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Our recent interviews this year with aPriori and SAP were with companies that had less of a focus on the traditional product design process and more of a focus on the (circular) manufacturing process. In these interviews the importance of working with connected data was discussed in a shared (digital) thread.
This time, we, Mark Reisig and Jos Voskuil, were excited to talk with Siemens, not only a well-known PLM vendor but also a manufacturer of products and, therefore, having a close understanding of what is needed and can be achieved with their software solutions.
Siemens
As Siemens is such a broad enterprise; we were happy to speak with Ryan R. Rochelle, who focuses on Sustainable Production, Sustainable Manufacturing and Sustainable Industry within Siemens . In the interview we discussed the importance of digital twins and the feedback loops between design and manufacturing. Despite some flaws in the network connection, we are happy to share an informative interview.
Enjoy listening and watching the next 33 minutes, talking with Ryan Rochelle.
You can download the images shown during the interview HERE
What I have learned
- Like all PLM vendors in this domain, Siemens talks about the importance of a circular economy and the need for digital threads and digital twins, confirming the need for all of us to invest in the digitization of the product lifecycle.
- Siemens is in a unique position as both the industrial user and software provider of its PLM suite, therefore having a unique feedback loop on the usability and applicability of its software in its industry.
- In the area of sustainability, they learn from both customers and internal customers. They are customer zero. Here, they observe shifting in engineering activities to the left” to optimize processes, supply chain and manufacturing earlier . (<<PGGA>>: which aligns with our aPriori and Makersite interviews).
- Siemens, SiGreen’s solution is an example of this unique position, being be able to track the carbon footprint of products across the supply chain.
Want to learn more
- There is the Siemens Sustainable industries website
- How the Digital Enterprise helps attain sustainability
- The Journey to a Sustainability Lighthouse awarded by the World Economic Forum
Conclusion
We have been discussing the relationship between PLM and sustainability with relevant software vendors for over two years now. As we saw initially in 2022, a few companies were exploring the possibilities.
Now, with further regulations and advanced software capabilities, companies are starting to implement new capabilities to make their product development process and products more sustainable. Siemens, as a software provider and an industrial user of its tools, is leading this journey—is it time for your company to step up, too?
Last week, I have been participating in the biannual NEM network meeting, this time hosted by Vestas in Ringkøbing (Denmark).
NEM (North European Modularization) is a network for industrial companies with a shared passion and drive for modular products and solutions.
NEM’s primary goal is to advance modular strategies by fostering collaboration, motivation, and mutual support among its diverse members.
During this two-day conference, there were approximately 80 attendees from around 15 companies, all with a serious interest and experience in modularity. The conference reminded me of the CIMdata Roadmap/PDT conferences, where most of the time a core group of experts meet to share their experiences and struggles.
The discussions are so much different compared to a generic PLM or software vendor conference where you only hear (marketing) success stories.
Modularity
When talking about modularity, many people will have Lego in mind, as with the Lego bricks, you can build all kinds of products without the need for special building blocks. In general, this is the concept of modularity.
With modularity, a company tries to reduce the amount of custom-made designs by dividing a product into modules with strict interfaces. Modularity aims to offer a wider variety of products to the customer – but configure these from a narrower assortment of modules to streamline manufacturing, sourcing and service. Modularity allows managing changes and new functionality within the modules without managing a new product.
From ETO (Engineering To Order) to BTO (Build To Order) or even CTO (Configure to Order) is a statement often heard when companies are investing in a new PLM system. The idea is that with the CTO model, you reduce the engineering costs and risks for new orders.
With modularity, you can address more variants and options without investing in additional engineering efforts.
How the PLM system supports modularity is an often-heard question. How do you manage in the best way options and variants? The main issue here is that modularity is often considered an R&D effort – R&D must build the modular architecture. An R&D-only focus is a common mistake in the field similar to PLM. Both
PLM and Modularity suffer from the framing that it is about R&D and their tools, whereas in reality, PLM and Modularity are strategies concerning all departments in an enterprise, from sales & marketing, engineering, and manufacturing to customer service.
PLM and Modularity
In 2021, I discussed the topic of Modularity with Björn Eriksson & Daniel Strandhammar, who had written during the COVID-19 pandemic their easy-to-read book: The Modular Way. In a blog post, PLM and Modularity, I discussed with Daniel the touchpoints with PLM. A little later, we had a Zoom discussion with Bjorn and Daniel, together with some of the readers of the book. You can find the info still here: The Modular Way – a follow-up discussion.
What was clear to me at that time is that, in particular, Sweden is a leading country when it comes to Modularity. Companies like Scania, Electrolux are known for their product modularity.
For me it was great to learn the Vestas modularization journey. For sure the Scandinavian region sets the tone. And in addition, there are LEGO and IKEA, also famous Scandinavian companies, but with other modularity concepts.
The exciting part of the conference was that all the significant modularity players were present. Hosted by Vestas and with a keynote speech from Leif Östling, a former CEO of Scania, all the ingredients were there for an excellent conference.
The NEM network
The conference started with Christian Eskildsen, CEO of the NEM organization, who has a long history of leading modularity at Electrolux. The NEM is not only a facilitator for modularity. They also conduct training, certification sessions, and coaching on various levels, as shown below.
Christian mentioned that there are around 400 followers on the NEM LinkedIn group. I can recommend this LinkedIn group as the group shares their activities here.
At this moment, you can find here the results of Workstream 7 – The Cost of Complexity.
Peter Greiner, NEM member, presented the details of this result during the conference on day 2. The conclusion of the workstream team was a preliminary estimate suggesting a minimum cost reduction of 2-5% in terms of the Cost Of Goods Sold (COGS) on top of traditional modularization savings. These estimates are based on real-world cases.
Understanding that the benefits are related to the COGS with a high contribution of the actual material costs, a 2 – 5 % range is significant. There is the intention to dig deeper into this topic.
Besides these workstreams, there are also other workstreams running or finished. The ones that interest me in the sustainability context are Workstream 1 Modular & Circular and Workstream 10 Modular PLM (Digital Thread).
The NEM network has an active group of members, making it an exciting network to follow and contribute as modularity is part of a sustainable future. More on this statement later.
Vestas
The main part of day one was organized by our host, Vestas. Jens Demtröder, Chief Engineer at Vestas for the Modular Turbine Architecture and NEM board member, first introduced the business scope, complexity, and later the future challenges that Vestas is dealing with.
First, wind energy is the best cost-competitive source for a green energy system, as the image shows when taking the full environmental impact into the equation. As the image below shows
From the outside, wind turbines all look the same; perhaps a difference between on-shore and off-shore? No way! There is a substantial evolution in the size and control of the wind turbine, and even more importantly, as the image shows, each country has its own regulations to certify a wind turbine. Vestas has to comply with 80+ different local regulations, and for that reason, modularity is vital to manage all the different demands efficiently.
A big challenge for the future will be the transport and installation of wind turbines.
The components become so big that they need to be assembled on-site, requiring new constraints on the structure to be solved.
As the image to the left, rotor sizes up to 250 m are expected and what about the transport of the nacelle itself?
Click on this link to get an impression.
The audience also participated in a (windy) walk through the manufacturing site to get an impression of the processes & components – an impression below.
Processes, organization and governance
Karl Axel Petursson, Senior Specialist in Architecture and Roadmap, gave insights into the processes, organization and governance needed for the modularity approach at Vestas.
The modularization efforts are always a balance between strategy and execution, where often execution wins. The focus on execution is a claim that I recognize when discussing modularity with the companies I am coaching.
Vestas also created an organization related to the functions it provides, being a follower of Conway’s law, as the image below shows:
With modularity, you will also realize that the modular architecture must rely on stable interfaces between the modules based on clear market needs.
Besides an organizational structure, often more and more a matrix organization, there are also additional roles to set up and maintain a modular approach. As the image below indicates, to integrate all the functions, there are various roles in Vestas, some specialized and some more holistic:
These roles are crucial when implementing and maintaining modularity in your organization. It is not just the job of a clever R&D team.
Just a clever R&D is a misconception I have often discovered in the field. Buying one or more tools that support modularity and then let brilliant engineers do the work. And this is a challenge. Engineers often do not like to be constrained by modular constraints when designing a new capability or feature.
For this reason Vestas has established an Organization Change Management initiative called Modular Minds to make engineers flourish in the organization.
Modular Minds
Madhuri Srinivasan Systems Engineering specialist and Hanh Le Business Transformation leader both at Vestas, presented their approach to the 2020 must-win battle for Modularisation, aiming with various means, like blogs, podcasts, etc., to educate the organization and create Modular Minds for all Vestas employees.
The team is applying the ADKAR model from Prosci to support this change. As you can see from the (clickable) image to the left, ADKAR is the abbreviation of Awareness, Desire, Knowledge, Ability and Reinforcement.
The ADKAR model focuses on driving change at the individual level and achieving organizational results. It is great to see such an approach applied to Modularity, and it would also be valuable in the domain of PLM, as I discussed with Share PLM in my network.
Scania
The 1 ½ hour keynote speech from Leif Östling supported by Karl-Johan Linghede was more of an interactive discussion with the audience than a speech. Leif took us to the origins of Scania, their collaboration in the beginning with learning the Toyota Way. – customer first, respect for people and focus on quality. And initial research and development together with Modular Management resulting in the MFD-methodology.
It led to the understanding that:
- The #1 cost driver is the amount of parts you need to manage,
- The #2 crucial point is to have standardized interfaces and keep the flexibility inside the module
The Scania way
With Ericsson, Scania yearly on partnered to work on the connected vehicle. If you are my age, you will remember connectivity at that time was not easy. The connected vehicle was the first step of what we now would call a digital twin
An interesting topic discussed was that Scania has approximately 25 interfaces at Change Level 1. This is a C-level/Executive discussion to approve potential interface changes. This level shows the commitment of the organization to keep modularity operational.
Another benefit mentioned was that the move to electrification of the vehicle was not such a significant change as in many automotive companies. Thanks to the modular structure and the well-defined interfaces, creating an electric truck was not a complete change of the truck design.
The session with Leif and Karl-Johan could have easily taken longer, giving the interesting question-and-answer dialogue with the curious audience. It was a great learning moment.
Digitization, Sustainability & Modularization
As a PLM person from the PLM Green Global Alliance, I was allowed to give a speech about the winning combination of Digitization, Sustainability and Modularization. You might have seen my PLM and Sustainability blog post recently; now, a zoom-in on the circular economy and modularity is included.
In this conference, I also focused on Modularity, when implemented based on model-based and data-driven approaches, which is a crucial component of the circular economy (image below) and the lifecycle analysis per module when defined as model-based (Digital Twin).
My entire presentation on SlideShare: Digitization, Sustainability & Modularization.
Conclusion
It was the first time I attended a conference focused on modularity purely, and I realized we are all fighting the same battle. Like the fact that PLM is a strategy and not an engineering system, modularity faces the same challenge. It is a strategy and not an R&D mission. It would be great to see modularity becoming a part of PLM conferences or Circular Economy events as there is so much to learn from each other – and we need them all.
Are you interested in the future of PLM and the meaning of Digital Threads.?
Click on the image to see the agenda and join us for 2 days of discussion & learning.
During May and June, I wrote a guest chapter for the next edition of John Stark’s book Product Lifecycle Management (Volume 2): The Devil is in the Details.
The book is considered a standard in the academic world when studying aspects of PLM.
Looking into the table of contents through the above link, it shows that understanding PLM in its full scope is broad. I wrote about it recently: PLM is Complex (and we have to accept it?), and Roger Tempest and others are still fighting to get the job as PLM Professional recognized Associate Yourself With Professional PLM.
To make the scope broader, John invited me to write a chapter about PLM and Sustainability, which is an actual topic in many organizations. As sustainability is my dedicated topic in the PLM Global Green Alliance (PGGA) core team, I was happy to accept this challenge.
This activity is challenging because writing a chapter on a current topic might make it outdated soon. For the same reason, I never wanted to write a PLM book as I wrote in my 2014 post: Did you notice PLM is changing?
The book, with the additional chapter, will be available later this year. I want to share with you in this post the topics I addressed in this chapter. Perhaps relevant for your organization or personal interests. Also, I am looking forward to learning if I missed any topics.
Introduction
The chapter starts with defining the context. PLM is considered a strategy supported by a connected IT infrastructure, and for the definition of sustainability, I refer to the relevant SDGs as described on our PGGA theme page: PLM and Sustainability
Next, I discuss two major concepts indissoluble connected with sustainability.
The Circular Economy
On a planet with limited resources and still a growing consumption of raw materials, we need to follow the concepts of the circular economy in our businesses and lives. The circular economy section addresses mainly the hardware side of the butterfly as, here, PLM practices have the most significant impact.
The circular economy requires collaboration among various stakeholders, including businesses, governments and consumers. It involves rethinking production processes and establishing new consumption patterns. Policies and regulations will push for circular economy patterns, as seen in the following paragraphs.
Systems Thinking
A significant change in bringing products to the market will be the need to change how we look at our development processes. Historically, many of these processes were linear and only focused on time to market, cost and quality. Now, we have to look into other dimensions, like environmental impact, usage and impact on the planet. As I wrote in the past Systems Thinking – a must-have skill in the 21st century?
Systems Thinking is a cognitive approach that emphasizes understanding complex problems by considering interconnections, feedback loops, and emergent properties. It provides a holistic perspective and explores multiple viewpoints.
Systems Thinking guides problem-solving and decision-making and requires you to treat a solution with a mindset of a system interacting with other systems.
Regulations
More sustainable products and services will be driven primarily by existing and upcoming regulations. In this section, I refer to the success of the CFC (ChloroFluorCarbon) emission reduction, leading to slowly fixing the hole in the Ozon layer. Current regulations like WEEE, RoHS and REACH are already relevant for many companies, and compliance with these regulations is a good exercise for more stringent regulations related to Carbon emissions and upcoming related to the Digital Product Passport.
Making regulatory compliance a part of the concept phase ensures no late changes are needed to become compliant, saving time and costs. In addition, making regulatory compliance as much as possible with a data-driven approach reduces the overhead required to prove regulatory compliance. Both topics are part of a PLM strategy.
In this context, see Lionel Grealou’s article 5 Brand Value Benefits at the Intersection of Sustainability and Product Compliance. The article has also been shared in our PGGA LinkedIn group.
Business
On the business side, the Greenhouse Gas Protocol is explained. How companies will have to report their Scope 1 and Scope 2 emissions and, ultimately, Scope 3 – see the image below for the details.
GHG reporting will support companies, investors and consumers to decide where to prioritize and put their money.
Ultimately, companies have to be profitable to survive in their business. The ESG framework is relevant in this context as it will allow investors to put their money not only based on short-term gains (as expected) but also on Environmental or Social parameters. There are a lot of discussions related to the ESG framework, as you might have read in Vincent de la Mar’s monthly newsletter, Sustainability & ESG Insights, which is also published in our PGGA group – a link below..
Besides ESG guidelines, there is also the drive by governments and consumers to push for a Product as a Service economy. Instead of owning products, consumers would pay for the usage of these products.
The concept is not new when considering lease cars, EV scooters, or streaming services like Spotify and Netflix. In the CIMdata PLM Roadmap/PDT Fall 2021 conference, we heard Kenn Webster explaining: In the future, you will own nothing & you will be happy.
Changing the business to a Product as a Service is not something done overnight. It requires repairable, upgradeable products. And business related, it requires a connected ecosystem of all stakeholders – the manufacturer, the finance company, and the operating entities.
Digital Transformation
All the subjects discussed before require real-time reporting and analysis combined with data access to compliance-related databases. More in the section related to Life Cycle Assessment. As I discussed last year in several conferences, a sustainability initiative starts with data-driven and model-based approaches during the concept phase, but when manufacturing and operating (connected) products in the field. You can read the entire story here: Sustainability and Data-Driven PLM – the Perfect Storm.
Life Cycle Analysis
Special attention is given in this chapter to Life Cycle Analysis, which seems to be a popular topic among PLM vendors. Here, they can provide tools to make a lifecycle assessment, and you can read an impression of these tools in a guest blog from Roger L. Franz titled PLM Tools to Design for Sustainability – PLM Green Global Alliance.
However, Lifecycle Analysis is not as simple. Looking at the ISO 14040 framework, which describes – having the right goals and scope in mind, allows you to do an LCA where the Product Category Rules (PCS) will enable companies to compare their products with others.
PCRs include the description of the product category, the goal of the LCA, functional units, system boundaries, cut-off criteria, allocation rules, impact categories, information on the use phase, units, calculation procedures, requirements for data quality, and other information on the lifecycle Inventory Phase.
So be aware there is more to do than installing a tool.
Digital Twin
This section describes the importance of implementing a digital twin for the design phase, allowing companies to develop, test and analyze their products and services first virtually. Trade-off studies on virtual products are much cheaper, and when they are done in a data-driven, model-based environment, it will be the most efficient environment. In my terminology, setting up such a collaboration environment might be considered a System of Engagement.
The second crucial digital twin mentioned is the digital twin from a product in operation where performance can be monitored and usage can be optimized for a minimal environmental impact. Suppose a company is able to create a feedback loop between its products in the field and its product innovation platform. In that case, it can benchmark its design models and update the product behavior for better performance.
The manufacturing digital twin is also discussed in the context of environmental impact, as choosing the right processes and resources can significantly affect scope 3 emissions.
The chapter finishes with the story of a fictive company, WePack, where we can follow the impact and implementations of the topics described in this chapter.
Conclusion
As I described in the introduction, the topic of PLM and Sustainability is relatively new and constantly evolving. What do you think? Did I miss any dimensions?
Feel free to contribute to our PLM Global Green Alliance LinkedIn group.
Looking forward to meet you here
Yes, it is not a typo. Clayton Christensen famous book written in 1995 discussed the Innovator’s Dilemma when new technologies cause great firms to fail. This was the challenge two decades ago. Existing prominent companies could become obsolete quickly as they were bypassed by new technologies.
The examples are well known. To mention a few: DEC (Digital Equipment Corporation), Kodak, and Nokia.
Why the innovation dilemma?
This decade the challenge has become different. All companies are forced to become more sustainable in the next ten years. Either pushed by global regulations or because of their customer demands. The challenge is this time different. Besides the priority of reducing greenhouse gas emissions, there is also the need to transform our society from a linear, continuous growth economy into a circular doughnut economy.
The circular economy makes the creation, the usage and the reuse of our products more complex as the challenge is to reduce the need for raw materials and avoid landfills.
The circular economy concept – the regular product lifecycle in the middle
The doughnut economy makes the values of an economy more complex as it is not only about money and growth, human and environmental factors should also be considered.
Doughnut Economics: Trying to stay within the green boundaries
To manage this complexity, I wrote SYSTEMS THINKING – a must-have skill in the 21st century, focusing on the logical part of the brain. In my follow-up post, Systems Thinking: a second thought, I looked at the human challenge. Our brain is not rational and wants to think fast to solve direct threats. Therefore, we have to overcome our old brains to make progress.
An interesting and thought-provoking was shared by Nina Dar in this discussion, sharing the video below. The 17 Sustainability Development Goals (SDGs) describe what needs to be done. However, we also need the Inner Development Goals (IDGs) and the human side to connect. Watch the movie:
Our society needs to change and innovate; however, we cannot. The Innovation Dilemma.The future is data-driven and digital.
What is clear to me is that companies developing products and services have only one way to move forward: becoming data-driven and digital.
Why data-driven and digital?
Let’s look at something companies might already practice, REACH (Registration, Evaluation, Authorization and Restriction of Chemicals). This European directive, introduced in 2007, had the aim to protect human health and protect the environment by communicating information on chemicals up and down the supply chain. This would ensure that manufacturers, importers, and their customers are aware of information relating to the health and safety of the products supplied.
The regulation is currently still suffering in execution as most of the reporting and evaluation of chemicals is done manually. Suppliers report their chemicals in documents, and companies report the total of chemicals in their summary reports. Then, finally, authorities have to go through these reports.
Where the scale of REACH is limited, the manual effort to have end-to-end reporting is relatively high. In addition, skilled workers are needed to do the job because reporting is done in a document-based manner.
Life Cycle Assessments (LCA)
Where you might think REACH is relatively simple, the real new challenges for companies are the need to perform Life Cycle Assessments for their products. In a Life Cycle Assessment. The Wiki definition of LCA says:
Life cycle assessment or LCA (also known as life cycle analysis) is a methodology for assessing environmental impacts associated with all the stages of the life cycle of a commercial product, process, or service. For instance, in the case of a manufactured product, environmental impacts are assessed from raw material extraction and processing (cradle), through the product’s manufacture, distribution and use, to the recycling or final disposal of the materials composing it (grave)
This will be a shift in the way companies need to define products. Much more thinking and analysis are required in the early design phases. Before committing to a physical solution, engineers and manufacturing engineers need to simulate and calculate the impact of their design decisions in the virtual world.
This is where the digital twin of the design and the digital twin of the manufacturing process becomes relevant. And remember: Digital Twins do not run on documents – you need connected data and various types of models to calculate and estimate the environmental impact.
LCA done in a document-based manner will make your company too slow and expensive.
I described this needed transformation in my series from last year: The road to model-based and connected PLM – nine posts exploring the technology and concept of a model-based, data-driven PLM infrastructure.
Digital Product Passport (DPP)
The European Commission has published an action plan for the circular economy, one of the most important building blocks of the European Green Deal. One of the defined measures is the gradual introduction of a Digital Product Passport (DPP). As the quality of an LCA depends on the quality and trustworthy information about products and materials, the DPP is targeting to ensure circular economy metrics become reliable.
This will be a long journey. If you want to catch a glimpse of the complexity, read this Medium article: The digital product passport and its technical implementation related to the DPP for batteries.
The innovation dilemma
Suppose you agree with my conclusion that companies need to change their current product or service development into a data-driven and model-based manner. In that case, the question will come up: where to start?
Becoming data-driven and model-based, of course, is not the business driver. However, this change is needed to be able to perform Life Cycle Assessments and comply with current and future regulations by remaining competitive.
A document-driven approach is a dead-end.
Now let’s look at the real dilemmas by comparing a startup (clean sheet / no legacy) and an existing enterprise (experience with the past/legacy). Is there a winning approach?
The Startup
Having lived in Israel – the nation where almost everyone is a startup – and working with startups afterward in the past 10 years, I always get inspired by these people’s energy in startup companies. They have a unique value proposition most of the time, and they want to be visible on the market as soon as possible.
This approach is the opposite of systems thinking. It is often a very linear process to deliver this value proposition without exploring the side effects of such an approach.
For example, the new “green” transportation hype. Many cities now have been flooded with “green” scooters and electric bikes to promote transportation as a service. The idea behind this concept is that citizens do not require to own polluting motorbikes or cars anymore, and transportation means will be shared. Therefore, the city will be cleaner and greener.
However, these “green” vehicles are often designed in the traditional linear way. Is there a repair plan or a plan to recycle the batteries? Reuse of materials used.? Most of the time, not. Please, if you have examples contradicting my observations, let me know. I like to hear good news.
When startup companies start to scale, they need experts to help them grow the company. Often these experts are seasoned people, perhaps close to retirement. They will share their experience and what they know best from the past: traditional linear thinking.
As a result, even though startup companies can start with a clean sheet, their focus on delivering the product or service blocks further thinking. Instead, the seasoned experts will drive the company towards ways of working they know from the past.
Out of curiosity: Do you know or work in a startup that has started with a data-driven and model-based vision from scratch? Please add the name of this company in the comments, and let’s learn how they did it.
The Existing company
Working in an established company is like being on board a big tanker. Changing its direction takes a clear eye on the target and navigation skills to come there. Unfortunately, most of the time, these changes take years as it is impossible to switch the PLM infrastructure and the people skills within a short time.
From the bimodal approach in 2015 to the hybrid approach for companies, inspired by this 2017 McKinsey article: Toward an integrated technology operating model, I discovered that this is probably the best approach to ensure a change will happen. In this approach – see image – the organization keeps running on its document-driven PLM infrastructure. This type of infrastructure becomes the system of record. Nothing different from what PLM currently is in most companies.
In parallel, you have to start with small groups of people who independently focus on a new product, a new service. Using the model-based approach, they work completely independently from the big enterprise in a data-driven approach. Their environment can be considered the future system of engagement.
The data-driven approach allows all disciplines to work in a connected, real-time manner. Mastering the new ways of working is usually the task of younger employees that are digital natives. These teams can be completed by experienced workers who behave as coaches. However, they will not work in the new environment; these coaches bring business knowledge to the team.
People cannot work in two modes, but organizations can. As you can see from the McKinsey chart, the digital teams will get bigger and more important for the core business over time. In parallel, when their data usage grows, more and more data integration will occur between the two operation modes. Therefore, the old PLM infrastructure can remain a System of Record and serve as a support backbone for the new systems of engagement.
The Innovation Dilemma conclusion
The upcoming ten years will push organizations to innovate their ways of working to become sustainable and competitive. As discussed before, they must learn to work in a data-driven, connected manner. Both startups and existing enterprises have challenges – they need to overcome the “thinking fast and acting slow” mindset. Do you see the change in your company?
Note: Before publishing this post, I read this interesting and complementary post from Jan Bosch Boost your digitalization: instrumentation.
It is in the air – grab it.
In several discussions and posts I wrote, I talked about systems thinking, assuming everyone has the same understanding.
For example last year with the PLM Global Green Alliance (PGGA) we had a discussion with Frank Popielas Managing Partner and Co-founder of SMS_ThinkTank™ related to sustainability. We used the term “Systems Thinking” several times assuming everyone knows the concept.
I should have known better. When using terms in your profession, you always have to verify if the others have the same meaning. Crucial when you start a PLM implementation project.
For example, several years ago, I was asked to audit a PLM implementation that got stalled because the PDM and ERP-system capabilities created a conflict. In my first interview with the PLM team, they mentioned they were quite advanced in Systems Engineering. Everyone in the core team confirmed this. However, when diving into the details of the “Systems Engineering” activities, it appeared that they were talking about (product) Configuration Management.
When working with different people, always make sure you have a common dictionary.
What is a part? What is a material? What is a Workflow, and is it different from a Business Process? And also, for Configuration Management, you often see two definitions.
One focuses on the consistency of the product’s definition, the other more on the allowed configurations of a product. So now let’s dive into Systems Thinking which is not the same as Systems Engineering.
Systems thinking – a definition
When I checked on Wiki, I found this complex definition:
Systems thinking is a way of making sense of the complexity of the world by looking at it in terms of wholes and relationships rather than by splitting it down into its part. It has been used as a way of exploring and developing effective action in complex contexts. Systems thinking draws on and contributes to systems theory and the system sciences.
A careful reader would extract from this definition that the focus for systems thinking is looking at the bigger picture, the whole, a holistic approach. Of course, when using a holistic approach, you take more relationships or possibilities into account, which broadens your thinking (or value of your solution). The opposite of Systems Thinking is to focus on a single issue or part and describe it best. Let me explain this by an example:
The BIC ballpoint
You might remember the first BIC ballpoints with the sharp cap when you are as old as me.
This image is from the time I was born. The BIC ballpoint, with the pointed cap, was one of the most popular ballpoints during my teenage years.
In primary school not allowed, as we first had to learn to write with an ink pen or fountain pen. The BIC pen at that time was designed as a product with a single purpose: enabling people to write affordable, comfortable, and fast.
With a more holistic view of the BIC pen, you might say: “What happens when children play with it?” And apparently, there were accidents with children stabbing themselves in the eye with the sharp cap.
And this was indeed the case when considering the BIC ballpoint as a system; other stakeholders and scenarios were considered.
Now the cap is flattened (safe for children). The cap’s open end is apparently there to support performing a tracheotomy when no medical equipment is available (just a sharp knife and the BIC ballpoint are needed).
Don’t try this at home for fun: Performing the Tracheotomy
I hope the example illustrates that you can look at a product differently.
First as a product with a single purpose (single stakeholder) or as a system interacting with other stakeholders (writing, safe for children, first aid support).
System Thinking, therefore, is an attitude which not natural for humans. In his famous book Thinking Fast & Slow, Daniel Kahneman explains that our evolutionary brain always wants to save energy.
Therefore our brain is pushing us to make fast intuitive decisions, not always the ones that you would make after serious thinking.
Systems Thinking costs energy for the brain.
Often we hear that companies want to reduce their costs and time spent on engineering – more efficiency.
Systems Thinking and Systems Engineering are aiming for the opposite – spend more time thinking and analyzing in the virtual world, before committing to the physical world. Fixing issues once you are in the physical world is much more costly than in the virtual world.
Click on the image to see the details.
This brings us to the relationship with Systems Engineering
Systems thinking and Systems Engineering
You could say Systems Engineering is the best example of Systems Thinking. There are various viewpoints on Systems Engineering, best characterized in these two directions (Wiki here):
- Systems engineering is an interdisciplinary field of engineering and engineering management that focuses on how to design, integrate, and manage complex systems over their life cycles. At its core, systems engineering utilizes systems thinking principles to organize this body of knowledge. The individual outcome of such efforts, an engineered system, can be defined as a combination of components that work in synergy to collectively perform a useful function. Here the focus is on managing in a proven manner complexity
- Systems engineering focuses on analyzing and eliciting customer needs and required functionality early in the development cycle, documenting requirements, then proceeding with design synthesis and system validation while considering the complete problem, the system lifecycle. This includes fully understanding all of the stakeholders involved. Here the focus is on delivering the best product for the relevant stakeholders involved, not necessarily managing the complexity of the product.
To manage complexity, we have always used models. The weather forecast is based on models, the profitability of a business is based on models, and the behavior of a product can be predicted and analyzed using models. This is Model-Based Systems Engineering MBSE), and I wrote a lot about the Model-Based approach last year. Read The road to model-based and connected PLM
When it comes to extending the support for different stakeholders, we have seen the example of the BIC ballpoint.
However, when we start to talk about sustainability, we will see that by enlarging the number of stakeholders and their importance, we observe another way of Systems Thinking.
Systems thinking and sustainability
The title of this post is related to the challenges we have with sustainability, our society and even our planet. Currently, reducing carbon emissions gets the highest priority as we see the impact on our planet. Perhaps the awareness is not the same for everyone; the richer you are, the less you might feel impacted by climate change. Still, indisputably it is happening as the IPCC is reporting.
Now let’s look at the relation between systems thinking and sustainability.
Let’s imagine I work for a tier 2 or tier 3 supplier of an OEM. This means the OEM wants a component for their solution with the highest quality and the lowest price.
In the traditional approach, the supplier will try to find the cheapest materials that match the required quality. They will look for the most inexpensive manufacturing process to build their component. Everything extra will reduce their chances of remaining the OEM contractor and profitable. The only stakeholder in this process is the OEM and potentially some existing regulations. For example, ROHS controls the usage of hazardous materials.
Next, imagine a supplier that wants to be more sustainable. They will add sustainability requirements to their component design. They start to treat their product as a system. What would be the difference between choosing material A over material B or choosing production process ABC over production Process XYZ?
If it is up to the OEM, it is only costs, quality and compliance. Suppose the supplier will select an alternative material that has less impact on the environment. For example, recycling or needing less energy (carbon emissions) is easier to produce. In that case, this option might be more expensive. It is up to the OEM to decide if they accept this higher cost price to be more sustainable with their products.
To understand the sustainability of a product, we need to dive into a full Life Cycle Assessment (LCA). LCA is at the heart of PLM.
When a product or component is designed, the LCA will give you the information related to the impact of your product, assuming you have the accurate data to make the assessment. This is currently one of the major areas to focus on when it comes to sustainability – how can we measure the environmental impact of each part through its whole lifecycle.
With sustainability, the needs are no longer defined by the OEM. Other stakeholders, like authorities and consumers, will also have an impact. Realistically, we will see that mainly regulations will be the biggest driver towards sustainability as consumers still want the lowest price.
Currently, we see this behavior with the rising energy prices. Unfortunately, people complain about the price instead of realizing the price has always been too low. Changing behavior (energy consumption) might be the best path for the future, but that is more difficult than complaining.
Systems Thinking and the Circular Economy
Finally, I want to mention one topic closely related to Systems Thinking and Sustainability: the Circular Economy. The Circular Economy is well explained by the Ellen McArthur Foundation. Follow the link and get educated as the Circular Economy is about a system. A system that tries to minimize the leakage of resources and the need for new raw materials. Each loop is a process to consider.
With the PLM Global Green Alliance, we discussed the circular economy together with Darren West from SAP in our session: PLM and Sustainability: talking with SAP. I hope and trust we will learn more about companies to follow the principle of a circular economy.
Want to learn more?
There is so much more to say about Systems Thinking in general, and I will come back to this topic in a future post. Meanwhile, I recommend this post for all of you who want to learn more about systems thinking and sustainability: Systems Thinking can help build a sustainable world: A Beginning Conversation from the MAHB (Millennium Alliance for Humanity and the Biosphere). There is so much to learn and discuss if you are actively looking for it.
Conclusions
Systems Thinking is needed to solve the issues in a complex society. It is an attitude, not a new approach. Systems Thinking helps to manage a complex system, it helps to address sustainability, and it helps fight against populism. Simple answers do not exist – looking to the bigger picture, using systems thinking will make you better informed wherever you are on this limited planet
War is a place where young people who don’t know each other, and don’t hate each other, kill each other, by the decision of old people who know each other, and hate each other, but don’t kill each other…”
Sustainability has been already a topic on my agenda for many years. So when Rich McFall asked me to start the PLM Global Green Alliance (PGGA) in 2018, I supported that initiative. You can read more about my PLM and Sustainability ideas in this post here.
I have been lecturing about the relation between PLM and Sustainability last year. In 2018, the PGGA was a niche alliance trying to find people who would like to work and share PLM-related practices with others for a greener and sustainable planet.
Thanks to, or actually due to, the pandemic, climate disasters and the return of the US supporting the Paris Climate agreements, it became clear companies need to act. And preferably as soon as possible, which led to sustainability activities in many companies.
Also, the main PLM vendors started to publish their support and vision for a sustainable future, the area where we believe the PGGA can contribute in spreading the practices and experiences.
For that reason, the PGGA is aiming this year to have a series of discussions with the main PLM Vendors and their sustainability programs.
SAP
This time we are happy to publish an interview with Darren West from SAP. Darren West is the product management lead for SAP’s Circular Economy solutions. His role is to work with customers, sales and pre-sales colleagues, partners, solutions teams and product owners to expand existing and build new sustainability products, particularly those impacting Circular Economy topics.
We are glad to speak with Darren, as we believe sustainability and the circular economy go hand in hand and it requires systems thinking. We believe SAP, strong in managing materials and manufacturing processes, should be a leader in providing insights in ESG reporting. Helping companies to improve their environmental impact of products and production processes as they have the data.
Have a look at this 34 minutes interview and discussion with Darren West
The slides shown in this recording can be found here: Circular Economy -SAP for PLM Green Alliance
What we have learned
The interview showed that SAP is actively working on a sustainable future. Both by acting by themselves, but even more important, by helping their customers to change to more sustainable designs and production methods. There is still a way to go and we do not have too much time to sit back. The power of the current SAP Responsible Design and Production module is that it allows companies to understand their environmental impact and improve where possible. This is step 1 in my opinion to find a way to create sustainable products and business models.
The second, more general observation, is that we need to make our full product lifecycle management digital and connected. Data-driven is the only way to have efficient processes to estimate and calculate our environmental impact – my favorite From Coordinated to Connected topic.
Want to learn more?
In the context of this recording, Daren shared the following links for those of you who got inspired by the discussion (in alphabetical order):
- Catena-X, the german automotive alliance for secure and standardized data exchange
- Circularity Gap Report – a status where we are in our circularity targets
- Ellen MacArthur Foundation – all you want to learn about the circular economy
- Material Economics – Circular Economy and Climate study -explores the opportunities for the four largest materials in terms of emissions (steel, plastics, aluminum, and cement) and two large use segments for these materials (passenger cars and buildings).
- PLM Global Green Alliance – the place where Climate Change & Sustainability are discussed in the context of PLM
- SAP Circular Economy offerings and information
- SystemIQ – the place to discuss systems change/systems thinking
- World Business Council for Sustainable Development (WBCSD) – their vision and more
- World Economic Forum Global Plastic Action Partnership (GPAP) – a plastic sustainable economy
- World Wildlife Fund (WFF) about plastic pollution and plastic usage
Conclusion
This was a motivating session to see PLM-related vendors are taking action. Next time, you will learn more from the design side when we talk with Autodesk about their sustainability program.
Unfortunately the day after this motivating session we were shocked by the invasion of Ukraine by Russia. So I am in a mixed mood, as having friends in both countries makes me realize that one dictator can kill people and hope.
Listen to president Zelensky’s speech to the Russian people and get inspired to act against any brainwashing or dictatorship. To my friends and readers, wherever you are, stay strong, informed and human.
This Friday, February 26th, we had a PLM Green Global Alliance (PGGA) core team meeting to discuss our current status and next steps for 2021. If you are a PGGA member, you joined us because of the PLM Green Global Alliance LinkedIn group. The LinkedIn group is currently our primary channel for social interaction with the outside world.
Meanwhile, in the background, Rich McFall has been working on structuring the PLM Green Alliance website, which you can find here.
The PLM Green Alliance website is the place where we consolidate information and will experiment with forum discussions. LinkedIn is not the place to serve as an archive for information. Neither is LinkedIn a place for discussion on sensitive topics. Viewpoints on LinkedIn might even damage your current or future career if you have a controversial opinion. More about the forum discussions soon.
The PLM Green Alliance website
Therefore, the PLM Green Alliance website will be the place where interested parties can obtain information and active members can participate in forum discussions.
As a reminder, all our actions are related to PLM and PLM-related technologies – a niche environment bringing PLM-related skills and a Green and Sustainable society together.
Our actions are driven by a personal interest to contribute. With the limited time and means, we are aware of the differences with more prominent and professional organizations addressing a much broader scope and audience.
What makes us unique is the focus on PLM and PLM-related practices/technologies.
The PLM Green Themes
Although the website is still under development, our intentions become visible through the home page header. I want to zoom in on the area where we are currently focusing, the PLM Green Themes.
We decided on five PLM Green Themes, with each of them having their dedicated moderation and focus. Although the themes can overlap, they will help us to specialize and dive deeper into specific topics.
PLM and Climate Change
You might argue PLM and its related technologies do not directly impact activities related to climate change. However, as the moderators of this theme group, Klaus Brettschneider, and Richard McFall state:
The goal of this PLM Green discussion forum and working group on Climate Change is to promote activities to understand, analyze and reduce human-generated greenhouse gas (GHG) emissions through PLM-enabling technologies. We hope to help to answer the question of what the role and value of PLM technologies is in addressing the most critical challenge facing humankind this century, climate change.
And although there are still individuals with other opinions, the group will focus on the targeted outcome: reducing greenhouse gasses in the atmosphere. What are the types of innovations that make this possible? Find interesting posts here and start contributing.
PLM and Sustainability
This theme will be moderated by me, Jos Voskuil. We are still looking for one or more volunteers to extend our capabilities here.
The topic of sustainability is again broad, as you can read on the Sustainability theme page.
To be more precise, the page states:
Specific topics we wish to discuss further in this forum include how PLM can be used to:
- Make products and processes more efficient and greener.
- Understand and measure the impact on the carbon footprint of design decisions and production processes, along with changes to them.
- Develop, distribute, and use new sources of renewable green energy.
- Design products and their lifecycles to be sustainable.
- Recycle, reuse, or repurpose assets, materials, and natural resources.
- Enhance the resiliency and Sustainability of infrastructures, communities, and economies.
In my early 2021 survey asked participants their viewpoint on PLM and Sustainability. As you can see from the scores, the majority of us are currently observing what is happening.
One of the interesting “other” responses I highlighted here: “I am not sure if you mean real sustainability or just greenwashing.”
Good point. Greenwashing is needed when you know you have something to fix/hide. We are not fixing or hiding; we will discuss and share information and probably dismantle greenwashing attempts.
PLM and Green Energy
Green energy is an important topic on its own as many of the issues related to a green and sustainable society are dealing with the transition from limited fossil energy sources to a sustainable energy model. The moderator of this theme group, Bjorn Fidjeland, is well known for his skills and coaching on PLM in the context of Plant Lifecycle Management through his PLMpartner website.
Of course, we are looking for an additional moderator to support Bjorn, so feel free to contact Bjorn through the website if you can and want to contribute. The theme group objectives are:
…. to share experiences, examples, and best practices in a collaborative mode to promote discussion, learning, and understanding with respect to the mentioned focus areas. We also plan to publish our own “industry heads up” news, articles and case studies illustrating all that is happening in the global race towards “going green” and a low-carbon economy.
PLM and a Circular Economy
As the Circular Economy is itself an innovation, it provides an opportunity to innovate business models and reimagine how we consider something to be a product, a service, or a product as a service. Similarly, a more circular way of thinking requires different expectations when it comes to Information Technology systems, including PLM, that support the enablement of these new business models and the execution of their commercial strategies.
This theme group is currently moderated by a real passionate follower of the Circular Economy, Hannes Lindfred, and also here we are looking to another volunteer.
A year ago, I saw Hannes Lindfred presentation at the TECHNIA PLM Innovation Forum and wrote about his lecture as one of the highlights from the first day.
See my blog post: The Weekend after the PLM Innovation Forum, where I mention his session in the Business drivers for Sustainable Manufacturing paragraph.
The circular economy framework nicely aligns with concepts like “Product as a Service” or Outcome-based services. The original manufacturer becomes responsible for the full lifecycle of their products. A theme group, I expect we can make a lot of progress through sharing.
Accordingly, the main objective within our theme discussion group is to provide a support network for PLM professionals who seek to overcome the legacy linear economy mindset that may be systemic in their jobs, products, employers, or industries. We hope to incite the development and use of road maps for employing both existing and new PLM technologies to implement Circular Economy principles and best practices.
PLM and Industry 4.0
A topic that is closely related to PLM is Industry 4.0. At first glance, Industry 4.0 is an initiative to manufacture products smarter, more flexible, more automated, more modular by using new technologies and practices, all with the goal for (initially German) companies to become more competitive.
We are pleased that the PLM and Industry 4.0 theme group’s moderator is Lionel Grealou, quite active in the area of knowledge sharing related to PLM. A second moderator would be more than welcome too for this theme.
Recently Lionel published this interesting article on engineering.com: Exploring the Intersection of PLM and Industry 4.0. In this article, Lionel touches briefly on the potential contribution of Industry 4.0 towards a circular economy, new business models, and waste reduction, thanks to the interaction of PLM and Industry 4.0. There is a lot to explore, as Lionel states on the theme group introduction page:
This PLM Green theme group’s plan will explore the “intersection” of how PLM strategies and technologies enable the vision of Industry 4.0 for a more sustainable circular economy. In doing so, we plan to investigate the following questions concerning their green value:
- How do data and product connectivity contribute to feeding smart factories and enhancing the product lifecycle practice?
- How to improve feedback loops and data integration upstream-downstream of new product development to contribute positively to the circular economy?
- How to drive downstream waste reduction by improving data traceability and accessibility with better product analytics throughout its lifecycle?
- How to link more tightly manufacturing planning and execution?
- How to more robustly connect and integrate engineering, manufacturing, and service/maintenance process operations?
- How to reduce time to market, with both product development and production cost optimization, integrating co-creation from the design office to the shop floor?
- How to align the digital and the physical worlds, delivering more customer-centric products enabled by fully horizontally-integrated PLM strategies, taking an ecosystem approach to collaboration, leveraging more agile and continual release processes?
- How to reduce pre-launch costs and generate downstream manufacturing improvements?
Much more to do.
As you can see, the PLM Green Global Alliance is transforming slowly, as we are not marketing people, web designers, or a sponsored organization. We rely on our networks and your inputs to reach the next level of interaction. The majority of the PLM Themes need a second moderator to keep the workload balanced.
Do you want to contribute?
In the core team meeting, we also discussed improving ways to make the PLM Green Alliance more interactive, shifting and balancing the LinkedIn group’s activities and the persistent PLM Green Alliance website.
Conclusion
As a person, I cannot do big things for our future society; however, I can do small things. And if we all make sure our “small things” are directed to the same outcome, we achieve big things without a revolution. Be part of the active PLM Global Green Alliance with your small things.
In my previous post, I shared my observations from the past 10 years related to PLM. It was about globalization and digitization becoming part of our daily business. In the domain of PLM, the coordinated approach has become the most common practice.
Now let’s look at the challenges for the upcoming decade, as to my opinion, the next decade is going to be decisive for people, companies and even our current ways of living. So let’s start with the challenges from easy to difficult
Challenge 1: Connected PLM
Implementing an end-to-end digital strategy, including PLM, is probably business-wise the biggest challenge. I described the future vision for PLM to enable the digital twin –How PLM, ALM, and BIM converge thanks to the digital twin.
Initially, we will implement a digital twin for capital-intensive assets, like satellites, airplanes, turbines, buildings, plants, and even our own Earth – the most valuable asset we have. To have an efficient digital continuity of information, information needs to be stored in connected models with shared parameters. Any conversion from format A to format B will block the actual data to be used in another context – therefore, standards are crucial. When I described the connected enterprise, this is the ultimate goal to be reached in 10 (or more) years. It will be data-driven and model-based
Getting to connected PLM will not be the next step in evolution. It will be disruptive for organizations to maintain and optimize the past (coordinated) and meanwhile develop and learn the future (connected). Have a look at my presentation at PLM Roadmap PDT conference to understand the dual approach needed to maintain “old” PLM and work on the future.
Interesting also my blog buddy Oleg Shilovitsky looked back on the past decade (here) and looked forward to 2030 (here). Oleg looks at these topics from a different perspective; however, I think we agree on the future quoting his conclusion:
PLM 2030 is a giant online environment connecting people, companies, and services together in a big network. It might sound like a super dream. But let me give you an idea of why I think it is possible. We live in a world of connected information today.
Challenge 2: Generation change
At this moment, large organizations are mostly organized and managed by hierarchical silos, e.g., the marketing department, the R&D department, Manufacturing, Service, Customer Relations, and potentially more.
Each of these silos has its P&L (Profit & Loss) targets and is optimizing itself accordingly. Depending on the size of the company, there will be various layers of middle management. Your level in the organization depends most of the time on your years of experience and visibility.
The result of this type of organization is the lack of “horizontal flow” crucial for a connected enterprise. Besides, the top of the organization is currently full of people educated and thinking linear/analog, not fully understanding the full impact of digital transformation for their organization. So when will the change start?
In particular, in modern manufacturing organizations, the middle management needs to transform and dissolve as empowered multidisciplinary teams will do the job. I wrote about this challenge last year: The Middle Management dilemma. And as mentioned by several others – It will be: Transform or Die for traditionally managed companies.
The good news is that the old generation is retiring in the upcoming decade, creating space for digital natives. To make it a smooth transition, the experts currently working in the silos will be missed for their experience – they should start coaching the young generation now.
Challenge 3: Sustainability of the planet.
The biggest challenge for the upcoming decade will be adapting our lifestyles/products to create a sustainable planet for the future. While mainly the US and Western Europe have been building a society based on unlimited growth, the effect of this lifestyle has become visible to the world. We consume with the only limit of money and create waste and landfill (plastics and more) form which the earth will not recover if we continue in this way. When I say “we,” I mean the group of fortunate people that grew up in a wealthy society. If you want to discover how blessed you are (or not), just have a look at the global rich list to determine your position.
Now thanks to globalization, other countries start to develop their economies too and become wealthy enough to replicate the US/European lifestyle. We are overconsuming the natural resources this earth has, and we drop them as waste – preferably not in our backyard but either in the ocean or at fewer wealth countries.
We have to start thinking circular and PLM can play a role in this. From linear to circular.
In my blog post related to PLM Roadmap/PDT Europe – day 1, I described Graham Aid’s (Ragn-Sells) session:
Enabling the Circular Economy for Long Term Prosperity.
He mentioned several examples where traditional thinking just leads to more waste, instead of starting from the beginning with a sustainable model to bring products to the market.
Combined with our lifestyle, there is a debate on how the carbon dioxide we produce influences the climate and the atmosphere. I am not a scientist, but I believe in science and not in conspiracies. So there is a problem. In 1970 when scientists discovered the effect of CFK on the Ozone-layer of the atmosphere, we ultimately “fixed” the issue. That time without social media we still trusted scientists – read more about it here: The Ozone hole
I believe mankind will be intelligent enough to “fix” the upcoming climate issues if we trust in science and act based on science. If we depend on politicians and lobbyists, we will see crazy measures that make no sense, for example, the concept of “biofuel.” We need to use our scientific brains to address sustainability for the future of our (single) earth.
Therefore, together with Rich McFall (the initiator), Oleg Shilovitsky, and Bjorn Fidjeland (PLM-peers), we launched the PLM Green Alliance, where we will try to focus on sharing ideas, discussion related to PLM and PLM-related technologies to create a network of innovative companies/ideas. We are in the early stages of this initiative and are looking for ways to make it an active alliance. Insights, stories, and support are welcome. More to come this year (and decade).
Challenge 4: The Human brain
The biggest challenge for the upcoming decade will be the human brain. Even though we believe we are rational, it is mainly our primitive brain that drives our decisions. Thinking Fast and Slow from Daniel Kahneman is a must-read in this area. Or Predictably Irrational: The Hidden Forces that shape our decisions. Note: these books are “old” books from years ago. However, due to globalization and social connectivity, they have become actual.
Our brain does not like to waste energy. If we see the information that confirms our way of thinking, we do not look further. Social media like Facebook are using their algorithms to help you to “discover” even more information that you like. Social media do not care about facts; they care about clicks for advertisers. Of course, controversial headers or pictures get the right attention. Facts are no longer relevant, and we will see this phenomenon probably this year again in the US presidential elections.
The challenge for implementing PLM and acting against human-influenced Climate Change is that we have to use our “thinking slow” mode combined with a general trust in science. I recommend reading Enlightenment now from Steven Pinker. I respect Steven Pinker for the many books I have read from him in the past. Enlightenment Now is perhaps a challenging book to complete. However, it illustrates that a lot of the pessimistic thinking of our time has no fundamental grounds. As a global society, we have been making a lot of progress in the past century. You would not go back to the past anymore.
Back to PLM.
PLM is not a “wonder tool/concept,” and its success is mainly depending on a long-term vision, organizational change, culture, and then the tools. It is not a surprise that it is hard for our brains to decide on a roadmap for PLM. In 2015 I wrote about the similarity of PLM and acting against Climate Change – read it here: PLM and Global Warming
In the upcoming PI PLMx London conference, I will lead a Think Tank session related to Getting PLM on the Executive’s agenda. Getting PLM on an executive agenda is about connecting to the brain and not about a hypothetical business case only. Even at exec level, decisions are made by “gut feeling” – the way the human brain decides. See you in London or more about this topic in a month.
Conclusion
The next decade will have enormous challenges – more than in the past decades. These challenges are caused by our lifestyles AND the effects of digitization. Understanding and realizing our biases caused by our brains is crucial. There is no black and white truth (single version of the truth) in our complex society.
I encourage you to keep the dialogue open and to avoid to live in a silo.
Three weeks ago there was the Product Innovation conference in Düsseldorf. In my earlier post (here) I described what I experienced during this event. Now, after all the information is somehow digested, here a more high-level post, describing the visible change in business and how it relates to PLM. Trying to describe this change in non-academic wording but in images. Therefore, I described the upcoming change in the title: from linear to circular and fast.
Let me explain this image step by step
In the middle of the previous century, we were thinking linear in education and in business. Everything had a predictable path and manufacturing companies were pushing their products to the market. First local, later in time, more global. Still the delivery process was pretty linear:
This linear approach is reflected in how organizations are structured, how they are aligned to the different steps of the product development and manufacturing process. Below a slide I used at the end of the nineties to describe the situation and the pain; lack of visibility what happens overall.
It is discouraging to see that this situation still exists in many companies.
At the end of the nineties, early 2000, PLM was introduced, conceptually managing the whole lifecycle. In reality, it was mainly a more tight connection between design and manufacturing preparation, pushing data into ERP. The main purpose was managing the collaboration between different design disciplines and dispersed teams.
Jim Brown (Tech-Clarity) wrote at that time a white paper, which is still valid for many businesses, describing the complementary roles of PLM and ERP. See the picture below:
Jim introduced the circle and the arrow. PLM: a circle with iterations, interacting with ERP: the arrow for execution. Here visual it became already clear an arrow does not have the same behavior as a circle. The 100 % linearity in business was gone.
Let´s have a closer look at the PLM circle
This is how PLM is deployed in most organizations:
Due to the implementation of siloed systems for PDM, ERP, SCM and more, the flow of information is disconnected when moving from the design domain to the execution domain.
Information is pushed in the ERP system as disconnected information, no longer managed and connected to its design intent.
Next, the ERP system is most of the time not well-equipped for managing after sales and services content. Another disconnect comes up.
Yes, spare parts could be ordered through ERP, but issues appearing at the customer base are not stored in ERP, often stored in a separate system again (if stored beyond email).
The result is that when working in the concept phase, there is no information available for R&D to have a good understanding of how the market or customers work with their product. So how good will it be? Check in your company how well your R&D is connected with the field?
And then the change started …
This could have stayed reality for a long time if there were not a huge business change upcoming. The world becomes digital and connected. As a result, local inefficiencies or regional underperformance will be replaced by better-performing companies. The Darwin principle. And most likely the better performing companies are coming from the emerging markets as there they do not suffer from the historical processes and “knowledge of the past”. They can step into the digital world much faster.
In parallel with these fast growing emerging markets, we discovered that we have to reconsider the ways we use our natural resources to guarantee a future for next generations. Instead of spilling resources to deliver our products, there is a need to reuse materials and resources, introducing a new circle: the circular economy.
The circular economy can have an impact on how companies bring products to the market. Instead of buying products (CAPEX) more and more organizations (and modern people) start using products or services in a rental model (OPEX). No capital investment anymore, pay as you go for usage or capacity.
This, however, has an impact how traditional companies are organized – you need to be connected to your customers or you are out of business – a commodity.
The digital and connected world can have a huge impact on the products or services available in the near future. You are probably familiar with the buzz around “The Internet of Things” or “Smart and Connected”.
No longer are products depending on mechanical behavior only, more and more products are relying on electrical components with adaptive behavior through software. Devices that connect with their environment report back information to the manufacturer. This allows companies to understand what happens with their products in the field and how to react on that.
Remember the first PLM circle?
Now we can create continuity of data !
Combine the circular economy, the digital and connected world and you will discover everything can go much faster. A crucial inhibitor is how companies can reorganize themselves around this faster changing, circular approach. Companies need to understand and react to market trends in the fastest and adequate way. The future will be probably about lower volumes of the same products, higher variability towards the market and most likely more and more combining products with services (the Experience Model). This requires a flexible organization and most likely a new business model which will differ from the sequential, hierarchical organizations that we know at this moment.
The future business model ?
The flexibility in products and services will more and more come from embedded software or supported by software services. Software services will be more and more cloud based, to avoid IT-complexity and give scalability.
Software development and integration with products and services are already a challenge for classical mechanical companies. They are struggling to transform their mechanical-oriented design process towards support for software. In the long-term, the software design process could become the primary process, which would mean a change from (sequential – streamlined) lean towards (iterative – SCRUM) agile.
Once again, we see the linear process becoming challenged by the circular iterations.
This might be the end of lean organizations, potentially having to mix with agile conepts..
If it was a coincidence or not, I cannot judge, however during the PI Conference I learned about W.L. Gore & Associates, with their unique business model supporting this more dynamic future. No need to have a massive organization re-org to align the business, as the business is all the time aligning itself through its employees.
Last weekend, I discovered Semco Partners in the newspaper and I am sure there are more companies organizing themselves to become reactive instead of linear – for sure in high-tech world.
Conclusion:
Linearity is disappearing in business, it is all about reactive, multidisciplinary teams within organizations in order to support customers and their fast changing demands.
Fast reactions need new business organizations models (flexible, non-hierarchical) and new IT-support models (business information platforms – no longer PLM/ERP system thinking)
What do you think ? The end of linear ?
I have talked enough about platforms recently. Still if you want to read more about it:
Cimdata: Business strategy and platformization position paper
Engineering.com: Prod. Innovation Platform PlugnPlay in next generation PLM
Gartner: Product Innovation Platforms
VirtualDutchman: Platform, Backbone, Service Bus or BI
Shaping the PLM platform of the Future
In this post my observations from the PDT 2014 Europe conference which was hosted in the Microsoft Conference center in Paris and organized by Eurostep and CIMdata.
It was the first time I attended this event. I was positively surprised about the audience and content. Where other PLM conferences were often more focusing on current business issues, here a smaller audience (130 persons) was looking into more details around the future of PLM. Themes like PLM platforms, the Circular Economy, Open Standards and longevity of data were presented and discussed here.
The emergence of the PLM platform
Pieter Bilello from CIMdata kicked off with his presentation: The emergence of the PLM platform. Peter explained we have to rethink our PLM strategy for two main reasons:
1. The product lifecycle will become more and more circular due to changing business models and in parallel the different usage/availability of materials will have an impact how we design and deliver products
2. The change towards digital platforms at the heart of our economy (The Digital Revolution as I wrote about also in previous posts) will impact organizations dramatically.
Can current processes and tools support today’s complexity. And what about tomorrow? According to a CIMdata survey there is a clear difference in profit and performance between leaders and followers, and the gap is increasing faster. “Can you afford yourself to be a follower ?” is a question companies should ask themselves.
Rethinking PLM platform does not bring the 2-3 % efficiency benefit but can bring benefits from 20 % and more.
Peter sees a federated platform as a must for companies to survive. I in particular likes his statement:
The new business platform paradigm is one in which solutions from multiple providers must be seamlessly deployed using a resilient architecture that can withstand rapid changes in business functions and delivery modalities
Industry voices on the Future PLM platform
Auto
Steven Vetterman from ProSTEP talked about PLM in the automotive industry. Steven started describing the change in the automotive industry, by quoting Heraclitus Τα πάντα ρεί – the only constant is change. Steven described two major changes in the automotive industry:
1. The effect of globalization, technology and laws & ecology
2. The change of the role of IT and the impact of culture & collaboration
Interesting observation is that the preferred automotive market will shift to the BRIC countries. In 2050 more than 50 % of the world population (estimate almost 10 billion people at that time) will be living in Asia, 25 percent in Africa. Europe and Japan are aging. They will not invest in new cars.
For Steven, it was clear that current automotive companies are not yet organized to support and integrate modern technologies (systems engineering / electrical / software) beyond mechanical designs. Neither are they open for a true global collaboration between all players in the industry. Some of the big automotive companies are still struggling with their rigid PLM implementation. There is a need for open PLM, not driven from a single PLM system, but based on a federated environment of information.
Aero
Yves Baudier spoke on behalf of the aerospace industry about the standardization effort at their Strategic Standardization Group around Airbus and some of its strategic suppliers, like Thales, Safran, BAE systems and more. If you look at the ASD Radar, you might get a feeling for the complexity of standards that exist and are relevant for the Airbus group.
It is a complex network of evolving standard all providing (future) benefits in some domains. Yves was talking about the through Lifecycle support which is striving for data creation once and reuse many times during the lifecycle. The conclusion from Yves, like all the previous speakers is that: The PLM Platform of the Future will be federative, and standards will enable PLM Interoperability
Energy and Marine
Shefali Arora from Wärtsilä spoke on behalf of the energy and marine sector and gave an overview of the current trends in their business and the role of PLM in Wärtsilä. With PLM, Wärtsilä wants to capitalize on its knowledge, drive costs down and above all improve business agility. As the future is in flexibility. Shefali gave an overview of their PLM roadmap covering the aspects of PDM (with Teamcenter), ERP (SAP) and a PLM backbone (Share-A-space). The PLM backbone providing connectivity of data between all lifecycle stages and external partners (customer / suppliers) based on the PLCS standard. Again another session demonstrating the future of PLM is in an open and federated environment
Intermediate conclusion:
The future PLM platform is a federated platform which adheres to standards provides openness of interfaces that permit the platform to be reliable over multiple upgrade cycles and being able to integrate third-parties (Peter Bilello)
Systems Engineering
The afternoon session I followed the Systems Engineering track. Peter Bilello gave an overview of Model-Based Systems engineering and illustrated based on a CIMdata survey that even though many companies have a systems engineering strategy in place it is not applied consistently. And indeed several companies I have been dealing with recently expressed their desire to integrate systems engineering into their overall product development strategy. Often this approach is confused by believing requirements management and product development equal systems engineering. Still a way to go.
Dieter Scheithauer presented his vision that Systems Engineering should be a part of PLM, and he gave a very decent, academic overview how all is related. Important for companies that want to go into that direction, you need to understand where you aiming at. I liked his comparison of a system product structure and a physical product structure, helping companies to grab the difference between a virtual, system view and a physical product view:
More Industry voices
Construction industry
The afternoon session started with Christophe Castaing, explaining BIM (Building Information Modeling) and the typical characteristics of the construction industry. Although many construction companies focus on the construction phase, for 100 pieces of information/exchange to be managed during the full life cycle only 5 will be managed during the initial design phase (BIM), 20 will be managed during the construction phase (BAM) and finally 75 will be managed during the operation phase (BOOM). I wrote about PLM and BIM last year: Will 2014 become the year the construction industry will discover PLM?
Christophe presented the themes from the French MINnD project, where the aim is starting from an Information Model to come to a platform, supporting and integrated with the particular civil and construction standards, like IFC. CityGml but also PLCS standard (isostep ISO 10303-239
Consumer Products
Amir Rashid described the need for PLM in the consumer product markets stating the circular economy as one of the main drivers. Especially in consumer markets, product waste can be extremely high due to the short lifetime of the product and everything is scrapped to land waste afterward. Interesting quote from Amir: Sustainability’s goal is to create possibilities not to limit options. He illustrated how Xerox already has sustainability as part of their product development since 1984. The diagram below demonstrates how the circular economy can impact all business today when well-orchestrated.
Marc Halpern closed the tracks with his presentation around Product Innovation Platforms, describing how Product Design and PLM might evolve in the upcoming digital era. Gartner believes that future PLM platforms will provide insight (understand and analyze Big Data), Adaptability (flexible to integrate and maintain through an open service oriented architecture), promoting reuse (identifying similarity based on metadata and geometry), discovery (the integration of search analysis and simulation) and finally community (using the social paradigm).
If you look to current PLM systems, most of them are far from this definition, and if you support Gartner’s vision, there is still a lot of work for PLM vendor to do.
Interesting Marc also identified five significant risks that could delay or prevent from implementing this vision:
- inadequate openness (pushing back open collaboration)
- incomplete standards (blocking implementation of openness)
- uncertain cloud performance (the future is in cloud services)
- the steep learning curve (it is a big mind shift for companies)
- Cyber-terrorism (where is your data safe?)
After Marc´s session there was an interesting panel discussion with some the speakers from that day, briefly answering discussing questions from the audience. As the presentations have been fairly technical, it was logical that the first question that came up was: What about change management?
A topic that could fill the rest of the week but the PDT dinner was waiting – a good place to network and digest the day.
DAY 2
Day 2 started with two interesting topics. The first presentation was a joined presentation from Max Fouache (IBM) and Jean-Bernard Hentz (Airbus – CAD/CAM/PDM R&T and IT Backbones). The topic was about the obsolescence of information systems: Hardware and PLM applications. As in the aerospace industry some data needs to be available for 75 years. You can imagine that during 75 years a lot can change to hardware and software systems. At Airbus, there are currently 2500 applications, provided by approximate 600 suppliers that need to be maintained. IBM and Airbus presented a Proof of Concept done with virtualization of different platforms supporting CATIA V4/V5 using Linux, Windows XP, W7, W8 which is just a small part of all the data.
The conclusion from this session was:
To benefit from PLM of the future, the PLM of the past has to be managed. Migration is not the only answer. Look for solutions that exist to mitigate risks and reduce costs of PLM Obsolescence. Usage and compliance to Standards is crucial.
Standards
Next Howard Mason, Corporate Information Standards Manager took us on a nice journey through the history of standards developed in his business. I loved his statement: Interoperability is a right, not a privilege
In the systems engineering track Kent Freeland talked about Nuclear Knowledge Management and CM in Systems Engineering. As this is one of my favorite domains, we had a good discussion on the need for pro-active Knowledge Management, which somehow implies a CM approach through the whole lifecycle of a plant. Knowledge management is not equal to store information in a central place. It is about building and providing data in context that it can be used.
Ontology for systems engineering
Leo van Ruijven provided a session for insiders: An ontology for Systems Engineering based on ISO 15926-11. His simplified approach compared to the ISO 15288 lead to several discussion between supporters and opponents during lunch time.
Master Data Management
After lunch time Marc Halpern gave his perspective on Master Data Management, a new buzz-word or discipline need to orchestrate enterprise collaboration.
Based on the type of information companies want to manage in relation to each other supported by various applications (PLM, ERP, MES, MRO, …) this can be a complex exercise and Marc ended with recommendations and an action plan for the MDM lead. In my customer engagements I also see more and more the digital transformation leads to MDM questions. Can we replace Excel files by mastered data in a database?
Almost at the end of the day I was speaking about the PDM platform of the people targeted for the people from the future. Here I highlighted the fundamental change in skills that’s upcoming. Where my generation was trained to own and capture information as much as possible information in your brain (or cabinet), future generations are trained and skilled in finding data and building information out of it. Owning (information) is not crucial for them. Perhaps as the world is moving fast. See this nice YouTube movie at the end.
Ella Jamsin ended the conference on behalf of the Ellen MacArthur Foundation explaining the need to move to a circular economy and the PLM should play a role in that. No longer is PLM from cradle-to-grave but PLM should support the lifecycle from cradle-to-cradle.
Unfortunate I could not attend all sessions as there were several parallel sessions. Neither have I written about all sessions I attended. The PDT Europe conference, a conference for people who mind about the details around the PLM future concepts and the usage of standards, is a must for future strategists.
Jos Voskuil's Weblog 
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