You are currently browsing the category archive for the ‘PDM’ category.
Last week I started a small series of posts related to the topic PLM 2.0. I was hoping for more comments and discussion about the term PLM 2.0, although I must say I was glad Oleg picked it up in his posts: PLM 2.0 born to die? and Will JT-open enable future of PLM 2.0?
Oleg, as a full-time blogger, of course had the time to draw the conclusions, which will take me another two weeks, hoping meanwhile the discussion evolves. Where Oleg’s focus is on technology and openness (which are important points), I will also explain that PLM 2.0 is a change in doing business, but this will be in next week’s post.
This week I will focus on the current challenges and pitfalls in PLM. And we all know that when somebody talks about challenges, there might be problems.
| Last week | : What is PLM 2.0? |
| This week: | : Challenges in current PLM |
| Next | : Change in business |
| Final post | : Why PLM 2.0 – conclusions |
The Challenges in current PLM
First I want to state that there are several types of definition in the world for PLM, coming from different type of organizations – I listed here two vendor independent definitions:
In industry, product lifecycle management (PLM) is the process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal. PLM integrates people, data, processes and business systems and provides a product information backbone for companies and their extended enterprise.
Product Lifecycle Management (PLM) is the business activity of managing a company’s products all the way across the lifecycle in the most effective way. The objective of PLM is to improve company revenues and income by maximizing the value of the product portfolio
And there are more definitions. Just recently, I noticed on the PlanetPTC blog from Aibhe Coughlan a post where she promoted a definition of PLM published in the Concurrent Engineering blog. Here I got immediate a little irritated reading the first words: “PLM is software designed to enhance process efficiencies ……… and more …”
I do not believe PLM is software. Yes there is software used to automate or implement PLM practices, but this definition starts to neglect the culture and process sides of PLM. And as Oleg was faster – read his more extended comment here
(I am not paid by Oleg to promote his blog, but we seem to have similar interests)
Back to the classical definitions
The Wiki definition gives the impression that you need to have an infrastructure to manage (store) all product data in order to serve as an information backbone for the extended enterprise. It becomes more an IT-project, often sponsored by the IT-department, with the main goal to provide information services to the company in a standardized manner.
This type of PLM implementations tends to be the same type of implementation as an ERP system or other major IT-system. In this type of top-down implementations, the classical best practices for project management should be followed. This means:
- A clear vision
- Management sponsorship
- A steering committee
- A skilled project leader and team
- Committed resources
- Power user involvement
- Communication
- …… and more …
These PLM projects are promoted by PLM vendors and consultants as the best way to implement PLM. And there are a lot of positive things to say about this approach. For many big companies implementing cPDM or PLM was a major step forward. Most of the ROI stories are based on this type of implementations and have been the showcases on PLM events. It is true that data quality increases, therefore efficiency and product quality. Without PLM they would not reach the same competiveness as they have now.
But sometimes these projects go into extreme when satisfying users or IT-guidelines
To avoid the implementation of a ‘new IT-system’, companies often have the strategy that if we already have an ERP-system , let’s customize or extend it, so we can store the additional data and perform workflow processes based on this system.
In a recent webinar, I heard a speaker saying that in their company they had the following automation strategy defined together with IT is:
- First they will see if the needed PLM functionality exists in their ERP system or is part of the portfolio of their ERP provider. If the functionality is there (this means the ERP vendor has the capability to store metadata and a factsheet mentioning the right name), there is no looking outside.
- If the functionality is not there, there will be a discussion with the ERP vendor or implementer to build it on top of their ERP system.
I have seen implementations where the company has developed complete custom user interfaces in order to get user acceptance (the users would not accept the standard graphical interface). At that time, no one raised the flag about future maintenance and evolution of these custom environments. The mood was: we kept it simple – one single system.
I believe this closes the door for real PLM, as storing data in a system does not mean you will use it in an efficient and optimized manner. How will you anticipate on changes in business if it is just doing more with the same system?
And mid-market companies ?
The top-down approach described before is the fear of many mid-market companies, as they remember how painful their first ERP implementation was. And now with PLM it is even more unclear. PLM aims to involve the engineering department, which so far has not worked in a very procedural manner. Informal and ad-hoc communication combined with personal skills within this department was often the key for success.
And now an unfriendly system is brought in, with low or little usability, pushing these creative people to enter data without seeing any benefits. The organization downstream benefits but this will be only noticed later in time. And for the engineering department it will take more effort to change their work methodology focused on innovation. However, in general in the mid-market, the target of a PLM project is to have a Return on Investment (ROI) in a very short timeframe ( 1-2 years). Investing in usability should be even more important for this type of companies as there is less top-down pressure to accept this new PLM system.
And flexibility ?
In the past years we have seen that business is changing – there is a shift in global collaboration and manufacturing and from the recent history we can learn that those big enterprise projects from the past became a threat. Instead of being able to implement new concepts or new technology, the implementation became more and more vendor monolithic as other capabilities and applications do not fit anymore. This is against the concept of openness and being flexible for the future. I believe if PLM becomes as rigid as ERP, it blocks companies to innovate – the challenge for big companies is to find the balance between stability and flexibility (This was the title from Sony Ericsson’s presentation at the PLM forum in Sweden this year)
And again for mid-market companies who do not have the budget or resources to invest in similar projects. They have less a drive to optimize themselves in the same manner as big companies do as flexibility is often their trade mark (and capability to innovate) . So PLM for the mid-market will not work in the classical way.
This is one of the reasons why a mid-market PLM standard has not yet been found (yet ?). From the other hand many mid-market companies are dealing with PLM practices although often it is more close to PDM and CAD data management. And mid-market companies do not change their organization easily – there is more a departmental approach avoiding therefore a change in business.
To summarize the biggest challenges in current PLM described in this post:
- PLM is considered complex to implement
- PLM is a huge IT-project
- PLM requires change and structuring – but what about flexibility
- Where is the PLM value and ROI – user acceptance
- PLM for the mid-market – does it exist ?
Conclusion: I have been writing about the PLM challenges in the past, see the links below if you are interested in more details on a specific topic.
In 2008,I thought that Out-of-the-Box PLM systems and standard functionalities could bring a solution for the mid-market, perhaps future solutions based on the cloud. However I learned that if you want to do real PLM in a modern manner, you need to change the way you do your business – and this I will explain in my upcoming post.
Related links:
Last weeks have been busy weeks and I have seen various PLM candidates all around Europe. As these companies were mid-market companies, I noticed again how difficult it is for these companies to follow the ideal path towards PLM.
For those reading my blog frequently they might remember my definition of mid-market and PLM. For newer readers I will give my definitions again, as everyone has their own definition.
Mid market company: For me the definition of a mid-market company does not have to do with revenue or the amount of people working for this company. I characterize a mid-market company as a company, where everyone has a focus on the company’s primary process. There is no strategic layer of people, who are analyzing the current business and defining new strategies for the future. In addition, the IT-staff is minimal, more seen as an overhead than as strategic. Mid-market companies have their strength in being flexible and reacting fast on changes, which might contradict with a long term strategic approach.
As what happens if you are only in a reactive mode – it can be too late.
PLM: For me PLM is not a product but a vision or business approach based on a collection of best practices (per industry). Main characteristics of PLM are centralizing all product knowledge (IP) throughout all the lifecycle stages and a focus on best practices and immediate visibility on all lifecycle stages. Combining concept, planning, development, production planning and after sales / service into one integrated process. It is more than concurrent engineering, it is about sharing data and ownership of data through different departments. And this means business transformation, breaking through traditional barriers. Of course PLM vendors have a slight different definition in order to differentiate themselves from other vendors. For example more focus on a virtual product definition (CAD PLM vendors) or a focus on efficiency and one single platform (ERP PLM vendors)
Who will initiate this change ?
And these two definitions already raise the questions I want to reflect here as I experienced again in two recent visits that the pain to move to PLM is here.
First what is the result of a reactive mode, even when it is a quick reaction ?
A reactive mode leads to a situation where a company will never be able to differentiate rapidly from their competition. As every change takes time to implement, it is logically that a real business change will not be implemented as a quick reaction. The company needs to have a long term vision. And this is one of the things I noticed talking with mid-market companies. Ask these questions: “Where do you want to be in five years from now” and “How do you make sure you achieve these goals (if goals exist)” and often you find the company is depending on the business instinct of the founder(s) and has no real answers for the long term future.
This is of course a result of the typical mid-market company, they have no internal people who will step outside the daily hectic and work on a change. And being reactive always means you are (a little) behind. And this was the situation in one of the companies that I have met recently. There was an initial understanding of the values that PLM could bring, but when talking about some of the basic principles of PLM, the answers was: In our company ERP is God. This means real PLM has no chance – you do not want to fight against God.
And now the discussion who can initiate the change towards PLM
Now another example of a mid-market company that had a long term PLM vision but got trapped in their own approach. The company has been growing fast and like many European companies, production is done in China. And this causes collaboration issues around communication and quality between Europe and China as the company only knows CAD data management and ERP. The engineering manager was assigned to solve these issues.He did not get a full strategic assignment to look at the complete picture, but the management pushes him to solve the current pains, having the PLM wishes still in mind.
And solving the current pains lead again to function / feature comparison with a short term justification, believing that in the future all will fit in the PLM vision, as the potential resellers for the new solution said: “Yes we can”. Have you ever heard a reseller say “No we cannot”
The result, the engineering manager has to make a decision based on the ‘blue eyes’ of the reseller as he does not get the mandate and power from his management to analyze and decide on a PLM strategy for the long term. For one of the resellers talking about the details of PLM was even more a disadvantage as it creates an impression that PLM is complex. It is easier to sell a dream. A similar situation as I described in my posts: Who decides for PLM in a mid-market company
My conclusion
Although I am aware that many mid-market companies implement basics of PLM, it is frustrating to see that lack of priority and understanding of the management in mid-market companies blocks the growth to full benefits for PLM. The management is not to blame, as most PLM messages either come from the high-end PLM vendors or from product resellers both not packaged for the mid-market. See PLM for the mid-market – a mission impossible ?
PLM is a cross-departmental solution and the management should look for partners who can explain the business values and share best practices for mid-market companies business wise.
The partner is 50 % of the success for a PLM implementation.
Do you recoginize similar situations ? How would you address them ?
My PLM blog cloud based on Wordie – see the virtualdutchman blog cloud
In my previous post, BOM for Dummies related to Configure To Order, I promised to come back on the special relation between the items in the BOM and the CAD data. I noticed from several posts in PLM and PDM groups that also the importance of CAD data is perceived in a different manner, depending on the background of the people or the systems they are experienced with.
So I would like to start with some general statements based on these observations.
People who are talking about the importance of CAD data and product structures are usually coming from a background in PDM. In an environment where products are designed, the focus is around data creation, mostly CAD data. The language around parts in the BOM is mostly targeting design parts. So in a PDM environment CAD data is an important topic – therefore PDM people and companies will talk about CAD data and vaults as the center of information.
When you are working in a PLM environment, you need a way to communicate around a product, through its whole lifecycle, not only the design phase but also supporting manufacturing phases, the possible changes of an existing product through engineering changes, the traceability of as-built data and more. In a PLM environment, people have the physical part (often called the ERP part) in mind, when they talk about a part number.
As PLM covers product information across various departments and disciplines, the information carrier for product information cannot be the CAD data. The BOM, usually the mBOM, is the main structure used to represent and produce the product. Most parts in the mBOM have a relation to a CAD document (in many companies still the 2D drawing). Therefore PLM people and companies understanding PLM will talk about items and products and their lifecycle as their center of information.
CAD data in relation to Engineering to Order
The above generalizations have to be combined with the different main business processes. In a strict Engineering To Order environment, where you design and build a solution only once for a specific customer, there is no big benefit of going through an eBOM and mBOM transition.
During the design process the engineer already has manufacturing in mind, which will be reflected in the CAD structure they build – sometime hybrid representing both engineering and manufacturing items. In such an environment CAD data is leading to build a BOM structure.
And in cases where engineering is done in one single 3D CAD system, the company might use the PDM system from this vendor to manage their Bill of Materials. The advantage of this approach is that PDM is smoothly integrated with the design environment. However it restricts in a certain matter the future as we will see in further reading.
Not everyone needs the Engineering to Order process !
Moving to an integrated, multi-disciplinary engineering process or changing the main process from Engineering To Order to Built To Order / Configure To Order will cause major challenges in the company.
I have seen in the recent past, several companies that would like to change their way of working from a CAD centric Engineering To Order process towards a more Built to Order or Configure To Order process. The bottle neck of making this switch was every time that engineering people think in CAD structures and all knowledge is embedded in the CAD data. They now want to configure their products in the CAD system.
For Configure to Order you have to look at a different way to your CAD data:
Questions to ask yourself as a company are:
- When I configure my products around a CAD structure, what should I do with data from other disciplines (Electrical/Tooling/Supplier data) ?
- When I upgrade my 3D CAD system to a new version, do I need to convert all old CAD data to the newest versions in order to keep my configurations alive?
- When configuring a new customer solution, do I need to build my whole product in CAD in order to assure it is complete?
- In Configure to Order the engineering BOM and manufacturing BOM are different. Does this mean that when I go through a new customer order, all CAD data need to be handled, going through eBOM and mBOM transition again?
For me it is obvious that only in an Engineering to Order environment the CAD data are leading for order fulfillment. In all other typical processes, BTO (Built to Order), CTO (Configure to Order) and MTS (Make to Stock), product configuration and definition is done around items and the CAD data is important associated data for the product definition and manufacturing
In the case of order fulfillment in a Configure to Order process, the CAD structure is not touched as configuration of the product is available based on items. Each item in the mBOM has it relations to CAD data or other specifying information.
In the case of Built To Order, a huge part of the product is already configured, like in Configure To Order. Only new interfaces or functionality will go through a CAD design process. This new design might be released through a process with an eBOM to mBOM transition. In cases where the impact or the amount of data created in engineering is not huge, it is even possible to configure the changes immediately in an mBOM environment.
A second point, which is also under a lot of discussion in the field ( PLM interest groups), is that PDM is easily to introduce as a departmental solution. The engineering BOM is forwarded to manufacturing and there further (disconnected) processed. The step from PDM to PLM is always a business change.
When PDM vendors talk about ERP integration, they often mean the technical solution of connecting the two systems, not integrating the processes around the BOM (eBOM/mBOM transition) 0r an integrated engineering change (ECR/ECO). See how easy it is according to some PDM vendors:
or
PLM requires an adaptation of all departments to work different and together around a single product definition. Especially in a mid-market company, this is a big issue, as all product knowledge is stored in the CAD data and the knowledge how to produce the product is stored in the mBOM on the ERP side. These environments are often disconnected.
Conclusion: In the context of PDM the importance of CAD data is clear and for companies following a strict Engineering To Order process the main source of product knowledge. Companies following the Built To Order / Configure To Order process should configure their products around items to keep flexibility towards the future.
Companies with the intention to move to Built To Order or Configure To Order should not invest too much in CAD data configuration as it creates a roadblock for the future.
In my next post I will address the question that comes up from many directions, addressed by Jim Brown and others, as discussed in one of his recent posts around a PLM standard definition and more ….
I realized that time is flying when you are busy, and I promised to publish the conclusion from my previous post: More on who decides for plm in a mid market company. In my two previous posts, I described the difficulties companies have to select the right PLM system. So far I discussed the two extremes, the silent approach where a possible bottom up approach was discussed and as the opposite where an ‘academical’ approach was followed.
Now it is time to get the answers on the academical approach.
These were the questions to be answered in the previous post:
- How much time has passed since the management decided PLM was good for their organization?
- How independent is the consultancy firm?
- Did they consider open source PLM as a solution?
- What was the ranking of the PLM vendors?
How much time has passed since the management decided PLM was good for their organization?
The whole process of selecting a PLM system often takes more than one or two years, starting from the first activities till the final conclusion to start. I believe this is unavoidable, as especially in mid-market companies the business values that PLM can bring are not always discussed and realized on the strategic level.
However, I believe the recent years PLM has been recognized by analysts, by software vendors and many young companies as a necessity for innovation and in the long term remaining competitive. And this is not only in the classical domains where PLM started – automotive / aero / industrial equipment. PLM value is everywhere in different industries, even apparel for example.
For companies that are now in the decision process, I believe 2009 and early 2010 are the years to decide, because a recovery of the economy might put back the focus on execution and not on strategy and they might miss the management focus for PLM. And as I wrote in a previous post, companies who made the best pit stop will benefit upmost.
For companies still in doubt: It is now or never
How independent is the consultancy firm?
It is clear that real independent consultancy firms do not exist – even if a consultant wants to be independent, there are three challenges to meet:
- How can a consultant evaluate or judge PLM systems they have not seen?
- How much experience does the consultant have in your business?
- How much work is there required in the project for the consultant?
As you can imagine, reviewing the above challenges, you will realize that consultants usually specialize in systems, where their expertise it required – as they also want to make a living. Consultants cannot afford to be an academic institute, as coming back to the previous point, all consultancy work at the end will be paid by the customer.
So to conclude on this point, if you want to be cost-effective, a company should do already a pre-selection based on systems and possible implementation partners, that fit naturally to their type of business and then evaluate how consultancy can be achieved.
What you will find out is that the major ‘expensive’ packages have loads of consultants to offer en the more and more you go into a mid-market environment, consultants become rare. For software from PLM vendors you will usually find a reseller network with people close to your offices that can support you. For Open Source software you will need to find the consultancy services through their software delivery program.
Anyway remember: 50 % of the success of a PLM implementation is based on the right implementation approach and partner not on the PLM functions and features.
Did they consider open source PLM as a solution?
No, because the consultant was not familiar with it, and discouraged the company to look at it. In general Open Source PLM, like PLM On-Demand are interesting trends to follow and should not be neglected. However the focus and approach for this type of solutions is different. I will not generalize at this moment as also I have no clear picture where Open Source PLM or PLM on Demand would be a big differentiator. I will try to evaluate and report it in future posts.
Comments from Open Source PLM Vendors or On Demand PLM Vendors are welcome to complete the PLM selection approach.
What was the ranking of the PLM vendors?
Ranking was done by the management, the selection team and the design department. These were the results plus their major comment:
Management
1. The slide show PLM provider – they liked the business pitch
2. The CAD supplier with PLM features and gadgets – good guys – we know them
3. The PLM provider who showed everything – too much handling of data – too complex
Selection Team
1. The PLM Provider who showed everything – they really did it
2. The CAD supplier with PLM features and gadgets– we understand where they are going
3. The slide show PLM provider – do they really have a solution?
The Designers
1. The CAD supplier with PLM features and gadgets– he knows what we want
2. The slide show PLM provider– could be a good solution too
3. The PLM Provider who showed everything – too complex, it will limit our productivity
As the management had the final vote, they decided for the slide show PLM Provider, as they felt most comfortable with them.
The reason to drop the CAD supplier was that they were too afraid this provider does not know all about PLM. Both management and users felt the PLM provider that showed everything was too complex, this opposite to the project team where the members were very familiar with PLM capabilities after two years investigation and many demos and trade shows.
Conclusion: Selecting PLM, even in an academical manner is a subjective process. As in general the customer does not exactly knows what he needs and often the PLM provider shows too much in detail, the real journey starts at implementation time. And in this stage you need an experienced implementation partner who can match and communicate the expectations
Two weeks ago I was writing about the Silent PLM approach. What I showed in that post that often the PLM vision as a complete vision does not exist in all layers of the organization.
Often the management in is not aware of where and how PLM can have an impact. In the Silent Management approach, one or more visionary people believe they can introduce PLM by starting it in their department, and from there grow and extend the impact of PLM. As I concluded, this approach usually fails in most of the cases as when the decisive step comes to extend PLM to other departments and to change current processes, this is the point where is mostly gets stuck.
Other departments and the management do not see how this engineering / CAD extension could benefit for them and the whole organization. Why not extending our ERP system as this already exists ? And here a stand still will come up until a push comes. The push can come from the top or from the outside world. From my experience more then half of the companies that started this silent PLM approach got stuck where they are ……..
So this time another approach, called the academical approach. And again a disclaimer, I am generalizing and putting some points a little more in the extreme to demonstrate the difference between the approaches. Any similarity with the real world is pure coincidence
Approach 2: Academical PLM
Inside our mid-market company ACCPY, the management has understood that PLM will bring a lot of benefits and in case they were not aware of it, they have learned from analyst reports, from blogs and from their network that PLM should bring a lot benefit for them.
So the management decides to prepare and educate themselves and they start a PLM taskforce inside ACCPY to collect and digest all the information. The team has enthusiastic members from all departments and starts buying some books and reports on PLM. In addition they visit some PLM events all around the country and sometimes around the continent. These visits lead to contact with PLM Vendors who also start to educate why their PLM is the one fitting ACCPY the best. After one or two years of education they are theoretical skilled and know to differentiate between EDM, PDM, cPDM and even they learn to understand the difference between PDM and ERP.
As a conclusion of their learning stage the PLM taskforce presents to the management a firm report, explaining what is PLM and how ACCPY can benefit from it plus recommendations how to proceed.
The management is happy with the result, that what they thought two year ago was really valid and agrees with the report and recommendations. Now the selection of the PLM system needs to be done and who will be the implementation partner. Although all PLM vendors have been knocking on their door already to explain the benefits and implementation approach from their solution, ACCPY decides to hire an ‘independent’ PLM consultancy firm to assist with the selection of the solution.
The consultancy firm starts with interviewing the key members of ACCPY, in order to understand the major processes and the needs per department. A month later they present to the management a PLM Vendor Selection Procedure, where in 15 pages the PLM Vendor has to explain and confirm requirement per requirement, the implementation approach and give a budget estimate.
This RFQ will be sent to 5 PLM vendors which were already in touch with ACCPY since the PLM research started. Also the consultancy firm brought in a company which they new very well. It takes a few weeks for the consultancy firm to compile the RFQ and two months later the responses are there.
From the received proposals three PLM vendors are invited to benchmark their system and company based on a business case developed by the consultancy firm together ACCPY.
PLM Vendor 1
The first PLM vendor gives a standard demo of the system and explains that the business case is well known to them and therefore instead of showing it, they give a whole set of screenshots and references. The attendees had a good feeling with this vendor
PLM Vendor 2
The second PLM vendor tries to follow exactly the business case as defined. The attendees liked the fact that all was demonstrated so well, however the PLM system seems to be rather too complex and giving a lot of overhead to the engineers, according to their impression.
PLM Vendor 3
The third PLM vendor was already known to the company as they were also providing the 3D CAD system. In their presentation they explained how well they knew ACCPY already and that the business case was too artificial. They demonstrated some gadgets of their PLM system which none of the competing vendors could do, thanks to their tight integration with the CAD system. The attendees were impressed, however a few days later, they were asking themselves, why were those gadgets needed ? None of the other vendors talked about it and it was also not part of the RFQ.
So now it was time for the consultancy firm together with the task force to process all the information and to determine the final score. On product features they had a nice comparison – only hard to tell what was most important. On usage it was more difficult, as they got three different approaches during the benchmark, so the scores for this section was rather artificial. Also the financial part seemed to be hard to compare but at least it gave an indication.
As it is an academical approach, my post for this week ends here. We need to give the ACCPY task force together with the consultancy firm some time to build a justification for their choice and next week we will discover how this story ended. Meanwhile ask yourself:
- how much time has passed since the management decided PLM was good for their organization ?
- how independent is the consultancy firm ?
- did they consider open source PLM as a solution ?
- what was the ranking of the PLM vendors ?
- read the book Blink the power of thinking without thinking about intuition
Conclusion (so far): Academical PLM takes time and it would be unfair to explain it all in one post.
So next week the real conclusion.
This week I realized that, although I believe the benefits of PLM are more and more accepted in mid-market companies, the decision how to start and where to start with PLM is often not clear. I recognize several approaches which I will describe in this and some upcoming posts.
All persons in this post are fiction and in case you recognize these persons in your company, it is pure coincidence. Instead of talking about approaches,I was tempted to call it strategies, but when you read my observation you will realize the word strategy would not fit.
Approach 1: The silent PLM
Inside our company, often there is an engineer or an engineering manager, who got caught by the PxM virus. The PxM virus is a modern virus, which makes you a believer that PDM or PLM will bring your company a lot of benefits. Documents and proof points of the severe impact exist all around the world. However nobody has gotten infected so far in this company. Everyone is working the way they worked since many years and life is secure and predictable.
Now this infected engineer is getting exited and dreams about the introduction of PLM in his company and how he will become the hero of the company and gets a big promotion. Unfortunate for him in this kind of business there are no big bonuses to collect, so the honor of promotion is already a big achievement.
So the first thing this engineer does is chatting with his peers and friends to find out where PxM has been implemented successful and he studies some success stories which he learned from his network.
Now the challenge starts.
He goes to the management and shows a nice PowerPoint, explaining why the company needs PxM and what are the expected benefits, based on reference stories. The management has no real clue what he is talking about, but it looks promising and they allow him to select a PxM system for his department and to start a pilot.
The engineer already knows which PxM system to choose. The one, recommended by the friendly reseller, who sold them their 3D CAD system (which is a success) and worked hard with him to finalize the slides. As requested by the management he had to invite two other PxM vendors to make an objective selection and at the end an impressive comparison matrix is shown to the management why system A has been chosen.
Now the implementation starts and step 1 is very successful. The document management part around the CAD system goes smoothly and everyone in the engineering department starts to be happy.
Following this successful implementation there are two options:
- the engineer does not get promoted and the implementation ends. It will remain a silent document management implementation and the dream is put aside.
- the engineer gets promoted and continues to push his vision as now he has a broader audience to spread the PxM virus. We will follow this story line…….
The engineer gets promoted and continues to push his vision
This is the best that can happen and the engineer, who now became the head of engineering, starts to express his vision to his fellow managers, explaining the advantages of PLM. Notice, he is now talking about PLM as the scope has been extended beyond product data management, involving other disciplines in the organization.
And here the head of engineering discovers that his fellow managers are also infected by a virus. Not the PxM virus, but one of them has already for many years the ERP virus. And as the ERP virus addresses the operational and financial tasks in the organization, the management trusts him. The sales and marketing department seems to be infected by CRM, but currently they caught a social disease, which made them push for all kind of communities. The management either likes it (as their kids are also on Facebook) or dislikes it, because they believe work is a serious business and being on internet all day is considered gaming.
So the head of engineering realizes that he has some freedom within his department, but the other departments and the management have their own priorities. And PLM is not on their list. Together with the friendly CAD reseller, who meanwhile was promoted to be Senior PLM Consultant, they work on a perfect PLM environment within the engineering department and they believe their success will show off in the upcoming years.
And then the crisis came and the company had to cut budgets. To be continued in (hopefully) 1 or 2 years
Conclusion: The silent PLM approach has a huge chance to fail as there is no corporate vision and management push to get PLM implemented. PLM should be addressed top-down. As in many mid-market companies there was also no strategically partner, who could assist the management to build a vision and to set priorities.
Next week:
approach 2: Academical PLM
Last week was a week of transition. As I wrote in my previous post, I finalized a traditional PLM 1.0 project ( I will come back on this term ‘traditional’ PLM 1.0) and now probably because of the sunny days and some interesting articles I read (each word goes to a different article), I am reflecting what it means to think about the new trends: WEB 2.0 or even PLM 2.0
In this post I will try to explain the developments I have seen so far in the mid-market and from there project what might happen.
In the 80’s there was no PDM or PLM in the mid-market. This was the time most companies were moving away from the drawing board towards CAD. Most of the CAD was 2D and at that time in the mid-market AutoCAD was the dominant CAD software.
At that time I was working for the biggest AutoCAD distributor in the Netherlands (picture on the left). This was the golden age for hardware and software resellers – margins were high and there was little or none IT-knowledge inside mid-market companies. In order to keep the high margin we provided a free helpdesk for our customers to differentiate from others. It was an interesting time. Prospects came to our demo room to plot a drawing of A0 format and to discuss the quality of the lines and the hatching as compared to handmade drawings. There was always the discussion if CAD was more productive and must of us agreed that benefits only came when rework or changes were needed. In parallel we offered a training course for the heads of a design department how they learned to understand if their designers were productive. They were used to observe the behavior of the draftsman and the minor bar on the drawing board and from there they understood if someone was productive. We were talking about the new digital generation that would replace the people at the drawing board.
Are there still drawing boards ? Is there still free support as the margins are high ? This was 20 years ago.
Then slowly 3D CAD was introduced for the mid-market, initially only on Unix boxes, but with the introduction of Microsoft Windows it became achievable – SolidWorks for sure was leading in this area. Hardware became already more a commodity so the customer relation changed from free support to paid support, which required quality and knowledge. At that time in my company, we also saw the first demands for what customers called an “engineering database”. In the 2D world it was all about drawing management, now with 3D the focus was on managing the whole product. Initially called EDM (Engineering Data Management), later evolving in Product Data Management. The term PDM was not known at that time and I remember one of our customers visiting us with a sample of 13 reports – drawing list, spare part list, manufacturing BOM, etc. He told us: “I need a system that can generate these reports for me at anytime”. The solution: we implemented a PDM system for this customer. At the end of the nineties 3D was introduced in the mid-market combined with PDM. We were talking about the new generation of people that thinks in 3D which would replace the people who still worked in 2D
Are we still working with 2D ? Do we still look for support on hard- and software ? This was 10 years ago.
Then came the era of connectivity, initially through the first internet wave, leading to terms as cPDM and ultimately PLM. Instead of focusing on productivity in a single department, the intention was to focus on collaboration between departments, development teams and to address the whole product lifecycle. Specially Dassault Systems extended this concept by focusing on the process and virtualization: test and build your product virtually before you spend any money on prototypes. Autodesk does the same in different words, they call it Digital Prototyping and they try to avoid talking about the processes as here we touch the most sensitive point in mid-market companies: touching or changing processes – ‘classical PLM 1.0. And this is also what I read between the lines of Jim Brown’s post Is innovation or product pipeline killing profitability ? As long as we do not change our product development process but focus still on doing the same with better tools, the real innovation will not come. We are now talking about the global collaboration generation that has to learn to work together and replaces the people who are not changing their processes.
Are we still solving our departmental problems only ? Can we survive keep on doing the same ? This is now !
And meanwhile mid-market companies are learning to understand and digest the above, we already see the new wave coming. WEB 2.0 – social networking – social collaboration – PLM 2.0 – communities and more. Instead of companies working on their own data, the future is to work in communities, live data, cross-company with employees, who are focused as a team to bring a result, we do not send so much emails anymore, we chat, we twitter, we …….. and more. In addition as we will see the trend that teams have members from all around the world, the question comes up: What is the standard communication language ? German (past) , English (present), Chinese (future) ? Here I am a big fan and believer of the Dassault vision that 3D becomes the global language for communication as the people participating do not come from the same educational background anymore – so it easier to see what you mean. Meanwhile the futurists are all the time talking about the aging workforce (a lot of people plan to retire), but if you read back, you will notice every ten years we are talking about an aging workforce. Every time there was a new generation picking up the new capabilities and challenging the next generation.
Are we in 2020 a global, 3D twittering world ? What is each individual’s added value ? What are companies doing to anticipate to the above trends ? It looks like it is going to happen and the current economical downturn allows us to anticipate even earlier till the next pit stop.
A thought I take with me on the summer holidays.
(Yes, in Europe we still have holidays that are so long you have time to think about work –
you can find me on the island below in August)
The last month I have been working with Aerosud Aviation in South Africa to finalize and conclude on ROI and the lessons learned around their PLM implementation, which started in May 2007. I was lucky to be involved in the initial scoping of the project in 2007 and assisted the local Value Added Reseller together with the team from Dassault Systèmes UK team in a step by step project towards PLM.
When I met the people in Aerosud the first time in 2007, I noticed it was a young company, with open-minded people, everyone trying to improve their daily activities per department. There was the need for PLM as some of their major customers required Aerosud to have a PLM system in place. Also Configuration Management was mentioned many times in the interviews and what I learned that time: Excel was the tool for configuration management.
Based on the initial interviews a plan needed to be developed in which steps to implement PLM. The following three major points were the guidance for the implementation:
- The company was thinking documents and understanding documents especially Excel
- The company had no clear understanding of what PLM would mean for them as real awareness was not inside the company. Customers like Boeing and Airbus talked about the importance of PLM, but how this could impact Aerosud as a company was no commonly clear
- People in the company had a major focus on their department and there was no availability of a overarching group of people leading the implementation
You could say you will see the above points in many smaller and medium-sized companies. I wrote about it also in one of my previous posts: Where does PLM start beyond document management ?
The project phases
The good news for Aerosud was that their PLM Champion was an expert in CATIA and was familiar with writing macros in Visual Basic plus the fact that everyone in the company was open for using the system as standard as possible – no demands for special behavior of the system: “because we do this already for 100 years”
The last phrase you hear a lot in ancient Europe
The choice was to start with implementing ENOVIA SmarTeam Design Express and to focus in two phases around design data management (phase 1) and the usage of design data by other users (phase 2)
The plan was that each phase would take maximum 2-3 months and we would give the users the time to digest and change their habits towards the standards in the system. In reality it took almost a year, not due to technical or conceptual issues, but this was the maximum pace we could have with the amount of time and available resources. The good news after these two phases was that the first bullet was much clearer understood – the difference between having a system with a single version of the truth or Excel management.
In the summer of 2008 (our summer – as it was winter in South Africa) there was a management workshop in Aerosud and here after three days of discussion the position of PLM became clear. One year ago this would not have been possible, now people had seen ENOVIA SmarTeam and they could imagine what benefits the system could further bring. This addressed the second bullet I mentioned before. Although this workshop was not scheduled upfront, looking back now I see this was a crucial point to get understanding for the next PLM steps.
The next PLM steps were extending to a real Item-centric data model, because if you want to do PLM you need to work around Bill of Materials and all related information to the items in the Bill of Material. At the end this gives you configuration management without chasing Excels.
Again the next steps were divided in two phases with again a scope of 2 – 3 months. The implementation would be based on the ENOVIA SmarTeam Engineering Express methodology which came as a logic extension of the current implementation, without having to change the database or existing data model.
In the first phase we had awareness sessions for BOM (discussing EBOM / MBOM / Effectivity, etc) plus in parallel we introduced the item as place holder for the information. Not longer folders or projects as the base.
Introduction of the item was conceptual not a big issue and the major activities in this phase were focused on connection legacy data or current data from projects to the items. Data coming from various sources (directories, legacy databases) plus NC data became connected and visible in the single version of truth.
In the second phase of moving to PLM the focus was on EBOM and MBOM. Initially assuring that from the designer point of view the CATIA design and EBOM were connected as smoothly as possible, trying to avoid a lot of administrative overhead on the designer (sometimes unavoidable – see my previous post: Where is my ROI, Mr. Voskuil)
After having implemented a streamlined CATIA – EBOM connection, the focus moved to the MBOM. For me this is the differentiator for companies if they implement PLM or just Product Data Management). Implementing the MBOM requires a culture change and this is the place where the ERP people need to see the benefits instead of the threats . Luckily in Aerosud the manufacturing engineers were working in their Excels initially and not in the ERP system – which happens a lot in older companies.
For that reason the concept of MBOM in PLM was much better understood. Now Aerosud is experiencing these capabilities and once they become obvious for everyone the third bullet will be addressed: people start to work in processes cross-departmental instead of optimizing their department with a specific tool.
As this activity will continue, I also conducted with the Aerosud management and PLM implementation team an ROI assessment. Estimates about the experienced and projected benefits were kept low and on the realistic side. The result was that the outcome for the ROI period was approx 27 months, almost the same time as the whole project had as throughput time. This proved again the statement about a phased PLM approach. payback of project comes in parallel with the implementation and will ultimately fund the next steps.
End of July I will be holding a webinar with more details about this implementation for the Dassault VAR Community. I will be happy to expand this information for a wider audience afterwards, as I believe the project is representative for many mid-market companies that struggle to find the place where PLM fits ….. and brings ROI
Let me know if you are interested in this follow up and I will collect the inputs for a follow up.
It is time to continue with my posts about ROI and the need for measuring. I described in previous posts the concept phase and planning phase and will touch in this post the development phase.
But before doing so, there are two points I want to share before.
Queen’s Day in the Netherlands 2009
First as a Dutchman (although many times virtual) I enjoy April 30, as a special day, as it is our Queen’s Day.
People around the world celebrate the 1st of May, we Dutch celebrate Queen’s Day the day before.
It is a celebration of the people, with free flee markets, concerts and activities all around the country and at some special locations our royal family contributes to the atmosphere by participating amongst us. We celebrate this day not because the Dutch are so royalty minded, it is also a good excuse to celebrate our existence together, and there is always the discussion if a president of the country would bring more to the country as compared to the royal family.
This year Queens Day however became the blackest Queens Day ever. A lunatic apparently decided to make a statement and tried to drive his car into the bus with the royal family. However to get there he drove through the cheering crowd – 7 people died, including the driver because of this attempt. It makes you realize that in the modern society innocence is gone and that life is not as obvious as it is.
Hopefully Queen’s Day will be again a day of the people celebrating , with respect to the victims, still we should not change our lives because we fear.
Concurrent Engineering around the BOM
Next point, back to PLM again, I read an interesting discussing on two blogs regarding the need for the BOM – For me the shared and consolidated BOM, is the major object (placeholder / entry point) for a company to share developed data, so it is an interesting discussion.
Read these posts at: vuuch.com and plwtwine.com – they give points to consider, and I support the observation that although we try to do concurrent engineering already for many years, I haven’t seen many successful implementations, mainly due to the human behavior. Classically PDM and PLM require the BOM for collaboration and we might stay with this concept for a long time. Knowing the mid-market, I believe alternative solutions have to come up as a boom embraced by everyone (and conquer the market within a few years) or we will stick to what we know and what we are doing – changing habits and culture is hard. For the moment I stick to the current situation.
To PLM or Not to PLM – Measuring the development phase
So what happens in the development phase.> We have a concept and a plan and now we need to develop or change the product. In the past this was much easier. Companies worked mainly locally and around a single discipline. Now product development has the typical challenges of collaboration between different locations (many times around the globe), different disciplines (mechanical, electrical, software), integrate suppliers (as we focus on core competence) and meanwhile comply to (local) regulations. A lot of activities in parallel that should run coordinated to a single goal, the developed product. The phase where a lot of data is created and need to be shared among along the enterprise.
So the most important questions related to the development phase are:
- How many review cycles does a product introduction require in general?
Measure: time spent on getting a joined status on development and plan next detailed steps
Analyze: Can we improve the quality of the status information to better plan next steps - How much time does it take to prepare a product status review
Measure: the amount of time and people spent to collect information to make a status review
Analyze: Can this process of collecting data be shortened and (semi-) automated - How do we make sure we select the right parts and solutions for a certain function / system ?
Measure: The amount of changes during the development phase or after this phase
Analyze: Why were these changes needed ? Missing information, obsolete/redundant parts, failed solutions ? - How do we make sure our products comply to local regulations
Measure: At which state of the development process compliance is checked and how it affects development / go to market time.
Analyze: Can we verify compliance earlier than current – and how - How much effort does it take to communicate around an engineering change
Measure: What does it take to communicate and implement a change during the development phase. How much time, many resources are involved around this communication process (and how reliable is it)
Analyze: Can we improve by doing things different ? Implementing processes, push technology, ….?
Most of the above points focus on facilitating (global) processes and making information available anywhere needed. This brings me to my previous post, where I talked about Can ERP vendors do PLM ? The ERP vendors that do PLM, will claim they are addressing these points in their PLM offering too. The major difference however is that (and I am generalizing) ERP based systems score low on usability as their systems are not planned to work from within an application (CAD or Office for example) . This is the major difference with PLM systems, closely related to CAD systems. Through their CAD integrations, the PLM environment will be embedded in the day-to-day user / design environment (immersive is the term).
An immersive integration has the benefit that collecting data is much more natural and the chance of having more accurate data available all the time is higher. So most of the point mentioned above will have a higher ROI when working from an integrated PLM environment. And in addition to that, in the mid-market users have a voice – their acceptance is also part of the ROI.
Conclusion
The keywords for the development phase are global collaboration and visibility of actual data and affected changes. To make data available, integration with the data creator’s desktop is important as then it will be available straight from the source. I keep it here to ‘classical’ PDM / PLM as new concepts like PLM 2.0 will drastically change the way we work, however getting there will take years
Note: It might be misleading to talk about ROI benefits per phase, as other and additional benefits may come from doing the whole process different. I will stick to my initial approach as it will give you a baseline to start working from. Remember in order to understand– you need to start measuring even if it is not the ultimate approach
And closing with Queen’s day how it could be (2008 – learning Dutch is not required)
You might have heard about the chaos theory and the butterfly effect ? In general, the theory promoted by Edward Lorentz and others, claims that the flapping of the wings of a butterfly, somewhere in South America may influence ultimately the path of a tornado, either preventing or accelerating that a tornado may hit at a certain place in North America.
WOW, if a butterfly can do this, can you imagine the impact of all of us, flapping our notes and plans around PLM in an organization ? What a chaos we can create ?
I came to this association, looking back on my activities the past three weeks. Talking with implementers and companies, who all had a tornado of wishes and activities, trying to create order through a PLM implementation – the anti-chaos theory.
Most of the discussions were based on a typical mid-market approach.
What do I mean by a typical mid-market approach – and I am generalizing here. None of the people I have been talking to in the past weeks match the exact characteristics, however all contributed to the picture in my mind.
Typical mid-market approach (my generalization):
- (Power) User Driven / Do It yourself approach – inside the organization there are people who have the dream to improve the company with PDM / PLM and the energy to prove it. They build the plan and define the solutions. External resources are only hired to do specialized services, fitting in the thought process of the power users. They believe that everyone will see the benefits of the implementation and join their approach step-by-step enthusiastically.
- Focus on technical details– often the wishes are based on implementing technical capabilities close to the understanding of users, usually requiring a minimum of change in the daily processes. For example the focus might be on a technical capability how to connect the PLM system to the ERP system (Middleware / XML /Web Services / …..) instead of discussing how it will work from the process point of view – how is the process impacted ?
- Task solving – much in combination with the previous point, the focus is on optimizing and/or automating tasks of a certain user. The end-user’s daily tasks/pains are the focus for solving, which means trying to automate as much as possible, providing as much as possible single system / single screen solutions.
- Risk Avoidance – often these companies do not have the capabilities (people / time / budget) to experiment with new directions. Approaches from other similar companies are followed (looking for references). For sure not a bad approach, however the result is it will be harder to be differentiate from your competitors. And of course risk avoidance should always be considered in the scope of manageable risks.
- Lack of top-management investment / push – although the top management in these companies subscribe to the needs for PLM, the focus of the investment is usually mainly on the external costs (software and services), where internal resources are forced to do the PLM activities beside daily tasks. Later the management will wonder why things are going slow, as they did their job (they approved the investment– waiting for the results now)
- Focus on business skills – the people in the project team are often well educated in their daily business and practices, but lack project management, risk management and change management skills. These ‘soft’ skills are often acquired by buying a book to be placed on the desk.
After writing these generalizations, I had the feeling that instead of characteristics, i was writing about risks . As this was not the intention, let see the how to manage these risks:
- The power users should realize that they are sent on a difficult mission which requires a lot of creativity to implement changes in the context of the PLM project. And strange as it seems the PLM software might not be the biggest challenge.
The biggest challenge will be on choosing the right best practices and to implement them with acceptance of the users. This is change management combined with implementation knowledge / experience. They point for the power users should be to have an implementation partner with experience, who can explain why best practices work and explain how other companies address this issue. Without practical guidance the power users have become pioneers, which is something the management for sure wants to avoid.
Often to avoid user objections, the project team decides on heavy customizations or ‘weird’ compromises – nice to keep the user community quiet, but bad for the future, as benefits will not be the same.
This mainly happens as there is too much focus the ‘hard’ side of the project ( hardware /software /IT /Services ) , and no or limited attention to the human / change management side.
Power Users – be aware ! - The management should realize that it is a company’s decision and vision. So from their side a steering committee with a clear vision is required. Their job is to keep the vision, prioritize the activities and make sure the power users are not creating an isolated solution based on their dreams.
The most important role of the management is to take continues responsibility for the project – it does not end by giving the approval for the project and budget. Where users might reluctantly accept changes, it is the job of the management to enforce the changes and support them.
This can be done in a harsh way by imposing the changes, however this will cause resistance and the end users will demonstrate the management was wrong. This leads at the end to a situation where the company as a whole will be in a worse position as before.
So managing by motivation should be the approach, as after all the power lies in motivated users, who understand the benefits of the changes and benefits for their future job.
Management – be aware ! - Make sure the focus and priority is on business not on IT. Sell and explain the business benefits internally all the time.
All be aware !
To conclude:
- The mid-market characteristics look like risks for a successful PLM implementation, if not addressed and taken seriously
- There is significant management support and control needed to monitor, guide and sell the PLM project.
To make sure the company benefits are targeted and not the individual users or departments demands only. - Implement bottom up but control and direct top-down
- Your implementation partner should have resources with skills for both levels – so not only programmers who can do miracles, but also consultants that can explain, validate best practices based on other experiences
Understanding chaos – enjoy:
Jos Voskuil's Weblog 
Jos, what a ride you have had! And looking at some of the spaghetti system architectures of even today's businesses,…
Congratulations, Jos! I'm very happy that you'll stay active in the PLM world and continue with your blogs - during…
Jos, welcome to the world of (part-time) retirement. Enjoy your AOW. Thanks Dick, you have the experience now - enjoy…
Thanks for all the valuable thoughts you have shared with us Jos, hope your 'new career' will bring you lots…
Great.. Congratulations on reaching yet another milestone... your blog is very thought proving and helps us to think in multiple…