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Last week I started my final preparation for the PLM Innovation Congress 2012 on February 22nd and 23rd in Munich, where I will speak about Making the Case for PLM. Looking forward for two intensive days of knowledge sharing and discussion
The question came to my mind that when you make the case for PLM, you also must be clear about what you mean by PLM. And here I started to struggle a little. I have my perception of PLM, but I am also aware everyone has a different perception about the meaning of PLM.
I wrote about it last year, triggered by a question in the CMPIC group (configuration management) on LinkedIn. The question was Aren’t CM and PLM the same thing ? There was a firm belief from some of the members that PLM was the IT-platform to implement CM.
A few days ago Inge Craninckx posted a question in the PDM PLM CAD network group about the definition of PLM based on a statement from the PLMIG. In short:
“PDM is the IT platform for PLM.”Or, expressed from the opposite viewpoint: “PLM is the business context in which PDM is implemented
The response from Rick Franzosa caught my attention and I extracted the following text:
The reality is that most PLM systems are doing PDM, managing product data via BOM management, vaulting and workflow. In that regard, PDM [read BOM management, vaulting and workflow], IS the IT platform for the, in some ways, unfulfilled promise of PLM.
I fully agree with Rick’s statement and coming back to my introduction about making the case for PLM, we need to differentiate how we implement PLM. Also we have to take into our minds that no vendor, so also not a PLM vendor, will undersell their product. They are all promising J
Two different types of PLM implementation
Originally PLM has started in 1999 by extending the reach of Product Data outside the engineering department. However besides just adding extra functionality to extend the coverage of the lifecycle, PLM also created the opportunity to do things different. And here I believe you can follow two different definitions and directions for PLM.
Let’s start with the non-disruptive approach, which I call the extended PDM approach
Extended PDM
When I worked 6 years ago with SmarTeam on the Express approach, the target was to provide an OOTB (Out of the Box) generic scenario for mid-market companies. Main messages were around quick implementation and extending the CAD data management with BOM and Workflow. Several vendors at that time have promoted their quick start packages for the mid-market, all avoiding one word: change.
I was a great believer of this approach, but the first benchmark project that I governed demonstrated that if you want to do it right, you need to change the way people work, and this takes time (It took 2+ years). For the details: See A PLM success story with ROI from 2009
Cloud based solutions have become now the packaging for this OOTB approach enriched, with the ease of deployment – no IT investment needed (and everyone avoids the word change again).
If you do not want to change too much in your company, the easiest way to make PDM available for the enterprise is to extend this environment with an enterprise PLM layer for BOM management, manufacturing definition, program management, compliancy and more.
Ten years ago, big global enterprises started to implement this approach, using local PDM systems for mainly engineering data management and a PLM system for the enterprise. See picture below:
This approach is now adapted by the Autodesk PLM solution and also ARAS is marketing themselves in the same direction. You have a CAD data management environment and without changing much on that area, you connect the other disciplines and lifecycle stages of the product lifecycle by implementing an additional enterprise layer.
The advantage from this approach is you get a shared and connected data repository of your product data and you are able to extend this with common best practices, BOM management (all the variants EBOM/MBOM/SBOM, …) but also connect the market opportunities and the customer (Portfolio management, Systems engineering)
The big three, Dassault Systemes, Siemens PLM and PTC, provide the above functionality as a complete set of functionalities – either as a single platform or as a portfolio of products (check the difference between marketing and reality).
Oracle and SAP also fight for the enterprise layer from the ERP side, by providing their enterprise PLM functionality as an extension of their ERP functionality. Also here in two different ways: as a single platform or as a portfolio of products. As their nature is on efficient execution, I would position these vendors as the one that drive for efficiency in a company, assuming all activities somehow can be scheduled and predicted
My statement is that extended PDM leads to more efficiency, more quality (as you standardize on your processes) and for many companies this approach is a relative easy way to get into PLM (extended PDM). If your company exists because of bringing new products quickly to the market, I would start from the PDM/PLM side with my implementation.
The other PLM – innovative PLM
Most PLM vendors associate the word PLM in their marketing language with Innovation. In the previous paragraph I avoided on purpose the word Innovation. How do PLM vendors believe they contribute to Innovation?
This is something you do not hear so much about. Yes, in marketing terms it works, but in reality? Only few companies have implemented PLM in a different way, most of the time because they do not carry years of history, numbering systems, standard procedures to consider or to change. They can implement PLM in a different way, as they are open to change.
If you want to be innovative, you need to implement PLM in a more disruptive manner, as you need to change the way your organization is triggered – see the diagram below:
The whole organization works around the market, the customer. Understanding the customer and the market needs at every moment in the organization is key for making a change. For me, an indicator of innovative PLM is the way concept development is connected with the after sales market and the customers. Is there a structured, powerful connection in your company between these people? If not, you do the extended PLM, not the innovative PLM.
Innovative PLM requires a change in business as I described in my series around PLM 2.0. Personally I am a big believer that this type of PLM is the lifesaver for companies, but I also realize it is the hardest to implement as you need people that have the vision and power to change the company. And as I described in my PLM 2.0 series, the longer the company exist, the harder to make a fundamental change.
Conclusion
There are two main directions possible for PLM. The first and oldest approach, which is an extension of PDM and the second approach which is a new customer centric approach, driving innovation. Your choice to make the case for one or the other, based on your business strategy.
Looking forward to an interesting discussion and see you in Munich where I will make the case
Since the past six months I am involved in several discussions related to the (building) construction industry. If you look to this industry, it seems like this is one of the few industries without innovation in its processes.
Someone in the discussion even claimed that if a worker from the middle ages would come back to this century, he would be quickly adapt and understand the way people work. OK, there are some new tools and materials, but the way the building construction industry works has not changed.
And let’s look to productivity. Where in the past 60 years in all industries productivity has increased, I have seen a survey where productivity in this industry has not increased and even decreased a little.
Although the survey ends in 2003, another article caught my attention. Robert Prieto, Senior Vice President from Fluor Corporation wrote end of last year in Engineering News Record his viewpoint: Engineering-Construction Needs a New Model. Reading this article and the comments demonstrates there is a need for innovation in the building construction industry.
Failure costs up to 15 % and delayed deliveries are considered normal business in this industry, where if this would be applied to mid-market companies in the manufacturing industry, they would have gone bankrupt due to claims and lost profit.
If we look at this industry, the first excuse you hear is that every project is unique and that project execution is done by a group of loose connected suppliers, not really pushed to stay within the targeted budget. But you might ask yourself: what is the correct budget?
I noticed that in this industry when a project is estimated, suppliers are asked to deliver their bid and proposed solution based on their understanding. Usually the lowest bid wins the bid.
All participants are aware that not all requirements are clear, but no one wants to ask and invest further as to invest more in accurate cost estimation. This is not anticipated. It is about winning the bid with the lowest trouble and investment.
So who is to blame? First of all, the client who has a short term vision. By selecting the lowest bids and not pushing for in-depth analysis of the project delivery and operational costs in the long term, the situation will not change.
What if the client was using the basics of PLM – Product Lifecycle Management? For me PLM means a connection and sharing of the concept phase, the delivery phase, production phase and maintenance phase.
What I consider as strange is the fact that in the engineering and construction industry these four phases are not connected and often that the maintenance phase (operations) is not taken into account during the concept phase.
And then there is the data handover. After engineering and construction specific data is handed over to the maintenance organization. What is the quality of the data, how applicable is it to the maintenance organization and how does it support maintenance is not clear. There is a disconnect and loss of knowledge as the handover is just based on the minimum data required.
What if the engineering construction industry would use PLM best practices, like:
- Requirements Management – connecting, implementing and validating all the requirements from each stakeholder. Making sure all requirements are considered and negotiated in a structured manner – no excuse for surprises.
- Data sharing with versions and status. Instead of a handover, data becomes mature during the lifecycle of the project. It requires the maintenance organization to be involved from the start
- Standardized validation and approval processes related to requirements and data. These processes might be considered as an overhead but they are the ones that lead to quality, risk and cost management
Conclusion: I believe connecting the engineering and maintenance phase for engineering construction companies will lead to higher productivity and quality. For sure the initial engineering cost will be higher, but during the construction and maintenance phase these costs will be recovered and probable much more – here is the ROI
As my intention was to write shorter blog posts this year, I stop at this point and look forward to your comments for a further discussion.
YOUR THOUGHTS ??
Related articles
- Why PLM 2.0 – Conclusions (virtualdutchman.com)
Sorry for the delay between this post and the previous post. A break with a lot of PLM work on my side and no adverts on your side: win-win. But now I have time to continue the serial around PLM 2.0. We are in the middle.
A small recap on the agenda:
| First post | : What is PLM 2.0? – published Aug 24th |
| Second post | : Challenges in current PLM – published Sept 4th |
| This post | : Change in business – published Oct 3rd |
| Final post | : Why PLM 2.0 – conclusions |
In the first post I described the changes in PLM messaging from vendors – PLM 2.0 or similar terms. In the second post I described the current challenges of PLM, which are well known – if you have access to in LinkedIn to the PLM related groups you will find discussions around the challenges of current PLM. And they set the spirit – good or bad.
Now in this post I will bring up some trends, which to my opinion, unmistakably must lead to a new way of PLM in order to adapt to the future.
Generation Y – a new generation of workers
Generation Y: It is interesting to learn that everywhere companies are complaining or warning that their existing workforce is going to retire with all their knowledge without decent follow-up. In parallel they state it is difficult to find new employees with similar skills that will guarantee the future of the company. The new generation of workers, often identified as Generation Y, has different skills and different motivations.
Some interesting generalizations (note I am not a social anthropologist).
The older generations were raised with the concept: Knowledge is Power – You as an individual needed to have in-depth skills to be the right person for a job – a job is your life and for life. As a negative result of this approach, you see that exactly this older generation sometimes ‘sits’ on their knowledge as a kind of job guarantee – they do not like sharing information – “Come to me and I will help you” is their motto till they retire.
Generation Y does not have this job for life attitude – they look more for short term success and fulfillment and therefore they do not fit so well in the way traditional companies work. They are not the type of knowledge workers previous generations had, but they are, thanks to their skills with modern digital media, capable of finding information and combining information into knowledge. They work different.
The interesting observation from my side is that Generation Y is exactly the type of people PLM requires, as it is all about sharing and combining data. What is blocking their acceptance for current PLM is that the implementation is not architected to their work motivation. Look at:
- The way information is stored (too structured),
- The way information is presented (too structured, boring screens).
- The way information has to be entered in the system (too unfriendly – overkill)
For them PLM needs to move more to an intuitive way of presenting information, capturing data as-if it is something like serious gaming. And the new PLM needs to have a way to manage structured and unstructured data combined.
For companies that complain, they are losing skilled workers in the future, they should not complain but adapt. They should look forward and solve the problems for the future, which means a different way of doing business and implementing PLM. Do not choose what the dinosaurs did.
New styles of business management
Here I want to come back to my first post – I was intrigued by reading Steve Denning’s posts and its relation to PLM. Through the post Why Amazon can’t Make a Kindle in the USA, I found the post The Death and Reinvention of Management the best fitting with my PLM drive.
Steve describes five fundamental shifts in management that make companies ready for the 21st century.
Take time to read the post (and go more in-depth if you get as enthusiastic as me) – but come back to read the rest of this post
I summarize/quote the five shifts from Steve here (as I am sure not everyone has done the reading):
1. The company’s goal has to shift to one of delighting clients i.e. a shift from inside-out (“You take what we make”) to outside-in (“We seek to understand your problems and will surprise you by solving them”)
2. The role of the manager has to shift from being a controller to an enabler, so as to liberate the energies and talents of those doing the work and remove impediments that are getting in the way of work.
3. The mode of coordination shifts from hierarchical bureaucracy to dynamic linking, i.e. to a way of dynamically linking self-driven knowledge work to the shifting requirements of delighting clients.
4. There is a shift from value to values; i.e. a shift from a single-minded focus on economic value and maximizing efficiency to instilling the values that will create innovation and growth for the organization over the long term.
5. Communications shift from command to conversation: i.e. a shift from top-down communications comprising predominantly hierarchical directives to communications made up largely of adult-to-adult conversations that solve problems and generate new insights.
Here we see the typical PLM 2.0 targets. I will translate them into our PLM terminology.
Shift # 1 – The shift to delight clients – from which PLM vendor do we hear this statement? Which PLM vendor puts the customer in focus, instead of their “superior” technology?
Shift #2, #3 and #5 are typical PLM 2.0 capabilities which I described in my first post. See below the PLM 2.0 differentiators:
And where do we find shift #4? How do PLM vendors address this change beyond marketing?
My conclusion on this point: Both PLM and management require a change to be ready for the 21st century – It is exactly what generation Y is looking for, it is exactly what future consumers are looking for. However currently classical PLM and classical Management are dominating the thought process – and they do not like change so much as it would put past investments and achievements at risk.
The Importance of Social Media
Already described in the two previous trends, social media concepts fit exactly in the shift that we see towards the future. It impacts the way companies change their marketing and address their customer base. In parallel it affects the ways teams collaborate in the product development space, innovation teams are global product development teams.
My thoughts: Social media might look like a hype, but the basic concepts of social media will be required for future PLM
Globalization for SMB
The major trend from the past decade is that SMB’s (Small and Medium Businesses) do not longer serve and fight for a regional existence. Competition and customers come from everywhere and production is more and more outsourced. The traditional company that is #1 in their region does not longer exist. Even SMBs have to consider ways to collaborate globally – again another driver for PLM 2.0
My thought: Traditional SMBs are never the leading companies in new trends, they hang on their core knowledge and have probably a longer way to go to really adapt to the future. Startup SMBs with no historical hindrance are likely to outperform them.
Innovation, Intellectual Property & War on Patents
In a global market, innovation is the key driver to be successful combined with the point above: delight the customer. In order to delight the customer you need to innovate as delightment does not come from commodities.
And with innovation I am not only addressing the consumer market, innovation is required in all areas: green products, green production as world climate and its population forces us to change.
The successful products for the future will be those that are bringing innovation and when your company owns this Intellectual Property, your near future is going to be profitable,
Therefore the “War for Patents” will be everywhere. We currently see in the news the tablet and Smartphone patents wars, but it pops up everywhere, some more visible than others.
A “War for Patents” costs a lot of money (mainly spent to lawyers). Therefore the balance should be found between protecting your IP and to innovate faster. In this way your patents become less relevant because newer exist. To my opinion the new PLM should be the engine for innovation first and secondly the system to protect your IP
Conclusion:
Again too many words for a blog post, but the topic is huge and I hope you see the need for a different PLM (PLM 2.0): A PLM that is targeted to the change in business all around the world. The monetary crisis which is another symptom of the old business gives us a chance to change. We need to change organizations and collaboration to remain profitable in the future – don’t be an ostrich
My thoughts –looking forward to your feedback
Recently I have been reading various interesting articles, it started with Why Amazon can’t Make a Kindle in the USA from Steve Denning and from here I followed several interesting links.
Most of the articles were business driven and not with a focus on technology. However what caught my attention was the similarity of issues that were raised in these articles as-if it was about PLM.
At the end it is a plea/cry for change to be more competitive in the future. With the current economical stand still, I believe there is a need and an opportunity for this change also in PLM. I am not pointing to regime changes all around the world, but somehow they are all connected to this new wave of globalization and openness to information.
And as my domain is PLM, I took PLM 2.0 as the vehicle to describe the change currently in the PLM world. Although PLM 2.0 is a term invented by Dassault Systems, I will use it as the placeholder to describe the changes in PLM.
In four posts I will guide you in the upcoming weeks through the thought process:
| This week | : What is PLM 2.0 ? |
| Next | : Challenges in current PLM |
| Next | : Change in business |
| Final post | : Why PLM 2.0 – conclusions |
I hope you will stay with me when going through these four steps and look forward to your immediate feedback.
What is PLM 2.0 ?
In 2006 Dassault Systems announced PLM 2.0 as the new generation of PLM implemented on their V6 platform. If you go to the 3DS website you see the following definition of PLM 2.0
Look for the header PLM 2.0: PLM Online for All
In the DS definition you will find several keywords that will help us further to understand the PLM 2.0 capabilities:
a typical Dassault Systems viewpoint, as they are coming from the world or 3D CAD and virtualization and the company’s vision is around lifelike – and life is mostly in 3D.
3D as interface towards all product related information is a paradigm shift for companies that were used to display only metadata on boring tabular screens where you navigate on numbers and text. The other major CAD-related PLM vendors of course could follow this paradigm too, as 3D visualization of information is known to them. However when coming from an ERP-based PLM system you will see 3D is something far out of reach for these vendors (at this moment).
This is what I believe is a crucial keyword for all PLM future implementations it builds upon the Business Information concepts that became in fashion 8 years ago. Online means direct access to the actual data. No information conversion, no need for import or export, but sharing and filtering. What you are allowed to see is actual data and an actual status. Imagine what kind of impact working on-line would have on your organization. Evaluation of trends, Key Performance Indicators directly available – still of course the interpretation to be done by experts.
Intellectual Property – a topic that should be on every company’s agenda. The reason a company currently exists and will exist in the future is based on how they manage their unique knowledge. This knowledge can be based on how certain processes are done, which components are chosen, which quality steps are critical and more. Working in a global collaboration environment challenges the company to keep their IP hidden for others, for sure when you talk about online data. Losing your IP means for a company to be vulnerable for the future – read in the referenced blog post from Steve Jennings about DELL.
This is currently the platform for change as technologies are now enabling people and companies to implement applications in a different manner. Not only on premises, but it could be online, Software As A Service, Cloud based solutions and through standardized programming interfaces, companies could implement end-to-end business process without a huge, monolithic impact. Also Web 2.0 provides the platform for communities.
The concept of communities opens new perspectives for collaboration. In general people in a community, have a common interest or task, and they share thoughts, deliverables back to the community across all company borders. This is the power of the community and the collective intelligence built inside such a community. Without company borders it should give the people a better perspective on their market on their business due to the global participation
The vision is there – now ….
All the above keywords are capabilities for the future and in the world of PLM you see that every PLM vendor / implementer is struggling with them. How to implement them consistently across their offering is the major challenge for the upcoming years, assuming PLM 2.0 is considered as the next step.
If you look at the PLM vendors beside Dassault Systems, you see that Siemens and PTC are closest to following the PLM 2.0 approach, without mentioning the term PLM 2.0. Other vendors even refuse to talk about PLM, but they share already similar components, for example Autodesk.
Interesting to see that the ERP-based PLM vendors do not follow this trend in their communication, they are still working on consolidating and completing their ‘classical’ PLM components
But the classical PLM vendors struggle with the change in paradigm too.
- What to do with current, huge and structured implementations ?
- Is PLM 2.0 having the same demands or can it be different ?
Here you see opportunities for new comers in this market as you can implement online collaboration, intellectual property creation/handling and communities in different manners with different types of implementation demands.
So far my introduction in PLM 2.0. Browsing on the web, I did not find too much other viewpoints on this specific terminology, so I am curious about your thoughts or and complementary comments on this topic.
In my next post I will zoom in into the challenges of PLM and relate them to the PLM 2.0 vision
My take on PLM (classical) and PLM 2.0
Referenced in this context – not directly mentioned:
- IBM visionary presentation from 2006 – Michael Neukirchen
- The future of PLM – Martin Ohly (global PLM blog)
- PLM 2.0 technology or facelift – Oleg Shilovitsky
- Social Media and PLM explained for Dummies – Jos Voskuil
- Going Social With Product Development – Jim Brown
This week I was happy to participate in the PLM INNOVATION 2011 conference in London. It was an energizer, which compared to some other PLM conferences, makes the difference. The key of the success, to my opinion was that there was no vendor dominance. And that participants were mainly discussing around their PLM implementation experiences not about products.
Additional as each of the sessions were approximate 30 minutes long, it forced the speakers to focus on their main highlights, instead of going into details. Between the sessions there was significant time to network or to setup prescheduled meetings with other participants. This formula made it for me an energizing event as every half hour you moved into a next experience.
In parallel, I enjoyed and experienced the power of the modern media. Lead by Oleg, a kind of parallel conference took place on Twitter around the hash tag #plminnovation2011. There I met, and communicated with people in the conference (and outside) and felt sorry I was not equipped with all the modern media (iPhone/Pad type equipment) to interact more intensive during these days.
Now some short comments/interpretations on the sessions I was able to attend
Peter Bilello, president of Cimdata opened the conference in the way we are used from Cimdata, explaining the areas and values of PLM, the statistics around markets, major vendors and positive trends for the near future. Interesting was the discussion around the positioning of PLM and ERP functionality and the coverage of these functionalities between PLM and ERP vendors.
Jean-Yves Mondon, EADS’ head of PLM Harmonization (Phenix program) , illustrated by extracts of an interview with their CEO Louis Gallois, how EADS relies on PLM as critical for their business and wants to set standards for PLM in order to have the most efficient interoperability of tools and processes coming from multiple vendors
Due to my own session and some one-to-one sessions, I missed a few parallel sessions in the morning and attended Oleg Shilovitsky’s session around the future of engineering software. Oleg discussed several trends and one of the trends I also see as imminent, it the fact that the PLM world is changing from databases towards networks. It is not about capturing all data inside one single system, but to be able to find the right information through a network of information carriers.
This suits also very well with the new generation of workers (generation-Y) who also learned to live in this type of environments and collect information through their social networks.
The panel discussion with 3 questions for panelist could have been a little better in case the panelist would have had the time to prepare some answers, although some of the improvisations were good. I guess the audience choose Graham McCall’s response on the question: “What will be the Next Biggest Disappointment” as the best. He mentioned the next ‘big world-changing’ product launch from a PLM vendor.
Then I followed the afternoon session from Infor, called Intelligent PLM for Manufacturing. The problem with this session I had (and I have this often with vendor sessions) was that Venkat Rajaj did exactly wrong what most vendors do wrong. They create their own niche definition – Product Lifecycle Intelligence (is there no intelligence in PLM) , being the third software company (where are they on Cimdata’s charts) and further a lot of details on product functions and features. Although the presentation was smooth and well presented, the content did not stick.
A delight that day was the session from Dr. Harminder Singh, associate fellow at Warwick Business School, about managing the cultural change of PLM. Harminder does not come from the world of software or PLM and his outsider information and looks, created a particular atmosphere for those who were in the audience and consider cultural change as an important part of PLM. Here we had a session inspired by a theme not by product or concept. I was happy to have a longer discussion with Harminder that day as I also believe PLM has to do with culture change – it is not only technology and management push as we would say. Looking forward to follow up here.
The next day we started with an excellent session from Nick Sale from TaTa Technologies. Beside a Nano in the lobby of the conference he presented all the innovation and rationalization related to the Nano car and one of his messages was that we should not underestimate the power of innovation coming from India. An excellent sponsor presentation as the focus was on the content.
In the parallel track I was impressed how Philips Healthcare implemented their PLMD architecture with three layers. 
Gert-Jan Laurenssen explained they have an authoring layer, where they do global collaboration within one discipline. A PDM layer where they manage the interdisciplinary collaboration, which of course in the case of Healthcare is a mix of mechanical, electrical and software. And above these two layers they connect to the layer of transactional systems, that need the product definition data. Impressive was their implementation speed for sure due to some of the guidelines Gert-Jan gave – see Oleg’s picture from his slide here. Unfortunate I did not have the time to discuss deeper with Gert-Jan as I am curious about the culture change and the amount of resources they have in this project. Interesting observation was that the project was driven by IT-managers and Engineering managers, confirming the trend that PLM more and more becomes business focussed instead of IT-focused.
Peter Thorne from Cambashi brought in his session called Trends and Maximizing PLM investments an interesting visual historical review on engineering software investments using Google Earth as the presentation layer. Impressing to see the trends visualized this way and scary the way Europe is not really a major area of investment and growth.
Keith Connolly explained in his session how S&C Electric integrated their PLM environment with ERP. Everything sounded so easy and rational but as I know the guys from S&C for a longer time, I know it is a result of having a clear vision and working for many years towards implementing this vision.
Leon Lauritsen from Minerva gave a presentation around Open Source PLM and he did an excellent job around explaining where Open Source PLM could/should become attractive. Unfortunate his presentation quickly went into the direction of Open Source PLM equals Aras and he continued with a demo of Aras capabilities. I would have preferred to have a longer presentations around the Open Source PLM business model instead of spending time on looking at a product.
I believe Aras has a huge potential, for sure in the mid-market and perhaps beyond, but I keep coming back on my experiences I also have with SmarTeam: An open and easy to install PLM system with a lot of features is a risk in the hand of IT-people with no focus on business. Without proper vision and guiding (coming from ????? ) it will become again an IT-project, for cheaper to the outside world (as internal investments often are not so clear), but achieving the real PLM goals depends on how you implement.
After lunch we really reached to the speed of light with David Widgren, who gave us the insight of data management at CERN. Their problematic, somehow a single ‘product’ – the accelerators and all its equipment plus a long lifecycle (20 years development before operational), surviving all technologies and data formats requires them to think all time on pragmatic data storage and migration. In parallel as the consumers of data are not familiar with the complexity of IT-systems they build lots of specific interfaces for specific roles to provide the relevant information in a single environment. Knowing a lot of European funds are going there, David is a good ambassador for the CERN, explaining in a comic manner he is working at the coolest place on Earth.
Last session I could attend was Roger Tempest around Data Management. Roger is a co-founder of the PLMIG (PLM Interest group) and they strive for openness, standards and interoperability for PLM systems. I was disappointed by this session as I was not able to connect to the content. Roger was presenting his axioms as it seemed. I had the feeling he would come down the stage with his 10 commandments. I would be interested to understand where these definitions came from. Is it a common understanding or it it just again another set of definitions coming from another direction and what is the value or message for existing customers using particular PLM software.
I missed the closing keynote session from John Unsworth from Bentley. I learned later this was also an interesting session but cannot comment it.
My conclusion:
An inspiring event, both due to its organization and agenda and thanks to the attendees who made a real PLM centric event. Cannot wait for 2012
The past week I was involved in three different situations, which seem to be disconnected from each other, but when looking back, I found one common similarity
The first case was with a company that had implemented pdm with a tight CAD integration many years ago. They have built together with their implementer(s) a dedicated environment, which was working efficient, perhaps never efficient enough. In the beginning of this year they planned an upgrade to the latest available software and after going live with the upgrade of CAD and PLM software, they discovered severe issues both in performance, in data inaccuracy and user acceptance. With ups and downs and serious effort from several sides, it looked like things were going better, but now they are in a down again as some users refuse to work with the system.
What do to: Fix the system everyone would think ?
In the second case a company has implemented document management and with the support of the IT department the system was defined to cover the known needs.
The users however were reluctant to work with the system, complaining it was too slow, too complex and a lot of extra work, so nothing happened.
More than a year later, the engineering department got the assignment from the management to revive the system and they focused on implementing their main processes in the system, so everyone could work with the system. Still the system has not gone live! As all the time, when the management or users see the system, there are discussions on making it more user-friendly, simple interfaces and more.
What to do: Simplify the system everyone would think?
The third case is a company ready to launch their first PLM implementation and they really go for the full PLM story, including CAD data management, EBOM, MBOM and even BOP (Bill of Process) managed in their PLM system. Main reason they were able to plan the full PLM story was the fact that they were implementing a new ERP system too, so no legacy habits from the ERP side around ‘owning data’ like the Item master, MBOM or BOP. The past year has been spent on building the systems (PLM & ERP) conceptually in a test environment and from there on the PLM side they discovered some performance issues, which were considered critical to fix. And then they would go live both PLM and ERP at the same moment (a big bang), after almost a year of isolated preparation.
What to do: Fix the critical issues and go live everyone would think?
Although all three projects are in different countries, in a different culture and with different software, they all share one thought:
Implementing PLM is like installing an operating system. Once it is installed fix some bugs and the company will work with it. Perhaps not everyone is happy, similar like we have Windows, Apple MAC and UNIX communities, but the platform is there and we make it work. And updates of the system come with the new hardware; check our applications – if they are still running we are happy, if they are not running anymore we implement new versions or other software
By writing it so black and white, I hope you will agree it is more complicated. And I will be very happy that you agree here, as in many PLM implementations, the management of such a company has this impression – not being aware, not being knowledgeable, not being informed it is different. In addition PLM vendors and implementers try to stay close to this simple message, as no-one wants to be the messenger of the bad news that PLM is more than a software installation
The root cause of all these problems is exactly the lack of management understanding and commitment to PLM.
As most of the members in a management team are relying on their ERP system for financial activities, production status, order status, stock value, etc, they also try not to touch ERP anymore once it is running. It is a mandatory system for execution and everyone is aware and somehow comfortable with costs.
And there is the difference with PLM. Do we need PLM ? We have been doing projects, designing projects already before our ERP system ? And if we install a PLM system, isn’t it like the ERP system, you install it and it is up and running ?
No !
PLM is not a system, it a vision how to work more efficient and intelligent. And by collaboration (using modern tools and means) between all stakeholders: market, design, execution (production or construction) and field services, we are better able to understand what is happing and as a next step, we are able to react or even better, be pro-active and come with better and innovative products and services.
So it is not about automation only. It is a change in doing businesses. It is about connecting people who were not used to work together, share information together. And there are various ways to achieve this – but not by installing simple, error free software only.
And this happened in all three companies I described. The vision of PLM was (partly) based on certain software capabilities. In the first example, it was not really PLM. It was automating the existing situation and now several years later, the company assumes after upgrading it still works, without making an evaluation, where the PLM vendor was heading to, without making an evaluation what the current quality of their data was. The focus was again on a system and fixing errors that the system should be able to understand
In the two other situations, there was the thought that once the system is there, users will accept it and start working with it.
Big, big mistake !
Users do not like software that requires them to change their way of working and we forget every time that changing the way someone works is not a software change. For the oldies: remember MS-DOS ? Single screen – no window swapping/multiple applications open. Many users loved the old MS-DOS due its simplicity (now they are retired) and we see the Apple generation (single window and single tasking again, but modern interface)
Building a multi-tasking environment, which PLM often is, requires a guided change process, motivation of the users, but at the end a firm statement from the management that this is the chosen way to go forward -assuming they support the introduction and usage of PLM.
(I received a nice comment on my previous post, stating we should give every user £100 to commit start working with the software, instead of paying thousands of pounds for customization to comfort the user)
And here is the major pain in all of these three companies. The management is not able to take the ownership of the PLM vision and guide it through the company.
They let the execution to their project leader, lead engineer or IT staff and assume like ERP, everyone knows what to do and fix the bugs – no business change – just software implementation.
This leaves these front-runners in a very difficult position.
- Not loved by the end-user, who wants no change and if there is a change it should be more fun. The will show the system is not working for them.
- Not loved by the management as they are wondering why it takes so long to fix the issues. Should not we be up and running already after such a long time ?
- Not loved by the PLM implementer as there is a limit to fixing the problem. After solving a problem there is always a next problem discovered
- Not loved by the PLM vendor as they need positive references
And put any combination of people above in a meeting, the ones who are not there are to blame – and I realize I am doing the same – I am pointing to the management who is often invisible.
Call for the management
For me the management has the task to feel responsible for PLM – as they are responsible for the company’s future – not the end-users. This means they should be able to judge the steps executed during a PLM implementation, or for an upgrade and assure they fit in the vision. They should realize that they are the voice to the end-users to explain the value of PLM and why there is a different way of working. They do not have to go into the details, but keep the bigger picture in mind.
And the management must show commitment to all –they want PLM . So commitment is needed to the end-users, to the IT department, to project team and to the implementation partner. And commitment is not easy to delegate.
Unfortunate commitment for PLM is also a long-term engagement, as it is not like ERP. Once it is running do not touch it. The markets change, the people change, technology changes and therefore the software practices change. To decide where, when and how to engage with a next PLM step should be a strategic decision from the management, not from a user who wants a new interface.
My last remark: it is clear that the management does not have the time and in-depth knowledge of PLM today as also the PLM is a young and moving vision due to changes in our society. (In my next post I will go into the new social hype – ask yourself is there also social ERP ?).
So the management team needs a sparring partner, a PLM supporter, who will reflect their vision into PLM steps and how to enroll them and communicate them into the organization, without losing visions and faith but also without talking about software features. Either you should make sure this knowledge is in your company, as several companies have already successfully discovered. Or search for an external PLM supporter – looking to my blog questionnaire results they exist !!!
I am curious to learn if you recognize these situations, if you agree, disagree – feel free to comment
Last weeks have been busy weeks and I have seen various PLM candidates all around Europe. As these companies were mid-market companies, I noticed again how difficult it is for these companies to follow the ideal path towards PLM.
For those reading my blog frequently they might remember my definition of mid-market and PLM. For newer readers I will give my definitions again, as everyone has their own definition.
Mid market company: For me the definition of a mid-market company does not have to do with revenue or the amount of people working for this company. I characterize a mid-market company as a company, where everyone has a focus on the company’s primary process. There is no strategic layer of people, who are analyzing the current business and defining new strategies for the future. In addition, the IT-staff is minimal, more seen as an overhead than as strategic. Mid-market companies have their strength in being flexible and reacting fast on changes, which might contradict with a long term strategic approach.
As what happens if you are only in a reactive mode – it can be too late.
PLM: For me PLM is not a product but a vision or business approach based on a collection of best practices (per industry). Main characteristics of PLM are centralizing all product knowledge (IP) throughout all the lifecycle stages and a focus on best practices and immediate visibility on all lifecycle stages. Combining concept, planning, development, production planning and after sales / service into one integrated process. It is more than concurrent engineering, it is about sharing data and ownership of data through different departments. And this means business transformation, breaking through traditional barriers. Of course PLM vendors have a slight different definition in order to differentiate themselves from other vendors. For example more focus on a virtual product definition (CAD PLM vendors) or a focus on efficiency and one single platform (ERP PLM vendors)
Who will initiate this change ?
And these two definitions already raise the questions I want to reflect here as I experienced again in two recent visits that the pain to move to PLM is here.
First what is the result of a reactive mode, even when it is a quick reaction ?
A reactive mode leads to a situation where a company will never be able to differentiate rapidly from their competition. As every change takes time to implement, it is logically that a real business change will not be implemented as a quick reaction. The company needs to have a long term vision. And this is one of the things I noticed talking with mid-market companies. Ask these questions: “Where do you want to be in five years from now” and “How do you make sure you achieve these goals (if goals exist)” and often you find the company is depending on the business instinct of the founder(s) and has no real answers for the long term future.
This is of course a result of the typical mid-market company, they have no internal people who will step outside the daily hectic and work on a change. And being reactive always means you are (a little) behind. And this was the situation in one of the companies that I have met recently. There was an initial understanding of the values that PLM could bring, but when talking about some of the basic principles of PLM, the answers was: In our company ERP is God. This means real PLM has no chance – you do not want to fight against God.
And now the discussion who can initiate the change towards PLM
Now another example of a mid-market company that had a long term PLM vision but got trapped in their own approach. The company has been growing fast and like many European companies, production is done in China. And this causes collaboration issues around communication and quality between Europe and China as the company only knows CAD data management and ERP. The engineering manager was assigned to solve these issues.He did not get a full strategic assignment to look at the complete picture, but the management pushes him to solve the current pains, having the PLM wishes still in mind.
And solving the current pains lead again to function / feature comparison with a short term justification, believing that in the future all will fit in the PLM vision, as the potential resellers for the new solution said: “Yes we can”. Have you ever heard a reseller say “No we cannot”
The result, the engineering manager has to make a decision based on the ‘blue eyes’ of the reseller as he does not get the mandate and power from his management to analyze and decide on a PLM strategy for the long term. For one of the resellers talking about the details of PLM was even more a disadvantage as it creates an impression that PLM is complex. It is easier to sell a dream. A similar situation as I described in my posts: Who decides for PLM in a mid-market company
My conclusion
Although I am aware that many mid-market companies implement basics of PLM, it is frustrating to see that lack of priority and understanding of the management in mid-market companies blocks the growth to full benefits for PLM. The management is not to blame, as most PLM messages either come from the high-end PLM vendors or from product resellers both not packaged for the mid-market. See PLM for the mid-market – a mission impossible ?
PLM is a cross-departmental solution and the management should look for partners who can explain the business values and share best practices for mid-market companies business wise.
The partner is 50 % of the success for a PLM implementation.
Do you recoginize similar situations ? How would you address them ?
My PLM blog cloud based on Wordie – see the virtualdutchman blog cloud
Two weeks ago I received through the PLM group on LinkedIn, the following question from Nathalie: “Do you know any specific examples of what some companies have done to get their users ready, excited or more committed to the new PLM system?”
When digging in my mind and planning to give a quick answer, I realized it was an interesting question with a contradiction embedded: users and excitement for a new PLM system.
This week I was attending the SmarTeam User Group meeting in the Netherlands, where an excellent presentation was given by Simon and Hessel from a Dutch company called Meyn (Poultry processing) about their PLM implementation. They shared their excitement !
Combined with an interesting discussion on Oleg’s blog with Frank, I believe I have the ingredients to answer the above question more complete.
PLM is not exiting for users
I think this is fact number one. When you go to tradeshows or PLM exhibitions, you see usually only 3D CAD demos, nobody tries to demonstrate PLM functions and features in detail. As a side step, I believe the best PLM system should be almost invisible for the user. Users want to work in their own environment with applications like CAD, Excel (BOM handling apps), Office, FEA tools, Simulation tools and more.
ERP has a more clear value proposal, if you want to define and schedule your manufacturing and manage the financial transactions, everyone has accepted that you need ERP. User acceptance is not relevant, users have to work with the provided interface as otherwise production or accounting will fail, there is no alternative.
In contrary, the clear value and definition of PLM are not clear to user. For that reason these users do not get excited when confronted with PLM. They have been surviving without implementing PLM, so they believe there is an alternative.
But we know there are PLM benefits?
My previous post – PLM in the mid-market a mission impossible? – lead to a discussion with Oleg and Frank coming with anew and interesting view point. Frank mentioned that in the German area, many mid-market companies do PLM without purchasing an enterprise PLM system from the known vendors.
The discussion focused on granularity, as all of us believed that a set-by-step approach towards PLM best practices, driven by people who understand the company very well, is the key to success. For this approach you need people inside the customer’s organization who can formulate the vision assisted by consultants working very dedicated in that industry. It requires a different type of consultant as those active in the big enterprise projects.
Instead of implementing PLM as a standard process, in this approach the customer drives and leads the activities where they see benefits in their overall business process. To achieve this, the company must have has a clear vision, where they want to be in the next 5 – 10 years.
Next implementations steps should fit in this strategy and prioritized based on different parameters and these steps are not always with a focus on PLM.
And here lies the key for successful PLM implementations.
The implementation might be based on an academic approach around a core PLM data model and best practices. Mid-market offerings are around an OOTB (Out-Of-The-Box) quick implementation – the PLM system/implementer leads.
Something the management of likes to hear; quick and with little customization, which would translate in lower costs of implementation and disruption of the organization. But then, the end-users start to complain. There is too much change their standard way of working and they do not see the advantages – keying in more data in a system does not help them.
The introduction of PLM brings more complexity and as the new system has to prove itself, there is not big enthusiasm from the average user. The management can push, like in the ERP situation, but in general also the management is anxious to learn if this OOTB-approach brings the benefits and when it fails they ask the vendor where the estimated ROI can be found.
Concluding you will be lucky if users get excited form the OOTB approach.
In the second and granular approach, the company defines their strategy and vision, not necessary a 100 % PLM vision. This strategy need to be clear and shared with the employees in the company, especially for those who are affected by changes.
Next together with implementation partners, who bring in the know-how and possible software tools, a part of the company’s process is addressed and improved. It can be in any area, changing the CAD engine, automate BOM handling, connect sales to engineering or connect after sales/service to engineering.
Many of these areas of interest have different solutions, some are extensions of the CAD environment, some of them are extensions of the ERP environment and some of them are extensions of the IT-platform used in the company.
This approach is not sold by the PLM vendors, as they want to introduce their system as the IT-platform, wrap around the CAD and even capture the definition of the MBOM and initiation of the Item master.
A step-by-step approach based on different granular components, every time in the direction of the company’s strategy, plus all the time feed-back to the end-users on the positive impact of the change, is for me the key to success. In my previous post I was looking for a global provider for these required components.
With the step by step approach with granular solutions, we get users involved and excited.
And this brings me the to the presentation from Meyn
The first time I got involved with Meyn was in October 2004. At that time they had chosen to move from their BaaN-2D CAD infrastructure to a new environment with BaaN – 3D CAD (CATIA). Simon presented their target strategy and vision: moving away from being an Engineering To Order company to become primarily a Configure To Order company.
ENOVIA SmarTeam was chosen to manage the 3D CAD and to connect the information to BaaN. Initially Meyn started in the classical PLM approach, but already after a few months, the understanding was there, they need have step-by-step approach, focused on results for the new CATIA users, without communicating around a complete PLM focused project.
So they followed a stepped approach, they called them waves.
Moving from Engineering to Order to Configure to Order is not software implementation. It requires rationalization of your products; convert them into modular, configurable parts. For this you need to be an engineering expert, not a software expert.
But when it comes to implementation of this concept in the software, you need both experts. And through this collaboration, a methodology for skeleton design was established which was driven by Meyn. And the reason the users were excited was, that they were doing real engineering, the benefits were significant visible.
Customer project related engineering time (typical ETO), which was in the beginning their core activity, became around 30 % of the time. More time could be spent on developing new machines in a modular way. With almost the same amount of engineers the turn-over of the company had more than doubled. A win-win environment which makes also the end-users excited.
Still the backend with ERP at Meyn remained almost the same similar to the time they were working in the 2D environment. And the most interesting conclusion at the end of the presentation was, they are still using the same slide with the vision and they can explain why each step was taken and justify it by measurable benefits.
And this brings me to the answer of the question
“Do you know any specific examples of what some companies have done to get their users ready, excited or more committed to the new PLM system”?
- The management needs to have a clear vision where they want to be as a company in the future. This is not an IT-vision, but a business vision which explain why changes are needed. This vision should be clear to the employees. Communicate!
- Where possible provide metrics!
- Do not talk about a PLM system; it can be also in other tools. Talk about improvement steps in the business processes contributing to the vision. The PLM system is the information backbone, not the front-end. Management and implementers should talk business functionality not IT functions and features. Do not talk in applications!
- Build step by step user scenarios with focus on methodology and user understanding. Implementations with a function-feature focus are hard to accept by the users. Talk business!
- The management should present their vision again and again, supported by metrics what has been accomplished and what has been learned for the future – repeat!
Conclusion
There are thousands of mid-market companies that have a vision to improve their business. The PLM system should never be the topic of discussion with the end users; it is the change in working methods that is important, supported by various systems -CAD/ERP/CRM – and almost invisible …….. PLM
The company Meyn is an example of this approach. Simon and Hessel are working for Meyn as engineers improving their company’s business. Unfortunate it is not their business to explain all around the world, how PLM supports business change in a mid-market company. I was glad to attend their session last week.
This strange title came to my mind when I made an overview of my PLM posts in this blog so far. As I am working in the PLM space already for many years, I noticed by reviewing the topics below, that progress in PLM is slow. Yes, technology changes every 5 years, business models can change due to that, but most of the underlying concepts haven’t changed much.
At the implementation level, especially in traditional manufacturing companies, you notice a slow progress, although closely related to PLM, I believe 3D CAD has become a common practice, which could be one of the drivers for further change towards more PLM.
And this brought me to the Echternach procession, which currently is a dancing procession, where the pilgrims dance slowly to the church ( 1 mile / 1.6 km – dancing from left to right). In the Netherlands, we learned in primary school, that in the past the pilgrims made three steps forward and then two steps backward, which became an expression for a slow forward moving process in our idiom.
And if you look back to the topics overview underneath the movie , you see PLM adaptation is a slow process in the mid-market, still a way to go – perhaps dancing like the pilgrims this year ?
PLM and ERP
PLM and ERP – the culture change , continued, conclusion
Connecting PLM and ERP , continued
PLM and change
PLM for the SMB – a process of culture change
Culture Change in a mid-sized company a management responsibility
The gap between mid-market companies and PLM – 15 year ?
What not to do in a bottom-up PLM implementation approach
Implementing PLM requires a vision
What if SMB as vision for PLM and PLM vendors do not understand it
Can Chaos become order through PLM
What have PLM and Capitalism in common ?
Some users do not like the single version of the truth
PLM concepts
Working file based in the supply chain – manager have two options (actually one)
Where does PLM start beyond document management ?
PLM and ROI
5 reasons not to implement PLM
2. PLM implementations take too long
3. We already have an ERP system
4. Isn’t PLM the same as CAD data management ?
To PLM or not to PLM – start measuring
Measuring the development phase
Free PLM software does not help companies
Where is my PLM Return On Investment
Who decides for PLM in a mid-market company ? continued academic conclusion
The title of this post came in my mind when looking back on some of the activities I was involved in, in the past two weeks. I was discussing with several customers their progress or status of the current PLM integration. One of the trends was, that despite the IT department did their best to provide a good infrastructure for project or product related information, the users always found a problem ,why they could not use the system.
I believe the biggest challenge for every organization implementing PDM and later PLM is, to get all users aligned to store their information in a central location and to share it with others. Only in this manner a company can achieve the goal of having a single version of the truth.
With single version of the truth I mean – if I look in the PLM system I find there all the needed data to explain me the exact status of a product or a project.
If it is not in the PLM system, it does not exist !
How many companies can make that statement ?
If your company does not have the single version of the truth implemented yet , you might be throwing away money and even bring your company at risk in the long term. Why ? Let’s look at some undisclosed examples I learned in the past few weeks:
- A company ordering 16 pumps which on arrival where not the correct ones –
1 M Euro lost - During installation at a drilling site the equipment did not fit and had many clashes – 20 M Dollar lost, due to rework and penalties
- 7000 K Euro lost due to a wrong calculation based on the wrong information
- A major bid lost due to high price estimation due to lack of communication between the estimator and the engineering department
- 500 K Euro penalty for delivering the wrong information (and too late)
All the above examples – and I am sure it is just a tip of what is happening around the world – were related to the power & process industry, where of course high-capital projects run and the losses might look small related to the size of the projects.
But what was the source of all this: Users
Although the companies were using a PLM system, in one company a user decided that some of the data should not be in the system, but should be in his drawer, to assure proper usage (according to his statement, as otherwise when the data is public available, people might misuse the data) – or was it false job security as at the end you loose your job by this behavior.
People should bring value in collaboration not in sitting on the knowledge.
Another frequently heard complaint is that users decide the PLM system is too complex for them and it takes too much time for them to enter data. And as engineers have not been bothered by any kind of strict data management, as ERP users are used to work with, their complaints are echoed to the PLM implementer. The PLM implementer can spend a lot of time to customize or adapt the system to the user’s needs.
But will it be enough ? It is always subjective and from my experience, the more you customize the higher the future risks. What about upgrades or changes in the process ?
And can we say NO to the next wish of this almighty user ?
Is the PLM system to blame ?
The PLM system is often seen as the enemy of the data creator, as it forces a user in a certain pattern. Excel is much easier to use, some home-made macros and the user feels everything is under control (as long as he is around).
Open Source PLM somehow seems to address this challenge, as it does not create the feeling, that PLM Vendors only make their money from complex, unneeded functionality. Everything is under own control for the customer, they decide if the system is good enough.
PLM On Demand has even a harder job to convince the unwilling user, therefore they also position themselves as easy to use, friend of the user and enemy of the software developer. But at the end it is all about users committing to share and therefore adapt themselves to changes.
So without making a qualification of the different types of PLM systems, for me it is clear that:
The first step all users in a company should realize is that, by working together towards a single version of the truth for all product or project related data, it brings huge benefits. Remember the money lost due to errors because another version of data existed somewhere. This is where the most ROI for PLM is reported
Next step is to realize, it is a change process and by being open minded towards change, either motivated or pushed by the management, the change will make everyone’s work more balanced – not in the first three months but in the longer term.
Conclusion: Creating the single version of the truth for project or product data is required in any modern organization, to remain competitive and profitable. Reaching this goal might not be as easy for every person or company but the awards are high when reaching this very basic goal.
At the end it is about human contribution – not what the computer says:
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