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Last year, I read Clayton Christensen’s book “The Innovator’s dilemma – When New Technologies Cause Great Firms to Fail “. I was intrigued how his theory also applies to PLM and wrote about it in a blog posts last year.

hbrRecently, I attended an HBR Webinar “Innovating over the Horizon: How to Survive Disruption and Thrive , which raises serious implications for PLM. As presented by Clayton Christensen and Max Wessel, both professors in the Harvard Business School, I foresaw numerous consequences demanding attention.

I’d like to highlight some observations for you:

  • Disruptive innovation will hit any domain – so also the PLM domain
  • You are less impacted if your products/services are targeting a job to be done
  • ERP has a well defined job – so not much discussion there
  • PLM does not have a clear job – so vulnerable for disruption
  • Will PLM disappear?

Disruption explained

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The above diagram explains it all. Often products come into the market with a performance below customer expectations. The product will improve in time, and at a certain moment it will reach that expectation level.  Through sustaining innovation, the company keeps improving their product(s) to attract more customers, and start delivering more than a single customer is asking for.

slideplmThis is for sure the case in PLM. All the PLM vendors are now able to deliver a lot of functionality around global collaboration, covering the whole product lifecycle. Companies that implement PLM, just implement a fraction of these capabilities and still have additional demands. Still the known PLM vendors nearly always win when a company is searching for a new PLM solution.

Disruption comes from other technologies and products. In the beginning, they are not even considered by companies in that product space as a possible solution. As these products improve in time at a certain moment, they reach that level of functionality and performance, a potential customer can use these products to address their demands.

imageAt this stage, the disrupters will nearly always win the battle. The reason is that they are more close to what the customer wants than the incumbents. Their product performance and price point are most likely to be more attractive than the incumbents´ portfolio.

Translating this to PLM it would mean: “Do not look for PLM systems as they already provide too much functionality, way above the line of customer desire”

As a PLM consultant, I need to provide some second thoughts to keep my job. There is much more behind Prof. Christensen’s theory, and I recommend before agreeing with what I write, read his books ! And although there is a horizontal time axis where the disruptive technology comes in, it does not indicate it will be this year or next year.

If you are aware that disruption can kill your business, how likely is it that it will happen in your business and when?

Professor Christensen makes two key points:

  1. Disruption will always happen, but this does not mean it is going to be fast and totally overtaking the old products. It might be a slower process as expected and incomplete. Here, I was thinking about disruptive cloud technology, which came in fast on the consumer level, but will it reach the business level too, in the same manner that it overrules the classical PLM platforms ? I am not sure about that (yet)
  2. If your company’s value is on delivering products, instead of delivering means to get the job done for your customer, you are extremely vulnerable for disruption.

As companies are looking to get their job done in the most efficient manner, they will switch at any time to new solutions that provide a better way to get the job done, often with a better performance and at a lower price point.

ERP has a well defined job

I realized that this is one of the big differences between PLM and ERP. Why is there such a discussion around the need for PLM and I do not catch the same messages from the ERP domain ?  Maybe because I am a PLM consultant?

ERP has a clear mission: “To get the job done – deliver a product as efficient and fast as possible to the customer”. ERP is an execution system.  Although ERP vendors as well are delivering more than their individual customers ask for, the job is more clear defined.

PLM does not have a clear job

For PLM, it becomes fuzzy. What is the job that PLM does ? Here, we get a lot of different answers. Have a look at these definitions from some vendors.

Quote from the Siemens website

CIMdata calls PLM “the most effective investment you can make to achieve product leadership.” AMR Research says “Companies committed to time to value in product innovation certainly cannot succeed without a sound PLM foundation.”

Quote from PTC’s website

Product Lifecycle Management, or PLM, is a driver of successful product development, and a strategic contributor to business value across the enterprise. PLM helps product manufacturers manage complex, cross-functional processes, coordinating the efforts of distributed teams to consistently and efficiently create the best possible products

Quote from the Autodesk website

For companies of any size, Autodesk PLM 360 helps to streamline your business processes for more efficient product development, improved profitability, and higher product quality.

I also reviewed the websites from the other PLM vendors, and I can confirm: None of them is talking in a clear way which job needs to be done. All PLM solutions are around technology and products.

Companies want to get the job done

And here I come back to the webinar’s conclusion. If you want to secure your future as a company, you need to focus on the job to be done. And even better, focus on the experience to do the job and the best integration of these experiences in a total framework. See the slide below:

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My interpretation is that PLM has not even reached level 1.  Still many companies are struggling to understand the fundamental need(s) for PLM.

Interesting to see is that Dassault Systemes in their messaging and approach is already targeting level 2 – the experiences. If potential customers will embrace the experience approach without passing level 1, is something to observe.

Will PLM disappear ?

2050In my December 2008 blog post PLM in 2050 and recently in The Innovator’s dilemma and PLM,  I wrote that I believe PLM as it is currently defined, will disappear. Perhaps made redundant by a collection of disruptive technologies. Main reason is that PLM does not do a single, clear job.

One of these disruptive candidates to my opinion is Kenesto. They deliver “social business enterprise software to empower teams” as stated on their website. Kenesto is not considered as a competitor of classic PLM, starting on a different trajectory. For sure there will be more disruptive candidates aiming at different pieces of the PLM scope.

What do you think: 

  • Does PLM have too many jobs ?
  • Will PLM survive disruption ?

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clip_image002[4]Last week I attended the Product Innovation Conference in Berlin, an event that revitalized the discussions and information exchange around PLM.

I have been blogging about this event since it started in London 2011, the year after in Munich and Atlanta and now in Berlin. The event has grown in size, both for the amount of speakers and participants. There were many parallel sessions per interest stream, and for that reason I cannot give a full overview of the event as I did in my previous blog posts.

This time I will describe only my personal highlights, being aware there was much more to learn. A nice service to the more than 350 attendees is that they will be able to see all sessions online soon as they were all recorded.

Some of my personal highlights

The first keynote speaker was Steve Wozniak and for me one of the guys that changed my professional life. The Apple IIe was my first personal affordable computer to explore a new world of automation, the peeks and pokes, the analog/digital converter, programming and application software, like Visicalc. I somehow feel the same excitement with 3D printing. How is this going to affect our future life?

clip_image004[4]The Apple IIe was an innovation and Steve Wozniak led us through the successes and failures he experienced within Apple. Steve´s presentation was a clear motivation for all of us to think different, to have your goals in mind. Do not focus on the common sense or be part of the organization. There will be failure but also success if you are clear about your goals. Engineers should follow their creativity and be original, instead of copying books. Creativity and Innovation are like humor (some have it and some will never have it). It was a good inspiring start for the two days, and these themes came back several times.

During the rest of the day, I learned about The Human Factor and Managing Cultural Change by Dagmar Heinrich, which can lead to damaged bike or car.

Stan Przybylinski provided interesting statistics and insights about investments in discrete manufacturing related software around the world (US, Japan, Germany, India, China) demonstrating there is still an enormous gap between the traditional economies in the west and the emerging countries.

clip_image006[4]An excellent presentation was given by Caterpillar – Beth Hinchee representing the PLM / business side, John Berg representing the IT/Infrastructure side, combined with Accenture Rüdiger Stern – Innovation and Product Development Lead.

Their presentation was a blueprint how large PLM implementations should be executed, and it was a confirmation of what I am preaching.

steppedAs a PLM implementation is always about changing the way a company works, you need to make sure you have a strong involvement from both business and IT. Without a third party that brings in the best practices, the coaching and moderation between the two disciplines it often fails due to different viewpoints and a different focus. The role of the consultancy partner is to be the glue, the motivator and source of bringing outside experience from other implementations into the discussion. As normally a company might have experience with one or two PLM implementations, a consultancy firm should be able to bring in much more experiences from all their customer engagements.

In the afternoon Michael Grieves, author of Virtually Perfect: Driving Innovative and Lean Products through Product Lifecycle Management talked about the value of innovating starting from virtual products, and how they contribute to faster mature, better validated products, benefitting from a lower overall investment for innovation. He also stated it is more important to focus on practices instead of standardized processes inside PLM. clip_image008[4]

This matched perfectly with my presentation; Innovation loves PLM, explaining the huge value that PLM brings for Innovation in relation to the company’s culture and approach towards open innovation.

The two closing keynotes sessions from the afternoon were interesting. Peter Bilello from CIMdata talked about The Future of PLM: Enabling Radical Collaboration. For me the first time I saw such a change from CIMdata, now looking forward to the upcoming generation instead of presenting more common, consolidated PLM wisdom. My blog buddy Oleg wrote about it in more detail in his recent blog post: Product Development as we have known it is dying.

The last session of the day was from Marc Chapman: Designing the World Land Speed Record. It was inspiring for all of us, demonstrating the beauty and challenges of engineering when trying to break the world land speed record. See more at bloodhoundssc.com. Not so much PLM related, but full of challenges and a need for innovative approaches.

And after a network session with drinks and a short night

clip_image010[4]The next day started with an inspiring speech, please pay extra attention to this topic. Massoud Hassani, born in Afghanistan, is striving for awareness of the global land-mine problem through his innovative decommissioning device Mine Kafon. Traditional mine discovery and detonation programs are expensive. Affected countries and the UN are not spending significant money to solve the problem as an exploding mine is no longer world news (unless it is a famous person).

Still people get injured or killed by these mines – forgotten victims. Have a look at Massoud´s project on kickstarter.com and get inspired where you can contribute. Massoud’s initial design was based on his childhood experiences, knowledge gained at the design academy and now looking for engineering support to optimize his extreme low cost, but innovative solution.

Some other sessions from the second day: The lessons learned from previous failed PLM projects by Andritz: When Things Go Wrong: How to Put Them Right. They decided not to follow the common approach that many companies try to make: one size (type of PLM) fits all, learning from their failed PLM project now rolling out several PDM systems.

clip_image012[4] This presentation somehow has a connection to what Marc Halpern from Gartner mentioned. One of my favorite opening statements he made about PLM upgrades was:

“Upgrading your PLM system, is like rewiring the house with the electricity on”.

As Gartner’s focus is more on the IT-side of the business, he explained that current PLM implementations cannot be maintained in the long term future as they become too expensive and complex to maintain. He mentioned the risk when selecting one provider for PLM, you would suffer probably from being locked-in by the vendor. This made me think what about if you would implement SAP PLM ? The SAP message is clear: one single platform for PLM and Execution!

The counter approach from this vendor lock-in is the approach to work towards open standards. Here, I attended the session EUROSTEP: Achieving business benefits by using PLM standards such as STEP and PLCS.

Currently I am involved in several projects where standardization of data for the long term and efficient data exchange between various systems is important. It is somehow a battle against all odds. Standardization is making small steps forward, but it requires companies to have a long-term vision and most of the time they chose for the short-term proprietary data formats from their software vendors. As time and less complexity is money – the problem will come later for the next generation of managers and software.
Of course this always has to be considered in the context of the dynamics of your industry – the longevity of data plays an important role.

clip_image014[4]Second last keynote speaker of the day was Prof. Martin Eigner, a long term visionary and icon when it comes to PLM. Prof. Eigner provoked the audience again that almost no company actually has implemented PLM.

Most companies are stuck with a form of PDM combined with complex customizations. They do not keep it simple – PLM is for Product Development and definition and ERP is only for execution. Companies tend to invest in their expensive ERP systems which have less impact on the future business as PLM and Innovation have.

Companies should invest much more in the design process as here it is where almost 70 % of the costs are defined and innovative products are born. To innovate better we should add Model Based engineering which includes the steps of systems engineering into the design process. Mr. Eigner was talking about a new term for PLM: sysLM. His speech was consistent and logical for all of us. But why do companies not adopt this vision?

I will come back to that in my conclusion.

clip_image016[4]The last keynote speech was from Doug McCuistion, program manager from the NASA Curiosity Mars Exploration mission. Doug guided us through all the challenges the mission went through. He shared with us the reasons for the mission, the complexity and challenges of the landing procedure and the upcoming discoveries expected. It was the last session of the congress and I feel sorry for those who had to leave earlier for their travels as it was the most inspiring session of the congress. Going for the almost impossible and such a contrast to the “boring” world of PLM.

And here comes the link between NASA´s Curiosity project and Prof Eigner´s PLM presentation.

The Curiosity project is a challenge, not on this planet, it is on the edge of what is possible and has no competition (or it must be budget cuts by the government). For most other companies, the challenge lies on this earth, and they want to stay ahead of the competition. Here it is about being able to fund your innovation and assure future funding by introducing innovative products to the market that generate enough margin to invest in the future. PLM presentations seem to be “boring” as the business value is not clear for the management (the do not attend PLM conferences), they get more enthusiastic from short-term financial figures.

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One of the (younger) attendees told me that it was impressive to see so many PLM icons at this conference, but where is the new generation of PLM to-be icons ?

Fixing this disconnect is probably related to the magic we need to find to bring Innovation and PLM to the next generations.

Who starts ???

My conclusions:

  • The conference has become a “must” for companies looking for experiences related to PLM. Why and how PLM contributes to your business
  • Companies are looking for their second PLM implementation trail. Learning from their previous mistakes they learned it is not an IT-only project, business should be leading, cloud becomes an option.
  • The awareness of a new upcoming generation of workers. Everyone is aware of it, still at PLM conferences we are waiting for the first thought leaders of this generation to speak.
  • Excitement comes from innovations that seem to be unachievable. Some go extremely fast, some detonate mines and some go to Mars, the rest has to be achieved in a competitive and global market.
    Innovation loves PLM.

observation

First of all happy new year to all of you. As there is no “End of the World”  risk anymore in the near future , we can start looking forward and set our goals for the next 5 years or is it a 7-years plan Oleg ?.

Christmas, the moment the light returns on the Northern hemisphere, plus the food , cycling and the preparations for the next Product Innovation conference in Berlin were the drivers for this blog post.

The title might give you the impression that it is an IQ-quiz: “Which word does not fit in this sequence”?  Well, It’s not, they are all related.  Let’s put them in a chronological order.

Frogs

frogFrogs existed first, and were exploring the world before us humans.  Paleontologists assume they had no notion of what was global.  In their world it was probably a few ponds in size.  For certain, they did not have anything to do with innovation.  At that time, survival depended on the slow process of evolution.

Millions of years later, the first Homos appeared on the earth surface;  Homo Sapiens, Homo Erectus, Homo Ludens and perhaps more.  They all had something in common: Instead of waiting for the evolution which was ongoing, they started in parallel to innovate.  First by walking upright, using a more advanced language to communicate and learning to have tools to achieve more.  Their world was still within a reasonable walking distance and probably they started to eat frogs.

Human evolution

This evolution continued for thousands of years.  Human beings started to spread around the world and in waves they brought innovation. They built stone temples, learned to sail, discovered gunpowder, electricity, the universe, the internet and more.  It is interesting to see that every time a major innovation was born, these innovators enriched their region in wealth and culture, using their innovation as a competitive advantage to dominate their neighbors.

In many cases 1000 years later, this innovation became a commodity and other civilizations stood up with their innovation and dominated their regional environment which became bigger and bigger in size.  Where possible they made use of the cheap resources (modern word for what was initially called slaves) to enrich their civilization.  For certain, the most civilized were eating frogs!

Market expansion – innovation pace

During the last century, the pace of innovation went faster and faster.  New ways of communication and transportation became available and affordable, which made it impossible for innovations to stay within a specific civilization. Innovation became available for everyone around the world and the domination shifted towards companies and markets.

SNAGHTML4a560dcCompanies with a strategy to innovate, discovered that there were new ways needed to respond faster than before to market opportunities.  This was the driving force behind PDM, as an first attempt to get a better grip and understanding of their fast evolving, more complex products, that require more and more global collaboration between design teams.

PDM is now accepted as critical by all manufacturing companies around the world, to guarantee quality and efficiency.  Customer focus became the next demand from the market and interestingly enough, the demand for frogs decreased.

However this wave of innovation was followed by a wave with even greater impact on the global society.  New technologies, the availability of internet and social media, suddenly changed society. Combined with the financial crisis in the US and Europe, it became clear that the way we worked in the past is no longer the way to survive in the future.

Faster and global

plm_txtPLM was introduced early this century as a new strategy to become more customer-centric, being able to respond faster and better to market demands by bringing innovation to the market before the competition. PLM requires a different approach by companies to work internally and interact with the (global) outside world.  The need to implement the PLM vision requires change and as it cannot be considered as an evolutionary process over several generations, it will be a business change. However, in general, human beings do not like rapid change.  Here the frogs come back into the picture, now as the boiling frog metaphor.

It is based on 19th century anecdote describing a frog slowly being boiled alive.  The premise is that if a frog is placed in boiling water, it will jump out, but if it is placed in cold water that is slowly heated, it will not perceive the danger and will be cooked to death.  The story is often used as a metaphor for the inability of people to react to significant changes that occur gradually.  This metaphor is very applicable for the classical approach companies bring their products to the market, where innovation is more a lucky coincidence than a result of a strategy.

Here it all comes together again.

marketleaderInnovation is the only way for companies to avoid becoming a commodity – not able to differentiate for your potential customers.  Now the title of this post should be clear: “Do not be a boiling frog, use PLM to support your innovation and become available for the global market”

As the new year has started and it is still time to extend your good intentions, add Innovation, PLM and Change to your survival list.

I look forward to your comments and hope to discuss with you the relation between PLM and Innovation during the upcoming Product Innovation event in Berlin, where I present a session with the title: “PLM loves Innovation ?”

(when you know me, you know the answer, but there are always surprises)

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Confused? You won’t be after this episode of Soap. “

Who does not remember this tagline from the first official Soap series starting in 1977 and released in the Netherlands in 1979?

Every week the Campbells and the Tates entertained us with all the ingredients of a real soap: murder, infidelity, aliens’ abduction, criminality, homosexuality and more.

The episode always ended with a set of questions, leaving you for a week in suspense , hoping the next episode would give you the answers.

For those who do not remember the series or those who never saw it because they were too young, this was the mother of all Soaps.

What has it to do with PLM?

Soap has to do with strange people that do weird things (I do not want to be more specific). Recently I noticed that this is happening even in the PLM blogger’s world. Two of my favorite blogs demonstrated something of this weird behavior.

First Steve Ammann in his Zero Wait-State blog post: A PLM junkie at sea point-solutions versus comprehensive mentioned sailing from Ventura CA to Cabo San Lucas, Mexico on a 35 foot sailboat and started thinking about PLM during his night shift. My favorite quote:

Besides dealing with a couple of visits from Mexican coast guard patrol boats hunting for suspected drug runners, I had time alone to think about my work in the PLM industry and specifically how people make decisions about what type of software system or systems they choose for managing product development information. Yes only a PLM “junkie” would think about PLM on a sailing trip and maybe this is why the Mexican coast guard was suspicious.

Second Oleg in his doomsday blog post: The End of PLM Communism, was thinking about PLM all the weekend. My favorite quote:

I’ve been thinking about PLM implementations over the weekend and some perspective on PLM concepts. In addition to that, I had some healthy debates over the weekend with my friends online about ideas of centralization and decentralization. All together made me think about potential roots and future paths in PLM projects.

imageIt demonstrates the best thinking is done during out-of-office time and on casual locations. Knowing this from my long cycling tours in the weekend, I know it is true.
I must confess that I have PLM thoughts during cycling.

Perhaps the best thinking happens outside an office?

I leave the follow up on this observation to my favorite Dutch psychologist Diederik Stapel, who apparently is out of office too.

Now back to serious PLM

Both posts touch the topic of a single comprehensive solution versus best-of-breed solutions. Steve is very clear in his post. He believes that in the long term a single comprehensive solution serves companies better, although user performance (usability) is still an issue to consider. He provides guidance in making the decision for either a point solution or an integrated solution.

And I am aligned with what Steve is proposing.

Oleg is coming from a different background and in his current position he believes more in a distributed or network approach. He looks at PLM vendors/implementations and their centralized approach through the eyes of someone who knows the former Soviet Union way of thinking: “Centralize and control”.

imageThe association with communism which was probably not the best choice when you read the comments. This association makes you think as the former Soviet Union does not exist anymore, what about former PLM implementations and the future? According to Oleg PLM implementations should be more focused on distributed systems (on the cloud ?), working and interacting together connecting data and processes.

And I am aligned with what Oleg is proposing.

Confused? You want be after reading my recent experience.

I have been involved in the discussion around the best possible solution for an EPC contractor (Engineering Procurement Construction) in the Oil & Gas industry. The characteristic of their business is different from standard manufacturing companies. EPC contractors provide services for an owner/operator of a plant and they are selected because of their knowledge, their price, their price, their price, quality and time to deliver.

This means an EPC contractor is focusing on execution, making sure they have the best tools for each discipline and this is the way they are organized and used to work. The downside of this approach is everyone is working on its own island and there is no knowledge capitalization or sharing of information. The result each solution is unique, which brings a higher risk for errors and fixes required during construction. And the knowledge is in the head of experience people ….. and they retire at a certain moment.

So this EPC contractor wanted to build an integrated system, where all disciplines are connected and sharing information where relevant. In the Oil & Gas industry, ISO15926 is the standard. This standard is relative mature to serve as the neutral exchange standard of information between disciplines. The ideal world for best in class tools communicating with each other, or not ?

imageImagine there are 6 discipline tools, an engineering environment optimized for plant engineering, a project management environment, an execution environment connecting suppliers and materials, a delivery environment assuring the content of a project is delivered in the right stages and finally a knowledge environment, capitalizing lessons learned, standards and best practices.

This results in 6 tools and 12 interfaces to a common service bus connecting these tools. 12 interfaces as information needs to be send and received from the service bus per application. Each tools will have redundant data for its own execution.

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What happens if a PLM provider could offer three of these tools on a common platform? This would result into 4 tools to install and only 8 interfaces. The functionality in the common PLM system does not require data redundancy but shares common information and therefore will provide better performance in a cross-discipline scenario.

In the ultimate world all tools will be on one platform, providing the best performance and support for this EPC contractor. However this is utopia. It is almost impossible to have a 100 % optimized system for a group of independent companies working together. Suppliers will not give up their environment and own IP to embed it in a customer´s ideal environment. So there is always a compromise to find between a best integrated platform (optimal performance – reduced cost of interfaces and cost of ownership) and the best connected environment (tools connection through open standards).

And this is why both Steve and Oleg have a viewpoint that makes sense. Depending on the performance of the tools and the interaction with the supplier network the PLM platform can provide the majority of functionality. If you are a market dominating OEM you might even reach 100 % coverage for your own purpose, although the modern society is more about connecting information where possible.

MY CONCLUSION after reading both posts:

  • Oleg tries to provoke, and like a soap, you might end up confused after each episode.
  • Steve in his post gives a common sense guidance, useful if you spend time on digesting it, not a soap.

Now I hope you are not longer confused and wish you all a successful and meaningful 2013. The PLM soap will continue in alphabetical order:

  • Will Aras survive 21-12-2012 and support the Next generation ?
  • Will Autodesk get of the cloud or have a coming out ?
  • Will Dassault get more Experienced ?
  • Will Oracle PLM customers understand it is not a database ?
  • Will PTC get out of the CAD jail  and receive $ 200 ?
  • Will SAP PLM be really 3D  and user friendly ?
  • Will Siemens PLM become a DIN or ISO standard ?

See the next episodes of my PLM blog in 2013

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A week later after the PLM Innovation conference in the US, I have time to write down my impressions. It was the first time this event was organized in the US, after having successful events the past years in Europe. For me it was a pleasure to meet some of my PLM friends in reality as most of my activities are in Europe.

With an audience of approximate 300 people, there were a lot of interesting sessions. Some of them in parallel, but as all session are recorded I will soon catch up with the sessions I have been missing.

My overall impression of the event: Loud en Positive, which is perhaps a typical difference between the US and Old Europe.

Here some impressions from sessions that caught my attention

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Kevin Fowler, Chief Architect Commercial Airplanes Processes and Tools from The Boeing Company presented the PLM journey BCA went through. Their evolution path is very similar to the way Siemens and Dassault Systemes went through (driven by Boeing’s challenges).

Impressive was the amount of parts that need to be managed aircraft (up to a billion) and with that all its related information. Interesting to see that the amount of parts for the 787 have strongly decreased.

After PLM Generation 1 based on Teamcenter and Generation 2 based on Dassault Kevin demonstrated that functionality and cost of ownership increased due to more complexity, it was evident that usability decreased.

And this will be a serious point of attention for Generation 3, the PLM system BCA will be selecting for 2015 and beyond. Usability has to increase.

And as we were among all the PLM vendors and customers, during the breaks there was a discussion, which PLM vendor would be the preferred next partner for PLM.  I had a discussion related to PLM vision and visibility with one of the SAP partners (DSC software Inc.). He is convinced that SAP provides one of the best PLM platforms. I am not convinced as I see SAP still as a company that wants to do everything, starting from ERP. And as long as their management and websites do not reflect a PLM spirit I am not convinced. In 2015 I might be wrong with my impression that PLM, Usability and SAP are not connected.

Note: browse to this SAP PLM rapid-deployment solution page and view the Step by Step guide. Now the heading becomes SAP CRM rapid-deployment solution. A missing link, marketing or do they know the difference between PLM and CRM ?

imageNext Nathan Hartman from Purdue University described his view on future PLM which will be model-based and he presented how PLM tools could work together describing a generic architecture and interfaces. This is somehow the way the big PLM Vendors are describing their platform too, only in their situation more in a proprietary environment.

  • Nathan gave an interesting anecdote related to data sharing. He mentioned as example a 3D model that was built by one student and he asked another student to make modifications on it. This was already a challenge and even working with the same software lead to knowledge issues, trying to understand the way the model was built. Demonstrating  PLM data sharing is not only about having the right format and application, but also the underlying knowledge needs to be exposed

imageMonica Schnitger, as business analyst presented her thoughts on PLM justification. Where in Munich I presented Making the case for PLM session,  Monica focused on a set of basic questions that you need to ask (as a company) and how you can justify a PLM investment. It is not for the big kids anymore and you can find her presentation here (with another PLM definition).

I liked the approach of keeping things simple, as sometimes people make PLM too complex. (Also as it serves their own businesses). Monica presented that a company should define its own reasons for why and how PLM. Here I have a slight different approach. Often mid-market companies do not want PLM, they have pains they want to get rid of or problems that they want to solve. Often starting from the pain and with guidance from a consultant companies will understand which PLM practices they could use and how it fits in a bigger picture instead of using plasters to fix the pain.

imageBeth Lange, Chief Scientific Officer from Mary Kay presented how her organization, operating from the US (Texas), managed a portfolio of skin care products sold around the world by an independent local sales force all around the world. In order to do this successfully and meet all the local regulatory requirements, they implemented a PLM system where a central repository of global information is managed.

The challenge for Mary Kay is that from origin a company with a focus on skin care products and an indirect sales force, where sometimes the sales person has no IT skills, this project was also a big cultural change. Beth explained that indeed the support from Kalypso was crucial to manage the change. Something which I believe is always crucial in a global PLM project where the ideal implementation is so different from current, mainly isolated practices.

As regulatory compliance is an important topic for skin care products, Beth explained that due to the compliancy rules for China, where they have to expose their whole IP, the only way to protect their IP was putting a patent on everything, even on changes.

Would NPI mean New Patent Introduction in the CPG market ?

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Ron Watson, Director, PLM COE and IT Architecture
from Xylem Inc. presented their global PLM approach. As the company is is relative young (2011) but is a collection of businesses all around the world, they have the challenge to operate as a single company and sharing the synergy.

Ron introduced PDLM (Product Data Lifecycle Management) and he explained there was first a focus getting all data under control and make it the single source for all product data in a digital format, preferably with a minimum of translation needed.

Here you see xylem has chosen for an integrated platform and not the best of breed applications. After having the product data under control the focus can be on standardizing processed overall the company. Something which other companies that have followed this approach, confirm it brings huge benefits.

As it was a PTC case study, Graham Birch, senior director of Product Management from PTC did the closing part. Unfortunate by demoing some pieces of the software. A pity as I believe people do not get impressed by seeing some data on the screen they recognize. Only when there is a new paradigm to demonstrate related to usability I would be interested.

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And as-if they have read my mind, Daniel Armour from Joy Global demonstrated the value and attractiveness of 3D Visualization tools in their organization. Joy Global is manufacturer of some of the biggest mining equipment and he demonstrated how 3D Visualization can be used in the sales and marketing process, but also during training and analysis of work scenarios.

His demonstration showed again that 3D as a communication layer is attractive and appeals to the user (serious gaming in some cases).

As it was a SAP case, I was surprised to hear the words from Brian Soaper, explaining the power of 3D for SAP users and how SAP users will benefit from better understanding, higher usability etc. Iw as as-if a 3D-CAD/PLM was talking, was this a dream ?

I woke up out of this dream when someone from the audience asked to Daniel how they would keep the visualizations actual, is there a kind of version management ?  Daniel mentioned currently not but you could build a database to perform check-in/checkout of data. Apparently all the 3D we have seen is not connected to this single database SAP always promotes.

image

Peter Bilello, CIMdata’s president had a closing session with the title: Evaluate the tangible benefits from PLM can prove complex, which indeed is true.  Peter’s presentation was partly similar to the presentation he gave early this year in Munich. And this is what I appreciate about CIMdata. Some people in the audience mentioned that many times it is the same story and many of the issues Peter was presenting are somehow known facts. And this is what I like about CIMdata, PLM is not changing per conference or new IT-hype. If you want to understand PLM, you need to keep to the purpose and meaning of PLM. And these known facts apparently are not so known, a majority of PLM projects are executed or lead by people that decided to invent the wheel,as inventing the wheel seems cheaper than renting a wheel, and this lead again to issues later that every experienced consultant could foresee.

imageThe evening with a champagne reception on the paddle boat making a tour around the lake and a dinner at the lake side concluded this first day.
The combination of presentations, scheduled network meetings and enough network time made it a successful first day

observationNext day I started with a BOM management Think Thank were in the target was to come to some common practices and understanding of BOM management.  As the amount of participants was large and the time was short we only had a chance to touch the surface of the cases brought in.

What was clear from this session to me is that most challenges reported were due to the fact that the tools were already in place and only afterwards the PLM team (mostly engineering people) had to struggle to make it into a consistent process. They do not get a real help from PLM vendors or implementers, as their focus is on selling more tools and services.

What is missing for these organizations is a PLM for Dummies methodology guide, which is business centric instead of technology centric. For sure there are people who have published PLM books, but either they are not found of relevant. And as nothing comes for free, these companies try to invent the wheel again. PLM is serious business.

imageThe first keynote speech from the second day was from Dantar Oosterwal, Partner and President of the Milwaukee Consulting Group, who inspired us with Lean and PLM: Operation Excellence and this all related to his experiences with Harley Davidson.

It was interesting how described the process of focusing on the throughput to get market results. There are various parameters how you can influence market share, by a price strategy, by increased marketing , but the most impact on Harley Davidson sales result was the effect of innovation. More model variants being the choice for more potential customers. By measuring and analyzing the throughput of the organization an optimal tuning could be found.

Dantar also shared an interesting anecdote about an engineer that had to study the impact of ethanol as fuel for a certain engine. And after a certain time the engineer came back with the answer: yes we can. He answered the question but left no knowledge behind. Where a similar question was asked about performance to a supplier and he came back with an answer and graphs explaining where the answered was based upon. This answer created knowledge as it could be reused for similar questions. It is a good example how companies should focus on collecting knowledge in their PLM environment instead of answers on a question.

imageThe second keynote speaker was from the world biggest brand, Christopher Boudard, PLM Director from the Coca Cola Company. With its multiple brands and global operations it is a challenge to work towards a single PLM platform. He explained that at this stage they are still busy loading data into the system, where a lot of time is spent on data cleansing as the system has only value when the data is clean and accurate.

And this requires a lot of motivation for the PLM team to keep the executive management involved and sponsoring a project that takes five years to consolidate data and only then through the right processes make sure the data remains correct.

Christopher demonstrated in a passionate manner that leadership is crucial for such a project to be successful and implemented. For me as an European it was interesting to see that the world biggest brand PLM Director is a French citizen inspiring the management of such an American company.

imageMonica Schnitger conducted an interesting session about the state-of-the-state of multi-platform PLM.
If you cannot understand this tittle, it was a debate between the PLM vendors ( Aras, Autodesk, Dassault Systemes, PTC, SAP and Siemens) about openness, interoperability, cloud and open source.

After the first question from Monica about the openness of each of the vendor’s systems, it was clear there are no problems to expect in the future. All systems were extremely open according to the respondents and I lost my attention for the debate somehow as I had the feeling I was listening to an election debate. Monica did her best to make it an unbiased discussion, however I feel when some people want to make a specific point and use every question to jump on that it becomes an irritation.

imageChad Jackson, this time dressed up as the guy that is always killed in the first 5 minutes of a Star Trek episode, shared with us the early findings of the 2012 State of PLM. Tech4PD followers, and who is not a follower, understood he lost the bet of the second episode.

Chad let me know if this picture needs to be removed, as it can kill your future career.

The preliminary findings Chad was sharing with us that manufacturing and service where significant interested and consumers of PLM data, but do not consider it as their data, where they have to contribute too also. The fact that it is available makes them involved in using the data, still these departments do not show active participating in PLM. Somehow this confirms the observation that PLM is still considered as an engineering tool, not as an enterprise wide platform.

As the initial group of participants (n = 100) is small and not random selected from an overall population, the questions remains what the state of PLM is in 2012. I assume Chad will come back on that in a later time.

The last plenary sessions, David Karamian from Flextronics and Michael Grieves, a Virtual Perfect Future, had the ungrateful position being the last two speakers of this event. I have to review  David’s presentation again as it was not easy to digest and recall a week later what were his highlights. Michael’s presentation was easier to digest and I also believe with the new upcoming concepts and technology the virtual perfect future is there.

Looking back on a successful event, where I met many of my PLM peers from across the ocean, I will take the upcoming weeks to review the sessions I missed. Final good news for all PLM mind sharers, is the fact that CIMdata and MarketKey announced the coordination of their upcoming events next year – more content and more attendees guaranteed.

tacit_logoThe brain has become popular in the Netherlands in the past two years. Brain scientists have been publishing books sharing their interpretations on various topics of human behavior and the brain. Common theme of all: The brain is influencing your perceptions, thoughts and decisions without you even being aware of it.

Some even go that far by claiming certain patterns in the brain can be a proof if you have a certain disorder. It can be for better or for worse.

“It was not me that committed this crime; it was my brain and more…”

Anyway this post will be full of quotes as I am not the  brain expert, still giving the brain an important role (even in PLM)

“My brain? That´s my second favorite organ” – Woody Allen

It is good to be aware of the influence of the brain. I wrote about this several times in the past, when discussing PLM vendor / implementer selection or when even deciding for PLM. Many of my posts are related to the human side of justifying and implementing PLM.

As implementing PLM for me primary is a business change instead of a combination of IT-tools to implement, it might be clear that understanding the inhibitors for PLM change are important to me.

In the PLM communities, we still have a hard job to agree between each other what is the meaning of PLM and where it differs from ERP. See for example this post and in particular the comments on LinkedIn (if you are a member of this group): PLM is a business process, not a (software) tool

And why it is difficult for companies to implement PLM beside ERP (and not as an extension of ERP) – search for PLM and ERP and you find zillions of thoughts and answers (mine too).

Charles_RoxburghThe brain plays a major role in the Why PLM we have ERP battle (blame the brain). A week ago I read an older publication from Charles Roxburgh (published in May 2003 for McKinsey) called: Hidden flaws in strategy subtitle: Can insights from behavioral economics explain why good executives back bad strategies. You can read, hear and download the full article here if you are a registered user.

The article has been written long before the financial and global crises were on the agenda and Mr. Roxburgh describes 8 hidden flaws that influence our strategic decision making (and PLM is a strategy). I recommend all of you to read the full article, so the quotes I will be making below will be framed in the bigger picture as described by Mr. Roxburgh. Note all quotes below are from his publication.

Flaw 1: Overconfidence

We often make decisions with too much confidence and optimism as the brain makes us feel overconfident and over optimistic about our own capabilities.

Flaw 2: Mental accounting

Avoiding mental accounting traps should be easier if you adhere to a basic rule: that every pound (or dollar or euro) is worth exactly that, whatever the category. In this way, you will make sure that all investments are judged on consistent criteria and be wary of spending that has been reclassified. Be particularly skeptical of any investment labeled “strategic.”

Here I would relate to the difference in IT-spending and budget when you compare ERP and PLM. ERP spending is normal (or strategic) where PLM spending is not understood.

Flaw 3: The status quo bias

People would rather leave things as they are. One explanation for the status quo bias is aversion to loss—people are more concerned about the risk of loss than they are excited by the prospect of gain.

Another reason why adapting and implementing PLM in an organization is more difficult than for example just automating what we already do.

Flaw 4: Anchoring

Anchoring can be dangerous—particularly when it is a question of becoming anchored to the past

PLM has been anchored with being complex and expensive. Autodesk is trying to change the anchoring. Other PLM-like companies stop talking about PLM due to the anchoring and name what they do different: 3DExperience, Business Process Automation, …..

Flaw 5: The sunk-cost effect

A familiar problem with investments is called the sunk-cost effect, otherwise known as “throwing good money after bad.” When large projects overrun their schedules and budgets, the original economic case no longer holds, but companies still keep investing to complete them.

I have described several cases in the past anonymously; where companies kept on investing and customizing their ERP environment in order to achieve PLM goals. Although it never reached the level of acceptance and quality a PLM system could offer, stopping these projects was impossible.

Flaw 6: The herding instinct

This desire to conform to the behavior and opinions of others is a fundamental human trait and an accepted principle of psychology.

Warren Buffett put his finger on this flaw when he wrote, “Failing conventionally is the route to go; as a group, lemmings may have a rotten image, but no individual lemming has ever received bad press.”

A quote in a quote but so true. Innovative thinking, introducing PLM in a company requires a change. Who needs to be convinced? If you do not have consensus (which usually happens as PLM is vague) you battle against the other lemmings.

Flaw 7: Misestimating future hedonic states

Social scientists have shown that when people undergo major changes in circumstances, their lives typically are neither as bad nor as good as they had expected—another case of how bad we are at estimating. People adjust surprisingly quickly, and their level of pleasure (hedonic state) ends up, broadly, where it was before

A typical situation every PLM implementation faces: users complaining they cannot work as efficient anymore due to the new system and their work will be a mess if we continue like this. Implementers start to customize quickly and we are trapped. Let these people ‘suffer’ with the right guidance and motivation for some months (but this is sometimes not the business model the PLM implementer pushes as they need services as income)

Flaw 8: False consensus

People tend to overestimate the extent to which others share their views, beliefs, and experiences—the false-consensus effect. Research shows many causes, including these:

  • confirmation bias, the tendency to seek out opinions and facts that support our own beliefs and hypotheses
  • selective recall, the habit of remembering only facts and experiences that reinforce our assumptions
  • biased evaluation, the quick acceptance of evidence that supports our hypotheses, while contradictory evidence is subjected to rigorous evaluation and almost certain rejection; we often, for example, impute hostile motives to critics or question their competence
  • groupthink, the pressure to agree with others in team-based cultures

Although positioned as number 8 by Mr. Roxburgh, I would almost put it as the top when referring to PLM and PLM selection processes. So often a PLM decision has not been made in an objective manner and PLM selection paths are driven to come to the conclusion we already knew. (Or is this my confirmation bias too Smile)

Conclusion

As scientists describe, and as Mr. Roxburgh describes (read the full article !!!) our strategic thinking is influenced by the brain and you should be aware of that. PLM is a business strategy and when rethinking your PLM strategy tomorrow, be prepared to avoid these flaws mentioned in this post today.

observationThe past three weeks I had time to observe some PLM Vendors marketing messages (Autodesk as the major newbie). Some of these message lead to discussions in blogs or (LinkedIn) forums. Always a good moment to smile and think about reality.

In addition the sessions from PLM Innovation 2012 became available for the attendees (thanks MarketKey – good quality).  I had the chance to see the sessions I missed. On my wish list was “The future of PLM Business Models” moderated by Oleg as here according to Oleg some interesting viewpoints came up. This related to my post where I mentioned the various definitions of PLM.

All the above inspired me to write this post, which made me realize we keep on pushing misconceptions around PLM in our customer’s mind, with the main goal to differentiate.

I will address the following four misconceptions. The last one is probably not a surprise, therefore on the last position. Still sometimes taken for granted.

  1. PLM = PLM
  2. On the cloud = Open and Upgradeable
  3. Data = Process Support
  4. Marketing = Reality

1. PLM = PLM

It is interesting to observe that the definition of PLM becomes more and more a marketing term instead of a common definition which applies to all.

plm_shareLet me try to formulate again a very generic definition which captures most of what PLM Vendors target to do.

PLM is about connecting and sharing the company’s intellectual property through the whole product lifecycle. This includes knowledge created at the concept phase going through the whole lifecycle till a product is serviced in the field or decommissioned.

Experiences from the field (services / customers / market input) serve again for the other lifecycle phases as input to deliver a better or innovative product.

Innovation is an iterative process. It is not only about storing data, PLM is also covering the processes of managing the data, especially the change processes. Sharing data is not easy. It requires a different mind set, data is not only created for personal or departmental usage, but also should be found and extended by other roles in the organization. This all makes it a serious implementation, as aligning people is a business change, not an IT driven approach.

Based on this (too long) high-level PLM definition, it does not imply you cannot do PLM without a PLM system. You might also have a collection of tools that are able to provide a complete coverage of the PLM needs.

DIYOleg talks about DIY (Do It Yourself) PLM, and  I have seen examples of Excel spreadsheets managing Excel spreadsheets and Email archives.  The challenge I see with this type of PLM implementations is that after several years it is extremely difficult for a company to change. Possible reasons: the initial gurus do not longer work for the company, new employees need years of experience to find and interpret the right data.

A quick and simple solution can become a burden in the long term if you analyze the possible risks.

Where in the early years of PLM, it was mainly a Dassault Systemes, Siemens and PTC driven approach with deep CAD integrations,  the later years other companies like Aras and now Autodesk, started to change the focus from classical PLM more to managing enterprise metadata. A similar approach SAP PLM is offering. Deep integrations with CAD are the most complex parts of PLM and by avoiding them, you can claim your system is easier to implement, etc., etc.

myplmA Single version of the truth is a fancy PLM expression. It would be nice if this was also valid for the definition of PLM. The PLM Innovation 2012  session at the future of PLM models demonstrated that the vendors in this panel discussion had a complete different opinion about PLM. So how can people inside their company explain to the management and others why the need PLM and which PLM they have in mind ?

2. On the cloud = Open and Upgradeable

cloudDuring the panel discussion Grant Rochelle from Autodesk mentioned the simplicity of their software and how easy it will be upgradeable in the future. Also he referred to Salesforce.com as a proof point.They provide online updates from the software, without the customer having to do anything.

The above statement is true as long as you keep your business coverage simple and do not anticipate changes in the future. Let me share you an analogy with SmarTeam, how it started in 1995

At that time SmarTeam was insanely configurable. The Data Model Wizard contained several PDM templates an within hours you could create a company specific data model. A non-IT skilled person could add attributes, data types, anything they wanted and build the application, almost the same as Autodesk 360. The only difference, SmarTeam was not on the cloud, but it was running on Windows, a revolution at that time as all serious PDM systems were Unix based.

The complexity came however when SmarTeam started to integrate deeply with CAD systems. These integrations created the need for a more standardized data model per CAD system. And as the SmarTeam R&D was not aware of each and every customer’s implementation, it became hard to define a common business logic in the data (and to remain easily upgradable).

warningI foresee similar issues with the new cloud based PLM systems. They seem to be very easy to implement (add what you want – it is easy). As long as you do not integrate to other systems it remains safe. Integrating with other and future systems requires either a common data definition (which most vendors do not like) or specific integrations with the cost of upgrading.

In the beginning everything is always possible with a well-defined system. But  be aware looking back in history, every 10 years a disruptive wave comes in, changing the scope and upgradability.

And to challenge the cloud-based PLM vendors: in the generic definition of PLM that I shared above, PLM integrates also design data.

3. Data = Process Support

Another misconception, which originates from the beginning of PLM is the idea that once you have support for specific data in your system, you support the process.

PDM_ERP_2000First example: Items defined in ERP. When engineers started to use a PDM system and started to define a a new item there were challenges.  I had many discussions with IT-departments, that they did not need or wanted items in PDM. ERP was the source for an item, and when a designer needed a new item, (s)he had to create it in ERP. So we have a single definition of the item.

Or the designer had to request a new item number from the ERP system. And please do not request numbers too often as we do not want to waste them was the message.

Ten years later this looks like a joke, as most companies have an integrated PDM/ERP process and understand that the initial definition of a new item comes from PDM and at a certain stage the matured item is shared (and completed) by the ERP system.  It is clear that the most efficient manner to create a new item is through PLM as the virtual definition (specs / CAD data) also reside there and information is handled in that context.

capaA second more actual example is the fact that compliancy is often handled in ERP. It is correct that in the case you manufacture a product for a specific target market, you need to be able to have the compliancy information available.

However would you do this in your ERP system, where you are late (almost at the end) of the design lifecycle or is it more logical that during your design stages at all time you verify and check compliancy ? The process will work much more efficient and with less cost of change when done in PLM but most companies still see ERP as their primary IT system and PLM is an engineering tool.

Finally on this topic a remark to the simplified PLM vendors. Having the ability to store for example requirements in your system does not mean you have support for a complete requirements management process. It is also about the change and validation of requirements, which should be integrated for a relevant role during product definition (often CAD) and validation. As long as the data is disconnected there is not such a big advantage compared to Excel.

4. Marketing = Reality

plm_modelsIn the future of PLM Business Models
Oleg showed a slide with the functional architectures of the major PLM Vendors. In the diagram all seems to be connected as a single system, but in reality this is usually not the case.

As certain components / technologies are acquired, they provide the process coverage and only in the future you can imagine it works integrated. You cannot blame marketing for doing so, as their role is to position their products in the most appealing way customers will buy it. Without marketing perhaps no-one would buy a PLM system, when understanding the details Smile

Autodesk as a newcomer in PLM has a strong background in marketing. This is understandable as similar to Microsoft, their main revenue comes from selling a large volume of products, where the classical PLM vendors often have a combination with services and business change. And therefore a different price point.

When in the eighties Autodesk introduced AutoCAD, it was a simple, open 2D CAD environment, able to run on a PC. Autodesk’s statement at that time: “We provide 80 percent of the functionality for 20 % of the price”.
Does this sound familiar nowadays ?

As AutoCAD was a basic platform allowing customers and resellers to build their solutions on top of it, this became the mid-market success for Autodesk with AutoCAD.

The challenge with Autodesk PLM 360 is that although the same logic seems to make sense, I believe the challenge is not in the flexible platform. The challenge is in the future, when people want to do more complex things with the system, like integrations with design, enterprise collaboration.

At that time you need people who can specify the change, guide the change and implement the change. And this is usually not a DIY job.

pinoAutodesk is still learning to find the right PLM messages I noticed recently. When attending the Autodesk PLM session during PLM Innovation 2012 (end of February), one of their launching customers ElectronVault presented their implementation – it took only two weeks !!! Incredible

However reading Rob Cohee’s blog post the end of March, he mentions ElectronVault again. Quote:

ElectronVault was searching for something like this for over two years and after 6 weeks they have implemented Project Management, EBOM, MBOM, and starting on their APQP project. Six Weeks!!!

As you see, four weeks later the incredible two weeks have become six weeks and again everything is implemented. Still incredible and I am looking forward to meet ElectronVault in the future as I believe they are a typical young company and they will go through all of the maturity phases a company will go through: people, processes and tools (in this order). A tool driven implementation is more likely to slow down in the long term.

Conclusion: Misconceptions are not new. History can teach us a lot about what we experience now. New technology, new concepts can be a break through. However implementing them at companies requires a change in organizations and this has been the biggest challenge the past 100 years.

PLM_innoIn my last post PLM kills Innovation or not, I tried to provoke PLM vendors to respond to my claim that PLM has too much a focus on structuring data (and therefore removing freedom) claiming it blocks innovation as everyone believes innovation requires freedom and flexibility. This statement is often heard from startups claiming implementing any type of management would kill their competitive advantage. Still in the PLM marketing world everyone mentions PLM and Innovation as Siamese twins, but no one explains explicitly why they are connected.

So not too many reactions from vendors but some interesting comments from others to this post. Andrew Mack mentions that we should not confuse Innovation and Invention as for native English speakers there is a clear distinction. I agree with him however as most of my blog readers are not native English speakers I will explain the difference in this post.

For me it is clear PLM supports Innovation in three different manners, which I will explain here in a logical order – see the conclusion for the order of profit it will bring:

Invention Discovery

Invention, the creation of a new idea that might be the golden egg for the future of a company. It is often the result of one or more individuals- not something a systematic approach or system will bring automatically. If you look how big companies handle with invention, you see that often they do not manage it. They look around the world for , or sometimes get approached by, startups that have a concept that fits to their portfolio and they buy the company and concept.

This is of course a very disconnected way of invention, but from the other hand, the drive from many startups is to work day and night to develop a concept and ultimately sell the company for a good price. Compare it to the big soccer companies that have only money (currently mainly Russian or Arabic) but no own youth development plan to raise new talents. So it is a common way for companies to acquire invention (and promote innovation).

But I believe there is also a way companies can stimulate invention by implementing the modern way of PLM (PLM 2.0 – see my posts on that) and not use PLM as an extended PDM as I described in PLM What is the target. When a company has implemented PLM in a PLM 2.0 approach, it means there is a full visibility and connection of all product data, customer demands (through sales) and experiences (through service) for an R&D department to innovate.

Why this does not happen so much?

plmBecause inside most companies, people do not have an approach or drive for sharing data through the whole product lifecycle. Every department is optimizing themselves, not taking into account the value and overall company needs as they are not measured on that. In order to support invention PLM can provide an R&D department and individuals with all related market and customer information in order to create relevant inventions. So PLM helps here on understanding the areas of invention and probably the most unexplored area of PLM

 

Support selection of the right invention

 

funnelThe second area where PLM contributes to innovation is assisting companies to select the right opportunities that can be the next big opportunity for these companies. In case you have many opportunities, which one would you select and invest in ? As usually it unaffordable to invest in every opportunity usually and knowing at this stage you are not sure if a particular opportunity will lead to a profitable new product, you need a process and tool to select the right ones.

 

Here comes portfolio management as a functionality that allows companies to have an overview of all running initiatives and through reporting on key performance indicators (KPIs) being able to select the opportunities where to invest.

 

 

Support New Product Introduction

Once you have selected an opportunity and also as part of the portfolio management process you feel secure, there is the third step. How to bring this opportunity to the market as fast as possible, with the right quality and the right manufacturing definition? As being first on the market gives you market share and premium pricing.

Time2MarketAlso as changes in the early manufacturing stage and later during the go to market phase are extremely costly, it is important to bring a new product to the market as fast as possible in the right quality, avoiding changes when the new product is in the market. This is the area where PLM contributes the most. Allowing R&D organizations to work on their virtual product definition and perform simulations, design and customer verifications. Also anticipate and resolve compliancy and sourcing issues in the early stages of the product development. All this assures a reduction in the amount of iterations before a new product is ready to ´ hit´ the market.

iterations

 

A famous PLM one-liner is for PLM is: PLM – doing it right the first time, it refers more to the fact that a product introduction process is done only once and with the right quality. It does not mean iterations to improve or change the product scope are not needed.

 

Improvement cycles are necessary to bring a product to the market. But as they are done in the virtual world, the R&D department has the option to evaluate several alternatives (virtually), work and improve them till the best option is selected for the market saving cost for late design changes or errors to be solved. And even when the product is defined, PLM can help by defining the right generic manufacturing process and make it available for the local manufacturing organizations (where is the MBOM ?)

 

Conclusion

PLM does not kill innovation and although the PLM Vendor marketing is not very explicit, there are three areas where PLM supports Innovation. In a (subjective) order of priority I would say:

· New Product Introduction – bringing the highest revenue advantages for a selected invention

· Invention discovery – by providing R&D a 360 view of their customers and market landscape enable inventions to happen in your company

· Portfolio Management – to assist in selecting the right opportunities to focus

 

PLM_inno

Your thoughts ?

KILL_INNOThis time a little provocative title, which I hope will give some feedback from those who claim PLM brings INNOVATION. In one of my earlier posts, I talked about PLM – what is the target and also acted as an advocate for innovation.

Now after hearing PLM and INNOVATION mentioned the past two weeks everywhere as a logical combination, I started to question myself is this is just marketing ?
In this post I will act as the advocate of the devil.

Two weeks ago I attended the PLM Innovation congress, where first of all these two words were accepted by the audience as obvious linked together PLM INNOVATION. I participated in three sessions where INNOVATION was the topic. Charles Gagnon from Hydro Quebec talked about open innovation, but mentioned Hydro Quebec did not use any tool to manage INNOVATION so also not PLM. Peter Fassbender talked about the innovative approach to connect to the outside world using crowd sourcing and social media, but again no mentioning about PLM. Finally Christian Verstraete held an appeal for INNOVATION, urging everyone to think outside the box (did he mean outside the PLM box? Anyway no mentioning of PLM contribution)

Autodesk´s CEO  Carl Bass talked about The New Rules of INNOVATION at TEDx  and in the first part of his speech he is making the same statement that I would make related to PLM – see video:

Innovation–the work of the individual

Some quotes from his speech:

“Innovation is fundamentally not a corporate phenomena. Innovation involves taking risks and involves breaking the rules. And companies aren’t particularly good at that. In fact let´s say that it is just the opposite: companies are good in making rules and minimizing risk”

and quoting the author of The Innovator´s Dilemma Clayton Christensen:

“The lack of innovation is not the failure of companies but rather the result of prudent and sound management”

Autodesk

A week later Autodesk PLM 360 is launched. Again a PLM system that is bringing rules and structure, but apparently so far not affecting INNOVATION as we can see in one of the videos that came with the launch.

What the experts say.

Unfortunate the above video is only a teaser to get to the Autodesk Facebook page where, if you like them, you will be rewarded with access. A modern way of marketing: Only if you like us, we will tell you what we like.

Sanjeev Pal believes PLM is a business strategy that helps companies to reach their INNOVATION goals. Tom Grant starts with: “INNOVATION is really the word to focus on. At the heart of PLM is INNOVATION”. Later he states that probably one of the problems in PLM is the M (the Management part) that misleads the mind shifting in the wrong direction (against user acceptance and involvement’) and he prefers to call it more enablement instead of management. Somehow the conclusion is that PLM supports INNOVATION by bringing products faster to market. Does this mean PLM is the vehicle of bringing new innovations to the market ? Instead of creating a platform for INNOVATION?

STATS: Autodesk PLM + Innovation: 199.000 hits on Google

Once you have struggled like me to find the roundtable discussion and its content,  let´s look at other PLM vendors in alphabetical order:

Aras

Aras INNOVATOR– the word INNOVATOR it is already in the name but when you read more clearly what is stated at the Aras website, you see the word INNOVATOR is more targeting themselves (the software / the delivery model) instead of customer oriented INNOVATION. There the message is more about streamlining and connecting people and businesses (efficiency / collaboration).  So not much INNOVATION here related to PLM is my conclusion

STATS: Aras + Innovation: 11.200.000  hits on Google

Dassault Systèmes

When looking for Dassault Systèmes and INNOVATION I found an interesting statement on their website.

Dassault Systems launched its Passion for Innovation program in 2005. The program is based on a simple guiding principle: it is often the case that outstanding ideas do not come to fruition due to lack of appropriate resources. At Dassault Systèmes, all employees are free to install CATIA on their workstation. The idea of the program is to provide this opportunity to everyone

Is INNOVATION a result of the CAD tool ? not related to PLM ? I am sure there must a better story – but where is it ? There is a lot of talk about innovation, but related to PLM ?

STATS: Dassault Systèmes+ Innovation 1.340.000 hits on Google

Oracle Agile PLM

Oracle Agile PLM has a clear statement how they support INNOVATION:

Accelerate innovation through ideation management and collaboration, product portfolio management and analytics, data consolidation and cleansing, and a rich enterprise product record

I am not sure from this statement if we know the source wrote it. Marketing or a serious attempt to describe how Agile supports INNOVATION. I would love to learn a refined statement here that I understand.

STATS: Oracle PLM  + Innovation: 150.000 hits on Google

PTC

PTC does not give a direct association with INNOVATION. When I searched for PTC and INNOVATION the first suggestion was:  Did you mean HTC INNOVATION ?

Also when searching the PTC website, INNOVATION was hard to find. Interesting I noticed that the first main tab on the left was Discover our software capabilities. I was expecting that PTC like most PLM vendors would start from the business and not from the products.

STATS: PTC + Innovation 3.450.000 hits on Google

SAP PLM

On the SAP PLM website I found a tab called Innovation Management and here SAP PLM gave a clear explanation which practices contribute to INNOVATION Management. SAP mentions here:

  • Strategy and planning
  • Managing innovative ideas
  • Program and project management
  • Portfolio management

As I expected SAP will not hint in any direction towards CAD tools and their focus is mainly on the management side. I would love to learn the part of managing innovative ideas as this is the challenging part. Ideas and management ?

STATS: SAP PLM + Innovation 131.000 hits on Google

Siemens PLM

On the Siemens PLM website you have to search for INNOVATION and when you do a search, you are mainly directed to blog articles, The word-cloud next to the blog did not show the word INNOVATION in bold, showing it is not a common used word. Digging deeper, I found a blog post related to an Innovation Leadership Summit, which suggests again there is a relation between PLM and INNOVATION. The closest match I found here was:

The HBR survey found that enterprises rely on PLM and IT to manage all this complexity, including new sustainability and regulatory requirements. PLM solutions  track the ideation process, monitor progress, identify laggard projects, and facilitate collaboration. Leading organizations leverage PLM to improve new product development processes and outcomes

That´s all. So my conclusion here is that also Siemens PLM not naturally connects PLM and Innovation.

STATS: Siemens PLM + Innovation 901.000 hits on Google

Common rumors

InnovDilemma

Without mentioning names, I hear stories from PLM implementations (or should I call it extended PDM implementations) that have created such a massive lock-in on the current state of the company, that changing the processes or innovating is almost a mission impossible. Exact what Clayton Christensen mentions in his Innovator´s Dilemma.

So having played the devil´s advocate role, I hope I made my statement that there is no real relation between PLM and INNOVATION despite it seems these two words are mentioned together as if they are linked.

Call for action

Therefore I challenge all vendors and companies that have a proven relation between PLM and INNOVATION to come to this debate and make their statement.

Where are the mythbusters that will crack the statement:

PLM has nothing to do with INNOVATION?

Looking forward to your responses.

mythbusters

PLM_inno_2012

I am just back from an exciting PLM Innovation 2012 conference. With a full program and around 250 participants, it was two intensive days of PLM interaction.

What I liked the most is that the majority of the audience was focusing on PLM business related topics. The mood of PLM has changed.

In this post, I will give an impression of the event, how I experienced it without going into the details of each session.

Several interesting sessions were in parallel so I could not attend them all, but MarketKey, the organizer of the conference confirmed that all presentations are filmed and will become available on-line for participants. So more excitement to come.

First my overall impression: Compared to last year’s conference there was more a focus on the PLM business issues and less on PLM IT or architecture issues (or was it my perception ?)

DAY 1

Gerard Litjens (CIMdata Director European Operations) opened the conference as CIMdata co-hosted the conference. In his overview he started with CIMdata’s PLM definition – PLM is a strategic business approach. (Everyone has his own definition as Oleg noticed too). Next he presented what CIMdata sees as the hottest topics. No surprises here: Extension from PLM to new industries, extending PDM towards PLM, Integration of Social Media, Cloud, Open Source, Enterprise integration and compliance.

abbNext speaker was Thomas Schmidt (Vice President, Head of Operational Excellence and IS – ABB’s Power Products Division) was challenging the audience with his key note speech: PLM: Necessary but not sufficient. With this title it seemed that the force was against him (thanks Oleg for sharing).

Thomas explained that the challenge of ABB is being a global company and at the same time acting as a ‘local’ company everywhere around the world. In this perspective he placed PLM as part of a bigger framework to support operational excellence and presented some major benefits from a platform approach. I believe the Q&A session was an excellent part to connect Thomas’s initial statements to the PLM focused audience.

Marc Halpern from Gartner gave his vision on PLM. Also Marc started with the Gartner definition of PLM, where they characterized PLM as a discipline. Gartner identified the following 5 major trends: Software everywhere in products, usage of social media for product development and innovation, using analytics tools to support the whole product lifecycle – after sales, service, connecting to the customer. Opportunities for existing products to deliver them through services (media content, transportation)

PLM_profNext I attended the Autodesk session, a PLM journey using the cloud, where I was eager to learn their approach towards PLM. Autodesk (Mike Lieberman) let Linda Maepa, COO from Electron Vault in the USA explain the benefits of the Autodesk PLM 360 solution. Electron Vault, a young, high-tech company, has implemented the solution within 2 weeks. And here I got disconnected . Also when the suggestion was raised that you do not need time to specify the requirements for the system (old-fashioned stuff),

I suddenly got into a trance and saw a TV advert from a new washing power, with numerous features (program management, new product introduction, …..) that was washing whiter than all the others and a happy woman telling it to the world. I believe if Autodesk wants to be considered as serious in the PLM world it should also work with existing customers and managing the change in these organizations. Usually it takes already more than two weeks to get them aligned and agree on the requirements. Unfortunate I did not have time during the breaks to meet Autodesk at their booth as I would love to continue the discussion about reality as my experience and focus is on mid-market companies. Waiting for a next opportunity.

After Autodesk, I presented in my session what are the main drivers for making the case for PLM. I also started with my favorite PLM definition (a collection of best practices – 2PLM) and explained that PLM starts with the management vision and targets for the future. Is it about efficiency, quality, time to market, knowledge capture or a more challenging task: creating the platform for innovation?

hydroQNext I followed the Energy tracks, where I listened to Charles Gagnon from Hydro Quebec, who gave an interesting lecture called: Implementing Open Innovation and Co-Development.

At first glance this is a sensitive topic. When you innovate it is all about creating new intellectual property, and the fear that when working with partners the IP might be out of the company, Charles explained how this process of collaborative innovation was started and monitored. At the end he reported they measured a significant gain in R&D value perceived when working with external partners. And they did not use a PLM system to manage Innovation (to be investigated how they could survive)

After the lunch I continued with Jonas Hagner from WinWinD, a young manufacturer of windmills that are targeted to operate in extreme climate conditions ( a niche market). They are both implementing PLM and ERP in parallel and they did not have to suffer from years of ERP before PLM and therefore could have a more balanced discussion around part information availability / part number and more. Still I believe they have the challenge to connect in an efficient manner the services of the windmills back to their R&D organization, to do a full PLM circle.

Karer consulting together with Siemens Energy presented the case how they have designed and starting the implement the interface between their PLM system (Teamcenter) and ERP system (SAP). What was disappointing to see was that the interface between Teamcenter and SAP was relative complex (bi-directional with engineering activities in both sides) . Almost 1½ years of development of this interface and one of the main reasons, because SAP was first and they start the engineering order in SAP.

ebom_mbom_problem

Apparently 2 years later Siemens Energy could not implement a clear distinct separation between PLM and ERP anymore and will not have to live with this complex interface. In the past I have written several times about this complexity that companies seem to accept due to political or historical reasons. Sad story for PLM – Where is the MBOM ?.

ebom_mbom_plm

The day finished with a closing keynote from Peter Bilello, explaining how a successful PLM implementation could look like. Many wise statements that everyone should follow in case you want to come to a successful implementation (and define correctly what success is)

Thanks to Autodesk we had a nice evening reception, discussion and evaluating with peers the first day.

Day 2

mioDay 2 started for me with an interesting lecture from Peter Fassbender, Head Design Center Fiat Latin America, describing how in Brazil the Fiat Mio experiment used modern social media techniques, like crowdsourcing, communities and user involvement to guide the innovation and development of a potential car. A unique experiment demonstrating that this type of projects are influence the brand reputation positively (if managed correct) and for me an example of what PLM could bring if R&D is connected to the outside world.

Christian Verstraete Chief Technologist – Cloud Strategy from HP gave an inspiring session about the open frontiers of innovation. The speed of business in the past 30 years has increased dramatically (you need to be from an older generation to be aware of this – the definition of response time has changed due to new technologies) Christian pushed everyone to think Out of the Box and to be innovative, which made me wonder how long will companies in the future build standard boring products. Will keep on innovating in this amazing pace as we did in the past 30 years ?

lf1Graeme Hackland, IT/IS director from the UK based Lotus F1 team presented the challenges a F1 team has to face every year due to changing regulations. I visited Lotus F1 last year and was impressed by the fact that over 500 engineers are all working around one carper year to optimize the car mainly for aerodynamics, but next to assure it performs during the years. Thousands of short interactions, changes to be implemented a.s.a.p. challenge the organization to collaborate in an optimum manner. And of course this is where PLM contributes. All the F1 fans could continue to dream and listen to Graeme’s stories but Jeremie Labbe from Processia brought us back to earth by explaining how Processia assisted Lotus F1 in a PLM value assessment as a next step.

Meanwhile I had some side discussions on various PLM topics and went back to the sessions, seeing how David Sherburne, Director of Global R&D Effectiveness from Carestream Health presented his case (open source PLM) and his analysis why an open source PLM model (based on Aras) is very appealing in their case. Indeed the business value perceived and significant lower operational costs for the software are appealing for his organization and for sure will influence the other PLM vendors in their pricing model.

Pierfrancesco Manenti, from IDC Manufacturing Insights gave a clear presentation indicating the future directions for PLM: managing operational complexity, not product complexity. As you could expect from IDC Manufacturing Insights all was well based on surveys in the manufacturing industry and clearly indicating that there is still a lot to do for companies to efficient share and work around a common product development and operational platform. New technologies (the four IT forces: mobility, cloud, social business and big data analytics) will help them to improve.

eso

The closing keynote came from Jason Spyromilio , who was director of the European Southern Observatory’s Very Large Telescope (http://www.eso.org) and he gave us the insights in designing (and building) the biggest eye on the sky. Precision challenges for such a huge telescope mirror, being built in the high mountains of Chili in an earthquake sensitive area demonstrate that all participants are required to contribute their IQ in order to realize such a challenge.

Conclusion: This PLM Innovation 2012 event doubled the 2011 event from a year ago in all dimensions. Thanks to the sponsors, the organization and high quality lectures, I expect next year we could double again – in participants, in content and innovation. It shows PLM is alive. But comming back to the title of this post: I saw some interesting innovation concepts – now how to enabale them with PLM ? 

Note: looking at the pictures in this postyou will notice PLM is everywhere. I published this post on February 29th – a unique day which happens only every 4 years. In May this year my blog will be 4 years old.

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