Imagine you are a supplier working for several customers, such as big OEMs or smaller companies. In Dec 2020, I wrote about PLM and the Supply Chain because it was an underexposed topic in many companies. Suppliers need their own PLM and IP protection and work as efficiently as possible with their customers, often the OEMs.

Most PLM implementations always start by creating the ideal internal collaboration between functions in the enterprise. Historically starting with R&D and Engineering, next expanding to Manufacturing, Services and Marketing. Most of the time in this logical order.

In these implementations, people are not paying much attention to the total value chain, customers and suppliers. And that was one of the interesting findings at that time, supported by surveys from Gartner and McKinsey:

  • Gartner: Companies reported improvements in the accuracy of product data and product development as the main benefit of their PLM implementation. They did not see so much of a reduced time to market or reduced product development costs. After analysis, Gartner believes the real issue is related to collaboration processes and supply chain practices. Here the lead times did not change, nor did the number of changes.
  • McKinsey: In their article, The Case for Digital Reinvention, digital supply chains were mentioned as the area with the potential highest ROI; however, as the image shows below, it was the area with the lowest investment at that time.

In 2020 we were in the middle of broken supply chains and wishful thinking related to digital transformation, all due to COVID-19.

Meanwhile, the further digitization in PLM (systems of engagement) and the new topic, Sustainability of the supply chain, became visible.

Therefore it is time to make a status again, also driven by discussions in the past few weeks.

 

The old “connected” approach (loose-loose).

A preferred way for OEMs in the past was to have the Supplier or partner directly work in their PLM environment. The OEM could keep control of the product development process and the incremental maturity of the BOM, where the Supplier could connect their part data and designs to the OEM environment. T

The advantage for the OEM is clear – direct visibility of the supplier data when available. The benefit for the Supplier could also be immediate visibility of the broader context of the part they are responsible for.

However, the disadvantages for a supplier are more significant. Working in the OEM environment exposes all your IP and hinders knowledge capitalization from the Supplier. Not a big thing for perhaps a tier 3 supplier; however, the more advanced the products from the Supplier are, the higher the need to have its own PLM environment.

Therefore the old connected approach is a loose-loose relationship in particular for the Supplier and even for the OEM (having less knowledgeable suppliers)

 

The modern “connected” approach (wins t.b.d.)

In this situation, the target infrastructure is a digital infrastructure, where datasets are connected in real-time, providing the various stakeholders in engagement access to a filtered set of data relevant to their roles.

In my terminology, I refer to them as Systems of Engagement, as the target is that all stakeholders work in this environment.

The counterpart of Systems of Engagement is the Systems of Record, which provides a product baseline, manufacturing baseline, and configuration baseline of information consumed by other disciplines.

These baselines are often called Bills of Information, and the traditional PLM system has been designed as a System of Record. Major Bills of Information are the eBOM, the mBOM and sometimes people talk about the sBOM(service BOM).

Typical examples of Systems of Engagement I have seen in alphabetical order are:

  • Arena Solutions has a long-term experience in BOM collaboration between engineering teams, suppliers and contract manufacturers.
  • CATENA-X might be a strange player in this list, as CATENA-X is more a German Automotive consortium targeting digital collaboration between stakeholders, ensuring security and IP protection.
  • Colab is a provider of cloud-based collaboration software allowing design teams and suppliers to work in real time together.
  • OnShape – a cloud-based collaborative product design environment for dispersed engineering teams and partners.
  • OpenBOM – a SaaS solution focusing on BOM collaboration connected to various CAD systems along with design teams and their connected suppliers

These are some of the Systems of Engagement I am aware of. They focus on specific value streams that can improve the targeted time to market and product introduction efficiency. In companies with no extensive additional PLM infrastructure, they can become crucial systems of engagement.

The main challenge for these systems of engagement is how they will connect to traditional Systems or Records – the classical PLM systems that we know in the market (Aras, Dassault, PTC, Siemens).

Image on the left from a presentation done by Eric Herzog from SAAB at last year’s CIMdata/PDT conference.

You can read more about this here.

When establishing a mix of Systems of Engagement and Systems of Record in your organization digitally connected, we will see overall benefits. My earlier thoughts, in general, are here: Time to split PLM?

The almost Connected approach

As I mentioned, in most companies, it is already challenging to manage their internal System of Record, which is needed for current operations and the traceability of information. In addition, most of the data stored in these systems is document-driven, not designed for real-time collaboration. So how would these companies collaborate with their suppliers?

The Model-Based Enterprise

In the bigger image below, I am referring to an image published by Jennifer Herron from her book Re-use Your CAD, where she describes the various stages of interaction between engineering, manufacturing and the extended enterprise.

Her mission is to promote and educate organizations in moving to a Model-Based Definition and, in the long term, to a Model-Base Enterprise.

The ultimate target of information exchange in this diagram is that the OEM and the Supplier are separate entities. However, they can exchange Digital Product Definition Packages and TDPs over the web (electronically). In this exchange, we have a mix of systems of engagement and systems of record on the OEM and Supplier sides.

Depending on the type of industry, in my ecosystem of companies, many suppliers are still at level 2, dreaming or pushed to become level 3, illustrating there is a difficult job to do – learning new practices. And why would you move to the next level?

Every step can have significant benefits, as reported by companies that did this.

So what’s stopping your company from moving ahead? People, Processes, Skills, Work Pressure? It is one of the most common excuses: “We are too busy, no time to improve”.

A supply chain collaboration hub

On March 21, I discussed with  Magnus Färneland from Eurostep their cloud-based PLM collaboration hub, ShareAspace. You can read the interview here: PLM and Supply Chain Collaboration

I believe this concept can be compelling for a connected enterprise. The OEM and the Supplier share (or connect) only the data they want to share, preferably based on the PLCS data schema (ISO 10303-239).

In a primitive approach, this can be BOM structures with related files; however, it could become a real model-based connection hub in the advanced mode. “

Now you ask yourself why this solution is not booming.

In my opinion, there are several points to consider:

  • Who designs, operates and maintains the collaboration hub?
    It is likely not the suppliers, and when the OEM takes ownership, they might believe there is no need for the extra hub; just use the existing PLM infrastructure.
  • Could a third party find a niche market for this? Eurostep has already been working on this for many years, but adopting the concept seems higher in de BIM or Asset Management domains. Here the owner/operator sees the importance of a collaboration hub.

A final remark, we are still far from a connected enterprise; concepts like Catena-X and others need to become mature to serve as a foundation – there is a lot of technology out there -now we need the skilled people and tested practices to use the right technology and tune solutions concepts.

Sustainability demands a connected enterprise.

I focused on the Supplier dilemma this time because it is one of the crucial aspects of a circular economy and sustainable product development.

Only by using virtual models of the To-Be products/systems can we seriously optimize them. Virtual models and Digital Twins do not run on documents; they require accurate data from anywhere connected.

You can read more details in my post earlier this year: MBSE and Sustainability or look at the PLM and Sustainability recording on our PLM Global Green Alliance YouTube channel.

Conclusion

Due to various discussions I recently had in the field, it became clear that the topic of supplier integration in a best-connected manner is one of the most important topics to address in the near future. We cannot focus longer on our company as an isolated entity – value streams implemented in a connected manner become a must.

And now I am going to enjoy Liveworx in Boston, learning, discussing and understanding more about what PTC is doing and planning in the context of digital transformation and sustainability. More about that in my next post: The week(end) after Liveworx 2023 (to come)