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On March 22 this year, I wrote Time to Think (and act differently) in de middle of a changing world. We were entering a lockdown in the Netherlands due to the COVID-19 virus. As it was such a disruptive change, it was an opportunity to adapt their current ways of working.

The reason for that post was my experience when discussing PLM-initiatives with companies. Often they have no time to sit down, discuss and plan their PLM targets as needed. Crucial people are too busy, leading to an implementation of a system that, in the best case, creates (some) benefits.

The well-known cartoon says it all. We are often too busy doing business as usual, making us feel comfortable. Only when it is too late, people are forced to act.  As the second COVID-19 wave seems to start in the Netherlands, I want to look back on what has happened so far in my eco-system.

Virtual Conferences

As people could not travel anymore, traditional PLM-conferences could not be organized anymore. What was going to be the new future for conferences? TECHNIA, apparently clairvoyant, organized their virtual PLM Innovation Forum as one of the first, end of April.

A more sustainable type of PLM-conference was already a part of their plans, given the carbon footprint a traditional conference induces.  The virtual conference showed that being prepared for a virtual conference pays off during a pandemic with over 1000 participants.

Being first does not always mean being the best,  as we have to learn. While preparing my session for the conference, I felt the same excitement as for a traditional conference. You can read about my initial experience here: The weekend after the PLM Innovation Forum.

Some weeks later, having attended some other virtual conferences, I realized that some points should be addressed/solved:

  • Video conferencing is a must – without seeing people talking, it becomes a podcast.
  • Do not plan long conference days. It is hard to sit behind a screen for a full day. A condensed program makes it easier to attend.
  • Virtual conferences mean that they can be attended live from almost all around the globe. Therefore, finding the right timeslots is crucial for the audience – combined with the previous point – shorter programs.
  • Playing prerecorded sessions without a Q&A session should be avoided. It does not add value.
  • A conference is about networking and discussion – I have not seen a solution for this yet. Fifty percent of the conference value for me comes from face-to-face discussions and coffee meetings. A virtual conference needs to have private chat opportunities between attendees.

In the last quarter of this year, I will present at several merely local conferences, sometimes a mix between “live” with a limited number of attendees, if it will be allowed.

And then there is the upcoming PLM Road Map & PDT Fall 2020 (virtual) conference on 17-18-19 November.

This conference has always been my favorite conference thanks to its continued focus on sharing experiences, most of the time, based on industry standards. We discuss topics and learn from each other. See my previous posts: The weekend after 2019 Day 1, 2019 Day 2, 2018 Day 1, 2018 Day2, 2017 Day 1, 2017 Day 2, etc.

The theme Digital Thread—the PLM Professionals’ Path to Delivering Innovation, Efficiency, and Quality has nothing to do with marketing. You can have a look at the full schedule here. Although there is a lot of buzz around Digital Thread, presenters discuss the reality and their plans

Later in this post, see the paragraph Digital Thread is not a BOM, I will elaborate on this theme.

Getting tired?

I discovered I am getting tired as I am missing face-to-face interaction with people. Working from home, having video calls, is probably a very sustainable way of working.  However, non-planned social interaction, meeting each other at the coffee machine, or during the breaks at a conference or workshop, is also crucial for informal interaction.

Apparently, several others in my eco-system are struggling too. I noticed a tsunami of webinars and blog posts where many of them were an attempt to be noticed. Probably the same reason: traditionally businesses have stalled. And it is all about Digital Transformation and SaaS at this moment. Meaningless if there is no interaction.

In this context, I liked Jan Bosch’s statement in his article: Does data-driven decision-making make you boring? An article not directly addressing the PLM-market; however, there is a lot of overlap related to people’s reluctance to imagine a different future.

My favorite quote:

 I still meet people that continue to express beliefs about the world, their industry, their customers or their own performance that simply aren’t true. Although some, like Steve Jobs, were known for their “reality distortion field,” for virtually all of us, just wishing for something to be true doesn’t make it so. As William Edwards Deming famously said: in God we trust; all others must bring data.

I fully concur with this statement and always get suspicious when someone claims the truth.

Still, there are some diamonds.

I enjoyed all episodes from Minerva PLM TV – Jennifer Moore started these series in the early COVID19-days (coincidence?). She was able to have a collection of interviews with known and less-known people in the PLM-domain. As most of them were vendor-independent, these episodes are a great resource to get educated.

The last episode with Angela Ippisch illustrates how often PLM in companies depends on a few enthusiastic persons, who have the energy to educate themselves. Angela mentions there is a lot of information on the internet; the challenge is to separate the useful information from marketing.

I have been publishing the past five months a series of posts under the joint theme learning from the past to understand the future. In these posts, I explained the evolution from PDM to PLM, resulting in the current item-centric approach with an EBOM, MBOM, and SBOM.

On purpose, one post per every two weeks – to avoid information overflow. Looking back, it took more posts than expected, and they are an illustration of the many different angles there are in the PLM domain – not a single truth.

Digital Thread is not a BOM

I want to address this point because I realized that in the whole blogging world there appear to be two worlds when discussing PLM terminology. Oleg Shilovitsky, CEO@OpenBOM, claims that Digital Thread and Digital Twin topics are just fancy marketing terms. I was even more surprised to read his post: 3 Reasons Why You Should Avoid Using The Word “Model” In PLM. Read the comments and discussion in these posts (if LinkedIn allows you to navigate)

Oleg’s posts have for me most of the time, always something to discuss. I would be happier if other people with different backgrounds would participate in these discussions too – A “Like” is not a discussion. The risk in a virtual world is that it becomes a person-to-person debate, and we have seen the damage such debates can do for an entire community.

In the discussion we had related to Digital Thread and BOM, I realized that when we talk about traditional products, the BOM and the Digital Thread might be the same. This is how we historically released products to the market. Once produced, there were no more changes. In these situations, you could state a PLM-backbone based on BOM-structures/views, the EBOM, MBOM, and SBOM provide a Digital Thread.

The different interpretation comes when talking about products that contain software defining its behavior. Like a computer, the operating system can be updated on the fly; meanwhile, the mechanical system remains the same. To specify and certify the behavior of the computer, we cannot rely on the BOM anymore.

Having software in the BOM and revise the BOM every time there is a software change is a mission impossible. A mistake suggested ten years ago when we started to realize the different release cycles of hardware and software. Still, it is all about the traceability of all information related to a product along its whole lifecycle.

In a connected environment, we need to manage relationships between the BOM and relations to other artifacts. Managing these relations in a connected environment is what I would call the Digital Thread – a layer above PLM. While writing this post, I saw Matthias Ahrens’ post stating the same (click on the image to see the post)

When we discuss managing all the relations, we touch the domain of Configuration Management.  Martijn Dullaart/Martin Haket’s picture shares the same mindset – here, CM is the overlapping layer.

However, in their diagram, it is not a system picture; the different systems do not need to be connected. Configuration Management is the discipline that maintains the correct definition of every product – CM maintains the Thread. When it becomes connected, it is a Digital Thread.

As I have reached my 1500 words, I will not zoom in on the PLM and Model discussion – build your opinion yourself. We have to realize that the word Model always requires a context. Perhaps many of us coming from the traditional PDM/PLM world (managing CAD data) think about CAD models. As I studied physics before even touching CAD, I grew up with a different connotation

Lars Taxén’s comment in this discussion perhaps says it all (click on the image to read it). If you want to learn and discuss more about the Digital Thread and Models, register for the PLM Roadmap & PDT2020 event as many of the sessions are in this context (and not about 3D CAD).

Conclusion

I noticed I am getting tired of all the information streams crying for my attention and look forward to real social discussions, not broadcasted. Time to think differently requires such discussion, and feel free to contact me if you want to reflect on your thoughts. My next action will be a new series named Painting the future to stay motivated. (As we understand the past).

In the previous seven posts, learning from the past to understand the future, we have seen the evolution from manual 2D drawing handling. Next, the emerge of ERP and CAD followed by data management systems (PDM/PLM) and methodology (EBOM/MBOM) to create an infrastructure for product data from concept towards manufacturing.

Before discussing the extension to the SBOM-concept, I first want to discuss Engineering Change Management and Configuration Management.

ECM and CM – are they the same?

Often when you talk with people in my PLM bubble, the terms Change Management and Configuration Management are mixed or not well understood.

When talking about Change Management, we should clearly distinguish between OCM (Organizational Change Management) and ECM (Engineering Change Management). In this post, I will focus on Engineering Change Management (ECM).

When talking about Configuration Management also here we find two interpretations of it.

The first one is a methodology describing technically how, in your PLM/CAD-environment, you can build the most efficient way connected data structures, representing all product variations. This technology varies per PLM/CAD-vendor, and therefore I will not discuss it here. The other interpretation of Configuration Management is described on Wiki as follows:

Configuration management (CM) is a systems engineering process for establishing and maintaining consistency of a product’s performance, functional, and physical attributes with its requirements, design, and operational information throughout its life.

This is also the area where I will focus on this time.

And as-if great minds think alike and are synchronized, I was happy to see Martijn Dullaart’s recent blog post, referring to a poll and follow-up article on CM.

Here Martijn precisely touches the topic I address in this post. I recommend you to read his post: Configuration Management done right = Product-Centric first and then follow with the rest of this article.

Engineering Change Management

Initially, engineering change management was a departmental activity performed by engineering to manage the changes in a product’s definition. Other stakeholders are often consulted when preparing a change, which can be minor (affecting, for example, only engineering) or major (affecting engineering and manufacturing).

The way engineering change management has been implemented varies a lot. Over time companies all around the world have defined their change methodology, and there is a lot of commonality between these approaches. However, terminology as revision, version, major change, minor change all might vary.

I described the generic approach for engineering change processes in my blog post: ECR / ECO for Dummies from 2010.

The fact that companies have defined their own engineering change processes is not an issue when it works and is done manually. The real challenge came with PDM/PLM-systems that need to provide support for engineering change management.

Do you leave the methodology 100 % open, or do you provide business logic?

I have seen implementations where an engineer with a right-click could release an assembly without any constraints. Related drawings might not exist, parts in the assembly are not released, and more. To obtain a reliable engineering change management process, the company had to customize the PLM-system to its desired behavior.

An exercise excellent for a system integrator as there was always a discussion with end-users that do not want to be restricted in case of an emergency  (“we will complete the definition later” / “too many clicks” / “do I have to approve 100 parts ?”). In many cases, the system integrator kept on customizing the system to adapt to all wishes. Often the engineering change methodology on paper was not complete or contained contradictions when trying to digitize the processes.

For that reason, the PLM-vendors that aim to provide Out-Of-The-Box solutions have been trying to predefine certain behaviors in their system. For example, you cannot release a part, when its specifications (drawings/documents) are not released. Or, you cannot update a released assembly without creating a new revision.

These rules speed-up the implementation; however, they require more OCM (Organizational Change Management) as probably naming and methodology has to change within the company. This is the continuous battle in PLM-implementations. In particular where the company has a strong legacy or lack of business understanding, when implementing PLM.

There is an excellent webcast in this context on Minerva PLM TV – How to Increase IT Project Success with Organizational Change Management.

Click on the image or link to watch this recording.

Configuration Management

When we talk about configuration management, we have to think about managing the consistency of product data along the whole product lifecycle, as we have seen from the Wiki-definition before.

Wiki – the configuration Activity Model

Configuration management existed long before we had IT-systems. Therefore, configuration management is more a collection of activities (see diagram above) to ensure the consistency of information is correct for any given product. Consistent during design, where requirements match product capabilities. Consistent with manufacturing, where the manufacturing process is based on the correct engineering specifications. And consistent with operations, meaning that we have the full definition of product in the field, the As-Built, in correct relation to its engineering and manufacturing definition.

Source: Configuration management in aerospace industry

This consistency is crucial for products where the cost of an error can have a massive impact on the manufacturer. The first industries that invested heavily in configuration management were the Aerospace and Defense industries. Configuration management is needed in these industries as the products are usually complex, and failure can have a fatal impact on the company. Combined with many regulatory constraints, managing the configuration of a product and the impact of changes is a discipline on its own.

Other industries have also introduced configuration management nowadays. The nuclear power industry and the pharmaceutical industry use configuration management as part of their regulatory compliance. The automotive industry requires configuration management partly for compliance, mainly driven by quality targets. An accident or a recall can be costly for a car manufacturer. Other manufacturing companies all have their own configuration management strategies, mainly depending on their own risk assessment. Configuration management is a pro-active discipline – it costs money – time, people and potential tools to implement it. In my experience, many of these companies try to do “some” configuration management, always hoping that a real disaster will not happen (or can happen). Proper configuration management allows you to perform reliable impact analysis for any change (image above)

What happens in the field?

When introducing PLM in mid-market companies, often, the dream was that with the new PLM-system configuration, management would be there too.

Management believes the tools will fix the issue.

Partly because configuration management deals with a structured approach on how to manage changes, there was always confusion with engineering change management. Modern PLM-systems all have an impact analysis capability. However, most of the time, this impact analysis only reaches the content that is in the PLM-system. Configuration Management goes further.

If you think that configuration management is crucial for your company, start educating yourselves first before implementing anything in a tool. There are several places where you can learn all about configuration management.

  • Probably the best-known organization is IpX (Institute for Process Excellence), teaching the CM2 methodology. Have a look here: CM2 certification and courses
  • Closely related to IpX, Martijn Dullaart shares his thoughts coming from the field as Lead Architect for Enterprise Configuration Management at ASML (one of the Dutch crown jewels) in his blog: MDUX
  • CMstat, a configuration and data management solution provider, provides educational posts from their perspective. Have a look at their posts, for example, PLM or PDM or CM
  • If you want to have a quick overview of Configuration Management in general, targeted for the mid-market, have a look at this (outdated) course: Training for Small and Medium Enterprises on CONFIGURATION MANAGEMENT. Good for self-study to get an understanding of the domain.

 

To summarize

In regulated industries, Configuration Management and PLM are a must to ensure compliance and quality. Configuration management and (engineering) change management are, first of all, required methodologies that guarantee the quality of your products. The more complex your products are, the higher the need for change and configuration management.

PLM-systems require embedded engineering change management – part of the PDM domain. Performing Engineering Change Management in a system is something many users do not like, as it feels like overhead. Too much administration or too many mouse clicks.

So far, there is no golden egg that performs engineering change management automatically. Perhaps in a data-driven environment, algorithms can speed-up change management processes. Still, there is a need for human decisions.

Similar to configuration management. If you have a PLM-system that connects all the data from concept, design, and manufacturing in a single environment, it does not mean you are performing configuration management. You need to have processes in place, and depending on your product and industry, the importance will vary.

Conclusion

In the first seven posts, we discussed the design and engineering practices, from CAD to EBOM, ending with the MBOM. Engineering Change Management and, in particular, Configuration Management are methodologies to ensure the consistency of data along the product lifecycle. These methodologies are connected and need to be fit for the future – more on this when we move to modern model-based approaches.

Closing note:

While finishing this blog post today I read Jan Bosch’s post: Why you should not align. Jan touches the same topic that I try to describe in my series Learning from the Past ….., as my intention is to make us aware that by holding on to practices from the past we are blocking our future. Highly recommended to read his post – a quote:

The problem is, of course, that every time you resist change, you get a bit behind. You accumulate some business, process and technical debt. You become a little less “fitting” to the environment in which you’re operating

In the series learning from the past to understand the future, we have almost reached the current state of PLM before digitization became visible. In the last post, I introduced the value of having the MBOM preparation inside a PLM-system, so manufacturing engineering can benefit from early visibility and richer product context when preparing the manufacturing process.

Does everyone need an MBOM?

It is essential to realize that you do not need an EBOM and a separate MBOM in case of an Engineering To Order primary process. The target of ETO is to deliver a unique customer product with no time to lose. Therefore, engineering can design with a manufacturing process in mind.

The need for an MBOM comes when:

  • You are selling a specific product over a more extended period of time. The engineering definition, in that case, needs to be as little as possible dependent on supplier-specific parts.
  • You are delivering your portfolio based on modules. Modules need to be as long as possible stable, therefore independent of where they are manufactured and supplier-specific parts. The better you can define your modules, the more customers you can reach over time.
  • You are having multiple manufacturing locations around the world, allowing you to source locally and manufacture based on local plant-specific resources. I described these options in the previous post

The challenge for all companies that want to move from ETO to BTO/CTO is the fact that they need to change their methodology – building for the future while supporting the past. This is typically something to be analyzed per company on how to deal with the existing legacy and installed base.

Configurable EBOM and MBOM

In some previous posts, I mentioned that it is efficient to have a configurable EBOM. This means that various options and variants are managed in the same EBOM-structure that can be filtered based on configuration parameters (date effectivity/version identifier/time baseline). A configurable EBOM is often called a 150 % EBOM

The MBOM can also be configurable as a manufacturing plant might have almost common manufacturing steps for different product variants. By using the same process and filtered MBOM, you will manufacture the specific product version. In that case, we can talk about a 120 % MBOM

Note: the freedom of configuration in the EBOM is generally higher than the options in the configurable MBOM.

The real business change for EBOM/MBOM

So far, we have discussed the EBOM/MBOM methodology. It is essential to realize this methodology only brings value when the organization will be adapted to benefit from the new possibilities.

One of the recurring errors in PLM implementations is that users of the system get an extended job scope, without giving them the extra time to perform these activities. Meanwhile, other persons downstream might benefit from these activities. However, they will not complain. I realized that already in 2009, I mentioned such a case: Where is my PLM ROI, Mr. Voskuil?

Now let us look at the recommended business changes when implementing an EBOM/MBOM-strategy

  1. Working in a single, shared environment for engineering and manufacturing preparation is the first step to take.

Working in a PLM-system is not a problem for engineers who are used to the complexity of a PDM-system. For manufacturing engineers, a PLM-environment will be completely new. Manufacturing engineers might prepare their bill of process first in Excel and ultimately enter the complete details in their ERP-system. ERP-systems are not known for their user-friendliness. However, their interfaces are often so rigid that it is not difficult to master the process. Excel, on the other side, is extremely flexible but not connected to anything else.

And now, this new PLM-system requires people to work in a more user-friendly environment with limited freedom. This is a significant shift in working methodology. This means manufacturing engineers need to be trained and supported  over several months. Changing habits and keep people motivated takes energy and time. In reality, where is the budget for these activities?  See my 2016 post: PLM and Cultural Change Management – too expensive?

  1. From sequential to concurrent

Once your manufacturing engineers are able to work in a PLM-environment, they are able to start the manufacturing definition before the engineering definition is released. Manufacturing engineers can participate in design reviews having the information in their environment available. They can validate critical manufacturing steps and discuss with engineers potential changes that will reduce the complexity or cost for manufacturing. As these changes will be done before the product is released, the cost of change is much lower. After all, having engineering and manufacturing working partially in parallel will reduce time to market.

Reducing time to market by concurrent engineering

One of the leading business drivers for many companies is introducing products or enhancements to the market. Bringing engineering and manufacturing preparation together also means that the PLM-system can no longer be an engineering tool under the responsibility of the engineering department.

The responsibility for PLM needs to be at a level higher in the organization to ensure well-balanced choices. A higher level in the organization automatically means more attention for business benefits and less attention for functions and features.

From technology to methodology – interface issues?

The whole EBOM/MBOM-discussion often has become a discussion related to a PLM-system and an ERP-system. Next, the discussion diverted to how these two systems could work together, changing the mindset to the complexity of interfaces instead of focusing on the logical flow of information.

In an earlier PI Event in München 2016, I lead a focus group related to the PLM and ERP interaction. The discussion was not about technology, all about focusing on what is the logical flow of information. From initial creation towards formal usage in a product definition (EBOM/MBOM).

What became clear from this workshop and other customer engagements is that people are often locked in their siloed way of thinking. Proposed information flows are based on system capabilities, not on the ideal flow of information. This is often the reason why a PLM/ERP-interface becomes complicated and expensive. System integrators do not want to push for organizational change, they prefer to develop an interface that adheres to the current customer expectations.

SAP has always been promoting that they do not need an interface between engineering and manufacturing as their data management starts from the EBOM. They forgot to mention that they have a difficult time (and almost no intention) to manage the early ideation and design phase. As a Dutch SAP country manager once told me: “Engineers are resources that do not want to be managed.” This remark says all about the mindset of ERP.

After overlooking successful PLM-implementations, I can tell the PLM-ERP interface has never been a technical issue once the methodology is transparent. A company needs to agree on logical data flow from ideation through engineering towards design is the foundation.

It is not about owning data and where to store it in a single system. It is about federated data sets that exist in different systems and that are complementary but connected, requiring data governance and master data management.

The SAP-Siemens partnership

In the context of the previous paragraph, the messaging around the recently announced partnership between SAP and Siemens made me curious. Almost everyone has shared an opinion about the partnership. There is a lot of speculation, and many questions were imaginarily answered by as many blog posts in the field. Last week Stan Przybylinski shared CIMdata’s interpretations in a webinar Putting the SAP-Siemens Partnership In Context, which was, in my opinion, the most in-depth analysis I have seen.

For what it is worth, my analysis:

  • First of all, the partnership is a merger of slide decks at this moment, aiming to show to a potential customer that in the SAP/Siemens-combination, you find everything you need. A merger of slides does not mean everything works together.

  • It is a merger of two different worlds. You can call SAP a real data platform with connected data, where Siemens offering is based on the Teamcenter backbone providing a foundation for a coordinated approach. In the coordinated approach, the data flexibility is lower. For that reason, Mendix is crucial to make Siemens portfolio behave like a connected platform too.
    You can read my doubts about having a coordinated and connected system working together (see image above). It was my #1 identified challenge for this decade: PLM 2020 – PLM the next decade (before COVID-19 became a pandemic and illustrated we need to work connected)
  • The fact that SAP will sell TC PLM and Siemens will sell SAP PPM seems like loser’s statement, meaning our SAP PLM is probably not good enough, or our TC PPM capabilities are not good enough. In reality, I believe they both should remain, and the partnership should work on logical data flows with data residing in two locations – the federated approach. This is how platforms reside next to each other instead of the single black hole.

  • The fact that standard interfaces will be developed between the two systems is a subtle sales argument with relatively low value. As I wrote in the “from technology to methodology”-paragraph, the challenges are in the organizational change within companies. Technology is not the issue, although system integrators also need to make a living.
  • What I believe makes sense is that both SAP and Siemens, have to realize their Industry 4.0 end-to-end capabilities. It is a German vision now for several years and it is an excellent vision to strive for. Now it is time to build the two platforms working together. This will be a significant technical challenge mainly for Siemens as its foundation is based on a coordinated backbone.
  • The biggest challenge, not only for this partnership, is the organizational change within companies that want to build an end-to-end connected solution. In particular, in companies with a vast legacy, the targeted industries by the partnership, the chasm between coordinated legacy data and intended connected data is enormous. Technology will not fix it, perhaps smoothen the pain a little.

 

Conclusion

With this post, we have reached the foundation of the item-centric approach for PLM, where the EBOM and MBOM are managed in a real-time context. Organizational change is the biggest inhibitor to move forward. The SAP-Siemens partnership is a sales/marketing approach to create a simplified view for the future at C-level discussions.
Let us watch carefully what happens in reality.

Next time potentially the dimension of change management and configuration management in an item-centric approach.
Or perhaps Martijn Dullaart will show us the way before, following up on his tricky poll question

 

Life goes on, and I hope you are all staying safe while thinking about the future. Interesting in the context of the future, there was a recent post from Lionel Grealou with the title: Towards PLM 4.0: Hyperconnected Asset Performance Management Framework.

Lionel gave a kind of evolutionary path for PLM. The path from PLM 1.0 (PDM) ending in a PLM 4.0 definition.  Read the article or click on the image to see an enlarged version to understand the logical order. Interesting to mention that PLM 4.0 is the end target, for sure there is a wishful mind-mapping with Industry 4.0.

When seeing this diagram, it reminded me of Marc Halpern’s diagram that he presented during the PDT 2015 conference. Without much fantasy, you can map your company to one of the given stages and understand what the logical next step would be. To map Lionel’s model with Marc’s model, I would state PLM 4.0 aligns with Marc’s column Collaborating.

In the discussion related to Lionel’s post, I stated two points. First, an observation that most of the companies that I know remain in PLM 1.0 or 2.0, or in Marc’s diagram, they are still trying to reach the level of Integrating.

Why is it so difficult to move to the next stage?

Oleg Shilovitsky, in a reaction to Lionel’s post, confirmed this. In Why did manufacturing stuck in PLM 1.0 and PLM 2.0? Oleg points to several integration challenges, functional and technical. His take is that new technologies might be the answer to move to PLM 3.0, as you can read from his conclusion.

What is my conclusion?

There are many promising technologies, but integration is remaining the biggest problem for manufacturing companies in adopting PLM 3.0. The companies are struggling to expand upstream and downstream. Existing vendors are careful about the changes. At the same time, very few alternatives can be seen around. Cloud structure, new data management, and cloud infrastructure can simplify many integration challenges and unlock PLM 3.0 for future business upstream and especially downstream. Just my thoughts…

Completely disconnected from Lionel’s post,  Angad Sorte from Plural Nordic AS wrote a LinkedIn post: Why PLM does not get attention from your CEO. Click on the image to see an enlarged version, that also neatly aligns with Industry 4.0. Coincidence, or do great minds think alike? Phil Collins would sing: It is in the air tonight

Angad’s post is about the historical framing of PLM as a system, an engineering tool versus a business strategy. Angrad believes once you have a clear definition, it will be easier to explain the next steps for the business. The challenge here is: Do we need, or do we have a clear definition of PLM? It is a topic that I do not want to discuss anymore due to a variety of opinions and interpretations.  An exact definition will never lead to a CEO stating, “Now I know why we need PLM.”

I believe there are enough business proof points WHY companies require a PLM-infrastructure as part of a profitable business. Depending on the organization, it might be just a collection of tools, and people do the work. Perhaps this is the practice in small enterprises?

In larger enterprises, the go-to-market strategy, the information needs, and related processes will drive the justification for PLM. But always in the context of a business transformation. Strategic consultancy firms are excellent in providing strategic roadmaps for their customers, indicating the need for a PLM-infrastructure as part of that.

Most of the time, they do not dive more in-depth as when it comes to implementation, other resources are needed.

What needs to be done in PLM 1.0 to 4.0 per level/stage is well described in all the diagrams on a high-level. The WHAT-domain is the domain of the PLM-vendors and implementers. They know what their tools and skillsets can do, and they will help the customer to implement such an environment.

The big illusion of all the evolutionary diagrams is that it gives a false impression of evolution.  Moving to the next level is not just switching on new or more technology and involve more people.

So the big question is HOW and WHEN to make progress.

HOW to make progress

In the past four years, I have learned that digital transformation in the domain of PLM is NOT an evolution. It is disruptive as the whole foundation for PLM changes. If you zoom in on the picture on the left, you will see the data model on the left, and the data model on the right is entirely different.

On the left side of the chasm, we have a coordinated environment based on data-structures (items, folders, tasks) to link documents.

On the right side of the chasm, we have a connected environment based on federated data elements and models (3D, Logical, and Simulation models).

I have been discussing this topic in the past two years at various PLM conferences and a year ago in my blog: The Challenges of a connected ecosystem for PLM

If you are interested in learning more about this topic, register for the upcoming virtual PLM Innovation Forum organized by TECHNIA. Registration is for free, and you will be able to watch the presentation, either live or recorded for 30 days.

At this moment, the detailed agenda has not been published, and I will update the link once the session is visible.  My presentation will not only focus on the HOW to execute a digital transformation, including PLM can be done, but also explain why NOW is the moment.

NOW to make progress

When the COVID19-related lockdown started, must of us thought that after the lockdown, we will be back in business as soon as possible. Now understanding the impact of the virus on our society, it is clear that we need to re-invent ourselves for a sustainable future, be more resilient.

It is now time to act and think differently as due to the lockdown, most of us have time to think.  Are you and your company looking forward to creating a better future? Or will you and your company try to do the same non-sustainable rat race of the past and being caught by the next crises.

McKinsey has been publishing several articles related to the impact of COVID19 and the article: Beyond coronavirus: The path to the next normal very insightful

As McKinsey never talks about PLM, therefore I want to guide you to think about more sustainable business.

Use a modern PLM-infrastructure, practices, and tools to remain competitive, meanwhile creating new or additional business models. Realizing concepts as digital twins, AR/VR-based business models require an internal transition in your company, the jump from coordinated to connected. Therefore, start investigating, experimenting in these new ways of working, and learn fast. This is why we created the PLM Green Alliance as a platform to share and discuss.

If you believe there is no need to be fast, I recommend you watch Rebecka Carlsson’s presentation at the PLMIF event. The title of her presentation: Exponential Tech in Sustainability. Rebecca will share insights for business development about how companies can upgrade to new business models based on the new opportunities that come with sustainability and exponential tech.

The reason I recommend her presentation because she addresses the aspect of exponential thinking nicely. Rebecka states we are “programmed” to think local-linear as mankind. Exponential thinking goes beyond our experience. Something we are not used doing until with the COVID19-virus we discovered exponential growth of the number of infections.

Finally, and this I read this morning, Jan Bosch wrote an interesting post: Why Agile Matters, talking about the fact that during the design and delivery of the product to the market, the environment and therefore the requirements might change. Read his post, unless as Jan states:

Concluding, if you’re able to perfectly predict the optimal set of requirements for a system or product years ahead of the start of production or deployment and if you’re able to accurately predict the effect of each requirement on the user, the customer and the quality attributes of the system, then you don’t need Agile.

What I like about Jan’s post is the fact that we should anticipate changing requirements. This statement combined with Rebecka’s call for being ready for exponential change, with an emerging need for sustainability, might help you discuss in your company how a modern New Product Introduction process might look like, including requirements for a sustainable future that might come in later (per current situation) or can become a practice for the future

Conclusion

Now is the disruptive moment to break with the old ways of working.  Develop plans for the new Beyond-COVID19-society.  Force yourselves to work in more sustainable modes (digital/virtual), develop sustainable products or services (a circular economy), and keep on learning. Perhaps we will meet virtually during the upcoming PLM Innovation Forum?

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Looking forward to your feedback.

Meanwhile, two weeks of a partial lockdown have passed here in the Netherlands, and we have at least another 3 weeks to go according to the Dutch government. The good thing in our country, decisions, and measures are made based on the advice of experts as we cannot rely on politicians as experts.

I realize that despite the discomfort for me, for many other people in other countries, it is a tragedy. My mental support to all of you, wherever you are.

So what has happened since Time to Think (and act differently)?

All Hands On Deck

In the past two weeks, it has become clear that a global pandemic as this one requires an “All Hands On Deck” mentality to support the need for medical supplies and in particular respiration devices, so-called ventilators. Devices needed to save the lives of profoundly affected people. I have great respect for the “hands” that are doing the work in infectious environments.

Due to time pressure, innovative thinking is required to reach quick results in many countries. Companies and governmental organizations have created consortia to address the urgent need for ventilators. You will not see so much PR from these consortia as they are too busy doing the real work.

Still, you see from many of the commercial participants their marketing messages, why, and how they contribute to these activities.

One of the most promoted capabilities is PLM collaboration on the cloud as there is a need for real-time collaboration between people that are under lockdown. They have no time setting-up environments and learning new tools to use for collaboration.

For me, these are grand experiments, can a group of almost untrained people corporate fast in a new environment.

For sure, offering free cloud software, PLM, online CAD or 3D Printing, seems like a positive and compassionate gesture from these vendors. However, this is precisely the wrong perception in our PLM-world – the difficulty with PLM does not lie necessary in the tools.

 

It is about learning to collaborate outside your silo.

Instead of “wait till I am done” it should become “this is what I have so far – use it for your progress”. This is a behavior change.

Do we have time for behavioral changes at this moment? Time will tell if the myth will become a reality so fast.

A lot of thinking

The past two weeks were weeks of thinking and talking a lot with PLM-interested persons along the globe using virtual meetings.

As long as the lockdowns will be there I keep on offering free of charge PLM coaching for individuals who want to understand the future of PLM.

Through all these calls, I really became THE VirtualDutchman in many of these meetings (thanks Jagan for the awareness).

I realized that there is a lot of value in virtual meetings, in particular with the video option on. Although I believe video works well when you had met before as most of my current meetings were with people, I have met before face-to-face. Hence, you know each other facial expressions already.

I am a big fan of face-to-face meetings as I learned in the past 20 years that despite all the technology and methodology issues, the human factor is essential. We are not rational people; we live and decide by emotions.

Still, I conclude that in the future, I could do with less travel, as I see the benefits from current virtual meetings.

Less face-to-face meetings will help me to work on a more sustainable future as I am aware of the impact flying has on the environment. Also, talking with other people, there is the notion that after the lockdowns, virtual conferencing might become more and more a best practice. Good for the climate, the environment, and time savings – bad for traditional industries like aircraft carriers, taxis, and hotels. I will not say 100 % goodbye but reduce.

A Virtual PLM conference!

I was extremely excited to participate in the upcoming PLM Innovation Forum (PLMIF) starting on April 28th, organized by TECHNIA. I have been visiting the event in the past a few times in Stockholm. It was a great place to meet many of the people from my network.

This time I am even more excited as the upcoming PLMIF will be a VIRTUAL conference with all the aspects of a real conference – read more about the conference here.

There will be an auditorium where lectures will be given, there are virtual booths, and it will be a place to network virtually. In my next post, I hope to zoom in on the conference.

Sustainability, a circular economy, and modern PLM should go together. Since 2014, these topics have been on the agenda of the joint CIMdata Roadmap/PDT conferences. Speakers like Amir Rashid KTH Sweden, Ken Webster Ellen MacArthur Foundation, and many others have been talking about the circular economy.

The Scandinavian mindset for an inclusive society for people and the environment for sure, has influenced the agenda. The links above lead to some better understanding of what is meant by a circular economy and a sustainable future, as also the short YouTube movie below:

The circular economy is crucial for a sustainable future. Therefore, I am looking forward to participating in the upcoming PLM Innovation Forum on April 28th, where it will be all about digitalization for sustainable product development and manufacturing. Hopefully, with the right balance towards the WHY-side of our brain, not so much about WHAT.

You are welcomed to register for free here: the virtual PLM Innovation Forum – we might meet there (virtually).

The PLM Green Alliance

The PLM Green Alliance had been announced some months ago, started by Rich McFall and supported by  Bjorn Fidjeland,  Oleg Shilovitsky, and me.

It was the first step to proactively bringing people together to discuss topics like reducing our carbon footprint, sharing and brainstorming about innovations that will lead to a sustainable future for ourselves and our children, grand-grand-children. The idea behind the PLM Green Alliance is that a proactive approach is much cheaper in the long term as we can still evaluate and discuss options.

This brings me back to the All hands On Deck approach we currently use for fighting the COVID-19 virus.

In a crisis mode, the damage to the people and the economy is severe. Besides, in a crisis mode, a lot of errors will be made, but don’t blame or joke about these people that are trying. Without failure, there is no learning.

We are in a potential time of disruption as the image shows below, but we do not have the complete answers for the future

Think about how you could pro-actively work on a sustainable future for all of us. This will be my personal target, combined with explaining and coaching companies related to topics of modern PLM, during the current lockdown and hopefully long after. The PLM Green Alliance is eager to learn from you and your companies where they are contributing to a more sustainable and greener future.

Do not feel your contribution is not needed, as according to research done by the Carr Center’s Erica Chenoweth: The ‘3.5% rule’: How a small minority can change the world. It could be an encouragement to act instead of watching who will determine your future.

Conclusion

While learning to live in a virtual world, we might be realizing that the current crisis is an opportunity to switch faster to a more sustainable and inclusive society. For PLM moving to data-driven, cloud-based environments, using a Model-Based approach along the whole lifecycle, is a path to reduce friction when delivering innovations. From years to weeks? Something we wished to have today already. Stay safe!

This post is based on a mix of interactions I had the last two weeks in my network, mainly on LinkedIn.  First, I enjoyed the discussion that started around Yoann Maingon post: Thoughts about PLM Business models. Yoann is quite seasoned in PLM, as you can see from his LinkedIn profile, and we have had interesting discussions in the past, and recently about a new PLM-system, he is developing Ganister PLM, based on a flexible Graph database.

Perhaps in that context, Yoann was exploring the various business models. Do you pay for the software (and maintenance), do you pay through subscription, what about a modular approach or a full license for all the functionality? All these questions made me think about the various business models that I encountered and how hard it is for a customer to choose the optimal solution.  And is the space for a new type of PLM? Is there space for free PLM? Some of my thoughts here:

PLM vendors need to be profitable

One of the most essential points to consider is that whatever PLM solution you are aiming to buy, make sure that your PLM vendor has a profitable business model. As once you started with a PLM solution, it is your company’s IP that will be stored in this environment, and you do not want to change every few years your PLM system. Switching PLM systems would be affordable if the PLM system would store their data in a standard format – I will share a more in-depth link under PLM and standards.

For the moment, you cannot state PLM vendors endorse standards. None of the real PLM vendors have a standardized data model, perhaps closest to standards are Eurostep, who have based that ShareAspace solution on top of the PLCS (ISO 10303) standard. However, ShareAspace is more positioned as a type of middleware, connecting between OEMs/Owner/Operators and their suppliers to benefit for standardized connectivity.

Coming back to the statement, PLM Vendors need to be profitable to provide a guarantee for the future of your company’s data is the first step. The major PLM Vendors are now profitable as during a consolidation phase starting 15 years ago, a lot of non-profitable PLM Vendors disappeared. Matrix One, Agile, Eigner & Partner PLM are the best-known companies that were bought for either their technology or market share. In that context, you might also look at OnShape.

Would they be profitable as a separate company, or would investors give up? To survive, you need to be profitable, so giving software away for free is not a good sign (see the software for free paragraph) as a company needs continuity.

PLM startups

In the past 10 years, I have seen and evaluated several new PLM companies. All of them did not really change the PLM paradigm, most of them were still focusing on being an engineering collaboration tools. Several of these companies have in their visionary statement that they are going to be the “Excel killer.” We all know Excel has the best user interface and capabilities to manipulate a collection of metadata.

Very popular is the BOM in Excel, extracted from the CAD-system (no need for an “expensive” PDM or PLM) or BOM used to share with suppliers and stakeholders (ERP is too rigid, purchasing does not work with PDM).

The challenge I see here is that these startups do not bring real new value. The cost of manipulating Excels is a hidden cost, and companies relying on Excel communication are the type of companies that do not have a strategic point of view. This is typical for Small and Medium businesses where execution (“let’s do it”) gets all the attention.

PLM startups often collect investor’s money because they promise to kill Excel, but is Excel the real problem? Modern PLM is about data sharing, which is an attitude change, not necessarily a technology change from Excel tables to (cloud) shared tables. However, will one of these “new Excel killers” PLMs be disruptive? I don’t think so.

PLM disruption?

A week ago, I read an interview with Clayton Christensen (thanks Hakan Karden), which I shared on LinkedIn a week ago. Clayton Christensen is the father of the Disruptive Innovation theory, and I have cited him several times in my blogs. His theory is, in my opinion, fundamental to understand how traditional businesses can be disrupted. The interview took place shortly before he died at the age of 67. He died due to complications caused by leukemia.

A favorite part of this interview is, where he restates what is really Disruptive Innovation as we often talk about disruption without understanding the context, just echoing other people:

Christensen: Disruptive innovation describes a process by which a product or service powered by a technology enabler initially takes root in simple applications at the low end of a market — typically by being less expensive and more accessible — and then relentlessly moves upmarket, eventually displacing established competitors. Disruptive innovations are not breakthrough innovations or “ambitious upstarts” that dramatically alter how business is done but, rather, consist of products and services that are simple, accessible, and affordable. These products and services often appear modest at their outset but over time have the potential to transform an industry.

Many of the PLM startups dream and position themselves as the new disruptor.  Will they succeed? I do not believe so if they only focus on replacing Excel, there is a different paradigm needed. Voice control and analysis perhaps (“Hey PLM if I change Part XYZ what will be affected”)?

This would be disruptive and open new options. I think PLM startups should focus here if they want my investment money.

PLM for free?

There are some voices that PLM should be free in an analogy to software management and collaboration tools. There are so many open-source software management tools, why not using them for PLM? I think there are two issues here:

  • PLM data is not like software data. A lot of PLM data is based on design models (3D CAD / Simulation), which is different from software. Designs are often not that modular as software for various reasons. Companies want to be modular in their products, but do they have the time and resources to reinvent their existing product. For software, these costs are so much lower as it is only a brain exercise. For hardware, the impact is significant. Bringing me to the second point.
  • The cost of change for hardware is entirely different compared to software. Changing software does not have an impact on existing stock or suppliers and, therefore, can be implemented once tested for its purpose. A hardware change impacts the existing production process. First, use the old parts before introducing the change, or do we accept the (costs) of scrap. Is our supply chain, or are our production tools ready to deliver continuity for the new version? Hardware changes are costly, and you want to avoid them. Software changes are cheap, therefore design your products to be configurable based on software (For example Tesla’s software controlling the features to be allowed)

Now imagine, with enough funding, you could provide a PLM for free.  Because of ease of deployment, this would be very likely a cloud offering, easy and scalable. However, all your IP is in that cloud too, and let’s imagine that the cloud is safer than on-premise, so it does not matter in which country your data is hosted (does it ?).

Next, the “free” PLM provider starts asking a small service fee after five years, as the promised ROI on the model hasn’t delivered enough value for the shareholders, they become anxious. Of course, you do not like to pay the fee. However, where is your data, and what happens when you do not pay?

If the PLM provider switches you off, you are without your IP. If you ask the PLM provider to provide your data, what will you get? A blob of XML-files, anything you can use?

In general, this is a challenge for all cloud solutions.

  • What if you want to stop your subscription?
  • What is the allowed Exit-strategy?

Here I believe customers should ask for clarity, and perhaps these questions will lead to a renewed understanding that we need standards.

PLM and standards

We had a vivid discussion in the blogging community in September last year. You can read more related to this topic in my post: PLM and the need for standards which describes the aspects of lock-in and needs for openness.

Finally, a remark related to the PLM-acronym. Another interesting discussion started around Joe Barkai’s post: Why I do not do PLM . Read the comments and the various viewpoint on PLM here. It is clear that the word PLM unites us all; however, the interpretation is different.

If someone in the street asks me what is your profession, I never mention I do PLM. I say: “I assist mainly manufacturing companies in redesigning their business processes using best practices and modern digital technologies”. The focus is on the business value, not on the ultimate definition of PLM

Conclusion

There are many business aspects related to PLM to consider. Yoann Maingon’s post started the thinking process, and we ended up with the PLM-definition. It all illustrates that being involved in PLM is never a boring journey. I am curious to learn about your journey and where we meet.

Last week I shared my thoughts related to my observation that the ROI of PLM is not directly visible or measurable, and I explained why. Also, I explained that the alignment of an organization requires a myth to make it happen. A majority of readers agreed with these observations. Some others either misinterpreted the headlines or twisted the story in favor of their opinion.

A few came from Oleg Shilovitsky and as Oleg is quite open in his discussions, it allows me to follow-up on his statements. Other people might share similar thoughts but they haven’t had the time or opportunity to be vocal. Feel free to share your thoughts/experiences too.

Some misinterpretations from Oleg’s post: PLM circa 2020 – How to stop selling Myths

  • The title “How to stop selling Myths” is the first misinterpretation.
    We are not selling myths – more below.
  • “Jos Voskuil’s recommendation is to create a myth. In his PLM ROI Myths article, he suggests that you should not work on a business case, value, or even technology” is the second misinterpretation, you still need a business case, you need value and you need technology.

And I got some feedback from Lionel Grealou, who’s post was a catalyst for me to write the PLM ROI Myth post. I agree I took some shortcuts based on his blog post. You can read his comments here. The misinterpretation is:

  • “Good luck getting your CFO approve the business change or PLM investment based on some “myth” propaganda :-)” as it is the opposite, make your plan, support your plan with a business case and then use the myth to align

I am glad about these statements as they allow me to be more precise, avoiding misperceptions/myth-perceptions.

A Myth is bad

Some people might think that a myth is bad, as the myth is most of the time abstract.  I think these people do not realize that there a lot of myths that they are following; it is a typical social human behavior to respond to myths. Some myths:

  • How can you be religious without believing in myths?
  • In this country/world, you can become anything if you want?
  • In the past, life was better
  • I make this country great again

The reason human beings need myths is that without them, it is impossible to align people around abstract themes. Try for each of the myths above to create an end-to-end logical story based on factual and concrete information. Impossible!

Read Yuval Harari’s book Sapiens about the power of myths. Read Steven Pinker’s book Enlightenment Now to understand that statistics show a lot of current myths are false. However, this does not mean a myth is bad. Human beings are driven by social influences and myths – it is our brain.

Unless you have no social interaction, you might be immune to myths. With brings me to quoting Oleg once more time:

“A long time ago when I was too naive and too technical, I thought that the best product (or technology) always wins. Well… I was wrong. “

I went through the same experience, having studied physics and mathematics makes you think extremely logical. Something I enjoyed while developing software. Later, when I started my journey as the virtualdutchman mediating in PLM implementations, I discovered logical alone does not work in businesses. The majority of decisions are done based on “gut feelings” still presented as reasonable cases.

Unless you have an audience of Vulcans, like Mr. Spock, you need to deal with the human brain. Consider the myth as the envelope to pass the PLM-project to the management. C-level acts by myths as so far I haven’t seen C-level management spending serious time on understanding PLM. I will end with a quote from Paul Empringham:

I sometimes wish companies would spend 6 months+ to educate themselves on what it takes to deliver incremental PLM success BEFORE engaging with software providers

You don’t need a business case

Lionel is also skeptical about some “Myth-propaganda” and I agree with him. The Myth is the envelope, inside needs to be something valuable, the strategy, the plan, and the business case. Here I want to stress one more time that most business cases for PLM are focusing on tool and collaboration efficiency. And from there projecting benefits. However, how well can we predict the future?

If you implement a process, let’s assume BOM-collaboration done with Excel by BOM-collaboration based on an Excel-on-the-cloud-like solution, you can measure the differences, assuming you can measure people’s efficiency. I guess this is what Oleg means when he explains OpenBOM has a real business case.

However, if you change the intent for people to work differently, for example, consult your supplier or manufacturing earlier in the design process, you touch human behavior. Why should I consult someone before I finish my job, I am measured on output not on collaboration or proactive response? Here is the real ROI challenge.

I have participated in dozens of business cases and at the end, they all look like the graph below:

The ROI is fantastic – after a little more than 2 years, we have a positive ROI, and the ROI only gets bigger. So if you trust the numbers, you would be a fool not to approve this project. Right?

And here comes the C-level gut-feeling. If I have a positive feeling (I follow the myth), then I will approve. If I do not like it, I will say I do not trust the numbers.

Needless to say that if there was a business case without ROI, we do not need to meet the C-level. Unless, and it happens incidental, at C-level, there was already a decision we need PLM from Vendor X because we played golf together, we are condemned together or we believe the same myths.

In reality, the old Gartner graph from realized benefits says it all. The impact of culture, processes, and people can make or break a plan.

You do not need an abstract story for PLM

Some people believe PLM on its own is a myth. You just need the right technology and people will start using it, spreading it out and see how we have improved business. Sometimes email is used as an example. Email is popular because you can with limited effort, collaborate with people, no matter where they are. Now twenty years later, companies are complaining about the lack of traceability, the lack of knowledge and understanding related to their products and processes.

PLM will always have the complexity of supporting traceability combined with real-time collaboration. If you focus only on traceability, people will complain that they are not a counter clerk. If you focus solely on collaboration, you miss the knowledge build-up and traceability.

That’s why PLM is a mix of governance, optimized processes to guarantee quality and collaboration, combined with a methodology to tune the existing processes implemented in tools that allow people to be confident and efficient. You cannot translate a business strategy into a function-feature list for a tool.

Conclusion

Myths are part of the human social alignment of large groups of people. If a Myth is true or false, I will not judge. You can use the Myth as an envelope to package your business case. The business case should always be a combination of new ways of working (organizational change), optimized processes and finally, the best tools. A PLM tool-only business case is to my opinion far from realistic

 

Now preparing for PI PLMx London on 3-4 February – discussing Myths, Single BOMs and the PLM Green Alliance

It’s the beginning of the year. Companies are starting new initiatives, and one of them is potentially the next PLM-project. There is a common understanding that implementing PLM requires a business case with ROI and measurable results. Let me explain why this understanding is a myth and requires a myth.

I was triggered by a re-post from Lionel Grealou, titled: Defining the PLM Business Case.  Knowing Lionel is quite active in PLM and digital transformation, I was a little surprised by the content of the post. Then I noticed the post was from January 2015, already 5 years old. Clearly, the world has changed (perhaps the leadership has not changed).

So I took this post as a starting point to make my case.

In 2015, we were in the early days of digital transformation. Many PLM-projects were considered as traditional linear projects. There is the AS-IS situation, there is the TO-BE situation. Next, we know the  (linear) path to the solution and we can describe the project and its expected benefits.

It works if you understand and measure exactly the AS-IS situation and know almost entirely the TO-BE situation (misperception #1).

However,  implementing PLM is not about installing a new transactional system. PLM implementations deal with changing ways-of-working and therefore implementing PLM takes time as it is not just a switch of systems. Lionel was addressing this point:

“The inherent risks associated with any long term business benefit driven projects include the capability of the organization to maintain a valid business case with a benefit realization forecast that remains above the initial baseline. The more rework is required or if the program delivery slips, the more the business case gets eroded and the longer the payback period.”

Interestingly here is the mentioning ..the business case gets eroded – this is most of the time the case. Lionel proposes to track business benefits. Also, he mentions the justification of the PLM-project could be done by considering PLM as a business transformation tool (misperception #2) or a way to mitigate risk,s due to unsupported IT-solutions (misperception #3).

Let’s dive into these misperceptions

#1 Compare the TO-BE and the AS-IS situation

Two points here.

  1. Does your company measure the AS-IS situation? Do you know how your company performs when it comes to PLM related processes? The percentage of time spent by engineers for searching for data has been investigated – however, PLM goes beyond engineering. What about product management, marketing, manufacturing, and service?  Typical performance indicators mentioned are:
    • Time To Market (can you measure?)
    • Developing the right product – better market responsiveness (can you measure?)
    • Multidisciplinary collaboration (can you measure?)
  2. Do you know the exact TO-BE situation? In particular, when you implement PLM, it is likely to be in the scope of a digital transformation. If you implement to automate and consolidate existing processes, you might be able to calculate the expected benefits. However, you do not want to freeze your organization’s processes. You need to implement a reliable product data infrastructure that allows you to enhance, change, or add new processes when required. In particular, for PLM, digital transformation does not have a clear target picture and scope yet. We are all learning.

#2 PLM is a business transformation tool

Imagine you install the best product innovation platform relevant for your business and selected by your favorite consultancy firm. It might be a serious investment; however, we are talking about the future of the company, and the future is in digital platforms. So nothing can go wrong now.

Does this read like a joke? Yes, it is, however, this is how many companies have justified their PLM investment. First, they select the best tool (according to their criteria, according to their perception), and then business transformation can start. Later in time, the implementation might not be so successful; the vendor and/or implementer will be blamed. Read: The PLM blame game

When you go to PLM conferences, you will often hear the same mantras: Have a vision, Have C-level sponsoring/involved, No Big Bang, it is a business project, not an IT-project, and more. And vendor-sponsored sessions always talk about amazing fast implementations (or did they mean installing the POC ?)

However, most of the time, C-level approves the budget without understanding the full implications (expecting the tool will do the work); business is too busy or does not get enough allocated time to supporting implementation (expecting the tool will do the work). So often the PLM-project becomes an IT-project executed mainly by the cheapest implementation partner (expecting the tool will do the work). Again this is not a joke!

A business transformation can only be successful if you agree on a vision and a learning path. The learning path will expose the fact that future value streams require horizontal thinking and reallocation of responsibilities – breaking the silos, creating streams.

Small teams can demonstrate these benefits without disrupting the current organization. However, over time the new ways of working should become the standard, therefore requiring different types of skills (people), different ways of working (different KPIs and P&L for departments), and ultimate different tools.

As mentioned before, many PLM-projects start from the tools – a guarantee for discomfort and/or failure.

#3 – mitigate risks due to unsupported IT-solutions

Often PLM-projects are started because the legacy environment becomes outdated. Either because the hardware infrastructure is no longer supported/affordable or the software code dependencies on the latest operating systems are no longer guaranteed.

A typical approach to solve this is a big-bang project – the new PLM system needs to contain all the old data and meanwhile, to justify the project, the new PLM system needs to bring additional business value. The latter part is most of the time not difficult to identify as traditional PLM implementations most of the time were in reality cPDM environments with a focus on engineering only.

However, the legacy migration can have such a significant impact on the new PLM-system that it destroys the potential for the future. I wrote about this issue in The PLM Migration Dilemma

How to approach PLM ROI?

A PLM-project never will get a budget or approval from the board when there is no financial business case. Building the right financial business case for PLM is a skill that is often overlooked. During the upcoming PI PLMx London conference (3 – 4 February), I will moderate a Focus Group where we will discuss how to get PLM on the Exec’s agenda.

Two of my main experiences:

  • Connect your PLM-project to the business strategy. As mentioned before, isolated PLM fails most of the time because business transformation, organizational change and the targeted outcome are not included. If PLM is not linked to an actual business strategy, it will be considered as a costly IT-project with all its bad connotations. Have a look at my older post: PLM, ROI and disappearing jobs
  • Create a Myth. Perhaps the word Myth is exaggerated – it is about an understandable vision. Myth connects nicely to the observations from behavioral experts that our brain does not decide on numbers but by emotion. Big decisions and big themes in the world or in a company need a myth: “Make our company great again” could be the tagline. In such a case people get aligned without a deep understanding of what is the impact or business case; the myth will do the work – no need for a detailed business case. A typical human behavior, see also my post: PLM as a myth.

Conclusion

There should never be a business case uniquely for PLM – it should always be in the context of a business strategy requiring new ways of working and new tools. In business, we believe that having a solid business case is the foundation for success. Sometimes an overwhelming set of details and numbers can give the impression that the business case is solid.  Consultancy firms are experts in this area to build a business case based on emotion. They know how to combine numbers with a myth. Therefore look at their approach – don’t be too technical / too financial. If the myth will hold, at the end depends on the people and organization, not on the investments in tools and services.

It is the holiday season many groups, religions have their celebrations in this period, mostly due to the return of the light on the Northern hemisphere – Christmas, Diwali, Hanukkah, Kwanzaa and Santa Lucia are a few of them. Combined with a new decade upcoming, also a time for me to reflect on what have we learned and what can we imagine in the next ten years.

Looking back the last decade

Globalization is probably one of the most significant changes we have seen. Almost the whole world is connected now through all kinds of social and digital media. Information is instantly available and influences our behavior dramatically. The amount of information coming to us is so huge that we only filter the information that touches us emotionally. The disadvantage of that, opinions become facts and different opinions become enemies. A colorful society becomes more black and white.

These trends have not reached us, in the same manner, the domain of PLM. There have been several startups in the past ten years, explaining that PLM should be as easy as social communication with Facebook. Most of these startups focused on integrations with MCAD-systems, as-if PLM is about developing mechanical products.

In my opinion, the past decade has shown that mechanical design is no longer a unique part of product development. Products have become systems, full of electronics and driven by software. Systems Engineering became more and more important, defining the overall concept of a product, moving the focus to the earlier stages of the product design – see image below.

During Ideation and system definition, we need “social” collaboration between all stakeholders. To get a grip on this collaboration, we use models (SysML, UML, Logical, 2D, 3D) to have an unambiguous representation, simulation and validation of the product already in the virtual world.

Actually, there is nothing social about that collaboration. It is a company-driven demand to deliver competitive products to remain in business. If our company does not improve multidisciplinary collaboration, global competitors with less nostalgic thoughts to the past will conquer the market space.

Currently in most companies there are two worlds, hardware and software, almost 100 %-separated managed by either PLM or ALM (Application Lifecycle Management). It is clear that “old” PLM – item-driven with related documents cannot match the approach required for ALM – data-elements (code) based on software models (and modules).

In the hardware world a change can have a huge effect on the cost (or waste) of the product, however, implementing a hardware change can take months. Think about new machinery, tooling in the worst case. In the software domain, a change can be executed almost immediately. However here testing the impact of the change can have serious effects. The software fix for the Boeing 737 Max is not yet proven and delivered.

Therefore, I would like to conclude that in the past decade we learned in the PLM-domain to work in a Coordinated manner – leaving silos mostly in place.

Next week I will look forward to our challenging upcoming decade. Topics on my list for the next decade are:

  • From Coordinated to Connected – Generation Change
  • Sustainability of our Earth (and how PLM can help)
  • Understanding our human behavior to understand how to explain PLM to your execs- PI PLMx London 2020
  • All combined with restoring trust in science

 

I wish you all a happy and healthy New Year – take time to listen and learn as we need dialogue for the future, not opinions.

See you in 2020

In my previous post, the PLM blame game, I briefly mentioned that there are two delivery models for PLM. One approach based on a PLM system, that contains predefined business logic and functionality, promoting to use the system as much as possible out-of-the-box (OOTB) somehow driving toward a certain rigidness or the other approach where the PLM capabilities need to be developed on top of a customizable infrastructure, providing more flexibility. I believe there has been a debate about this topic over more than 15 years without a decisive conclusion. Therefore I will take you through the pros and cons of both approaches illustrated by examples from the field.

PLM started as a toolkit

The initial cPDM/PLM systems were toolkits for several reasons. In the early days, scalable connectivity was not available or way too expensive for a standard collaboration approach. Engineering information, mostly design files, needed to be shared globally in an efficient manner, and the PLM backbone was often a centralized repository for CAD-data. Bill of Materials handling in PLM was often at a basic level, as either the ERP-system (mostly Aerospace/Defense) or home-grown developed BOM-systems(Automotive) were in place for manufacturing.

Depending on the business needs of the company, the target was too connect as much as possible engineering data sources to the PLM backbone – PLM originated from engineering and is still considered by many people as an engineering solution. For connectivity interfaces and integrations needed to be developed in a time that application integration frameworks were primitive and complicated. This made PLM implementations complex and expensive, so only the large automotive and aerospace/defense companies could afford to invest in such systems. And a lot of tuition fees spent to achieve results. Many of these environments are still operational as they became too risky to touch, as I described in my post: The PLM Migration Dilemma.

The birth of OOTB

Around the year 2000, there was the first development of OOTB PLM. There was Agile (later acquired by Oracle) focusing on the high-tech and medical industry. Instead of document management, they focused on the scenario from bringing the BOM from engineering to manufacturing based on a relatively fixed scenario – therefore fast to implement and fast to validate. The last point, in particular, is crucial in regulated medical environments.

At that time, I was working with SmarTeam on the development of templates for various industries, with a similar mindset. A predefined template would lead to faster implementations and therefore reducing the implementation costs. The challenge with SmarTeam, however, was that is was very easy to customize, based on Microsoft technology and wizards for data modeling and UI design.

This was not a benefit for OOTB-delivery as SmarTeam was implemented through Value Added Resellers, and their major revenue came from providing services to their customers. So it was easy to reprogram the concepts of the templates and use them as your unique selling points towards a customer. A similar situation is now happening with Aras – the primary implementation skills are at the implementing companies, and their revenue does not come from software (maintenance).

The result is that each implementer considers another implementer as a competitor and they are not willing to give up their IP to the software company.

SmarTeam resellers were not eager to deliver their IP back to SmarTeam to get it embedded in the product as it would reduce their unique selling points. I assume the same happens currently in the Aras channel – it might be called Open Source however probably it is only high-level infrastructure.

Around 2006 many of the main PLM-vendors had their various mid-market offerings, and I contributed at that time to the SmarTeam Engineering Express – a preconfigured solution that was rapid to implement if you wanted.

Although the SmarTeam Engineering Express was an excellent sales tool, the resellers that started to implement the software began to customize the environment as fast as possible in their own preferred manner. For two reasons: the customer most of the time had different current practices and secondly the money come from services. So why say No to a customer if you can say Yes?

OOTB and modules

Initially, for the leading PLM Vendors, their mid-market templates were not just aiming at the mid-market. All companies wanted to have a standardized PLM-system with as little as possible customizations. This meant for the PLM vendors that they had to package their functionality into modules, sometimes addressing industry-specific capabilities, sometimes areas of interfaces (CAD and ERP integrations) as a module or generic governance capabilities like portfolio management, project management, and change management.

The principles behind the modules were that they need to deliver data model capabilities combined with business logic/behavior. Otherwise, the value of the module would be not relevant. And this causes a challenge. The more business logic a module delivers, the more the company that implements the module needs to adapt to more generic practices. This requires business change management, people need to be motivated to work differently. And who is eager to make people work differently? Almost nobody,  as it is an intensive coaching job that cannot be done by the vendors (they sell software), often cannot be done by the implementers (they do not have the broad set of skills needed) or by the companies (they do not have the free resources for that). Precisely the principles behind the PLM Blame Game.

OOTB modularity advantages

The first advantage of modularity in the PLM software is that you only buy the software pieces that you really need. However, most companies do not see PLM as a journey, so they agree on a budget to start, and then every module that was not identified before becomes a cost issue. Main reason because the implementation teams focus on delivering capabilities at that stage, not at providing value-based metrics.

The second potential advantage of PLM modularity is the fact that these modules supposed to be complementary to the other modules as they should have been developed in the context of each other. In reality, this is not always the case. Yes, the modules fit nicely on a single PowerPoint slide, however, when it comes to reality, there are separate systems with a minimum of integration with the core. However, the advantage is that the PLM software provider now becomes responsible for upgradability or extendibility of the provided functionality, which is a serious point to consider.

The third advantage from the OOTB modular approach is that it forces the PLM vendor to invest in your industry and future needed capabilities, for example, digital twins, AR/VR, and model-based ways of working. Some skeptic people might say PLM vendors create problems to solve that do not exist yet, optimists might say they invest in imagining the future, which can only happen by trial-and-error. In a digital enterprise, it is: think big, start small, fail fast, and scale quickly.

OOTB modularity disadvantages

Most of the OOTB modularity disadvantages will be advantages in the toolkit approach, therefore discussed in the next paragraph. One downside from the OOTB modular approach is the disconnect between the people developing the modules and the implementers in the field. Often modules are developed based on some leading customer experiences (the big ones), where the majority of usage in the field is targeting smaller companies where people have multiple roles, the typical SMB approach. SMB implementations are often not visible at the PLM Vendor R&D level as they are hidden through the Value Added Reseller network and/or usually too small to become apparent.

Toolkit advantages

The most significant advantage of a PLM toolkit approach is that the implementation can be a journey. Starting with a clear business need, for example in modern PLM, create a digital thread and then once this is achieved dive deeper in areas of the lifecycle that require improvement. And increased functionality is only linked to the number of users, not to extra costs for a new module.

However, if the development of additional functionality becomes massive, you have the risk that low license costs are nullified by development costs.

The second advantage of a PLM toolkit approach is that the implementer and users will have a better relationship in delivering capabilities and therefore, a higher chance of acceptance. The implementer builds what the customer is asking for.

However, as Henry Ford said, if I would ask my customers what they wanted, they would ask for faster horses.

Toolkit considerations

There are several points where a PLM toolkit can be an advantage but also a disadvantage, very much depending on various characteristics of your company and your implementation team. Let’s review some of them:

Innovative: a toolkit does not provide an innovative way of working immediately. The toolkit can have an infrastructure to deliver innovative capabilities, even as small demonstrations, the implementation, and methodology to implement this innovative way of working needs to come from either your company’s resources or your implementer’s skills.

Uniqueness: with a toolkit approach, you can build a unique PLM infrastructure that makes you more competitive than the other. Don’t share your IP and best practices to be more competitive. This approach can be valid if you truly have a competing plan here. Otherwise, the risk might be you are creating a legacy for your company that will slow you down later in time.

Performance: this is a crucial topic if you want to scale your solution to the enterprise level. I spent a lot of time in the past analyzing and supporting SmarTeam implementers and template developers on their journey to optimize their solutions. Choosing the right algorithms, the right data modeling choices are crucial.

Sometimes I came into a situation where the customer blamed SmarTeam because customizations were possible – you can read about this example in an old LinkedIn post: the importance of a PLM data model

Experience: When you plan to implement PLM “big” with a toolkit approach, experience becomes crucial as initial design decisions and scope are significant for future extensions and maintainability. Beautiful implementations can become a burden after five years as design decisions were not documented or analyzed. Having experience or an experienced partner/coach can help you in these situations. In general, it is sporadic for a company to have internally experienced PLM implementers as it is not their core business to implement PLM. Experienced PLM implementers vary from size and skills – make the right choice.

 

Conclusion

After writing this post, I still cannot write a final verdict from my side what is the best approach. Personally, I like the PLM toolkit approach as I have been working in the PLM domain for twenty years seeing and experiencing good and best practices. The OOTB-box approach represents many of these best practices and therefore are a safe path to follow. The undecisive points are who are the people involved and what is your business model. It needs to be an end-to-end coherent approach, no matter which option you choose.

 

 

 

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