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The past year I have written about PLM in the context of digital transformation, relevant for companies that deliver products to the market. Some years ago, I have advocated the value of a PLM infrastructure for EPC companies and Owners/Operators of a plant.
EPC stands for Engineering, Construction, and Procurement, a typical name for often large capital-intensive projects, executed by a consortium of companies. Together they create buildings, platforms, plants, infrastructure and more one-off deliveries, which will be under control of the Owner/Operator after going-live.
2014 EPC related: The year the construction industry did not discover PLM
2013 Owner/Operators related: PLM for all industries?
As you can see from the dates, these posts are not the most recent posts. Meanwhile, EPC-based businesses are discovering the value of a PLM infrastructure. Main component for them is BIM (Building Information Model or Building Information Management) and they use cloud-based collaboration environments to be more cost-efficient. Slowly these companies are moving to a single repository of the data supporting multidisciplinary collaboration related to a BIM model to guarantee a continuity of data and better execution. I am positive about EPC companies that are discovering the value of PLM- It might be slightly different from classical product-selling companies, mainly because data ownership is different. In an EPC environment many companies are responsible for parts of the data and each of them keeps the real knowledge as IP (Intellectual Property) for themselves. They only “publish” deliverables. For companies that deliver products to the market, the OEM keeps responsibility for all relevant product information and h has a different strategy.
I worked in the past with one of my peers, Bjorn Fidjeland (www.plmpartner.com) on PLM for EPCs and Owner/Operators. We share the same passion to bring PLM outside traditional industries. As Bjorn is now more active than I am in this domain, I recommend to read Bjorn´s posts on this topic. For example:
EPC related 2016: Handover to logistics and supply chain in capital projects
Owner/Operators 2015: Plant Information Management – Information Structures
Bjorn provides a lot of details, which are important as implementing PLM for EPCs or Owner/Operators requires different data structures. I wrote about these concepts in 2014 in two posts – PLM and/or SLM ? post 1 and post 2. At that time not realizing the virtual twin was becoming popular.
PLM complementary to EAM
The last year I have explored these concepts together with (potential) Owner/Operators of a plant, where PLM would be complementary to their EAM system. In the world of Owner/Operators, Enterprise Asset Management (EAM) software is the major software these companies use. You find some of the major EAM players here.
You will discover that all these software suites are good for plant operations, but they all have a challenge to support data consistency and quality in particular when dealing with plant changes and efficient, high-quality plant information management. Versioning and status management, typical PLM capabilities are often not there.
Owner/Operators have challenges with EAM environments as:
- EAM systems are designed to support an as-operated environment, assuming all data it correct. Support for Maintenance, Repair or Overhaul projects is often rudimentary and depending on document-driven processes. The primary business process of these companies is producing continuously, such as, electricity or chemicals. Therefore typical engineering projects to change or enhance the main production process do not have the same financial focus.
- A document-driven approach is the de facto standard common for these industries. Most of the time because the plant has been established through an EPC approach, which was 100 % document-driven due to the different disconnected disciplines/tools working at that time in the EPC project. As the asset information is stored and delivered in documents, most owners/operators keep the document-driven approach for future change projects.
Owners/operator can benefit significantly from a data-driven PLM system as complementary infrastructure to their EAM system. The PLM system will be the source for accurate asset information, manage the change and approvals for the assets and ultimately push the new released information to the EAM system. The PLM system will offer the full history an traceability of decisions made, important for regulatory bodies or insurance companies.
.A data-driven approach for asset information allows owners/operators to benefit from efficient processes, reducing strongly the amount of people required to process data (documents) or reducing the time for people working in maintenance and operations to search for data. I found a nice slide from IBM explaining the concept of PLM an EAM collaboration – see below:
The same benefits modern digital enterprises will have related to a data-driven approach will come available for owner/operators. Operational management is supported by the EAM system combined with real-time capabilities provided by a modern PLM systems to analyze, design and deliver changes to the plant without a costly data conversion process (e.g. compiling new documents) and disconnected processes.
Moving to a virtual twin
Interesting enough the digital transformation is bringing the concepts of connecting engineering, manufacturing and operations together into an infrastructure of digital platforms interacting together. Where owners/operators historically do not focus on optimizing the engineering process to build and maintain their assets, in the “classical” industries companies were not really focusing on how products behaved in the field after they were delivered. With digital continuity (the digital thread) and IoT now these “classical” companies can connect to their products in the field. Their products become assets of information, and in case these companies change their business offering into leasing products and services, these assets become managed assets, like the assets owner/operators are managing.
The concept of a virtual twin (or digital twin – image proprietary of GE) , where a virtual model-based environment is linked to one or more real instances in operations, is the dream of all industries. Preparing, Simulating and verifying changes in a virtual world is so much more efficient and cheaper that is allows for higher quality of products and in the case of plant operators higher safety will be the number one topic.
What I have learned so far from plant owners/operators is that they are struggling to grasp a modern digital enterprise concept as their current environment is not model-based but document-driven. Starting with PLM to complement their EAM system could be a first step to understand the value and business benefits of digital continuity. It requires a new way of thinking which is not a commodity at this time. It will happen in the next 5 to 10 years. Expect it to be driven by the realization of virtual twins in the industry and further BIM maturity. The future is model-based !!!
p.s. I am happy to announce WordPress provided a new feature to my blog. In the side panel you can now choose your language (based on Google Translate) if you have difficulties with English. Enjoy !
Recently, I have written about classical PLM (document-driven and sequential) and modern PLM (data-driven and iterative) as part of the upcoming digital transformation that companies will have to go through to be fit for the future. Some strategic consultancy companies, like Accenture, talk about Digital PLM when referring to a PLM environment supporting the digital enterprise.
From classical PLM to Digital PLM?
The challenge for all companies is to transform their businesses to become customer-centric and find a transformation path from the old legacy PLM environment towards the new digital environment. Companies want to do this in an evolutionary mode. However my current observations are that the pace of an evolutionary approach is too slow related to what happens in their market. This time the change is happening faster than before.
A Big Bang approach towards the new environment seems to be a big risk. History has taught us that this is very painful and costly. To be avoided too. So what remains is a kind of bimodal approach, which I introduced in my recent blog posts (Best Practices or Next Practices). Although one of my respected readers and commenters Ed Lopategui mentioned in his comment (here) bimodal is another word for coexistence. He is not optimistic about this approach either
So, what remains is disruption?
And disruption is a popular word and my blog buddy Oleg Shilovitsky recently dived into that topic again with his post: How to displace CAD and PLM industry incumbents. An interesting post about disruption and disruption patterns. My attention was caught by the words: digital infrastructure.
How it might happen? Here is one potential answer – digital infrastructure. Existing software is limited to CAD files stored on a desktop and collaboration technologies developed 15-20 years using relational database and client-server architecture.
As I mentioned the words, Digital Infrastructure triggered me to write this post. At this moment, I see companies marketing their Digital Transformation story in a slick way, supported by all the modern buzz words like; customer-centric, virtual twin and data-driven. You would imagine as a PLM geek that they have already made the jump from the old document-driven PLM towards modern digital PLM. So what does a modern digital PLM environment look like ?
The reality, however, behind this slick marketing curtain, is that there are still the old legacy processes, where engineers are producing drawings as output for manufacturing. Because drawings are still legal and controlled information carriers. There is no digital infrastructure behind the scenes. So, what would you expect behind the scenes?
Model-Based Definition as part of the digital infrastructure
Crucial to be ready for a digital infrastructure is to transform your company´s product development process from a file-based process where drawings are leading towards a model-based enterprise. The model needs to be the leading authority (single source of truth) for PMI (Product Manufacturing Information) and potentially for all upfront engineering activities. In this case, we call it Model-Based Systems Engineering sometimes called RFLP (Requirements-Functional-Logical-Product), where even the product can be analyzed and simulated directly based on the model.
A file-based process is not part of a digital infrastructure or model-based enterprise architecture. File-based processes force the company to have multiple instances and representations of the same data in different formats, creating an overhead of work to keep up quality and correctness of data, that is not 100 % secure. A digital infrastructure works with connected data in context.
Therefore, if your company is still relying on drawings and you want to be ready for the future, a first step towards a digital infrastructure would be fixing your current processes to become model-based. Some good introductions can be found here at ENGINEERING.com – search for MBD and you will find:
Moving to Mode-Based is already a challenging transformation inside your company before touching the challenge of moving towards a full digital enterprise, through evolution, disruption or bimodal approach – let the leading companies show the way.
Companies should consider and investigate how to use a Model-Based Engineering approach as a first step to becoming lean and fit for a digital future. The challenge will be different depending on the type of industry and product.
I am curious to learn from my readers where they are on the path to a digital enterprise.
In my earlier post The weekend after PDT Europe I wrote about the first day of this interesting conference. We ended that day with some food for thought related to a bimodal PLM approach. Now I will take you through the highlights of day 2.
Interoperability and openness in the air (aerospace)
I believe Airbus and Boeing are one of the most challenged companies when it comes to PLM. They have to cope with their stakeholders and massive amount of suppliers involved, constrained by a strong focus on safety and quality. And as airplanes have a long lifetime, the need to keep data accessible and available for over 75 years are massive challenges. The morning was opened by presentations from Anders Romare (Airbus) and Brian Chiesi (Boeing) where they confirmed they could switch the presenter´s role between them as the situations in Airbus and Boeing are so alike.
Anders Romare started with a presentation called: Digital Transformation through an e2e PLM backbone, where he explained the concept of extracting data from the various silo systems in the company (CRM, PLM, MES, ERP) to make data available across the enterprise. In particular in their business transformation towards digital capabilities Airbus needed and created a new architecture on top of the existing business systems, focusing on data (“Data is the new oil”).
In order to meet a data-driven environment, Airbus extracts and normalizes data from their business systems and provides a data lake with integrated data on top of which various apps can run to offer digital services to existing and new stakeholders on any type of device. The data-driven environment allows people to have information in context and almost real-time available to make right decisions. Currently, these apps run on top of this data layer.
Now imagine information captured by these apps could be stored or directed back in the original architecture supporting the standard processes. This would be a real example of the bimodal approach as discussed on day 1. As a closing remark Anders also stated that three years ago digital transformation was not really visible at Airbus, now it is a must.
Next Brian Chiesi from Boeing talked about Data Standards: A strategic lever for Boeing Commercial Airplanes. Brian talked about the complex landscape at Boeing. 2500 Applications / 5000 Servers / 900 changes annually (3 per day) impacting 40.000 users. There is a lot of data replication because many systems need their own proprietary format. Brian estimated that if 12 copies exist now, in the ideal world 2 or 3 will do. Brian presented a similar future concept as Airbus, where the traditional business systems (Systems Engineering, PLM, MRP, ERP, MES) are all connected through a service backbone. This new architecture is needed to address modern technology capabilities (social / mobile / analytics / cloud /IoT / Automation / ,,)
Interesting part of this architecture is that Boeing aims to exchange data with the outside world (customers / regulatory/supply chain /analytics / manufacturing) through industry standard interfaces to have an optimal flow of information. Standardization would lead to a reduction of customized applications, minimize costs of integration and migration, break the obsolescence cycle and enable future technologies. Brian knows that companies need to pull for standards, vendors will deliver. Boeing will be pushing for standards in their contracts and will actively work together with five major Aerospace & Defense companies to define required PLM capabilities and have a unified voice to PLM solutions providers.
My conclusion on these to Aerospace giants is they express the need to adapt to move to modern digital businesses, no longer the linear approach from the classic airplane programs. Incremental innovation in various domains is the future. The existing systems need to be there to support their current fleet for many, many years to come. The new data-driven layer needs to be connected through normalization and standardization of data. For the future focus on standards is a must.
Simon Floyd from Microsoft talked about The Impact of Digital Transformation in the Manufacturing Enterprise where he talked us through Digital Transformation, IoT, and analytics in the product lifecycle, clarified by examples from the Rolls Royce turbine engine. A good and compelling story which could be used by any vendor explaining digital transformation and the relation to IoT. Next, Simon walked through the Microsoft portfolio and solution components to support a modern digital enterprise based on various platform services. At the end, Simon articulated how for example ShareAspace based on Microsoft infrastructure and technology can be an interface between various PLM environments through the product lifecycle.
Simon’s presentation was followed by a panel discussion where the theme was: When is history and legacy an asset and barriers of entry and When does it become a burden and an invitation to future competitors.
Mark Halpern (Gartner) mentioned here again the bimodal thinking. Aras is bimodal. The classical PLM vendors running in mode 1 will not change radically and the new vendors, the mode 2 types will need time to create credibility. Other companies mentioned here PropelPLM (PLM on Salesforce platform) or OnShape will battle the next five years to become significant and might disrupt.
Simon Floyd(Microsoft) mentioned that in order to keep innovation within Microsoft, they allow for startups within in the company, with no constraints in the beginning to Microsoft. This to keep disruption inside you company instead of being disrupted from outside. Another point mentioned was that Tesla did not want to wait till COTS software would be available for their product development and support platform. Therefore they develop parts themselves. Are we going back to the early days of IT ?
Interesting trend I believe too, in case the building blocks for such solution architecture are based on open (standardized ?) services.
After the lunch, the conference was split in three streams where I was participating in the “Creating and managing information quality stream.” As I discussed in my presentation from day 1, there is a need for accurate data, starting a.s.a.p. as the future of our businesses will run on data as we learned from all speakers (and this is not a secret – still many companies do not act).
In the context of data quality, Jean Brange from Boost presented the ISO 8000 framework for data and information quality management. This standard is now under development and will help companies to address their digital needs. The challenge of data quality is that we need to store data with the right syntax and semantic to be used and in addition, it needs to be pragmatic: what are we going to store that will have value. And then the challenge of evaluating the content. Empty fields can be discovered, however, how do you qualify the quality of field with a value. The ISO 8000 framework is a framework, like ISO 9000 (product quality) that allow companies to work in a methodological way towards acceptable and needed data quality.
Magnus Färneland from Eurostep addressed the topic of data quality and the foundation for automation based on the latest developments done by Eurostep on top of their already rich PLCS data model. The PLCS data model is an impressive model as it already supports all facets of product lifecycle from design, through development and operations. By introducing soft typing, EuroStep allows a more detailed tuning of the data model to ensure configuration management. When at which stage of the lifecycle is certain information required (and becomes mandatory) ? Consistent data quality enforced through business process logic.
The conference ended with Marc Halpern making a plea for Take Control of Your Product Data or Lose Control of Your Revenue, where Marc painted the future (horror) scenario that due to digital transformation the real “big fish” will be the digital business ecosystem owner and that once you are locked in with a vendor, these vendors can uplift their prices to save their own business without any respect for your company’s business model. Marc gave some examples where some vendor raised prices with the subscription model up to 40 %. Therefore even when you are just closing a new agreement with a vendor, you should negotiate a price guarantee and a certain bandwidth for increase. And on top of that you should prepare an exit strategy – prepare data for migration and have backups using standards. Marc gave some examples of billions extra cost related to data quality and loss. It can hurt !! Finally, Marc ended with recommendations for master data management and quality as a needed company strategy.
Gerard Litjens from CIMdata as closing speaker gave a very comprehensive overview of The Internet of Thing – What does it mean for PLM ? based on CIMdata’ s vision. As all vendors in this space explain the relation between IoT and PLM differently, it was a good presentation to be used as a base for the discussion: how does IoT influence our PLM landscape. Because of the length of this blog post, I will not further go into these details – it is worth obtaining this overview.
Concluding: PDT2016 is a crucial PLM conference for people who are interested in the details of PLM. Other conferences might address high-level customer stories, at PDT2016 it is about the details and sharing the advantages of using standards. Standards are crucial for a data-driven environment where business platforms with all their constraints will be the future. And I saw more and more companies are working with standards in a pragmatic manner, observing the benefits and pushing for more data standards – it is not just theory.
See you next year ?
At this moment I am finalizing my session for PDT2016 where I will talk about the importance of accurate data. Earlier this year I wrote a post about that theme: The importance of accurate data. Act now!
My PDT session will be elaborating on this post, with a focus on why and how we need this change in day-to-day business happen. So if you are interested in a longer story and much more interesting topics to learn and discuss, come to Paris on 9 and 10 November.
Dreaming is free
Recently I found a cartoon on LinkedIn and shared it with my contacts, illustrating the optimistic view companies have when they are aiming to find the best solution for their business, going through an RFI phase, the RFP phase, and ultimately negotiation the final deal with the PLM solution provider or vendor. See the image below:
All credits to the author – I found this image here
The above cartoon gives a humoristic view of the (PLM) sales process (often true). In addition, I want to share a less optimistic view related to PLM implementations after the deal has been closed. Based on the PLM projects if have been coaching in the past, the majority of these projects became in stress mode once the stakeholders involved only focused on the software, the functions and features and centralizing data. Implementing the software without a business transformation caused a lot of discomfort.
Users started to complain that the system did not allow them to do their day-to-day work in the same way. And they were right! They should have a new day-to-day work in the future, with different priorities based on the new PLM infrastructure.
This cultural change (and business change) was often not considered as the PLM system was implemented from an IT-perspective, not with a business perspective.
Over time, a better understanding of PLM and the fact that vendors and implementers have improved their portfolio and implementation skills, classical PLM implementations are now less disruptive.
A classical PLM implementation can be done quickly is because the system most of the time does not change the roles and responsibilities of people. Everyone remains working in his/her own silo. The difference: we store information in a central place so it can be found. And this approach would have worked if the world was not changing.
The digital enterprise transformation.
With the upcoming digitization and globalization of the market, enterprises are forced to adapt their business to become more customer-driven. This will have an impact on how PLM needs to be implemented. I wrote about this topic in my post: From a linear world to fast and circular. The modern digital enterprise has new roles and responsibilities and will eliminate roles and responsibilities that can be automated through a data-driven, rule-based approach. Therefore implementing PLM in a modern approach should be related (driven) by a business transformation and not the other way around!
In the past two years, I have explained this story to all levels inside various organizations. And nobody disagreed. Redefining the processes, redefining roles was the priority. And we need a team to help people to make this change – these people are change management experts. The benefits diagram from Gartner as shown below was well understood, and most companies agreed the ambition should be to the top curve, in any case, stay above the red curve
But often reality relates to the first cartoon. In the majority of the implementations I have seen the past two years, the company did not want to invest in change management, defining the new process and new roles first for an optimum flow of information. They spent the entire budget on software and implementation services. With a minimum of staff, the technology was implemented based on existing processes – no change management at all. Disappointing, as short-term thinking destroyed the long-term vision and benefits were not as large as they had been dreaming.
Without changing business processes and cultural change management, the PLM team will fight against the organization, instead of surfing on the wave of new business opportunities and business growth.
If your company is planning to implement modern PLM which implicit requires a business transformation, make sure cultural change management is part of your plan and budget. It will bring the real ROI. Depending on your company´s legacy, if a business transformation is a mission impossible, it is sometimes easier to start a new business unit with new processes, new roles and potentially new people. Otherwise, the benefits will remain (too) low from your PLM implementation.
I am curious to learn your experience related to (the lack) of change management – how to include it into the real scope – your thoughts ?
As a reaction to this post, Oleg Shilovitsky wrote a related blog post: PLM and the death spiral of cultural change. See my response below to this post as it will contribute to the understanding of this post
Oleg, thanks for contributing to the theme of cultural change. Your post illustrates that my post was not clear enough, or perhaps too short. I do not believe PLM is that difficult because of technology, I would even claim that technology is a the bottom of my list of priorities. Not stating it is not important, but meaning that when you are converging with a company to a vision for PLM, you probably know the kind of technologies you are going to use.
The highest priority to my opinion is currently the business transformation companies need to go through in order to adapt their business to remain relevant in a digital world. The transformation will require companies to implement PLM in a different manner, less silo-oriented, more focus on value flows starting from the customer.
Working different means cultural change and a company needs to allocate time, budget and energy to that. The PLM implementation is supporting the cultural change not driving the cultural change.
And this is the biggest mistake I have seen everywhere. Management decides to implement a new PLM as the driver for cultural change, instead of the result of cultural change. And they reason this is done, is most of the time due to budget thinking as cultural change is ways more complex and expensive than a PLM implementation.
Summer holidays are upcoming. Time to look back and reflect on what happened so far. As a strong believer that a more data-driven PLM is required to support modern customer-focused business models, I have tried to explain this message to many individuals around Europe with mixed success.
Compared to a year ago the notion of a new PLM approach, digital and data-driven, has been resonating more and more. Two years ago I presented at the Product Innovation conference in Berlin a session with the title: Did you notice PLM is changing ? The feedback at that time was that it was a beautiful story, probably happening in the far future. Last year in Düsseldorf ( my review here), the digital trend (s) became clearer. And this year in Munich (my review here), people mentioned upcoming changes were unavoidable, in particular in the relation with IoT, how it could drastically change existing business models.
For me, the enjoyable thing of the PI Conferences is that they give a snapshot of what people care the most in the context of their product development and in particular PLM. When you are busy in day-to-day business, everything seems to move slowly forward. However, by looking back, I must admit the pace of change has increased dramatically, not the same pace as it was five or ten years ago.
Something is happening, and it happens fast !
And here I want to encourage my readers to step back for a moment from day-to-day business and look around what is happening, in business and in the world. It is all related !
Jobs are disappearing in the middle class due to automation and direct connectivity with customers creates new types of businesses. Old jobs will never come back, not even when you close your border. And this is what worries many societies. This global, connected world has created a new way of doing business, challenging old and traditional businesses (and people) as their models become obsolete.
The primary reaction is trying to close the discomfort outside. Let´s act as if it never happened and just switch back to the good life in the previous century or centuries.
To be honest, it is all about the discomfort this new world brings to us. This new world requires new skills, in particular, more personal skills to develop continuously, learn and adapt for the future. Closing your mind and thought for the future, by hanging in the past, only brings you further away from the future and create more discomfort.
Are you talking PLM ?
Yes, the previous section was very generic, however also valid for PLM. Modern enterprises are changing the way they are going to do business and PLM is a crucial part of that total picture. Jeff Immelt, CEO of GE, explains in a discussion with Microsoft´s CEO Satya Nadella what it takes for an organization to be ready for the future. He does not talk about PLM, he talks about the need for people to be different in attitude and responsibilities – it is a business transformation – people first. Have a look here:
And although Jeff does not mention PLM, the changing digital business paradigm will affect all classical system, PLM, ERP, CRM. And your PLM vision and plans should anticipate for such a business transformation. Implementing PLM now in the same way is has been done for 10 years in the past, with the processes from the past in mind might make your company even more rigid than before. See my recent blog post: The value of PLM at the C-level.
Take this thought into consideration during your holidays. Can you be comfortable in this world by keep on hanging on the past or should you consider an uncomfortable, but crucial change the way your company will remain (flexible) in future business?
My holiday this year will be in my ultimate comfort zone at the beach. Reading books, no internet, discussing with friends what moves us. Two weeks to charge the batteries for this exciting, rapidly changing world of business (and PLM). I look forward coming back with some of my findings in my upcoming blogs.
Getting in and out of your comfort zone happens everywhere. Read this HBR article with a lot of similarities: If You’re Not Outside Your Comfort Zone, You Won’t Learn Anything
See you soon in the PLM (dis)comfort zone
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 ?
Finally, I have time to share my PLM experiences with you in this blog. The past months have been very busy as I moved to a new house, and I wanted to do and control a lot of activities myself. Restructuring your house in an agile way is not easy. Luckily there was a vision how the house should look like. Otherwise, the “agile” approach would be an approach of too many fixes. Costly and probably typical for many old construction projects.
Finally, I realized the beauty of IKEA´s modular design and experienced the variety of high-quality products from BLUM (an impressive company in Austria I worked with)
In parallel, I have been involved in some PLM discussions where in all cases the connection with the real C-level was an issue. And believe it or not, my blog buddy Oleg Shilovitsky just published a post: Hard to sell PLM? Because nobody gives a SH*T about PLM software. Oleg is really starting from the basics explaining you do not sell PLM; you sell a business outcome. And in larger enterprises I believe you sell at this time the ability to do a business transformation as business is becoming digital, with the customer in the center. And this is the challenge I want to discuss in this post
The value of PLM at the C-level
Believe it or not, it is easier to implement PLM (in general) instead of explaining a CEO why a company needs modern PLM. A nice one-liner to close this post, however, let me explain what I mean by this statement and perhaps show the reasons why PLM does not seem to be attractive so much at the C-level. I do not want to offend any particular PLM company, Consultancy firm or implementor, therefore, allow me to stay on a neutral level.
The C-level time challenge
First, let´s imagine the situation at C-level. Recently I heard an excellent anecdote about people at C-level. When they were kids, the were probably the brightest and able to process and digest a lot of information, making their (school) careers a success. When later arriving in a business environment, they were probably the ones that could make a difference in their job and for that reason climbed the career ladder fast to reach a C-level position. Then arriving at that level, they become too busy to dive really deep into the details.
Everyone around them communicates in “elevator speeches” and information to read must me extremely condensed and easy to understand. As if people at C-level have no brains and should be informed like small kids.
I have seen groups of people working weeks on preparing the messages for the CEO. Every word is twisted hundred times – would he or she understand it? I believe the best people at C-level have brains, and they would understand the importance of PLM when someone explains it. However, it requires time if it does not come from your comfort zone.
Who explains the strategic value of PLM
There are a lot of strategic advisory companies who have access to the board room, and we can divide them into two groups. The ones that focus on strategy independent of any particular solution and the ones that concentrate on a strategy, guaranteeing their implementation teams are ready to deploy the solution. Let´s analyze both options and their advice:
Independent of a particular solution
When a company is looking for help from a strategic consultancy firm, you know upfront part of the answer. As every consultancy firm has a preferred sweet spot, based on their principal consultant(s). As a PLM consultant, I probably imagine the best PLM approach for your company, not being expert in financials or demagogic trends. If the advisory company has a background in accountancy, they will focus their advice on financials. If the company has a background in IT, they will focus their information on an infrastructure concept saving so much money.
A modern digital enterprise is now the trend, where digital allows the company to connect and interact with the customer and therefore react faster to market needs or opportunities. IoT is one of the big buzz words here. Some companies grasp the concept of being customer centric (the future) and adapt their delivery model to that, not realizing the entire organization including their product definition process should be changing too. You cannot push products to the market in the old linear way, while meanwhile expecting modern agile work processes.
Most of the independent strategic consultants will not push for a broader scope as it is out of their comfort zone. Think for a moment. Who are the best strategic advisors that can talk about the product definition process, the delivery process and products in operation and service? I would be happy if you give me their names in the comments with proof points.
Related to a particular solution
When you connect with a strategic advisory company, which an extensive practice in XXX or YYY, you can be sure the result will be strategic advice containing XXX or YYY. The best approach with ZZZ will not come on the table, as consultancy firms will not have the intention to investigate in that direction for your company. They will tell you: “With XXX we have successfully transformed (many) other companies like yours, so choose this path with the lowest risk.
And this is the part what concerns me the most at this time. Business is changing rapidly and therefore PLM should be changing too. If not that would be a strange situation? Read about the PLM Identity crisis here and here.
The solution is at C-level (conclusion)
I believe the at the end the future of your company will be dependent on your DNA, your CEO and the C-level supporting the CEO. Consultancy firms can only share their opinion from their point of view and with their understanding in mind.
If you have a risk-averse management, you might be at risk.
Doing nothing or following the majority will not bring more competitive advantage.
The awareness that business is global and changing rapidly should be on every company’s agenda.
Change is always an opportunity to get better; still no outsider can recommend you what is the best. Take control and leadership. For me, it is clear that the product development and delivery process should be a part of this strategy. Call it PLM or something different. I do not care. But do not focus on efficiency and ROI, focus on being able to be different from the majority. Apple makes mobile phones; Nespresso makes coffee, etc.
Think and use extreme high elevators to talk with your C-level!
Last week I attended the PI conference in Munich, which has become a tradition since 2011. Personally, I have been busy moving houses, so blogging has not been my priority recently. However, the PI Conference for me is still one of the major events happening in Europe. Excellent for networking and good for understanding what is going on in the world of PLM. Approximate 200 delegates attended from various industries and. Therefore, the two days were good to find and meet the right people.
As the conference has many parallel sessions, I will give some of the highlights here. The beauty of this conference is that all sessions are recorded. I am looking forward to catch-up with other meetings in the upcoming weeks. Here some of the highlights of the sessions that I attended.
Some of the highlights
The first keynote session was from Mark Gallagher with the title: High-Performance Innovation in Formula One. Mark took us through the past and current innovations that have been taken place in the F1. I was involved some years ago in a PLM discussion with one of the F1 team.
I believe F1 is a dream for engineers and innovators. Instead of a long time to market, in F1, it is all about bringing innovation to the team as fast as possible. And interesting to see IoT, direct feedback from the car during the race is already a “commodity” in F1 – see the picture. Now we need to industrialize it.
Peter Bilello (CIMdata) took us through The Future Sustainability of PLM. One of the big challenges for PLM implementations is to make the sustainable. Currently, we see many PLM implementations reaching a state of obsolescence, no longer able to support the modern business for various reasons.
Change of owner, mergers, a different type of product, the importance of software. All of these reasons can become a significant challenge when your PLM implementation has been tuned to support the past.
How to be ready for the future. Peter concluded that companies need to be pro-active manage their systems and PLM platforms might give an answer for the future. However, these platforms need to be open and rely on standards, to avoid locking in data in the platform.
Final comment: To stay competitive in the future companies need to have an adequate strategy and vision.
Gary Knight, PLM Business Architecture Manager from Jaguar Land Rover, gave an impressive presentation about the complete approach JLR has executed. Yes, there is the technical solution. However the required cultural change and business change to align the vision with execution on the floor are as important. Making people enthusiastic and take part in realizing the future.
The traditional productivity dip during a business transformation has been well supported by intensive change management support, allowing the company to keep the performance level equal without putting its employees under big pressure. Many companies I have seen could learn from that.
PLM and ERP
In the afternoon, I moderated a focus group related to PLM and ERP integration challenges. An old-fashioned topic you might think. However, the room was full of people (too many) all hoping to find the answers they need. Some conclusions:
- Understanding the difference between owning data and sharing data. Where sharing still requires certain roles to be responsible for particular data sets.
- First define the desired process how information should flow between roles in the organization without thinking in tools. Once a common agreement exists, a technical realization will not be the bottleneck.
- PLM and ERP integrations vary per primary process (ETO, BTO, CTO, and MTS). In each of these processes the interaction between PLM and ERP will be different due to timing issues or delivery model
Irene Gustafson from Volvo Cars explained the integration concept with partners / suppliers based on Eurostep´s ShareAspace. I wrote about this concept in my blog post: The weekend after PDT2015. Meanwhile, the concept of a collaboration hub instead of direct integration between an OEM and its supplier has become more traction.
Irene Gustafson made some interesting closing statements
- Integration should not be built into the internal structure, it takes away flexibility
- A large portion of collaborative data is important here and now. Long term only a limited part of that data will need to be saved
Eurostep announced their new upcoming releases based on different collaboration scenarios, InReach, InControl and InLife. These packages allow fast and more OOTB deployment of their collaboration hub (based on de PLCS standard)
Digital Transformation at Philips and GE
Anosh Thakkar, Chief Technology Officer from Philips, explained their digital business transformation from pushing products to the markets towards a HealthTech company, leaving the lightning division behind. Philips used three “transformers” to guide the business change:
- From Complex to Simple, aligning businesses to 4 simplified business model (instead of 75) and one process framework supported by core IT platforms reducing customizations and many applications (from 8000 to 1000)
- From Analog to Digital, connecting customer devices through a robust cloud-based platform. A typical example of modern digital businesses
- From Products to Solution, again with a focus on the end-user how they could work in an ideal way instead of delivering a device (the Experience economy)
Ronan Stephan, chief scientist of GE, presented the digital business transformation is working on. Ronan took us through the transformation models of Amazon, Apple, and Google, explaining how their platforms and the insight coming from platform information have allowed these companies to be extremely successful. GE is aiming to be the leader in the digital industry, connecting their company with all their customers (aerospace, transportation, power & healthcare) on their Predix platform.
On the second day, I presented to a relatively small audience (5 parallel sessions – all interesting) a session with the title: The PLM Identity crisis. Luckily there were still people in the conference that have the feeling something is changing in PLM. My main message was that PLM like everything else in the current world suffers from rapid changing business models (hardware products towards software driven systems) and lack of time to distinguish between facts and opinions. The world of one-liners. To my opinion existing PLM, concepts are no longer enough, however, the PLM market still is mainly based on classical linear thinking as my generation (the baby boomers) are still leading the business. Have a look at the presentation here, of find a nice complementary related post from my blog buddy Oleg Shilovitsky here.
As I am in the middle of moving houses, now in no man’s land, I do not have the time and comfortable environment to write a more extensive review this time. Perhaps I will come back with some other interesting thoughts from this conference after having seen more recordings.
My observation after the conference:
A year ago I wrote The Weekend After Product Innovation 2015 in Düsseldorf where managing software in the context of PLM was the new topic. This year you could see the fast change as now IoT platforms and M2M communication was the main theme. The digital revolution is coming …..
Some weeks ago I wrote a post about non-intelligent part numbers (here) and this was (as expected) one of the topics that fired up other people to react. Thanks to Oleg Shilovitsky (here), Ed Lopategui (here), David Taber (here) for your contribution to this debate. For me, the interesting conclusion was that nobody denies the advantage of non-intelligent part number anymore. Five to ten years ago this discussion would be more a debate between defenders of the old “intelligent” methodology and non-intelligent numbers. Now it was more about how to deal/wait/anticipate for the future. Great progress !!
Non-intelligent part number benefits
Again a short summary for those who have not read the posts referenced in the introduction. Non-intelligent part numbers provide the following advantages:
- Flexibility towards the future in case of mergers, new products, and technologies of number ranges not foreseen. Reduced risk of changes and maintenance for part numbers in the future.
- Reduced support for “brain related connectivity” between systems (error prone) and better support for automated connectivity (interfaces / digital scanning devices). Minimizing mistakes and learning time.
So when a company decides to move forward towards non-intelligent part numbers, there are still some more actions to take. As the part number becomes irrelevant for human beings, there is the need for more human-readable properties provided as metadata on screens or attributes in a report.
CLASSIFICATION: The first obvious need is to apply a part classification to your parts. Intelligent part numbers somehow were often a kind of classification based on the codes and position of numbers and characters inside the intelligent ID. The intelligent part number containing information about the type of part, perhaps the drawing format, the project or the year it was issued the first time. You do not want to lose this information and therefore, make sure it is captured in attributes (e.g. part type / creation date) or in related information (e.g. drawing properties, model properties, customer, project). In a modern PLM system, all the intelligence of a part number needs to be at least stored as metadata and relations.
Which classification to use is hard to tell. It depends on your industry and the product you are making. Each industry has it standards which are probably the optimized target when you work in that industry. Classifications like UNSPC might be too generic. Although when you classify, do not invent a new classification yourself. People have spent thousands of hours (millions perhaps) on building the best classification for your industry – don’t be smarter unless you are a clever startup.
And next, do not rely on a single classification. Make sure your parts can adhere to multiple classifications as this is the best way to stay flexible for the future. Multiple classifications can offer support for a marketing view, a technology view (design and IP usage), a manufacturing view and so on.
Legacy parts should be classified by using analytic tools and custom data manipulations to complete the part metadata in the future environment. There are standard tools in the market to support data discovery and quality improvement. Part similarity discovery done by Exalead’s One Part and for more specific tools read Dick Bourke’s article on Engineering.com.
DOWNSTREAM USAGE: As Mathias Högberg commented on my post, the challenge of non-intelligent part numbers has its impact downstream on the shop floor. Production line scheduling for variants or production process steps for half-fabricates often depends on the intelligence of the part number. When moving to non-intelligent numbers, these capabilities have to be addressed too, either by additional attributes, immediately identifying product families or by adding a more standardized description based on the initial attributes of the classification. Also David Taber in his post talked about two identifiers, one meaningless and fixed and a second used for the outside world, which could be build by a concatenation of attributes and can change during the part lifecycle.
In the latter case, you might say, we remove intelligence from the part number and we bring intelligence back in the description. This is correct. Still human beings are better in mapping a description in their mind than a number.
Do you know Jos Voskuil (a.k.a. virtualdutchman) or
Do you know NL 13.012.789 / 56 ?
Quality of data
Moving from “intelligent” part numbers towards meaningless part numbers enriched with classification and a standardized description, allow companies to gain significant benefits for just part reuse. This is what current enterprises are targeting. Discovering and eliminating similar parts already justifies this process. I consider this as a tactical advantage. The real strategic advantage will come in the next ten years when we will go more and more to a digital enterprise. In a digital enterprise, algorithms will play a significant role (see Gartner) amount of human interpretation and delays. However, algorithms only work on data with certain properties and a reliable quality.
Introducing non-intelligent part numbers has it benefits and ROI to stay flexible for the future. However consider it also as a strategic step for the long-term future when information needs to flow in an integrated way through the enterprise with a minimum of human handling.
Happy New Year to all of you and I am wishing you all an understandable and digital future. This year I hope to entertain you again with a mix of future trends related to PLM combined with old PLM basics. This time, one of the topics that are popping up in almost every PLM implementation – numbering schemes – do we use numbers with a meaning, so-called intelligent numbers or can we work with insignificant numbers? And of course, the question what is the impact of changing from meaningful numbers towards unique meaningless numbers.
Why did we create “intelligent” numbers?
Intelligent part numbers were used to help engineers and people on the shop floor for two different reasons. As in the early days, the majority of design work was based on mechanical design. Often companies had a one-to-one relation between the part and the drawing. This implied that the part number was identical to the drawing number. An intelligent part number could have the following format: A4-95-BE33K3-007.A
Of course, I invented this part number as the format of an intelligent part number is only known to local experts. In my case, I was thinking about a part that was created in 1995, drawn on A4. Probably a bearing of the 33K3 standard (another intelligent code) and its index is 007 (checked in a numbering book). The version of the drawing (part) is A
A person, who is working in production, assembling the product and reading the BOM, immediately knows which part to use by its number and drawing. Of course the word “immediately” is only valid for people who have experience with using this part. And this was in the previous century not so painful as it is now. Products were not so sophisticated as they are now and variation in products was limited.
Later, when information became digital, intelligent numbers were also used by engineering to classify their parts. The classification digits would assist the engineer to find similar parts in a drawing directory or drawing list.
And if the world had not changed, there would be still intelligent part numbers.
Why no more intelligent part numbers?
There are several reasons why you would not use intelligent part numbers anymore.
- An intelligent number scheme works in a perfect world where nothing is changing. In real life companies merge with other companies and then the question comes up: Do we introduce a new numbering scheme or is one of the schemes going to be the perfect scheme for the future?If this happened a few times, a company might think: Do we have to through this again and again? As probably topic #2 has also occurred.
- The numbering scheme does not support current products and complexity anymore. Products change from mechanical towards systems, containing electronic components and embedded software. The original numbering system has never catered for that. Is there an overreaching numbering standard? It is getting complicated, perhaps we can change ? And here #3 comes in.
- As we are now able to store information in a digital manner, we are able to link to this complex part number a few descriptive attributes that help us to identify the component. Here the number is becoming less important, still serving as access to the unique metadata. Consider it as a bar code on a product. Nobody reads the bar code without a device anymore and the device connected to an information system will provide the right information. This brings us to the last point #4.
- In a digital enterprise, where data is flowing between systems, we need unique identifiers to connect datasets between systems. The most obvious example is the part master data. Related to a unique ID you will find in the PDM or PLM system the attributes relevant for overall identification (Description, Revision, Status, Classification) and further attributes relevant for engineering (weight, material, volume, dimensions).
In the ERP system, you will find a dataset with the same ID and master attributes. However here they are extended with attributes related to logistics and finance. The unique identifier provides the guarantee that data is connected in the correct manner and that information can flow or connected between systems without human interpretation or human-spent processing time.
What to do now in your company?
There is no business justification just to start renumbering parts just for future purposes. You need a business reason. Otherwise, it will only increase costs and create a potential for migration errors. Moving to meaningless part numbers can be the best done at the moment a change is required. For example, when you implement a new PLM system or when your company merges with another company. At these moments, part numbering should be considered with the future in mind.
And the future is no longer about memorizing part classifications and numbers, even if you are from the generation that used to structure and manage everything inside your brain. Future businesses rely on digitally connected information, where a person based on machine interpretation of a unique ID will get the relevant and meaningful data. Augmented reality (picture above) is becoming more and more available. It is now about human beings that need to get ready for a modern future.
Intelligent part numbers are a best practice from the previous century. Start to think digital and connected and try to reduce the dependency of understanding the part number in all your business activities. Move towards providing the relevant data for a user. This can be an evolution smoothening a future PLM implementation step.
Looking forward to discussing this topic and many other PLM related practices with you face to face during the Product Innovation conference in Munich. I will talk about the PLM identity change and lead a focus group session about PLM and ERP integration. Looking from the high-level and working in the real world. The challenge of every PLM implementation.