Last weeks have been busy weeks and I have seen various PLM candidates all around Europe. As these companies were mid-market companies, I noticed again how difficult it is for these companies to follow the ideal path towards PLM.
For those reading my blog frequently they might remember my definition of mid-market and PLM. For newer readers I will give my definitions again, as everyone has their own definition.
Mid market company: For me the definition of a mid-market company does not have to do with revenue or the amount of people working for this company. I characterize a mid-market company as a company, where everyone has a focus on the company’s primary process. There is no strategic layer of people, who are analyzing the current business and defining new strategies for the future. In addition, the IT-staff is minimal, more seen as an overhead than as strategic. Mid-market companies have their strength in being flexible and reacting fast on changes, which might contradict with a long term strategic approach.
As what happens if you are only in a reactive mode – it can be too late.
PLM: For me PLM is not a product but a vision or business approach based on a collection of best practices (per industry). Main characteristics of PLM are centralizing all product knowledge (IP) throughout all the lifecycle stages and a focus on best practices and immediate visibility on all lifecycle stages. Combining concept, planning, development, production planning and after sales / service into one integrated process. It is more than concurrent engineering, it is about sharing data and ownership of data through different departments. And this means business transformation, breaking through traditional barriers. Of course PLM vendors have a slight different definition in order to differentiate themselves from other vendors. For example more focus on a virtual product definition (CAD PLM vendors) or a focus on efficiency and one single platform (ERP PLM vendors)
Who will initiate this change ?
And these two definitions already raise the questions I want to reflect here as I experienced again in two recent visits that the pain to move to PLM is here.
First what is the result of a reactive mode, even when it is a quick reaction ?
A reactive mode leads to a situation where a company will never be able to differentiate rapidly from their competition. As every change takes time to implement, it is logically that a real business change will not be implemented as a quick reaction. The company needs to have a long term vision. And this is one of the things I noticed talking with mid-market companies. Ask these questions: “Where do you want to be in five years from now” and “How do you make sure you achieve these goals (if goals exist)” and often you find the company is depending on the business instinct of the founder(s) and has no real answers for the long term future.
This is of course a result of the typical mid-market company, they have no internal people who will step outside the daily hectic and work on a change. And being reactive always means you are (a little) behind. And this was the situation in one of the companies that I have met recently. There was an initial understanding of the values that PLM could bring, but when talking about some of the basic principles of PLM, the answers was: In our company ERP is God. This means real PLM has no chance – you do not want to fight against God.
And now the discussion who can initiate the change towards PLM
Now another example of a mid-market company that had a long term PLM vision but got trapped in their own approach. The company has been growing fast and like many European companies, production is done in China. And this causes collaboration issues around communication and quality between Europe and China as the company only knows CAD data management and ERP. The engineering manager was assigned to solve these issues.He did not get a full strategic assignment to look at the complete picture, but the management pushes him to solve the current pains, having the PLM wishes still in mind.
And solving the current pains lead again to function / feature comparison with a short term justification, believing that in the future all will fit in the PLM vision, as the potential resellers for the new solution said: “Yes we can”. Have you ever heard a reseller say “No we cannot”
The result, the engineering manager has to make a decision based on the ‘blue eyes’ of the reseller as he does not get the mandate and power from his management to analyze and decide on a PLM strategy for the long term. For one of the resellers talking about the details of PLM was even more a disadvantage as it creates an impression that PLM is complex. It is easier to sell a dream. A similar situation as I described in my posts: Who decides for PLM in a mid-market company
My conclusion
Although I am aware that many mid-market companies implement basics of PLM, it is frustrating to see that lack of priority and understanding of the management in mid-market companies blocks the growth to full benefits for PLM. The management is not to blame, as most PLM messages either come from the high-end PLM vendors or from product resellers both not packaged for the mid-market. See PLM for the mid-market – a mission impossible ?
PLM is a cross-departmental solution and the management should look for partners who can explain the business values and share best practices for mid-market companies business wise.
The partner is 50 % of the success for a PLM implementation.
Do you recoginize similar situations ? How would you address them ?
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Jos Voskuil's Weblog 
2 comments
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May 17, 2010 at 3:02 pm
Riaan Havenga
Hi Jos
I absolutely agree with you, the future of plm in Mid-size are very tricky indeed. I have also recently been pondering on this, and you have been reflecting my thoughts exactly in your last three posts. (but with this you have given me a lot more to think on as well)
Your paragraph under the PLM Excitement blog nicely explains the perception of PLM in general :
“In contrary, the clear value and definition of PLM are not clear to user.”
and
“They have been surviving without implementing PLM, so they believe there is an alternative.”
A mid-market company has much less fat, one failed project could even lead to closure – So why risk this on the fuzzy concept of PLM.
Adding to this, the complexity of the environment and the lack of PLM skills at the VAR’s, makes a sucesfull Mid-Market PLM implementation quite a challenge.
Rightly said the correct partner experienced in PLM, knowing the company, having support from top management and taking smalls steps at a time are the secrets of PLM success.
It is also true in what you say that people are willing to do ERP consiously, but PLM must be invisible to be accepted. ERP is considered Production, PLM is part of the overheads in a Mid-size company.
Talking about the PLM vision of the PLM vendor, this is unfortunately tied to their marketing campains, which in some respects resembles an arms race between the big vendors:
“See what WE can do, WE are the BEST”.
This BIG VISION, more in tune with the big corporations, is sometimes a bit of an overkill for Joe Block’s toolroom around the corner. 😉
Kind Regards
Riaan Havenga
Dankie Riaan for your comments coming from real life. The question always remains can the PLM manager stimulate the company’s management to implement the business change needed for PLM. Succes with bafana bafana and let’s meet at the final
Best regards
Jos
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May 18, 2010 at 12:26 am
Stephen Porter
Jos,
Great article. This resonates with me since we see the same thing with our clients. Very few SME’s have the staff and vision to really benefit from PLM. Most use it as a PDM system and have a very myopic view about what PLM can do for them. Most adopt based on a crisis or something dictated to them by a customer or regulatory agency. I think the key is to get the client to build a muti-disciplined team to find the issues that really drive the motivation of the management group. As I mentioned on my blog
bit.ly/dc7tWS you have to tap into emotion to drive meaningful change. If you are just going through the motions the solution will be lackluster in its results.
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