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This is the fifth year that marketkey organized their vendor-independent conference in Europe around Product Innovation, where PLM is the major cornerstone. Approximate 100 companies attended this conference coming from various industries. As there were most of the time two till four parallel tracks (program here), it will still take time for me to digest all the content. However here a first impression and a comparison to what has changed since the PI Conference in 2014 – you can read my review from that conference here.
First of all the keynote speeches for this conference were excellent and were a good foundation for attendees to discuss and open their mind. Secondly I felt that this conference was actually dealing with the imminent shift from classic, centralized businesses towards the data-centric approach to connectivity of information coming from anyone / anything connected. Naturally the Internet of Everything (IoE) and the Internet of Things (IoT) were part of the discussion combined with changing business models: moving from delivering products toward offering services (CAPEX versus OPEX).
Some of the highlights here:
The first keynote speaker was Carlo Rati Director, MIT Senseable Lab. He illustrated through various experiments and examples how being connected through devices we can change and improve our world: tagging waste, mobile phone activity in a city and the Copenhagen Wheel. His main conclusion (not a surprise): For innovation there is a need to change collaboration. Instead of staying within the company / discipline boundaries solving problems through collaboration between different disciplines will lead to different thinking. How is your company dealing with innovation?
The second session I attended was John Housego from W.L. Gore and Associates who explained the company’s model for continuous growth and innovation. The company’s future is not based on management but based on leadership of people working in teams in a flat organization. Every employee is an associate, directly involved and challenged to define the company’s future. Have a read about the company’s background here on Wikipedia.
Although the company is 50 years old, I realized that their cultural model is a perfect match with the future of many businesses. More and more companies need to be lean and flexible and support direct contact between the field, customers, market and experts inside the company. Implementing a modern PLM platform should be “a piece of cake” if the technology exists, as W.L. Gore’s associates will not block the change if they understand the value. No silos to break down.
My presentation “The Challenge of PLM Upgrades as We See the Rules of Business Change” was based around two themes (perpetual software ? / seamless upgrades ?) and from there look towards the future what to expect in business. When we look back, we see that every 10 years there is a major technology change, which makes the past incompatible to upgrade. Now we are dreaming that cloud-based solutions are the future to guarantee seamless upgrades (let’s wait 10 years). To my opinion companies should not consider a PLM upgrade at this moment.
The changes in business models, people behavior and skills plus technology change, will enable companies to move towards a data-centric approach. Companies need to break with the past (a linear, mechanical-design-based, product development approach) and redesign a platform for the future (a business-innovation platform based on the data). In my upcoming blog post(s) I will give more background on this statement.
Trond Zimmerman from the Volvo Group Truck explained the challenges and solution concept they experienced as they are currently implementing answering the challenge of working in a joint venture with Dongfeng Commercial Vehicles. As in a joined venture you want to optimize sharing of common parts, still you cannot expect a single PLM solution for the total joint venture. For that reason, Volvo Group Truck is implementing Share-A-Space from Eurostep to have a controlled collaboration layer between the two joint venture partners.
This is, to my opinion, one of the examples of future PLM practices, where data will not be stored in a single monolithic system, but data will be connected through information layers and services. The case is similar to what has been presented last year at Product Innovation 2014 where Eurostep and Siemens Industrial Turbomachinery implemented a similar layer on top of their PDM environment to enable controlled sharing with their suppliers.
David Rowan from wired.co.uk closed the day with his keynote: Understanding the New Rules of Product Innovation. He touched the same topic as John Housego from W.L. Gore somehow: it is all about democratization. Instead of hierarchy we are moving to network-based activities. And this approach has a huge impact on businesses. David’s message: Prepare for constant change. Where in the past we lived in a “linear” century, change according to Moore’s law, we are entering now an exponential century where change is going faster and faster. Besides examples of the Internet of Thing, David also gave some examples of the Internet of Stupid Things. He showed a quote from Steve Balmer stating that nobody would pay $ 500 for a phone (Apple). The risk he made is that by claiming some of these stupid inventions might lead to a quote in the future. I think the challenge is always to stay open-minded without judging as at the end the market will decide.
PLM and ERP
I spent the evening networking with a lot of people, most of them excited about the future capabilities that have been presented. In parallel, the discussion was also about the conservative behavior of many companies. Topics that are already for ten years under discussion – how to deal and connect PLM and ERP, where is the MBOM, what are the roles of PLM and ERP for an organization, are still thankful topics for a discussion, showing where most companies now are with their business understanding.
In parallel to a product innovation conference apparently there is still a need to agree on basic PLM concepts from the previous century.
The second day opened with an excellent keynote speech from Dirk Schlesinger from Cisco. He talked about the Internet of Everything and provided examples of the main components of IoE: Connectivity, Sensors, Platform, Analytics, and Mobility. In particular the example of Connectivity was demonstrating the future benefits modern PLM platforms can bring. Dirk talked about a project with Dundee Mining where everything in the mine was tagged with RFI devices (people, equipment, vehicles, and resources) and the whole mine was equipped with Wi-Fi.
Based on this approach the execution and planning of what happened was done in their HQ through a virtual environment, giving planners immediate visibility of what happens and allowing them to decide on real data. This is exactly the message I have posted in my recent blog posts.
The most fascinating part were the reported results. This project is ongoing now for 3 years and the first year they achieved a production increase of 30 %. Now they are aiming for this year for a 400 % production increase and a 250 % efficiency increase. These are the numbers to imagine when you implement a digital strategy. It is no longer any more about making our classical processes more efficient, it is about everyone connected and everyone collaborates.
Marc Halpern from Gartner gave an good presentation connecting the hype of the Internet of Things with the world of PLM again, talking about Product Innovation Platforms. Marc also touched on the (needed) upcoming change in engineering processes. More and more we will develop complex products, which need system thinking. Systems of Systems to handle this complexity, As Marc stated: “Product, process, culture is based on electro-mechanical products where the future trend is all about software.” We should reconsider our Bill of Materials (mechanical) and think probably more about a Bill of Features (software). Much of Marc’s presentation contained the same elements as I discussed in my PDT2014 blog post from October last year.
I was happy to see Jenni Ala-Mantila presenting the usage of PLM system for Skanska Oy. Skanska is one of the largest construction companies operating global. See one of their beautiful corporate videos here. I always have been an advocate to use PLM practices and PLM infrastructure to enhance, in particular, the data-continuity in a business where people work in silos with separate tools. There are so many benefits to gain by having an end-to-end visibility of the project and its related data. Jenni’s presentation was confirming this.
By implementing a PLM backbone with a focus on project management, supplier collaboration and risk management, she confirmed that PLM has contributed significant to their Five Zero – vision: Zero loss-making projects, Zero Environmental incidents, Zero Accidents, Zero Ethical breaches and Zero Defects. Skanska is really a visionary company although it was frustrating to learn that there was still a need to build a SharePoint connection with their PLM environment. The future of data-centric has not reached everyone in the organization yet.
The last two sessions of the conference, a panel discussion “Why is Process Innovation Challenging & What can be done about it” plus the final keynote “Sourcing Growth where Growth Takes Place” had some commonality which I expressed in some twitter quotes:
Where last year I had the impression that the PLM world was somehow in a static mode, not so much news in 2014. It became clear in this 2015 conference that the change towards new business paradigms is really happening and at a faster pace than expected. From mechanical development processes to software processes, from linear towards continuous changes. Moe to come this year
In the past two years, I have been heavily involved in PLM Proof of Concepts sitting at both sides of the table. Supporting companies in their PLM selection, supporting a vendor explaining their value to the customer and supporting implementers assisting them with industry knowledge, all in the context of a PLM selection process.
The Proof of Concept is crucial in a PLM selection process as it is the moment where the first glimpse of reality comes to the table.
Different size of companies, different consultants all have a different view on the importance of the Proof of Concept. Let me share you my thoughts after a quick recap on the PLM selection process.
The PLM selection process
1. Build a vision
It is important that a company understands what they want to achieve in the next five to ten years, before starting a PLM selection process. Implementing PLM means a business transformation, even if you are a small company. If the management does not understand a vision is required, there is a potential risk upcoming, as PLM without a change in the way people work, will not deliver the expected results.
2. Issue an RFI to potential candidates
Once you have a PLM vision, it is time to get in touch with potential suppliers. The RFI (Request for Information) phase is the phase where you can educate yourself better by challenging the suppliers to work with you on the future solutions.
3. Discuss with selected candidates
From the RFI responses you understand which companies are attractive because they match your vision, your budget or industry. Have a first interaction with the selected companies and let them demo their standard environment targeted to your vision.
In this stage, you check with the preferred companies their ability to deliver and your ability to work together. The POC phase should give you the understanding of the scope for the upcoming PLM project and help you to understand who and how the project can be executed. More details about this step below.
Although some companies start with an RFP before the POC, for me it makes most sense to verify the details after you have a proper understanding of the To-Be solution. The RFP is often the base for the contractual scope and therefore should be as accurate as possible
In the past, I wrote in more detail about the PLM selection process. Two posts: PLM selection: Don’t do this and PLM selection: Do this. Have a read if you want to understand this part in more depth. Now let´s focus on the POC .
- As described before, the target of the Proof of Concept should be to get a better understanding of the potential To-Be processes and obtain an impression of the capabilities of the implementer and the preferred PLM software.
The result should be that you have more realistic expectations of what can be achieved and the challenges your company will face.
- From there, you can evaluate the risks, address them and build an achievable roadmap to implement. It is important that the focus is not just on the cost of the implementation.
- To sell PLM inside your company, you need to realign with the vision and explain, to all people involved,the value of “Why PLM”.
Explaining the value is complex, as not everyone needs the same message. The management will focus on business benefits where users will focus how it impacts their daily life. If you forget to explain the value, the PLM projects, it is considered again as just another software purchase.
Make sure the Proof of Concept is driven by validating future business scenarios, focusing on the To-Be solution. The high-level scenarios should be demonstrated and explained to the business people. In this stage, it is important people realize the benefits and the value of the new processes.
The POC is also an internal sales event. The goal should be to get more enthusiastic and supportive business people in your company for the upcoming PLM project. Identify the champions you will need to lean on during the implementation.
Test the implementer. To my opinion the critical success of a PLM implementation depends on the implementation team, not on the software. Therefore, the POC phase is the best moment to learn if you can work with the implementer. Do they know your business? Do they have experience with your business? The more you are aligned, the higher the chance you will be successful as a team
Show commitment to engage. Often I have seen POC engagements where the company demanded the implementer or vendor a Proof of Concept for free. This creates an unbalanced situation during the Proof of Concept as the vendor or implementer can not invest time and resources in the process as expected without any commitment from the company. By paying a certain fee for the POC, a company can demonstrate to the implementer /vendor that this POC is valuable for you and you can request the same response from them.
The Proof of Concept is not a detailed function/feature check to identify each mouse-click or option in the system. During the implementation, these details might come up. It is important in a Proof of Concept to understand the big picture and not to get lost in the details. As human beings we tend to focus on what does not work, not realizing that probably over eighty-ninety percent works according the needs
Do not expect the ultimate To-Be scenario demonstrated during the Proof of Concept. The Proof of Concept is a learning stage for both the company and the implementer to imagine the best possible scenario. PLM systems are generic and likely they will not provide a similar configuration and functionality matching your environment. At this stage validate if the primary capabilities are there and if there are gaps.
Do not run a POC with a vendor (only). This might be one of the most critical points for a POC. A PLM software vendor’s target is to sell their software and for that reason they often have dedicated presales teams that will show you everything in a smooth manner, overwhelming you with all the beauty of the software. However after the POC this team is gone and you will have to align yourself again with the implementation partner, trying to match again your business needs and their understanding.
Realize – you get what you are asking for. This is more a Do-and-Don’t message packed together. A Proof of Concept phase is a point where companies get to know each other. If you are not focused, do not expect the implementer / vendor to be committed. A PLM implementation is not product. It is a business transformation supported by products and services. Do not treat PLM implementers and vendors in the same way, as your customers treat you (in case you deliver products).
There are still many more thoughts about the Proof of Concept . Ideally you run two POCs in parallel, either with two implementers of the preferred software (if possible) or with two different implementers representing different software.
Ideally, as I know it is a challenge, especially for small and medium-sized businesses, where people are running to keep the business on-going.
Still remember, PLM is a business transformation, targeting to improve your business in the upcoming five to ten years, avoiding you are running out of business.
Your thoughts ?
As a bonus a short anecdote that I posted in 2010 still relevant:
Some time ago a Christian PLM Sales professional died (let’s call him Jack) and according to his believe he faced Saint Peter at the gates of Heaven and Hell.
Saint Peter greeted Jack and said: “Jack, with the PLM Sales you have done good and bad things to the world. For that reason, I cannot decide if you should go to Heaven or to Hell. Therefore, I allow you to make the choice yourself”.
Jack replied: “But Saint Peter, how can I make such an important decision for the rest of my eternal life. It is too difficult!”
Saint Peter replied: “No problem Jack, take a look at Heaven and Hell, take your time and then tell me your decision.”
Jack entered Heaven and he was surprised about the quietness and green atmosphere there. Angels were singing, people were eating from golden plates with the best food ever, people were reading poetry and everything was as peaceful as you could imagine. In the distance, he could see God surrounded by some prophets talking about the long-term future. After some time, Jack had seen it and went to Hell to have a view there.
And when he opened the gates of Hell, he was astonished. Everywhere he looked there were people partying, having fun. It reminded him off these sales kick-offs, he had in the past, exotic places with lots of fun. In the distance, he could see the Devil as DJ playing the latest dance music – or was it DJ Tiësto?
Jack did not hesitate and ran back to Saint Peter, no time to lose. “Saint Peter,” he said “I want to go to Hell, no doubt. And pity I did not know it before”
“So be it, ” said Saint Peter “go for it.”
And then once Jack entered Hell, it was suddenly all fire around him, people were screaming of pain and suffering and also Jack felt the first flames.
“Devil!!” He screamed “what happened to what I have seen before?”
With a sarcastic voice, the devil replied: “That? That was a proof of concept.”
Business is changing and becoming digital as you might have noticed. If you haven´t noticed it, you might be disconnected from the world or work in a stable silo. A little bit simplified and provocative otherwise you would not read further.
The change towards digital also has its effect on how PLM is evolving. Initially considered as an extension of PDM, managing engineering data, slowly evolving to an infrastructure to support the whole product lifecycle.
The benefits from a real PLM infrastructure are extremely high as it allows people to work smarter, identify issues earlier and change from being reactive towards proactive. In some industries, this change in working is they only way to stay in business. Others with still enough margin will not act.
Note: I am talking about a PLM infrastructure as I do not believe in a single PLM system anymore. For me PLM is supported through a collection of services across the whole product lifecycle, many potentially in one system or platform.
Changing from an engineering-centric system towards an infrastructure across the departmental silos is the biggest challenge for PLM. PLM vendors and ERP vendors with a PLM offering are trying provide this infrastructure and mainly fight against Excel. As an Excel file can easy pass the border from one department to the other. No vision needed for Excel.
A PLM infrastructure however requires a vision. A company has to look at its core business processes and decide on which information flows through the organization or even better their whole value chain.
Building this vision, understanding this vision and then being able to explain the vision is a challenge for all companies. Where sometime even management says
“Why do we need to have a vision, just fix the problem”
also people working in departments are not looking forward to change their daily routines because they need to share information. Here you here statements like
“Why people feel the need to look at the big picture. I want to have my work done.”
So if current businesses do not change, will there be a change?
Here I see the digital world combined with search-based applications coming up. Search based applications allow companies to index their silos and external sources and get an understanding of the amount of data there exists. And from these results learn that there is a lot of duplicated data or invalid information at different places.
This awareness might create the understanding that if instead of having hundred thousands of Excels in the organization, it would be better to have the data inside a database, uniquely stored and connected to other relevant information.
Next if you want to understand it in a more down-to-earth manner it is important to listen and talk with your peers from other companies, other industries. This is currently happening all around the world and I invite you to participate.
Here is a list of events that I am attending or planned to attend but too far away:
Here I will participate as a panel member in the discussion around the concept of zero files. Here we want to explain and discuss to the audience what a data-centric approach means for an organization. Also, customers will share their experiences. This conference is focusing on the ENOVIA community – you can still register here
Here I will speak about the PLM future (based on data) and what PLM should deliver for the future generations. This conference is much broader and addresses all PLM related topics in a broader perspective
Relative new in the Nordics Infuseit, a PLM consultancy company, is able to attract an audience that wants to work on understanding the PLM future. Instead of listening to presenters, here you are challenged to to discuss and contribute to build a common opinion. I will be there too.
Conclusion: It is time to prepare yourself for the change – it is happening and be educated an investment that will be rewarding for your company
What do you think – Is data-centric a dream ?
In my previous post, I talked about the unstoppable trend towards digital information and knowledge based on data becoming the new business paradigm.
Building knowledge based on information extracted from data, instead of working with documents and people, who need to manipulate these documents.
Moreover, the reasons to move towards a digital data-oriented approach are the immense business benefits it can bring to an organization. Having online visibility on information in context of other information from different stakeholders allows companies to be more proactive.
A proactive company will react faster to the market or customer. This will reduce waste and resources (materials / people) and therefore in the end be more competitive. This is all described in my first post, with relevant links to various global references.
In this post, I want to describe in an example what the differences are between a document-oriented and a data-oriented approach and how it affects people and business. This might give you an impression of the expected business benefits.
The ultimate goal behind a data-oriented approach is to have a single version of the truth for a product, project or plant. This can be realized by treating information as data elements in various connected database, where on demand reports or dashboards can be created based on actual information, instead of documents generated by duplicating data in new systems and locations. Digital data will provide paperless processes accessible almost anywhere around the world.
As an example, I will explain the difference between document-centric and data-centric when dealing with specifications.
Everyone knows the challenge with specifications. Most of the time in printed documents describing how a product or service should work from the client point of view. There are two principles behind specifications:
- Complexity. The more complex product or service is, the bigger chance that specifications are not complete or hundred percent understood, leading to an iterative change process. The challenge here is to manage the change and the consistency of the full specifications.
- Industry and margins. In a repetitive business, for example, the automotive or other mass consumer products, products can be quiet complex and once sold hard to maintain and repair. In a competitive business, an error in the field can consume a lot of the expected profit. In the construction industry, where most of the time single projects are executed by a chain of disciplines, the industry (still) accepts the costs overrun and the high costs of fixing issues in the field, instead of being clearer upfront during the design and planning.
Let’s stay with the example in the middle of complexity and industry volume. In color the various stages of the process.
The document based specification – 1
When the document based specification arrives, the company has to get an understanding of the content. The project manager has a first read through the document (100+ pages) and decides to send the document (it is a pdf) to sales, engineering, legal and planning. Engineering decides to distribute the document internally to mechanical, electrical and quality (for compliance).
The project manager stresses everyone on a weekly base to deliver the responses and tries to understand if the answers will come in time. There are some meetings needed with the stakeholders as the whole understanding needs to be consistent. Based on several iterations a response is compiled.
The data-oriented approach – 1
When the document based specification arrives, the project leader first stores the document as a reference in the PLM system and extracts all the customer requirements as data elements in the system. While extracting the requirements, the projects manager groups them into digital folders (functional / non-functional, contractual, regulations, etc.) and assigns them to the relevant stakeholders, who get notified by the system. Each of the persons assigned, again the engineering manager has distributed the discipline specific requirements internally.
The project manager watches the progress of the requirements analyses which are around a virtual model. There is still a need for meetings with the stakeholders to agree on the solution approach. Everything is stored and visible online in the system. This visibility has helped some of the stakeholders to be better-aligned upfront. In the end, the response is generated and converted to the customer’s format.
Not much benefit for step 1
If you compare the two approaches, there is mainly one person happy: the project manager. Instead of spending time to collect the status of all information, direct visibility on the response helps him/her to prioritize of focus where attention is needed, instead of discovering it on a weekly base.
There is some small benefit from the virtual model as other stakeholders can have a better understanding of the actual progress.
However, for the rest, all stakeholders are complaining. It is difficult to work. (Fl)Excel was much easier. Moreover, thinking about a virtual model takes time as we are not used working in this way. Typically something for aerospace you might think.
And now the benefits come – step 2
The customer has placed the order, and the project has started. The design has started, and people start to discover discrepancies or ambiguous demands that need to be negotiated with the customer. Is it part of the project and if not, should it become part of the project and at which costs (for whom)
The document oriented approach – 2
Several engineers are now discussing with the counterparts at the customer the detailed interpretation of the requirements, either through face-to-face meetings or emails. Changes are collected and sent to the project manager, who tries to understand what has changed and how to merge it in an on-going specification document. To avoid many revisions, he/she tries to update the document on a bi-weekly base, send it to the internal stakeholders for review and with their feedback generates a specification document for the customer that supposed to cover the latest agreements.
Unfortunate not all changes have reached the document as some of the stakeholders were busy and forgot to include some of the changes agreed with the customer as they were in a lost email. Also, a previous change of a requirement was overwritten as an update from quality used the old data. Finally, some design solutions were changed, which raised the costs. And not sure if the product with all its changes will be compliant after delivery. However, luckily nobody noticed so far, not even the customer
The data-oriented approach – 2
Thanks to the virtual model and the relations between all the requirements, any change in a requirement gets notified in the system. When a requirement is further clarified, it is updated in the system. When a requirement needs to be changed, it is clear what the impact of this change is. A change workflow assures that decisions are made visible and approved. Potentially changes that lead to more work were quoted to the customer for acceptance. Luckily the compliancy engineer noted that the change of materials used would lead to a compliancy issue. On a bi-weekly base, the project manager generates an agreed specification for the customer based on the data in the system.
Benefits are growing.
The project manager remains the happiest person and is even happier as less discussion is needed about who changed what and why. Alternatively, discussions about changes that should exist and cannot be found. The time saved by the project manager could be used to collaborate even better with the teams (without annoying them) or perhaps a second project to manage in parallel.
Other stakeholders start to enjoy the data-oriented approach too. Less ambiguity on their side too, fewer iterations because changes were not apparent. As all information is related to the virtual model online, the actual status is clear when making a decision. Less fixing afterwards and luckily still project meeting between the stakeholders to synchronize. The PLM system does not eliminate communication; it provides a reliable baseline of the truth. No need (and option) to look in your archives.
At this stage, benefits start to become clear. Fewer iterations and better decisions will have an impact on the costs and project stress. Still a complaint from the engineers might be that they need to do too much upfront thinking although some years later they might discover that this will be their main job. Fixing issues from the past have diminished.
And then the ultimate benefits
Now the project has reached the physical state. It is manufactured or under commissioning.
The document oriented approach – 3
In the document oriented approach, many issues might pop-up because they have not been considered in the early phase, or they got lost during document exchanges. Does the product work as specified? Is the building certified as specified?
The customer is king and for manufacturing companies this might lead to product recalls or launch delays. In the construction world, people in the field, will fix the issues by using skilled resources and creating a waste of materials and/or resources.
Data handover to the owner is a nightmare for a the project-centric delivery. Several people have been searching for documents, specifications and emails to build and compile the required documents for handover.
The data-oriented approach – 3
In the data-centric approach, the behavior of the physical product works as expected as most of the issues have been solved in the virtual model. When testing the product it works as specified as the specifying requirements have always been linked to the product. Moreover, they have been agreed and approved by the relevant stakeholders. Where relevant, the customer has paid for the extra work specified.
The handover process was not so stressful as before with the document-oriented approach. As the required information was known and specified upfront related to the requirements, the maturity process of the virtual model assured this data exists in the system. Now the as-built information matches the as-specified information. What a relief.
It is clear that the significant benefits can be found in step 3. I wrote the comparison in an extreme manner, knowing that reality lies in the middle. Excellent people can comprehend and fix more upfront because of their experience. Building the ultimate virtual model is not yet an easy achievement either.
The savings in materials and required resources are significant in a data-oriented approach. The time savings and the quality enhancements might change your company into a market-leader. The cost savings achieved through a pro-active approach will make your margin growing (unless competition does the same) and enable you to innovate.
One final remark on business change
However, if you change to a data-centric approach, it will be a though change process and therefore once implemented you will leave competitors behind that keep on hanging on the past.
Two weeks ago I attended the Nobletek PLM forum in Belgium, where a group of experts, managers and users discussed topics related to my favorite theme: “Is PLM changing? “
Dick Terleth (ADSE) lead a discussion with title “PLM and Configuration Management as a proper profession” or "How can the little man grow?". The context of the discussion was related to the topic: “How is it possible that the benefits of PLM (and Configuration Management) are not understood at C-level?” or with other words: “Why is the value for Configuration Management and PLM not obvious?”.
In my previous post, PLM is doomed unless …., I quoted Ed Lopategui (www.eng-eng.com), who commented that being a PLM champion (or a Configuration Management expert as Dick Terleth would add) is bad for your career. Dick Terleth asked the same question, showing pictures of the self-assured accountant and the Configuration Management or PLM professional. (Thanks Dick for the pictures). Which job would you prefer?
The PLM ROI discussion
A first attempt to understand the difference could be related to the ROI discussion, which seems to be only applicable for PLM. Apparently ERP and financial management systems are a must for companies. No ROI discussion here. Persons who can control/report the numbers seem to have the company under control. For the CEO and CFO the value of PLM is often unclear. And to make it worse, PLM vendors and implementers are fighting for their unique definition of PLM so we cannot blame companies to be confused. This makes it clear that if you haven´t invested significant time to understand PLM, it will be hard to see the big picture. And at C-level people do not invest significant time to understand the topic. It is the C-level´s education, background or work experience that make him/her decide.
So if the C-level is not educated on PLM, somebody has to sell the value to them. Oleg Shilovitsky wrote about it recently in his post Why is it hard to sell PLM ROI and another respected blogger, Joe Barkai, sees the sun come up behind the cloud, in his latest post PLM Service Providers Ready To Deliver Greater Value. If you follow the posts of independent PLM bloggers (although who is 100 % independent), you will see a common understanding that implementing PLM currently requires a business transformation as old processes were not designed for a modern infrastructure and digital capabilities.
PLM is about (changing) business processes
Back to the Nobletek PLM forum. Douglas Noordhoorn, the moderator of the forum challenged the audience stating that PLM has always been there (or not there – if you haven´t discovered it). It is all about managing the product development processes in a secure way. Not talking about “Best Practices” but “Good practices." Those who had a proper education in the aerospace industry learned that good processes are crucial to deliver planes that can fly and are reliable.
Of course, the aerospace industry is not the same as other industries. However, more and more other industries in my network, like Nuclear new build, the construction industry or other Engineering, Procurement and Construction companies want to learn from aerospace and automotive good practices. They realize they are losing market share due to the fact that the cost of failure combined with relative high labor costs makes them too expensive. But from where to they get their proper good practices education?
The PLM professional?
And this was an interesting point coming up from the Nobletek forum. There is no proper, product agnostic education for PLM (anymore). If you study logistics, you will learn a lot about various processes and how they can be optimized for a certain scenario. When you study engineering, there is a lot of focus on engineering disciplines and methods. But there is no time to educate engineers in-depth to understand the whole product development process and how to control it. Sometimes I give a guest lecture to engineering classes. It is never an important part of the education.
To become a PLM professional
For those who never had any education in standard engineering processes, there is Frank Watts Engineering control book, which probably would be a good base. But it is not the PLM professional only that should be aware, of the good practices. Moreover, all companies manufacturing products, plants or buildings should learn these basics. As a side step, it would make a discussion around BIM more clear. At this time, manufacturing companies are every time discovering their good practices in the hard way.
And when this education exists, companies will be aware that it is not only about the tools, but it is the way the information is flowing through the organization. Even there is a chance that somewhere at C-level someone has been educated and understands the value. For ERP everyone agrees. For PLM, it remains a labyrinth of processes designed by companies learning on the job currently. Vendors and implementers pushing what they have learned. Engineering is often considered as a hard-to-manage discipline. As a SAP country manager once said to me: “Engineers are actually resources that do not want be managed, but we will get them …..”
And then the future ……
I support the demand for a better education in engineering processes especially for industries outside aerospace or automotive. I doubt if it will have a significant impact although it might create the visibility and understanding for PLM at C-level. No need anymore for the lone ranger who fights for PLM. Companies will have better educated people that understand the need for good practices that exist. These good practices will be the base for companies when discussing with PLM vendors and implementers. Instead of vendors and implementers pushing their vision, you can articulate, and follow your vision.
However, we need a new standard book too. We are currently in the middle of a big change. Thanks to modern technology and connectivity the world is changing. I wrote and spoke about it in: Did you notice PLM is changing?
This awareness needs to become visible at C-level.
Who will educate them ??
Now back to soccer – 4 years ago Spain-The Netherlands was the last match – the final. Now it is the first match for them – will the Dutch change the game ?
Human beings are a strange kind of creatures. We think we make a decision based on logic, and we think we act based on logic. In reality, however, we do not like to change, if it does not feel good, and we are lazy in changing our habits.
Disclaimer: It is a generalization which is valid for 99 % of the population. So if you feel offended by the previous statement, be happy as you are one of the happy few.
Our inability to change can be seen in the economy (only the happy few share). We see it in relation to global climate change. We see it in territorial fights all around the world.
Owning instead of sharing. ?
The cartoon below gives an interesting insight how personal interests are perceived more important than general interest.
It is our brain !
More and more I realize that the success of PLM is also related to his human behavior; we like to own and find it difficult to share. PLM primarily is about sharing data through all stages of the lifecycle. A valid point why sharing is rare , is that current PLM systems and their infrastructures are still too complex to deliver shared information with ease. However, the potential benefits are clear when a company is able to transform its business into a sharing model and therefore react and anticipate much faster on the outside world.
But sharing is not in our genes, as:
- In current business knowledge is power. Companies fight for their IP; individuals fight for their job security by keeping some specific IP to themselves.
- As a biological organism, composed of a collection of cells, we are focused on survival of our genes. Own body/family first is our biological message.
Breaking these habits is difficult, and I will give some examples that I noticed the past few weeks. Of course, it is not completely a surprise for readers of my blog, as a large number of my recent posts are related to the complexity of change. Some are related to human behavior:
Ed Lopategui, an interesting PLM blogger, see http://eng-eng.com, wrote a long comment to my PLM and Blockers post. The (long) quote below is exactly describing what makes PLM difficult to implement within a company full of blockers :
“I also know that I was focused on doing the right thing – even if cost me my position; and there were many blockers who plotted exactly that. I wore that determination as a sort of self-imposed diplomatic immunity and would use it to protect my team and concentrate any wrath on just myself. My partner in that venture, the chief IT architect admitted on several occasions that we wouldn’t have been successful if I had actually cared what happened to my position – since I had to throw myself and the project in front of so many trains. I owe him for believing in me.
But there was a balance. I could not allow myself to reach a point of arrogance; I would reserve enough empathy for the blockers to listen at just the right moments, and win them over. I spent more time in the trenches than most would reasonably allow. It was a ridiculously hard thing and was not without an intellectual and emotional cost.
In that crucible, I realized that finding people with such perspective (putting the ideal above their own position) within each corporation is *exceptionally* rare. People naturally don’t like to jump in front of trains. It can be career-limiting. That’s kind of a problem, don’t you think? It’s a limiting factor without a doubt, and not one that can be fulfilled with consultants alone. You often need someone with internal street cred and long-earned reputation to push through the tough parts”
Ed concludes that it is exceptionally rare to find people putting the ideal above their own position. Again referring to the opening statement that only a (happy) few are advocates for change
Now let´s look at some facts why it is exceptionally rare, so we feel less guilty.
Although it was not the easiest book to read during a holiday, it was well written considering the complexity of the topic discussed. Jeff describes how the information architecture of the brain could work based on the neocortex layering.
In his model, he describes how the brain processes information from our senses, first in a specific manner but then more and more in an invariant approach. You have to read the book to get the full meaning of this model. The eye opener for me was that Jeff described the brain as a prediction engine. All the time the brain anticipates what is going to happen, based on years of learning. That’s why we need to learn and practice building and enrich this information model.
And the more and more specialized you are on a particular topic, it can be knowledge but it can also be motoric skill, the deeper in the neocortex this pattern is anchored. This makes is hard to change (bad) practices.
The book goes much further, and I was reading it more in the context of how artificial intelligence or brain-like intelligence could support the boring PLM activities. I got nice insights from it, However the main side observation was; it is hard to change our patterns. So if you are not aware of it, your subconscious will always find reasons to reject a change. Follow the predictions !
Thinking Fast and Slow
And this is exactly the connection with another book I have read before: Thinking Fast and Slow from Daniel Kahneman. Daniel explains that our brain is running its activities on two systems:
System 1: makes fast and automatic decisions based on stereotypes and emotions. System 1 is what we are using most of the time, running often in subconscious mode. It does not cost us much energy to run in this mode.
System 2: takes more energy and time; therefore, it is slow and pushes us to be conscious and alert. Still system 2 can be influenced by various external, subconscious factors.
Thinking Fast and Slow nicely complements On Intelligence, where system 1 described by Daniel Kahneman is similar to the system Jeff Hawkins describes as the prediction engine. It runs in an subconscious mode, with optimal energy consumption allowing us to survive most of the time.
Fast thinking leads to boiling frogs
And this links again to the boiling frog syndrome. If you are not familiar with the term follow the link. In general it means that people (and businesses) are not reacting on (life threating) outside change when it goes slowly, but would react immediately if they are confronted with the end result. (no more business / no more competitive situation)
Conclusion: our brain by default wants to keep business in predictive mode, so implementing a business change is challenging, as all changes are painful and against our subconscious system.
So PLM is doomed, unless we change our brain behavior ?
The fact that we are not living in caves anymore illustrates that there have been always those happy few that took a risk and a next step into the future by questioning and changing comfortable habits. Daniel Kahneman´s system 2 and also Jeff Hawkins talk about the energy it takes to change habits, to learn new predictive mechanisms. But it can be done.
I see two major trends that will force the classical PLM to change:
- The amount of connected data becomes so huge, it does not make sense anymore to store it and structure the information in a single system. The time required to structure data does not deliver enough ROI in a fast moving society. The old “single system that stores all”-concept is dying.
- The newer generations (generation Y and beyond) grew up with the notion that it is impossible to learn, capture and own specific information. They developed different skills to interpret data available from various sources, not necessary own and manage it all.
These two trends lead to the point where it becomes clear that the future in system thinking becomes obsolete. It will be about connectivity and interpretation of connected data, used by apps, running on a platform. The openness of the platform towards other platform is crucial and will be the weakest link.
The PLM vision is not doomed and with a new generations of knowledge workers the “brain change” has started. The challenge is to implement the vision across systems and silos in an organization. For that we need to be aware that it can be done and allocate the “happy few” in your company to enable it.
What do you think ???????????????????????????
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