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observation I realized that time is flying when you are busy, and I promised to publish the conclusion from my previous post: More on who decides for plm in a mid market company. In my two previous posts, I described the difficulties companies have to select the right PLM system. So far I discussed the two extremes, the silent approach where a possible bottom up approach was discussed and as the opposite where an ‘academical’ approach was followed.

Now it is time to get the answers on the academical approach.

These were the questions to be answered in the previous post:

  • How much time has passed since the management decided PLM was good for their organization?
  • How independent is the consultancy firm?
  • Did they consider open source PLM as a solution?
  • What was the ranking of the PLM vendors?

How much time has passed since the management decided PLM was good for their organization?

planning The whole process of selecting a PLM system often takes more than one or two years, starting from the first activities till the final conclusion to start. I believe this is unavoidable, as especially in mid-market companies the business values that PLM can bring are not always discussed and realized on the strategic level.

However, I believe the recent years PLM has been recognized by analysts, by software vendors and many young companies as a necessity for innovation and in the long term remaining competitive.  And this is not only in the classical domains where PLM started – automotive / aero / industrial equipment.  PLM value is everywhere in different industries, even apparel for example.

For companies that are now in the decision process, I believe 2009 and early 2010 are the years to decide, because a recovery of the economy might put back the focus on execution and not on strategy and they might miss the management focus for PLM. And as I wrote in a previous post, companies who made the best pit stop will benefit upmost.

For companies still in doubt:  It is now or never

How independent is the consultancy firm?

It is clear that real independent consultancy firms do not exist – even if a consultant wants to be independent, there are three challenges to meet:

  • How can a consultant evaluate or judge PLM systems they have not seen?
  • How much experience does the consultant have in your business?
  • How much work is there required in the project for the consultant?

sel_a As you can imagine, reviewing the above challenges, you will realize that consultants usually specialize in systems, where their expertise it required – as they also want to make a living.  Consultants cannot afford to be an academic institute, as coming back to the previous point, all consultancy work at the end will be paid by the customer.

So to conclude on this point, if you want to be cost-effective, a company should do already a pre-selection based on systems and possible implementation partners, that fit naturally to their type of business and then evaluate how consultancy can be achieved.

What you will find out is that the major ‘expensive’ packages have loads of consultants to offer en the more and more you go into a mid-market environment, consultants become rare. For software from PLM vendors you will usually find a reseller network with people close to your offices that can support you. For Open Source software you will need to find the consultancy services through their software delivery program.

Anyway remember: 50 % of the success of a PLM implementation is based on the right implementation approach and partner not on the PLM functions and features.

Did they consider open source PLM as a solution?

search No, because the consultant was not familiar with it, and discouraged the company to look at it. In general Open Source PLM, like PLM On-Demand are interesting trends to follow and should not be neglected.  However the focus and approach for this type of solutions is different. I will not generalize at this moment as also I have no clear picture where Open Source PLM or PLM on Demand would be a big differentiator. I will try to evaluate and report it in future posts.

Comments from Open Source PLM Vendors or On Demand PLM Vendors are welcome to complete the PLM selection approach.

What was the ranking of the PLM vendors?

Ranking was done by the management, the selection team and the design department. These were the results plus their major comment:

Management

1. The slide show PLM provider – they liked the business pitch

2. The CAD supplier with PLM features and gadgets – good guys – we know them

3. The PLM provider who showed everything – too much handling of data – too complex

Selection Team

1. The PLM Provider who showed everything – they really did it

2. The CAD supplier with PLM features and gadgets– we understand where they are going

3. The slide show PLM provider – do they really have a solution?

The Designers

1. The CAD supplier with PLM features and gadgets– he knows what we want

2. The slide show PLM provider– could be a good solution too

3. The PLM Provider who showed everything – too complex, it will limit our productivity

slideplmAs the management had the final vote, they decided for the slide show PLM Provider, as they felt most comfortable with them.

The reason to drop the CAD supplier was that they were too afraid this provider does not know all about PLM. Both management and users felt the PLM provider that showed everything was too complex, this opposite to the project team where the members were very familiar with PLM capabilities after two years investigation and many demos and trade shows.

Conclusion: Selecting PLM, even in an academical manner is a subjective process. As in general the customer does not exactly knows what he needs and often the PLM provider shows too much in detail, the real journey starts at implementation time. And in this stage you need an experienced implementation partner who can match and communicate the expectations

observation This week I realized that, although I believe the benefits of PLM are more and more accepted in mid-market companies, the decision how to start and where to start with PLM is often not clear. I recognize several approaches which I will describe in this and some upcoming posts.

All persons in this post are fiction and in case you recognize these persons in your company, it is pure coincidence. Instead of talking about approaches,I was tempted to call it strategies, but when you read my observation you will realize the word strategy would not fit.

Approach 1:  The silent PLM

PxM Inside our company, often there is an engineer or an engineering manager, who got caught by the PxM virus. The PxM virus is a modern virus, which makes you a believer that PDM or PLM will bring your company a lot of benefits. Documents and proof points of the severe impact exist all around the world. However nobody has gotten infected so far in this company. Everyone is working the way they worked since many years and life is secure and predictable.

Now this infected engineer is getting exited and dreams about the introduction of PLM in his company and how he will become the hero of the company and gets a big promotion. Unfortunate for him in this kind of business there are no big bonuses to collect, so the honor of promotion is already a big achievement.

So the first thing this engineer does is chatting with his peers and friends to find out where PxM has been implemented successful  and he studies some success stories which he learned from his network.

Now the challenge starts.

He goes to the management and shows a nice PowerPoint, explaining why the company needs PxM and what are the expected benefits, based on reference stories. The management has no real clue what he is talking about, but it looks promising and they allow him to select a PxM system for his department and to start a pilot.

sel_a The engineer already knows which PxM system to choose. The one, recommended by the friendly reseller, who sold them their 3D CAD system (which is a success) and worked hard with him to finalize the slides. As requested by the management he had to invite two other PxM vendors to make an objective selection and at the end an impressive comparison matrix is shown to the management why system A has been chosen.

Now the implementation starts and step 1 is very successful. The document management part around the CAD system goes smoothly and everyone in the engineering department starts to be happy.

Following this successful implementation there are two options:

  • the engineer does not get promoted and the implementation ends. It will remain a silent document management implementation and the dream is put aside.
  • the engineer gets promoted and continues to push his vision as now he has a broader audience to spread the PxM virus. We will follow this story line…….

The engineer gets promoted and continues to push his vision

This is the best that can happen and the engineer, who now became the head of engineering, starts to express his vision to his fellow managers, explaining the advantages of PLM. Notice, he is now talking about PLM as the scope has been extended beyond product data management, involving other disciplines in the organization.

vision

And here the head of engineering discovers that his fellow managers are also infected by a virus. Not the PxM virus, but one of them has already for many years the ERP virus. And as the ERP virus addresses the operational and financial tasks in the organization, the management trusts him.  The sales and marketing department seems to be infected by CRM, but currently they caught a social disease, which made them push for all kind of communities. The management either likes it (as their kids are also on Facebook) or dislikes it, because they believe work is a serious business and being on internet all day is considered gaming.

myplmSo the head of engineering realizes that he has some freedom within his department, but the other departments and the management have their own priorities. And PLM is not on their list. Together with the friendly CAD reseller, who meanwhile was promoted to be Senior PLM Consultant, they work on a perfect PLM environment within the engineering department and they believe their success will show off in the upcoming years.

And then the crisis came and the company had to cut budgets. To be continued in (hopefully) 1 or 2 years

Conclusion: The silent PLM approach has a huge chance to fail as there is no corporate vision and management push to get PLM implemented. PLM should be addressed top-down. As in many mid-market companies there was also no strategically partner, who could assist the management to build a vision and to set priorities.

Next week:

approach 2: Academical  PLM

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

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

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

Does it prove anything ?

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

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

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

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

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

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

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

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

So my conclusion this time:

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

observation Last week was a week of transition. As I wrote in my previous post, I finalized a traditional PLM 1.0 project ( I will come back on this term ‘traditional’ PLM 1.0) and now probably because of the sunny days and some interesting articles I read (each word goes to a different article), I am reflecting what it means to think about the new trends:  WEB 2.0 or even PLM 2.0

In this post I will try to explain the developments I have seen so far in the mid-market and from there project what might happen.

In the 80’s there was no PDM or PLM in the mid-market. This was the time most companies were moving away from the drawing board towards CAD. Most of the CAD was 2D and at that time in the mid-market AutoCAD was the dominant CAD software.

CAD At that time I was working for the biggest AutoCAD distributor in the Netherlands (picture on the left). This was the golden age for hardware and software resellers – margins were high and there was little or none IT-knowledge inside mid-market companies. In order to keep the high margin we provided a free helpdesk for our customers to differentiate from others. It was an interesting time. Prospects came to our demo room to plot a drawing of A0 format and to discuss the quality of the lines and the hatching as compared to handmade drawings. There was always the discussion if CAD was more productive and must of us agreed that benefits only came when rework or changes were needed. In parallel we offered a training course for the heads of a design department how they learned to  understand if their designers were productive. They were used to observe the behavior of the draftsman and the minor bar on the drawing board and from there they understood if someone was productive. We were talking about the new digital generation that would replace the people at the drawing board.

Are there still drawing boards ? Is there still free support as the margins are high ? This was 20 years ago.

Then slowly 3D CAD was introduced for the mid-market, initially only on Unix boxes, but with the introduction of Microsoft Windows it became achievable – SolidWorks for sure was leading in this area. Hardware became already more a commodity so the customer relation changed from free support to paid support, which required quality and knowledge. At that time in my company, we also saw the first demands for what customers called an “engineering database”.  In the 2D world it was all about drawing management, now with 3D the focus was on managing the whole product. Initially called EDM (Engineering Data Management), later evolving in Product Data Management. The term PDM was not known at that time and I remember one of our customers visiting us with a sample of 13 reports – drawing list, spare part list, manufacturing BOM, etc. He told us:  “I need a system that can generate these reports for me at anytime”.  The solution: we implemented a PDM system for this customer. At the end of the nineties 3D was introduced in the mid-market combined with PDM. We were talking about the new generation of people that thinks in 3D which would replace the people who still worked in 2D

Are we still working with 2D ? Do we still look for support on hard- and software ? This was 10 years ago.

express Then came the era of connectivity, initially  through the first internet wave, leading to terms as cPDM and ultimately PLM.  Instead of focusing on productivity in a single department, the intention was to focus on collaboration between departments, development teams and to address the whole product lifecycle. Specially Dassault Systems extended this concept by focusing on the process and virtualization: test and build your product virtually before you spend any money on prototypes. Autodesk does the same in different words, they call it Digital Prototyping and they try to avoid talking about the processes as here we touch the most sensitive point in mid-market companies: touching or changing processes – ‘classical PLM 1.0. And this is also what I read between the lines of Jim Brown’s post Is innovation or product pipeline killing profitability ? As long as we do not change our product development process but focus still on doing the same with better tools, the real innovation will not come. We are now talking about the global collaboration generation that has to learn to work together and replaces the people who are not changing their processes.

Are we still solving our departmental problems only ? Can we survive keep on doing the same ? This is now !

And meanwhile mid-market companies are learning to understand and digest the above, we already see the new wave coming. WEB 2.0 – social networking – social collaboration – PLM 2.0 – communities and more. Instead of companies working on their own data, the future is to work in communities, live data, cross-company with employees, who are focused as a team to bring a result, we do not send so much emails anymore, we chat, we twitter, we …….. and more. In addition as we will see the trend that teams have members from all around the world, the question comes up: What is the standard communication language ? German (past) , English (present), Chinese  (future) ?  Here I am a big fan and believer of the Dassault vision that 3D becomes the global language for communication as the people participating do not come from the same educational background anymore – so it easier to see what you mean. Meanwhile the futurists are all the time talking about the aging workforce (a lot of people plan to retire), but if you read back, you will notice every ten years we are talking about an aging workforce. Every time there was a new generation picking up the new capabilities and challenging the next generation.

Are we in 2020 a global, 3D twittering world ? What is each individual’s added value ? What are companies doing to anticipate to the above trends ? It looks like it is going to happen and the current economical downturn allows us to anticipate even earlier till the next pit stop.

A thought I take with me on the summer holidays.

(Yes, in Europe we still have holidays that are so long you have time to think about work –
you can find me on the island below in August)

anafi

observation The last month I have been working with Aerosud Aviation in South Africa to finalize and conclude on ROI and the lessons learned around their PLM implementation, which started in May 2007.  I was lucky to be involved in the initial scoping of the project in 2007 and assisted the local Value Added Reseller together with the team from  Dassault Systèmes UK team in a step by step project towards PLM.

planningWhen I met the people in Aerosud the first time in 2007, I noticed it was a young company, with open-minded people, everyone trying to improve their daily activities per department. There was the need for PLM as some of their major customers required Aerosud to have a PLM system in place. Also Configuration Management was mentioned many times in the interviews and what I learned that time: Excel was the tool for configuration management.

Based on the initial interviews a plan needed to be developed in which steps to implement PLM.  The following three major points were the guidance for the implementation:

  1. The company was thinking documents and understanding documents especially Excel
  2. The company had no clear understanding of what PLM would mean for them as real awareness was not inside the company. Customers like Boeing and Airbus talked about the importance of PLM, but how this could impact Aerosud as a company was no commonly clear
  3. People in the company had a major focus on their department and there was no availability of a overarching group of people leading the implementation

You could say you will see the above points in many smaller and medium-sized companies. I wrote about it also in one of my previous posts: Where does PLM start beyond document management ?

The project phases

riaan The good news for Aerosud was that their PLM Champion was an expert in CATIA and was familiar with writing macros in Visual Basic plus the fact that everyone in the company was open for using the system as standard as possible – no demands for special behavior of the system:  “because we do this already for 100 years”

The last phrase you hear a lot in ancient Europe

The choice was to start with implementing ENOVIA SmarTeam Design Express and to focus in two phases around design data management (phase 1) and the usage of design data by other users (phase 2)

The plan was that each phase would take maximum 2-3 months and we would give the users the time to digest and change their habits towards the standards in the system. In reality it took almost a year, not due to technical or conceptual issues, but this was the maximum pace we could have with the amount of time and available resources. The good news after these two phases was that the first bullet was much clearer understood – the difference between having a system with a single version of the truth or Excel management.

businesssystem In the summer of 2008 (our summer – as it was winter in South Africa) there was a management workshop in Aerosud and here after three days of discussion the position of PLM became clear. One year ago this would not have been possible, now people had seen ENOVIA SmarTeam and they could imagine what benefits the system could further bring. This addressed the second bullet I mentioned before. Although this workshop was not scheduled upfront, looking back now I see this was a crucial point to get understanding for the next PLM steps.

 

The next PLM steps were extending to a real Item-centric data model, because if you want to do PLM you need to work around Bill of Materials and all related information to the items in the Bill of Material. At the end this gives you configuration management without chasing Excels.

Again the next steps were divided in two phases with again a scope of 2 – 3 months. The implementation would be based on the ENOVIA SmarTeam Engineering Express methodology which came as a logic extension of the current implementation, without having to change the database or existing data model.

In the first phase we had awareness sessions for BOM (discussing EBOM / MBOM / Effectivity, etc) plus in parallel we introduced the item as place holder for the information. Not longer folders or projects as the base.

Introduction of the item was conceptual not a big issue and the major activities in this phase were focused on connection legacy data or current data from projects to the items. Data coming from various sources (directories, legacy databases) plus NC data became connected and visible in the single version of truth.

In the second phase of moving to PLM the focus was on EBOM and MBOM. Initially assuring that from the designer point of view the CATIA design and EBOM were connected as smoothly as possible, trying to avoid a lot of administrative overhead on the designer (sometimes unavoidable – see my previous post: Where is my ROI, Mr. Voskuil)

ebom_mbom

After having implemented a streamlined CATIA – EBOM connection, the focus moved to the MBOM. For me this is the differentiator for companies if they implement PLM or just Product Data Management). Implementing the MBOM requires a culture change and this is the place where the ERP people need to see the benefits instead of the threats . Luckily in Aerosud the manufacturing engineers were working in their Excels initially and not in the ERP system – which happens a lot in older companies.

For that reason the concept of MBOM in PLM was much better understood. Now Aerosud is experiencing these capabilities and once they become obvious for everyone the third bullet will be addressed: people start to work in processes cross-departmental instead of optimizing their department with a specific tool.

phased implementation As this activity will continue, I also conducted with the Aerosud management and PLM implementation team an ROI assessment. Estimates about the experienced and projected benefits were kept low and on the realistic side. The result was that the outcome for the ROI period was approx 27 months, almost the same time as the whole project had as throughput time. This proved again the statement about a phased PLM approach. payback of project comes in parallel with the implementation and will ultimately fund the next steps.

 

 

shout_left End of July I will be holding a webinar with more details about this implementation for the Dassault VAR Community. I will be happy to expand this information for a wider audience afterwards, as I believe the project is representative for many mid-market companies that struggle to find the place where PLM fits ….. and brings ROI

 

Let me know if you are interested in this follow up and I will collect the inputs for a follow up.

observation The past few weeks I have been busy in an area which I believe is crucial for understanding PLM. I had meetings, web meetings with prospects, with implementers and existing customers – of course all in the mid-market. And the generalized key question on the table was: “

 

question

Yes, we understand document management, and yes, CAD management is understandable to us, but why do you need to work with the BOM further down the product lifecycle, as this is ERP, isn’t it ?

I realized several topics play a role here:

  • Mid-market companies usually do not think top-down in their approach. As an example: they will not look at their whole organization’s business processes and then try to map all the activities cross departments, cross suppliers, etc.  Usually they are looking per department to optimize the way they are working.
    Classical enterprise PLM implementations are designed to go top-down. Describe the as-is situation, describe the the to-be situation and then transform the company to meet the to-be situation. Decisions are pushed to the people in the company as the to-be situation seems to be clear. Many of the classical PLM implementers still believe in this approach – and the risk / challenge is always that the to-be situation was not well understood, or that at the time we reach the to-be situation the environment of the company has changed and another to-be is needed.
  • Mid-market companies understand a central storage for documents brings a lot of benefits. Most companies realize that all this departmental archives of documents and files create too much overhead and a higher quality risk. Finding the absolute right file for a certain product release might be a quest and of course each of the departments claims that their solution fits exactly their needs. This is what I believe the main driver behind the success of SharePoint. As Microsoft Office is used as a common document authoring tool among all departments, why not use the Office Document Management tool as our common backbone ? PLM and ERP vendors might say we also manage documents, but usually these documents are managed in a structured manner – related to revisions of a product or to a product order. Usually an infrastructure to manage unstructured documents does not exist in ERP systems.
  • Mid-market companies do not understand the value of managing the BOM outside ERP. As I mentioned, everyone understands documents, but items seem to be the domain of an ERP system. Understandable as ERP was often the first IT-system implemented.  As mid-market companies usually do not have a holistic view, items will remain to be managed there (“as we invested so much in the first implementation the management will say – no other source for items !!!”)
    And here i believe is the crucial go-no/go point for a PLM implementation. Once the company starts to understand that the definition of items is not done in the ERP system, but is a result of the work done in the engineering department, only then the value of managing the BOM outside ERP become apparent. And here is the catch 22, we already manage our documents in environments without items (BOM’s) (SharePoint / CAD Documents management) – so no place for PLM ?

  So what to do as a mid-market company ?

point It is hard to understand the full picture (because of the above points), can you trust the selling PLM partner ?(we have been promised easy implementations in the past with other IT-systems too) and at the end you do not believe the value PLM can bring (as you cannot imagine and digest the impact of PLM to your company)

And just when thinking about this – three articles came to my attention as they all address this topic, somehow from a different perspective:

The first two posts deal with a packaged approach for mid-market companies, allowing them to implement PLM faster and with a faster ROI. As Jim (and many others are stating – in an economical down turn you cannot focus on efficiency only (the ERP slogan). It is innovation – better and more customer oriented and attractive products – brings much higher revenue as compared to doing more of the same more efficient.

Oleg focuses on the steps to implement PLM and I agree with most of the statements there. It needs to be gradual and implementing the business processes comes as the last phase.

There is one difference I see in my approach compared to what Jim and Oleg are writing. Both believe that PLM brings value (and i support this statement 100 % based on experiences with customers I have worked).

However the missing point to be addressed is the lack of understanding (and often also trust) of companies talking with a PLM vendor and committing to PLM.  I tried to explain these points in the above 3 statements. As long as those points are not addressed, each stepped approach will lead to the question:  “When are we really going to do PLM instead of CAD Document management or enhanced ERP ? “

My experiences with guiding successful PLM implementations are the following:stepped

  1. Start with basic document management and CAD data management. It aligns with the understanding of companies that a centralized and secure repository for documents brings ROI. This step introduces to the company that a company wide approach of data management brings value (and ROI). Some basic processes might be introduced here already- basic document approval as required by all quality systems.
  2. Once basic CAD and Document Management are introduced, the company will realize that it is missing ‘place holders’ to hook the information. If you work in a document management system only, the system implementer will say: Use projects to collect your product data and use folders to collect your item related data. A PLM vendor would say; Now you are ready to introduce Items in your system, as they are the logical place holders for information. Here PLM starts to be introduced.
  3. Once understood that the item is a needed place holder to manage development data, the understanding for managing items in a structure becomes clear. Here we introduce the EBOM and as Items also contain logistical data, this is the first point to start connecting PLM and ERP to work with a shared ‘place holder’ but with different focus on characteristics.
  4. Once the Engineering BOM is understood, the discussion starts around the MBOM. Who is responsible for defining how a product is manufactured ? PLM believes this is part of their duty, ERP vendors will say, we own the item historically ,so we manage the MBOM. As a 100 % PLM believer, I think it should be in PLM as it is not part of the execution but part of the product definition (See the post I wrote on this topic: Where is the MBOM).
    At the end the defined MBOM can be pushed to ERP once required.
  5. Once you are able to manage and centralize all data related to product development and definition, a company becomes ready to guarantee the quality and flow of the data, by implementing company wide engineering change and development processes. Much in line with Oleg’s PLM action plan.

I have supported implementations of the above approach in several mid-market companies and key success factors were:coop

  • the company understanding PLM brings benefits but also understands it will take a time to realize this vision.
    Management vision and support were always there. 
  • a PLM system that allows you to start simple with centralizing documents and keeping things understandable but also allows you to scale up to a PDM system and finally supporting the whole PLM vision once accepted and understood .
    Think Top-Down – Implement Bottom-Up
  • an implementer who understands that in the mid-market a push of concepts will bring rejections from the end-users, and where listening to the end-users only, it will result in an unguided system. The implementation partner needs to say No at the right time and to push for Yes when needed.
    The implementer is 50 % of the success !

expressConclusion:  A management vision, a scalable PLM system and an experienced implementation partner are needed to bring the innovation to survive in the long term – document management and ERP alone will not bring this unique value. The phased approach allows a company with digestible steps to grow to their ‘to-be’ situation – as building trust and understanding is still required in the mid-market of PLM

See also: ENOVIA SmarTeam Express

observation It is time to continue with my posts about ROI and the need for measuring. I described in previous posts the concept phase and planning phase and will touch in this post the development phase.
But before doing so, there are two points I want to share before.

Queen’s Day in the Netherlands 2009

First as a Dutchman (although many times virtual) I enjoy April 30,  as a special day, as it is our Queen’s Day.
People around the world celebrate the 1st of May, we Dutch celebrate Queen’s Day the day before.

It is a celebration of the people, with free flee markets, concerts and activities all around the country and at some special locations our royal family contributes to the atmosphere by participating amongst us. We celebrate this day not because the Dutch are so royalty minded, it is also a good excuse to celebrate our existence together, and there is always the discussion if a president of the country would bring more to the country as compared to the royal family.

This year Queens Day however became the blackest Queens Day ever. A lunatic apparently decided to make a statement and tried to drive his car into the bus with the royal family. However to get there he drove through the cheering crowd – 7 people died, including the driver because of this attempt. It makes you realize that in the modern society innocence is gone and that life is not as obvious as it is.

Hopefully Queen’s Day will be again a day of the people celebrating , with respect to the victims, still  we should not change our lives because we fear.

Concurrent Engineering around the BOM

idea Next point, back to PLM again, I read an interesting discussing on two blogs regarding the need for the BOM – For me the shared and consolidated BOM, is the major object (placeholder / entry point) for a company to share developed data, so it is an interesting discussion.

Read these posts at: vuuch.com and plwtwine.com – they give points to consider, and I support the observation that although we try to do concurrent engineering already for many years, I haven’t seen many successful implementations, mainly due to the human behavior. Classically PDM and PLM require the BOM for collaboration and we might stay with this concept for a long time. Knowing the mid-market, I believe alternative solutions have to come up as a boom embraced by everyone  (and conquer the market within a few years) or we will stick to what we know and what we are doing – changing habits and culture is hard. For the moment I stick to the current situation.

To PLM or Not to PLM – Measuring the development phase

So what happens in the development phase.> We have a concept and a plan and now we need to develop or change the product. In the past this was much easier. Companies worked mainly locally and around a single discipline. Now product development has the typical challenges of collaboration between different locations (many times around the globe), different disciplines (mechanical, electrical, software), integrate suppliers (as we focus on core competence) and meanwhile comply to (local) regulations. A lot of activities in parallel that should run coordinated to a single goal, the developed product. The phase where a lot of data is created and need to be shared among along the enterprise.

So the most important questions related to the development phase are:

  • How many review cycles does a product introduction require in general?
    Measure: time spent on getting a joined status on development and plan next detailed steps
    Analyze: Can we improve the quality of the status information to better plan next steps
  • How much time does it take to prepare a product status review
    Measure: the amount of time and people spent to collect information to make a status review
    Analyze: Can this process of collecting data be shortened and (semi-) automated
  • How do we make sure we select the right parts and solutions for a certain function / system ?
    Measure: The amount of changes during  the development phase or after this phase 
    Analyze: Why were these changes needed ? Missing information, obsolete/redundant parts, failed solutions ?
  • How do we make sure our products comply to local regulations
    Measure: At which state of the development process compliance is checked and how it affects development / go to market time.
    Analyze: Can we verify compliance earlier than current  – and how
  • How much effort does it take to communicate around an engineering change
    Measure
    : What does it take to communicate and implement a change during the development phase. How much time, many resources are involved around this communication process (and how reliable is it)
    Analyze: Can we improve by doing things different ?  Implementing processes, push technology, ….?

Most of the above points focus on facilitating (global) processes  and making information available anywhere needed. This brings me to my previous post, where I talked about Can ERP vendors do PLM ?  The ERP vendors that do PLM, will claim they are addressing these points in their PLM offering too.  The major difference however is that (and I am generalizing) ERP based systems score low on usability as their systems are not planned to work from within an application (CAD or Office for example) . This is the major difference with PLM systems, closely related to CAD systems. Through their CAD integrations, the PLM environment will be embedded in the day-to-day user / design environment (immersive is the term).

An immersive integration has the benefit that collecting data is much more natural and the chance of having more accurate data available all the time is higher. So most of the point mentioned above will have a higher ROI when working from an integrated PLM environment.  And in addition to that, in the mid-market users have a voice – their acceptance is also part of the ROI.

Conclusion
The keywords for the development phase are global collaboration and visibility of actual data and affected changes. To make data available, integration with the data creator’s desktop is important as then it will be available straight from the source. I keep it here to ‘classical’ PDM / PLM as new concepts like PLM 2.0 will drastically change the way we work, however getting there will take years

point Note: It might be misleading to talk about ROI benefits per phase, as other and additional benefits may come from doing the whole process different.  I will stick to my initial approach as it will give you a baseline to start working from. Remember in order to understand– you need to start measuring even if it is not the ultimate approach

And closing with Queen’s day how it could be (2008 – learning Dutch is not required)

tornado_butterfly You might have heard about the chaos theory and the butterfly effect ? In general, the theory promoted by Edward Lorentz and others, claims that the flapping of the wings of a butterfly, somewhere in South America may influence ultimately the path of a tornado, either preventing or accelerating that a tornado may hit at a certain place in North America.

WOW, if a butterfly can do this, can you imagine the impact of all of us, flapping our notes and plans around PLM in an organization ?  What a chaos we can create ?

I came to this association, looking back on my activities the past three weeks. Talking with implementers and companies, who all had a tornado of wishes and activities,  trying to create order through a PLM implementation – the anti-chaos theory.

Most of the discussions were based on a typical mid-market approach.

What do I mean by a typical mid-market approach – and I am generalizing here. None of the people I have been talking to in the past weeks match the exact characteristics, however all contributed to the picture in my mind.

shout_left

 

Typical mid-market approach (my generalization):

 

  • (Power) User Driven / Do It yourself approach – inside the organization there are people who have the dream to improve the company with PDM / PLM and the energy to prove it. They build the plan and define the solutions. External resources are only hired to do specialized services, fitting in the thought process of the power users. They believe that everyone will see the benefits of the implementation and join their approach step-by-step enthusiastically.
  • Focus on technical details– often the wishes are based on implementing technical capabilities close to the understanding of users, usually requiring a minimum of change in the daily processes. For example the focus might be on a technical capability how to connect the PLM system to the ERP system (Middleware / XML /Web Services / …..)  instead of discussing how it will work from the process point of view – how is the process impacted ?
  • Task solving – much in combination with the previous point, the focus is on optimizing and/or automating tasks of a certain user. The end-user’s daily tasks/pains are the focus for solving, which means trying to automate as much as possible, providing as much as possible single system / single screen solutions. 
  • Risk Avoidance – often these companies do not have the capabilities (people / time / budget) to experiment with new directions. Approaches from other similar companies are followed (looking for references). For sure not a bad approach, however the result is it will be harder to be differentiate from your competitors. And of course risk avoidance should always be considered in the scope of manageable risks.
  • Lack of top-management investment / push – although the top management in these companies subscribe to the needs for PLM, the focus of the investment is usually mainly on the external costs (software and services), where internal resources are forced to do the PLM activities beside daily tasks. Later the management will wonder why things are going slow, as they did their job (they approved the investment– waiting for the results now)
  • Focus on business skills – the people in the project team are often well educated in their daily business and practices, but lack project management, risk management and change management skills. These ‘soft’ skills are often acquired by buying a book to be placed on the desk.

observation

 

After writing these generalizations, I had the feeling that instead of characteristics, i was writing about risks . As this was not the intention, let see the how to manage these risks:

 

  • The power users should realize that they are sent on a difficult mission which requires a lot of creativity to implement changes in the context of the PLM project. And strange as it seems the PLM software might not be the biggest challenge.
    The biggest challenge will be on choosing the right best practices and to implement them with acceptance of the users. This is change management combined with implementation knowledge / experience. They point for the power users should be to have an implementation partner with experience, who can explain why best practices work and explain how other companies address this issue. Without practical guidance the power users have become pioneers, which is something the management for sure wants to avoid.
    Often to avoid user objections, the project team decides on heavy customizations or ‘weird’ compromises – nice to keep the user community quiet, but bad for the future, as benefits will not be the same.
    This mainly happens as there is too much focus the ‘hard’ side of the project ( hardware /software /IT /Services ) , and no or limited attention to the human / change management side.
    Power Users – be aware !
  • The management should realize that it is a company’s decision and vision. So from their side a steering committee with a clear vision is required. Their job is to keep the vision, prioritize the activities and make sure the power users are not creating an isolated solution based on their dreams.
    The most important role of the management is to take continues responsibility for the project – it does not end by giving the approval for the project and budget. Where users might reluctantly accept changes, it is the job of the management to enforce the changes and support them.
    This can be done in a harsh way by imposing the changes, however this will cause resistance and the end users will demonstrate the management was wrong. This leads at the end to a situation where the company as a whole will be in a worse position as before.
    So managing by motivation should be the approach, as after all the power lies in motivated users, who understand the benefits of the changes and benefits for their future job.
    Management – be aware !
  • Make sure the focus and priority is on business not on IT. Sell and explain the business benefits internally all the time.
    All be aware !

To conclude:

  • The mid-market characteristics look like risks for a successful PLM implementation, if not addressed and taken seriously
  • There is significant management support and control needed to monitor, guide and sell the PLM project.
    To make sure the company benefits are targeted and not the individual users or departments demands only.
  • Implement bottom up but control and direct top-down
  • Your implementation partner should have resources with skills for both levels – so not only programmers who can do miracles, but also consultants that can explain, validate best practices based on other experiences

 

Understanding chaos – enjoy:

observationFinally I have time to continue on my sequence: “How to come to measurable PLM benefits ?” I think it is a topic where everyone talks about, but little is known in concrete figures. One of the main challenges is also “What to measure ? “. As I added to Martin’s comment on my previous post, we can measure comparable activities, like how much time and people are involved in average for an engineering change. And when a company makes the statement: “We reduced the time for an engineering change in average from 23 days to 8 days” – what does it mean ?

Does is mean people have spent less time to understand and implement correctly the change ? Probably – so there might me xxx amount of money related to this saving in time. Of course, there might be also a saving in distribution costs, assuming in the traditional approach a paper-based distribution process was used – people spending time in distribution, printing, copying etc.

Everyone experienced with Excel and formulas can make these kind of calculations (and I did it too) and often I was surprised about the huge benefits showing up in the spreadsheet. So please continue filling spreadsheets as in general the benefits will be high

In parallel a second approach should be considered. Benchmarking against similar companies and Aberdeen has published some papers in this area, (see for example: The Best Kept Secret of Top SMB Product Developers -Finding the Shortest Path to PLM Value) . Maybe less specific per activity but they offer a good secondary view of the PLM benefits, in this case viewed from the business point of view.

Back to ROI measuring – and now in the planning phase

planning The planning phase, by my definition is the phase where we have a concept and we start to analyze which activities and which resources are required to develop the concept. In a Built To Order process, the planning phase might overlap the concept phase, as the inputs from the prospect require besides to provide a solution also the need to have it done within a certain budget and timeframe.

So the most important questions related to the planning phase are:

  • How many projects we are doing are similar in approach?
    Measure: time spent in finding similar solutions / percentage reuse /classify projects
    Analyze: Can we improve by standardization
  • How often do we have to do a major change /disruption in our planning ?
    Measure: the amount of projects that have small compared to major changes (define a rule to differentiate)
    Analyze: What is the reason for the major changes
  • During execution of a project – do we know if we are on track ?
    Measure: Select an arbitrary project and make a status
    Analyze: Was this status correct looking back later ? ( a month – some months)
  • How much time and effort do we spent to understand the status of a project ?
    Measure: Select an arbitrary project and make a status
    Analyze: How much time and people were involved to get the status
  • How much time does it take to plan an engineering change ?
    Measure
    : Once an ECO (Engineering Change Order) has been approved, what does it take to plan the change
    (perhaps you already planned too as part of the ECR process- excellent) – resources and time
    Analyze: Can we improve by doing things different

Again all the above points can be addressed by PLM, either through a sales and product configurator (a configurator btw already requires a certain level of standardization or modularization of products. I will write  more on configurators and how to get there perhaps in the future. Meanwhile read this excellent white paper from the Valent Group: 7 Myths of Configurators).
Project and program management combined with template best practices, how to do execute an customer order or a new product introduction are also providing huge benefits. Every time you have the chance to do something similar, you have reduced the risk dramatically. So investing in standardization and templates is an investment in risk reduction and increased reliability

At then the measurable results will come from two sides: customer satisfaction and market share (hard to measure) and internal increased efficiency (easy to measure)which contributes to your margin or to your market share as you can follow a different price point.

status Conclusion
The keywords for the planning phase are: standardization, reuse (in the broadest context) and activities that can be monitored with low effort . This allows companies to control their margin and their risks and their health status.

And planning is import – see video below (and I hope all are still alive)

22112007178In the past year I shared with you my thoughts around PLM. Most of the post were based on discussions with customers, implementers, resellers and peers around the world. I learned a lot and will keep on learning I assume, as PLM has many aspects:

 

– the products, there are many products with the label PLM

– the concept, how do we interpret PLM per industry

– the customers, what do they want to achieve, without buzz-word

– the world, people and economic trends drive us sometime to irrational decisions

In this post I will give an overview from the 2008 posts, categorized by topic. I am looking forward to further suggestions in the comments if you are interested in more depth in certain areas. In parallel I will continue to share my experiences and provide an overview of best-practices and terminology experienced in the PLM space.

PLM concepts

Managing the MBOM is crucial for PLM

Is there a need for classification – and how should it be done ?

Is the PLM concept applicable for mid-market companies too ?

What will happen with PLM – looking towards 2050

 

PLM and ERP

PLM and ERP – the culture change, continued

Connecting PLM and ERP – part 1, part 2, part 3

 

PLM and ROI

Implementing PLM is too costly ?

Implementing PLM takes too long ?

Why implement PLM next to an ERP system ?

How is PLM different from CAD data management ?

Too busy to implement PLM ?

Economical crisis creates the opportunity for change

 

Business Process Change

PLM in SMB requires a change in thinking

The management is responsible to initiate a change towards PLM

The change in automotive/aero supply chains to more advanced partners

How will mid-market companies pick-up the benefits from implementing PLM ?

 

Experiences

European Enovia Customer Conference (ECC)

PLM in Greece – does it exist ?

Is the concept for PLM mature enough ?

Don’t expect a bottom up PLM implementation to become successful

 

Conclusion

I would like to conclude with a quote from my favorite scientist, who taught us everything is relative, however:

“We can’t solve problems by using the same kind of thinking we used when we created them.”

Looking forward to your feedback, wishes in 2009 !

8years

Jos Voskuil

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