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If your are reading blogs related to PLM, I am sure you have seen a blog post from Stephen Porter (Zero Wait State), for example: The PLM state the walking dead – PLM projects that never end.
Like Stephen, I am often triggered by an inspiring book, a touching movie or a particular song combined with my PLM-twisted brain I relate the content to PLM (there is no official name for this abnormality yet).
When driving home last week, I was listening to Phil Collins – In the air tonight
As I was just coming back from a discussion around PLM tools, BOMs and possible PLM expansion strategies in a company with customers and resellers, my twisted brain was thinking about two PLM related topics that were in the air tonight (at least for me).
Granularity vs. Integration: Suites vs. Best-in-class PLM
You must have noticed it, and if not, now you are aware: Jim Brown and Chad Jackson started a PLM duel discussion platform at Engineering.com to bring PLM related topics to the table: TECH4PD. Watch them argue and I hope with your feedback and the feedback of the PLM community, it will help us to make up your mind.
The topic they discussed in their first session was about two different approaches you can have for PLM. Either start from a best in class PLM platform or build your PLM support by using dedicated applications and integrate them.
This is to my opinion one of the fundamental PLM topics to discuss. And if I would have to vote (as Jim and Chad ask you to do so), I would first vote for Chad (integration of software) and after a second thought, vote for Jim (best in class PLM). So see my problem.
If I relate the discussion to my experiences with different companies, I realized that probably both answers are correct. In case you are an OEM you likely would benefit from a best in class PLM platform, as PLM systems aim to cover and integrate all data through the product lifecycle in a single system, single data model, etc.. So a good PLM platform would have the lowest cost of ownership in the long term. OEMs are by definition not the smallest companies and in general have the highest need for global coverage.
But not every company is an OEM. Many mid-market companies are specific suppliers,serving different OEMs and although they also develop products, it is in a different context of market delivery. There is a need to be flexible, as their products used by OEMs might become obsolete in the near term, they need to be more flexible, reactive. and the best in class companies innovate and are proactive. For that reason they do want to invest in a best in class PLM system, which somehow brings some rigidness , but keep on optimizing these areas where improvement is needed in their organization, instead of changing the organization.
I believe this question will remain in the air until we get a clear split between these two types of PLM. There is a trend splitting classic PLM (OEM oriented) and new upcoming PLM solutions. Till that time, we will be confused by the two approaches. It is a typical PLM disease and the reason you do not experience the same discussion for ERP is obvious. ERP is much more a linear process that both for the OEMs and mid-market companies is aiming to manufacture products or goods at a single location. The differentiation is in global manufacturing. Where do you manufacture your products ? Here the OEMs might have a bigger challenge. Global manufacturing is a PLM challenge too, which is in the air.
Where is the MBOM ?
This is the topic most visited in my blog and I am preparing a session with the MBOM as theme combined with PLM for the upcoming PLM Innovation US conference end of October in Atlanta. I am not going to disclose all the content here, but I will give you some thoughts that are in the air.
Companies historically manage their BOM in ERP, but as a result of globalization they now need to manage their manufacturing BOM at different locations. But each location has its own ERP and a local (M)BOM. What to do ?
This is in the air:
I hope you will participate in both discussions that are the air, either by commenting to this blog, through Tech4PD, your blog (Oleg ? ) or your participation at PLM Innovation US.
Looking forward to discuss with you about what you believe is in the air tonight.
Conclusion (as usual): It is a busy time – we are heading towards the end of the year, which for some reason is a deadline for many companies. So no long thought processes this time, just what is in the air.
In my last post PLM kills Innovation or not, I tried to provoke PLM vendors to respond to my claim that PLM has too much a focus on structuring data (and therefore removing freedom) claiming it blocks innovation as everyone believes innovation requires freedom and flexibility. This statement is often heard from startups claiming implementing any type of management would kill their competitive advantage. Still in the PLM marketing world everyone mentions PLM and Innovation as Siamese twins, but no one explains explicitly why they are connected.
So not too many reactions from vendors but some interesting comments from others to this post. Andrew Mack mentions that we should not confuse Innovation and Invention as for native English speakers there is a clear distinction. I agree with him however as most of my blog readers are not native English speakers I will explain the difference in this post.
For me it is clear PLM supports Innovation in three different manners, which I will explain here in a logical order – see the conclusion for the order of profit it will bring:
Invention, the creation of a new idea that might be the golden egg for the future of a company. It is often the result of one or more individuals- not something a systematic approach or system will bring automatically. If you look how big companies handle with invention, you see that often they do not manage it. They look around the world for , or sometimes get approached by, startups that have a concept that fits to their portfolio and they buy the company and concept.
This is of course a very disconnected way of invention, but from the other hand, the drive from many startups is to work day and night to develop a concept and ultimately sell the company for a good price. Compare it to the big soccer companies that have only money (currently mainly Russian or Arabic) but no own youth development plan to raise new talents. So it is a common way for companies to acquire invention (and promote innovation).
But I believe there is also a way companies can stimulate invention by implementing the modern way of PLM (PLM 2.0 – see my posts on that) and not use PLM as an extended PDM as I described in PLM What is the target. When a company has implemented PLM in a PLM 2.0 approach, it means there is a full visibility and connection of all product data, customer demands (through sales) and experiences (through service) for an R&D department to innovate.
Why this does not happen so much?
Because inside most companies, people do not have an approach or drive for sharing data through the whole product lifecycle. Every department is optimizing themselves, not taking into account the value and overall company needs as they are not measured on that. In order to support invention PLM can provide an R&D department and individuals with all related market and customer information in order to create relevant inventions. So PLM helps here on understanding the areas of invention and probably the most unexplored area of PLM
Support selection of the right invention
The second area where PLM contributes to innovation is assisting companies to select the right opportunities that can be the next big opportunity for these companies. In case you have many opportunities, which one would you select and invest in ? As usually it unaffordable to invest in every opportunity usually and knowing at this stage you are not sure if a particular opportunity will lead to a profitable new product, you need a process and tool to select the right ones.
Here comes portfolio management as a functionality that allows companies to have an overview of all running initiatives and through reporting on key performance indicators (KPIs) being able to select the opportunities where to invest.
Support New Product Introduction
Once you have selected an opportunity and also as part of the portfolio management process you feel secure, there is the third step. How to bring this opportunity to the market as fast as possible, with the right quality and the right manufacturing definition? As being first on the market gives you market share and premium pricing.
Also as changes in the early manufacturing stage and later during the go to market phase are extremely costly, it is important to bring a new product to the market as fast as possible in the right quality, avoiding changes when the new product is in the market. This is the area where PLM contributes the most. Allowing R&D organizations to work on their virtual product definition and perform simulations, design and customer verifications. Also anticipate and resolve compliancy and sourcing issues in the early stages of the product development. All this assures a reduction in the amount of iterations before a new product is ready to ´ hit´ the market.
A famous PLM one-liner is for PLM is: PLM – doing it right the first time, it refers more to the fact that a product introduction process is done only once and with the right quality. It does not mean iterations to improve or change the product scope are not needed.
Improvement cycles are necessary to bring a product to the market. But as they are done in the virtual world, the R&D department has the option to evaluate several alternatives (virtually), work and improve them till the best option is selected for the market saving cost for late design changes or errors to be solved. And even when the product is defined, PLM can help by defining the right generic manufacturing process and make it available for the local manufacturing organizations (where is the MBOM ?)
PLM does not kill innovation and although the PLM Vendor marketing is not very explicit, there are three areas where PLM supports Innovation. In a (subjective) order of priority I would say:
· New Product Introduction – bringing the highest revenue advantages for a selected invention
· Invention discovery – by providing R&D a 360 view of their customers and market landscape enable inventions to happen in your company
· Portfolio Management – to assist in selecting the right opportunities to focus
Your thoughts ?
This time a little provocative title, which I hope will give some feedback from those who claim PLM brings INNOVATION. In one of my earlier posts, I talked about PLM – what is the target and also acted as an advocate for innovation.
Now after hearing PLM and INNOVATION mentioned the past two weeks everywhere as a logical combination, I started to question myself is this is just marketing ?
In this post I will act as the advocate of the devil.
Two weeks ago I attended the PLM Innovation congress, where first of all these two words were accepted by the audience as obvious linked together PLM INNOVATION. I participated in three sessions where INNOVATION was the topic. Charles Gagnon from Hydro Quebec talked about open innovation, but mentioned Hydro Quebec did not use any tool to manage INNOVATION so also not PLM. Peter Fassbender talked about the innovative approach to connect to the outside world using crowd sourcing and social media, but again no mentioning about PLM. Finally Christian Verstraete held an appeal for INNOVATION, urging everyone to think outside the box (did he mean outside the PLM box? Anyway no mentioning of PLM contribution)
Autodesk´s CEO Carl Bass talked about The New Rules of INNOVATION at TEDx and in the first part of his speech he is making the same statement that I would make related to PLM – see video:
Some quotes from his speech:
“Innovation is fundamentally not a corporate phenomena. Innovation involves taking risks and involves breaking the rules. And companies aren’t particularly good at that. In fact let´s say that it is just the opposite: companies are good in making rules and minimizing risk”
and quoting the author of The Innovator´s Dilemma Clayton Christensen:
“The lack of innovation is not the failure of companies but rather the result of prudent and sound management”
A week later Autodesk PLM 360 is launched. Again a PLM system that is bringing rules and structure, but apparently so far not affecting INNOVATION as we can see in one of the videos that came with the launch.
Unfortunate the above video is only a teaser to get to the Autodesk Facebook page where, if you like them, you will be rewarded with access. A modern way of marketing: Only if you like us, we will tell you what we like.
Sanjeev Pal believes PLM is a business strategy that helps companies to reach their INNOVATION goals. Tom Grant starts with: ”INNOVATION is really the word to focus on. At the heart of PLM is INNOVATION”. Later he states that probably one of the problems in PLM is the M (the Management part) that misleads the mind shifting in the wrong direction (against user acceptance and involvement’) and he prefers to call it more enablement instead of management. Somehow the conclusion is that PLM supports INNOVATION by bringing products faster to market. Does this mean PLM is the vehicle of bringing new innovations to the market ? Instead of creating a platform for INNOVATION?
STATS: Autodesk PLM + Innovation: 199.000 hits on Google
Once you have struggled like me to find the roundtable discussion and its content, let´s look at other PLM vendors in alphabetical order:
Aras INNOVATOR– the word INNOVATOR it is already in the name but when you read more clearly what is stated at the Aras website, you see the word INNOVATOR is more targeting themselves (the software / the delivery model) instead of customer oriented INNOVATION. There the message is more about streamlining and connecting people and businesses (efficiency / collaboration). So not much INNOVATION here related to PLM is my conclusion
STATS: Aras + Innovation: 11.200.000 hits on Google
When looking for Dassault Systèmes and INNOVATION I found an interesting statement on their website.
Dassault Systems launched its Passion for Innovation program in 2005. The program is based on a simple guiding principle: it is often the case that outstanding ideas do not come to fruition due to lack of appropriate resources. At Dassault Systèmes, all employees are free to install CATIA on their workstation. The idea of the program is to provide this opportunity to everyone
Is INNOVATION a result of the CAD tool ? not related to PLM ? I am sure there must a better story – but where is it ? There is a lot of talk about innovation, but related to PLM ?
STATS: Dassault Systèmes+ Innovation 1.340.000 hits on Google
Oracle Agile PLM
Oracle Agile PLM has a clear statement how they support INNOVATION:
Accelerate innovation through ideation management and collaboration, product portfolio management and analytics, data consolidation and cleansing, and a rich enterprise product record
I am not sure from this statement if we know the source wrote it. Marketing or a serious attempt to describe how Agile supports INNOVATION. I would love to learn a refined statement here that I understand.
STATS: Oracle PLM + Innovation: 150.000 hits on Google
PTC does not give a direct association with INNOVATION. When I searched for PTC and INNOVATION the first suggestion was: Did you mean HTC INNOVATION ?
Also when searching the PTC website, INNOVATION was hard to find. Interesting I noticed that the first main tab on the left was Discover our software capabilities. I was expecting that PTC like most PLM vendors would start from the business and not from the products.
STATS: PTC + Innovation 3.450.000 hits on Google
On the SAP PLM website I found a tab called Innovation Management and here SAP PLM gave a clear explanation which practices contribute to INNOVATION Management. SAP mentions here:
- Strategy and planning
- Managing innovative ideas
- Program and project management
- Portfolio management
As I expected SAP will not hint in any direction towards CAD tools and their focus is mainly on the management side. I would love to learn the part of managing innovative ideas as this is the challenging part. Ideas and management ?
STATS: SAP PLM + Innovation 131.000 hits on Google
On the Siemens PLM website you have to search for INNOVATION and when you do a search, you are mainly directed to blog articles, The word-cloud next to the blog did not show the word INNOVATION in bold, showing it is not a common used word. Digging deeper, I found a blog post related to an Innovation Leadership Summit, which suggests again there is a relation between PLM and INNOVATION. The closest match I found here was:
The HBR survey found that enterprises rely on PLM and IT to manage all this complexity, including new sustainability and regulatory requirements. PLM solutions track the ideation process, monitor progress, identify laggard projects, and facilitate collaboration. Leading organizations leverage PLM to improve new product development processes and outcomes
That´s all. So my conclusion here is that also Siemens PLM not naturally connects PLM and Innovation.
STATS: Siemens PLM + Innovation 901.000 hits on Google
Without mentioning names, I hear stories from PLM implementations (or should I call it extended PDM implementations) that have created such a massive lock-in on the current state of the company, that changing the processes or innovating is almost a mission impossible. Exact what Clayton Christensen mentions in his Innovator´s Dilemma.
So having played the devil´s advocate role, I hope I made my statement that there is no real relation between PLM and INNOVATION despite it seems these two words are mentioned together as if they are linked.
Call for action
Therefore I challenge all vendors and companies that have a proven relation between PLM and INNOVATION to come to this debate and make their statement.
Where are the mythbusters that will crack the statement:
PLM has nothing to do with INNOVATION?
Looking forward to your responses.
I am just back from an exciting PLM Innovation 2012 conference. With a full program and around 250 participants, it was two intensive days of PLM interaction.
What I liked the most is that the majority of the audience was focusing on PLM business related topics. The mood of PLM has changed.
In this post, I will give an impression of the event, how I experienced it without going into the details of each session.
Several interesting sessions were in parallel so I could not attend them all, but MarketKey, the organizer of the conference confirmed that all presentations are filmed and will become available on-line for participants. So more excitement to come.
First my overall impression: Compared to last year’s conference there was more a focus on the PLM business issues and less on PLM IT or architecture issues (or was it my perception ?)
Gerard Litjens (CIMdata Director European Operations) opened the conference as CIMdata co-hosted the conference. In his overview he started with CIMdata’s PLM definition – PLM is a strategic business approach. (Everyone has his own definition as Oleg noticed too). Next he presented what CIMdata sees as the hottest topics. No surprises here: Extension from PLM to new industries, extending PDM towards PLM, Integration of Social Media, Cloud, Open Source, Enterprise integration and compliance.
Next speaker was Thomas Schmidt (Vice President, Head of Operational Excellence and IS – ABB’s Power Products Division) was challenging the audience with his key note speech: PLM: Necessary but not sufficient. With this title it seemed that the force was against him (thanks Oleg for sharing).
Thomas explained that the challenge of ABB is being a global company and at the same time acting as a ‘local’ company everywhere around the world. In this perspective he placed PLM as part of a bigger framework to support operational excellence and presented some major benefits from a platform approach. I believe the Q&A session was an excellent part to connect Thomas’s initial statements to the PLM focused audience.
Marc Halpern from Gartner gave his vision on PLM. Also Marc started with the Gartner definition of PLM, where they characterized PLM as a discipline. Gartner identified the following 5 major trends: Software everywhere in products, usage of social media for product development and innovation, using analytics tools to support the whole product lifecycle – after sales, service, connecting to the customer. Opportunities for existing products to deliver them through services (media content, transportation)
Next I attended the Autodesk session, a PLM journey using the cloud, where I was eager to learn their approach towards PLM. Autodesk (Mike Lieberman) let Linda Maepa, COO from Electron Vault in the USA explain the benefits of the Autodesk PLM 360 solution. Electron Vault, a young, high-tech company, has implemented the solution within 2 weeks. And here I got disconnected . Also when the suggestion was raised that you do not need time to specify the requirements for the system (old-fashioned stuff),
I suddenly got into a trance and saw a TV advert from a new washing power, with numerous features (program management, new product introduction, …..) that was washing whiter than all the others and a happy woman telling it to the world. I believe if Autodesk wants to be considered as serious in the PLM world it should also work with existing customers and managing the change in these organizations. Usually it takes already more than two weeks to get them aligned and agree on the requirements. Unfortunate I did not have time during the breaks to meet Autodesk at their booth as I would love to continue the discussion about reality as my experience and focus is on mid-market companies. Waiting for a next opportunity.
After Autodesk, I presented in my session what are the main drivers for making the case for PLM. I also started with my favorite PLM definition (a collection of best practices – 2PLM) and explained that PLM starts with the management vision and targets for the future. Is it about efficiency, quality, time to market, knowledge capture or a more challenging task: creating the platform for innovation?
Next I followed the Energy tracks, where I listened to Charles Gagnon from Hydro Quebec, who gave an interesting lecture called: Implementing Open Innovation and Co-Development.
At first glance this is a sensitive topic. When you innovate it is all about creating new intellectual property, and the fear that when working with partners the IP might be out of the company, Charles explained how this process of collaborative innovation was started and monitored. At the end he reported they measured a significant gain in R&D value perceived when working with external partners. And they did not use a PLM system to manage Innovation (to be investigated how they could survive)
After the lunch I continued with Jonas Hagner from WinWinD, a young manufacturer of windmills that are targeted to operate in extreme climate conditions ( a niche market). They are both implementing PLM and ERP in parallel and they did not have to suffer from years of ERP before PLM and therefore could have a more balanced discussion around part information availability / part number and more. Still I believe they have the challenge to connect in an efficient manner the services of the windmills back to their R&D organization, to do a full PLM circle.
Karer consulting together with Siemens Energy presented the case how they have designed and starting the implement the interface between their PLM system (Teamcenter) and ERP system (SAP). What was disappointing to see was that the interface between Teamcenter and SAP was relative complex (bi-directional with engineering activities in both sides) . Almost 1½ years of development of this interface and one of the main reasons, because SAP was first and they start the engineering order in SAP.
Apparently 2 years later Siemens Energy could not implement a clear distinct separation between PLM and ERP anymore and will not have to live with this complex interface. In the past I have written several times about this complexity that companies seem to accept due to political or historical reasons. Sad story for PLM – Where is the MBOM ?.
The day finished with a closing keynote from Peter Bilello, explaining how a successful PLM implementation could look like. Many wise statements that everyone should follow in case you want to come to a successful implementation (and define correctly what success is)
Thanks to Autodesk we had a nice evening reception, discussion and evaluating with peers the first day.
Day 2 started for me with an interesting lecture from Peter Fassbender, Head Design Center Fiat Latin America, describing how in Brazil the Fiat Mio experiment used modern social media techniques, like crowdsourcing, communities and user involvement to guide the innovation and development of a potential car. A unique experiment demonstrating that this type of projects are influence the brand reputation positively (if managed correct) and for me an example of what PLM could bring if R&D is connected to the outside world.
Christian Verstraete Chief Technologist – Cloud Strategy from HP gave an inspiring session about the open frontiers of innovation. The speed of business in the past 30 years has increased dramatically (you need to be from an older generation to be aware of this – the definition of response time has changed due to new technologies) Christian pushed everyone to think Out of the Box and to be innovative, which made me wonder how long will companies in the future build standard boring products. Will keep on innovating in this amazing pace as we did in the past 30 years ?
Graeme Hackland, IT/IS director from the UK based Lotus F1 team presented the challenges a F1 team has to face every year due to changing regulations. I visited Lotus F1 last year and was impressed by the fact that over 500 engineers are all working around one carper year to optimize the car mainly for aerodynamics, but next to assure it performs during the years. Thousands of short interactions, changes to be implemented a.s.a.p. challenge the organization to collaborate in an optimum manner. And of course this is where PLM contributes. All the F1 fans could continue to dream and listen to Graeme’s stories but Jeremie Labbe from Processia brought us back to earth by explaining how Processia assisted Lotus F1 in a PLM value assessment as a next step.
Meanwhile I had some side discussions on various PLM topics and went back to the sessions, seeing how David Sherburne, Director of Global R&D Effectiveness from Carestream Health presented his case (open source PLM) and his analysis why an open source PLM model (based on Aras) is very appealing in their case. Indeed the business value perceived and significant lower operational costs for the software are appealing for his organization and for sure will influence the other PLM vendors in their pricing model.
Pierfrancesco Manenti, from IDC Manufacturing Insights gave a clear presentation indicating the future directions for PLM: managing operational complexity, not product complexity. As you could expect from IDC Manufacturing Insights all was well based on surveys in the manufacturing industry and clearly indicating that there is still a lot to do for companies to efficient share and work around a common product development and operational platform. New technologies (the four IT forces: mobility, cloud, social business and big data analytics) will help them to improve.
The closing keynote came from Jason Spyromilio , who was director of the European Southern Observatory’s Very Large Telescope (http://www.eso.org) and he gave us the insights in designing (and building) the biggest eye on the sky. Precision challenges for such a huge telescope mirror, being built in the high mountains of Chili in an earthquake sensitive area demonstrate that all participants are required to contribute their IQ in order to realize such a challenge.
Conclusion: This PLM Innovation 2012 event doubled the 2011 event from a year ago in all dimensions. Thanks to the sponsors, the organization and high quality lectures, I expect next year we could double again – in participants, in content and innovation. It shows PLM is alive. But comming back to the title of this post: I saw some interesting innovation concepts – now how to enabale them with PLM ?
Note: looking at the pictures in this postyou will notice PLM is everywhere. I published this post on February 29th – a unique day which happens only every 4 years. In May this year my blog will be 4 years old.
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)
This week I was reading a management article completely unrelated to PLM, but very applicable for PLM. The article stated that one of the basics of capitalism is innovation through crisis. Never let a crisis pass by without using it for your benefits was the message.
As we are currently in the middle of the economical downturn (according to the optimists or pessimists – we still have to figure out who is right), this is the moment for the management to decide. Do we try to sit still till it does not hurt anymore , or are we making strategic changes that will for sure demolish some holy houses but from the other hand will create a more lean and stronger organization after the change ?
Examples of IBM and GM were given from the nineties. IBM made the change from a hardware company towards a software company, where GM kept on doing the same with even bigger SUVs’. We know the results…….
Does it prove anything ?
For sure there are many companies that haven’t survived the nineties as they were not successful in their transformation, although they really tried. So where is the relation to PLM ?
I believe that the problem of implementing PLM, and specially in mid-market companies is the fact that there is no ambition for change when things are going relatively well. In one of my old posts I referred to the story of the boiling frog.
This happens when an organization is slipping down slowly and it is hard for the management to change and define and sell internally another strategy. Jobs and people are kept in place as long as affordable and only natural evolvement (an aging workforce) or mergers are drivers for a change.
Now with this crisis it is different. Everyone realizes (or should realize) that going on the same manner with the same people is not good for survival (unless you are in one of the few industries that benefit from the crisis – apparently the fast food industry I read)
In times of a crisis, first of all the management is challenged to come with a survival plan and in most cases this time they can get support from their employees as there is always the threat of lay offs if people are not creative or flexible for change. Secondly, employees will be also more flexible to save their jobs and the company (usually in this order)
Therefore this is the ideal moment to implement PLM in phased approach. For a successful PLM implementation you need employees, who are open minded to change the way they work, plus you need internal resources that have time to work with the implementer to fine tune the PLM system.
This moment exists now and by implementing PLM in a phased approach, each phase will bring ROI, perhaps even before the end of the crisis as you can start with the low hanging fruits and start to collect the benefits.
In parallel there is the discussion around free open source software or dumping software for free by some PLM providers in order to stay in the market. I think here as a customer you should always realize that every company, also software providers, need to survive the crisis and will look for income in another way – services / maintenance / additional software.
So my conclusion this time:
I never realized that both capitalism and PLM were striving for innovation. They have a crisis in common – For capitalism it is a must to push innovation for PLM it is an enabler for innovation
Last week was a week of transition. As I wrote in my previous post, I finalized a traditional PLM 1.0 project ( I will come back on this term ‘traditional’ PLM 1.0) and now probably because of the sunny days and some interesting articles I read (each word goes to a different article), I am reflecting what it means to think about the new trends: WEB 2.0 or even PLM 2.0
In this post I will try to explain the developments I have seen so far in the mid-market and from there project what might happen.
In the 80’s there was no PDM or PLM in the mid-market. This was the time most companies were moving away from the drawing board towards CAD. Most of the CAD was 2D and at that time in the mid-market AutoCAD was the dominant CAD software.
At that time I was working for the biggest AutoCAD distributor in the Netherlands (picture on the left). This was the golden age for hardware and software resellers – margins were high and there was little or none IT-knowledge inside mid-market companies. In order to keep the high margin we provided a free helpdesk for our customers to differentiate from others. It was an interesting time. Prospects came to our demo room to plot a drawing of A0 format and to discuss the quality of the lines and the hatching as compared to handmade drawings. There was always the discussion if CAD was more productive and must of us agreed that benefits only came when rework or changes were needed. In parallel we offered a training course for the heads of a design department how they learned to understand if their designers were productive. They were used to observe the behavior of the draftsman and the minor bar on the drawing board and from there they understood if someone was productive. We were talking about the new digital generation that would replace the people at the drawing board.
Are there still drawing boards ? Is there still free support as the margins are high ? This was 20 years ago.
Then slowly 3D CAD was introduced for the mid-market, initially only on Unix boxes, but with the introduction of Microsoft Windows it became achievable – SolidWorks for sure was leading in this area. Hardware became already more a commodity so the customer relation changed from free support to paid support, which required quality and knowledge. At that time in my company, we also saw the first demands for what customers called an “engineering database”. In the 2D world it was all about drawing management, now with 3D the focus was on managing the whole product. Initially called EDM (Engineering Data Management), later evolving in Product Data Management. The term PDM was not known at that time and I remember one of our customers visiting us with a sample of 13 reports – drawing list, spare part list, manufacturing BOM, etc. He told us: “I need a system that can generate these reports for me at anytime”. The solution: we implemented a PDM system for this customer. At the end of the nineties 3D was introduced in the mid-market combined with PDM. We were talking about the new generation of people that thinks in 3D which would replace the people who still worked in 2D
Are we still working with 2D ? Do we still look for support on hard- and software ? This was 10 years ago.
Then came the era of connectivity, initially through the first internet wave, leading to terms as cPDM and ultimately PLM. Instead of focusing on productivity in a single department, the intention was to focus on collaboration between departments, development teams and to address the whole product lifecycle. Specially Dassault Systems extended this concept by focusing on the process and virtualization: test and build your product virtually before you spend any money on prototypes. Autodesk does the same in different words, they call it Digital Prototyping and they try to avoid talking about the processes as here we touch the most sensitive point in mid-market companies: touching or changing processes – ‘classical PLM 1.0. And this is also what I read between the lines of Jim Brown’s post Is innovation or product pipeline killing profitability ? As long as we do not change our product development process but focus still on doing the same with better tools, the real innovation will not come. We are now talking about the global collaboration generation that has to learn to work together and replaces the people who are not changing their processes.
Are we still solving our departmental problems only ? Can we survive keep on doing the same ? This is now !
And meanwhile mid-market companies are learning to understand and digest the above, we already see the new wave coming. WEB 2.0 – social networking – social collaboration – PLM 2.0 – communities and more. Instead of companies working on their own data, the future is to work in communities, live data, cross-company with employees, who are focused as a team to bring a result, we do not send so much emails anymore, we chat, we twitter, we …….. and more. In addition as we will see the trend that teams have members from all around the world, the question comes up: What is the standard communication language ? German (past) , English (present), Chinese (future) ? Here I am a big fan and believer of the Dassault vision that 3D becomes the global language for communication as the people participating do not come from the same educational background anymore – so it easier to see what you mean. Meanwhile the futurists are all the time talking about the aging workforce (a lot of people plan to retire), but if you read back, you will notice every ten years we are talking about an aging workforce. Every time there was a new generation picking up the new capabilities and challenging the next generation.
Are we in 2020 a global, 3D twittering world ? What is each individual’s added value ? What are companies doing to anticipate to the above trends ? It looks like it is going to happen and the current economical downturn allows us to anticipate even earlier till the next pit stop.
A thought I take with me on the summer holidays.
(Yes, in Europe we still have holidays that are so long you have time to think about work –
you can find me on the island below in August)