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The problem with a TLA is that there is a limited number of combinations that make sense. And even once you have found the right meaning for a TLA, like PLM you discover so many different interpretations.
For PLM I wrote about this in my post PLM misconceptions –: PLM = PLM ?
I can imagine an (un)certain person, who wants to learn about PLM, might get confused (and should be – if you take it too serious).
At the end your company’s goal should be how to drive innovation, increase profitability and competiveness and not about how it is labeled.
As a frequent reader of my blog, you might have noticed I wrote sometimes about ALM and here a similar confusion might exist as there are three ALMs that might be considered in the context I am blogging.
Therefore this post to clarify which ALM I am dedicated to.
So first I start with the other ALMs:
ALM = Application Lifecycle Management
This is an upcoming discipline in the scope of PLM due to the fact that more and more in the product development world embedded software becomes a part of the product. And like in PLM where we want to manage the product data through its lifecycle, ALM should become a logical part of a modern PLM implementation. Currently most of the ALM applications in this context are isolated systems dealing only with the software lifecycle, see this Wiki Page
ALM = Asset Lifecycle Management (operational)
In 2009 I started to focus on (my type of) ALM, called Asset Lifecycle Management, and I discovered the same confusion as when you talk about a BOM. What BOM really means is only clear when you understand the context. Engineers will usually think of an Engineering BOM, representing product as specified by engineering (managed by PDM). Usually the rest of the organization will imagine the Manufacturing BOM, representing the product the way it will be produced (managed mostly in ERP).
The same is valid for ALM. The majority of people in a production facility, plant or managed infrastructure will consider ALM as the way to optimize the lifecycle of assets. This means optimizing the execution of the plant, when to service or replace an asset ? What types of MRO activities to perform. Sounds a lot like ERP and as it has direct measurable impact on finance, it is the area that gets most of the attention by the management.
ALM = Asset Lifecycle Management (information management)
Here we talk about the information management of assets. When you maintain your assets only in a MRO system, it is similar like in a manufacturing company when only using an ERP system. You have the data for operations, but you do not have the process in place to manage the change and quality of data. In the manufacturing world this is done in PDM and PLM system and I believe owners/operators of plant can learn from that.
I wrote a few posts about this topic, see Asset Lifecycle Management using a PLM system, PLM CM and ALM – not sexy or using a PLM system for Asset Lifecycle Management requires a vision and I am not going to rewrite them in this post. So get familiar with my thoughts if you read the first time about ALM in my blog.
What I wanted to share is that thanks to modern PLM systems, IT infrastructure/technologies and SBA it becomes achievable for owner/operators to implement an Asset Lifecycle Management vision for their asset information and I am happy to confirm that in my prospect and customer base, I see companies investing and building this ALM vision.
And why do they do this:
- Reduce maintenance time (incidental and planned) by days or weeks due to the fact that people have been working with the right and complete data. Depending on the type of operations, one week less maintenance can bring millions (power generation, high demand/high cost chemicals and more)
- Reduce the failure costs dramatically. As maintenance is often a multi-disciplinary activity errors due to miscommunication are considered as normal in this industry (10 % up and even more). It is exactly this multi-disciplinary coordination that PLM systems can bring to this world. And the more you can do in a virtual world the more you can assure you do the right thing during real maintenance activities. Here industries similar as for the previous bullet, but also industries where high-costly materials and resources are used, the impact on reducing failure costs is high.
- Improve the quality of data. Often the MRO system contains a lot of operational parameters that were entered there at a certain time by a certain person with certain skills – the fact that although I used the word certain three times, the result is uncertainty as there is no separate tracing and validation of the parameters per discipline and an uncertain person looking at the data might not discover there is an error, till it goes wrong. Here industries where a human error can be dramatic benefit the most from it (nuclear, complex chemical processes)
Conclusion: The PLM system based ALM implementations are more and more becoming reality next to the ALM operational world. After spending more then three years focused on this area, I believe we can see and learn from the first results.
Are you interested in more details or do you want to share your experience ? Please let me know and I will be happy to extend the discussion
Note: On purpose I used as much TLA’s to assure it looks like an specialist blog, but you can always follow the hyperlink to the wiki explanation, when the TLA occurs the first time.
In the past months, I have talked and working with various companies about the topic of Asset Lifecycle Management (ALM) based on a PLM system. Conceptual it is a very strong concept and so far only a few companies have implemented this approach, as PLM systems have not been used so much outside the classical engineering world.
Why using a PLM system ?
To use a PLM system for managing all asset related information ( asset parameters, inventory, documents, locations, lifecycle status) in a single system assures the owner / operator that a ‘single version of the truth’ starts to exist. See also one of my older posts about ALM to understand the details.
The beauty lies in the fact that this single version of the truth concept combines the world of as-built for operators and the world of as-defined / as-planned for preparing changes. Instead of individual silos the ALM system provides all information, of course filtered in such a way that a user only sees information related to the user’s role in the system.
The challenge for PLM vendors is to keep the implementation simple as PLM initially in its core industries was managing the complexity. Now the target is to keep it extremely simple and easy to used for the various user roles, meanwhile trying to stay away from heavy customizations to deliver the best Return on Investment.
Having a single version of the truth provides the company with a lot of benefits to enhance operations. Imagine you find information and from its status you know immediately if it is the latest version and if other versions exists. In the current owner / operator world often information is stored and duplicated in many different systems, and finding the information in one system does not mean that this is the right information. I am sure the upcoming event from IDC Manufacturing Insights will also contribute to these findings
It is clear that historically this situation has been created due to the non-intelligent interaction with the EPC contractors building or changing the plant. The EPC contractors use intelligent engineering software, like AVEVA, Bentley, Autodesk and others, but still during hand-over we provide dumb documents, paper based, tiff, PDF or some vendor specific formats which will become unreadable in the upcoming years. For long-term data security often considered the only way, as neutral standards like ISO-15926 still require additional vision and knowledge from the owner/operator to implement it.
Now back to the discussions…
In many discussions with potential customers the discussion often went into the same direction:
“How to get the management exited and motivated to invest into this vision ? The concept is excellent but applying it to our organization would lead to extra work and costs without immediate visibility of the benefits !”
This is an argument I partly discussed in one of my previous posts: PLM, CM and ALM not sexy. And this seems to be the major issue in western Europe and the US. Business is monitored and measured for the short term, maximum with a plan for the next 4 – 5 years. Nobody is rewarded for a long-term vision and when something severe happens, the current person in power will be to blame or to excuse himself.
As a Dutch inhabitant, I am still proud of what our former Dutch government decided and did in the after the flooding in 1953. The Dutch invested a lot of money and brain power into securing inhabitants behind the coast line in a project called the Delta Works. This was an example of vision instead of share holder value. After the project has been finished in the eighties there was no risk for a severe flooding anymore and the lessons learned from that time, brought the Dutch the knowledge to support other nations at risk for flooding. I am happy that in 1953 the government was not in the mood to optimize their bonus ( an unknown word at that time)
Back to Asset Lifecycle Management ….
Using a PLM system for asset lifecycle management provides the economical benefits by less errors during execution (working on the right information), less human involvement in understanding the information ( lower labor costs) and lower total cost of ownership (less systems to maintain and connect by IT).
But these benefits are in no relation with risk containment. What happens if something goes really wrong ?
If you you are a nuclear plant owner, you are in global trouble. A chemical plant owner or oil company can be in regional trouble, but they also will suffer from the damage done to their brand name globally. Other types of plant owners might come away with less, depending on the damage they potential ‘embank’
The emerging visionaries
For that reason, it is enlightening to see that some companies in Asia think different. There the management understands that they have the opportunity to build their future in a more clever way. Instead of copying the old way EPC contractors and plant owners work together, they start from a single version of the truth concept, pushing their contractors to work more integrated and clever with them. Instead of becoming boiling frogs, they are avoiding to fall into the same trap of many owners / operators in European and US based companies: “Why change the way we work, it does not seem to be so bad”
It requires a vision for the long term, something that will lead to extra benefits in the long term future: more efficient management of their assets, including risk containment and therefore being more competitive. If European and US-based companies want to be dominating in this industry they will need to show their vision too ..
Tomorrow I am attending the European Chemical Manufacturing Masters conference in Berlin, where I hope to learn and discuss this vision with the participants. I will keep you updated if i found the vision …..