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Two weeks ago I got this message from WordPress, reminding me that I started blogging about PLM on May 22nd in 2008. During some of my spare time during weekends, I began to read my old posts again and started to fix links that have been disappearing.
Initially when I started blogging, I wanted to educate mid-market companies about PLM. A sentence with a lot of ambiguities. How do you define the mid-market and how do you define PLM are already a good start for a boring discussion. And as I do not want to go into a discussion, here are my “definitions”
Warning: This is a long post, full of generalizations and a conclusion.
PLM and Mid-market
The mid-market companies can be characterized as having a low-level of staff for IT and strategic thinking. Mid-market companies are do-ers and most of the time they are good in their domain based on their IP and flexibility to deliver this to their customer base. I did not meet mid-market companies with a 5-year and beyond business vision. Mid-market companies buy systems. They bought an ERP system 25-30 years ago (the biggest trauma at that time). They renewed their ERP system for the Y2K problem/fear and they switched from drawing board towards a 2D CAD system. Later they bought a 3D CAD system, introducing the need for a PDM system to manage all data.
PLM is for me a vision, a business approach supported by an IT-infrastructure that allows companies to share and discover and connect product related information through the whole lifecycle. PLM enables companies to react earlier and better in the go-to-market process. Better by involving customer inputs and experience from the start in the concept and design phases. Earlier thanks to sharing and involving other disciplines/suppliers before crucial decisions are made, reducing the amount of iterations and the higher costs of late changes.
Seven years ago I believed that a packaged solution, combined with a pre-configured environment and standard processes would be the answer for mid-market companies. The same thought currently PLM vendors have with a cloud-based solution. Take it, us it as it is and enjoy.
Here I have changed my opinion in the past seven years. Mid-market companies consider PLM as a more complex extension of PDM and still consider ERP (and what comes with that system) as the primary system in the enterprise. PLM in mid-market companies is often seen as an engineering tool.
LESSON 1 for me:
The benefits of PLM are not well-understood by the mid-market
To read more:
PLM for the mid-market – mission impossible?
PLM for the SMB – a process or culture change ?
Culture change in a mid-sized company – a management responsibility
Mid-market PLM – what did I learn in 2009 ?
Implementing PLM is a change not a tool
Who decides for PLM in a mid-market company ?
More on: Who decides for PLM in a mid-market company ?
Globalization and Education
In the past seven years, globalization became an important factor for all type of companies. Companies started offshoring labor intensive work to low-labor-cost countries introducing the need for sharing product data outside their local and controlled premises. Also, acquisitions by larger enterprises and by some of the dominant mid-market companies, these acquisitions introduced a new area of rethinking. Acquisitions introduced discussions about: what are real best practices for our organization? How can we remain flexible, meanwhile adapt and converge our business processes to be future ready?
Here I saw two major trends in the mid-market:
Lack of (PLM) Education
To understand and implement the value of PLM, you need to have skills and understanding of more than just a vendor-specific PLM system. You need to understand the basics of change processes (Engineering Change Request, Engineering Change Order, Manufacturing Change Order and more). And you need to understand the characteristics of a CAD document structure, a (multidisciplinary) EBOM, the MBOM (generic and/or plant specific) and the related Bill of Processes. This education does not exist in many countries and people are (mis-)guided by their PLM/ERP vendor, explaining why their system is the only system that can do the job.
Interesting enough the most read posts on my blog are about the MBOM, the ETO, BTO and CTO processes. This illustrates there is a need for a proper, vendor-independent and global accepted terminology for PLM
Some educational posts:
Bill of Materials for Dummies – ETO ranked #1
ECR/ECO for Dummies ranked #2
BOM for Dummies – CTO ranked #4
BOM for Dummies: BOM and CAD ranked #7
BOM for Dummies – BTO
Where does PLM start beyond document management ?
The dominance of ERP
As ERP systems were introduced long before PLM (and PDM), these systems are often considered by the management of a mid-market company as the core. All the other tools should be (preferably) seen as an extension of ERP and if possible, let´s implement ERP vendor´s functionality to support PLM – the Swiss knife approach – one tool for everything. This approach is understandable as at the board level there are no PLM discussions. Companies want to keep their “Let´s do it”-spirit and not reshuffle or reorganize their company, according to modern insights of sharing. Strangely enough, you see in many businesses the initiative to standardize on a single ERP system first, instead of standardizing on a single PLM approach first. PLM can bring the global benefits of product portfolio management and IP-sharing, where ERP is much more about local execution.
LESSON 2:
PLM is not understood at the board level, still considered as a tool
Some post related to PLM and ERP
Where is the MBOM ? ranked #3
Connecting PLM and ERP (post 1) – (post 2) – (post 3) ranked #8
PLM and ERP – the culture change
5 reasons not to implement PLM – Reason #3 We already have an ERP system
The human factor
A lot of the reasons why PLM has the challenge to become successful have to do with its broad scope. PLM has an unclear definition and most important, PLM forces people to share data and work outside their comfort zones. Nobody likes to share by default. Sharing makes day-to-day life more complicated, sharing might create visibility on what you actually contribute or fix. In many of my posts, I described these issues from various viewpoints: the human brain, the innovators dilemma, the way the older generation (my generation) is raised and used to work. Combined with the fact that many initial PLM/PDM implementations have created so many legacies, the need to change has become a risk. In the discussion and selection of PLM I have seen many times that in the end a company decides to keep the old status quo (with new tools) instead of really having the guts to move toward the future. Often this was a result of investors not understanding (and willing to see) the long term benefits of PLM.
LESSON 3:
PLM requires a long-term vision and understanding, which most of the time does not fit current executive understanding (lack of education/time to educate) and priority (shareholders)
Many recent posts are about the human factor:
The Innovator´s dilemma and PLM
Our brain blocks PLM acceptance
How to get users excited or more committed to a new PLM system?
The digital transformation
The final and most significant upcoming change is the fact that we are entering a complete new era: From linear and predictable towards fast and iterative, meaning that classical ways we push products to the market will become obsolete. The traditional approach was based on lessons learned from mechanical products after the second world-war. Now through globalization and the importance of embedded software in our products, companies need to deliver and adapt products faster than the classical delivery process as their customers have higher expectations and a much larger range to choose from. The result from this global competitiveness is that companies will change from delivering products towards a more-and-more customer related business model (continuous upgrades/services). This requires companies to revisit their business and organization, which will be extremely difficult. Business wise and human change require new IT concepts – platform? / cloud services? / Big data?
Older enterprises, mid-market and large enterprises will be extremely challenged to make this change in the upcoming 10 years. It will be a matter of survival and I believe the Innovator´s Dilemma applies here the most.
LESSON 4:
The digital transformation is apparent as a trend for young companies and strategic consultants. This message is not yet understood at the board level of many businesses.
Some recent post related to this fast upcoming trend:
From a linear world to fast and circular ?
Did you notice PLM is changing?
Documents or Intelligent Data ?
The difference between files and data-oriented – a tutorial (part 1) – (part 2) – (part 3)
PLM and/or SLM? – (part 1) – (part 2)
Breaking down the silos with data
ROI (Return On Investment)
I also wrote about ROI – a difficult topic to address as in most discussions related to ROI, companies are talking about the costs of the implementation, not about the tremendous larger impact a new business approach or model can have, once enabled through PLM. Most PLM ROI discussions are related to efficiency and quality gains, which are significant and relevant. However these benefits are relative small and not comparable with the ability to change your business (model) to become more customer centric and stay in business.
Some of the ROI posts:
To PLM or Not to PLM – measuring the planning phase ranked #5
Free PLM Software does not help companies ranked #6
PLM selection–additional thoughts
PLM Selection: Proof Of Concept observations
Where is my PLM Return On Investment (ROI) ?
Conclusion
A (too) long post this time however perhaps a good post to mark 7 years of blogging and use it as a reference for the topics I briefly touched here. PLM has many aspects. You can do the further reading through the links.
From the statistics it is clear that the education part scores the best – see rankings. For future post, let me know by creating a comment what you are looking for in this blog: PLM Mid-Market, Education, PLM and ERP, Business Change, ROI, Digitalization, or …??
Also I have to remain customer centric – thanks for reading and providing your feedback
Above Image courtesy of the marketoonist.com – Tom Fishburne
Image related to digital transformation: The Economist – the onrushing wave
It is time to continue with my posts about ROI and the need for measuring. I described in previous posts the concept phase and planning phase and will touch in this post the development phase.
But before doing so, there are two points I want to share before.
Queen’s Day in the Netherlands 2009
First as a Dutchman (although many times virtual) I enjoy April 30, as a special day, as it is our Queen’s Day.
People around the world celebrate the 1st of May, we Dutch celebrate Queen’s Day the day before.
It is a celebration of the people, with free flee markets, concerts and activities all around the country and at some special locations our royal family contributes to the atmosphere by participating amongst us. We celebrate this day not because the Dutch are so royalty minded, it is also a good excuse to celebrate our existence together, and there is always the discussion if a president of the country would bring more to the country as compared to the royal family.
This year Queens Day however became the blackest Queens Day ever. A lunatic apparently decided to make a statement and tried to drive his car into the bus with the royal family. However to get there he drove through the cheering crowd – 7 people died, including the driver because of this attempt. It makes you realize that in the modern society innocence is gone and that life is not as obvious as it is.
Hopefully Queen’s Day will be again a day of the people celebrating , with respect to the victims, still we should not change our lives because we fear.
Concurrent Engineering around the BOM
Next point, back to PLM again, I read an interesting discussing on two blogs regarding the need for the BOM – For me the shared and consolidated BOM, is the major object (placeholder / entry point) for a company to share developed data, so it is an interesting discussion.
Read these posts at: vuuch.com and plwtwine.com – they give points to consider, and I support the observation that although we try to do concurrent engineering already for many years, I haven’t seen many successful implementations, mainly due to the human behavior. Classically PDM and PLM require the BOM for collaboration and we might stay with this concept for a long time. Knowing the mid-market, I believe alternative solutions have to come up as a boom embraced by everyone (and conquer the market within a few years) or we will stick to what we know and what we are doing – changing habits and culture is hard. For the moment I stick to the current situation.
To PLM or Not to PLM – Measuring the development phase
So what happens in the development phase.> We have a concept and a plan and now we need to develop or change the product. In the past this was much easier. Companies worked mainly locally and around a single discipline. Now product development has the typical challenges of collaboration between different locations (many times around the globe), different disciplines (mechanical, electrical, software), integrate suppliers (as we focus on core competence) and meanwhile comply to (local) regulations. A lot of activities in parallel that should run coordinated to a single goal, the developed product. The phase where a lot of data is created and need to be shared among along the enterprise.
So the most important questions related to the development phase are:
- How many review cycles does a product introduction require in general?
Measure: time spent on getting a joined status on development and plan next detailed steps
Analyze: Can we improve the quality of the status information to better plan next steps - How much time does it take to prepare a product status review
Measure: the amount of time and people spent to collect information to make a status review
Analyze: Can this process of collecting data be shortened and (semi-) automated - How do we make sure we select the right parts and solutions for a certain function / system ?
Measure: The amount of changes during the development phase or after this phase
Analyze: Why were these changes needed ? Missing information, obsolete/redundant parts, failed solutions ? - How do we make sure our products comply to local regulations
Measure: At which state of the development process compliance is checked and how it affects development / go to market time.
Analyze: Can we verify compliance earlier than current – and how - How much effort does it take to communicate around an engineering change
Measure: What does it take to communicate and implement a change during the development phase. How much time, many resources are involved around this communication process (and how reliable is it)
Analyze: Can we improve by doing things different ? Implementing processes, push technology, ….?
Most of the above points focus on facilitating (global) processes and making information available anywhere needed. This brings me to my previous post, where I talked about Can ERP vendors do PLM ? The ERP vendors that do PLM, will claim they are addressing these points in their PLM offering too. The major difference however is that (and I am generalizing) ERP based systems score low on usability as their systems are not planned to work from within an application (CAD or Office for example) . This is the major difference with PLM systems, closely related to CAD systems. Through their CAD integrations, the PLM environment will be embedded in the day-to-day user / design environment (immersive is the term).
An immersive integration has the benefit that collecting data is much more natural and the chance of having more accurate data available all the time is higher. So most of the point mentioned above will have a higher ROI when working from an integrated PLM environment. And in addition to that, in the mid-market users have a voice – their acceptance is also part of the ROI.
Conclusion
The keywords for the development phase are global collaboration and visibility of actual data and affected changes. To make data available, integration with the data creator’s desktop is important as then it will be available straight from the source. I keep it here to ‘classical’ PDM / PLM as new concepts like PLM 2.0 will drastically change the way we work, however getting there will take years
Note: It might be misleading to talk about ROI benefits per phase, as other and additional benefits may come from doing the whole process different. I will stick to my initial approach as it will give you a baseline to start working from. Remember in order to understand– you need to start measuring even if it is not the ultimate approach
And closing with Queen’s day how it could be (2008 – learning Dutch is not required)
Jos Voskuil's Weblog 
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