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In my last post related to Learning from the past to understand the future, I discussed what happened when 3D CAD became available for the mid-market. In the large automotive or aerospace & defense companies, 3D CAD has been introduced along the path of defining processes and selecting tools. In the mid-market 3D CAD started from the other side, first as a productivity tool, not thinking further to change methodologies or processes.

The approach starting with 3D CAD without changing processes, has created several complexities. Every company that is aiming to move towards a digital future needs to reduce complexity to remain competitive. Now let us focus on the relation between the 3D CAD-structure and a BOM.

The 3D CAD-structure

When building a product in a 3D CAD system, the concept is that you have individual parts designed in 3D.  Every single part has a unique identifier.

If possible, the (file) name would equal the physical part number.

Next, a group of parts could be stored as a subassembly. Such an assembly is sometimes called a phantom assembly, in case they only group together several 3D parts. The usage of this type of assemblies increased CAD productivity. For data management reasons, these assemblies need to have a unique identifier, preferably not with the same numbering scheme for physical part numbers. It would consume part numbers that would never be used during manufacturing.

Note: in the early days of connecting 3D CAD to ERP, there was a considerable debate about which system could generate the part number.

ERP has always been the leading system for parts definition, why change ? And why generate part numbers that might not be used later in production. “Wasting” part numbers was a bad practice as historically, the part number was like a catalog number: 6 to 7 digits.

Next, there is also another group of subassemblies that represent one or more primary components of a product. For example, a pump assembly, that might be the combination of the pump, the motor, and the base frame. This type of assembly appears most of the time high in the CAD-structure. They can be considered as a phantom assembly too, regarding a required identifier for this subassembly.

Finally, there might be parts in the CAD-structure that will not exist in reality as part but need to be created during the manufacturing process. Sheet metal parts are created during the manufacturing process. Cappings, strips and cables shown in the CAD-structure might come from materials that are purchased in standardized sizes (1 meter / 2 meter / 10 meter) and need to be cut during manufacturing. Here the instances in the CAD-structure will have a unique identifier. What type of identifier to use depends on the manufacturing process. It might be a physical part number, as it is a half-fabricate,  or it remains a unique identifier for the CAD-structure only.

The reason I am coming back to these identifiers is that as described before, companies wanted to keep a relation between the part number and the file name.

There was a problem with flexible parts. A rubber hose with a specific length could be shaped differently in an assembly based on its connection. Two different shapes would create two files and therefore break the rule of a part number equals file name. The 3D CAD vendors “solved” this issue by storing configurable views of the same part inside one file and allow the user to select the active view.

Later we will see that management of views inside the 3D CAD model is not a wrong choice. This, contrary to managing different configurations of a part/product inside a single file, which creates complexity in the PLM domain.

In the end, the product became an assembly with several levels of subassemblies. At that time, when I worked a lot with CAD-integrations, the average depth of 3D CAD-structures was 6 to 7 levels deep, with exceptions in both directions.

The entire product CAD-structure is mainly used for a final digital mock-up, to allow engineers to analyze the full product behavior.  One of my favorite YouTube movies is the one from Airbus – seven years ago, they described the power of a full digital mock-up used for the A380.

In ETO-processes, the 3D CAD-structure is unique for a given customer solution – like the A380.

In the case of large assemblies with a lot of parts and subassemblies,  there were situations where the full product could not be resolved anymore. For Airbus a must, for the mid-market not always easy to reach.  Graphics memory, combined with the way graphics were represented, are the major constraint. This performance issue is resolved in the gaming world, however then the 3D representation had no longer the required accuracy or definition.

The Version pop-up problem

Working with a 3D CAD structure created a new problem when designers were sharing parts and assemblies between themselves and suppliers. The central storage of the files required a versioning mechanism, supported by a check-in and check-out mechanism.

Depending on the type of 3D CAD integration, the PDM system generated a new minor revision of the file after check-in again. In this way, there was full traceability of the changes before release. The image below shows an example of how SmarTeam was dealing with minor and major revisions combined with lifecycle stages.

When revising a part, all assemblies that contained the changed part need to be updated too, in case you want to have traceability and preventing others from overwriting your version. Making sure this assembly file points to the right file again. In the cases of a 6-level deep CAD-structure, this has led to a lot of methodology problems on how to deal (or not to deal) with file changes.

In the case of a unique delivery for a customer, the ETO-process, the issue might not be so big. As everything in the 3D CAD-structure is work in progress, you only need to be sure during the release process of the 3D CAD-structure that all parts and assemblies are resolved to the latest version (and verified)

Making changes on an existing product is way more complicated, as assemblies are released, and parts exist in production.  In that case, the Bill of Material is the leading structure to control the versions and the change impact, as we will see.

Note: Most CAD- and PLM-vendors loved to show you their demos, where starting from the CAD-structure, a product gets created (the ETO-process). The reality is that most companies do not start from the CAD-structure, but from an existing Bill of Material. In 2010, I wrote a few posts, discussing the relation between CAD and the BOM:

to explain there is more than a CAD-driven scenario.

The EBOM

In most PDM-systems with CAD-integrations, it is possible to create a Bill of Materials from the 3D CAD-structure. The Bill of Materials will be based on the parts inside the 3D CAD-structure. There is often the option to filter out phantom assemblies.

The structures are not the same. The 3D CAD-structure is instance-based, where the extracted Bill of Materials will summarize the part quantities on the same level.  See the image below. There are four Wheel instances in the CAD structure, in the EBOM-structure, we have only one Wheel reference with quantity 4.

I named the structure on the right the EBOM as the structure represents the Bill of Materials from the engineering point of view. This definition is a little arbitrary, as we will see. In companies that started to develop products based on a conceptual BOM, often, this conceptual BOM was an “early” EBOM that had to be developed further. This EBOM was more representing a logical or modular structure driving the design, instead of an extract from the 3D CAD-structure. In the next post, I will zoom in on these differences. I want to conclude this time with a critical methodology needed to manage the 3D CAD structure changes in relation to an EBOM.

Breaking the rule Drawing ID (Model ID)  = Part ID

Although I have been writing mostly about the 3D CAD structure, I want to remind us that the 3D Model in the mid-market is mainly used for design purposes. The primary delivery for manufacturing or a supplier is still a 2D-drawing for most companies. The 3D Model might be “nice to have” for CAM- or quality usage. Still, in case of a dispute, the 2D Drawing will be leading.

For that reason, in many mid-market companies, there was the following relation below:

In an environment without file versioning through check-in/check-out, this relation was easy to maintain. In the electronic world, every change in the 3D Model (which could be an assembly) triggers a new file version and, therefore, most of the time, a new version of the drawing and the physical part. However, you do not want to have a physical part with many revisions, in particular when this part could be again part of a Bill of Material.

To solve this issue, the Physical Part and the related Drawing/Model should have different lifecycles. The relation between the Physical Part and the Drawing Model should no longer be based on numbers but on a relation in the PDM/PLM-system. One of the main characteristics of a PDM/PLM-system is that it allows users to navigate through relations to find information in context.  For example, solving a Where Used – question is a (few) mouse-click(s) in a PDM/PLM-system.

Click on the image to see the details.

Breaking this one-to-one numbering rule is a must if you want to evolve to an item-centric or data-driven PLM-environment. When to introduce this change and how to implement this new behavior is a methodology exercise, not an implementation of a new tool.

There is a lot to read about this topic as it is related to the Form-Fit-Function-discussion we had earlier this year. A collection of information can be found in these two LinkedIn-post, where the comments are providing the insights:

 

I will not dive deeper into this theme (reached 1700 words ☹) – next time I will zoom in on the EBOM and leave the world of 3D CAD behind (for a while)

 

 

To understand our legacy in the PLM-domain, what are the types of practices we created, I started this series of posts: Learning from the past to understand the future. My first post (The evolution of the BOM) focused on the disconnected world between engineering  – generation of drawings as a  deliverable – and execution MRP/ERP – the first serious IT-systems in a company.

At that time, due to minimal connectivity, small and medium-sized companies had, most of the time, an informal connection between engineering and manufacturing. I remember a statement at that time, PLM was just introduced. One person during a conference claimed:

“You guys make our lives so difficult with your systems. If we have a problem, we gather around the machine, and we fix it.”

PLM started at large enterprises

Of course, large enterprises could not afford such behavior as they operate globally. The leading enterprises for PDM/PLM were the Aerospace & Defense and Automotive companies. They needed consistent processes and formal ways of working to guarantee quality output.

In that sense, I was happy with the reaction from Jean-Jacques Urban-Galindo, who shared in the LinkedIn comments a reference to a relevant chapter of John Stark’s PLM book. In the pdf describing the evolution of CAD / PDM / PLM at PSA. Jean-Jacques was responsible at that time for Responsible for the re-engineering of the Product & Process Engineering processes using digital tools (CAD/CAM, DMU, and more).

Read the PSA story here: PLM at GROUPE PSA. It describes nicely where 3D CAD and EBOM are coming in.  In large enterprise like PSA, the need for tools are driven by the processes. When you read it to the end, you will also see the need for a design and a manufacturing view. A topic I will touch in future posts too.

The introduction of 3D CAD in the mid-market

Where large automotive and aerospace companies already invested in (expensive) 3D CAD hard and software, for the majority of the midsize companies, the switch from 2D CAD (AutoCAD mainly) towards 3D CAD (SolidWorks, Solid Edge, Inventor) started at the end of the 20th century.

It was the time that Microsoft NT became a serious platform beside the existing mainframe and mini-computer based CAD-systems. The switch to PCs went so fast that the disruption from DEC (Digital Equipment Company) is one of the cases discussed by Clayton Christensen in his groundbreaking book: The Innovator’s dilemma

3D CAD introduced a lot of new capabilities, like DMU (Digital Mock-Up), for clash detection, and above all, a better understanding of a product’s behavior. The introduction of 3D CAD introduced a new set of challenges to be resolved.

For example, the concept of reusing 3D CAD parts. Mid-market companies, most of the time, are buying productivity tools. Can I design my product faster and with higher quality in 3D instead of using only the 2D definitions?

Mid-market companies usually do not redesign their business processes – no people available for strategy – the pain of lack of strategy is felt in a different way compared to large enterprises—a crucial differentiator for the future of PLM.

Reuse of (3D) CAD parts / Assemblies

In the 2D CAD world, there was not so much reuse of CAD parts. Standard parts were saved in libraries or generated on demand by parametric libraries. Now with 3D CAD, designers might spend more time to define the part. The benefits come from the reuse of small sub-assemblies (modules) into a larger product assembly. Something not relevant in the 2D CAD world.

As every 3D CAD part had to have a file name, it became difficult to manage the file names without a system. How do you secure that the file with name Part01.xxx is unique? Another designer might also create an assembly, where the 3D CAD tool would suggest Part01.xxx as the name. And what about revisions? Do you store them in the filename, and how do you know you have the correct and latest version of the file?

Companies had already part naming rules for drawings, often related to the part’s usage similar to “intelligent” numbers I mentioned in my previous post.

With 3D CAD it became a little more complicated as now in electronic formats, companies wanted to maintain the relation:

Drawing ID = Part ID = File Name

The need for a PDM-system,

If you look to the image on the left, which I found in one of my old SmarTeam files, there is a part number combined with additional flags A-A-C, which also have meaning (I don’t know ☹ ) and a description.

 

The purpose of these meaningful flags was to maintain the current ways of working. Without a PDM-system, parts of the assembly could be shared with an OEM or a supplier. File-based 3D CAD without using a PDM-system was not a problem for small and medium enterprises.

The 3D CAD-system maintained the relations in the assembly files, including relations to the 2D Drawings. Despite the introduction of 3D CAD, the 2D Drawing remained the deliverable the rest of the company or supply chain, was waiting for. Preferably a drawing containing a parts list and balloon numbers, the same as it has been done before.  Why would you need a PDM-system?

PDM for traceability and reuse

If you were working in your 3D CAD-system for a single product, or on individual projects for OEMs, there was no significant benefit for a PDM-system. All deliveries needed for the engineering department were in the 3D CAD environment. Assembly files and drawing files are already like small databases, containing references to the source files of the part (image above).

A PDM-system at this stage could help you build traceability and prevent people from overwriting files. The ROI for this part only depends on the cost and risks of making mistakes.

However, when companies started to reuse parts or subassemblies, there was a need for a system that could manage the 3D models separately. This had an impact on the design methodology.

Now parts could be used in various products. How do you discover parts for reuse, and how do you know you have the last released version.  For sure their naming cannot be related anymore to a single product or project (a practice still used a lot)

This is where PDM-systems came in. Using additional attributes per file combined with relations between parts,  allowing companies to structure and deliver more details related to a part. A detailed description for internal usage, a part type (classification), and the part material were commonly used attributes. And not to forget the status and revision.

For reuse, it was important that the creators of content had a strategy to define a part for future reuse or discovery. Engineerings were not used to provide such services, filling in data in a PDM-system was seen as an overhead – bureaucracy.

As they were measured on the number of drawings they produced, why do extra work with no immediate benefits?

The best compromise was to have the designer fill in properties in the CAD-file when creating a part. Using the CAD-integration with the PDM-system could be used to fill attributes in the PDM-system.

This “beautiful” simple concept lead later to a lot of complexity.

Is the CAD-model the source of data, meaning designers should always start from CAD when designing a product. If someone added or modified data in the PDM-system, should we open the CAD-file to update some properties? Changing a file means it is a new version. What happens if the CAD-file is released, and I update some connected attributes in PDM?

To summarize this topic. Companies have missed the opportunity here to implement data governance. However, none of the silos (manufacturing preparation, service) recognized the need. Implementing new tools (3D CAD and PDM) did not affect the company’s way of working.

Instead of people, processes, tools, the only focus was on new tools and satisfying the people withing the same process.

Of course, when introducing PDM, which happened for mid-market companies at the beginning of this century, there was no PLM vision. Talking about lifecycle support was a waste of time for management. As we will discover in the future posts, large enterprises and small and medium enterprises have the same PLM needs. However, there is already a fundamentally different starting point. Where large enterprises are analyzing and designing business processes, the small and medium enterprises are buying tools to improve the current ways of working

The Future?

Although we have many steps to take in the upcoming posts, I want to raise your attention to an initiative from the PLM Interest Group together with Xlifecycle.com. The discussion is about what will be PLM’s role in digital transformation.

As you might have noticed, there are people saying the word PLM is no longer covering the right context, and all kinds of alternatives have been suggested. I recommend giving your opinion without my personal guidance. Feel free to answer the questionnaire, and we will be all looking forward to the results.

Find the survey here: Towards a digital future: the evolving role of PLM in the future digital world

 

Conclusion

We are going slow. Discovering here in this post the split in strategy between large enterprises (process focus) and small and medium enterprises (tool focus) when introducing 3D CAD. This different focus, at this time for PDM, is one of the reasons why vendors are creating functions and features that require methodology solving – however, who will provide the methodology.

Next time more on 3D CAD structures and EBOM

imageSomeone notified me that not everyone subscribed to my blog necessary will read my posts on LinkedIn. Therefore I will repost the upcoming weeks some of my more business oriented posts from LinkedIn here too. This post was from July 3rd and an introduction to all the methodology post I am currently publishing.

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The importance of a (PLM) data model

thinkWhat makes it so hard to implement PLM in a correct manner and why is this often a mission impossible? I have been asking myself this question the past ten years again and again. For sure a lot has to do with the culture and legacy every organization has. Imagine if a company could start from scratch with PLM. How would they implement PLM nowadays?

My conclusion for both situations is that it all leads to a correct (PLM) data model, allowing companies to store their data in an object-oriented manner. In this way reflecting the behavior the information objects have and the way they mature through their information lifecycle. If you making compromises here, it has an effect on your implementation, the way processes are supported out-of-the-box by a PLM system or how information can be shared with other enterprise systems, in particular, ERP. PLM is written between parenthesis as I believe in the future we do not talk PLM or ERP separate anymore – we will talk business.

Let me illustrate this academic statement.

A mid-market example

imageWhen I worked with SmarTeam in the nineties, the system was designed more as a PDM system than a PLM system. The principal objects were Projects, Documents, and Items. The Documents had a sub-grouping in Office documents and CAD documents. And the system had a single lifecycle which was very basic and designed for documents. Thanks to the flexibility of the system you could quickly implement a satisfactory environment for the engineering department. Problems (and customizations) came when you wanted to connect the data to the other departments in the company.

The sales and marketing department defines and sells products. Products were not part of the initial data model, so people misused the Project object for that. To connect to manufacturing a BOM (Bill of Material) was needed. As the connected 3D CAD system generated a structure while saving the assemblies, people start to consider this structure as the EBOM. This might work if your projects are mechanical only.

However, a Document is not the same as a Part. A Document has a complete different behavior as a Part. Documents have continuous iterations, with a check-in/checkout mechanism, where the Part definition remains unchanged and gets meanwhile a higher maturity.

The correct approach is to have the EBOM Part structure, where Part connect to the Documents. And yes, Documents can also have a structure, but it is not a BOM. SmarTeam implemented this around 2004. Meanwhile, a lot of companies had implemented their custom solution for EBOM by customization not matching this approach. This created a first level of legacy.

When SmarTeam implemented Part behavior, it became possible to create a multidisciplinary EBOM, and the next logical step was, of course, to connect the data to the ERP system. At that time, most implementations have been pushing the EBOM to the ERP system and let it live there further. ERP was the enterprise tool, SmarTeam the engineering tool. The information became disconnected in an IT-manner. Applying changes and defining a manufacturing BOM was done manually in the ERP system and could be done by (experienced) people that do not make mistakes.

Next challenge comes when you want to automate the connection to ERP. In that case, it became apparent that the EBOM and MBOM should reside in the same system. (See old and still actual post with comments here: Where is the MBOM) In one system to manage changes and to be able to implement these changes quickly without too much human intervention. And as the EBOM is usually created in the PLM system, the (commercial/emotional) PLM-ERP battle started. “Who owns the part definition”, “Who owns the MBOM definition” became the topic of many PLM implementations. The real questions should be: “Who is responsible for which attributes of the Part ?” and “Who is responsible for which part of the MBOM definition ?” as data should be shared not owned.

The SmarTeam evolution shows how a changing scope and an incomplete/incorrect data model leads to costly rework when aligning to the mainstream. And this is happening with many implementation and other PLM systems. In particular when the path is to grow from PDM to PLM. An important question remains what is going to be mainstream in the future. More on that in my conclusion.

A complex enterprise example

In the recent years, I have been involved in several PLM discussions with large enterprises. These enterprises suffer from their legacy. Often the original data management was not defined in an object-oriented manner, and the implementation has been expanding with connected and disconnected systems like a big spaghetti bowl.

The main message most of the time is:

“Don’t touch the systems it as it works for us”.

The underlying message is;

“We would love to change to a modern approach, but we understand it will be a painful exercise and how will it impact profitability and execution of our company”

The challenge these companies have is that it extremely hard to imagine the potential to-be situation and how it is affected by the legacy. In a project that I participated several years ago the company was migrating from a mainframe database towards a standard object-oriented (PLM) data model. The biggest pain was in mapping data towards the object-oriented data model. As the original mainframe database had all kind of tables with flags and mixed Part & Document data, it was almost impossible to make a 100 % conversion. The other challenge was that knowledge of the old system had vaporized. The result at the end was a customized PLM data model, closer to current reality, still containing legacy “tricks” to assure compatibility.

All these enterprises at a particular time have to go through such a painful exercise. When is the best moment? When business is booming, nobody wants to slow-down. When business is in a lower gear, costs and investments are minimized to keep the old engine running efficiently. I believe the latter would be the best moment to invest in making the transition if you believe your business will still exist in 10 years from now.

Back to the data model.

Businesses should have today a high-level object-oriented data model, describing the main information objects and their behavior in your organization. The term Master Data Management is related to this. How many companies have the time and skills to implement a future-oriented data model? And the data model must stay flexible for the future.

knowledgeCompare it to your brain, which also stores information by its behavior and by learning the brain understands what it logically related. The internal data model gets enriched while we learn.

Once you have a business data model, you are able to implement processes on top of it. Processes can change over time, therefore, avoid hard-coding specific processes in your enterprise systems. Like the brain, we can change our behavior (applying new processes) still it will be based on the data model stored inside our brain.

Conclusion:

A lot of enterprise PLM implementations are in a challenging situation due to legacy or incomplete understanding and availability of an enterprise data model. Therefore cross-department implementations and connecting others systems are considered as a battle between systems and their proprietary capabilities.

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The future will be based on business platforms and realizing this take years – imagine openness and usage of data standards. An interesting conference to attend in the near future for this purpose is the PDT2015 conference in Stockholm.

Meanwhile I also learned that a  one-day Master Data Management workshop will be held before the PDT2015 conference starts on the 12th of October. A good opportunity to deep-dive for three days !

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:

observation 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: it_approval
    “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 ?

blind 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

users 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.

dead_end 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.

standardization

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 ???

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 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.

eb In 2008 and 2009 several analysts predicted that the mid-market was now ready for PLM and that most of the PLM vendors were building a targeted offering for the mid-market. I was, and still am, a believer that mid-market companies will benefit from PLM in case ………… they implement it.
When you review my observations in my blog from the past two years, apparently this does not seem to happen. Therefore in the past months, I have been analyzing posts and discussions around the ‘old’ and ‘new’ PLM, I have been talking with representatives from various PLM and PDM vendors, and last but not least analyzed what was the implementation process of a PLM system in companies, where I could get these insights.

This all lead to this post, perhaps too big for a blog, too small for a report.

First the definitions

Before giving my opinion, first my definitions of PLM and mid-market (as everyone has their own definition):

plm PLM means for me the management of all product related data and processes, from the initial concept phase, through planning, development, production planning and after sales/service. When talking about PLM, I have always a circular process in mind. Experiences from products in the market are again inputs for new product development. Instead of a linear process where every department manages their own data, the challenge is that every discipline contributes and collaborates around the product data. This implies that a PLM implementation always requires a business change process for a customer

mid-market Mid-market companies are for those companies where there is no strategic layer available plus a minimized investment in IT-resources. This leads to organizations where most changes are happening inside departments and cross-departmental changes are hard to implement. The IT-department might be a facilitator here but usually IT people focus on architecture and infrastructure instead of business change. This implies that a PLM changed should come from external people.

 

And who are doing PLM?

On the enterprise level, there is a battle between the big three (Dassault Systems, Siemens and PTC) and they are challenged mostly by the two big ERP vendors (SAP and Oracle) and on the PLM front by Aras, competing through its Open Source model. Of course there are many other vendors. These observations come from the area where I am active.

cad_txt There are various ways to group these PLM vendors; one is from the CAD engine point of view: DS-CATIA / Siemens-NX / PTC-Pro/E. Although all claim to support a multi-CAD environment, the main focus in these companies is around the PLM integration with their primary CAD engine.

Where in the past, CAD independent PDM systems existed (Metaphase, MatrixOne), they could only survive in the major PLM industries by being integrated with CAD tools and were acquired for that reason. It will be interesting to see if Aras can play a major role in the PLM only domain, where others failed in the past due to lack of integration capabilities.

erp_txt SAP and Oracle took a different path; they have understood that PLM cannot be neglected in an enterprise, so they need to address it. SAP did this by developing a PLM module as a logical extension on their infrastructure. Oracle has chosen to add PLM to their portfolio by the acquisition of two different PLM vendors. Where SAP does not have the challenge to explain to customers a full integrated story, Oracle has to spend more time on marketing to make it look like a single platform, which will come in the future. Big question however for both companies: do they really understand PLM? Is it in their veins and core strategy or does it remain an extension to gain market share, especially as you have no connections to the design world? (Try to find PLM on their corporate website).

plm_txt Interesting to see how Aras will evolve. In their business model, the initial purchase of software is not needed, but once working with Aras you pay also for maintenance like with other PLM vendors. Their advantage is that switching from an existing legacy PLM vendor is less painful, as there are no initial software costs, which can be huge for an enterprise. I believe they have a good chance to succeed in industries where there is less a dependency on the CAD engine.So on the enterprise level the need for PLM is justified. Resources exist and are budgeted both at the customer level as at the supplier level. The PLM suppliers are either the PLM vendors themselves with service teams, or big, global service providers specialized in implementing the PLM software. They can do strategic PLM projects and support the required business change.

So why does it look like a mission impossible in the mid-market ?

The big enterprise vendors (PLM/ERP) believe that you can just strip down your enterprise software in a kind of prepackaged mode – PLM Out of the Box is a common heard expression. Also the analysts praise in their reports the mid-market approach from some of these vendors.

But do they really address the mid-market or only the high-end mid-market? Again it is all about the definition of where is the mid-market and in this post I stay with my definition of mid-market.

There are two main characteristics for this mid-market:

  1. Sales and implementation of software is done through Value Added Resellers and not through the vendors or big service companies. The software revenue per customer does not justify high expenses for global consultants with additional high expenses due to travel costs (and sometimes the local language issue). The local VAR is supposed to be the point of contact.
  2. Mid-market companies do not change their main company processes. Depending on the type of core process, let’s assume ETO or BTO, they have sales and engineering working close together on product/solution definition and they have manufacturing planning and production working close together on product/solution delivery. In term of functionality a PDM focus for sales/engineering and an ERP focus for manufacturing.

A mid-market company can be characterized as a two pillar company :

Who are successful in the mid-market ?

There are two software vendors, touching our PLM prospects , that really understand the mid-market, Autodesk and Microsoft.

Autodesk has a huge range of products and when we focus on the area of manufacturing, Autodesk does not talk about PLM. And I believe for several reasons.

ad Autodesk has never been a front-runner in making new technology and concepts available for the mainstream. They are more a company providing functionality for mainstream concepts, as compared to a company pushing new concepts and technology for premium pricing.
And this is what their customers like, as they also do not have internal strategic resources to push the company to new directions and surely no one wants to take the risk.

Thus risk avoidance and understandable concepts are key targets for mid-market companies.
Autodesk tries to avoid reaching beyond their engineering domain, the maximum they cover is presented in their Digital Prototyping solution. With their Vault product range they stay close to PDM, but do not go into the concepts of PLM, like mBOM handling. PLM is not established enough in the mid-market, so a no-go area for Autodesk.

Microsoft addresses the mid-market more from the IT-infrastructure. Slowly SharePoint has reached a certain status of an infrastructure component for content management – so why not for all the engineering data? SharePoint is the most relevant component related to PDM or PLM in my review and what I observed here is that the IT-manager often is the person who supports and enables a cross-departmental implementation of SharePoint. So not pushed from a strategic business level but from a strategic IT architecture approach.

md PLM providers and implementers jumped on this opening in the mid-market by providing PLM capabilities on top of SharePoint. This to get their software used in the mid-market. It does not mean they do PLM, it means they expand the visibility of engineering data across the organization. Microsoft apparently does not want to enter the area of managing CAD or engineering data. You see mainly investments in the Microsoft Dynamics software, where ERP and CRM are targeted. Again PLM is not established enough in the mid-market to provide common functionality, so a no-go area for Microsoft.

And the impact of a indirect sales channel….

CADVARs are the next challenge for PLM in the mid-market. The PLM Vendors, who work with VARs, expect that these VARs are an extension of their sales organization. And sales means here selling software . PLM means however also selling services and I learned in the hard way in my past that companies selling products and services within the same group of people are constant in internal conflict how to balance software and service budgets

Selling and implementing PLM software is also difficult in mid-market companies as these companies buy software because they want to solve a pain in one of their departments. It is not common that they have a holistic approach. So VARs trying to sell PLM are engineering centric – often with their roots in CAD Selling. And as their nature comes from product selling, they feel comfortable in selling data management and PDM as this remains close to product features easy to justify. PLM requires different people, who can guide a business change across departments at the customer.

varIt is very rare for VARs to have these skilled people in place due to lack of scale. You need to act local to be cost efficient and close to your customer. As a VAR has only visibility of a limited group of implementations, the consultancy practices often are not based on global experience and best practices, but defined on their own best practices, sometimes bring their ‘magic’ to be even more different than required, to differentiate from other VARs.

The companies implementing PLM for enterprises can afford to share global knowledge; VARs need to build up the knowledge locally, which leads to an extreme dependency on the person who is available. And to be affordable on the payroll a VAR, the consultant often is an experienced application engineer, who knows to satisfy his customer by providing services on top of the product.

And as PLM is not established enough in the mid-market, they will not invest and push for PLM which requires a long term experience build-up, so almost a no-go area for VARs

So no PLM in the mid-market?

I believe real PLM in my mid-market will be a rarity, based on a lucky coincidence of the right people, the right company and the right product at a certain time. It will not become a main stream solution in the mid-market as there is the design world and the ERP world.

PLM SaaS (Software As A Service) delivered by Arena or PLMplus will not bring the solution either for the mid-market. You might remove the IT complexity, but you are missing the resources (internal and external) for business change – who will be there to initiate and guide the change . PLM SaaS probably will be implemented as a PDM environment.

gw I give more credits for Social PLM (Facebook alike collaboration, Google Wave). This approach might bypass the classical way of working in companies and lead to new concepts, which probably will not be tagged PLM – will the new trigram be SPC (Social Product Collaboration) ?

Still it will not happen fast I believe. It requires a change of the management in mid-market companies. Most of the managers are representative of the older generation, not wanting to take the risk to jump on a new hype they haven’t made themselves familiar yet

 

Conclusion: PLM in the mid-market seems like a mission impossible and although PLM concepts are valuable for the mid-market as analysts report, the typical mid-market characteristics block PLM to become a common practice there.

I am looking forward to learn from your comments

observation In my previous post, BOM for Dummies related to Configure To Order, I promised to come back on the special relation between the items in the BOM and the CAD data. I noticed from several posts in PLM and PDM groups that also the importance of CAD data is perceived in a different manner, depending on the background of the people or the systems they are experienced with.

So I would like to start with some general statements based on these observations.

planning People who are talking about the importance of CAD data and product structures are usually coming from a background in PDM. In an environment where products are designed, the focus is around data creation, mostly CAD data. The language around parts in the BOM is mostly targeting design parts. So in a PDM environment CAD data is an important topic – therefore PDM people and companies will talk about CAD data and vaults as the center of information.

erp_bom

When you are working in a PLM environment, you need a way to communicate around a product, through its whole lifecycle, not only the design phase but also supporting manufacturing phases, the possible changes of an existing product through engineering changes, the traceability of as-built data and more. In a PLM environment, people have the physical part (often called the ERP part) in mind, when they talk about a part number.

As PLM covers product information across various departments and disciplines, the information carrier for product information cannot be the CAD data. The BOM, usually the mBOM, is the main structure used to represent and produce the product. Most parts in the mBOM have a relation to a CAD document (in many companies still the 2D drawing). Therefore PLM people and companies understanding PLM will talk about items and products and their lifecycle as their center of information.

CAD data in relation to Engineering to Order

The above generalizations have to be combined with the different main business processes. In a strict Engineering To Order environment, where you design and build a solution only once for a specific customer, there is no big benefit of going through an eBOM and mBOM transition.

During the design process the engineer already has manufacturing in mind, which will be reflected in the CAD structure they build – sometime hybrid representing both engineering and manufacturing items. In such an environment CAD data is leading to build a BOM structure.

And in cases where engineering is done in one single 3D CAD system, the company might use the PDM system from this vendor to manage their Bill of Materials. The advantage of this approach is that PDM is smoothly integrated with the design environment. However it restricts in a certain matter the future as we will see in further reading.

pointNot everyone needs the Engineering to Order process !

Moving to an integrated, multi-disciplinary engineering process or changing the main process from Engineering To Order to Built To Order / Configure To Order will cause major challenges in the company.

I have seen in the recent past, several companies that would like to change their way of working from a CAD centric Engineering To Order process towards a more Built to Order or Configure To Order process. The bottle neck of making this switch was every time that engineering people think in CAD structures and all knowledge is embedded in the CAD data. They now want to configure their products in the CAD system.

For Configure to Order you have to look at a different way to your CAD data:

Questions to ask yourself as a company are:

  • When I configure my products around a CAD structure, what should I do with data from other disciplines (Electrical/Tooling/Supplier data) ?
  • When I upgrade my 3D CAD system to a new version, do I need to convert all old CAD data to the newest versions in order to keep my configurations alive?
  • When configuring a new customer solution, do I need to build my whole product in CAD in order to assure it is complete?
  • In Configure to Order the engineering BOM and manufacturing BOM are different. Does this mean that when I go through a new customer order, all CAD data need to be handled, going through eBOM and mBOM transition again?

For me it is obvious that only in an Engineering to Order environment the CAD data are leading for order fulfillment. In all other typical processes, BTO (Built to Order), CTO (Configure to Order) and MTS (Make to Stock),  product configuration and definition is done around items and the CAD data is important associated data for the product definition and manufacturing

In the case of order fulfillment in a Configure to Order process, the CAD structure is not touched as configuration of the product is available based on items. Each item in the mBOM has it relations to CAD data or other specifying information.

In the case of Built To Order, a huge part of the product is already configured, like in Configure To Order. Only new interfaces or functionality will go through a CAD design process. This new design might be released through a process with an eBOM to mBOM transition. In cases where the impact or the amount of data created in engineering is not huge, it is even possible to configure the changes immediately in an mBOM environment.

old_process A second point, which is also under a lot of discussion in the field ( PLM interest groups), is that PDM is easily to introduce as a departmental solution. The engineering BOM is forwarded to manufacturing and there further (disconnected) processed.  The step from PDM to PLM is always a business change.

When PDM vendors talk about ERP integration, they often mean the technical solution of connecting the two systems, not integrating the processes around the BOM (eBOM/mBOM transition) 0r an integrated engineering change (ECR/ECO). See how easy it is according to some PDM vendors:

or
PLM requires an adaptation of all departments to work different and together around a single product definition. Especially in a mid-market company, this is a big issue, as all product knowledge is stored in the CAD data and the knowledge how to produce the product is stored in the mBOM on the ERP side. These environments are often disconnected.
Conclusion: In the context of PDM the importance of CAD data is clear and for companies following a strict Engineering To Order process the main source of product knowledge. Companies following the Built To Order / Configure To Order process should configure their products around items to keep flexibility towards the future.

Companies with the intention to move to Built To Order or Configure To Order should not invest too much in CAD data configuration as it creates a roadblock for the future.

In my next post I will address the question that comes up from many directions, addressed by Jim Brown and others, as discussed  in one of his recent posts around a PLM standard definition and more ….

globe

Like many people, the meditation of the dark Christmas days and the various 2009 reviews give you a push to look back and reflect.  What happened and what did not happen in 2009?

And what might happen in 2010?

Here my thoughts related to:

 

ERP-related PLM vendors

Here I think mainly about Oracle and SAP. They have already identified PLM as an important component for a full enterprise solution. They are further pushing their one-shop-stop approach . Where Oracle’s offering is based on a set of acquired and to-be-integrated systems, SAP has been extending their offering by more focus on their own development.

vision If you are one of those companies that require PLM, and believe all software should come from one vendor (beside Microsoft), it is hard to decide.

As there might be real PLM knowledge in the Oracle organization as an effect of the acquisitions, but is it easily accessible for you? Is it reflected in the company’s strategy ?
With SAP I am even more in doubt; here you might find more people with ERP blood having learned the PLM talk. Maybe for that reason, I saw mostly Oracle as a PLM option in my environment and very few SAP opportunities for real PLM.

I assume in 2010 Oracle will push stronger and SAP try harder.

 

CAD-related PLM vendors

In this group you find as the major players PTC, Siemens and Dassault Systems. Autodesk could be there too, but they refuse to do PLM and remain focused around design collaboration. All these PLM vendors are striving to get the PLM message towards the mid-market. They have solutions for the enterprise, but to my feeling, most of the enterprises in the traditional well-know PLM markets, like Automotive and Aerospace, are in a kind of stand-still due to economical and upcoming environmental crisis.

It is sure business will not be as usual anymore, but where will the sustainable future go? Here I believe answers will come from innovation and small mid-market companies. The bigger enterprises need time to react so before we see new PLM activities in this area it will take time.

search Therefore all PLM vendors move in directions outside engineering, like apparel, life sciences, and consumer packaged goods. These industries do not rely on the 3D CAD, but still can benefit from the key building blocks of PLM, like lifecycle management, program and portfolio management and quality/compliancy management.  The challenge I believe for the PLM vendors is: Will these CAD-focused organizations be able to learn and adapt other industries fast enough? Where does 3D fit – although Dassault has a unique vision here.

For the mid-market, the PLM vendors offer more OOTB (Out Of The Box) solutions, mostly based on limited capabilities or more common available Microsoft components like SharePoint and SQL Server. This is not so strange as according to my observation, most smaller mid-market companies have not really made or understood the difference internally between document management and product data management, including Bill Of Materials not to be managed in Excel.

I assume 2010 the CAD related PLM vendors initially will focus on the bigger enterprises and new industries, the smaller mid-market companies require a different approach

 

PLM-only vendors

This is an area which I expect to disappear in the future, although this is also the area where interesting developments start to happen. We see open source PLM software coming up with Aras leading and we see companies coming up with PLM on-demand software, Arena as the first company to sell this concept.

fish

The fact that the traditional PLM-only vendors disappeared in this area  (Eigner bought by Agile, Agile bought by Oracle, MatrixOne bought by Dassault Systems) indicates that the classical way of selling PLM-only was not profitable enough.

Either PLM needs to be integrated in companywide business processes (which I believe), or there will be PLM-only vendors that find a business model to stay alive.

Here I hope to see more clarity in 2010

 

Smaller mid-market companies

planning What I have seen in the past year is, that despite the economical crisis, PLM investments by these companies remained active. Maybe not in purchasing much more licenses or implementing new PLM features. Main investments here were around optimizing or slightly extending the PLM base. Maybe because there was time to sit still and analyze what could be changed, or maybe it was planned but due to work pressure, it was never executed. Anyway there was a lot of activity in this area not less than in 2008.

An interesting challenge for these mid-market companies will be to remain attractive for the new generation. They are not used to the classical ways of structured work as most of the current workforce is used to.
Social networking, social PLM, I have seen the thoughts, discussions and benefits, still trying to see where it will become reality.

2010 is another chance.

 

Sustainability and going green

frog This is an area where I am a little disappointed and this is perhaps not justified. I would expect with the lessons learned around energy and the upcoming shortage of natural resources, companies would take the crisis as a reason to change.

To my observation most of the companies I have seen are still trying to continue as usual, hoping that the traditional growth will come back. The climate conference in Copenhagen also showed that, we as human beings, do not feel pressured enough to adapt, by nature we are optimists (or boiling frogs).

Still there are interesting developments – I assume in the next few years we will see innovation coming – probably first from smaller companies as they have the flexibility to react. During the European Customer Conference in Paris, I heard Bernard Charles talking about the concept of a Bill Of Energy (The energy needed to create, maintain and demolish a product) As PLM consultants we already have a hard time explaining to our customers the various views on a BOM, still I like the concept, as a Bill Of Energy makes products comparable.

2010 the acceptance of Bill Of Energy

Here I want to conclude my post for this year. Thank you all for reading and sharing your thoughts and comments with this community. My ultimate conclusion for 2009 is, that is was a good PLM year for the mid-market, better as expected but the changes are going slow. Too slow – we will see next year.

2010

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