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PLM can be swinging and inspiring although there will be times of frustration and stress when implementing. These seven musical views will help you to make it through the project.
Every business change should start with a vision and a strategy. Defining the vision and keeping the vision alive is the responsibility of senior management. When it comes to PLM, the vision is crucial.
No more heroes
Of course, when implementing PLM, the target is to streamline the organization’s processes, eliminate bottlenecks and reduce dependencies on individuals. No more need for firefighters or other heroes because they fix or solve issues that appear due to the lack of processes and clarity.
Let´s do it together
PLM implementations are not IT-projects, where you install, configure and roll out an infrastructure based on one or more systems. Like a music band, it should be a well-orchestrated project between business experts and IT. Here´s a song to make your project swing.
Say NO at the right time
When implementing PLM, the software geeks can do everything for you: Customize the system, create a complete new environment looking like the old environment, and more. Of course, you will pay for it. Not only for the extra services, but also in the long-term to support all these customizations. Always try to find a balance between the standard functionality and infrastructure of the PLM system and the company´s vision. This means there are times you must Say NO to your users. Maybe not always as funny as these guys say it.
Eight days a week
During the PLM implementation and for sure after one of the several rollouts, changes may appear. And, normal work still needs to be done, sometimes in a different way. There will never be enough time to do everything perfect and fast, and it feels like you need more days in the week. When you are stressed, swing with these guys.
We are the champions
Then when the PLM project has been implemented successfully, there is a feeling of relief. It has been a tough time for the company and the PLM team. This should be the moment for the management to get everyone together in the stadium as an important change for the company´s future has been realized. Sing all together.
… But the times they are a-changing
Although a moment of relief is deserved, PLM implementations never end. The current infrastructure could be improved continuously due to better business understanding. However, globalization and digitalization will create new business challenges and opportunities at an extraordinarily fast pace. So, be aware and sing along with Bob.
Time to close the 2016 book and look forward to next year’s activities. I wish all my readers happy holidays and a healthy, successful new year with a lot of dialogue, and no more one-liners.
See you in 2017 !!!!
The past half-year I have been intensively discussing potential PLM roadmaps with companies of different sizes and different maturity in PLM. Some companies are starting their PLM journey after many years of discussion and trying to identify the need and scope, others have an old PLM implementation (actually most of the time it is cPDM) where they discover that business paradigms from the previous century are no longer sufficient for the future.
The main changing paradigms are:
- From a linear product-driven delivery process towards an individual customer focused offering based on products and effective services, quickly -adapting to the market needs.
- From a document-driven, electronic files exchange based processes and systems towards data-driven platforms supporting information to flow in almost real-time through the whole enterprise.
Both changes are related and a result of digitization. New practices are under development as organizations are learning how to prepare and aim for the future. These new practices are currently dominating the agenda from all strategic consultancy firms as you cannot neglect the trend towards a digital enterprise. And these companies need next practices.
And what about my company?
It is interesting to see that most of the PLM implementers and vendors are promoting best practices, based on their many years of experience working having customers contributing to functionality in their portfolio.
And it is very tempting to make your customer feel comfortable by stating:
“We will implement our (industry) best practices and avoid customization – we have done that before!”
I am sure you have heard this statement before. But what about these best practices as they address the old paradigms from the past?
Do you want to implement the past to support the future?
Starting with PLM ? Use Best Practices !
If the company is implementing PLM for the first time and the implementation is bottom-up you should apply the old PLM approach. My main argument: This company is probably not capable/ready to work in an integrated way. It is not in the company´s DNA yet. Sharing data and working in a controlled environment is a big step to take. Often PLM implementations failed at this point as the cultural resistance was too big.
When starting with classical PLM, avoid customization and keep the scope limited. Horizontal implementations (processes across all departments) have more success than starting at engineering and trying to expand from there. An important decision to make at this stage is 2D leading (old) or the 3D Model leading (modern). Some future thoughts: How Model-based definition can fix your CAD models. By keeping the scope limited, you can always evolve to the next practices in 5 -10 years (if your company is still in business).
Note 1: remark between parenthesis is a little cynical and perhaps for the timeframe incorrect. Still, a company working bottom-up has challenges to stay in a modern competitive global environment.
Note 2: When writing this post I got notified about an eBook available with the tittle Putting PLM within reach written by Jim Brown. The focus is on cloud-based PLM solution that require less effort/investments on the IT-side and as side effect it discourages customization (my opinion) – therefore a good start.
Evolving in PLM – Next Practices
Enterprises that have already a PDM/PLM system in place for several years should not implement the best practices. They have reached the level that the inhibitors off a monolithic, document based environment are becoming clear.
They (must) have discovered that changing their product offering or their innovation strategy now with partners is adding complexity that cannot be supported easily. The good news, when you change your business model and product offering, there is C-level attention. This kind of changes do not happen bottom-up.
Unfortunate business changes are often discussed at the execution level of the organization without the understanding that the source of all products or offering data needs to be reorganized too. PLM should be a part of that strategic plan and do not confuse the old PLM with the PLM for the future.
The PLM for the future has to be built upon next practices. These next practices do not exists out of the box. They have to be matured and experienced by leading companies. The price you pay when being a leader Still being a leader bring market share and profit your company cannot meet when being a follower.
The Bi-modal approach
As management of a company, you do not want a disruption to switch from one existing environment to a new environment. Too much risk and too disruptive – people will resist – stress and bad performance everywhere. As the new data-driven approach is under development (we are learning), the end target is still moving.
Evolving using the old PLM system towards the new PLM approach is not recommended. This would be too expensive, slow and cumbersome. PLM would get a bad reputation as all the complexity of the past and the future are here. It is better to start the new PLM with a new business platform and customer-oriented processes for a limited offering and connect it to your legacy PLM.
Over the years the new PLM will become more clear and grow where the old PLM will become less and less relevant. Depending on the dynamics of your industry this might take a few years till decades.
It must and will be a business-driven learning path for new best practices
Best Practices and Next Practices are needed in parallel. Depending on the maturity and lack of sharing information in your company, you can choose. Consider the bi-modal approach to choose a realistic time path.
What do you think? Could this simplified way of thinking help your company?
Sorry guys, I am aware of the fact that the definition of PLM is very ambiguous. Every vendor, implementor and probably PLM consultant has a favorite definition. Just to illustrate this statement, read Brain Soaper´s recent post: What are the top 5 things to know about PLM ?
Interesting Brian starts with stating the definition of PLM is priority #1, however as you can see from the comment session, it is all about having inside your company a common definition of PLM.
And now I start writing about digital PLM, again a definition. You might have read in my blog about classical PLM and modern PLM.
In particular for CAD data, classical PLM is focusing on managing files in a controlled way, through check-in and check-out mechanisms. On top of file management, classical PLM provides more data-driven functionality, like project management, process governance (workflows / approvals / ECx processes) and BOM management (to link to ERP).
Classical PLM can still bring great benefits to a company as time for searching, paper-based processes and data retyping in ERP can be avoided, leading to reuse and fewer errors. The ROI time for a classical PLM implementation lays between two years to three years; my observations from the past. This time can still vary a lot as not every company or implementor/vendor uses the ideal approach to implement PLM, due to cultural issues, wrong expectations or lack of experience from both parties.
The connotations I have with classical PLM are:
linear, rigid, mechanical,(old) automotive, previous century
Modern PLM = Digital PLM
Modern PLM is based on the vision that all information should be managed and stored as data objects, not necessary in a single system. Still the PLM infrastructure, using structured and unstructured data, should give each user in the organization with almost real-time information in context of other relevant information.
My non-stop blog buddy Oleg recently wrote a post in that context: Data as a platform & future manufacturing intelligence. Oleg is nicely describing some of the benefits of a data-driven approach.
Accenture provides insight with their infographic related to Digital PLM. Read it here as it is very concise and gives you a quick impression what Digital PLM means for an organization. Here is my favorite part, showing the advantages.
The substantial advantages from digital PLM are all coming from the fact that information is stored as data objects, all having their individual versions, relations and status. The advantage of data elements is that they are not locked in a document or specific file format. Information can flow to where or whom needed without translation.
The connotations I have with digital PLM are:
real-time, data continuity, flexible, software and future.
Still some caution:
Reported ROI numbers for digital PLM are significant larger than classical PLM and I observed some facets of that. Digital PLM is not yet established and requires a different type of workforce. See other blog post I wrote about this theme: Modern PLM brings Power to the People.
But what about digital PLM – where is the word digital relevant ?
ETO – model-based engineering
Where to focus first depends very much on your company´s core business process. Companies with an Engineering To Order (ETO) process will focus on delivering a single product to their customer and most of the time the product is becoming more like a system, interacting with the outside world.
Big challenges in ETO are to deliver the product as required, to coordinate all disciplines preferable in a parallel and real-time manner – in time – on budget. Here a virtual model that can be accessed and shared with all stakeholders should be the core. The construction industry is introducing BIM for this purpose (a modern version of DMU). The virtual model allows the company to measure progress, to analyze and simulate alternatives without spending money for prototypes. In the ideal world engineering and simulation are done on the same model, not losing time and quality on data translations and iterations.
The virtual model linked to requirements, functions and the logical definition allows virtual testing – so much cheaper and faster and therefore cost efficient. Of course this approach requires a change in how people work together, which is characteristic for any digital business. Breakdown the silos.
Typical industries using the ETO model: Construction, Energy, Offshore, Shipbuilding, Special Equipment
CTO – model-based manufacturing
In a Configure To Order (CTO) business model you do not spend time for engineering anymore. All options and variants are defined and now the focus is on efficient manufacturing. The trend for CTO companies is that they have to deliver more and more variants in a faster and more demanding global market. Here the connectivity between engineering data and manufacturing data becomes one of the cornerstones of digital PLM. Digital PLM needs to make sure that all relevant data for execution (ERP and MES) is flowing through the organization without reformatting or reworking the data.
The digital thread is the dream. Industry 4.0 is focusing on this part. Also in the CTO environment it is crucial to work with a product model, so all downstream disciplines can consume the right data. Although in CTO the company´s attention might go to MES and ERP, it is crucial that the source of the product model is well specified and under control from (dgital) PLM.
Typical CTO industries are: Automotive, Consumer Goods, High-Tech, Industrial Equipment
BTO – models everywhere
In BTO there is always engineering to do. It can be customer specific engineering work (only once) or it can be changing/ adding new features to the product.
Modularity of the product portfolio might be the answer for the first option, where the second option requires strong configuration management on the engineering side, similar to the ETO model. Although the dream of many BTO companies is to change a CTO company, I strongly believe change in technology and market requirements will always be faster than product portfolio definition.
ETO, BTO and CTO are classical linear business models. The digital enterprise is changing these models too. Customer interaction (myProduct), continuous upgrade and feedback of products (virtual twin), different business models (performance as a service) all will challenges organizations to reconsider their processes.
Digital PLM utilizing a model-based or model-driven backbone will be the (potential) future for companies as data can be flowing through the organization, not locked in documents and classical processes. In my upcoming blog post I will spend some more time on the model-based enterprise.
It depends on your company´s core business process where the focus on a model-based enterprise supported by (digital) PLM benefits the most. In parallel business models are changing which means the future must be flexible.
Digital PLM should be one of your company´s main initiatives in the next 5 years if you want to stay competitive (or relevant)
What do you think ? Am I too optimistic or too pessimistic ?
Two weeks ago I got this message from WordPress, reminding me that I started blogging about PLM on May 22nd in 2008. During some of my spare time during weekends, I began to read my old posts again and started to fix links that have been disappearing.
Initially when I started blogging, I wanted to educate mid-market companies about PLM. A sentence with a lot of ambiguities. How do you define the mid-market and how do you define PLM are already a good start for a boring discussion. And as I do not want to go into a discussion, here are my “definitions”
Warning: This is a long post, full of generalizations and a conclusion.
PLM and Mid-market
The mid-market companies can be characterized as having a low-level of staff for IT and strategic thinking. Mid-market companies are do-ers and most of the time they are good in their domain based on their IP and flexibility to deliver this to their customer base. I did not meet mid-market companies with a 5-year and beyond business vision. Mid-market companies buy systems. They bought an ERP system 25-30 years ago (the biggest trauma at that time). They renewed their ERP system for the Y2K problem/fear and they switched from drawing board towards a 2D CAD system. Later they bought a 3D CAD system, introducing the need for a PDM system to manage all data.
PLM is for me a vision, a business approach supported by an IT-infrastructure that allows companies to share and discover and connect product related information through the whole lifecycle. PLM enables companies to react earlier and better in the go-to-market process. Better by involving customer inputs and experience from the start in the concept and design phases. Earlier thanks to sharing and involving other disciplines/suppliers before crucial decisions are made, reducing the amount of iterations and the higher costs of late changes.
Seven years ago I believed that a packaged solution, combined with a pre-configured environment and standard processes would be the answer for mid-market companies. The same thought currently PLM vendors have with a cloud-based solution. Take it, us it as it is and enjoy.
Here I have changed my opinion in the past seven years. Mid-market companies consider PLM as a more complex extension of PDM and still consider ERP (and what comes with that system) as the primary system in the enterprise. PLM in mid-market companies is often seen as an engineering tool.
LESSON 1 for me:
The benefits of PLM are not well-understood by the mid-market
To read more:
Globalization and Education
In the past seven years, globalization became an important factor for all type of companies. Companies started offshoring labor intensive work to low-labor-cost countries introducing the need for sharing product data outside their local and controlled premises. Also, acquisitions by larger enterprises and by some of the dominant mid-market companies, these acquisitions introduced a new area of rethinking. Acquisitions introduced discussions about: what are real best practices for our organization? How can we remain flexible, meanwhile adapt and converge our business processes to be future ready?
Here I saw two major trends in the mid-market:
Lack of (PLM) Education
To understand and implement the value of PLM, you need to have skills and understanding of more than just a vendor-specific PLM system. You need to understand the basics of change processes (Engineering Change Request, Engineering Change Order, Manufacturing Change Order and more). And you need to understand the characteristics of a CAD document structure, a (multidisciplinary) EBOM, the MBOM (generic and/or plant specific) and the related Bill of Processes. This education does not exist in many countries and people are (mis-)guided by their PLM/ERP vendor, explaining why their system is the only system that can do the job.
Interesting enough the most read posts on my blog are about the MBOM, the ETO, BTO and CTO processes. This illustrates there is a need for a proper, vendor-independent and global accepted terminology for PLM
Some educational posts:
Bill of Materials for Dummies – ETO ranked #1
ECR/ECO for Dummies ranked #2
BOM for Dummies – CTO ranked #4
BOM for Dummies: BOM and CAD ranked #7
The dominance of ERP
As ERP systems were introduced long before PLM (and PDM), these systems are often considered by the management of a mid-market company as the core. All the other tools should be (preferably) seen as an extension of ERP and if possible, let´s implement ERP vendor´s functionality to support PLM – the Swiss knife approach – one tool for everything. This approach is understandable as at the board level there are no PLM discussions. Companies want to keep their “Let´s do it”-spirit and not reshuffle or reorganize their company, according to modern insights of sharing. Strangely enough, you see in many businesses the initiative to standardize on a single ERP system first, instead of standardizing on a single PLM approach first. PLM can bring the global benefits of product portfolio management and IP-sharing, where ERP is much more about local execution.
PLM is not understood at the board level, still considered as a tool
Some post related to PLM and ERP
Where is the MBOM ? ranked #3
The human factor
A lot of the reasons why PLM has the challenge to become successful have to do with its broad scope. PLM has an unclear definition and most important, PLM forces people to share data and work outside their comfort zones. Nobody likes to share by default. Sharing makes day-to-day life more complicated, sharing might create visibility on what you actually contribute or fix. In many of my posts, I described these issues from various viewpoints: the human brain, the innovators dilemma, the way the older generation (my generation) is raised and used to work. Combined with the fact that many initial PLM/PDM implementations have created so many legacies, the need to change has become a risk. In the discussion and selection of PLM I have seen many times that in the end a company decides to keep the old status quo (with new tools) instead of really having the guts to move toward the future. Often this was a result of investors not understanding (and willing to see) the long term benefits of PLM.
PLM requires a long-term vision and understanding, which most of the time does not fit current executive understanding (lack of education/time to educate) and priority (shareholders)
Many recent posts are about the human factor:
The digital transformation
The final and most significant upcoming change is the fact that we are entering a complete new era: From linear and predictable towards fast and iterative, meaning that classical ways we push products to the market will become obsolete. The traditional approach was based on lessons learned from mechanical products after the second world-war. Now through globalization and the importance of embedded software in our products, companies need to deliver and adapt products faster than the classical delivery process as their customers have higher expectations and a much larger range to choose from. The result from this global competitiveness is that companies will change from delivering products towards a more-and-more customer related business model (continuous upgrades/services). This requires companies to revisit their business and organization, which will be extremely difficult. Business wise and human change require new IT concepts – platform? / cloud services? / Big data?
Older enterprises, mid-market and large enterprises will be extremely challenged to make this change in the upcoming 10 years. It will be a matter of survival and I believe the Innovator´s Dilemma applies here the most.
The digital transformation is apparent as a trend for young companies and strategic consultants. This message is not yet understood at the board level of many businesses.
Some recent post related to this fast upcoming trend:
ROI (Return On Investment)
I also wrote about ROI – a difficult topic to address as in most discussions related to ROI, companies are talking about the costs of the implementation, not about the tremendous larger impact a new business approach or model can have, once enabled through PLM. Most PLM ROI discussions are related to efficiency and quality gains, which are significant and relevant. However these benefits are relative small and not comparable with the ability to change your business (model) to become more customer centric and stay in business.
Some of the ROI posts:
A (too) long post this time however perhaps a good post to mark 7 years of blogging and use it as a reference for the topics I briefly touched here. PLM has many aspects. You can do the further reading through the links.
From the statistics it is clear that the education part scores the best – see rankings. For future post, let me know by creating a comment what you are looking for in this blog: PLM Mid-Market, Education, PLM and ERP, Business Change, ROI, Digitalization, or …??
Also I have to remain customer centric – thanks for reading and providing your feedback
I was sitting outside in the garden during Ascension Day, which is (still) a national holiday in the Netherlands (Thanks God). It was again nice and warm, and it made me think about the parallels between Global warming and PLM.
Climate change has always been there if we look at the history of our planet. We started to talk about Global Warming when scientist indicated that this time the climate change is caused by human intervention. As a result of vast amounts of carbon dioxide emissions, a greenhouse effect started to become visible. When the first rumors came that global warming began to come up, environmentalists started preaching we have to act NOW before it is too late. Meanwhile at the other side, people began arguing that it was just a coincidence, an opinion.
There is no scientific proof, so why worry?
In the past ten years, the signs and proofs of global warming have become evident and climate conferences filled with people who want to act and on the other side the blockers, try to create progress in the battle against global warming. In particular in Europe governments and companies are starting to become aware that they can contribute to a more sustainable society.
Not enough according to the environmentalists and scientists. As our brains still operate mostly in a prehistoric mode (day-to-day survival, food, home, social status), slow changes and sustainability for next generations are not part of most people concerns. And those people, who make us aware of this lack of priority for sustainability, are considered annoying as they disrupt our lives.
Companies that have invested (heavily) in sustainable business models often have a challenging path to survive against traditional businesses. As the majority of consumers wants cheap. Some examples:
- Energy: most power plants are heated by burning coal as this is the cheapest option. Shale gas winning became attractive because we need cheap fuel. Alternatives like solar, wind and others cannot compete on price level as long as we do not pay for the damage to nature.
- Food: produced in bio-farms, where animal wellness or health is not part of the plan. The goal is to deliver xx kilos of meat for the lowest price. Alternative like more natural ways of growing meat or even revolutionary ways (the grown hamburger) cannot compete on price currently unless we are willing to pay for it.
- The Fashion industry where down in its supply chains human beings are treated like slaves. When you buy a cheap garment, you know somebody has been suffering.
Governments sometimes subsidize or push sustainable technologies as they realize that something has to happen (most of the time for the public opinion – their voters) but there is no consistent strategy as liberals believe every form of support is against open competition. And as long as we let our prehistoric brain run our choices, the earth gets warmer with the consequences being visible more and more.
We know we have to act, but we do not act seriously
Now let´s switch to PLM. The association started when I saw Chad Jackson’s retweet from Lifecycle insights related to top PLM challenges.
Clearly the message illustrates that costs, time, and technology have priority. Not about what PLM really can establish (even in the context of global warming).
PLM started end of the previous century, initially invented by some of the major CAD vendors, Dassault Systemes, PTC, and Siemens. Five years later it was taken more seriously, as also enterprise software vendors, like SAP and Oracle, started to work on their PLM offering. And some years ago even the most skeptic company related to PLM, Autodesk, began to sell a PLM offering.
So like global warming we can conclude: PLM is recognized, and now we can act.
The early adopters of PLM are also in a challenging situation. Their first PLM implementations were very much focused on an IT-infrastructure, allowing data to flow through a global organization, without disrupting the day-to-day business model too much. These implementations are now a burden to many of them: costly and almost impossible to change. Look at the PLM stories from some of the major automotive companies, like Daimler, JLR, PSA, Renault, , Volvo Cars and more.
They are all somehow kept hostage by their old implementations (as business continues) however due to changing ownership, business models and technology they cannot benefit from modern PLM concepts as it would be a disruption.
Meanwhile, PLM has evolved from an IT-infrastructure into a business-driven approach to support global, more flexible and customer-driven business processes. Younger companies that are now starting in Asia do not suffer from this legacy and are faster established based on the know-how from the early adopters.
And this is not only happing in the automotive industry. In the recent years, I have seen examples in the Oil & Gas industry, the High-Tech industry (which in theory is relative young) and the Manufacturing industry.
Coming back to the 2015 PLM challenges tweeted by Chad Jackson, it looks like they are related to time and costs. Obviously it is not clear what values PLM can bring to a company outside efficiency gains (ERP/Lean thinking). Modern PLM allows companies to change their business model as I wrote recently: From a linear to fast and circular. No longer is the PLM mission to support companies with product information from cradle to grave but from cradle to cradle. Sustainability and becoming connected to customers are new demands: Operational services instead of selling products, linking it with the need for IoT to understand what is happening.
In the 2015 PLM, the discussion with executives is about purchasing technology instead of the need to change our business for long-term survival. Most investors do not like long-term visions as their prehistoric brains are tuned to be satisfied in the short-term.
Therefore, as long as the discussion about PLM is about IT and infrastructure and not about business change, there will be this stall, identical to what happens with addressing global warming. Short term results are expected by the stakeholders, trying to keep up the current model. Strategists and business experts are all talking about the new upcoming digital era, similar to global warming.
We know we have to act, but we do not act seriously
When I posted a short version of this post on LinkedIn on Ascension Day, I got some excellent feedback which I want to share here:
Dieter de Vroomen (independent advisor, interim manager & neighbor) wrote me an email. Dieter does not have a PLM-twisted brain. Therefore I like his opinion:
PLM and Global Warming are both assumptions, mental constructs that we can make plausible with technology and data. Both mindsets save us from disasters through the use of technology. And that’s what both sell. But is that what they produce, what we want? Apple and associates think vice versa, making what first we want and explain later the underlying technology. I miss that with global warming, but certainly PLM. That’s why it sells so bad CxO’s.
I think the point Dieter is making is interesting as he is a non-PLM guy -showing the way CxO might be thinking. As long as we (PLMers) do not offer a packaged solution, an end-to-end experience, it is hard to convince the C-level. This is one of the significant differences between ERP (its purpose is clearly is tangible) and PLM (see my post PLM at risk! It does not have a clear target).
A more motivating comment came from Ben Muis, consultant and entrepreneur in the fashion industry. We met at the PI Apparel 2013 conference, and I like his passion for bringing innovation to the fashion industry. Read his full comments on my post on LinkedIn as he combined in his career sustainability and PLM. Two quotes from Ben:
As you may know I did quite a bit of work on how the fashion industry could and should be more sustainable in its approach. This was at a time where only a handful of people at best were willing to even think about this. Knowing that in reality the decisions around cost and commercialism were driving the agenda, I drew the conclusion that by improving processes within the industry I could actually cause a sustainability improvement that was driven by commercial desire.
Explaining how you can become involved in the bigger picture and for Ben it is the possibility to keep on working on his passion in a real-time world. And finally:
So there you have it… my reasons for initially thinking your title was very close to the reason I shifted my focus from pure sustainability advice to PLM implementations to begin with. I could drive a real result much quicker. This, as I am sure you will agree, in itself supports the reason for taking PLM seriously
The topics PLM and Global Warming have a lot in common. The awareness exists. However when it comes to action, we are blocked by our prehistoric brain, thinking about short term benefits. This will not change in the next 1000 years. Therefore, we need organizations and individuals that against all odds take the steep path and have a vision of change, breaking the old models and silos. It will cost money, it will require a sacrifice and the reward will only be noticed by next generations. What a shame
A final quote before going back to standard PLM matter in upcoming posts:
“Everything is theoretically impossible, until it is done.”
Robert A. Heinlein
Three weeks ago there was the Product Innovation conference in Düsseldorf. In my earlier post (here) I described what I experienced during this event. Now, after all the information is somehow digested, here a more high-level post, describing the visible change in business and how it relates to PLM. Trying to describe this change in non-academic wording but in images. Therefore, I described the upcoming change in the title: from linear to circular and fast.
Let me explain this image step by step
In the middle of the previous century, we were thinking linear in education and in business. Everything had a predictable path and manufacturing companies were pushing their products to the market. First local, later in time, more global. Still the delivery process was pretty linear:
This linear approach is reflected in how organizations are structured, how they are aligned to the different steps of the product development and manufacturing process. Below a slide I used at the end of the nineties to describe the situation and the pain; lack of visibility what happens overall.
It is discouraging to see that this situation still exists in many companies.
At the end of the nineties, early 2000, PLM was introduced, conceptually managing the whole lifecycle. In reality, it was mainly a more tight connection between design and manufacturing preparation, pushing data into ERP. The main purpose was managing the collaboration between different design disciplines and dispersed teams.
Jim Brown (Tech-Clarity) wrote at that time a white paper, which is still valid for many businesses, describing the complementary roles of PLM and ERP. See the picture below:
Jim introduced the circle and the arrow. PLM: a circle with iterations, interacting with ERP: the arrow for execution. Here visual it became already clear an arrow does not have the same behavior as a circle. The 100 % linearity in business was gone.
Let´s have a closer look at the PLM circle
This is how PLM is deployed in most organizations:
Information is pushed in the ERP system as disconnected information, no longer managed and connected to its design intent.
Next, the ERP system is most of the time not well-equipped for managing after sales and services content. Another disconnect comes up.
Yes, spare parts could be ordered through ERP, but issues appearing at the customer base are not stored in ERP, often stored in a separate system again (if stored beyond email).
The result is that when working in the concept phase, there is no information available for R&D to have a good understanding of how the market or customers work with their product. So how good will it be? Check in your company how well your R&D is connected with the field?
And then the change started …
This could have stayed reality for a long time if there were not a huge business change upcoming. The world becomes digital and connected. As a result, local inefficiencies or regional underperformance will be replaced by better-performing companies. The Darwin principle. And most likely the better performing companies are coming from the emerging markets as there they do not suffer from the historical processes and “knowledge of the past”. They can step into the digital world much faster.
In parallel with these fast growing emerging markets, we discovered that we have to reconsider the ways we use our natural resources to guarantee a future for next generations. Instead of spilling resources to deliver our products, there is a need to reuse materials and resources, introducing a new circle: the circular economy.
The circular economy can have an impact on how companies bring products to the market. Instead of buying products (CAPEX) more and more organizations (and modern people) start using products or services in a rental model (OPEX). No capital investment anymore, pay as you go for usage or capacity.
The digital and connected world can have a huge impact on the products or services available in the near future. You are probably familiar with the buzz around “The Internet of Things” or “Smart and Connected”.
No longer are products depending on mechanical behavior only, more and more products are relying on electrical components with adaptive behavior through software. Devices that connect with their environment report back information to the manufacturer. This allows companies to understand what happens with their products in the field and how to react on that.
Remember the first PLM circle?
Now we can create continuity of data !
Combine the circular economy, the digital and connected world and you will discover everything can go much faster. A crucial inhibitor is how companies can reorganize themselves around this faster changing, circular approach. Companies need to understand and react to market trends in the fastest and adequate way. The future will be probably about lower volumes of the same products, higher variability towards the market and most likely more and more combining products with services (the Experience Model). This requires a flexible organization and most likely a new business model which will differ from the sequential, hierarchical organizations that we know at this moment.
The future business model ?
The flexibility in products and services will more and more come from embedded software or supported by software services. Software services will be more and more cloud based, to avoid IT-complexity and give scalability.
Software development and integration with products and services are already a challenge for classical mechanical companies. They are struggling to transform their mechanical-oriented design process towards support for software. In the long-term, the software design process could become the primary process, which would mean a change from (sequential – streamlined) lean towards (iterative – SCRUM) agile.
Once again, we see the linear process becoming challenged by the circular iterations.
This might be the end of lean organizations, potentially having to mix with agile conepts..
If it was a coincidence or not, I cannot judge, however during the PI Conference I learned about W.L. Gore & Associates, with their unique business model supporting this more dynamic future. No need to have a massive organization re-org to align the business, as the business is all the time aligning itself through its employees.
Last weekend, I discovered Semco Partners in the newspaper and I am sure there are more companies organizing themselves to become reactive instead of linear – for sure in high-tech world.
Linearity is disappearing in business, it is all about reactive, multidisciplinary teams within organizations in order to support customers and their fast changing demands.
Fast reactions need new business organizations models (flexible, non-hierarchical) and new IT-support models (business information platforms – no longer PLM/ERP system thinking)
What do you think ? The end of linear ?
I have talked enough about platforms recently. Still if you want to read more about it:
Engineering.com: Prod. Innovation Platform PlugnPlay in next generation PLM
Gartner: Product Innovation Platforms
VirtualDutchman: Platform, Backbone, Service Bus or BI
Currently, I am preparing my sessions for the upcoming Product Innovation conference in Düsseldorf. See: www.picongress.com. My first session will be about PLM upgrades and how to deal with them for the future. It is a challenging topic as some PLM vendors claim using their product, there will be no upgrade problems and cloud-based solutions also provide seamless upgrades in the future.
Don’t cheer to early when you see this kind of messages. I had the chance to look back the past twenty years what happened with PLM and tried to look forward to the upcoming ten years what might happen.
In addition, this lead to some interesting thoughts that I will share in detail during the conference. I will come back to this topic in this blog after the conference. Here some unstructured thoughts that passed my mind recently when preparing this session.
Not every upgrade is the same!
First there was an interesting blog post from Ed Lopategui from E(E) with the title There is No Upgrade, where he addresses the difference between consumer software and enterprise software. Where consumer software will be used by millions and tested through long Alfa and beta cycles, PLM software often comes to the market in what you could consider a beta stage with limited testing.
Most PLM vendors invest a lot of their revenue in providing new functionality and technology based on their high-end customer demands. They do not have the time and budget to invest in the details of the solution; for this reason PLM solutions will remain a kind of framework.
In addition, when a solution is not 100 % complete there will be an adaptation from the customer, making upgrades later, not 100 percent guaranteed or compatible. More details on PLM Upgrades after the conference, let’s look into the near future.
The Future of PLM resides in Brussels!
Some weeks ago I was positively amused by some messages coming from Roger Tempest (PLM Interest Group) related to the future of PLM. Roger claims the PLM industry is effectively rudderless. For that Roger announces the Launch Meeting for the PLM International Research Foundation,
“simple because such a platform does not yet exist.”
I checked if perhaps an ERP International Research Foundation existed, but I only found references to SAP, so what makes the PLM International Research Foundation unique ?
According to Roger, the reason behind this initiative is the lack of clear targets for PLM. I quote:
The lack of detailed thought means that many future possibilities for PLM are just not being considered; and the lack of collective thought means that even the current initiatives to improve PLM remain fragmented and ineffective
As I mentioned in the previous paragraph, PLM vendors are in a kind of rat race to keep up with market demands, rapidly changing business, meanwhile building on their core technology. Not an easy game, as they cannot start from scratch, but for sure, and here I agree, they do not optimize their portfolio.
Who can and will take part in such a research forum?
This is the same for companies implementing PLM systems. They are looking for solutions in the market that improve their businesses. This might be a PLM system, but perhaps other components bring even a higher value. Is ALM or SLM part of PLM, for example? This is a challenge as who defined what PLM is and where are the boundaries ?
This leaves the activity to the academics for sure they will have the most advanced and futuristic vision of what is possible conceptually. From my observations, the main challenges currently with PLM are that even the vendors are ten years ahead in their capabilities compared to what most companies are asking for. For the academic approach, I still have to think about Monty Python’s sketch related to soccer. See below
Sorry for the generalization, I believe we should not focus on what is PLM and how PLM should be defined. What we now call PLM is entirely different from what we called PLM 10 years ago, see my last year´s post PLM is changing. I think the future should focus how we are going to deal with business platforms, which contain PLM facets.
The PLM future
Interesting enough we are on the brink of a new business paradigm due to globalization and digitization as you might have read from my recent posts. There are analysts, consultancy firms and research foundations all describing this challenging future.
Have a look at this post from Verdi Ogewell’s article at Engineering.com: Product Innovation Platform: Plug’n’play next generation PLM. The post is a summary of the platform discussion during the PDT 2014 conference, which I consider as one of the best conferences if you want to go into the details. See also my post: The weekend after PDT 2014.
The future is about innovation and/or business platforms where data is available based on a federated approach, not necessary based on a single, monolithic PLM platform.
Focusing on standardization and openness of such a platform is for me the central mission we have.
Remember: Openness is a right, not a privilege.
Let PLM vendors and other application providers develop their optimized services for individual business scenarios that will remove the borders of system thinking. Academic support will be needed to solve interoperability and openness required for initiatives like Industry 4.0 and IDC´s third platform.
I am looking forward to interesting discussions at the upcoming
PI conference but also with peers in my network.
The future is challenging and will it still be named PLM?
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.
My holidays are over. After reading and cycling a lot, it is time to focus again on business and future. Those of you who have followed my blog the past year must have noticed that I have been talking on a regular base about business moving to a data-oriented approach instead of a document / file-based approach. I wrote an introduction to this topic at the beginning of this year: Did you notice PLM has been changing?
This year I have had many discussions around this topic with companies acting in various industries; manufacturing, construction, oil & gas, nuclear and general EPC-driven companies. There was some commonality in all these discussions:
- PLUS: Everyone believes it is a beautiful story and it makes sense
- MINUS: Almost nobody wants to act upon it as it is an enormous business change and to change the way a company works you need C-level understanding
- PLUS: Everyone thinks the concept is clear to them
- MINUS: Few understand what it means to work data-oriented and what the impact on their business would be
Therefore, what I will try to do in the upcoming blog posts (two-three-four ??) is to address the two negative observations and how to make them more precise.
What is data / information / knowledge?
Data for me is a collection of small artifacts (numbers, characters, lines, sound bits, …) which have no meaning at all. This could be bundled together as a book, a paper drawing, a letter but also bundled together as a digital format like an eBook, a CAD file, an email and even transmission bytes of a network / internet provider can be considered as data.
Data becomes significant once provided in the context of each other or in the context of other data. At that time, we start calling it information. For that reason, a book or a drawing provides information as the data has been structured in such a manner to become meaningful. The data sent through the network cable only becomes information when it is filtered and stripped from the irrelevant parts.
Information is used to make decisions based on knowledge. Knowledge is the interpretation of information, which combined in a particular way, helps us to make decisions. And the more decisions we make and the more information we have about the results of these decisions, either by us or other, it will increase our knowledge.
Data and big data
Now we have some feeling about data, information and knowledge. For academics, there is room to discuss and enhance the definition. I will leave it by this simple definition.
Big data is the term for all digital data that is too large to handle in a single data management system, but available and searchable through various technologies. Data can come from any source around the world as through the internet an infrastructure exists to filter and search for particular data.
By analyzing and connecting the data coming from these various sources, you can generate information (placing the data in context) and build knowledge. As it is an IT-driven activity, this can be done in the background and give almost actual data to any person. This is a big difference with information handling in the old way, where people have to collect and connect manual the data.
The power of big data applies to many business areas. If you know how your customers are thinking and associating their needs to your products, you can make them better and more targeted to your potential market. Or, if you know how your products are behaving in the field during operation (Internet of Things) you can provide additional services, instant feedback and be more proactive. Plus the field data once analyzed provide actual knowledge helping you to make better products or offer more accurate services.
Wasn’t there big data before?
Yes, before the big data era there was also a lot of information available. This information could be stored in “analogue” formats ( microfiche, paper, clay tablets, papyrus) or in digital formats, better known as files or collections of files (doc, pdf, CAD-files, ZIP….).
Note the difference. Here I am speaking about information as the data is contained in these formats.
You have to open or be in front of information container first, before seeing the data. In the digital world, this is often called document management, content management. The challenge of these information containers is that you need to change the whole container version once you modify one single piece of data inside it. And each information container holds duplicated information from a data element. Therefore, it is hard to manage a “single version of the truth” approach.
And here comes the data-oriented approach
The future is about storing all these pieces of data inside connected data environments, instead of storing a lot of data inside a (versioned) information container (a file / a document).
Managing these data elements in the context of each other allow people to build information from any viewpoint – project oriented, product oriented, manufacturing oriented, service oriented, etc.
The data remains unique, therefore supporting much closer the single version of the truth approach. Personally I consider the single version of the truth as a utopia, however reducing the amount of duplicated data by having a data-oriented approach will bring a lot more efficiency.
In my next post, I will describe an example of a data-oriented approach and how it impacts business, both from the efficiency point of view and from the business transformation point of view. As the data-oriented approach can have immense benefits . However, they do not come easy. You will have to work different.
Some more details
An important point to discuss is that this data-oriented approach requires a dictionary, describing the primary data elements used in a certain industry. The example below demonstrates a high-level scheme for a plant engineering environment.
Data standards exist in almost any industry or they are emerging and crucial for the longevity and usage of the data. I will touch it briefly in one of the upcoming posts, however, for those interested in this topic in relation to PLM, I recommend attending the upcoming PDT Europe. If you look at the agenda there is a place to learn and discuss a lot about the future of PLM.
I hope to see you there.