucial.
- Where do you want to go? This is sometimes more difficult to achieve than the previous point, especially in cases when you only have an idea of the target.
- How do you travel? In which way do you want to reach your target? A fast and direct connection is expensive and considers the trip as a waste of time. An alternative is that you want to travel towards the target, meanwhile spending some money along the road and even make money from the experiences gained along the road? In that case, time spent is less an issue. It is the combination of having the target in mind, move forward in the right direction and simultaneously gain experience and benefits.
The fast approach
The fast approach is for many IT-systems a must. If you implement an ERP system, you know its exact purpose; it supports the scheduling and transactions through the organization. You cannot afford to have an old system and a new system work in parallel. And because these transactions are related to the financial state of the company, the management will always prioritize investments in ERP.
Another reason why ERP implementations can be reasonable fast is that you are not going to reinvent the way information is handled. It is more an improvement process than an innovation process. Although to be fair, moving towards multiple manufacturing locations and different costs centers can be considered as complex topics.
Why no fast approach for PLM ?
For PLM, there is no fast approach as there are so many areas that you can address? Too many jobs – remember my previous post? In addition, the exact meaning of all these jobs is not clear from the start.You have to prepare for a journey. And here is the main challenge. Management will not easily fund your journey as you cannot explain it specific results in comprehensible words to them. Management might be excited by the proposed value of PLM. Who does not need to be more competitive and innovative in the future? This message resonates particularly well among members of the board and shareholders.
But when it comes to implementation, there is usually only one cross-disciplines unit that can accomplish this assignment: the IT-department. And here is the crucial mistake discovered time after time where PLM implementations fail. PLM is a business transformation, not an IT-system implementation.
Business should lead this transformation, but it is very rare you find the right people that have the full overview, skills and availability to implement this transformation across departments. People from the business side will be primarily focused on their (small) part of the full process, leaving at the end the project to be done to IT.
But as the financial transactions are already taking care of in other systems, the company does not appear at risk. Accountant will never push for PLM as a life saver. Slow reducing margin, slowly diminishing market share often do not alert people in the board room. It requires a deep-dive from the management into these symptoms, which they do not wish to do – it takes time to learn and understand.
Autodesk and Aras somehow dream to have solved this issue by claiming their PLM tools are easy to implement, easy to configure. They are somehow stating: “Don’t worry about the IT-side, build what you need”. It is a bottom-up approach likely to fail as I learned from many SmarTeam implementations that never reached the enterprise level due to inconsistency and misunderstanding at management level.
The journey approach
There is only one strategy that works for PLM, which is starting from a clear vision from the top (the target/destination) and the belief that the target needs to be reached by business people supported by IT.
And in order to keep the business alive we will try to get closer and closer to the target, year by year: the journey approach. During the journey, various business needs and changes will be addressed as isolated but connected stages. Each stage should have its business targets and benefits. The advantage is that it is a learning experience where in every stage different business people are leading the subject. IT is always involved as the integrator of all stages. More on that in later posts.
There is a vital role required in the journey approach: The Guide(s). As implementing PLM is usually not a typical job for a company, it is something that you need to experience in order to do it right. And there are two types of guides:
- The travel agencies – companies that have collected the experiences from people around the world identified the places to go and often have done some local research to confirm the promises. In the PLM landscape, this is a company like CIMdata with their focus on PLM. There are also more specialized travel agencies that might focus on DIY trips (they provide infrastructure and support) or cruises (no escape). Here, I will not mention names, but there is always a demand for cruises.
- The local guides – this are usually individuals that have years of experience in the space they have been working. They know in detail where the dirt is and how to avoid swamps. In the PLM landscape, this is the PLM consultant with a focus on a particular product or on a certain part of PLM. The quality of a local guide varies a lot, and you need to examine their track record but I think they are required. Do not leave it to the travel agencies only.
To conclude after 100 posts. I am sure PLM is a journey. If you don’t know me by now, watch the movie below and browse through the top 10 most read individual posts to get an opinion.
- PLM at risk – it does not have a single, clear job ! (virtualdutchman.com)
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 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.
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.
Companies 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 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.
Innovation 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)
- Are we as dumb as “Slowly Boiling Brainless Frogs”? (1) (blogs.redding.com)
I am just back from an exciting PLM Innovation 2012 conference. With a full program and around 250 participants, it was two intensive days of PLM interaction.
What I liked the most is that the majority of the audience was focusing on PLM business related topics. The mood of PLM has changed.
In this post, I will give an impression of the event, how I experienced it without going into the details of each session.
Several interesting sessions were in parallel so I could not attend them all, but MarketKey, the organizer of the conference confirmed that all presentations are filmed and will become available on-line for participants. So more excitement to come.
First my overall impression: Compared to last year’s conference there was more a focus on the PLM business issues and less on PLM IT or architecture issues (or was it my perception ?)
Gerard Litjens (CIMdata Director European Operations) opened the conference as CIMdata co-hosted the conference. In his overview he started with CIMdata’s PLM definition – PLM is a strategic business approach. (Everyone has his own definition as Oleg noticed too). Next he presented what CIMdata sees as the hottest topics. No surprises here: Extension from PLM to new industries, extending PDM towards PLM, Integration of Social Media, Cloud, Open Source, Enterprise integration and compliance.
Next speaker was Thomas Schmidt (Vice President, Head of Operational Excellence and IS – ABB’s Power Products Division) was challenging the audience with his key note speech: PLM: Necessary but not sufficient. With this title it seemed that the force was against him (thanks Oleg for sharing).
Thomas explained that the challenge of ABB is being a global company and at the same time acting as a ‘local’ company everywhere around the world. In this perspective he placed PLM as part of a bigger framework to support operational excellence and presented some major benefits from a platform approach. I believe the Q&A session was an excellent part to connect Thomas’s initial statements to the PLM focused audience.
Marc Halpern from Gartner gave his vision on PLM. Also Marc started with the Gartner definition of PLM, where they characterized PLM as a discipline. Gartner identified the following 5 major trends: Software everywhere in products, usage of social media for product development and innovation, using analytics tools to support the whole product lifecycle – after sales, service, connecting to the customer. Opportunities for existing products to deliver them through services (media content, transportation)
Next I attended the Autodesk session, a PLM journey using the cloud, where I was eager to learn their approach towards PLM. Autodesk (Mike Lieberman) let Linda Maepa, COO from Electron Vault in the USA explain the benefits of the Autodesk PLM 360 solution. Electron Vault, a young, high-tech company, has implemented the solution within 2 weeks. And here I got disconnected . Also when the suggestion was raised that you do not need time to specify the requirements for the system (old-fashioned stuff),
I suddenly got into a trance and saw a TV advert from a new washing power, with numerous features (program management, new product introduction, …..) that was washing whiter than all the others and a happy woman telling it to the world. I believe if Autodesk wants to be considered as serious in the PLM world it should also work with existing customers and managing the change in these organizations. Usually it takes already more than two weeks to get them aligned and agree on the requirements. Unfortunate I did not have time during the breaks to meet Autodesk at their booth as I would love to continue the discussion about reality as my experience and focus is on mid-market companies. Waiting for a next opportunity.
After Autodesk, I presented in my session what are the main drivers for making the case for PLM. I also started with my favorite PLM definition (a collection of best practices – 2PLM) and explained that PLM starts with the management vision and targets for the future. Is it about efficiency, quality, time to market, knowledge capture or a more challenging task: creating the platform for innovation?
Next I followed the Energy tracks, where I listened to Charles Gagnon from Hydro Quebec, who gave an interesting lecture called: Implementing Open Innovation and Co-Development.
At first glance this is a sensitive topic. When you innovate it is all about creating new intellectual property, and the fear that when working with partners the IP might be out of the company, Charles explained how this process of collaborative innovation was started and monitored. At the end he reported they measured a significant gain in R&D value perceived when working with external partners. And they did not use a PLM system to manage Innovation (to be investigated how they could survive)
After the lunch I continued with Jonas Hagner from WinWinD, a young manufacturer of windmills that are targeted to operate in extreme climate conditions ( a niche market). They are both implementing PLM and ERP in parallel and they did not have to suffer from years of ERP before PLM and therefore could have a more balanced discussion around part information availability / part number and more. Still I believe they have the challenge to connect in an efficient manner the services of the windmills back to their R&D organization, to do a full PLM circle.
Karer consulting together with Siemens Energy presented the case how they have designed and starting the implement the interface between their PLM system (Teamcenter) and ERP system (SAP). What was disappointing to see was that the interface between Teamcenter and SAP was relative complex (bi-directional with engineering activities in both sides) . Almost 1½ years of development of this interface and one of the main reasons, because SAP was first and they start the engineering order in SAP.
Apparently 2 years later Siemens Energy could not implement a clear distinct separation between PLM and ERP anymore and will not have to live with this complex interface. In the past I have written several times about this complexity that companies seem to accept due to political or historical reasons. Sad story for PLM – Where is the MBOM ?.
The day finished with a closing keynote from Peter Bilello, explaining how a successful PLM implementation could look like. Many wise statements that everyone should follow in case you want to come to a successful implementation (and define correctly what success is)
Thanks to Autodesk we had a nice evening reception, discussion and evaluating with peers the first day.
Day 2 started for me with an interesting lecture from Peter Fassbender, Head Design Center Fiat Latin America, describing how in Brazil the Fiat Mio experiment used modern social media techniques, like crowdsourcing, communities and user involvement to guide the innovation and development of a potential car. A unique experiment demonstrating that this type of projects are influence the brand reputation positively (if managed correct) and for me an example of what PLM could bring if R&D is connected to the outside world.
Christian Verstraete Chief Technologist – Cloud Strategy from HP gave an inspiring session about the open frontiers of innovation. The speed of business in the past 30 years has increased dramatically (you need to be from an older generation to be aware of this – the definition of response time has changed due to new technologies) Christian pushed everyone to think Out of the Box and to be innovative, which made me wonder how long will companies in the future build standard boring products. Will keep on innovating in this amazing pace as we did in the past 30 years ?
Graeme Hackland, IT/IS director from the UK based Lotus F1 team presented the challenges a F1 team has to face every year due to changing regulations. I visited Lotus F1 last year and was impressed by the fact that over 500 engineers are all working around one carper year to optimize the car mainly for aerodynamics, but next to assure it performs during the years. Thousands of short interactions, changes to be implemented a.s.a.p. challenge the organization to collaborate in an optimum manner. And of course this is where PLM contributes. All the F1 fans could continue to dream and listen to Graeme’s stories but Jeremie Labbe from Processia brought us back to earth by explaining how Processia assisted Lotus F1 in a PLM value assessment as a next step.
Meanwhile I had some side discussions on various PLM topics and went back to the sessions, seeing how David Sherburne, Director of Global R&D Effectiveness from Carestream Health presented his case (open source PLM) and his analysis why an open source PLM model (based on Aras) is very appealing in their case. Indeed the business value perceived and significant lower operational costs for the software are appealing for his organization and for sure will influence the other PLM vendors in their pricing model.
Pierfrancesco Manenti, from IDC Manufacturing Insights gave a clear presentation indicating the future directions for PLM: managing operational complexity, not product complexity. As you could expect from IDC Manufacturing Insights all was well based on surveys in the manufacturing industry and clearly indicating that there is still a lot to do for companies to efficient share and work around a common product development and operational platform. New technologies (the four IT forces: mobility, cloud, social business and big data analytics) will help them to improve.
The closing keynote came from Jason Spyromilio , who was director of the European Southern Observatory’s Very Large Telescope (http://www.eso.org) and he gave us the insights in designing (and building) the biggest eye on the sky. Precision challenges for such a huge telescope mirror, being built in the high mountains of Chili in an earthquake sensitive area demonstrate that all participants are required to contribute their IQ in order to realize such a challenge.
Conclusion: This PLM Innovation 2012 event doubled the 2011 event from a year ago in all dimensions. Thanks to the sponsors, the organization and high quality lectures, I expect next year we could double again – in participants, in content and innovation. It shows PLM is alive. But comming back to the title of this post: I saw some interesting innovation concepts – now how to enabale them with PLM ?
Note: looking at the pictures in this postyou will notice PLM is everywhere. I published this post on February 29th – a unique day which happens only every 4 years. In May this year my blog will be 4 years old.
First I was in Copenhagen, attending the Microsoft Convergence event. A meeting where Dynamic customers, resellers and partners from all around Europe came together to learn the latest from Microsoft, to network with other partners and discuss their business processes.
Of course the focus from all of the 4000 attendees was around logistical processes, I was very curious to learn how manufacturing companies would describe their needs and where they feel the missing link – PLM.
But they did not feel it ……….
I believe this is one of the most challenging issues for mid-market companies. They have been investing in their ERP system and consider this as the company’s backbone. Their production and finance is dependent on it. Other departments, like sales and engineering provide somehow their inputs to the system, often Excel is here the information carrier. No PLM vision exist – or in case it exists – it is perfectly hidden.
I touched this topic in one of my previous post, called: “We do not need PLM, we already have ERP”
So why is PLM not yet adopted by mid-market companies and I raise this question mainly for those companies that obvious would benefit from PLM ?
I believe the major reason is the fact that often in mid-market companies there is no high-level strategy available analyzing where the company should be in 5 years from now and what are the challenges to overcome. Most of the companies I am currently working with want to implement something they call PLM, but often it is just PDM.
The big difference between PLM and PDM is that PLM requires the company to work different across departments, where PDM is considered more as an automated way to centralize product data, without changing the department responsibilities.
And now some generalizations
In addition mid-market CAD resellers try to explain their customers that PLM is only for big enterprises and that they just need PDM. This of course makes their sales beyond CAD easier, as touching cross-departmental processes requires different knowledge (which their resellers do not have), a different product (which they do not sell) and of course a longer sales cycle.
The same happens from the ERP side. ERP resellers consider what happens in the engineering department as a black box, where product data is generated and at the end a (configurable) Bill Of Materials. ERP vendors do not jump on PLM as extending the process to engineering requires different knowledge (which is not their domain) , a more extended product (which they do not have (yet))
Mid-market companies are of course influenced by these resellers of their core components and as mentioned before do not have the time and budget to take a strategic, holistic view where the company should be in 5 years. Usually their focus is on solving the pains they experience in their organization. For example we have too many databases and spreadsheets per department, let’s put them all in one central place – more an IT focus then a business focus.
So how to get the vision ?
Companies should ask themselves the following questions:
- what is the success of my company ?
- will I still be successful in 5 years from now if I keep on doing the same ?
- how does globalization affect me ? Risks but also challenges.
- how do I capture the knowledge of my (experienced) workforce before they retire ?
To answer these questions (and the above ones are only the most probing) it requires time and understanding to build a vision. Perhaps the economical downturn creates the opportunity or need to prepare for the future (survival).
And if you are working in a mid-market manufacturing company, chances are big that implementing PLM is a way to guarantee the company’s future and success. This has been proven in big enterprises and mid-market companies are not so different at the end.
Adapting business processes and connecting the whole product lifecycle are key activities. Beyond PDM and ERP it brings portfolio management (which product bring the real revenue) and innovation (New Product Introduction – how do we make sure we introduce a good product in the market).
PLM requires a company vision and strategy. Building the vision is something that PLM vendors, business consultants and others can assist you with. Each group has its own pro’s and con’s but at the end it is the vision that is needed before making the change – it requires first of all an investment in brain power – not in products
Interesting to read: