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dontmissLast week I started my final preparation for the PLM Innovation Congress 2012 on February 22nd and 23rd in Munich, where I will speak about Making the Case for PLM. Looking forward for two intensive days of knowledge sharing and discussion

The question came to my mind that when you make the case for PLM, you also must be clear about what you mean by PLM. And here I started to struggle a little. I have my perception of PLM, but I am also aware everyone has a different perception about the meaning of PLM.

cmpicI wrote about it last year, triggered by a question in the CMPIC group (configuration management) on LinkedIn. The question was Aren’t CM and PLM the same thing ? There was a firm belief from some of the members that PLM was the IT-platform to implement CM.

PLM_PDM_CAD_networkA few days ago Inge Craninckx posted a question in the PDM PLM CAD network group about the definition of PLM based on a statement from the PLMIG. In short:

“PDM is the IT platform for PLM.”Or, expressed from the opposite viewpoint: “PLM is the business context in which PDM is implemented

The response from Rick Franzosa caught my attention and I extracted the following text:

The reality is that most PLM systems are doing PDM, managing product data via BOM management, vaulting and workflow. In that regard, PDM [read BOM management, vaulting and workflow], IS the IT platform for the, in some ways, unfulfilled promise of PLM.

I fully agree with Rick’s statement and coming back to my introduction about making the case for PLM, we need to differentiate how we implement PLM. Also we have to take into our minds that no vendor, so also not a PLM vendor, will undersell their product. They are all promising J

Two different types of PLM implementation

Originally PLM has started in 1999 by extending the reach of Product Data outside the engineering department. However besides just adding extra functionality to extend the coverage of the lifecycle, PLM also created the opportunity to do things different. And here I believe you can follow two different definitions and directions for PLM.

Let’s start with the non-disruptive approach, which I call the extended PDM approach

Extended PDM

expressWhen I worked 6 years ago with SmarTeam on the Express approach, the target was to provide an OOTB (Out of the Box) generic scenario for mid-market companies. Main messages were around quick implementation and extending the CAD data management with BOM and Workflow. Several vendors at that time have promoted their quick start packages for the mid-market, all avoiding one word: change.

I was a great believer of this approach, but the first benchmark project that I governed demonstrated that if you want to do it right, you need to change the way people work, and this takes time (It took 2+ years). For the details: See A PLM success story with ROI from 2009

NoChange

Cloud based solutions have become now the packaging for this OOTB approach enriched, with the ease of deployment – no IT investment needed (and everyone avoids the word change again).

If you do not want to change too much in your company, the easiest way to make PDM available for the enterprise is to extend this environment with an enterprise PLM layer for BOM management, manufacturing definition, program management, compliancy and more.

Ten years ago, big global enterprises started to implement this approach, using local PDM systems for mainly engineering data management and a PLM system for the enterprise. See picture below:

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This approach is now adapted by the Autodesk PLM solution and also ARAS is marketing themselves in the same direction. You have a CAD data management environment and without changing much on that area, you connect the other disciplines and lifecycle stages of the product lifecycle by implementing an additional enterprise layer.

The advantage from this approach is you get a shared and connected data repository of your product data and you are able to extend this with common best practices, BOM management (all the variants EBOM/MBOM/SBOM, …) but also connect the market opportunities and the customer (Portfolio management, Systems engineering)

myplmThe big three, Dassault Systemes, Siemens PLM and PTC, provide the above functionality as a complete set of functionalities – either as a single platform or as a portfolio of products (check the difference between marketing and reality).

Oracle and SAP also fight for the enterprise layer from the ERP side, by providing their enterprise PLM functionality as an extension of their ERP functionality. Also here in two different ways: as a single platform or as a portfolio of products. As their nature is on efficient execution, I would position these vendors as the one that drive for efficiency in a company, assuming all activities somehow can be scheduled and predicted

My statement is that extended PDM leads to more efficiency, more quality (as you standardize on your processes) and for many companies this approach is a relative easy way to get into PLM (extended PDM). If your company exists because of bringing new products quickly to the market, I would start from the PDM/PLM side with my implementation.

The other PLM – innovative PLM

idea

Most PLM vendors associate the word PLM in their marketing language with Innovation. In the previous paragraph I avoided on purpose the word Innovation. How do PLM vendors believe they contribute to Innovation?

This is something you do not hear so much about. Yes, in marketing terms it works, but in reality? Only few companies have implemented PLM in a different way, most of the time because they do not carry years of history, numbering systems, standard procedures to consider or to change. They can implement PLM in a different way, as they are open to change.

If you want to be innovative, you need to implement PLM in a more disruptive manner, as you need to change the way your organization is triggered – see the diagram below:

PLM_flow

The whole organization works around the market, the customer. Understanding the customer and the market needs at every moment in the organization is key for making a change. For me, an indicator of innovative PLM is the way concept development is connected with the after sales market and the customers. Is there a structured, powerful connection in your company between these people? If not, you do the extended PLM, not the innovative PLM.

Innovative PLM requires a change in business as I described in my series around PLM 2.0. Personally I am a big believer that this type of PLM is the lifesaver for companies, but I also realize it is the hardest to implement as you need people that have the vision and power to change the company. And as I described in my PLM 2.0 series, the longer the company exist, the harder to make a fundamental change.

Conclusion

There are two main directions possible for PLM. The first and oldest approach, which is an extension of PDM and the second approach which is a new customer centric approach, driving innovation. Your choice to make the case for one or the other, based on your business strategy.

Looking forward to an interesting discussion and see you in Munich where I will make the case

PLM_inno_2012

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.

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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:

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The Wiki definition:

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.


clip_image005The 2PLM definition:

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 …”

clip_image007I 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 …

project_structure

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.

clip_image011I 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.

clip_image013And 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 ?

clip_image015In 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:

kindle_usa 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:calendar

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:

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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).

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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.

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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.

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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.

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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

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Referenced in this context – not directly mentioned:

observation 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:

  1. 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 ?knowledge_theft
  2. 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.

swiss

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.

PLM forum 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. old_fashioned

Am I old fashioned ?

observation This time it is hard to write my blog post. First of all, because tomorrow there will be the soccer final between Holland and Spain and as a Virtual Dutchman I still dream of a real cup for the Dutch team.

Beside that I had several discussions around PLM (Product Lifecycle Management), CM (Configuration Management) and ALM (Asset Lifecycle Management), where all insiders agreed that it is hard to explain and sell the value and best practices, because it is boring, because it is not sexy, etc, etc. 

So why am I still doing this job…..

Product Lifecycle Management (PLM)

3dlive

If you look at trade shows and major events of PLM vendors, the eye-catching hdplmstuff is 3D (CAD).  

Dassault Systemes introduced in 2006 3DLive as the 3D collaboration layer for all users with the capability to provide in a 3D manner (see what you mean) on-line role specific information, coming from different information sources.  Recently Siemens introduced their HD PLM, which as far as I understood, brings decision making capabilities (and fun) to the user.

Both user interfaces are focusing on providing information in a user-friendly and natural way – this is sexy to demonstrate, but a question never asked: “Where does the information come from ? “

And this is the boring but required part of PLM. Without data stored or connected to the PLM system, there is no way these sexy dashboards can provide the right information. The challenge for PLM systems will be to extract this information from various applications and from users to have the discipline to enter the needed data. 

Those software vendors, who find an invisible way to capture the required information hold the key to success. Will it be through a more social collaboration with a lot of fun, I am afraid not. The main issue is that the people who need to enter the data are not rewarded for doing it. It is downstream the organization, in the product lifecycle, that other people benefit from the complete information. And I even suspect in some organizations that there are people who do not want share data to assure being required in the organization – see also Some users do not like the single version of the truth

important

So who can reward these users and make them feel important. I believe this is a management job and no sexy (3D) environment will help here

 

Configuration Management (CM)

cmii Although it is considered a part of PLM, I added configuration management to my post as a separate bullet. Two weeks ago, I attended the second day of the  CMII Europe conference in Amsterdam. What I learned from this event was that the members of the CMII community are a group of enthusiastic people with somehow the same vision as PLM missionaries. 

Quoting the organization:  “CMII is about changing faster and documenting better. It is about accommodating change and keeping requirements clear, concise and valid.” 

And it was interesting to listen to speeches of the members. Like with PLM, everyone is convinced configuration management brings a lot of value to a company, they are also fighting for acknowledgement. Not sexy is what I learned here and also here those people who are responsible for data accuracy are not necessary the ones that benefit (the most).

Like PLM, but even more in Configuration Management, the cultural change should not be neglected. Companies are used to have a certain level of “configuration management”, often based on manual processes, not always as efficient, clear and understood and satisfactory for the management, till something happens due to incorrect information.

whyworry

  Of course the impact of an error differentiates per industry, a problem occurring due to wrong information for an  airplane is something different compared to a problem with a  sound system.

So the investment in configuration management pays of for complex products with critical behaviors and in countries where labor costs are high. It was interesting to learn that a CM maturity assessment showed that most companies score below average when it comes to management support and that they score above average when talking about the tools they have in place.

This demonstrates for me that also for configuration management, companies believe tools will implement the change without a continuous management push. I remember that in several PLM selection processes, prospects were asking for all kind of complex configuration management capabilities, like complex filtering of a product structure. Perhaps pushed by a competitor, as at the end it was never implemented 😦

Asset Lifecycle Management (ALM)

iaea In some previous posts,  I wrote about the benefits a PLM system can bring, when used as the core system for all asset related information. For nuclear plants, the IAEA (International Atomic Energy Agency) recommends to use configuration management best practices and I have met an owner/operator of a nuclear plant who recognized that a PLM system brings the right infrastructure, instead of SAP for example, which has more focus on operational data.

Also I had a meeting with another owner/operator, who was used to manage their asset data in a classical manner – documents in an as-built environment and changes of documents in various projects environments.

alm_1 When discussing the ALM best practices based on a PLM system, it was clear all the benefits it could bring, but also we realized that implementing these concepts would require a conceptual revolution. People would need to start thinking asset centric (with lifecycle behavior) instead of document centric with only revisions.

This kind of change requires a management vision, clear explanation of the benefits and a lot of attention for the user. Only then when these changes have been implemented, and data is available in a single repository, only then the fun and sexy environments become available for use.

Conclusion

PLM, CM and ALM are not sexy especially for the users who need to provide the data. But they provide the base for sexy applications where users have instant access to complete information to make the right decisions.  To get there a cultural change is required. The management needs to realize that the company changes into becoming proactive (avoiding errors) instead of being reactive  (trying to contain errors);  investing upfront and never be able to know what the losses would be in case an error occurred.

Not sexy, however the benefits this approach can bring allow employees and companies to continue to do their work for a secure future

 

And now … time to close as the final is near

spain_nl

observation Two weeks ago I received through the PLM group on LinkedIn, the following question from Nathalie: “Do you know any specific examples of what some companies have done to get their users ready, excited or more committed to the new PLM system?”

When digging in my mind and planning to give a quick answer, I realized it was an interesting question with a contradiction embedded: users and excitement for a new PLM system.

This week I was attending the SmarTeam User Group meeting in the Netherlands, where an excellent presentation was given by Simon and Hessel from a Dutch company called  Meyn (Poultry processing) about their PLM implementation. They shared their excitement !

Combined with an interesting discussion on Oleg’s blog with Frank, I believe I have the ingredients to answer the above question more complete.

PLM is not exiting for users

myplm I think this is fact number one. When you go to tradeshows or PLM exhibitions, you see usually only 3D CAD demos, nobody tries to demonstrate PLM functions and features in detail. As a side step, I believe the best PLM system should be almost invisible for the user. Users want to work in their own environment with applications like CAD, Excel (BOM handling apps), Office, FEA tools, Simulation tools and more.

ERP has a more clear value proposal, if you want to define and schedule your manufacturing and manage the financial transactions, everyone has accepted that you need ERP. User acceptance is not relevant, users have to work with the provided interface as otherwise production or accounting will fail, there is no alternative.

In contrary, the clear value and definition of PLM are not clear to user. For that reason these users do not get excited when confronted with PLM. They have been surviving without implementing PLM, so they believe there is an alternative.

 

But we know there are PLM benefits?

My previous post – PLM in the mid-market a mission impossible? – lead to a discussion with Oleg and Frank coming with anew and interesting view point. Frank mentioned that in the German area, many mid-market companies do PLM without purchasing an enterprise PLM system from the known vendors.

coopThe discussion focused on granularity, as all of us believed that a set-by-step approach towards PLM best practices, driven by people who understand the company very well, is the key to success. For this approach you need people inside the customer’s organization who can formulate the vision assisted by consultants working very dedicated in that industry. It requires a different type of consultant as those active in the big enterprise projects.

Instead of implementing PLM as a standard process, in this approach the customer drives and leads the activities where they see benefits in their overall business process. To achieve this, the company must have has a clear vision, where they want to be in the next 5 – 10 years.

Next implementations steps should fit in this strategy and prioritized based on different parameters and these steps are not always with a focus on PLM.

And here lies the key for successful PLM implementations.

my_way The implementation might be based on an academic approach around a core PLM data model and best practices. Mid-market offerings are around an OOTB (Out-Of-The-Box) quick implementation –  the PLM system/implementer leads.

Something the management of likes to hear; quick and with little customization, which would translate in lower costs of implementation and disruption of the organization. But then, the end-users start to complain. There is too much change their standard way of working and they do not see the advantages – keying in more data in a system does not help them.

No_roi The introduction of PLM brings more complexity and as the new system has to prove itself, there is not big enthusiasm from the average user. The management can push, like in the ERP situation, but in general also the management is anxious to learn if this OOTB-approach brings the benefits and when it fails they ask the vendor where the estimated ROI can be found.

Concluding you will be lucky if users get excited form the OOTB approach.

sel_a In the second and granular approach, the company defines their strategy and vision, not necessary a 100 % PLM vision. This strategy need to be clear and shared with the employees in the company, especially for those who are affected by changes.

Next together with implementation partners, who bring in the know-how and possible software tools, a part of the company’s process is addressed and improved. It can be in any area, changing the CAD engine, automate BOM handling, connect sales to engineering or connect after sales/service to engineering.

Many of these areas of interest have different solutions, some are extensions of the CAD environment, some of them are extensions of the ERP environment and some of them are extensions of the IT-platform used in the company.

This approach is not sold by the PLM vendors, as they want to introduce their system as the IT-platform, wrap around the CAD and even capture the definition of the MBOM and initiation of the Item master.

A step-by-step approach based on different granular components, every time in the direction of the company’s strategy, plus all the time feed-back to the end-users on the positive impact of the change, is for me the key to success. In my previous post I was looking for a global provider for these required components.
With the step by step approach with granular solutions, we get users involved and excited.

 

And this brings me the to the presentation from Meyn

meyn The first time I got involved with Meyn was in October 2004. At that time they had chosen to move from their BaaN-2D CAD infrastructure to a new environment with BaaN – 3D CAD (CATIA). Simon presented their target strategy and vision: moving away from being an Engineering To Order company to become primarily a Configure To Order company.

ENOVIA SmarTeam was chosen to manage the 3D CAD and to connect the information to BaaN. Initially Meyn started in the classical PLM approach, but already after a few months, the understanding was there, they need have step-by-step approach, focused on results for the new CATIA users, without communicating around a complete PLM focused project.

So they followed a stepped approach, they called them waves.

Moving from Engineering to Order to Configure to Order is not software implementation. It requires rationalization of your products; convert them into modular, configurable parts. For this you need to be an engineering expert, not a software expert.

But when it comes to implementation of this concept in the software, you need both experts. And through this collaboration, a methodology for skeleton design was established which was driven by Meyn. And the reason the users were excited was, that they were doing real engineering, the benefits were significant visible.

roi Customer project related engineering time (typical ETO), which was in the beginning their core activity, became around 30 % of the time. More time could be spent on developing new machines in a modular way. With almost the same amount of engineers the turn-over of the company had more than doubled. A win-win environment which makes also the end-users excited.

Still the backend with ERP at Meyn remained almost the same similar to the time they were working in the 2D environment. And the most interesting conclusion at the end of the presentation was, they are still using the same slide with the vision and they can explain why each step was taken and justify it by measurable benefits.

And this brings me to the answer of the question

“Do you know any specific examples of what some companies have done to get their users ready, excited or more committed to the new PLM system”?

  • The management needs to have a clear vision where they want to be as a company in the future. This is not an IT-vision, but a business vision which explain why changes are needed. This vision should be clear to the employees. Communicate!
  • Where possible provide metrics!
  • Do not talk about a PLM system; it can be also in other tools. Talk about improvement steps in the business processes contributing to the vision. The PLM system is the information backbone, not the front-end. Management and implementers should talk business functionality not IT functions and features. Do not talk in applications!
  • Build step by step user scenarios with focus on methodology and user understanding. Implementations with a function-feature focus are hard to accept by the users. Talk business!
  • The management should present their vision again and again, supported by metrics what has been accomplished and what has been learned for the future – repeat!

Conclusion

There are thousands of mid-market companies that have a vision to improve their business. The PLM system should never be the topic of discussion with the end users; it is the change in working methods that is important, supported by various systems -CAD/ERP/CRM – and almost invisible …….. PLM

The company Meyn is an example of this approach. Simon and Hessel are working for Meyn as engineers improving their company’s business. Unfortunate it is not their business to explain all around the world, how PLM supports business change in a mid-market company. I was glad to attend their session last week.

observation The title of this post came in my mind when looking back on some of the activities I was involved in, in the past two weeks. I was discussing with several customers their progress or status of the current PLM integration. One of the trends was, that despite the IT department did their best to provide a good infrastructure for project or product related information, the users always found a problem ,why they could not use the system.

alm_1 I believe the biggest challenge for every organization implementing PDM and later PLM is, to get all users aligned to store their information in a central location and to share it with others. Only in this manner a company can achieve the goal of having a single version of the truth.

With single version of the truth I mean – if I look in the PLM system I find there all the needed data to explain me the exact status of a product or a project.
If it is not in the PLM system, it does not exist !

How many companies can make that statement ?

If your company does not have the single version of the truth implemented yet , you might be throwing away money and even bring your company at risk in the long term. Why ? Let’s look at some undisclosed examples I learned in the past few weeks:No_roi

  • A company ordering 16 pumps which on arrival where not the correct ones –
    1 M Euro lost
  • During installation at a drilling site the equipment did not fit and had many clashes – 20 M Dollar lost, due to rework and penalties
  • 7000 K Euro lost due to a wrong calculation based on the wrong information
  • A major bid lost due to high price estimation due to lack of communication between the estimator and the engineering department
  • 500 K Euro penalty for delivering the wrong information (and too late)

All the above examples – and I am sure it is just a tip of what is happening around the world – were related to the power & process industry, where of course high-capital projects run and the losses might look small related to the size of the projects.

But what was the source of all this: Users

locked Although the companies were using a PLM system, in one company a user decided that some of the data should not be in the system, but should be in his drawer, to assure proper usage (according to his statement, as otherwise when the data is public available, people might misuse the data) – or was it false job security as at the end you loose your job by this behavior.
People should bring value in collaboration not in sitting on the knowledge.

save Another frequently heard complaint is that users decide the PLM system is too complex for them and it takes too much time for them to enter data. And as engineers have not been bothered by any kind of strict data management, as ERP users are used to work with, their complaints are echoed to the PLM implementer. The PLM implementer can spend a lot of time to customize or adapt the system to the user’s needs.
But will it be enough ? It is always subjective and from my experience, the more you customize the higher the future risks. What about upgrades or changes in the process ?
And can we say NO to the next wish of this almighty user ?

Is the PLM system to blame ?

PxMThe PLM system is often seen as the enemy of the data creator, as it forces a user in a certain pattern.  Excel is much easier to use, some home-made macros and the user feels everything is under control (as long as he is around).

Open Source PLM somehow seems to address this challenge, as it does not create the feeling, that PLM Vendors only make their money from complex, unneeded functionality. Everything is under own control for the customer, they decide if the system is good enough.

PLM On Demand has even a harder job to convince the unwilling user, therefore they also position themselves as easy to use, friend of the user and enemy of the software developer. But at the end it is all about users committing to share and therefore adapt themselves to changes.

So without making a qualification of the different types of PLM systems, for me it is clear that:

point The first step all users in a company should realize is that, by working together towards a single version of the truth for all product or project related data, it brings huge benefits.  Remember the money lost due to errors because another version of data existed somewhere. This is where the most ROI for PLM is reported

pointNext step is to realize, it is a change process and by being open minded towards change, either motivated or pushed by the management, the change will make everyone’s work more balanced – not in the first three months but in the longer term.

Conclusion: Creating the single version of the truth for project or product data is required in any modern organization, to remain competitive and profitable. Reaching this goal might not be as easy for every person or company but the awards are high when reaching this very basic goal.

At the end it is about human contribution – not what the computer says:

observation This week I was reading a management article completely unrelated to PLM, but very applicable for PLM. The article stated that one of the basics of capitalism is innovation through crisis. Never let a crisis pass by without using it for your benefits was the message.

As we are currently in the middle of the economical downturn (according to the optimists or pessimists – we still have to figure out who is right), this is the moment for the management to decide. Do we try to sit still till it does not hurt anymore , or are we making strategic changes that will for sure demolish some holy houses but from the other hand will create a more lean and stronger organization after the change ?

Examples of IBM and GM were given from the nineties.  IBM made the change from a hardware company towards a software company, where GM kept on doing the same with even bigger SUVs’.  We know the results…….

Does it prove anything ?

For sure there are many companies that haven’t survived the nineties as they were not successful in their transformation, although they really tried. So where is the relation to PLM ?

frog I believe that the problem of implementing PLM, and specially in mid-market companies is the fact that there is no ambition for change when things are going relatively well. In one of my old posts I referred to the story of the boiling frog.

This happens when an organization is slipping down slowly and it is hard for the management to change and define and sell internally another strategy. Jobs and people are kept in place as long as affordable and only natural evolvement (an aging workforce) or mergers are drivers for a change.

Now with this crisis it is different. Everyone realizes (or should realize) that going on the same manner with the same people is not good for survival (unless you are in one of the few industries that benefit from the crisis – apparently the fast food industry I read)

In times of a crisis, first of all the management is challenged to come with a survival plan and in most cases this time they can get support from their employees as there is always the threat of lay offs if people are not creative or flexible for change. Secondly, employees will be also more flexible to save their jobs and the company (usually in this order)

Therefore this is the ideal moment to implement PLM in phased approach. For a successful PLM implementation you need employees, who are open minded to change the way they work,  plus you need internal resources that have time to work with the implementer to fine tune the PLM system.

This moment exists now and by implementing PLM in a phased approach, each phase will bring ROI, perhaps even before the end of the crisis as you can start with the low hanging fruits and start to collect the benefits.

In parallel there is the discussion around free open source software or dumping software for free by some PLM providers in order to stay in the market. I think here as a customer you should always realize that every company, also software providers, need to survive the crisis and will look for income in another way – services / maintenance / additional software.

So my conclusion this time:

I never realized that both capitalism and PLM were striving for innovation. They have a crisis in common – For capitalism it is a must to push innovation for PLM it is an enabler for innovation

observation 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.

planningWhen 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:

  1. The company was thinking documents and understanding documents especially Excel
  2. 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
  3. 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

riaan 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.

businesssystem 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)

ebom_mbom

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.

phased implementation 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.

 

 

shout_left 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.

observation Again three busy weeks and I envy my colleagues who had the time to write a blog post on a regular base.
Two major topics kept me busy:

  1. explaining the complete PLM scenario from concept (initial BOM), through CAD, through EBOM and MBOM to a final shipped product. I will come back on this topic in future posts as it even goes beyond my old post: Where is the MBOM. To be more detailed in the future
  2. analyzing ROI and predicting ROI for various PLM implementations. And this is the topic I want to share 2 experiences with you, and I am curious for feedback or other viewpoints

Where is my ROI, Mister Voskuil ?

No_roi Some years ago I supervised a PLM implementation and I only was involved after the company had already implemented their 3D CAD software (SolidWorks) after years of 2D AutoCAD. The reason for my visit was that the technical manager was a good guy in monitoring the productivity of his engineering department.

And then he showed me some statistics. Working with AutoCAD 2D was defined as the baseline. Implementing SolidWorks brought initially a drop in drawing output (pay attention to the wording) but after 6 – 9 month the started to be more efficient with SolidWorks and at that time the output was rated at 120 % (or sometimes even more due to more and enhanced product modeling)

Then came the SmarTeam implementation and again the output of the engineering department dropped and going down to 70 % and after one year effort of the SmarTeam implementing VAR, they were still not happy as output was below 100 % still.

point

Conclusion from their side:  There is no ROI on implementing PLM

In the following discussion we discovered that working methods of the engineers had changed. Less freedom in adding data, incomplete information as the integration with SolidWorks enforced a more strict methodology to the CAD users (who of course complained). The effect of the changed working procedures was however that downstream tasks should have been eliminated . In production preparation 4 people were in the past completing, checking the engineering BOM coming from the design department. They fixed the mistakes and then typed it all in another order into their ERP system for production.

quietIt appeared that those 4 people had a much easier job – first of all they did not complain. Data was immediately on release of the design sent to the ERP system – no manual interaction – and there they could pick-up the EBOM and adapt it for production.  There was less search work to do – as the designer already provided validated input plus there were no typos anymore. Amazingly these 4 people never complained to their management that they could do more, they kept on having their ‘busy’ days.

Morale 1: Measuring ROI in a single department (often an mid-market characteristic) does not give you a good understanding of PLM benefits. PLM, once implemented correct, affects the whole organization

We know there is ROI, but where is it ?

search As you noticed, a less confronting customer,  as we all feel being involved in a successful PLM implementation going in the right direction. Yes, perhaps a little to slow, but the advantage is that people start to see the benefits of a ‘single version of the truth’ – we haven’t reached the advanced scenarios yet as I mentioned in the top.

But now we tried to measure, as I also wrote in previous posts, if you had your organization under control before PLM, in that case you would be able to measure the impact – after 6 months / after 12 months / after 2 years ?

It is like climate change, statistics demonstrate there is a trend and I believe we have an impact on this planet. Still skeptics (luckily less and less) explain us that it is just a normal climate variation, and after 10 – 50 years we will have a new ice age. Not sure if these people are optimists or …….. it just does not fit in their lives

But PLM is somehow the same, we see it has impact, we measure and try to explain, specially in the mid-market companies, skeptics is a natural survival mechanism as you cannot risk to be too optimistic. (This is how startup’

quiet2 So in our situation we started to fill in spreadsheets which brought huge benefits. Imagine searching goes much faster – let’s say instead of 1 hour per day we need only 10 minutes per day per employee. We have 120 people per day searching for data, does it mean we can do it with 20 people instead ? Or what would these people do in the remaining 50 minutes per hour ?

Right, they will find other work to do – less stress, more time to chat with colleagues, have a coffee and above all they won’t complain. People are flexible in filling their day and if the company is lucky some of the ambitious people might fill their day with innovation or other relevant improvements.

Morale 2: Even if there is indisputable ROI on a PLM implementation, the management should analyze what should be the impact on the organization. Invest more in creativity / engineering instead of quality assurance ? In the mid-market this might be perceived as a bad sign – as quality is key. But how much money would we make on a high quality product that no-body buys anymore.

Conclusion: With these two anecdotes I tried to share my ROI struggle which is still following PLM.  I am looking forward for more anecdotes or inputs on the soft side of ROI. Be welcomed to join the discussion

And to stay in the mood – enjoy with Dilbert

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