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I will be attending the annual Product Innovation conference again in Berlin next week. Looking forward to this event, as it is one of the places where you have the chance to network and listen to presentations from people that are PLM minded. A kind of relaxation, as strangely enough, most of the companies I am visiting, considerer PLM still considered as something difficult, something related to engineering, not so much connected to the future of their business.
I believe one of the reasons is that people have founded their opinion on the past. An expensive implementation horror story, an engineering focuses implementation or other stories that have framed PLM in a certain manner.
However PLM has changed and it significance has grown !
During the Product Innovation conference, I will present in more depth this topic related to the change of PLM.,with more examples and a surprising projection to the future. Later, when time permits, I will share the more in-depth observations in my blog, hopefully extended based on discussions during the conference. And if you attend the conference, don’t miss my session.
the term PLM (Product Lifecycle Management) was introduced as a logical extension to cPDM (collaborative Product Data Management). Where the initial focus was of global file sharing of mechanical CAD data, PLM extended the scope with multidisciplinary support, connecting manufacturing preparation and providing an infrastructure for change management.
In the nineties product data management was in transition.
In the early 90s, UNIX dominated, and installing a PDM system was the work of IT-experts. Large enterprises, already operating globally, were pushing for standardization, and control of data to connect their engineers in a more efficient manner. Connectivity was achieved through expensive lease lines; people like me, had to connect to the internet through dial-up modems and its usage was limited, providing static web pages with minimal graphics.
It was obvious that cPDM and the first PLM projects were extremely expensive. There was no experience; it was learning on the job. The costs were high and visible at the management level. Giving the management the impression that PLM is potentially the same challenge as ERP, but with a less clear scope. And the projects were executed by IT-experts, end-users were not really in the game.
At the end of the 90s, a small revolution started to take place. The power of the PC combined with Microsoft technology provided a much cheaper and flexible alternative for a complex UNIX based implementation.
Affordable 3D CAD emerged in the mid-market, leading to the need for Windows-based PDM systems and with Windows came Excel, the PDM/PLM killer application.
A person with some rudimentary Visual Basic skills could do magic with Excel and although not an IT-expert would become the champion of the engineering department.
At that time, PLM conferences provided a platform on which industry could discuss and share their tips and tricks on how to implement in the best manner a system. The focus was mainly on the IT-side and large enterprises. The scope was engineering centric, connecting the various disciplines including mechanical, electrical and simulation, in a database and connecting files and versions.
most large enterprises had already started to implement a PLM system. The term PLM became an accepted acronym associated with something that is needed for big companies and is complex and expensive, a logical statement based on the experiences of early adopters.
PLM was the infrastructure that could connect product information between disciplines and departments working from different locations. The NPI (New Product Introduction) process became a topic pushed by all enterprise PLM vendors and was a practice that demonstrated the value of providing visibility on information across a large, dispersed company, to better decision-making.
As this process was more data-centric instead of CAD-centric, these capabilities promoted the recognition and introduction of PLM in non-traditional manufacturing industries like Consumer Packaged Goods, Pharmaceuticals and Apparel where planning and coordination of information leads, instead of a Bill of Material.
In large enterprises, PLM still lay with the IT-architects as they were the ones deciding the standards and software to be used. PLM and ERP connectivity was an expensive topic.
For the mid-market, many PLM vendors were working on offers to standardize a PLM implementation; this usually involved a stripped-down or limited version from the full PLM system, a preconfigured system with templates or something connected to SharePoint. Connectivity was much easier then 15 years ago, thanks to a better internet infrastructure and the deployment of VPN.
For me at that time selling PLM to the mid-market was challenging; how do you explain the value and minimize the risk while current business was still running well? What was so wrong with the existing practices based on Excel? In summary, with good margins and growing business, wasn’t everything under control without the need for PLM? This was the time I started to share my experiences in my blog: A Virtual Dutchman´s introduction
Mid-market PLM projects focused on departmental needs, with IT providing implementation support and guidance. As the number of IT-staff is usually limited in these companies and often organized around ERP and what they learned from its implementation, it was hard to find business experts for PLM in the implementation teams.
the financial crisis had started, and globalization had started to become real through world-wide connectivity – better infrastructure and WEB 2.0. The world became an open space for consumers and competitors; the traditional offshore countries became consumers and began to invest in developing products and services for their domestic market but also targeted the rest of the world. Large enterprises were still expanding their huge PLM implementations though some were challenged because of a change of ownership. Capital investors did not come from the US or Europe anymore but from the BRIC (Brazil, Russia, India, China) countries, forcing some established companies to restructure and refocus.
In response to the crisis, mid-market companies started to reduce costs and focus on efficiency. Lots of discussions related to PLM began as it appeared to be THE strategy needed to survive, though a significant proportion of the investment in PLM was cancelled or postponed by management due to uncertainty and impact on the organization.
PLM conferences showed that almost all of the big enterprises and the mid-market companies still using PLM for connecting departments without fundamentally integrating them in one complete PLM concept. It is easier to streamline the sequential process (thinking lean) instead of making it a concurrent process with a focus on the market needs. PLM conferences were being attended by a greater mix of IT and Business representatives from different businesses learning from each other.
everyone in the world is connected and consequently, the amount of data is piling up. And now it is more about data than about managing document. The introduction of smart devices has had an impact on how people want to work; instead of sharing files and documents, we start sharing and producing huge amounts of data. In addition the upcoming “Internet of Things” demonstrates we are moving to a world where connectivity through data becomes crucial.
Sharing data is the ideal strategy for modern PLM. PLM vendors and other leading companies in enterprise software are discovering that the classical method of storing all information into one database does not work anymore and will not work in the future.
In the future, a new generation of PLM systems, either as an evolution of existing systems or as a disruption from the current market, will come. No longer will the target be to store all information in one system; the goal will be to connect and interpret data and make the right decisions based on that. This is similar to what the new generation of workers are used to, and they will replace the (my) older generation in the upcoming decade
Combined with more and more cloud-based solutions and platforms, the role of IT will diminish, and the importance of business people driving PLM will become ever more crucial.
PLM has become a business-driven strategy and requires people that are strong enough to develop, justify and implement this approach in their companies. New champions are needed !
The value of communities, blogs and conferences
is bringing together the global brainpower in social environments. Complemented with presentations, opinions and discussions from all different industries and domains the ideal environment to grow new ideas. Here you can associate the information, question its relevancy for your business and network with others – the perfect base for innovating and securing your future business.
Therefore, do not use communities or conferences to stick to your opinion but be open and learn.
One of my favorite quotes
When you are in a peaceful holiday accommodation close to the sea, it is about swimming, reading sleeping and food. I read two books this time Profit Beyond Measure from H. Thomas Johnson (2000) and Fast Future from David Burnstein (2013).
In a earlier post, PLM Statistics, I already referred to Johnson´s book. Now I had the time to read the whole book. Johnson is an advocate for MBM (Manage By Means) as compared to the most practiced MBM (Manage By Results) approach.
In Fast Future, Burnstein explains why his generation of Millennials (Generation Y) is not lazy and egocentric (etc. etc.) but different and ready for the future. Different from the Boomers, generation X and
These two books on two different topics have nothing in common you might think. But all you need is a PLM twisted brain, and it will be connected.
Let’s start with Profit Beyond Measure
Johnson in his introduction explains how manufacturing companies were gradually pushed into a MBR approach (Manage By Results). The Second World War was the moment that companies started to use accounting information to plan business activities. The growing presence of accountants in business started due to more regulations and financial regulations. Corporate executives were educated by professors of accounting and finance how to use their accounting information to plan and control business activities.
The result (quoting Johnson):
“..teaching a new generation of managers to put aside understanding the concrete particulars of how business organizes work. They taught them instead to focus exclusively on abstract quantitative generalizations about financial results”
And as he writes a little later:
“The unique feature of the multidivisional organization was the introduction of a level of managers that had not existed before. Managers at this level ran what appeared to be self-standing, fully articulated multifunctional companies known as divisions. The manager of a division, however, reported to a top management group that represented in effect, the market for capital and the market for managers”
The PLM-twisted brain understands that Johnson is describing one of the major inhibitors for PLM. PLM requires departments and individuals TO SHARE and work CONCURRENT on information. Meanwhile, department and division leaders are trained, pushed and measured to optimize their silo businesses to deliver the right financial results. Executives above the management monitor the consolidated numbers and have the slightest understanding of the real business challenges PLM can solve. Here, innovative ways of working are not discussed; numbers (costs /ROI) are discussed.
To proceed with Johnson, he believes in MBM (Manage by Means). Manage by Means could be compared with the way an organic life system is behaving. Johnson describes it as:
“Every entity is focusing on doing work, not on manipulating quantitative abstractions about work. In a company this would mean every person’s activity will embody that most fundamental condition of natural life systems – namely that all knowing is doing and that all doing is knowing”
Although Johnson is focusing on manufacturing companies (Toyota and Scania as two major examples of MBM), the PLM-twisted mind reads this as a concept that matches the PLM vision.
Everything and everyone is connected to the process and having the understanding how to interpret the data and what do to. This is how I imagine PLM implementations. Provide the right information to every person not matter where this person is in the lifecycle of the product. Too much automation prevents the system to be flexible and adapt to changes an in addition, it does not challenge the user anymore to think.
Enough about Profit Beyond Measure, ending with a quote about Manage by Means:
“…. which will bring a change in thinking for the next generation of managers more revolutionary than that which every previous generation has ever experienced”
Now the Fast Future
In Fast Future, David Burnstein talks about his generation, the Millennials, and how they are different. The Millennials are people who are now between 20 and 35. They grew up with one foot in the old analogue world and came to full wisdom in a digital, social connected manner during several shocking crises that formed their personality and behavior ( 9/11 – financial crisis – globalization – huge unemployment) according to Burnstein. People also referred to them as Generation Y.
In the context of this post we have the need to imagine four generations:
- The Pré-boomers, who build up the economy after the second world war, and as we learned from Johnson who introduced the mechanical thinking for business (MBR – management by results)
- The Boomers (my generation) who had the luxury to study and discuss the ultimate change for the world (make love not war), idealistic to change the world, but now most of us working in an MBR mode
- Generation X, they introduced punk, skeptics. They are supposed to be cynical, very ego-centric and materialistic. I am sure they also have positive points, but I haven’t read a book about them and you do not meet Generation X in the context of a particular change to something new (yet)
- Generation Y, the Millennials, who considered by the Boomers, is another lazy generation, all the time surfing the internet, not committing to significant causes, but seem to enjoy themselves. Burnstein in his book changes the picture as we will see below.
According to Burnstein the Millennials are forced to behave different as the traditional society is falling apart due to different crises and globalization. They have to invent a new purpose. And as they are so natural with all the digital media they can connect to anyone or any group to launch ideas, initiatives and build companies. The high unemployment numbers in their generation force them to take action and to become an entrepreneur, not always for profit but also for social or sustainable reasons.
They understand they will have to live with uncertainty and change all their lives. No guaranteed job after education, no certain pension later and much more uncertainty. This creates a different attitude. You embrace change, and you do not go for a single dream anymore like many of the boomers did.
Choosing the areas that are essential for you and where you think you can make a significant impact become important. Burnstein points to several examples of his generation and the impact they already have on society. Mark Zuckerberg – Facebook founder is a Millennial, many modern social apps are developed by Millennials, Obama won the elections twice, due to the impact and connectivity of the Millennials generation, the Facebook revolutions in the Middle East (Tunisia / Egypt/Libya) al lead by desperate Millennials that want to make a change.
When reading these statements, I wondered:
Would there also be Millennials in Germany?
As in Germany the impact of 9/11, the financial crisis and unemployment numbers did not touch that much. Are they for that reason the same as generation X? Perhaps a German reader in the millennial age can provide an answer here?
What I liked about the attitude described by Burnstein is that the Millennials network together for a better cause, a meaningful life. This could be by developing products, offer different types of services all through a modern digital means. The activities all in the context of social responsibility and sustainability, not necessary to become rich.
As noticed, they think different, they work different and here Johnson’s quote came to my mind:
“…. which will bring a change in thinking for the next generation of managers more revolutionary than that which every previous generation has ever experienced”
And the PLM-twisted brain started drifting
Is this the generation of the Millennials Johnson is hoping for? The high-level concept of Management by Means is based on the goal to have every entity directly linked to the cause – a customer order, flexibility, ability to change when needed. Not working with abstract mechanical models. I think the Millennials should be able to understand and lead these businesses.
This culture change and a different business approach to my opinion are about modern PLM. For me, modern PLM focuses on connecting the data, instead of building automated processes with a lot of structured data.
Current the modern PLM system as I described is does not exist (or I haven’t seen it yet). Also I have not worked with Millennials in a leading role in a company. Therefore, I kept on dreaming during my holiday – everything is possible if you believe it –even standing on the water:
And although after reading these books and seeing the connection, you can have the feeling that you are able to walk on the water. There are also potential pitfalls (a minute later) ahead to be considered as you can see below:
My PLM-twisted mind as you noticed combines everything.
What do you think?
Did I hallucinate or is there a modern future for business and PLM.
I am looking forward to learning your dreams.
Do you know the expression: “You have lies, damned lies and statistics”? Pointing to the fact that statistics are often abused to “prove” statements. A typical example from Hans Rosling, the Swedish statistics guru and entertainer: “In Sweden most of the people have an above average amount of legs!”
The proof: the Swedish average is 1.999 and as most of the people in Sweden have 2 legs, thus above average. Now it is time to share some statistics with you.
Last time, I asked readers of this blog to participate in a small survey about their PLM thoughts and experiences. Although many people have read the post, perhaps, not till the end, there are only 22 responses so far at this time. If you haven’t participated yet, please do so by answering: 6 questions – the result will be published in July. There are no rewards to win. The only thing we all will gain is the statistical insight of people who have read this blog and apparently are PLM minded.
What does it mean to be PLM-minded?
It is hard to tell what the purpose is of PLM really without some numbers to guide you. And when it comes to PLM decisions, I noticed that most of the companies, I am working with, believe they make decisions based on numbers and statistics. Personally I believe in our current society it is more the emotional side that drives our decisions, not pure the rational and numbers. This is another discussion.
We always find a way to interpret the numbers. For the outside world, we pretend we make decisions based on pure, objective criteria. This would mean you can capture an organization in numbers and decide from there what’s best for the organization. An utopia we will see after some small statistics.
In the past year I spent most of my time in eight PLM-related discussions, most of them still on-going. Here, some of the statistics
Four of them are large enterprises, where the power is inside the business unit. They act as one company, (one logo) but actually every business unit is focused on their own business profit and loss. They are not genuinely motivated to think about synergy with other businesses in cases it affects their work. Sometime IT believes they can bring the synergy by defining the common tools.
The other four companies are more centralized enterprises; some of them are large, with a centralized management and a single target to deliver to the market. Therefore, for a PLM project, they are easier to work with as you have more a single voice, instead of an opinion with a lot of conditions.
All eight companies are not in traditional PLM industries. They are either project centric industries, where every delivery is supposed to be unique, or they are an owner/operator of a collection of assets to be managed during a long lifecycle. The reason: since 2008 I am personally interested and driven to demonstrate PLM practices and capabilities are valid for other industries too.
All eight companies involved expressed in the current engagement that PLM is essential for their future.
The need for PLM comes from a vision. I believe you should start always with the vision. Before acting, you need to know what your goal is. And a goal does not mean you know what your pain is. Understanding the pains does not solve the future; it is a first step to help you shape a future with no more pains. A typical example that they are different can be found in the current economic crisis. Everyone experiences the pains and understands there is a need for change. But all we have a different opinion about that is the required change. There is no single vision?
From the eight companies, only two of them could express a clear vision where they want to be in the future. This means six of them either have not clarified their vision yet (still in work) or even do not believe there is a way to define the vision. They are more focused on solving a pain than creating a vision.
In three companies, the PLM project is considered to be a game changer. It was not about just fixing actual pains. The target is to be different from the competition and achieve a competitive advantage. Game changers are the most complex projects. The company needs to have a clear vision. It needs to have a trust in the fact that changing the game is indeed possible. And finally game changing contains the word CHANGE, which most companies try to avoid (evolution no revolution). But game changers, when successful, have the dominant companies for several years before others catch up.
In relation to change, two of the eight companies believe will be impossible to change the game. Although individual persons in the organization believe it is required, their ERP implementation and its related implementation scope have already taken part of the logical PLM space. This is blocking any serious PLM initiative making the implementation a PDM implementation, which has less value.
Four companies stated upfront IT-constraints that could not be discussed. This introduced a lot of complexity. Some of the IT-constraints were emotional (we just decided a year ago to standardize on software xyz – we cannot afford to change to something else now, perhaps in the future). Other constraints were quite irrational and were based on (IT) decisions to standardize on a technology or solution, irrelevant or counterproductive to the business needs.
Only three of the eight companies require an ROI estimate to convince the management. As mentioned before, everyone is looking for reliable numbers to support a decision. Still decisions are made emotionally, and ROI numbers might be based on statistics. These three companies believe that the ROI numbers will lead to the right decision.
Another three out of this eight companies did not need an ROI estimate. They think that what they will select as future solution is always justified: they just need PLM. The difficulty will come when they have to compare RFPs (Request for Proposal) from different vendors. Each vendor is focusing on its unique features, and from there the RFP review becomes an apples and pears comparison. Probably again the emotional decision will be made at the end. Most likely the cheapest to be sure nobody can be blamed.
PLM = PLM?
I believe the small amount of statistics provided in this post demonstrate that it is not easy to get a hundred percent common understanding of what PLM is about. Imagine what you would give as advice to one of these eight companies. This makes PLM difficult as a discipline as it is not just a collection of tools to implement. If you are selling hammers everything might look like a nail. Be aware of hammer PLM.
In addition to what is PLM, the majority of companies that claim to have implemented a PLM system do not necessary use PLM in all its capabilities. Often it is still more automation of the way the company worked before. Something you understand when attending PLM user conferences, like the product innovation conferences.
Innovation and disruption needed
I believe that in order to benefit in an optimal manner from PLM, a company needs to switch their mindset from being a departmental measured and triggered company into a customer centric company, where information flows and is shared with all relevant roles in the organization.
Sharing data, instead of owning data, is a big game changer. It requires companies to work different. In the past when you did not need to share data, you could store it anywhere and in any way you prefer to do this. It was your duty and job security to control the data. Now when an experienced person retires or leaves the company, we struggle to get this information back (or we lose it and recreate it later when needed again). Search engines become popular technology to find back data – if possible! I believe Search engines can help to connect the past to the future infrastructure, but there is more.
Sharing data does not mean storing data in the cloud. The cloud makes it easier to share data as the company can focus more on the business side of the solution instead of the IT-side where and how to store it at what cost. It is the awareness of the content (“Do I search for something that exists”) and the quality (“Can I trust what I have found”) that we share that needs to get the focus.
For data sharing a disruptive change is needed, which does not happen in the classical PLM environments. There we think too much in departments and a sequential (or concurrent) way of working.
Aiming for sharing is disruptive. The fact that engineers need to provide more accurate data is seen as a productivity loss instead of a gain through the whole organization – see an old post: “Where is my PLM ROI “?. Organizations normally do not like disruptions. Individuals do. If they find a cheaper and easier way to get their work done, they will grab this opportunity and not do anything more. However companies have the tendency and need to keep things more complex as it is not a single task the focus on. It is a complex network of interactions.
I had the chance to read two interesting topics in this context recently. First a relative new blog related to disruptive innovation: the Off-White papers. Although it is not about PLM, it describes the challenges related to disruptive innovation, and if you have a twisted PLM-brain you will get the message.
The same for a book I have been reading from H. Thomas Johnson called Profit Beyond Measure . Johnson describes in his book, based on cases from Toyota and Scania, a different business model focused on customer delivery instead of internal departmental optimization. Again my twisted PLM-brain got triggered by the customer centric business model. A favorite quote:
A continuously linked and balanced organization that “works to customer order” reflects a very different management style (and organization JV) than does a decoupled and discontinuous organization that “works to schedule”
It is the difference between managing by results (MBR) and managing by means (MBM). And I believe this is the target of modern PLM too.
Even with some small statistics I hope it is clear that PLM is not a simple activity as there are many constraints that can influence a project. Having an understanding about these constraints and being able to remove the blocking constraints is what I believe is the job of a PLM consultant.
Do you agree? Is there an easier world? I am looking forward to your feedback through the comments or through a response in the small survey: PLM, your opinion
It was Heraclitus, a Greek philosopher, living around 500 BC, who told the Greek people that change is the only constant: Τα πάντα ρεί – the title of this blog post. Apparently he was not a popular philosopher and telling people there will be change during a comfortable period of time in their society does not make you loved.
As I am personally passionate about Greece in my personal life, I have also some business activities in Greece. From these experiences, I wish Heraclitus would be their leading guru. Greece at this moment is stuck in their inability to change. Old habits and private interests prevent new initiatives, and the blame for their current situation goes to the outside world: Europe.
This trick has been used over and over again by politicians when a country needs to restructure or reorganize. Create an external enemy and the majority of people swallow their distressing situation. The outside world is to blame and thanks to the external focus nothing changes internally as the population focuses on the enemy first. Where Heraclitus implies there is always change, which could be evolution, it seems that the Greek need a revolution to change their old habits and patterns in order to adapt to the new global society.
But are the Greek the only ones that need to change?
Τα πάντα ρεί also came in my mind when I read Chad Jackson’s blog post: PLM requires Business Transformation ? Bollocks for the first time. I envy Chad’s powerful writing style, which calls for action, a BLOGFIGHT among the PLM community. Unfortunate due to the word Bollocks some of the younger PLM consultants (do they exist?) might not be able to participate to this blog fight as their parental filter on the computer has blocked the page.
My first impression from Chad’s post was that he claims we just need to go to for global centralized data management and build processes digital and automated. And as he calls a PLM journey bollocks, I suppose in Chad’s ideal world all would be done in a single step or focused project. A new Big Bang! The last known successful Big Bang was approx 13.798 billion years ago. All other Big Bangs failed.
Τα πάντα ρεί
However my first impression was not 100 % correct and after rereading the post and the related comments a more elaborated picture comes up. The few other PLM consultants that participated in the BLOGFIGHT demonstrated there are many viewpoints often based on the consultant’s background. Often PLM is associated with “The single source of the Truth”, it is precisely on that point where PLM as a concept is struggling. There is no single opinion for PLM.
I am glad that we (Chad and I) agreed there is a need for change. This axiom (another Greek word known from Euclid’s Elements) is to my opinion the first starting point to consider for any PLM implementation. If you do not expect change, you will be probably forced to customize the new system the way your company worked before, maybe a little faster, leaving the organization structure as-is. And by building automation similar to the as-is organization you actually make your organization less flexible to adapt for new concepts.
Why do most of the large automotive companies have a problem with their PDM / PLM platforms? Because they have automated and customized their environments year after year. For sure there was ROI (Return On Investment) at that time, but gradually it also created an inability to change. And change is happing faster and faster. Globalization has come up so fast that most large PLM implementations seem to be too rigid to change. What to do? Change their CAD system?
Τα πάντα ρεί !
Knowing that there will be always change, companies should anticipate for change. And this is what I mean by the PLM journey. If implementing PLM is a onetime shot, you might be shooting in your own foot. And if you do not change, you end up with the same problem that Greece is currently facing: revolution or bankruptcy. Revolution is something nobody sane wants, neither bankruptcy.
Evolution is the only way to go even if this is against the way we humans in general behave: we want things to stay the same.
Now combining all ancient Greek wisdom with modern PLM wisdom, I would like to post my five axioms for PLM.
- There will be always change – build your vision for the upcoming 5 – 10 years with the anticipation there will be change – do not try to consolidate the now.
- Look for the latest best practices, not your current best practices
- Implement systems (PLM / PDM / ERP) as much as possible Out-Of-The-Box again avoiding to become dependent on specific releases or fixed environments
- Focus on areas where there is direct visible ROI or long term strategic advantage. As there will be always change, identify where to improve or alter moving towards the big picture brings visible comfort (business wise / users wise)
- Focus on a clear and business oriented data model – it is easier to maintain data through a long lifecycle when their definition is clear. This is a call for open data standards (STEP / ISO) as they bring you long term flexibility.
Concluding notes and call for action:
- If you are a respected PLM consultant, feel motivated to continue the blog fight and share your thoughts here related to this post or related to Chad’s post.
- If you are a respected PLM consultant or PLM enthusiast, please take a moment to answer six questions in the following anonymous survey to share your opinion and background. The survey closes on July 1st 2013: http://www.surveymonkey.com/s/PYSMBJ9
I will publish the results in July.
- PLM is a journey (virtualdutchman.com)
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)
PLM is a popular discussion topic in various blogs, LinkedIn discussion groups, PLM Vendor web sites and for the upcoming Product Innovation congress in Berlin. I look forward to the event to meet and discuss with attendees their experience and struggle to improve their businesses using PLM.
From the other side talking about pure PLM becomes boring. Sometimes it looks like PLM is a monotheistic topic:
- “What is the right definition of PLM ?” (I will give you the right one)
- “We are the leading PLM vendor” (and they all are)
- A PLM system should be using technology XYZ (etc, etc)
Some meetings with customers in the past three weeks and two different blog posts I read recently made me aware of this ambiguity between boring and fun.
PLM dictating Business is boring
Oleg Shilovitsky´s sequence of posts (and comments) starting with A single bill of materials in 6 steps was an example of the boring part. (Sorry Oleg, as you publish so many posts, there are many that I like and some I can use as an example). When reading the BOM-related posts, I noticed they are a typical example of an IT- or Academic view on PLM, in particular on the BOM topic.
Will these posts help you after reading them ? Do they apply to your business ? Or do you feel more confused as a prolific PLM blogger makes you aware of all the different options and makes you think you should use a single bill of materials ?
I learned from my customers and coaching and mediating hundreds of PLM implementations, that the single BOM discussion is one of the most confusing and complex topics. And for sure if you address it from the IT-perspective
The customer might say:
“Our BOM is already in ERP – so if it is a single BOM you know where it is – goodbye !”.
A different approach is to start looking for the optimal process for this customer, addressing the bottlenecks and pains they currently face. It will be no surprise that PLM best practices and technology are often the building blocks for the considered solution. If it will be a single BOM or a collection of structures evolving through time, this depends on the situation, not on the ultimate PLM system.
Business dictating PLM is fun
Therefore I was happy to read Stephen Porter´s opinion and comments in: The PLM state: Pennywise Pound Foolish Pricing and PLM where he passes a similar message as mine, from a different starting point, the pricing models of PLM Vendors. My favorite part is in his conclusion:
A PLM decision is typically a long term choice so make sure the vendor and partners have the staying power to grow with your company. Also make sure you are identifying the value drivers that are necessary for your company’s success and do not allow yourself to be swayed by the trendy short term technology
Management in companies can be confused by starting to think they just need PLM because they hear from the analysts, that it improves business. They need to think first to solve their business challenges and change the way they currently work in order to improve. And next look for the way to implement this change.
Changing the way to work is the problem, not PLM.
It is not the friendly user-interface of PLM system XYZ or the advanced technical capabilities of PLM system ABC, that will make a PLM implementation easier. Nothing is solved on the cloud or by using a mobile device. If there is no change when implementing PLM, why implement and build a system to lock yourself in even more?
This is what Thomas Schmidt (VP Head of Operational Excellence and IS at ABB’s Power Products Division) told last year at PLM Innovation 2012 in Munich. He was one of the keynote speakers and surprised the audience by stating he did not need PLM !
He explained this by describing the business challenges ABB has to solve: Being a global company but acting around the world as a local company. He needed product simplification, part reduction among product lines around the world, compliance and more.
Another customer in a total different industry mentioned they were looking for improving global instant collaboration as the current information exchange is too slow and error prone. In addition they want to capitalize on the work done and make it accessible and reusable in the future, authoring tool independent. But they do not call it PLM as in their business nobody uses PLM !
Both cases should make a PLM reseller´s mouths water (watertanden in Dutch), as these companies are looking for key capabilities available in most of the PLM systems. But none of these companies asked for a single BOM or a service oriented architecture. They wanted to solve their business issues. And for sure it will lead into implementing PLM capabilities when business and IT-people together define and decide on the right balance.
Management take responsibility
And here lies the management responsibility of these companies. It is crucial that a business issue (or a new strategy) is the driving force for a PLM implementation.
In too many situations, the management decides that a new strategy is required. One or more bright business leaders decide they need PLM (note -the strategy has now changed towards buying and implementing a system). Together with IT and after an extensive selection process is done, the selected PLM system (disconnected from the strategy) will be implemented.
- why PLM projects are difficult
- why it is unclear what PLM does.
PLM Vendors and Implementers are not connected anymore at this stage to the strategy or business. They implement technology and do what the customer project team tells them to do (or what they think is best for their business model).
Successful implementations are those where the business and management are actively involved during the whole process and the change. And this requires a significant contribution from their side, often delegated to business and change consultants.
PLM Implementations usually lead to a crisis at some moment in time, when the business is not leading and the focus is on IT and User Acceptance. In the optimal situation business is driving IT. However in most cases due to lack of time and priorities from the business people, they delegate this activity to IT and the implementation team. And here it is a matter of luck if they will be successful:
- how experienced is the team ?
- Will they really implement a new business strategy or just automate and implement they way the customer worked before, but now in a digital manner ?
- Do we blame the software when the people do not change ?
Back to fun
I would not be so passionate about PLM if it was boring. However looking back the fun and enthusiasm does not come from PLM. The fun comes from a pro-active business approach knowing that first the motivating the people and preparing the change are defined, before implementing PLM practices
I believe the future success for PLM technologies is when we know to speak and address real business value and only then use (PLM) technologies to solve them.
PLM becomes is a logical result not the start.
And don´t underestimate: change is required.
What do you think – is it a dream ?
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
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.
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?
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 ??
- Why PLM 2.0 – Conclusions (virtualdutchman.com)