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Last week I was working with several people on data management issues for the supply chain. As I mentioned in my previous post from the ECC in Munich, there is a trend where OEMs require more and more cooperation from their suppliers. Most of these suppliers are mid-sized companies and these companies often lack the management support to implement changes top-down in an organization.

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In mid-market companies the concept for quality guarantee and consistent responses is often implemented in design data management (control the product data), a quality system (ISO,—–) and the ERP system. See also PLM and ERP culture change. As these systems could be implemented on department level, not touching each other too much, it is relative easy from the cultural point of view to implement them. Each department can optimize themselves and often the quality system is not enforcing the users to work completely different.

But who and where is innovation managed ?

Large enterprises discovered that, in order to innovate, you need to connect and analyze all information around the products they are manufacturing. In simple words they realized PLM is needed to connect everyone around the product lifecycle from the concept phase till the production and after-sales phases. For these companies PLM became the backbone for their specific knowledge – we call it IP (Intellectual Property). Big companies could implement PLM because they had the management vision, the resources (people and budget) and the top-down approach to enable (and sometimes enforce) this change.

In mid-sized companies there might be the management vision, but resources and a top-down approach are rare. When it comes to a top-down approach, often the management believes that the goal is to enforce one IT system to the organization to manage all the critical data. Naturally this is the ERP system, and ERP vendors remain claiming that they can do PLM. It is a kind of overestimation of these companies as their nature lies in processing data, resources as efficient as possible, not in being creative to find new innovations.

Innovation is not CAD design as others may believe. These beautiful 3D designs smell like innovation, but in fact before a designer could start working on a concept, a lot of work has been done before. Analysis about what is it that the market, the customers require?  What is de feedback on our current products in the field ? What is the competition doing etc, etc.

PLM requires culture change

As long as an organization remains thinking around 1 or 2 major IT systems (CAD data management and ERP) to manage all, there is no chance for PLM to be implemented successful. All departments and disciplines around the product lifecycle need to work together, change their departmental habits and learn to adapt to PLM best practices.

There is enough argumentation why to implement PLM and I believe solutions like ENOVIA SmarTeam Engineering Express are from the technology point a good start. See all related posts and comments to my previous post.

What I wanted to stress is that changes in a mid-market company are not done from the logical point of view. As the top-down vision and implementation often are not available, we are waiting for all departments to decide let’s change our way of working as we read all these beautiful benefits of PLM. This is of course not going to happen, only in advertisements.

Culture change even in mid-sized companies is a management responsibility and requires an open mind. We often forget that we have two sides in our brain. One side the logical side, analyzes all the arguments and stores them logically as good or bad. The other side of the brain, the emotional side is making the decisions, grabbing arguments that suit from the logical side in order to explain to others and ourselves why a decision is taken.

If you read books like The Language of Change (very theoretical, but the groundwork) or Blink: The power of thinking without thinking (very popular) you will understand that changes won’t happen if we stick to the traditional way of posting our arguments and keep on doing what we feel good with.

It is the management responsibility to think how to enforce a change in their companies. But as they also have a two sided brain, for that reason, management consultants were invented to reflect and discuss the emotional and logical side.

If after reading this post, you are more aware of the fact that one side of your brain fools you, then I achieved something. If however you will say “This is nonsense”, your other half of the brain has won.

Footnote:  No more words about soccer – Holland is out

This week, I was in Bruxelles conducting a Engineering Express training for ENOVIA SmarTeam resellers. The feedback I got from the participants during the training made me again more aware from the culture change needed or dreamed about in the small and medium manufacturing enterprises.

As I wrote before in PLM and ERP – the culture change , there is for sure a conservative vision in the small and medium enterprises to stay with their major IT systems they invested in, usually ERP and (3D) CAD.

From the bigger enterprises and reading all the analyst reports, many of us project that the small and medium enterprises also need PLM in the same way as the bigger enterprises, but then in a more packaged, ready to use manner, instead of a custom implementation guided by PLM experts like the bigger enterprises did.

So ENOVIA SmarTeam Engineering Express is a prepackaged solution bringing PLM closer to the mid-market. However during the training many of the questions were not around the capabilities of the Engineering Express, but more about why do we(customers) need to use the same approach as bigger enterprises, why do we have the same needs?

Where big companies focus on defining and implementing processes in order to have a predictable outcome, I noticed in talking with SMB companies, they are proud of explaining they exist without these processes enforced, but work in a more flexible, human task oriented manner.

If we look to a classical ECR/ECO process, we see in bigger companies there are several steps to be identified to react on a outside request (the ECR) and to implement it (ECO).

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An Engineering Change Request (ECR) process

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An Engineering Change Order (ECO) process

In smaller companies the ECR process is already embedded in one singe ECO process. Sometimes a formal (email) based activity takes place before a change is requested and implemented. One of the participants in the course – a manufacturing company – mentioned that they had the notice of a CCB in their company but all engineering change requests were sent to the CCB by email and as the CCB was meeting on a weekly base, this was the process to filter engineering change requests.

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So here is the question: Big enterprises need processes to remain manageable – like a big tanker needs a predefined methodology to navigate through a harbor. Small and medium enterprises are more relying on their flexibility and they need a reliable and sustainable way to react – like a small ship in a harbor – as it can react quickly there is no need for the anticipation, still the capability to change direction is needed.

So are small and medium enterprises that behave like small ships in the harbor ?

If yes, they need to remain open for change as going straight ahead at the end will lead to a collision – and the challenge remains to make the (culture) change.

Or if no, how can you provide small and medium enterprises with means that enforce change without creating the overhead that compromises the flexibility ?

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I am looking forward to comments and thought on this question – please post them.

However my first priority tonight is to survive in Milan where the match Italy-France will decide who continues to the next round in the European Soccer Championship. Worst case in parallel the Netherlands looses from Romania, in that case both Italy and France are gone and this might be my last post:)

Hoping to write my next post at the end of this week.  ciao – adieu

ECC
Last week I visited the ECC in Munich, a conference where around 1000 people attended. It was an excellent event for networking and being in touch with customers, implementers of the ENOVIA brand. The V6 announcement and demonstrations were the major key-note sessions and they showed the focus on real global collaboration for big enterprises.

In the industrial tracks I followed the Aerospace / Defense track (approx 80 attendees), where European companies like Airbus, Aermacchi and Messier-Dowty gave their status and vision on their core development processes, supported by sessions from IBM and Dassault Systems.

imageInteresting to learn from this session was that all agree that the classical hierarchical structure in the supply chain will disappear and that it will be more and more a network of suppliers working together, with much more responsibility and risk sharing for the supply chain partners.  This higher responsibility and risk requires supplier to work with a PDM system too, and Airbus stated that for future contracts with suppliers this is a must – either integrated or interfaced.

Suppliers who do not meet these quality standards by having PLM implemented will not get new contracts anymore and in the next three years we will see a change in the supplier network and collaboration technology, based on solutions upcoming from Dassault and other software suppliers.

On the second day I attended the ENOVIA SmarTeam track (approx 100 people) where beside the current roadmap an interesting scenario was explained how the smaller and medium enterprises could work on V5 but thanks to the coexistence capabilities of V6 could collaborate with V6 companies or even inside their company could work on both levels in the future. It will be interesting to follow this approach.

Finally on June 9th the European soccer championship started. The Dutch team did not perform well during the qualification rounds and we were all afraid for the real tournament.

But miracles still happen – enjoy

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