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Time is flying and since I started this sequence on PLM 2.0, four months have passed. Typical end-of-year activities took most of my time. Project deadlines are often tied to Christmas and at the bottom of this post you can see one of my favorite Dilbert cartoons related to deadlines. The advantage for me was that during these four months, I had time to think and discuss various trends with peers.
And then the news you could not miss: Autodesk acknowledged PLM exists and came with their PLM 360 Nexus announcement. Welcome Autodesk in the world called PLM. Too early to make a statement in this post, but an understandable move. The good news: PLM exists even for Autodesk customers.
Now the question is what kind of PLM are we talking about? Is it a PDM variant, PLM 1.0 or PLM 2.0? And this is what I will address in this post – the last one for 2011
A small recap on the agenda:
| First post | : What is PLM 2.0? – published Aug 24th |
| Second post | : Challenges in current PLM – published Sept 4th |
| This post | :Change in business– published Oct 3rd |
| Final post | : Why PLM 2.0 – conclusions – this post |
How good is your memory?
A small summary of the first 3 posts related to PLM 2.0. In 2006, short after the introduction of WEB 2.0, there was the PLM 2.0 announcement of Dassault Systemes and the introduction of new concepts for PLM: online data, communities, IP protection, apps and the starting discussion about cloud based solutions. Parts of these concepts are adapted by all the PLM 
vendors in their own terminology meanwhile.
The picture on the left (click on it to enlarge it) was a kind of summary what PLM 2.0 could bring. In addition, I referred to Steve Denning‘s post: Why Amazon can’t Make a Kindle in the USA
to illustrate that change is not only happening in the world of PLM. Change in business management is also required. This because people are changing (generation Y), but even more visible at this time: business has become global.
Next I described the classical PLM challenges and implementations, which fit to big enterprises, but are difficult to replicate for mid-market companies. And finally, I came back to the drivers for change in PLM: a new generation of workers, change in management, globalization (and Intellectual Property (IP) protection), all affected by more customer focus and social media.
So now it is time to conclude on all these topics
PLM 2.0
Is PLM 2.0 the next thing in 2012? For sure not! PLM 2.0 concepts are visionary, but far from mature. Where large companies think they have understood PLM 1.0, the mid-market is still in the process of understanding the need for PLM. In addition, the classical PLM vendors have most of their solutions based on old core technology (and new marketing). Therefore I believe it might be the mid-market companies that provide the jump start towards new PLM 2.0 concepts. Follow my thoughts full of generalizations (and comment):
Enterprises that have been investing in PLM
There is a group of enterprises that have started to invest in cPDM or PLM in the early days, ten years ago or more. The majority of these companies are in the automotive, aerospace or discrete manufacturing industries. Their implementation was focused on enabling collaboration between dispersed teams and standardization of processes, bringing efficiency. Often these big companies are a collection of smaller companies that have been going through mergers and acquisitions.
They used the PLM tools to align people and to standardize common processes through the organization. This brought big benefits at that time, but as a side-effect aligning and standardizing people and processes, this is complex change processes for an organization, therefore raising the fear to be ever successful. Although Return-On-Investment (ROI) numbers are in general positive from this implementation, nobody is looking for a new PLM.
A huge investment has been done to structure and classify data with all its complexity. And now, new trends are coming up (PLM 2.0) and the question comes how to embrace this. The management and the thought leaders on the old PLM implementation are probably still in the company and they are reluctant to a big change, based on their previous experience and investment.
So who is going to drive the innovation towards PLM 2.0 capabilities in these companies? Sadly to say, I see in Europe a trend where these companies block this type of innovation. The ERP backbone managing the manufacturing data and the PDM system mainly managing design data is something unlikely to change. Having the data buried somewhere in a system does not mean you can work with it. So the early PLM implementations might in the long term become a disadvantage compared to more modern enterprises.
So here I assume we will not see the frontrunners for PLM 2.0 concepts
Modern enterprises
If you look at enterprises that have been investing in PLM at later stage you will see a different focus. I call them modern because usually this type of industry does not exist as long as the classical industries. Here I think about the high-tech industry and new emerging industries like CPG and apparel, which do not have the classical CAD focus. Their investments in PLM technologies were in different areas. As their products and technology becomes much faster obsolete, the focus is on innovation, being first to market and being customer centric.
The New Product Introduction (NPI) process or Program and Portfolio Management (PPM) are typical PLM practices for these industries and as time-to-market and global manufacturing are key drivers for them, the focus of these implementations was different. They are less focused on capturing all data, but more on assuring efficient capturing and transferring data from work in progress environments to the enterprise environment.
In more modern enterprises you see two levels of product related processes: the work-in-progress area where global collaboration, ad-hoc activities are crucial, often managed by a PDM environment and you have the enterprise level, where the governance and publishing of the product data for production is managed. The enterprise gets their structured and validated data from the work-in-progress environments.
So it is not necessary to have one overall PLM system. This makes the implementation more flexible and it also enables modern PLM concepts to be introduced in an earlier phase, like crowd-sourcing, consumer communities and more. Here the speed of adoption is very much depending on the management of these companies and the way they feel comfortable with these new concepts. But as it is also in their veins due to their products, there is hope they will adopt (or are already using it)
Mid-market companies
The last type of company in this overview is the mid-market company. For me a mid-market company is a company that does not have a company-wide strategic department and a huge IT-environment to support company wide-systems. Mid-market companies have the same challenges as enterprise, they also operate more and more on a global base with design and manufacturing dislocated. However they solve their issues per department one by one. Prioritized where the pain is felt the most. This often leads to a seemingly fragmented approach, but it does not push for a big change in working methodology company-wide. Less change management to do for the management. Excel as a common interface, or sometimes the magic word XML and all is connected.
Still not efficient using the concept of sharing product data through the whole product lifecycle. And here I see the opportunity for PLM 2.0 concepts to be implemented much faster. Mid-market companies exist and flourish due to their flexibility. Concepts like communities, cloud based collaboration tools are much easier to implement for them, once the company endorses them. One department starts and without a big IT-investment another department can join the cloud based solution. Sharing data (a must for PLM) becomes a logical choice as it is the next tool available. And I believe Autodesk is aiming at that direction and others (existing and new comers) might come in from here – online solutions that connect the enterprise data in a clever manner (don’t forget search based applications – see for an interesting discussion: Tech-Clarity and the related LinkedIn discussion.
My conclusions:
PLM 2.0 is a vision for the upcoming 10 years or perhaps more and probably the ones that benefit the most in the first step are the ones that came last in PLM adoption: mid-market companies. The classical enterprises will have a challenge to let go their old PLM 1.0 thoughts and adapt themselves (and the management) to think 2.0. In parallel old PLM 1.0 is based on the old management principles where PLM 2.0 requires a new type of management also (more likely to appear in new companies – mid-market or modern ???)
No predictions this year for 2012, only good intentions:
- Shorter blog posts, in a little higher frequency when time allows
- More on Asset Lifecycle Management / Owner – Operators concepts based on PLM
- An appealing presentation about Making the case for PLM at PLM Innovation 2012
- More successful customers benefitting from PLM….
Sorry for the delay between this post and the previous post. A break with a lot of PLM work on my side and no adverts on your side: win-win. But now I have time to continue the serial around PLM 2.0. We are in the middle.
A small recap on the agenda:
| First post | : What is PLM 2.0? – published Aug 24th |
| Second post | : Challenges in current PLM – published Sept 4th |
| This post | : Change in business – published Oct 3rd |
| Final post | : Why PLM 2.0 – conclusions |
In the first post I described the changes in PLM messaging from vendors – PLM 2.0 or similar terms. In the second post I described the current challenges of PLM, which are well known – if you have access to in LinkedIn to the PLM related groups you will find discussions around the challenges of current PLM. And they set the spirit – good or bad.
Now in this post I will bring up some trends, which to my opinion, unmistakably must lead to a new way of PLM in order to adapt to the future.
Generation Y – a new generation of workers
Generation Y: It is interesting to learn that everywhere companies are complaining or warning that their existing workforce is going to retire with all their knowledge without decent follow-up. In parallel they state it is difficult to find new employees with similar skills that will guarantee the future of the company. The new generation of workers, often identified as Generation Y, has different skills and different motivations.
Some interesting generalizations (note I am not a social anthropologist).
The older generations were raised with the concept: Knowledge is Power – You as an individual needed to have in-depth skills to be the right person for a job – a job is your life and for life. As a negative result of this approach, you see that exactly this older generation sometimes ‘sits’ on their knowledge as a kind of job guarantee – they do not like sharing information – “Come to me and I will help you” is their motto till they retire.
Generation Y does not have this job for life attitude – they look more for short term success and fulfillment and therefore they do not fit so well in the way traditional companies work. They are not the type of knowledge workers previous generations had, but they are, thanks to their skills with modern digital media, capable of finding information and combining information into knowledge. They work different.
The interesting observation from my side is that Generation Y is exactly the type of people PLM requires, as it is all about sharing and combining data. What is blocking their acceptance for current PLM is that the implementation is not architected to their work motivation. Look at:
- The way information is stored (too structured),
- The way information is presented (too structured, boring screens).
- The way information has to be entered in the system (too unfriendly – overkill)
For them PLM needs to move more to an intuitive way of presenting information, capturing data as-if it is something like serious gaming. And the new PLM needs to have a way to manage structured and unstructured data combined.
For companies that complain, they are losing skilled workers in the future, they should not complain but adapt. They should look forward and solve the problems for the future, which means a different way of doing business and implementing PLM. Do not choose what the dinosaurs did.
New styles of business management
Here I want to come back to my first post – I was intrigued by reading Steve Denning’s posts and its relation to PLM. Through the post Why Amazon can’t Make a Kindle in the USA, I found the post The Death and Reinvention of Management the best fitting with my PLM drive.
Steve describes five fundamental shifts in management that make companies ready for the 21st century.
Take time to read the post (and go more in-depth if you get as enthusiastic as me) – but come back to read the rest of this post
I summarize/quote the five shifts from Steve here (as I am sure not everyone has done the reading):
1. The company’s goal has to shift to one of delighting clients i.e. a shift from inside-out (“You take what we make”) to outside-in (“We seek to understand your problems and will surprise you by solving them”)
2. The role of the manager has to shift from being a controller to an enabler, so as to liberate the energies and talents of those doing the work and remove impediments that are getting in the way of work.
3. The mode of coordination shifts from hierarchical bureaucracy to dynamic linking, i.e. to a way of dynamically linking self-driven knowledge work to the shifting requirements of delighting clients.
4. There is a shift from value to values; i.e. a shift from a single-minded focus on economic value and maximizing efficiency to instilling the values that will create innovation and growth for the organization over the long term.
5. Communications shift from command to conversation: i.e. a shift from top-down communications comprising predominantly hierarchical directives to communications made up largely of adult-to-adult conversations that solve problems and generate new insights.
Here we see the typical PLM 2.0 targets. I will translate them into our PLM terminology.
Shift # 1 – The shift to delight clients – from which PLM vendor do we hear this statement? Which PLM vendor puts the customer in focus, instead of their “superior” technology?
Shift #2, #3 and #5 are typical PLM 2.0 capabilities which I described in my first post. See below the PLM 2.0 differentiators:
And where do we find shift #4? How do PLM vendors address this change beyond marketing?
My conclusion on this point: Both PLM and management require a change to be ready for the 21st century – It is exactly what generation Y is looking for, it is exactly what future consumers are looking for. However currently classical PLM and classical Management are dominating the thought process – and they do not like change so much as it would put past investments and achievements at risk.
The Importance of Social Media
Already described in the two previous trends, social media concepts fit exactly in the shift that we see towards the future. It impacts the way companies change their marketing and address their customer base. In parallel it affects the ways teams collaborate in the product development space, innovation teams are global product development teams.
My thoughts: Social media might look like a hype, but the basic concepts of social media will be required for future PLM
Globalization for SMB
The major trend from the past decade is that SMB’s (Small and Medium Businesses) do not longer serve and fight for a regional existence. Competition and customers come from everywhere and production is more and more outsourced. The traditional company that is #1 in their region does not longer exist. Even SMBs have to consider ways to collaborate globally – again another driver for PLM 2.0
My thought: Traditional SMBs are never the leading companies in new trends, they hang on their core knowledge and have probably a longer way to go to really adapt to the future. Startup SMBs with no historical hindrance are likely to outperform them.
Innovation, Intellectual Property & War on Patents
In a global market, innovation is the key driver to be successful combined with the point above: delight the customer. In order to delight the customer you need to innovate as delightment does not come from commodities.
And with innovation I am not only addressing the consumer market, innovation is required in all areas: green products, green production as world climate and its population forces us to change.
The successful products for the future will be those that are bringing innovation and when your company owns this Intellectual Property, your near future is going to be profitable,
Therefore the “War for Patents” will be everywhere. We currently see in the news the tablet and Smartphone patents wars, but it pops up everywhere, some more visible than others.
A “War for Patents” costs a lot of money (mainly spent to lawyers). Therefore the balance should be found between protecting your IP and to innovate faster. In this way your patents become less relevant because newer exist. To my opinion the new PLM should be the engine for innovation first and secondly the system to protect your IP
Conclusion:
Again too many words for a blog post, but the topic is huge and I hope you see the need for a different PLM (PLM 2.0): A PLM that is targeted to the change in business all around the world. The monetary crisis which is another symptom of the old business gives us a chance to change. We need to change organizations and collaboration to remain profitable in the future – don’t be an ostrich
My thoughts –looking forward to your feedback
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:
Recently I have been reading various interesting articles, it started with Why Amazon can’t Make a Kindle in the USA from Steve Denning and from here I followed several interesting links.
Most of the articles were business driven and not with a focus on technology. However what caught my attention was the similarity of issues that were raised in these articles as-if it was about PLM.
At the end it is a plea/cry for change to be more competitive in the future. With the current economical stand still, I believe there is a need and an opportunity for this change also in PLM. I am not pointing to regime changes all around the world, but somehow they are all connected to this new wave of globalization and openness to information.
And as my domain is PLM, I took PLM 2.0 as the vehicle to describe the change currently in the PLM world. Although PLM 2.0 is a term invented by Dassault Systems, I will use it as the placeholder to describe the changes in PLM.
In four posts I will guide you in the upcoming weeks through the thought process:
| This week | : What is PLM 2.0 ? |
| Next | : Challenges in current PLM |
| Next | : Change in business |
| Final post | : Why PLM 2.0 – conclusions |
I hope you will stay with me when going through these four steps and look forward to your immediate feedback.
What is PLM 2.0 ?
In 2006 Dassault Systems announced PLM 2.0 as the new generation of PLM implemented on their V6 platform. If you go to the 3DS website you see the following definition of PLM 2.0
Look for the header PLM 2.0: PLM Online for All
In the DS definition you will find several keywords that will help us further to understand the PLM 2.0 capabilities:
a typical Dassault Systems viewpoint, as they are coming from the world or 3D CAD and virtualization and the company’s vision is around lifelike – and life is mostly in 3D.
3D as interface towards all product related information is a paradigm shift for companies that were used to display only metadata on boring tabular screens where you navigate on numbers and text. The other major CAD-related PLM vendors of course could follow this paradigm too, as 3D visualization of information is known to them. However when coming from an ERP-based PLM system you will see 3D is something far out of reach for these vendors (at this moment).
This is what I believe is a crucial keyword for all PLM future implementations it builds upon the Business Information concepts that became in fashion 8 years ago. Online means direct access to the actual data. No information conversion, no need for import or export, but sharing and filtering. What you are allowed to see is actual data and an actual status. Imagine what kind of impact working on-line would have on your organization. Evaluation of trends, Key Performance Indicators directly available – still of course the interpretation to be done by experts.
Intellectual Property – a topic that should be on every company’s agenda. The reason a company currently exists and will exist in the future is based on how they manage their unique knowledge. This knowledge can be based on how certain processes are done, which components are chosen, which quality steps are critical and more. Working in a global collaboration environment challenges the company to keep their IP hidden for others, for sure when you talk about online data. Losing your IP means for a company to be vulnerable for the future – read in the referenced blog post from Steve Jennings about DELL.
This is currently the platform for change as technologies are now enabling people and companies to implement applications in a different manner. Not only on premises, but it could be online, Software As A Service, Cloud based solutions and through standardized programming interfaces, companies could implement end-to-end business process without a huge, monolithic impact. Also Web 2.0 provides the platform for communities.
The concept of communities opens new perspectives for collaboration. In general people in a community, have a common interest or task, and they share thoughts, deliverables back to the community across all company borders. This is the power of the community and the collective intelligence built inside such a community. Without company borders it should give the people a better perspective on their market on their business due to the global participation
The vision is there – now ….
All the above keywords are capabilities for the future and in the world of PLM you see that every PLM vendor / implementer is struggling with them. How to implement them consistently across their offering is the major challenge for the upcoming years, assuming PLM 2.0 is considered as the next step.
If you look at the PLM vendors beside Dassault Systems, you see that Siemens and PTC are closest to following the PLM 2.0 approach, without mentioning the term PLM 2.0. Other vendors even refuse to talk about PLM, but they share already similar components, for example Autodesk.
Interesting to see that the ERP-based PLM vendors do not follow this trend in their communication, they are still working on consolidating and completing their ‘classical’ PLM components
But the classical PLM vendors struggle with the change in paradigm too.
- What to do with current, huge and structured implementations ?
- Is PLM 2.0 having the same demands or can it be different ?
Here you see opportunities for new comers in this market as you can implement online collaboration, intellectual property creation/handling and communities in different manners with different types of implementation demands.
So far my introduction in PLM 2.0. Browsing on the web, I did not find too much other viewpoints on this specific terminology, so I am curious about your thoughts or and complementary comments on this topic.
In my next post I will zoom in into the challenges of PLM and relate them to the PLM 2.0 vision
My take on PLM (classical) and PLM 2.0
Referenced in this context – not directly mentioned:
- IBM visionary presentation from 2006 – Michael Neukirchen
- The future of PLM – Martin Ohly (global PLM blog)
- PLM 2.0 technology or facelift – Oleg Shilovitsky
- Social Media and PLM explained for Dummies – Jos Voskuil
- Going Social With Product Development – Jim Brown
During this summer holiday, I was looking back on recent implementations and sales efforts related to PLM. Some had particular challenges regarding the PLM implementation and the relation to the IT department. The role of the IT-department was crucial, but always in a positive manner ? Judge yourself.
First this statement:
In many mid-market companies the choice for PLM is not that clear.
Let me explain what I mean by a typical mid-market company – it is not based on size or turn-over. For me a mid-market company is a company, not allocating the resources to have an overall strategic department and in addition the IT-department is limited to a team of people with a main focus to keep the company operational – ERP first.
The impact of this situation is twofold:
- From one way new business initiatives will mostly come from departments, either sales, marketing, engineering, production, service or IT. Companywide business initiatives are not likely to come from a separate department as each department is working on their own issues.
- Secondly IT often has a tendency to ‘standardize’ on certain environments. Some quotes:
“We love/hate Microsoft”
“SharePoint is our standard”
“If it is not Linux it is not reliable”
“Our ERP provider has also a PLM module, so this is going to be the standard”
And this standardization is often at the end the business killer
So where does PLM come from in a mid-market company ?
Example 1: The IT-department in company XYZ had the opinion there was a need to provide a company infrastructure for document management – people complained about not being able to find the right information. Related to the CAD system in use, it often became a kind of PDM implementation with extended document management. The IT-department provided the infrastructure (we need Oracle / SQL /DB2 – based on their standards) and engineering was allowed on top of that infrastructure to define their PDM environment.
As most of the people involved in this project were very familiar with computers, the implemented system was highly customized, due to specific actions the engineers wanted and what IT envisioned users would require. The overall thought was that other users would automatically get enthusiastic when seeing this implementation
In contrary: the regular users refused to work with the new PDM system – too complex, it takes too much time to fill in information and in situations of heavy customization some users became afraid of the system. Making one mistake was hard to undo and could have a chain reaction of events further down in the organization. They preferred the traditional method of sending documents or Excels to the other departments and getting face-to-face feedback. Of course in case of missing information or a mistake this could be clarified easily too.
Conclusion from all the PLM pessimists: PLM is too complex, PLM is hard to implement.
My intermediate conclusion: Good will to improve the company’s business is important, however you need business people to define and lead the implementation.
Example2: IT in a company ABC developed a custom PLM infrastructure for their users and everyone was happy, till …… business changed. Where several years ago, the users decided that the standard PLM software was not good enough as some details were not supported and the standard system PLM system was able to do too much, IT generously decided to build a complete, nice user environment for their company.
Everybody happy for three years, till recently, due to acquisitions, outsourced contracting (engineering and manufacturing), the IT-department has to hire more people to support more and more custom connections and data exchange. Now in an overheated state they are looking for ways to use PLM standard software instead, however IT does not want to write off the previous investments that easy, the users are not aware of the problems in changing business and the future PLM decision is again driven by IT and not by business,
Internal conclusion: The IT-department was very helpful for the end users, who appreciated the simple to-the-point interface – whispering: Therefore never a change process took place anticipating strategic changes upcoming. The result a kind of dead end.
My intermediate conclusion: If you are a mid-market company and you are not in software development, stay out of it. It is always a temporary and people dependent (who can/will leave at some time).
Just two examples out of many, typically for mid-market companies. I think also larger enterprises sometimes demonstrate the same problematic. Good IT-people and IT-department are crucial for every company. The challenge is to keep the balance between business and IT. The risk is that due to the fact that there is a lack of business strategy resources, the IT-department becomes the business standard.
Conclusion: PLM is about business change and PLM is not an IT-tool. However a PLM implementation requires good and intensive support from IT. The challenge for every company is that the IT-department often has the most skilled people for a company-wide implementation, however the business drivers and strategy should come from outside.
Your thoughts ???
Recently i noticed two different discussions. One on LinkedIn in the CMPIC® Configuration Management Trends group, where Chris Jennings started with the following statement:
Product Lifecycle Management (PLM) vs CM
An interesting debate has started up here about PLM vs CM. Not surprisingly it is revealing a variety of opinions on what each mean. So I’m wondering what sort of reaction I might get from this erudite community if I made a potentially provocative statement like …
“Actually, PLM and CM are one and the same thing” ?24 days ago
It became a very active discussion and it was interesting to see that some of the respondents saw PLM as the tool to implement CM. Later the discussion moved more towards system engineering, with a focus on requirements management. Of course requirements management is key for CM, you could say CM starts with the capturing of requirements.
There was some discussion about what is the real definition of PLM and this triggered my post. Is the definition of PLM secured in a book – and if so – in which book as historically we have learned that when the truth comes from one book there is discussion
But initially in the early days of the PLM, requirements management was not part of the focus for PLM vendors. Yes, requirements and specifications existed in their terminology but were not fully integrated. They focused more on the ‘middle part’ of the product lifecycle – digital mockup and virtual manufacturing planning. Only a few years later PLM vendors started to address requirements management (and systems engineering) as part of their portfolio – either by acquisitions of products or by adding it natively.
For me it demonstrates that PLM and CM are not the same. CM initially had a wider scope than early PLM systems supported, although in various definitions of PLM you will see that CM is a key component of the PLM practices.
Still PLM and CM have a lot in common, I wrote about is a year ago in my post: PLM, CM and ALM; not sexy ! and both fighting to get enough management support and investments. There is in the CMIP group another discussion open with the title: What crazy CM quotes have you heard ? You can easily use these quotes also for the current PLM opinion. Read them (if you have access and have fun)
But the same week another post caught my interest. Oleg’s post about Inforbix and Product Data Management. I am aware that also other vendors are working on concepts to provide end users with data without the effort of data management required. Alcove9 and Exalead are products with a similar scope and my excuses to all companies not mentioned here.
What you see it the trend to make PLM more simple by trying to avoid the CM practices that often are considered as “non-value add”, “bureaucracy” and more negative terms. I will be curious to learn how CM practices will be adhered by these “New Generation of PDM” vendors, as I believe you need CM to manage proactively your products.
What is your opinion about CM and PLM – can modern PLM change the way CM is done ?
In the past two weeks I had some interesting observations related to the core of PLM. Reading posts and some in-depth discussions with customers lead to the statements below:
Single version of truth ?
First I am going back to the intent of PLM – companies that implement PLM are not looking for a system where they can store information in a single database. Often the single version of the truth story is translated into technology . To illustrate this statement I was explaining a medical device company some weeks before how in PLM practices the interaction of requirements, integrated with regulatory compliance verification speeds up the product development process as deviations are early discovered during the development stage. The astonishing answer from the customer was; “Yes we already store this information in our well-known ERP system – so no need for PLM to handle this”
For this person the conclusion was that once data is stored in a system, it is managed. However what the company never tried was to track each requirement individually (and its possible change) during the engineering process and have a direct connection to regulatory demands.
In that area Excel, people’s knowledge and stored documents were used to collaborate. Off course with the late discovery of errors and several extra iterations due to it. As long as this company does not understand that the PLM system is not yet another tool to store data, but an enabler to work different and more efficient, these tools based statements will not bring them further. But as nobody get fired for selecting a well-known ERP system, but trying to change the way people work is a risk, often the first option is chosen.
And the more conservative the company culture, the more likely this will happen.
Tools do not make a change
In a last week meeting I met a VP of a business group of a real global company. I am stressing the word real as there are many global companies, that actually have one main location where the IP and influence comes from – as compared to the real global companies where all around the world the knowledge and IP of the company is invented and spread from there. Although the discussion was on the current status and quality of the tools in use, during breaks we concluded that although the discussion is about tools, the hardest part for implementing PLM in their company is to master and motivate the changes in the way of working towards the users.
In several blog posts from Oleg (and others) I see the hope that new user interfaces, user data handling can provide a break through here. I partly agree here – in the eighties/nineties we had the single window terminal screens, which were easy to understand (no multi-tasking / no multi-windows). Slowly the current workforce got used to windows (still no multi-tasking) and the new generation (generation-Y) is less and less single tasking and has different ways of solving issues. New interfaces can contribute to the acceptation of a tool, but as in the end we are still doing the same – storing data in a central system without changing the way we work – there is nothing improved
MBOM in PLM
Another interesting statement of this VP was also that they are in the process of bringing all engineering data coming from different disciplines in their R&D / PLM environment. Originally it was the ERP system that was used to combine all data coming from different disciplines. However the disadvantage was that this product definition resided partly in an ERP (there is no concept of a single ERP as manufacturing differ so much globally) and partly in PLM. Their future plan was therefore to extend the coverage of PLM toward the whole preparation for manufacturing – my favorite topic too: see Where is the MBOM ?
Conclusion so far
In day to day relations customers and PLM vendors, implementers are talking about functions and features to implement and where and how data is stored. The major driver should be the concept of changing the way we work to be more efficient, more clever and with higher quality. This is not reached by storing data, but by having the right data available at the right moment. And this moment changes when implementing PLM
- PLM Customers: Make sure that change of doing business is the target of your PLM implementation – do not look for tools only – check with your implementer and vendor which experience they have.
- PLM Implementers: Schedule time and activities during the implementation to understand the business change and the customer to adapt. It is a different type of skill required but as important.
- PLM Vendors: You have a hard time – as all are talking about the tools, you do not want to talk about the changes PLM implies – a pity but most customers do not want to hear this side during their PLM selection process
It has been silent from my side the past – more than two months. Extremely busy and sometimes surprised to see the amounts of post some of my colleagues could produce, with Oleg as the unbeaten number one. During this busy period I was able to observe some interesting trends listed below:
Going Social
Social Media and PLM is one of the favorite topics for both bloggers and some PLM vendors at this moment. New products for community based collaboration or social engineering are promoted. Combined with discussions and statements how the new workforce (Generation Y) should get challenging jobs without doing the ‘old boring stuff’.
True arguments to initiate a change in the way we work. And I agree, must of current PLM systems are not ‘intelligent’ enough to support engineers in a friendly manner. However is there an alternative at this moment ? Below a commercial (in Dutch) promoting that elderly workers are still required for quality.
I discussed the relation PLM and Social Media some time ago in my post Social Media and PLM explained for dummies. In addition my observation from the field, gives me the feeling that in most companies the management is still dominated by the older generation, and most of the time they decide on the tools they will be using. No X and Y at this moment. Therefore I do not see a quick jump to social media integrated with PLM – yes the vision is there – but the readiness of most companies is not yet there.
Cloud
PLM and Cloud are also more and more mentioned by PLM vendors as a new solution specially for the mid-market. And with an optimistic mind you can indeed believe that with a low investment (pay per use) mid-market companies can do their PLM on-line. But why are existing on-line PLM systems not booming at this time ? (Arena / PLMplus / and the major PLM vendors) I believe that there are two key reasons for that:
- Implementing PLM is not equal to installing a system. PLM is a vision to be implemented using a system. And the difficulty is that a vision does not match function and features from a product vendor. There is a need for a driving force inside the company that will support the business change. Where are the consultants and advocates (with experience) for this type of solutions ?
- There is still a reluctance to store intellectual property somewhere on-line in a cloud without direct control and ownership of data. Mid-market companies are not known to choose solutions ahead of the mass. In this type of companies cloud based CAD tools might be an entry point, but all product data – no way they say.
PLM or ERP
Before even talking about new technologies or fundamentals for PLM, I see the biggest challenge for PLM is still to get the recognition as the system for product knowledge (IP) and innovation. In too many companies ERP rules and PLM is considered as a way to capture CAD and engineering data. The main PLM vendors are not addressing this challenge – they neglect ERP (yes we can connect). And ERP vendors like SAP and Oracle are not known for their PLM messages and strategy (yes we have PLM). As ERP is often the major IT-system historically, there is so often the (wrong) opinion that everything should be built and based on one system.
In some publications I have seen the Swiss knife as an example for the multi-functional system with all tools embedded. My question remains – who wants to work only with a Swiss knife when doing professional work ?
I like to have the right tools to do my job
The most important topic around my blog the past 3 years has been around the Manufacturing BOM – where should it be – and where is the MBOM current ?
Sweden – a reality check
Last week I attended the DS PLM forum in Gothenburg to present the vision of using a PLM system as the backbone for plant information management for owners/operators and how ENOVIA supports this vision.
But I also learned Sweden is (one of) the most innovative countries (I need to verify the criteria used but can imagine there is a source of truth). What impressed me more where the presentations from Staffan Lundgren from Sony Ericsson with the title “Living in a world of change – balancing stability and flexibility” and Magnus Olsson from Volvo Cars with the title “Driving operational excellence in a challenging business environment”. Both companies are well known for their robust image. From both speakers you could experience that they are not worried so much about Generation Y, their success is depending on a clear vision and a will to go there. And this basic drive is often missing – PLM is not a product you buy and then business continues as usual
Conclusion
PLM vendors made a lot of noise the past months (events / product announcements) and customers might get the impression that technology and software (or the price of software) are the main criteria for successful PLM. Although not unimportant, I would focus on the vision and to assure this vision is understood and accepted by the company. 
Am I old fashioned ?
In the past months, I have talked and working with various companies about the topic of Asset Lifecycle Management (ALM) based on a PLM system. Conceptual it is a very strong concept and so far only a few companies have implemented this approach, as PLM systems have not been used so much outside the classical engineering world.
Why using a PLM system ?
To use a PLM system for managing all asset related information ( asset parameters, inventory, documents, locations, lifecycle status) in a single system assures the owner / operator that a ‘single version of the truth’ starts to exist. See also one of my older posts about ALM to understand the details.
The beauty lies in the fact that this single version of the truth concept combines the world of as-built for operators and the world of as-defined / as-planned for preparing changes. Instead of individual silos the ALM system provides all information, of course filtered in such a way that a user only sees information related to the user’s role in the system.
The challenge for PLM vendors is to keep the implementation simple as PLM initially in its core industries was managing the complexity. Now the target is to keep it extremely simple and easy to used for the various user roles, meanwhile trying to stay away from heavy customizations to deliver the best Return on Investment.
Having a single version of the truth provides the company with a lot of benefits to enhance operations. Imagine you find information and from its status you know immediately if it is the latest version and if other versions exists. In the current owner / operator world often information is stored and duplicated in many different systems, and finding the information in one system does not mean that this is the right information. I am sure the upcoming event from IDC Manufacturing Insights will also contribute to these findings
It is clear that historically this situation has been created due to the non-intelligent interaction with the EPC contractors building or changing the plant. The EPC contractors use intelligent engineering software, like AVEVA
, Bentley, Autodesk and others, but still during hand-over we provide dumb documents, paper based, tiff, PDF or some vendor specific formats which will become unreadable in the upcoming years. For long-term data security often considered the only way, as neutral standards like ISO-15926 still require additional vision and knowledge from the owner/operator to implement it.
Now back to the discussions…
In many discussions with potential customers the discussion often went into the same direction:
“How to get the management exited and motivated to invest into this vision ? The concept is excellent but applying it to our organization would lead to extra work and costs without immediate visibility of the benefits !”
This is an argument I partly discussed in one of my previous posts: PLM, CM and ALM not sexy. And this seems to be the major issue in western Europe and the US. Business is monitored and measured for the short term, maximum with a plan for the next 4 – 5 years. Nobody is rewarded for a long-term vision and when something severe happens, the current person in power will be to blame or to excuse himself.
As a Dutch inhabitant, I am still proud of what our former Dutch government decided and did in the after the flooding in 1953. The Dutch invested a lot of money and brain power into securing inhabitants behind the coast line in a project called the Delta Works. This was an example of vision instead of share holder value. After the project has been finished in the eighties there was no risk for a severe flooding anymore and the lessons learned from that time, brought the Dutch the knowledge to support other nations at risk for flooding. I am happy that in 1953 the government was not in the mood to optimize their bonus ( an unknown word at that time)
Back to Asset Lifecycle Management ….
Using a PLM system for asset lifecycle management provides the economical benefits by less errors during execution (working on the right information), less human involvement in understanding the information ( lower labor costs) and lower total cost of ownership (less systems to maintain and connect by IT).
But these benefits are in no relation with risk containment. What happens if something goes really wrong ?
If you you are a nuclear plant owner, you are in global trouble. A chemical plant owner or oil company can be in regional trouble, but they also will suffer from the damage done to their brand name globally. Other types of plant owners might come away with less, depending on the damage they potential ‘embank’
The emerging visionaries
For that reason, it is enlightening to see that some companies in Asia think different. There the management understands that they have the opportunity to build their future in a more clever way. Instead of copying the old way EPC contractors and plant owners work together, they start from a single version of the truth concept, pushing their contractors to work more integrated and clever with them. Instead of becoming boiling frogs, they are avoiding to fall into the same trap of many owners / operators in European and US based companies: “Why change the way we work, it does not seem to be so bad”
It requires a vision for the long term, something that will lead to extra benefits in the long term future: more efficient management of their assets, including risk containment and therefore being more competitive. If European and US-based companies want to be dominating in this industry they will need to show their vision too ..
Tomorrow I am attending the European Chemical Manufacturing Masters conference in Berlin, where I hope to learn and discuss this vision with the participants. I will keep you updated if i found the vision …..
In many PLM communities, you see discussions and statements, that there will be a significant impact on the way we perform product lifecycle management using social media capabilities. In this post I will give my thoughts without going in-depth into certain products. At the bottom of this post you will find some links to posts which contributed to my opinion (the usual suspects).
PLM
Let’s first establish a baseline, why we want Product Lifecycle Management. In a general PLM is a vision, to bring products to the market faster, with better quality, being innovative and more customer focused.
This vision can be implemented by best practices, like a standardized global staged New Product Introduction process, an enterprise wide Engineering Change Process, integration between different disciplines to work globally on a single repository for product definition and many more depending on your industry..
Two words pop up here: a single repository for product definition and global. This is where the technology comes in. Due to an improved world-wide (internet / WAN) connectivity, the capabilities are there to communicate efficient around a single repository for product definition and reliable, around the globe . The world became a global workplace and we are all connected. The improved connectivity enables PLM vendors (and others) to promote the “single version of the truth” concept.
Single Version of the truth
The idea behind it is that, if you store everything in a single database, you will always find the right information. This idea was developed at the time the world was not yet global and people were thinking more local.
Some of the major ERP vendors also push for this concept. If you store all your data in their single platform, you are sure there is no redundancy of data, so you are always confident about the content is the message. This concept is often embraced by IT-departments, as the message having one single platform or one single system for all enterprise data sound like efficient. (I call it Swiss Knife thinking – it does everything – but would you use it for professional work ?)
As long as we are talking about explicit data and local activities, this concept seems to prove itself. However, a lot of informal activities exist around the product development process, and these activities are not managed.
In 2009, I participated in a COE Automotive panel, where one of the attendees in the audience stood up accused the PLM vendors of making their life so complex. He said:
“If we have an issue on the shop floor with production, we just gather the right people and solve the issue – no need to fill in screens of data that PLM or ERP systems require. And if there was a customer with a problem, we send a service engineer and the problem is fixed”
Of course if his company was a global company, it would be impossible to gather all around the shop floor, or to visit the customer site and solve it in a reasonable time.
To avoid missing information, PLM and ERP systems try to collect as much as possible information in their systems, to have the best possible single version of the truth. Through immersive integrations and clever business logic, the user has to enter the minimum of information only once. However for the user still too much and way to complex they complain (and still not enough information is captured).
My conclusion so far: Single version of the truth is a concept to collect a majority of product related data, however missing all the informal communication, which is exchanged during talking (and later emailing and modern means of communication).
Extending the single version of the truth
The single version of the truth is an important implementation concept for PLM and it requires already a major challenge for companies. Imagine all information that you produce will be stored in such a manner that everyone authorized can see it and it is stored in such a manner that someone else also can understand the information (and not only you) . This is such an important change process often overlooked by IT-driven PLM implementations.
PLM Vendors focus on the tools to provide a platform to capture and share product data all around the product lifecycle. Not easy either as development is often based on generic functionality not optimized for a certain user role.
To understand the context of the shared data, you would like to hear or rewind the discussions people had at that time – as from these discussion a lot of implicit information can be retrieved. But no one wants to enter implicit information in a PLM system.
And then going global
Continuing with product development towards a global operation and addressing the communication around the product development is the next logic step. As it is much more difficult to communicate directly with everyone around the world, it is obvious that here social media come in the picture.
Initial people were using email to exchange ideas with other people around the world. This created new problems – sometimes huge attachments of unmanaged data, sometimes important information in mail boxes of only a few people, relevant for many. Email is against the concept of a single version of the truth as people were creating there own non-pubic archives of product discussions. Before the WEB 2.0 revolution, PLM vendors provided email integrations or embedded email functionality in their PLM system. Still there a millions of email databases (Lotus Notes / Exchange) with product data, development data and more not visible for many.
The 2.0 change
A trend we see in social media is that your ‘old’ email system becomes more a notification system, that you got a direct message through one of your social platforms (RSS feeds, LinkedIn, Facebook, Blog, etc). Of course, if you are connected to all these platforms on-line all the time, you do not need a notification system anymore and you are connected to whom you want and when you want – a little bit back to the old days. If you enter a social environment, you are a participant of the communication going on – you can look around or participate.
The benefit from social collaboration is that is does not push you into a structure of managed data. And it provides you with on-line communication with everyone who is in your selected community. The downside with the known social media is that it is not clear and secure, what happens with this information shared in social platforms. Will it be sold to special interest groups ? Can you find it through a search engine ?
For product related social collaboration, we need obviously more secure communities to collaborate. And as for this collaboration you do not know who is in your trusted company network, it is clear that cloud based solutions come in as a logical technical infrastructure. Of course these communities must be as easy accessible as popular social media and well integrated in the user’s environment.
Global single version of the truth ?
Combining the single version of the truth concept and the loose communication and content of social media brings us to the challenge of current PLM consultants, vendors and implementers. All the information collected in current social platforms is hard to find or interpret. If you use the embedded search functions in these communities, they are not designed for clever searches – you need to know the context? And then the question pops up if it is all information that existed ? You do not know as you do not see the full picture.
An old-fashioned managing all this data in our PLM system won’t work either. The capturing and classification and linking of data would be too much overhead for the reluctant user. We do not want to manage and justify each action that we do. (although this were knowledge management concepts in the 90’s)
Extended search
And this is where extended search comes in for PLM. The extended search is the glue between the single version of the truth and all the unmanaged data around the product in communities. Integrating this in a single environment is the challenge for PLM vendors (and less important for ERP vendors).
Why mainly for PLM vendors ? The main reason is that in product development a lot of iterations, knowledge building, searching and capturing of date takes place. The more you know and understand, the better you are capable to make adequate decisions, understanding the right context during your development process. And for that you need the formal and informal information, global available across disciplines, companies and countries.
I see two major requirements for these extended search capabilities.
- First of all the search engine should understand your context and skip irrelevant discussions and posts from your social media. I have seen how this could be done. In 2007, Yedda, an Israeli startup bought by AOL, came with an intelligent question and answer engine. The concept behind the engine was that it mapped the context of the question to your profile, to the community you belonged and compared it to other profiles of people in the community. The more you asked and the more your answered the clearer your context became. In additions your answers were rewarded by others, and the more thumbs up you got, the more value you provided to the community – saving your boss to do appraisals.
- Search engines should provide you with a facetted search to drill down on the search results. As you do not know exactly what you are looking for, some keywords should do and then as a next step based on your context and the search context you should be able to drill down to the information you are looking for. This information should now give you a better understanding of the context of your product – if it is versioned ? if it is the latest ? Leave this to PLM.
My conclusion:
Classic PLM (single version of the truth) and social media capabilities (easy collaboration in communities) combined with an extended search engine are the mandatory capabilities for a modern global PLM implementation where both formal and informal data are managed in the context of a product
Links for reference:
Jos Voskuil's Weblog 
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