The past month I have been very busy in a specific area where PLM is not yet as understood. Where PLM is a ‘must have’ for companies developing and manufacturing products, in the world of Asset Development and Asset Management not many companies are yet aware of the benefits PLM can bring. I wrote about it in one of my previous posts . I will share some of my experiences here and I must thank Stephen Porter for mentioning my blog in his review (and pushing me to write today – even during the soccer championships in South Africa.
PLM benefits for Owner / Operators
I had discussions with a few owner/operators in the past week and as they all came from different industries (nuclear power generation / gas distribution / chemical processing), the details might differ but the values a PLM system can bring is for all of them the same.
When talking to Owner/Operators there are a few standard situations you observe:
- The usage of a transactional system (MRO / ERP /SCADA) which is managing the operational and financial activities as job scheduling and purchasing. Main dominant players in this area are Maximo and SAP. Most Owner / Operators believe that this is the only main system they need.This looks very similar to what we see in the typical manufacturing companies. They all have an ERP system, and specially in the mid-market these companies are not looking for another major IT-system.
The problem with only the transactional system as the core system for the company is that there is no natural storage for product or process information that can change (the Intellectual Property of the company). Transactional systems use pointers to actual product or process information that they require. But where do they store other and historical information ?
- The challenge to manage in parallel data for maintenance, rework and innovation projects. As the transactional system provides data for the operational environment, these companies are used to copy out data to their project environment avoiding not released project data can be seen in the operational environment. Another situation in relation to the engineering projects is that the owner / operator usually outsources the engineering work to EPC contractors and only coordinates the activities taking ownership of the data only after the new installation is under operation
The two owner / operators I met in the past month were in two different stages. The first one had already many years of experience in maintaining the plant operational and there they understood that the SAP PM module could not help them managing all required plant information around scheduled maintenance projects. Having already four different document management systems in place, the biggest challenge remained to coordinate the different baselines for the various projects scheduled for the annual maintenance. At the end they developed the concept where the PLM system is the owner of all plant related information, based on an Asset Structure in PLM and the PLM system ‘pushes’ the right information to SAP when the changes become operational.
The other owner / operator was in the early stage. They were planning to have a process to become operational. Their understanding is that they need only one system that provides them all the time the actual information and if needed also all the history and approvals of each of the components. For sure the actual information needs to be managed in a transactional system (SCADA) and for sure the SCADA vendor will say they can manage all information in their system. The pity for this owner / operator is that once they need historical data, or need to manage complex maintenance projects, they have lost the opportunity to do it right from the beginning.
Of course there is also a significant difference between the two owner operators.. The first owner / operator is situated in the Nordics, where the cost of labor is high. This means investing in IT-solutions to assure people are working with the right information brings a much faster ROI as compared to the owner / operator from South Europe. Sometime the labor cost can be one-third or less in comparison to the Nordic countries.
The owner/operator in the South Europe will initially not focus on efficiency and reducing labor costs. Due to the economical crisis unemployment is also high, so working with less people – improving by investments in IT are also not a popular measure.
But for all owner/operators a main consideration should be to remain competitive also over 10 – 20 years. Short term strategy is not good for this type of companies
Conclusion so far:
PLM concepts are bringing competitive benefits for Owner/Operator, despite the fact that they do not develop products. The value is based on bringing a single version of the truth (no island systems) and working in a single environment for the as-built and the to-be environment, without data conversions or transitions
next post I will talk about Asset Development and the PLM benefits
6 comments
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June 21, 2010 at 3:36 am
Oleg Shilovitsky
Jos, It is a very interesting observation. So, your proposal is to replace transactional systems used for Asset Management by PLM systems? And, the main objective is the “Single Point of Truth”? Best, Oleg
Oleg hi, I assume I was no clear enough or you read to fast 🙂 I explained that there is a need for a PLM system beside the transactional system – as only a transactional system will lead in the long term to islands of information around it (due to uncovered needs) – And due to the islands, the single version of the truth is gone
Best regards
Jos
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June 21, 2010 at 8:42 pm
Oleg Shilovitsky
Jos, PLM is ‘yet another transactional system’, in my view. The islands you mentioned is the reality of systems and data in every organization. Since you don’t plan to replace all systems with PLM, I don’t understand how you suggest to establish what is called on your diagram – Single Repository for All Plant Data? Best, Oleg
Oleg, for me a PLM system is not a transactional system. It manages and ‘guides’ product (meta)data through its lifecycle. An ERP or MRO system is scheduling and monitoring actions. With the single version of the truth I mean the actual product or plant data where there needs to be a single actual version available. Time for a long debate ? Best regards Jos
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June 23, 2010 at 2:19 am
Kumar
Jos, Interesting thought. I come from a MRO background and I have worked with MRO products like Maximo and see SAP competing with Maximo on a regular basis. Both Maximo and SAP have configuration Management modules. Companies can implement them to bring their as-designed and as-built data into a singlr repository.
In case of Maximo it can help companies perform asset life accounting, to report on current and historic configurations.
I am not sure if companies need to buy a separate PLM product to maintain asset configuration data.
Kumar thanks for your feedback. As I am not the specialist in SAP (neither Maximo) I assume everything can be build upon a system perhaps as customization. The customer I am working with decided after 6 years SAP they required a separate PLM product – is it a pricing issue ? I will check.
Best regards
Jos
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June 30, 2010 at 2:46 pm
Jyotirmoy
Hi Jos,
As you have pointed out, PLM and EAM (Enterprise Asset Management) technologies have been conventionally used disjointedly by manufacturers for MRO operations. Nevertheless lots of them today see benefits of using PLM and EAM in concert to improve manufacturing performance. Since many manufacturers are already using PLM technology to design products, test them and automate their production, PLM and EAM integration offers supplementary payback when producers take on in ‘after sales service’ http://en.wikipedia.org/wiki/After_sales_service . And since the data islands get connected, the single version of the truth is at all times current.
Best,
Jyotirmoy
Thanks Jyotirmoy – we agree – the challenge is to convince companies to enjoy the benefits and to become proactive instead of reactive
Best regards
Jos
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July 1, 2010 at 5:58 pm
Ian Hamilton
Hi,
I had to go back through some previous posts to find out what you mean by PLM, another multi-variant TLA (Three-Letter-Acronym) with different meanings to different people.
In this context PLM is generally a quite different process for manufacturers and customers, so a system suitable for both is unlikely to be optimal for either.
One could question whether PLM for customers/users is relevant at all and Kumar’s point that configuration modules are available as/for PLM reinforces the question of what PLM actually is. As suppliers of a 3-D based system that could be called PLM in at least 2 contexts, this is not a reassuring point for me to make, but highlights the difficulties of getting the concept across.
regards
ian
Ian hi, you are right that a PLM system in a manufacturing environment supports a different process. The commonality for a PLM system in both implementations is that it serves as the IT-system providing the single version of the truth for product or plant data. Where in manufacturing the ERP system is responsible for day to day operations and transactions, this role is in asset lifecycle management performed by the MRO system.
Yes 3D data is nice to have and to view but I do not expect owner/operators to invest in that just for understanding, there should be a business case for that.
Best regards
Jos
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September 30, 2010 at 5:39 pm
Al Crain
I am Maximo certified and also am in the middle of a PLM Assessment. There is overlap between Maximo and a PLM, but Maximo also integrates with 3rd Party PLM systems. There are things that PLM systems do that Maximo cannot and vice-versa. Understanding these integration points is essential to implementing a tool or tolls that satisfy the needs of the business.
Thanks Al, it is like PLM and ERP in the manufacturing world – looking at the business process is key to define where data is stored and where it is viewed
Best regards
Jos
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