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In my previous post, I shared my thoughts Why PLM is the forgotten domain in digital transformation. Legacy data, (legacy) people and slow organizations are the main inhibitors to moving forward. Moreover, all this legacy makes it hard to jump on the digital wagon.
When you talk with vendors and implementers of PLM solutions, they will all focus on the fact that with their solution and support PLM is simple. It is simple because:
- We have the largest market share in your industry segment
- We have the superior technology
- We are cloud-based
- We are insane customizable
- Gartner is talking about us
- We have implemented at 100+ similar companies
For my customers, implementing PLM was never simple as every PLM implementation was driving a business change. In the early days of SmarTeam, we had the theme “We work the way you work”, which is in hindsight a very bad statement. You do not want to automate the way a company is currently working. You want to use a PLM implementation to support a business change.
Never implement the past, implement the future
And there are changes ……
When I was discussing PLM with my potential customers ten years ago, the world was different. PLM was in a transition from being a PDM-tool from engineering into an extended PDM-tool centered around product development. A major theme for this kind of implementations was to move from a document-driven environment towards an item-centric environment. Instead of managing documents (CAD files and other files like Excel) the implementation was based on providing a data continuity, where the item (the physical part or in SAP terms the material) would be the main information placeholder. The continuity is implemented around EBOMs and MBOMs and thanks to automation the MBOM can be connected to the ERP system in a continuous flow.
Just search for item-centric or BOM-centric, and you will find many references from vendors and consultants for this approach. Implementing PLM item-centric is already a big step forward in efficiency and quality for companies. However,…
Never implement the past, implement the future
And there will be changes …..
Digital transformation is changing the way we do business and is changing the way companies should organize their data. A BOM-centric approach is no longer the ultimate implementation concept. To support a digital enterprise, the next step is a model-based enterprise. The model (not necessary the 3D-model) and its maturity and configurations are intended to be the reference for an organization. The model and its representation can connect hardware and software in a data-driven environment through the whole lifecycle. A model is needed to support smart manufacturing and the digital twin concept.There are many impressive marketing movies on YouTube explaining how companies/vendors implement digital continuity. Unfortunate the gap between marketing and reality is big at this time because moving to a model based enterprise is not an easy step. Coming back to the LEGACY-statement at the beginning of this post, it is not simple.
We all have to learn
Digital transformation is just starting in the domain of PLM. Sharing and collecting knowledge is crucial, independent from particular solutions. For me, the upcoming PDT-conference in October is going to be a reference point where we are on this journey. In case your company has the experience to share related to this topic, please react to this link: http://pdteurope.com/call-for-abstract-now-open/
In case you want to learn and believe it is not simple, wait till the program it will be announced. The PDT conference has always been a conference where details are discussed. Looking forward and discuss with you.
Implementing and continuing with PLM is not simple for a company due to changes in paradigms. Digital transformation forces companies to investigate the details how to make it happen. Implementing PLM in scope of a digital transformation requires learning and time, not products first.
Last week I shared my observation from day 1 of the PI Berlin 2017 conference. If you have not read this review look here: The weekend after PI Berlin 2017.
Day 1 was the most significant day for me. I used the second day more for networking and some selective sessions that I wanted to attend. The advantage for the reader, this post is not as long as the previous one. Some final observations from day 2
PLM: The Foundation for Enterprise Digitalization
Peter Bilello from CIMdata gave an educational speech about digitalization and the impact of digitalization on current businesses. Peter considers digitalization as a logic next step in the PLM evolution process. See picture below.
Although it is an evolution process, the implementation of this next step requires a revolution. Digitalization will create a disruption in companies as the digital approach will reshape business models, internal business processes, roles and responsibilities. Peter further elaborated on the product innovation platform and its required characteristics. Similar to what I presented on the first day Peter concluded that we are in a learning stage how to build new methodology/infrastructure for PLM. For example, a concept of creating and maintaining a digital twin needs a solid foundation.
His conclusion: Digitalization requires PLM:
Boosting the value of PLM through
Advanced Analytics Assessment
Paul Haesman from Autoliv introduced the challenges they have as a typical automotive company. Digitalization is reshaping the competitive landscape and the demands on more technology, still guaranteeing the highest safety levels of their products. In that context, they invited Tata Technologies to analyze their current PLM implementation and from there to provide feedback about their as-is readiness for the future.
Chris Hind from Tata Technologies presented their methodology where they provide benchmark information, a health check, impact and potential roadmap for PLM. A method that is providing great insights for both parties and I encourage companies that haven´t done such an assessment to investigate in such an activity. The major value of a PLM assessment is that it provides an agreed baseline for the company that allows management to connect the Why to the What and How. Often PLM implementations focus on What and How with not a real alignment to the Why, which results in unrealistic expectations or budgets due to the perceived value.
An interesting point address by Chris (see picture above) is that Document Management is considered as a trending priority !!!
It illustrates that digitalization in PLM has not taken off yet and companies still focusing on previous century capabilities 😦
The second highlight rating Manufacturing Process Management as the most immature PLM pillar can be considered in the same context. PLM systems are still considered engineering systems and manufacturing process management is in the gray area between PLM systems and ERP systems.
The last two bullets are clear. The roots of PLM are in managing quality and compliance and improving time to market.
Overcoming integration challenges –
Outotec´s Digital Journey
Helena Gutiérrez and Sami Grönstand explained in an entertaining manner the Outotec (providing technologies and services for the metal and mineral processing industries) company and their digital journey. Outotec has been working already for several years on simplifying their IT-landscape meanwhile trying to standardize in a modern, data-driven manner the flow of information.
Sami provided with great detail how the plant process definition is managed in PLM. The process definition is driven by the customer´s needs and largely defines the costs of a plant to build. Crucial for the quotation phase but also important if you want to create a digital continuity. Next, the process definition is further detailed with detailed steps, defining the key parameters characteristics of the main equipment.
And then the challenge starts. In the context of the plant structure, the right equipment needs to be selected. Here it is where plant meets product or as the Outotec team said where the elephant and ants do the tango.
In the end, as much as possible standardized products need to match the customer specific solution. The dream of most of these companies: combining Engineering To Order and Configure To Order and remember this in the context of digital continuity.
So far, a typical EPC (Engineering Procurement Construction) project, however, Outotec wants to extend the digital continuity to support also their customer´s installed plant. I remembered one of their quotes for the past: “Buy one (plant) and get two (a real one and a virtual one). “This concept managed in a digital continuity is something that will come up in many other industries – the digital twin.
Where companies like Outotec are learning to connect all data from the initiation of their customer specific solution through delivery and services, other product manufacturing companies are researching the same digital continuity for their product offerings to the field of consumers. Thanks to digitization these concepts become more and more similar. I wrote about this topic recently in my post PLM for Owner/Operators.
Final conclusion from PI Berlin 2017
It is evident participants and speakers are talking about the strategic value and role PLM can have an organization.
With digitalization, new possibilities arise where the need and value for end-to-end connectivity pop up in every industry.
We, the PLM community, are all learning and building new concepts. Keep sharing and meeting each other in blogs, forums, and conferences.
It is already the 6th consecutive year that MarketKey organized the Product Innovation conference with its primary roots in PLM. For me, the PI conferences have always been a checkpoint for changes and progress in the field.
This year about 100 companies participated in the event with the theme: Digital Transformation. From Hype to Value? Sessions were split into three major streams: digital transformation, extended PLM, and Business Enabled Innovation larded with general keynote speeches. I wanted to attend all sessions (and I will do virtually later through PI.TV), but in this post, my observations are from the event highlights from the extended PLM sessions.
From iCub to R1
Giorgio Metta gave an overview of the RobotCub project, where teams are working on developing a robot that can support human beings in our day-to-day live. Some of us are used to industrial robots and understand their constraints. A robot to interact with human beings is extreme more complex, and its development is still in the early stages. This type of robot needs to learn and interpret its environment while remaining accurate and safe for the persons interacting with the robot.
One of the interesting intermediate outcome from the project is that a human-like robot with legs and arms is far too expensive and complicated to handle. Excellent for science fiction movies, but in reality too difficult to control its balance and movements.
This was an issue with the iCUB robot. Now Giorgio and the teams are working on the new R1 robot, maybe not “as-human” as the iCUB robot, but more affordable. It is not only the mechanics that challenge the researchers. Also, the software supporting the artificial intelligence required for a self-learning and performing safe robot is still in the early days.
An inspiring keynote speech to start the conference.
Standardizing PLM Components
The first Extended PLM session was Guido Klette (Rheinmetall), describing the challenges the Rheinmetall group has related to develop and support PLM needs. The group has several PLD/PLM-like systems in place. Guido does not believe in one size fits all to help every business in the group. They have already several PLM “monsters” in their organization. For more adequate support, Rheinmetall has defined a framework with PLM components and dependencies to a more granular choice of functionality to meet individual businesses.
A challenge for this approach, identified by a question from the audience, is that it is a very scientific approach not addressing the difference in culture between countries. Guido agreed and mentioned that despite culture, companies joining the Rheinmetall group most of the time were happy to adhere to such a structured approach.
My takeaway: the component approach fits very well with the modern thinking that PLM should not be supported by a single “monster” system but can be addressed by components providing at the end the right business process support.
PLM as a business asset
Björn Axling gave an excellent presentation describing the PLM perspective from the Husqvarna group. He addressed the external and internal challenges and opportunities for the group in a structured and logical approach which probably apply for most manufacturing companies in a global market. Björn explained that in the Husqvarna group PLM is considered as a business approach, more than ever, Product Lifecycle Management needs to be viewed as the DNA of a company which was the title of one of his slides.
I like his eleven key imperatives (see the above picture) in particular key imperative #9 which is often forgotten:
Take definitions, nomenclature and data management very seriously – the devil is in the details.
This point will always fire back on you if you did not give it the needed attention from the start. Of course, the other ten points are also relevant. The challenge in every PLM project is to get these points addressed and understood in your company.
How to use PLM to enable Industry 4.0?
The title of the presentation was related to Industry 4.0 more focusing on innovation in for Germany´s manufacturing industry. Germany has always been strong in manufacturing, not so strong in product innovation. Martin mentioned that later this year the German government will start another initiative, Engineering 4.0, which should be exciting for our PLM community.
Martin elaborated on the fact that end-to-end support for SysLM can be achieved through a backbone based on linked data. Do not try to solve all product information views in a single system is the lesson learned and preached.
For me, it was interesting to see that also Martin picked up on the bimodal approach for PLM, required to support a transition to a modern digital enterprise (see picture). We cannot continue to build upon our old PLM environments to support, future digital businesses.
PLM and Digital Transformation
In my afternoon session (Jos Voskuil), I shared the observations that companies invest a lot in digital transformation downstream by introducing digital platforms for ERP, CRM, MES and Operations. PLM is often the forgotten platform that needs to change to support a digital enterprise with all its benefits. You can see my presentation here on SlideShare. I addressed here the bimodal approach as discussed in a previous blog post, introduced in Best Practices or Next Practices.
In case your company is not ready yet for a digital transformation or bimodal approach I addressed the need to become model-driven instead of document-driven. And of course for a digital enterprise, the quality of the data counts. I wrote about these topics recently: Digital PLM requires a Model-Based Enterprise and The importance of accurate data: ACT NOW!
The last extended PLM presentation from day 1 was given by Felix Nyffenegger, professor for PLM/CAx at HSR (University of Applied Science in Rapperswil (CH)). Felix shared his discovery journey into Industry 4.0, and IoT combined with experiences from the digitalLab@HSR, leading into the concept of closed-loop PLM.
I liked in particular how Felix brought the various views on the product together into one diagram, telling the full story of closed-loop PLM – necessary for a modern implementation framework.
A new age for airships
The last presentation of the day was from Chris Daniels describing the journey of Hybrid Air Vehicles with their Airlander 10 project. Where the classical airships, the most infamous perhaps the Hindenburg, have disappeared due to their flaws, the team of Hybrid Air Vehicles built upon the concept of airships in a defense project with the target to deliver a long endurance multi-intelligence vehicle. The advantage of airships is that they can stay in the air for several days, serving as communication hotspot, communication or rescue ship for places hard to reach with traditional aircraft or helicopter. The Airlander can be operation without going back to a base for 5 days, which is extremely long when you compare this to other aircraft.
The Airlander project is a typical example of incremental innovation used to optimize and extend the purpose of an airship. Combined with the fact that Chris was an excellent speaker made it a great closure of the day
This post is just an extract of one day and one stream of the conference. Already too large for a traditional blog post. Next week I will follow-up with day two and respond beyond 140 characters to the tweet below:
Two terms pass me every day: Digital Transformation appears in every business discussion, and IP Security, a topic also discussed in all parts of society. We realize it is easy to steal electronic data without being detected (immediately).
What is Digital Transformation?
Digital Transformation is reshaping business processes to enable new business models, create a closer relation with the market, and react faster while reducing the inefficiencies of collecting, converting and processing analog or disconnected information.
Digital Transformation became possible thanks to the lower costs of technology and global connectivity, allowing companies, devices, and customers to interact in almost real-time when they are connected to the internet.
IoT (Internet of Things) and IIoT (Industrial Internet of Things) are terms closely related to Digital Transformation. Their focus is on creating connectivity with products (systems) in the field, providing a tighter relation with the customer and enabling new (upgrade) services to gain better performance. Every manufacturing company should be exploring IoT and IIoT possibilities now.
Digital Transformation is also happening in the back office of companies. The target is to create a digital data flow inside the company and with the outside stakeholders, e.g., customers, suppliers, authorities. The benefits are mainly improved efficiency, faster response and higher quality interaction with the outside world.
The part of Digital Transformation that concerns me the most is the domain of PLM. As I have stated in earlier posts (Best Practices or Next Practices ? / What is Digital PLM ?), the need is to replace the classical document-driven product to market approach by a modern data-driven interaction of products and services.
I am continually surprised that companies with an excellent Digital Transformation profile on their websites have no clue about Digital Transformation in their product innovation domain. Marketing is faster than reality.
I am happy to discuss this topic with many of my peers in the product innovation world @ PI Berlin 2017, three weeks from now. I am eagerly looking to look at how and why companies do not embrace the Digital Transformation sooner and faster. The theme of the conference, “Digital Transformation: From Hype to Value “ says it all. You can find the program here, and I will report about this conference the weekend after.
The topic of IP protection has always been high on the agenda of manufacturing companies. Digital Transformation brings new challenges. Digital information will be stored somewhere on a server and probably through firewalls connected to the internet. Some industries have high-security policies, with separate networks for their operational environments. Still, many large enterprises are currently struggling with IP security policies as sharing data while protecting IP between various systems creates a lot of administration per system.
Cloud solutions for sharing data are still a huge security risk. Where is the data stored and who else have access to it? Dropbox came in the news recently as “deleted” data came back after five years, “due to a bug.” Cloud data sharing cannot be trusted for real sensitive information.
Cloud providers always claim that their solutions are safer due to their strict safety procedures compared to the improvident behavior of employees. And, this is true. For example, a company I worked with had implemented Digital Rights Management (DRM) for internal sharing of their IP, making sure that users could only read information on the screen, and not store it locally if they had an issue with the server. “No problem”, one of the employees said, “I have here a copy of the documents on my USB-drive.”
Cloud-based PLM systems are supposed to be safer. However, it still matters where the data is stored; security and hacking policies of countries vary. Assume your company´s IP is safe for hacking. Then the next question is “How about ownership of your data?”
Vendor lock-in and ownership of data are topics that always comes back at the PDT conferences (see my post on PDT2016). When a PLM cloud provider stores your product data in a proprietary data format, you will always be forced to have a costly data migration project when you decide to change from the provider.
Why not use standards for data storage? Hakan Kårdén triggered me on this topic again with his recent post: Data Is The New Oil So Make Sure You Ask For The Right Quality.
Digital Transformation is happening everywhere but not always with the same pace and focus. New PLM practices still need to be implemented on a larger scale to become best practices. Digital information in the context of Intellectual Property creates extra challenges to be solved. Cloud providers do not offer yet solutions that are safe and avoiding vendor lock-in.
Be aware. To be continued…
Many thanks (again) to Dick Bourke for his editing suggestions
At this moment I am finalizing my session for PDT2016 where I will talk about the importance of accurate data. Earlier this year I wrote a post about that theme: The importance of accurate data. Act now!
My PDT session will be elaborating on this post, with a focus on why and how we need this change in day-to-day business happen. So if you are interested in a longer story and much more interesting topics to learn and discuss, come to Paris on 9 and 10 November.
Dreaming is free
Recently I found a cartoon on LinkedIn and shared it with my contacts, illustrating the optimistic view companies have when they are aiming to find the best solution for their business, going through an RFI phase, the RFP phase, and ultimately negotiation the final deal with the PLM solution provider or vendor. See the image below:
All credits to the author – I found this image here
The above cartoon gives a humoristic view of the (PLM) sales process (often true). In addition, I want to share a less optimistic view related to PLM implementations after the deal has been closed. Based on the PLM projects if have been coaching in the past, the majority of these projects became in stress mode once the stakeholders involved only focused on the software, the functions and features and centralizing data. Implementing the software without a business transformation caused a lot of discomfort.
Users started to complain that the system did not allow them to do their day-to-day work in the same way. And they were right! They should have a new day-to-day work in the future, with different priorities based on the new PLM infrastructure.
This cultural change (and business change) was often not considered as the PLM system was implemented from an IT-perspective, not with a business perspective.
Over time, a better understanding of PLM and the fact that vendors and implementers have improved their portfolio and implementation skills, classical PLM implementations are now less disruptive.
A classical PLM implementation can be done quickly is because the system most of the time does not change the roles and responsibilities of people. Everyone remains working in his/her own silo. The difference: we store information in a central place so it can be found. And this approach would have worked if the world was not changing.
The digital enterprise transformation.
With the upcoming digitization and globalization of the market, enterprises are forced to adapt their business to become more customer-driven. This will have an impact on how PLM needs to be implemented. I wrote about this topic in my post: From a linear world to fast and circular. The modern digital enterprise has new roles and responsibilities and will eliminate roles and responsibilities that can be automated through a data-driven, rule-based approach. Therefore implementing PLM in a modern approach should be related (driven) by a business transformation and not the other way around!
In the past two years, I have explained this story to all levels inside various organizations. And nobody disagreed. Redefining the processes, redefining roles was the priority. And we need a team to help people to make this change – these people are change management experts. The benefits diagram from Gartner as shown below was well understood, and most companies agreed the ambition should be to the top curve, in any case, stay above the red curve
But often reality relates to the first cartoon. In the majority of the implementations I have seen the past two years, the company did not want to invest in change management, defining the new process and new roles first for an optimum flow of information. They spent the entire budget on software and implementation services. With a minimum of staff, the technology was implemented based on existing processes – no change management at all. Disappointing, as short-term thinking destroyed the long-term vision and benefits were not as large as they had been dreaming.
Without changing business processes and cultural change management, the PLM team will fight against the organization, instead of surfing on the wave of new business opportunities and business growth.
If your company is planning to implement modern PLM which implicit requires a business transformation, make sure cultural change management is part of your plan and budget. It will bring the real ROI. Depending on your company´s legacy, if a business transformation is a mission impossible, it is sometimes easier to start a new business unit with new processes, new roles and potentially new people. Otherwise, the benefits will remain (too) low from your PLM implementation.
I am curious to learn your experience related to (the lack) of change management – how to include it into the real scope – your thoughts ?
As a reaction to this post, Oleg Shilovitsky wrote a related blog post: PLM and the death spiral of cultural change. See my response below to this post as it will contribute to the understanding of this post
Oleg, thanks for contributing to the theme of cultural change. Your post illustrates that my post was not clear enough, or perhaps too short. I do not believe PLM is that difficult because of technology, I would even claim that technology is a the bottom of my list of priorities. Not stating it is not important, but meaning that when you are converging with a company to a vision for PLM, you probably know the kind of technologies you are going to use.
The highest priority to my opinion is currently the business transformation companies need to go through in order to adapt their business to remain relevant in a digital world. The transformation will require companies to implement PLM in a different manner, less silo-oriented, more focus on value flows starting from the customer.
Working different means cultural change and a company needs to allocate time, budget and energy to that. The PLM implementation is supporting the cultural change not driving the cultural change.
And this is the biggest mistake I have seen everywhere. Management decides to implement a new PLM as the driver for cultural change, instead of the result of cultural change. And they reason this is done, is most of the time due to budget thinking as cultural change is ways more complex and expensive than a PLM implementation.
Coming back from holiday (a life without PLM), it is time to pick up blogging again. And like every start, the first step is to make a status where we are now (with PLM) and where PLM is heading. Of course, it remains a nopinion based on dialogues I had this year.
First and perhaps this is biased, there is a hype in LinkedIn groups or in the blogs that I follow, a kind of enthusiasm coming from OnShape and Oleg Shilovitsky´s new company OpenBOM: the hype of cloud services for CAD/Data Management and BOM management.
Two years ago I discussed at some PLM conferences, that PLM should not necessary be linked to a single PLM system. The functionality of PLM might be delivered by a collection of services, most likely cloud-based, and these services together providing support for the product lifecycle. In 2014 I worked with Kimonex, an Israeli startup that developed a first online BOM solution, targeting the early design collaboration. Their challenge was to find customers that wanted to start this unknown journey. Cloud-based meant real-time collaboration, and this is also what Oleg wrote about last week: Real-time collaborative edit is coming to CAD & PLM
Real-time collaboration is one of the characteristics of a digital enterprise, where thanks to the fact information is stored as data, information can flow rapidly through an organization. Data can be combined and used by anyone in the organization in a certain context. This approach removes the barriers between PLM and ERP. To my opinion, there is no barrier between PLM and ERP. The barrier that companies create exists because people believe PLM is a system, and ERP is a system. This is the way of (system) thinking is coming from the previous century.
So is the future about cloud-based, data-driven services for PLM?
To my opinion systems are still the biggest inhibitor for modern PLM. Without any statistical analysis based on my impressions and gut feelings, this is what I see:
- The majority of companies that say the DO PLM, actually do PDM. They believe it is PLM because their vendor is a PLM company and they have bought a PLM system. However, in reality, the PLM system is still used as an advanced PDM system by engineering to push (sometimes still manual) at the end information into the well-established ERP system. Check with your company which departments are working in the PLM system – anyone beyond engineering ?
- There is a group of companies that have implemented PLM beyond their engineering department, connecting to their suppliers in the sourcing and manufacturing phase. Most of the time the OEMs forces their suppliers to deliver data in an old-fashioned way or sometimes more advanced integrated in the OEM environment. In this case, the supplier has to work in two systems: their own PDM/PLM environment and the OEM environment. Not efficient, still the way traditional PLM vendors promote partner / supply chain integration .
This is an area where you might think that a services-based environment like OnShape or OpenBOM might help to connect the supply chain. I think to so too. Still, before that we reach this stage there are some hurdles to overcome:
Persistence of data
The current generation in management of companies older than 20 years grew up with the fact that “owning data” is the only way to stay relevant in business. Even open innovation is a sensitive topic. What happens with data your company does not own because it is in the cloud in an environment you do not own (but share ?) . As long as companies insist on owning the data, a service-based PLM environment will not work.
A nice compromise at this time is ShareAspace from EuroStep. I wrote about ShareAspace last year when I attended sessions from Volvo Car (The weekend after PI Munich 2016) ShareAspace was used as a middleware to map and connect between two PLM/PDM environments. In this way, persistence of data remains. The ShareAspace data model is based on PLCS, which is a standard in the core industries. And standards are to my opinion the second hurdle for a services-based approach
A standard is often considered as overhead, and the reason for that is that often a few vendors dominate the market in a certain domain and therefore become THE standard. Similar to persistence of data, what is the value of data that you own but that you only can get access to through a vendor´s particular format?
Good for the short-term, but what about the long-term. (Most of the time we do not think about the long-term and consider interoperability problems as a given). Also, a services based PLM environment requires support for standards to avoid expensive interfaces and lack of long-term availability. Check in your company how important standards are when selecting and implementing PLM.
There is a nice hype for real-time collaboration through cloud solutions. For many current companies not good enough as there is a lot of history and the mood to own data. Young companies that discover the need for a modern services-based solution might be tempted to build such an environment. For these companies, the long-term availability might be a topic to study
Note: I just realized if you are interested in persistency and standards you should attend PDT 2016 on 9 & 1o November in Paris. Another interesting post just published from Lionel Grealou : Single Enterprise BOM: Utopia vs Dystopia is also touching this subject
Finally, I have time to share my PLM experiences with you in this blog. The past months have been very busy as I moved to a new house, and I wanted to do and control a lot of activities myself. Restructuring your house in an agile way is not easy. Luckily there was a vision how the house should look like. Otherwise, the “agile” approach would be an approach of too many fixes. Costly and probably typical for many old construction projects.
Finally, I realized the beauty of IKEA´s modular design and experienced the variety of high-quality products from BLUM (an impressive company in Austria I worked with)
In parallel, I have been involved in some PLM discussions where in all cases the connection with the real C-level was an issue. And believe it or not, my blog buddy Oleg Shilovitsky just published a post: Hard to sell PLM? Because nobody gives a SH*T about PLM software. Oleg is really starting from the basics explaining you do not sell PLM; you sell a business outcome. And in larger enterprises I believe you sell at this time the ability to do a business transformation as business is becoming digital, with the customer in the center. And this is the challenge I want to discuss in this post
The value of PLM at the C-level
Believe it or not, it is easier to implement PLM (in general) instead of explaining a CEO why a company needs modern PLM. A nice one-liner to close this post, however, let me explain what I mean by this statement and perhaps show the reasons why PLM does not seem to be attractive so much at the C-level. I do not want to offend any particular PLM company, Consultancy firm or implementor, therefore, allow me to stay on a neutral level.
The C-level time challenge
First, let´s imagine the situation at C-level. Recently I heard an excellent anecdote about people at C-level. When they were kids, the were probably the brightest and able to process and digest a lot of information, making their (school) careers a success. When later arriving in a business environment, they were probably the ones that could make a difference in their job and for that reason climbed the career ladder fast to reach a C-level position. Then arriving at that level, they become too busy to dive really deep into the details.
Everyone around them communicates in “elevator speeches” and information to read must me extremely condensed and easy to understand. As if people at C-level have no brains and should be informed like small kids.
I have seen groups of people working weeks on preparing the messages for the CEO. Every word is twisted hundred times – would he or she understand it? I believe the best people at C-level have brains, and they would understand the importance of PLM when someone explains it. However, it requires time if it does not come from your comfort zone.
Who explains the strategic value of PLM
There are a lot of strategic advisory companies who have access to the board room, and we can divide them into two groups. The ones that focus on strategy independent of any particular solution and the ones that concentrate on a strategy, guaranteeing their implementation teams are ready to deploy the solution. Let´s analyze both options and their advice:
Independent of a particular solution
When a company is looking for help from a strategic consultancy firm, you know upfront part of the answer. As every consultancy firm has a preferred sweet spot, based on their principal consultant(s). As a PLM consultant, I probably imagine the best PLM approach for your company, not being expert in financials or demagogic trends. If the advisory company has a background in accountancy, they will focus their advice on financials. If the company has a background in IT, they will focus their information on an infrastructure concept saving so much money.
A modern digital enterprise is now the trend, where digital allows the company to connect and interact with the customer and therefore react faster to market needs or opportunities. IoT is one of the big buzz words here. Some companies grasp the concept of being customer centric (the future) and adapt their delivery model to that, not realizing the entire organization including their product definition process should be changing too. You cannot push products to the market in the old linear way, while meanwhile expecting modern agile work processes.
Most of the independent strategic consultants will not push for a broader scope as it is out of their comfort zone. Think for a moment. Who are the best strategic advisors that can talk about the product definition process, the delivery process and products in operation and service? I would be happy if you give me their names in the comments with proof points.
Related to a particular solution
When you connect with a strategic advisory company, which an extensive practice in XXX or YYY, you can be sure the result will be strategic advice containing XXX or YYY. The best approach with ZZZ will not come on the table, as consultancy firms will not have the intention to investigate in that direction for your company. They will tell you: “With XXX we have successfully transformed (many) other companies like yours, so choose this path with the lowest risk.
And this is the part what concerns me the most at this time. Business is changing rapidly and therefore PLM should be changing too. If not that would be a strange situation? Read about the PLM Identity crisis here and here.
The solution is at C-level (conclusion)
I believe the at the end the future of your company will be dependent on your DNA, your CEO and the C-level supporting the CEO. Consultancy firms can only share their opinion from their point of view and with their understanding in mind.
If you have a risk-averse management, you might be at risk.
Doing nothing or following the majority will not bring more competitive advantage.
The awareness that business is global and changing rapidly should be on every company’s agenda.
Change is always an opportunity to get better; still no outsider can recommend you what is the best. Take control and leadership. For me, it is clear that the product development and delivery process should be a part of this strategy. Call it PLM or something different. I do not care. But do not focus on efficiency and ROI, focus on being able to be different from the majority. Apple makes mobile phones; Nespresso makes coffee, etc.
Think and use extreme high elevators to talk with your C-level!
- It does not make sense to define the future of PLM
- PLM is not an engineering solution anymore
- Linearity of business is faster becoming a holdback
- The Product in PLM is no longer a mechanical Product
- Planet Lifecycle Management has made a next major step
It does not make sense to define the future of PLM
At the beginning of this year, there was an initiative to define the future of PLM for 2025 to give companies, vendors, implementors a guidance to what is critical and needed for PLM in 2015. Have a read here: The future of PLM resides in Brussels.
I believe it is already hard to agree what has been the recognized scope of PLM in the past 10 years, how can we define the future of PLM for the next 10 years. There are several trends currently happening (see the top 5 above) that all can either be in or out of scope for PLM. It is no longer about the definition of PLM; it is dynamically looking towards how businesses adapt their product strategy to new approaches.
Therefore, I am more curious how Product Innovation platforms or Business Innovation platforms will evolve instead of focusing on a definition of what should be PLM in 2025. Have a further look here, such as, The Next Step in PLM’s Evolution: Its Platformization a CIMdata positioning paper.
Conclusion: The future is bright and challenging, let´s not fence it in by definitions.
PLM is not an engineering solution anymore
More and more in all the discussions I had this year with companies looking into PLM, most of them see now PLM as a product information backbone throughout the lifecycle, providing a closed-loop of information flow and visibility across all discipline.
End-to-end visibility, End-to-end tractability, Real-time visibility were some of the buzz-words dropped in many meetings.
These words really express the change happening. PLM is no longer an engineering front-end towards ERP; PLM interacts at each stage of the product lifecycle with other enterprise systems.
End-to-end means when products are manufactured we still follow them through the manufacturing process (serialization) and their behavior in the field (service lifecycle management/field analytics).
All these concepts require companies to align in a horizontal manner, instead of investing in optimizing their silos. Platformization, as discussed above, is a logic step for extending PLM.
Conclusion: If you implement PLM now, start thinking first about the end-to-end flow of information. Or to be more concrete: Don´t be tempted to start with engineering first. It will lock your new PLM again in an extended PDM silo.
Linearity of business is faster becoming a holdback
Two years ago I started talking about: Did you notice PLM is changing ? This topic was not in the mainstream of PLM discussions two years ago. Now with the introduction of more and more software in products (products become systems), the linear process of bringing a product to the market has become a holdback.
The market /your customers expect faster and incremental innovations/ upgrades preferably without having to invest again in a new product. If you look back, the linear product development approach has not changed since the Second World War. We automated more and more the linear process. Remember the New Product Introduction hype around 2004 -2006, where companies started to extend the engineering process with a governance process to follow a product´s introduction from its early concept phase toward a globally available product. This process is totally linear. I wrote about it in my post: from a linear world to fast and circular, where the word circular is also addressing the change of delivering products as a service instead of deliver once and scrap them.
One of my favorite presentations is from Chris Armbruster: Rethinking Business for Exponential Times – enjoy if you haven´t seen this one.
Conclusion: The past two years the discussion related to modern, data-driven dynamic products and services has increased rapidly. Now with IoT, it has become a hype to be formalized soon as life goes faster and faster.
The Product in Product Lifecycle Management is no longer a mechanical Product
When I started to implement PDM systems in the nineties, we tried to keep electrical engineering outside the scope as we had no clue how to manage their information in the context of a mechanical design. It was very rudimentary. Now PLM best practices exist to collaborate and synchronize around the EBOM in an integrated manner.
The upcoming challenge now is due to the software used in products, which turn them into systems. And not only that, software can be upgraded in a minute. So the classical ECR / ECO processes designed for hardware are creating too much overhead. Agile is the motto for software development processes. Now, we (PLM consultants/vendors) are all working on concepts and implementations where these worlds come together. PLM (Product Lifecycle Management), ALM (Asset Lifecycle Management) and SysLM (System Lifecycle Management as introduced by Prof. Martin Eigner – have a read here) are all abbreviations representing particular domains that need to flow together.
Conclusion: For most companies their products become systems with electronics and software. This requires new management and governance concepts. The challenge for all vendors & implementors.
Planet Lifecycle Management has made a next major step
Finally good news came in the beginning of December, where for the first time all countries agreed that our planet needs to have a sustainable lifecycle. Instead of the classical lifecycle from cradle to grave we want to apply a sustainable lifecycle to this planet, when it is still possible. This decision is a major breakthrough pushing us all to leave the unsustainable past behind and to innovate and work on the future. The decisions taken in Paris should be considered as a call for innovative thinking. PLM can learn from that as I wrote earlier this year in my post PLM and Global Warming
Conclusion: 2015 was a year where some new trends became clear. Trends will become commodity faster and faster. A challenge for all of us to stay connected and understand what is happening. Never has the human brain challenged before to adapt to change with such an impact.
Closing 2015 means for me a week of quietness and stepping out of the fast lane. I wish you all a healthy 2016 with a lot of respect, compromises and changing viewpoints. The current world is too complex to solve issues by one-liners.
Take your time to think and reflect – it works!
SEE AND HEAR YOU BACK IN 2016
Topics discussed in 2014-2015
- The importance of a PLM data model: EBOM – MBOM
- EBOM and (CAD) Documents
- Some more EBOM methodology
- Products, BOMs, and Parts
- The Importance of a PLM data model
PLM and Business Change
- Modern PLM brings Power to the People
- The Innovator’s dilemma and Generation change
- The importance of change management with PLM
- PLM and Global warming
- Breaking down the silos with data
- From a linear world to fast and circular ?
From a linear world to a circular and fast-blog
PLM and Business
The past weeks I have discussed at various events two topics that appeared to be different:
- The change from an analogue, document-driven enterprise towards a digital, data-driven enterprise with all its effects. E.g. see From a linear world to fast and circular?
- The change in generations upcoming. The behavior and the attitude of the analogue generation(s) and the difference in behavior from the digital generation(s).
During PDT2015 (a review of the conference here), we discussed all the visible trends that business in exponential changing in some industries due to digitalization and every cheaper technology. The question not answered during that conference was: How are we going to make this happen in your company?
Last week I spoke at a PLM forum in Athens and shared with the audience the opportunities for Greece to catch-up and become a digital service economy like Singapore. Here I pictured an idealistic path how this could happen (based on an ideal world where people think long-term).
A mission impossible, perhaps.
The primary challenge to move from analogue towards digital is to my opinion the difference in behavior of the analogue and digital generations (and I am generalizing of course)
The analogue generation has been educated that knowledge is power. Store all you know in your head or keep it in books close to you. Your job was depending on people needing you. Those who migrated to the digital world most of the time continued the same behavior. Keep information on your hard disk or mailbox. A job was designed for life and do not plan to share as your job might come at risk. Continuous education was not part of their work pattern. And it is this generation that is in power in most of the traditional businesses.
The digital generation has been educated (I hope so – not sure for every country) to gather information, digest and process it and come with a result. There is no need to store information in your head as there is already an information overflow. Store in your head methodology and practices to find and interpret data. The digital generation for sure wants a stable work environment but they already grew up with the mindset that there is no job for life, having seen several crises. It is all about being flexible and keep your skills up-to-date.
So we have the dilemma here that business is moving from analogue towards digital, where the analogue business represents the linear processes that the old generation was used to. Digital business is much more an iterative approach, acting and adapting on what happens around you. A perfect match for the digital generations.
A dilemma ?
Currently the old generation is leading and they will not easy step aside due to their classical education and behavior. We cannot expect behavior to change, just because it is logically explained. In that case, everyone would stop smoking or adopt other healthy standards.
The dilemma reminded me of the Innovators Dilemma, a famous theory from Clayton Christensen, which also could apply to analogue and digital businesses. Read more about the Innovators Dilemma here in one of my older blog posts: The Innovator´s dilemma and PLM. You can replace the incumbent with the old analogue generation and the disruptive innovation comes from using digital platforms and information understood by the digital generation. If you follow this theory, it would mean old businesses would disappear and new businesses would pop-up and overtake the old companies. Interesting conclusion, however, will there be disruption everywhere?
Recently I saw Peter Sondergaard from Gartner presenting at Gartner Symposium/ITxpo 2015 in Orlando. In his keynote speech, he talked about the value of algorithms introducing first how companies should move from their traditional analogue business towards digital business in a bimodal approach. Have a read of the press release here.
If you have the chance to view his slick and impressive keynote video (approx. 30 minutes) you will understand it better. Great presentation. In the beginning Peter talks about the bimodal approach sustaining old, slowly dying analogue businesses and meanwhile building teams developing a digital business approach. The graph below says it all.
Interesting from this approach is that a company can evolve without being disrupted. Still my main question remains: Who will lead this change from the old analogue business towards modern digital business approach. Will it be the old generation coaching the new generation or will there be a natural evolution at the board level required before this process starts?
I have no conclusion this time as I am curious to your opinion. A shift in business is imminent, but HOW will companies / countries pick-up this shift?
Your thoughts or experiences ?
As a genuine Dutchman, I was able to spend time last month in the Netherlands, and I attended two interesting events: BIMOpen2015, where I was invited to speak about what BIM could learn from PLM (see Dutch review here) and the second event: Where engineering meets supply chain organized by two startup companies located in Yes!Delft an incubator place working close to the technical university of Delft (Dutch announcement here)
Two different worlds and I realized later, they potential have the same future. So let’s see what happened.
BIMopen 2015 had the theme: From Design to Operations and the idea of the conference was to bring together construction companies (the builders) and the facility managers (the operators) and discuss the business value they see from BIM.
First I have to mention that BIM is a confusing TLA like PLM. So many interpretations of what BIM means. For me, when I talk about BIM I mean Building Information Management. In a narrower meaning, BIM is often considered as a Building Information Model – a model that contains all multidisciplinary information. The last definition does not deal with typical lifecycle operations, like change management, planning, and execution.
The BIMopen conference started with Ellen Joyce Dijkema from BDO consultants who addressed the cost of failure and the concepts of lean. Thinking. The high cost of failure is known and accepted in the construction industry, where at the end of the year profitability can be 1 % of turnover (with a margin of +/- 3 % – so being profitable is hard).
Lean thinking requires a cultural change, which according to Ellen Joyce is an enormous challenge, where according to a study done by Prof Dr. A. Cozijnsen there is only 19 % of chance this will be successful, compared to 40 % chance of success for new technology and 30 % of chance for new work processes.
It is clear changing culture is difficult and in the construction industry it might be even harder. I had the feeling a large part of the audience did not grasp the opportunity or could find a way to apply it to their own world.
My presentation about what BIM could learn from PLM was similar. Construction companies have to spend more time on upfront thinking instead of fixing it later (costly). In addition thinking about the whole lifecycle of a construction, also in operations can bring substantial revenue for the owner or operator of a construction. Where traditional manufacturing companies take the entire lifecycle into account, this is still not understood in the construction industry.
This point was illustrated by the fact that there was only one person in the audience with the primary interest to learn what BIM could contribute to his job as facility manager and half-way the conference he still was not convinced BIM had any value for him.
A significant challenge for the construction industry is that there is no end-to-end ownership of data, therefore having a single company responsible for all the relevant and needed data does not exist. Ownership of data can result in legal responsibility at the end (if you know what to ask for) and in a risk shifting business like the construction industry companies try to avoid responsibility for anything that is not directly related to the primary activities.
Some larger companies during the conference like Ballast Nedam and HFB talked about the need to have a centralized database to collect all the data related to a construction (project). They were building these systems themselves, probably because they were not aware of PLM systems or did not see through the first complexity of a PLM system, therefore deciding a standard system will not be enough.
I believe this is short-term thinking as with a custom system you can get quick results and user acceptance (it works the way the user is asking for) however custom systems have always been a blockage for the future after 10-15 years as they are developed with a mindset from that time.
If you want to know, learn more about my thoughts have a look at 2014 the year the construction industry did not discover PLM. I will write a new post at the end of the year with some positive trends. Construction companies start to realize the benefits of a centralized data-driven environment instead of shifting documents and risks.
The cloud might be an option they are looking for. Which brings me to the second event.
Engineering meets Supply Chain
This was more an interactive workshop / conference where two startups KE-Works and TradeCloud illustrated the individual value of their solution and how it could work in an integrated way. I had been in touch with KE-Works before because they are an example of the future trend, platform-thinking. Instead of having one (or two) large enterprise system(s), the future is about connecting data-centric services, where most of them can run in the cloud for scalability and performance.
KE-Works provides a real-time workflow for engineering teams based on knowledge rules. Their solution runs in the cloud but connects to systems used by their customers. One of their clients Fokker Elmo explained how they want to speed up their delivery process by investing in a knowledge library using KE-works knowledge rules (an approach the construction industry could apply too)
In general if you look at what KE-works does, it is complementary to what PLM-systems or platforms do. They add the rules for the flow of data, where PLM-systems are more static and depend on predefined processes.
TradeCloud provides a real-time platform for the supply chain connecting purchasing and vendors through a data-driven approach instead of exchanging files and emails. TradeCloud again is another example of a collection of dedicated services, targeting, in this case, the bottom of the market. TradeCloud connects to the purchaser’s ERP and can also connect to the vendor’s system through web services.
The CADAC group, a large Dutch Autodesk solution provided also showed their web-services based solution connecting Autodesk Vault with TradeCloud to make sure the right drawings are available. The name of their solution, the “Cadac Organice Vault TradeCloud Adapter” is more complicated than the solution itself.
What I saw that afternoon was three solutions providers connected using the cloud and web services to support a part of a company’s business flow. I could imagine that adding services from other companies like OnShape (CAD in the cloud), Kimonex (BOM Management for product design in the cloud) and probably 20 more candidates can already build and deliver a simplified business flow in an organization without having a single, large enterprise system in place that connects all.
I believe this is the future and potential a breakthrough for the construction industry. As the connections between the stakeholders can vary per project, having a configurable combination of business services supported by a cloud infrastructure enables an efficient flow of data.
As a PLM expert, you might think all these startups with their solutions are not good enough for the real world of PLM. And currently they are not – I agree. However disruption always comes unnoticed. I wrote about it in 2012 (The Innovators Dilemma and PLM)
Innovation happens when you meet people, observe and associate in areas outside your day-to-day business. For me, these two events connected some of the dots for the future. What do you think? Will a business process based on connected services become the future?
Sometimes we have to study careful to see patterns have a look here what is possible according to some scientists (click on the picture for the article)