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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 ?
If you have followed my blog the recent years, you might have discovered my passion for a modern, data-driven approach for PLM. (Read about it here: The difference between files and data-driven – a tutorial (3 posts)).
The data-driven approach will be the foundation for product development and innovation in a digital enterprise. Digital enterprises can outperform traditional businesses is such a way that within five to ten years, non-digital businesses will be considered as dinosaurs (if they still exist).
In particular, a digital enterprise is operating in an agile, iterative way with the customer continuously in focus, where traditional enterprises often work more in a linear way, pushing their products to the market (if the market still is waiting for these commodities).
Read more about this topic here: From a linear world to fast and circular?
When and how to become a digital enterprise?
It is (almost) inevitable your company will transform at a particular time into a digital enterprise too. Either driven by a vision to remain ahead of the competition or as a final effort to stay in business as competing against agile digital competitors is killing your market share.
One characteristic of a digital enterprise is that all benefits rely on accurate data flowing through the organization and its eco-system. And it does not matter if the data resides in a single system/platform like the major vendors are promoting or the fact that data is federated and consumed by the right person with the right role. I am a believer in the latter concept, still seeing current startups trying to create the momentum to achieve such an infrastructure. Have a look at my blog buddy’s company OpenBOM and Oleg’s recent article: The challenges of distributed BOM handover in data-driven manufacturing
No matter what you believe at this stage, the future is about accurate data. I bumped recently into some issues related actual data again. Some examples:
A change in objectives is needed!
One of the companies I am working with were only focusing on individual outputs, either in their drawings (yes, the 3D Model was not leading yet) or/and in their Excels (sounds familiar ? ). When we started implementing a PLM backbone, it became apparent during the discovery phase we could not use any advanced search tools to have quick wins by aggregating data for better understanding of the information we discovered. Drawings and Models did not contain any (file) properties. Therefore, the only way to understand information was by knowing its (file) name and potential its directory. Of course, the same file could be in multiple directories and as there were almost no properties, how to know what belongs to what item ?
When discussing the future of PLM with such companies, you always hear people (mainly engineers) say:
“we are not administrators, we need to get our job done.”
This shortsighted statement is often supported by management, and then you get stuck in the past.
It is time for the management and engineers to realize their future is also based on a data-driven approach. Therefore adding data to a drawing or CAD model, or in the case of PLM, part / process characteristics become the job of an engineer. We have to redefine roles as in a digital enterprise there is nobody to fix data downstream. People fixing data issues are too expensive.
I do not want to go digital
Most companies at this time are not ready for a digital enterprise yet. The changing paradigm is relatively new. Switching now to a modern approach cannot be done either because their culture is still based on the previous century or they are just in the middle of a standard PLM process, just learning to share files within their (global) origination. These companies might create an attitude:
“I do now want to go digital”
I believe this is ostrich behavior, like saying:
“I want all information printed on paper on my desk so I can work in comfort (and keep my job).”
History shows hanging to the past is killing for companies. Those companies that did not invest in the first electronic wave are probably out of business (unless they never had competition). The same for digital. In potentially ten years from now, it is not affordable to work in a traditional way anymore as labor cost and speed of information flowing through an organization are going to be crucial KPIs to stay in business.
As Dutch, we are always seeking compromises. It helped our country to become a leading trading nation and due to the compromises, we struggle less with strikes compared to our neighboring companies. Therefore my proposal for those who do not like digital at this stage: Add just a little digital workload to your day-to-day business, preferably stimulated and motivated by your management and promoted as a company initiative. By adding as much as possible relevant properties and context to your work, you will be working on the digital future of your company. When the times is there to become digital, it will be much easier to connect your old legacy information to the new digital platform, speeding up the business transformation.
And of course there will be tools
If you are observing what is happening in the PLM domain , you will see more and more tools for data discovery and data cleansing will appear on the market. Dick Bourke wrote end of last year an introduction article about this topic at Engineering.com: Is-Suspect-Product-Data-the-Elephant-in-the-Search-and-Discover-Room? Have a read to get interested.
And there are rewards
Once you have more accurate data, you can:
- Find it (saving search time)
- Create reports through automation (saving processing time)
- Apply rules (saving validation work & time or processing time)
- Create analytics (predict the future – priceless J)
We are in a transition phase the way PLM will is implemented. What is clear, no matter in which stage you are, accurate data is going to be crucial for the future? Use this awareness for your company to stay in business.
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.
The past weeks I have discussed at various events two topics that appeared to be different:
- The change from an analogue, document-driven enterprise towards a digital, data-driven enterprise with all its effects. E.g. see From a linear world to fast and circular?
- The change in generations upcoming. The behavior and the attitude of the analogue generation(s) and the difference in behavior from the digital generation(s).
During PDT2015 (a review of the conference here), we discussed all the visible trends that business in exponential changing in some industries due to digitalization and every cheaper technology. The question not answered during that conference was: How are we going to make this happen in your company?
Last week I spoke at a PLM forum in Athens and shared with the audience the opportunities for Greece to catch-up and become a digital service economy like Singapore. Here I pictured an idealistic path how this could happen (based on an ideal world where people think long-term).
A mission impossible, perhaps.
The primary challenge to move from analogue towards digital is to my opinion the difference in behavior of the analogue and digital generations (and I am generalizing of course)
The analogue generation has been educated that knowledge is power. Store all you know in your head or keep it in books close to you. Your job was depending on people needing you. Those who migrated to the digital world most of the time continued the same behavior. Keep information on your hard disk or mailbox. A job was designed for life and do not plan to share as your job might come at risk. Continuous education was not part of their work pattern. And it is this generation that is in power in most of the traditional businesses.
The digital generation has been educated (I hope so – not sure for every country) to gather information, digest and process it and come with a result. There is no need to store information in your head as there is already an information overflow. Store in your head methodology and practices to find and interpret data. The digital generation for sure wants a stable work environment but they already grew up with the mindset that there is no job for life, having seen several crises. It is all about being flexible and keep your skills up-to-date.
So we have the dilemma here that business is moving from analogue towards digital, where the analogue business represents the linear processes that the old generation was used to. Digital business is much more an iterative approach, acting and adapting on what happens around you. A perfect match for the digital generations.
A dilemma ?
Currently the old generation is leading and they will not easy step aside due to their classical education and behavior. We cannot expect behavior to change, just because it is logically explained. In that case, everyone would stop smoking or adopt other healthy standards.
The dilemma reminded me of the Innovators Dilemma, a famous theory from Clayton Christensen, which also could apply to analogue and digital businesses. Read more about the Innovators Dilemma here in one of my older blog posts: The Innovator´s dilemma and PLM. You can replace the incumbent with the old analogue generation and the disruptive innovation comes from using digital platforms and information understood by the digital generation. If you follow this theory, it would mean old businesses would disappear and new businesses would pop-up and overtake the old companies. Interesting conclusion, however, will there be disruption everywhere?
Recently I saw Peter Sondergaard from Gartner presenting at Gartner Symposium/ITxpo 2015 in Orlando. In his keynote speech, he talked about the value of algorithms introducing first how companies should move from their traditional analogue business towards digital business in a bimodal approach. Have a read of the press release here.
If you have the chance to view his slick and impressive keynote video (approx. 30 minutes) you will understand it better. Great presentation. In the beginning Peter talks about the bimodal approach sustaining old, slowly dying analogue businesses and meanwhile building teams developing a digital business approach. The graph below says it all.
Interesting from this approach is that a company can evolve without being disrupted. Still my main question remains: Who will lead this change from the old analogue business towards modern digital business approach. Will it be the old generation coaching the new generation or will there be a natural evolution at the board level required before this process starts?
I have no conclusion this time as I am curious to your opinion. A shift in business is imminent, but HOW will companies / countries pick-up this shift?
Your thoughts or experiences ?
Image and article related to the article “The Onrushing Wave” in the Economist Jan 18th, 2014
When PLM is discussed at management level, often the goal is to increase efficiency, which translates into doing the same with fewer people. And it is the translation that is creating worries inside the company. The PLM system is going to cut down the amount of jobs in our company.
The result: People, who fear their job is at risk, will make sure PLM will fail and become blockers. These people will be the ones defending the “good old way of working” and create a mood of complexity for the new PLM system.
I wrote some time ago a post about PLM and Blockers
At the end there is frustration at all levels in the company and PLM systems are to blame.
How to address the fear for disappearing jobs block a PLM implementation?
First of all if you implement PLM now, do not target efficiency only. There is a digital revolution ongoing, radically changing standard businesses and markets. The picture at the top says it all. If you are still not convinced, read the “old” article from the Economist or more related to PLM, I just read this article from Accenture consulting talking about Digital PLM. I liked the opening sentence from that article:
“It’s time to adopt a digital model for product lifecycle management – or get left behind.”
The digital revolution forces companies to become extremely flexible and agile. Business models can rapidly change. Where perhaps your company was the market leader, a few years you can be in trouble, due to the decoupling of products and services in a different business model. There are a few places where you do not have to worry (yet). If you are in a governmental type of business (no competition – you are the only preferred supplier) the less worried you might be for the upcoming digital revolution. Other types of companies need to make a strategic plan.
Making a strategic plan
The strategic plan starts at the board level and has, of course, elements of efficiency. However, the major strategic discussion should be: “How will we differentiate our company in the future and stay in business and profitable”. This cannot be by competing on price only. It requires you can excite your future customers and who these customers are might not be clear yet either.
Different business models can give the company a better position in the market. The current trend in competitive markets is that the value does not come from selling products. Selling services or operation capacity (OPEX instead of CAPEX) are currently upcoming new business models and they need constant anticipation to what happens in the market or at your potential customer base.
Digitalization of information and being able to work with real-time information, instead of information hidden in documents, handled by document controllers, creates the opportunity to change. For example the potential of “The Internet of Everything” is huge.
At the board level, you need the vision where the company should be in the next 5 to 10 years. It will not bubble up automatically in an organization. And when talking about PLM, it should be digital PLM.
It is not easy to communicate the above if you have not lived through the whole process in your mind. Management needs to be able to explain the vision and its impact on the organization in such a way that it empowers people instead of making them afraid of change. We all know the examples of charismatic CEOs, like Steve Jobs, who could energize a company and its customers. However, it is clear that not every CEO is like Steve Jobs.
Once you are able to communicate the vision, it will be logical that the organization needs new processes and in modern digital processes create different responsibilities and need different management styles.
When you start implementing PLM in a modern approach (digital PLM according to Accenture) there will be jobs disappearing. There is no need to be secretive about that; it is a result of the vision that should be known to everyone in the company.
Disappearing jobs are:
- jobs where people are processing data (from one format to the other) and checking follow-up processes (from on Excel to the other). If your daily job is collecting data and filling spreadsheets with data your job is at risk. In a digital environment, the data will be real-time available and can be filtered and presented in automatic reports or dashboards.
- Jobs where team managers have the major task to decide on priorities for the team and fight with other discipline team managers on priorities. In a digital environment, empowered employees will understand conflicting activities and they will be able to discuss and decide immediately with the relevant people. No need for an intermediate layer of people handling escalations only. It is true that this modern approach requires a different management style and people who can deal with being empowered. In general, empowered people feel more motivated that employees who are just doing what their managers tell them to do. The business change from hierarchical and siloed organizations towards networked organizations is critical and challenging – all depending on trust and the right change management.
- The classical fire-fighters. At first glance they are considered as crucial as they solve all the issues with great energy, do not run away when work needs to be done and make it happen. From the management perspective, these people are blocking change as they flourish from the chaos and do not fix or prevent new issues coming up.
For all other people in the company, digital PLM should bring relief – see the Gartner quote below.
Digital business jobs imply spending less time in searching for information. Less work in a reactive mode as information in the right context in real-time will be available. End to end visibility of information combined with transparency will lead to higher performance and motivation. It requires changing behaviors, motivation must come from the inspiration of the management and the understanding that your company is becoming more flexible and more competitive than before. And for that reasons keeping you in business and providing you an interesting place to work.
Conclusion: Do not use PLM to improve efficiency only and ROI discussions. There is a strategic need to be ready and stay in business for the future. Modern PLM is an enabler, however, requires a vision, inspiring communication and a path for employees to be empowered.
I am curious about your opinion – will this happen to your company / industry?
As a genuine Dutchman, I was able to spend time last month in the Netherlands, and I attended two interesting events: BIMOpen2015, where I was invited to speak about what BIM could learn from PLM (see Dutch review here) and the second event: Where engineering meets supply chain organized by two startup companies located in Yes!Delft an incubator place working close to the technical university of Delft (Dutch announcement here)
Two different worlds and I realized later, they potential have the same future. So let’s see what happened.
BIMopen 2015 had the theme: From Design to Operations and the idea of the conference was to bring together construction companies (the builders) and the facility managers (the operators) and discuss the business value they see from BIM.
First I have to mention that BIM is a confusing TLA like PLM. So many interpretations of what BIM means. For me, when I talk about BIM I mean Building Information Management. In a narrower meaning, BIM is often considered as a Building Information Model – a model that contains all multidisciplinary information. The last definition does not deal with typical lifecycle operations, like change management, planning, and execution.
The BIMopen conference started with Ellen Joyce Dijkema from BDO consultants who addressed the cost of failure and the concepts of lean. Thinking. The high cost of failure is known and accepted in the construction industry, where at the end of the year profitability can be 1 % of turnover (with a margin of +/- 3 % – so being profitable is hard).
Lean thinking requires a cultural change, which according to Ellen Joyce is an enormous challenge, where according to a study done by Prof Dr. A. Cozijnsen there is only 19 % of chance this will be successful, compared to 40 % chance of success for new technology and 30 % of chance for new work processes.
It is clear changing culture is difficult and in the construction industry it might be even harder. I had the feeling a large part of the audience did not grasp the opportunity or could find a way to apply it to their own world.
My presentation about what BIM could learn from PLM was similar. Construction companies have to spend more time on upfront thinking instead of fixing it later (costly). In addition thinking about the whole lifecycle of a construction, also in operations can bring substantial revenue for the owner or operator of a construction. Where traditional manufacturing companies take the entire lifecycle into account, this is still not understood in the construction industry.
This point was illustrated by the fact that there was only one person in the audience with the primary interest to learn what BIM could contribute to his job as facility manager and half-way the conference he still was not convinced BIM had any value for him.
A significant challenge for the construction industry is that there is no end-to-end ownership of data, therefore having a single company responsible for all the relevant and needed data does not exist. Ownership of data can result in legal responsibility at the end (if you know what to ask for) and in a risk shifting business like the construction industry companies try to avoid responsibility for anything that is not directly related to the primary activities.
Some larger companies during the conference like Ballast Nedam and HFB talked about the need to have a centralized database to collect all the data related to a construction (project). They were building these systems themselves, probably because they were not aware of PLM systems or did not see through the first complexity of a PLM system, therefore deciding a standard system will not be enough.
I believe this is short-term thinking as with a custom system you can get quick results and user acceptance (it works the way the user is asking for) however custom systems have always been a blockage for the future after 10-15 years as they are developed with a mindset from that time.
If you want to know, learn more about my thoughts have a look at 2014 the year the construction industry did not discover PLM. I will write a new post at the end of the year with some positive trends. Construction companies start to realize the benefits of a centralized data-driven environment instead of shifting documents and risks.
The cloud might be an option they are looking for. Which brings me to the second event.
Engineering meets Supply Chain
This was more an interactive workshop / conference where two startups KE-Works and TradeCloud illustrated the individual value of their solution and how it could work in an integrated way. I had been in touch with KE-Works before because they are an example of the future trend, platform-thinking. Instead of having one (or two) large enterprise system(s), the future is about connecting data-centric services, where most of them can run in the cloud for scalability and performance.
KE-Works provides a real-time workflow for engineering teams based on knowledge rules. Their solution runs in the cloud but connects to systems used by their customers. One of their clients Fokker Elmo explained how they want to speed up their delivery process by investing in a knowledge library using KE-works knowledge rules (an approach the construction industry could apply too)
In general if you look at what KE-works does, it is complementary to what PLM-systems or platforms do. They add the rules for the flow of data, where PLM-systems are more static and depend on predefined processes.
TradeCloud provides a real-time platform for the supply chain connecting purchasing and vendors through a data-driven approach instead of exchanging files and emails. TradeCloud again is another example of a collection of dedicated services, targeting, in this case, the bottom of the market. TradeCloud connects to the purchaser’s ERP and can also connect to the vendor’s system through web services.
The CADAC group, a large Dutch Autodesk solution provided also showed their web-services based solution connecting Autodesk Vault with TradeCloud to make sure the right drawings are available. The name of their solution, the “Cadac Organice Vault TradeCloud Adapter” is more complicated than the solution itself.
What I saw that afternoon was three solutions providers connected using the cloud and web services to support a part of a company’s business flow. I could imagine that adding services from other companies like OnShape (CAD in the cloud), Kimonex (BOM Management for product design in the cloud) and probably 20 more candidates can already build and deliver a simplified business flow in an organization without having a single, large enterprise system in place that connects all.
I believe this is the future and potential a breakthrough for the construction industry. As the connections between the stakeholders can vary per project, having a configurable combination of business services supported by a cloud infrastructure enables an efficient flow of data.
As a PLM expert, you might think all these startups with their solutions are not good enough for the real world of PLM. And currently they are not – I agree. However disruption always comes unnoticed. I wrote about it in 2012 (The Innovators Dilemma and PLM)
Innovation happens when you meet people, observe and associate in areas outside your day-to-day business. For me, these two events connected some of the dots for the future. What do you think? Will a business process based on connected services become the future?
Sometimes we have to study careful to see patterns have a look here what is possible according to some scientists (click on the picture for the article)