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In the series learning from the past to understand the future, we have almost reached the current state of PLM before digitization became visible. In the last post, I introduced the value of having the MBOM preparation inside a PLM-system, so manufacturing engineering can benefit from early visibility and richer product context when preparing the manufacturing process.

Does everyone need an MBOM?

It is essential to realize that you do not need an EBOM and a separate MBOM in case of an Engineering To Order primary process. The target of ETO is to deliver a unique customer product with no time to lose. Therefore, engineering can design with a manufacturing process in mind.

The need for an MBOM comes when:

  • You are selling a specific product over a more extended period of time. The engineering definition, in that case, needs to be as little as possible dependent on supplier-specific parts.
  • You are delivering your portfolio based on modules. Modules need to be as long as possible stable, therefore independent of where they are manufactured and supplier-specific parts. The better you can define your modules, the more customers you can reach over time.
  • You are having multiple manufacturing locations around the world, allowing you to source locally and manufacture based on local plant-specific resources. I described these options in the previous post

The challenge for all companies that want to move from ETO to BTO/CTO is the fact that they need to change their methodology – building for the future while supporting the past. This is typically something to be analyzed per company on how to deal with the existing legacy and installed base.

Configurable EBOM and MBOM

In some previous posts, I mentioned that it is efficient to have a configurable EBOM. This means that various options and variants are managed in the same EBOM-structure that can be filtered based on configuration parameters (date effectivity/version identifier/time baseline). A configurable EBOM is often called a 150 % EBOM

The MBOM can also be configurable as a manufacturing plant might have almost common manufacturing steps for different product variants. By using the same process and filtered MBOM, you will manufacture the specific product version. In that case, we can talk about a 120 % MBOM

Note: the freedom of configuration in the EBOM is generally higher than the options in the configurable MBOM.

The real business change for EBOM/MBOM

So far, we have discussed the EBOM/MBOM methodology. It is essential to realize this methodology only brings value when the organization will be adapted to benefit from the new possibilities.

One of the recurring errors in PLM implementations is that users of the system get an extended job scope, without giving them the extra time to perform these activities. Meanwhile, other persons downstream might benefit from these activities. However, they will not complain. I realized that already in 2009, I mentioned such a case: Where is my PLM ROI, Mr. Voskuil?

Now let us look at the recommended business changes when implementing an EBOM/MBOM-strategy

  1. Working in a single, shared environment for engineering and manufacturing preparation is the first step to take.

Working in a PLM-system is not a problem for engineers who are used to the complexity of a PDM-system. For manufacturing engineers, a PLM-environment will be completely new. Manufacturing engineers might prepare their bill of process first in Excel and ultimately enter the complete details in their ERP-system. ERP-systems are not known for their user-friendliness. However, their interfaces are often so rigid that it is not difficult to master the process. Excel, on the other side, is extremely flexible but not connected to anything else.

And now, this new PLM-system requires people to work in a more user-friendly environment with limited freedom. This is a significant shift in working methodology. This means manufacturing engineers need to be trained and supported  over several months. Changing habits and keep people motivated takes energy and time. In reality, where is the budget for these activities?  See my 2016 post: PLM and Cultural Change Management – too expensive?

  1. From sequential to concurrent

Once your manufacturing engineers are able to work in a PLM-environment, they are able to start the manufacturing definition before the engineering definition is released. Manufacturing engineers can participate in design reviews having the information in their environment available. They can validate critical manufacturing steps and discuss with engineers potential changes that will reduce the complexity or cost for manufacturing. As these changes will be done before the product is released, the cost of change is much lower. After all, having engineering and manufacturing working partially in parallel will reduce time to market.

Reducing time to market by concurrent engineering

One of the leading business drivers for many companies is introducing products or enhancements to the market. Bringing engineering and manufacturing preparation together also means that the PLM-system can no longer be an engineering tool under the responsibility of the engineering department.

The responsibility for PLM needs to be at a level higher in the organization to ensure well-balanced choices. A higher level in the organization automatically means more attention for business benefits and less attention for functions and features.

From technology to methodology – interface issues?

The whole EBOM/MBOM-discussion often has become a discussion related to a PLM-system and an ERP-system. Next, the discussion diverted to how these two systems could work together, changing the mindset to the complexity of interfaces instead of focusing on the logical flow of information.

In an earlier PI Event in München 2016, I lead a focus group related to the PLM and ERP interaction. The discussion was not about technology, all about focusing on what is the logical flow of information. From initial creation towards formal usage in a product definition (EBOM/MBOM).

What became clear from this workshop and other customer engagements is that people are often locked in their siloed way of thinking. Proposed information flows are based on system capabilities, not on the ideal flow of information. This is often the reason why a PLM/ERP-interface becomes complicated and expensive. System integrators do not want to push for organizational change, they prefer to develop an interface that adheres to the current customer expectations.

SAP has always been promoting that they do not need an interface between engineering and manufacturing as their data management starts from the EBOM. They forgot to mention that they have a difficult time (and almost no intention) to manage the early ideation and design phase. As a Dutch SAP country manager once told me: “Engineers are resources that do not want to be managed.” This remark says all about the mindset of ERP.

After overlooking successful PLM-implementations, I can tell the PLM-ERP interface has never been a technical issue once the methodology is transparent. A company needs to agree on logical data flow from ideation through engineering towards design is the foundation.

It is not about owning data and where to store it in a single system. It is about federated data sets that exist in different systems and that are complementary but connected, requiring data governance and master data management.

The SAP-Siemens partnership

In the context of the previous paragraph, the messaging around the recently announced partnership between SAP and Siemens made me curious. Almost everyone has shared an opinion about the partnership. There is a lot of speculation, and many questions were imaginarily answered by as many blog posts in the field. Last week Stan Przybylinski shared CIMdata’s interpretations in a webinar Putting the SAP-Siemens Partnership In Context, which was, in my opinion, the most in-depth analysis I have seen.

For what it is worth, my analysis:

  • First of all, the partnership is a merger of slide decks at this moment, aiming to show to a potential customer that in the SAP/Siemens-combination, you find everything you need. A merger of slides does not mean everything works together.

  • It is a merger of two different worlds. You can call SAP a real data platform with connected data, where Siemens offering is based on the Teamcenter backbone providing a foundation for a coordinated approach. In the coordinated approach, the data flexibility is lower. For that reason, Mendix is crucial to make Siemens portfolio behave like a connected platform too.
    You can read my doubts about having a coordinated and connected system working together (see image above). It was my #1 identified challenge for this decade: PLM 2020 – PLM the next decade (before COVID-19 became a pandemic and illustrated we need to work connected)
  • The fact that SAP will sell TC PLM and Siemens will sell SAP PPM seems like loser’s statement, meaning our SAP PLM is probably not good enough, or our TC PPM capabilities are not good enough. In reality, I believe they both should remain, and the partnership should work on logical data flows with data residing in two locations – the federated approach. This is how platforms reside next to each other instead of the single black hole.

  • The fact that standard interfaces will be developed between the two systems is a subtle sales argument with relatively low value. As I wrote in the “from technology to methodology”-paragraph, the challenges are in the organizational change within companies. Technology is not the issue, although system integrators also need to make a living.
  • What I believe makes sense is that both SAP and Siemens, have to realize their Industry 4.0 end-to-end capabilities. It is a German vision now for several years and it is an excellent vision to strive for. Now it is time to build the two platforms working together. This will be a significant technical challenge mainly for Siemens as its foundation is based on a coordinated backbone.
  • The biggest challenge, not only for this partnership, is the organizational change within companies that want to build an end-to-end connected solution. In particular, in companies with a vast legacy, the targeted industries by the partnership, the chasm between coordinated legacy data and intended connected data is enormous. Technology will not fix it, perhaps smoothen the pain a little.

 

Conclusion

With this post, we have reached the foundation of the item-centric approach for PLM, where the EBOM and MBOM are managed in a real-time context. Organizational change is the biggest inhibitor to move forward. The SAP-Siemens partnership is a sales/marketing approach to create a simplified view for the future at C-level discussions.
Let us watch carefully what happens in reality.

Next time potentially the dimension of change management and configuration management in an item-centric approach.
Or perhaps Martijn Dullaart will show us the way before, following up on his tricky poll question

 

People, wherever you are, we are in a kind of lockdown. Some countries more restricted than others. Still, the challenge will be for most of us how to survive in two perhaps three months of being locked in your home and make the best of it. As I am not a virus expert, I will not give you any recommendations on this topic. As a PLM geek, I want to share with you the opportunities I see for the upcoming months.

A crisis is an opportunity

Most of us should be lucky that we do not live in the same situation as twenty years ago. At that time, internet connectivity was expensive and slow. Meaning working from home would mean isolation from the rest of the world. The positive point now is that we can be connected virtually without travel, without face-to-face meetings, and we are pushed to do so. This external push is an interesting point for me.

The traditional attitude for my PLM engagements was that face-to-face meetings are crucial for creating a human connection and trust. Now I ask myself is this a behavior of the past that should become obsolete in the future. Probably we cannot afford this approach anymore in the future if we take sustainability and the environment into consideration. We live now in a globally connected world, but should we act still in the old way?

Perhaps not. Let’s look at some of the examples that it is time to shift behaviors.

We might think in the Western world we know it all due to our dominance in the past hundred years. However, when you study history, you will see civilizations come to power and after hundreds of years, they lose power because they kill themselves internally. Apparently, a typical human property that will not disappear – still interesting to analyze when considering a globally connected world. Where is the point of gravity today?

Interestingly, the ancient Chinese population already knew that a crisis was an opportunity, as I am being told. The Chinese characters for crisis mean danger and opportunity, respectively, according to Wiki – see the image above. Joe Barkai was one of the first in my network that took action to explain that instead of focusing on the loss of what is happening now, we should take the opportunity to be better prepared for the future. You can read his post here: The Corona virus and your company’s brand. And these kinds of messages are popping up more frequently now. Let’s stay safe while thinking and preparing for the future.

Now a PLM related example.

Remember what the FFF is happening?

Two-three weeks ago, we had a vivid discussion in our PLM and CM community based on the famous FFF mnemonic.  What the FFF is happening was a post sharing my point of view, and there were a lot of reactions from different people.

The purpose of my post was to explain that the whole discussion was based on paradigms that drawings are defining the part. Because of that, we have a methodology to decide if YES or NO we need a new part number or revision. To me, this practice should no longer be a discussion.

A part has a unique identifier, and a document has a unique identifier. In PLM-systems, the information is managed by relations, no longer by identifiers – who knows the exact unique identifier? In a PLM-system information is connected, and the attributes of the part and document will tell you the details of the type of information. “Intelligent or meaningful” identifiers are in such an environment no longer relevant. Think about that…..

In the comments of my post, Jesse Leal was confirming this statement:

This in contrary to Joe Brouwer, who you might have noticed, always is spitting his opinion that the good old days of the draftsman are gone, Boeing made a tremendous mistake and that PLM is fake. This all combined with hyperlinks to his products and opinions. The comment below says it all:

Two points to observe in this response:

Hey, Bob, send me the new digital identifier”.

This statement assumes that if a person needs to retrieve information from someone else, they need to contact this person (Bob).

Bob then needs to drop his current work and answer to the response and send the latest version of a drawing?  This is old school. In a PLM-system,  information should be connected, and if Bob has released his latest drawing (no matter if it is FFF), any user could find the latest approved version, not even having to look at the identifier (which could be meaningless) but by following the relations between products, parts, and documents.

This is PLM!

One of the benefits, Bob does not get disturbed during the day by these kinds of questions and can focus on his critical work as an expert.

Second, if you need to sit with a designer to understand PLM, then you are probably talking with the wrong person. Designers work in the context of PDM. When we speak about PLM, we are talking about a broader scope beyond engineering and design.

This is a common mistake in a lot of marketing stories. Companies that focus on the design space only, some EBOM-integrations with CAD-systems, are most of the time focusing on PDM.  When Agile PLM came out (later Oracle E9) and later Aras without CAD-integrations, these companies were focusing on the flow of information inside the company, not necessarily driven by CAD. Of course, the traditional PLM companies combine CAD integration with other capabilities. Dassault Systèmes, Siemens, and PTC all have a strong relationship with their native CAD-systems. However, their offerings go way beyond CAD-integrations e.g. end-to-end governance, change processes and an item-centric backbone.

The diagram above explains the basics for the future. In a push-mode, the person in the middle has the responsibility to distribute information and ensure it remains accurate for all stakeholders. This makes this person crucial (good job security) but extremely inefficient compared to people working in the pull-mode, being responsible for getting the accurate data themselves. It may be clear the pull-mode is the model of a digital enterprise.

So if you have the time now, take this time to rethink how well your company is ready for a digital future. Companies that currently rely on Bob are in trouble as Bob is currently sitting at home. Companies that have learned to shift from the push-mode to the pull-mode could continue working as planned, as they do not need Bob. And don’t worry about your job. If you are in Bob’s position you will lose your job over time. However, when you keep on evolving, learning and adding value to your company, you will be always needed – don’t lock yourself in.

If you want to be inspired more in this area, read Jan Bosch’s post: This is not the end . Here Jan mentions the opportunity to move to digital practices (and more) – get out of our traditional patterns

 

What can you do?

Even though COVID-19 has, and will have, a dramatic impact on our society, this is also the moment to rewire some of our processes.  Because there was never time to think and act due to the running business. It reminded me of the financial crisis in 2008, when the market for PLM vendors was terrible, no significant sales for them as companies could not invest.

However, for me, 2008 was an extremely busy year,  thanks to all kinds of regulations from governments. There was time and budget to support employees to raise their skills and PLM was one of these domains. That year I conducted many workshops. It was also the year that I started my blog virtualdutchman.com.

Now we are in a similar situation and probably worse as now we are locked to our homes. However, we are also better connected. Imagine this situation without the internet. Now we can learn even better.

So let’s benefit from this connectivity and use the lockdown time to learn, think, and discuss with peers. Challenge and involve the management of your company how they see and lead to the future.


In that context, I am happy to spend on average one day per week on free conference calls if you need clarification or support for your PLM-related ideas.

Contact me through a personal message on LinkedIn, and we will find a way to connect.

 

Conclusion

This decade will be decisive for many of us. At the beginning of this year, I wrote PLM 2020- The next decade (4 challenges). With my narrow PLM-mind, I overlooked viruses. Bill Gates did not do that, as you can see from his 2015 TED talk: The next outbreak? We’re not ready.  Bill also explains that our traditional thinking patterns should change in a globally connected world.

I wish you all the time to think and educate yourself and prepare for a changed future. Stay safe inside, stay healthy, knowing for some of you it will be a big challenge.

At the beginning of this week, I was attending the 9th edition of the PI conference in London. Where it started as a popular conference with 300 – 400 attendees at its best, we were now back to a smaller number of approximately 100 attendees.

It illustrates that PLM as a standalone topic is no longer attracts a broad audience as Marketkey (the organization of the conference) confirms. The intention is that future conferences will be focusing on the broader scope of PLM, where business transformation will be one of the main streams.

In this post, I will share my highlights of the conference, knowing that other sessions might have been valuable too, but I had to make a choice.

It is about people

Armin Prommersberger, CTO from DIRAC and the chairman of the conference, made a great point: “What we will discuss in the upcoming two days, it is all about people not about technology.”

I am not sure if this opening has influenced the mood of the conference, as when I look back to what was the central theme: It is all about how we deal with people when explaining, implementing and justifying PLM.

AI at the Forefront of a Digital Transformation

Muhannad Alomari from R2 Data Labs as a separate unit within Rolls Royce to explore and provide data innovation started with his keynote speech sharing the AI initiatives within his team.

He talked about several projects where AI will become crucial.

For example, the EHM program related to engine behavior. How to detect anomalies, how to establish predictive maintenance and maximize the time an airplane engine is in operation. Interesting to mention is that Muhannad explained that most simulation models are based on simplified simulation models, not accurate enough to discover anomalies.

Modeling in the PLM world with feedback from reality

Machine learning and feedback loops are crucial to optimize the models both for the discovery of irregularities and, of course, to improve understanding of the engine behavior and predict maintenance. Currently, maintenance is defined based on the worst-case scenario for the engine, which in reality, of course, will not be the case for most engines. There is a lot (millions) to gain here for a company.

Interesting to mention is that Muhannad gave a realistic view of the current status of Artificial Intelligence (AI). AI is currently still dumb – it is a set of algorithms that need to be adapted whenever new patterns are discovered. Deep learning is still not there – currently, we still need human beings for that.

This was in contrast with the session from Kalypso later with the title: Supercharge your PLM with advanced analytics. It was a typical example of where a realistic story (R2 Data Labs) shows such a big difference with what is sold by PLM vendors or implementers. Kalypso introduced Product Lifecycle Intelligence (PLI) – you can see the dream on the left (click on the image to enlarge).

Combine PLM with Analytics, and you have Intelligence.  My main comment is, knowing from the field the first three phases in most companies have a lack of data quality and consistency. Therefore any “Intelligence” probably will be based on unreliable sources. Not an issue if you are working in the domain of politics, however when it comes to direct cost and quality implications, it can be a significant risk. We still have a way to go before we have a reliable PLM data backbone for analytics.

 

Keeping PLM Momentum after a Successful Campaign

Susanna Mäentausta from Kemira in Finland gave an exciting update of their PLM project. Where in 2019, she shared with us their PLM roadmap (see my 2019 post: The weekend after PI PLMx London 2019); this time, Susanna shared with us how they are keeping the PLM momentum.

Often PLM implementations are started based on a hypothetical business case (I talked about this in my post The PLM ROI Myth). But then, when you implement PLM, you need to take care you provide proof points to motivate the management. And this is exactly what the PLM team in Kemira has been doing. Often management believes that after the first investment, the project is done (“We bought the software – so we are done”) however the business and process change that will deliver the value is not reported.

Susanna shared with us how they defined measurable KPIs for two reasons.  First, to motivate the management that there are business progress and benefits, however, it is a journey. And secondary the facts are used to kill the legends that “Before PLM we were much faster or efficient.” These types of legends are often expressed loudly by persons who consider PLM as an overhead (killing their freedom) instead of a way to be more efficient in business. In the end, for a company, the business is more important than the person’s belief.

On the question for Susanna, what she would have done better with hindsight, she answered: “Communicate, communicate, communicate.” A response I fully support as often PLM teams are too busy completing their day-to-day work, that there is no spare time for communication. Crucial to achieving a business change.

My agreement: PLM needs facts based during implementation and support combined with the understanding we are dealing with people and their emotions too. Both need full attention.

Acceleration Digitalization at Stora Enso

Samuli Savo, Chief Digital Officer at Stora Enso, explained the principles of innovation, related to digitalization at his company. Stora Enso, a Swedish/Finish company, historically one of the largest forestry companies in the world as well as one of the most significant paper and packaging producers, is working on a transformation to become the renewable materials company. For me, he made two vital points on how Stora Enso’s digitalization’s journey is organized.

He pleads for experimentation funded by corporate as in the experimental stage, as it does not make sense to have a business case. First DO and then ANALYZE, where many companies have to policy first to ANALYZE and then DO, killing innovative thinking.

The second point was the active process to challenge startups to solve business challenges they foresee and, combined with a governance process for startups, allow these companies to be supported and become embedded within member companies of the Combient Foundry, like Stora Enso. By doing such in a structured way, the outcome must lead to innovation.

I was thinking about the hybrid enterprise model that I have been explaining in the past. Great story.

Cyber-security and Future Mobility

Out of interest, I followed the session from Madeline Cheah, Cybersecurity Innovation Lead at HORIBA MIRA. She gave an excellent and well-structured overview. Madeline leads the cybersecurity research program. Part of this job is investigating ways to prevent vehicles from being attacked.  In particular, when it comes to connected and autonomous vehicles. How to keep them secure.

She discussed the known gaps are and the cybersecurity implications of future mobility so extensive that I even doubted will there ever be an autonomous vehicle on the road. So much to define and explore. She looked at it from the perspective of the Internet of Everything, where Everything is divided into Things, Data, Processes, and People. Still, a lot of work to do, see image below

Good Times Ahead: Delay Mitigation Through a Plan for Every Part

Ian Quest, director at Quick Release, gave an overview of what their company aims to be. You could translate it as the plumbers of the automotive industry Where in the ideal world information should be flowing from design to release, there are many bottlenecks, leakages, hiccups that need to be resolved as the image shows.

Where their customers often do not have the time and expertise to fix these issues, Quick Release brings in various skillsets and common sense. For example, how to deal with the Bill of Materials, Configuration Management, and many other areas that you need to address with methodology first instead of (vendor-based) technology. I believe there is a significant need for this type of company in the PLM-domain.

The second part, presented by Nick Solly, with a focus on their QRonos tool, was perhaps a little too much a focus on the capabilities of the tool. Ian Quest, in his introduction,  already made the correct statement:

The QRonos tool, which is more or less a reporting tool, illustrates again that when people care about reliable data (planning, tasks, parts, deliverables, …..), you can improve your business significantly by creating visibility to delays or bottlenecks. The value lies in measurable activities and from there, learn to predict or enhance – see R2 Labs, Kemira and the PLI dream.

Conclusion

It is clear that a typical PLM conference is no longer a technology festival – it is about people. People are trying to change or improve their business. Trying to learn from each other, knowing that the technical concepts and technology are there.

I am looking forward to the upcoming PI events where this change will become more apparent.

 

Last week I shared my thoughts related to my observation that the ROI of PLM is not directly visible or measurable, and I explained why. Also, I explained that the alignment of an organization requires a myth to make it happen. A majority of readers agreed with these observations. Some others either misinterpreted the headlines or twisted the story in favor of their opinion.

A few came from Oleg Shilovitsky and as Oleg is quite open in his discussions, it allows me to follow-up on his statements. Other people might share similar thoughts but they haven’t had the time or opportunity to be vocal. Feel free to share your thoughts/experiences too.

Some misinterpretations from Oleg’s post: PLM circa 2020 – How to stop selling Myths

  • The title “How to stop selling Myths” is the first misinterpretation.
    We are not selling myths – more below.
  • “Jos Voskuil’s recommendation is to create a myth. In his PLM ROI Myths article, he suggests that you should not work on a business case, value, or even technology” is the second misinterpretation, you still need a business case, you need value and you need technology.

And I got some feedback from Lionel Grealou, who’s post was a catalyst for me to write the PLM ROI Myth post. I agree I took some shortcuts based on his blog post. You can read his comments here. The misinterpretation is:

  • “Good luck getting your CFO approve the business change or PLM investment based on some “myth” propaganda :-)” as it is the opposite, make your plan, support your plan with a business case and then use the myth to align

I am glad about these statements as they allow me to be more precise, avoiding misperceptions/myth-perceptions.

A Myth is bad

Some people might think that a myth is bad, as the myth is most of the time abstract.  I think these people do not realize that there a lot of myths that they are following; it is a typical social human behavior to respond to myths. Some myths:

  • How can you be religious without believing in myths?
  • In this country/world, you can become anything if you want?
  • In the past, life was better
  • I make this country great again

The reason human beings need myths is that without them, it is impossible to align people around abstract themes. Try for each of the myths above to create an end-to-end logical story based on factual and concrete information. Impossible!

Read Yuval Harari’s book Sapiens about the power of myths. Read Steven Pinker’s book Enlightenment Now to understand that statistics show a lot of current myths are false. However, this does not mean a myth is bad. Human beings are driven by social influences and myths – it is our brain.

Unless you have no social interaction, you might be immune to myths. With brings me to quoting Oleg once more time:

“A long time ago when I was too naive and too technical, I thought that the best product (or technology) always wins. Well… I was wrong. “

I went through the same experience, having studied physics and mathematics makes you think extremely logical. Something I enjoyed while developing software. Later, when I started my journey as the virtualdutchman mediating in PLM implementations, I discovered logical alone does not work in businesses. The majority of decisions are done based on “gut feelings” still presented as reasonable cases.

Unless you have an audience of Vulcans, like Mr. Spock, you need to deal with the human brain. Consider the myth as the envelope to pass the PLM-project to the management. C-level acts by myths as so far I haven’t seen C-level management spending serious time on understanding PLM. I will end with a quote from Paul Empringham:

I sometimes wish companies would spend 6 months+ to educate themselves on what it takes to deliver incremental PLM success BEFORE engaging with software providers

You don’t need a business case

Lionel is also skeptical about some “Myth-propaganda” and I agree with him. The Myth is the envelope, inside needs to be something valuable, the strategy, the plan, and the business case. Here I want to stress one more time that most business cases for PLM are focusing on tool and collaboration efficiency. And from there projecting benefits. However, how well can we predict the future?

If you implement a process, let’s assume BOM-collaboration done with Excel by BOM-collaboration based on an Excel-on-the-cloud-like solution, you can measure the differences, assuming you can measure people’s efficiency. I guess this is what Oleg means when he explains OpenBOM has a real business case.

However, if you change the intent for people to work differently, for example, consult your supplier or manufacturing earlier in the design process, you touch human behavior. Why should I consult someone before I finish my job, I am measured on output not on collaboration or proactive response? Here is the real ROI challenge.

I have participated in dozens of business cases and at the end, they all look like the graph below:

The ROI is fantastic – after a little more than 2 years, we have a positive ROI, and the ROI only gets bigger. So if you trust the numbers, you would be a fool not to approve this project. Right?

And here comes the C-level gut-feeling. If I have a positive feeling (I follow the myth), then I will approve. If I do not like it, I will say I do not trust the numbers.

Needless to say that if there was a business case without ROI, we do not need to meet the C-level. Unless, and it happens incidental, at C-level, there was already a decision we need PLM from Vendor X because we played golf together, we are condemned together or we believe the same myths.

In reality, the old Gartner graph from realized benefits says it all. The impact of culture, processes, and people can make or break a plan.

You do not need an abstract story for PLM

Some people believe PLM on its own is a myth. You just need the right technology and people will start using it, spreading it out and see how we have improved business. Sometimes email is used as an example. Email is popular because you can with limited effort, collaborate with people, no matter where they are. Now twenty years later, companies are complaining about the lack of traceability, the lack of knowledge and understanding related to their products and processes.

PLM will always have the complexity of supporting traceability combined with real-time collaboration. If you focus only on traceability, people will complain that they are not a counter clerk. If you focus solely on collaboration, you miss the knowledge build-up and traceability.

That’s why PLM is a mix of governance, optimized processes to guarantee quality and collaboration, combined with a methodology to tune the existing processes implemented in tools that allow people to be confident and efficient. You cannot translate a business strategy into a function-feature list for a tool.

Conclusion

Myths are part of the human social alignment of large groups of people. If a Myth is true or false, I will not judge. You can use the Myth as an envelope to package your business case. The business case should always be a combination of new ways of working (organizational change), optimized processes and finally, the best tools. A PLM tool-only business case is to my opinion far from realistic

 

Now preparing for PI PLMx London on 3-4 February – discussing Myths, Single BOMs and the PLM Green Alliance

This time a post that has been on the table already for a long time – the importance of having established processes, in particular with implementing PLM.  By nature, most people hate processes as it might give the idea that their personal creativity is limited, where large organizations love processes as for them this is the way to guarantee a confident performance.  So let’s have a more in-depth look.

Where processes shine

In a transactional world, processes can be implemented like algorithms, assuming the data to be processed has the right quality. That is why MRP (Material Requirement Planning) and ERP (Enterprise Resource Planning) don’t have the mindset of personal creativity. It is about optimized execution driven by financial and quality goals.

When I started my career in the early days of data management, before it was called PDM/PLM, I learned that there is a need for communication-related to product data. Terms are revisions, and versions started to pop-up combined with change processes. Some companies began to talk about configuration management.

Companies were not thinking PLM along the whole lifecycle. It was more PDM for engineering and ERP for manufacturing. Where PDM was ultimate a document-control environment, ERP was the execution engine relying on documented content, but not necessarily connected. Unfortunate this is still the case at many companies, and it has to do with the mindset. Traditionally a company’s performance has been measured based on financial reporting coming from the ERP system. Engineering was an unmanageable cost in the eyes of the manufacturing company’s management and ERP-software vendors.

In de middle of the nineties (previous century now ! ), I had a meeting with an ERP-country manager to discuss a potential partnership. The challenge was that he had no clue about the value and complementary need for PLM. Even after discussing with him the differences between iterative product development (with revisioning) and linear execution (on the released product), his statement was:

“Engineers are just resources that do not want to be managed, but we will get them”

Meanwhile, I can say this company has changed its strategy, giving PLM a space in their portfolio combined with excellent slides about what could be possible.

To conclude, for linear execution the meaning of processes is more or less close to algorithms and when there is no algorithm, the individual steps in place are predictable with their own KPIs.

Process certification

As I mentioned in the introduction, processes were established to guarantee a predictable outcome, in particular when it comes to quality. For that reason, in the previous century when globalization started companies were somehow forced to get ISO 900x certified. The idea behind these certifications was that a company had processes in place to guarantee an expected outcome and for when they failed, they would have procedures in place to fix these gaps. The reason companies were doing this because no social internet could name and shame bad companies. Having ISO 900x certification would be the guarantee to deliver quality.  In the same perspective, we could see, configuration management, a system of best practices to guarantee that product information was always correct.

Certification was and is heaven for specialized external auditors and consultants.  To get certification you needed to invest in people and time to describe your processes, and once these processes were defined, there were regular external audits to ensure the quality system has been followed.  The beauty of this system – the described procedures were more or less “best intentions” not enforced. When the auditor would come the company had to play some theater that processes were followed., the auditor would find some improvements for next year and the management was happy certification was passed.

This has changed early this century. In particular, mid-market companies were no longer motivated to keep up this charade. The quality process manual remained as a source of inspiration, but external audits were no longer needed. Companies were globally connected and reviewed, so reputation could be sourced easily.

The result: there are documented quality procedures, and there is a reality. The more disconnected employees became in a company due to mergers or growth, the more individual best-practices became the way to deliver the right product and quality, combined with accepted errors and fixes downstream or later. The hidden cost of poor quality is still a secret within many companies.  Talking with employees they all have examples where their company lost a lot of money due to quality mistakes. Yet in less regulated industries, there is no standard approach, like CAPA (Corrective And Preventive Actions), APQP or 8D to solve it.

Configuration Management and Change Management processes

When it comes to managing the exact definition of a product, either an already manufactured product or products that are currently made, there is a need for Configuration Management.  Before there were PLM systems configuration management was done through procedures defining configurations based on references to documents with revisions and versions. In the aerospace industry, separate systems for configuration management were developed, to ensure the exact configuration of an aircraft could be retrieved at any time. Less regulated industries used a more document-based procedural approach as strict as possible. You can read about the history of configuration management and PLM in an earlier blog post: PLM and Configuration Management – a happy marriage?

With the introduction of PDM and PLM-systems, more and more companies wanted to implement their configuration management and in particular their change management inside the system, as the changes are always related to product information that can reside in a PLM-system. The change of part can be proposed (ECR), analyzed and approved, leading to and implementation of the change (ECO) which is based on changed specifications, designs (3D Models / Drawings) and more. You can read the basics here: The Issue and ECR/ECO for Dummies (Reprise)

The Challenge (= Problem) of Digital Processes

More and more companies are implementing change processes fully in PLM, and this is the point that creates the most friction for a PLM implementation. The beauty of digital change processes is that they can be full-proof. No change gets unnoticed as everyone is forced to follow the predefined procedures, either a type of fast track in case of lightweight (= low risk) changes or the full change process when the product is already in a mature state.

Like the ISO-900x processes, the PLM-implementer is often playing the role of the consultancy firm that needs to recommend the company how to implement configuration management and change processes. The challenge here is that the company most of the time does not have a standard view for their change processes and for sure the standard change management inside PLM s not identical to their processes.

Here the battle starts….

Management believes that digital change processes, preferable out-of-the-box, a crucial to implement, where users feel their job becomes more an administrative job than a creative job. Users that create information don’t want to be bothered with the decisions for numbering and revisioning.

They expect the system to do that easily for them – which does not happen as old procedures, responsibilities, and methodologies do not align with the system. Users are not measured or challenged for data quality, they are measured on the work they deliver that is needed now. Let’s first get the work done before we make sure all is consisted defined in the PLM-system.

Digital Transformation allows companies to redefine the responsibilities for users related to the data they produce. It is no longer a 3D Model or a drawing, but a complete data set with properties/attributes that can be shared and used for analysis and automation.

Conclusion

Implementing digital processes for PLM is the most painful, but required step for a successful implementation. As long as data and processes are not consistent, we can keep on dreaming about automation in PLM. Therefore, digital transformation inside PLM should focus on new methods and responsibilities to create a foundation for the future. Without an agreement on the digital processes there will be a growing inefficiency for the future.

 

Image:  21stcenturypublicservant.wordpress.com/

I have talked a lot the past years about Digital Transformation and in particular its relation to PLM. This time I want to focus a little more on Digital Transformation and my observations related to big enterprises and small and medium enterprises. I will take you starting from the top, the C-level to the work floor and then try to reconnect through the middle management. As you can imagine from the title of this post, there is a challenge. And I am aware I am generalizing for the sake of simplicity.

Starting from the C-level of a large enterprise

Large and traditional enterprises are having the most significant challenge when aiming at a digital transformation for several reasons:

  • They have shareholders that prefer short-term benefits above long-term promising but unclear higher benefits. Shareholders most of the time have no personal interest in these companies, they just want to earn money above the average growth.
  • The CEO is the person to define the strategy which has to come with a compelling vision to inspire the shareholders, the customers and the employees in the company – most of the time in that order of priority.
  • The role of the CEO is to prioritize investments and stop or sell core components to make the transformation affordable. Every transformation is about deciding what to stop, what to start and what to maintain.
  • After four to seven years (the seven years’ itch) it is time for a new CEO to create a new momentum as you cannot keep the excitement up too long.
  • Meanwhile, the Stop-activities are creating fear within the organization – people start fearing their jobs and the start-activities are most of the time of such a small-scale that their successes are not yet seen. So at the work floor, there will be reservations about what’s next

Companies like ABB, Ericsson, GE, Philips – in alphabetical order – are all in several stages of their digital transformation and in particular I have followed GE as they were extremely visible and ambitious. Meanwhile, it is fair to say that the initial Digital Transformation plan from GE has stalled and a lot of lessons learned from that.

If you have time – read this article: The Only Way Manufacturers Can Survive – by Vijay Govindarajan & Jeff Immelt (you need to register). It gives useful insights about what the strategy and planning were for digital transformation. And note PLM is not even mentioned there J

Starting from the C-level of a small and medium enterprise

In a small or medium enterprise, the distance between the C-level and the work floor is most of the time much shorter and chances are that the CEO is a long-term company member in case of a long-standing family-owned business. In this type of companies, a long-term vision can exist and you could expect that digital transformation is more sustainable there.

Unfortunate most of the time it is not, as the C-level is often more active in current business strategies and capabilities close to their understanding instead of investing energy and time to digest the full impact of a digital transformation. These companies might invest in the buzz-words you hear in the market, IoT, Digital Twins and Augmented Reality/Virtual Reality, all very visionary topics, however of low value when they are implemented in an isolated way.

In this paragraph, I also need to mention the small and medium enterprises that are in the hands of an investment company.  Here I feel sorry as the investment company is most of the time trying to optimize the current ways of working by simplifying or rationalizing the business, not creating a transformative vision (as they do not have the insights. In this type of companies, you will see on a lower scale the same investments done as in the other category of small and medium enterprises, be it on a lesser scale.

Do people need to change?

Often you hear that the problem with any change within the companies is because people do not want to change. I think this is too much a generalization. I have worked in the past five years with several companies where we explored the benefits and capabilities of PLM in a modern way, sometimes focusing on an item-centric approach, sometimes focusing on a model-based approach. In all these engagements there was no reluctance from the users to change.

However, there were two types of users in these discussions. I would characterize as evolutionary thinkers (most of the time ten years or more in the company) and love-to-change thinkers (most of them five years or less in the company). The difference between these groups was that the evolutionary thinkers were responding in the context of the existing business constraints where the love-to-change thinkers were not yet touched by the “knowledge how good everything was”.

For digital transformation, you need to create the love-to-change attitude while using the existing knowledge as a base to improve. And this is not a people change, it is an organizational change where you need to enable people to work in their best mode. It needs to be an end-to-end internal change – not changing the people, but changing the organizational parameters: KPIs, divisions, departments, priorities. Have a look at this short movie, you can replace the word ERP by PLM, and you will understand why I like this movie (and the relaxing sound)

The Middle Management dilemma

And here comes my last observation. At the C-level we can find inspiring visions often outcome-based, talking about a more agile company, closer to the customer, empowered workers, etc.  Then there is the ongoing business that cannot be disrupted and needs to perform – so the business units, the departments all get their performance KPIs, merely keeping the status quo in place.

Also, new digital initiatives need to be introduced. They don’t fit in the existing business and are often started in separation – like GE Digital division, and you can read Jeff Immelt’ s thoughts and strategy how this could work. (The Only Way Manufacturers Can Survive). However as the majority of the business runs in the old mode, the Digital Business became another business silo in the organization, as the middle management could not be motivated to embed digital in their business (no KPIs or very low significance of new KPIs)

I talked about the hybrid/bimodal approach several times in my blog posts, most recently in The Challenges of a Connected Ecosystem.  One of the points that I did not address was the fact that probably nobody wants to work in the old mode anymore once the new approach is successful and scaled up.

When the new mode of business is still small, people will not care so much and continue business as usual. Once the new mode becomes the most successful part of the company, people do want to join this success if they can. And here the change effort is needed. An interesting article in this context is The End of Two-Speed IT from the Boston Consultancy Group (2016). They already point at the critical role of middle management. Middle management can kill digital transformation or being part of it, by getting motivated and adopting too.

Conclusion

Perhaps too much text in this post and even more content when you dive more in-depth in the provided content. Crucial if you want to understand the digital transformation process in an existing company and the critical place of middle management. They are likely the killers of digital transformation if not give the right coaching and incentives.  Just an observation – not a thought 😉

In this post, I will explain the story behind my presentation at PI PLMx London. You can read my review of the event here: “The weekend after ……” and you can find my slides on SlideShare: HERE.

For me, this presentation is a conclusion of a thought process and collection of built-up experiences in the past three to  five years, related to the challenges digital transformation is creating for PLM and what makes it hard to go through compared to other enterprise business domains.  So here we go:

Digital transformation or disruption?

Slide 2 (top image) until 5 are dealing with the common challenges of business transformation. In nature, the transformation from a Caterpillar (old linear business) to a Butterfly (modern, agile, flexible) has the cocoon stage, where the transformation happens. In business unfortunate companies cannot afford a cocoon phase, it needs to be a parallel change.

Human beings are not good at change (slide 3 & 4), and the risk is that a new technology or a new business model will disrupt your business if you are too confident – see examples from the past. The disruption theory introduced by Clayton Christensen in his book, the Innovators Dilemma is an excellent example of how this can happen.  Some of my thoughts are in The Innovator’s dilemma and generation change (2015)

Although I know some PLM vendors consider themselves as disruptor, I give them no chance in the PLM domain. The main reason: The existing PLM systems are so closely tied to the data they manage, that switching from one PLM system to a more modern PLM system does not pay off.  The data models are so diverse that it is better to stay with the existing environment.

What is clear for modern digital businesses is that if you could start from scratch or with almost no legacy you can move faster forward than the rest. But only if supported by a strong leadership , a(understandable) vision and relentless execution.

The impression of evolution

Marc Halpern’s slide presented at PDT 2015 is one of my favorite slides, as it maps business maturity to various characteristics of an organization, including the technologies used.

 

Slide 7 till 18 are zooming in on the terms Coordinated and Connected and the implications it has for data, people and business. I have written about Coordinated and Connected recently: Coordinated or Connected (2018)

A coordinated approach: Delivering the right information at the right moment in the proper context is what current PLM implementations try to achieve. Allowing people to use their own tools/systems as long as they deliver at the right moment their information (documents/files) as part of the lifecycle/delivery process. Very linear and not too complicated to implement you would expect. However it is difficult ! Here we already see the challenge of just aligning a company to implement a horizontal flow of data. Usability of the PLM backbone and optimized silo thinking are the main inhibitors.

In a connected approach: Providing actual information for anyone connected in any context the slide on the left shows the mental picture we need to have for a digital enterprise. Information coming from various platforms needs to be shareable and connected in real-time, leading, in particular for PLM, to a switch from document-based deliverables to models and parameters that are connected.

Slide 15 has examples of some models.  A data-driven approach creates different responsibilities as it is not about ownership anymore but about accountability.

The image above gives my PLM-twisted vision of which are the five core platforms for an enterprise.  The number FIVE is interesting as David Sherburne just published his Five Platforms that Enable Digital Transformation and in 2016 Gartner identified Five domains for the digital platform .- more IT-twisted ? But remember the purpose of digital transformation is: FIVE!

From Coordinated to Connected is Digital Transformation

Slide 19 till 27 further elaborate on the fact that for PLM there is no evolutionary approach possible, going from a Coordinated technology towards a Connected technology.

For three reasons:  different type of data (document vs. database elements), different people (working in a connected environment requires modern digital skills) and different processes (the standard methods for mechanical-oriented PLM practices do not match processes needed to deliver systems (hardware & software) with an incremental delivery process).

Due to the incompatibility of the data, more and more companies discover that a single PLM-instance cannot support both modes – staying with your existing document-oriented PLM-system does not give the capabilities needed for a model-driven approach. Migrating the data from a traditional PLM-environment towards a modern data-driven environment does not bring any value. The majority of the coordinated data is not complete and with the right quality to use a data-driven environment. Note: in  a data-driven environment you do not have people interpreting the data – the data should be correct for automation / algorithms.

The overlay approach, mentioned several times in various PLM-blogs, is an intermediate solution. It provides traceability and visibility between different data sources (PLM, ALM, ERP, SCM, …). However it does not make the information in these systems better accessible.

So the ultimate conclusion is: You need both approaches, and you need to learn to work in a hybrid environment !

What can various stakeholders do?

For the management of your company, it is crucial they understand the full impact of digital transformation. It is not about a sexy customer website, a service platform or Virtual Reality/Augmented Reality case for the shop floor or services. When these capabilities are created disconnected from the source (PLM), they will deliver inconsistencies in the long-term. The new digital baby becomes another silo in the organization. Real digital transformation comes from an end-to-end vision and implementation.  The result of this end-to-end vision will be the understanding that there is a duality in data, in particular for the PLM domain.

Besides the technicalities, when going through a digital transformation, it is crucial for the management to share their vision in a way it becomes a motivational story, a myth, for all employees. As Yuval Harari, writer of the book Sapiens,  suggested, we (Home Sapiens) need an abstract story, a myth to align a larger group of people to achieve a common abstract goal. I discussed this topic in my posts: PLM as a myth? (2017)  and PLM – measurable or a myth?

Finally, the beauty of new digital businesses is that they are connected and can be monitored in real-time. That implies you can check the results continuously and adjust – scale of fail!

Consultants and strategists in a company should also take the responsibility, to educate the management and when advising on less transformational steps, like efficiency improvements: Make sure you learn and understand model-based approaches and push for data governance initiatives. This will at least narrow the gap between coordinated and connected environments.

This was about strategy – now about execution:

For PLM vendors and implementers, understanding the incompatibility of data between current PLM practices – coordinated and connected – it will lead to different business models. Where traditionally the new PLM vendor started first with a rip-and-replace of the earlier environment – no added value – now it is about starting a new parallel environment.  This implies no more big replacement deals, but more a long-term. strategic and parallel journey.  For PLM vendors it is crucial that being able to offer to these modes in parallel will allow them to keep up their customer base and grow. If they would choose for coordinated or connected only it is for sure a competitor will work in parallel.

For PLM users, an organization should understand that they are the most valuable resources, realizing these people cannot make a drastic change in their behavior. People will adapt within their capabilities but do not expect a person who grew up in the traditional ways of working (linear / analogue) to become a successful worker in the new mode (agile / digital). Their value lies in transferring their skills and coaching new employees but do not let them work in two modes. And when it comes to education: permanent education is crucial and should be scheduled – it is not about one or two trainings per year – if the perfect training would exist, why do students go to school for several years ? Why not give them the perfect PowerPoint twice a year?

Conclusions

I believe after three years of blogging about this theme I have made my point. Let’s observe and learn from what is happening in the field – I remain curious and focused about proof points and new insights. This year I hope to share with you new ideas related to digital practices in all industries, of course all associated with the human side of what we once started to call PLM.

Note: Oleg Shilovitsky just published an interesting post this weekend: Why complexity is killing PLM and what are future trajectories and opportunities? Enough food for discussion. One point: The fact that consumers want simplicity does not mean PLM will become simple – working in the context of other information is the challenge – it is human behavior – team players are good in anticipating – big egos are not. To be continued…….

 

 

 

 

 

 

 

 

 

What I want to discuss this time is the challenging transformation related to product data that needs to take place.

The top image of this post illustrates the current PLM world on the left, and on the right the potential future positioning of PLM in a digital enterprise.  How the right side will behave is still vague – it can be a collection of platforms or a vast collection of small services all contributing to the performance of the company.  Some vendors might dream, all these capabilities are defined in one system of systems, like the human body; all functions are available and connected.

Coordinated or connected?

This is THE big question for a future digital enterprise. In the current PLM approach, there are governance structures that allow people to share data along the product lifecycle in a structured way.

These governance structures can be project breakdown structures, where with a phase-gate approach the full delivery is guided. Deliverables related to task and gates will make sure information is stored available for every stakeholder. For example, a well-known process in the automotive industry, the Advanced Product Quality Process ( APQP process) is a standardized approach to make sure parts or products are introduced with the right quality for the customer.

Deliverables at any stage in the process can be reviewed or consumed by another stakeholder. The result is most of the time a collection of approved documents (Office-type, Design & Test files) stored centrally. This is what I would call a coordinated data approach.

In complex environments, besides the project governance, there will be product structures and Bill of Materials, where each object in such a structure will be the placeholder for related information. In case of a product structure it can be its specifications per component, in case of a Bill of Materials, it can be its design specification (usually in CAD models) and its manufacturing specifications, in case of an MBOM.

An example of structures used in Enovia

Although these structures contain information about the product composition themselves, the related information makes the content understandable/realizable.

Again it is a coordinated approach, and most PLM systems and implementations are focusing on providing these structures.

Sometimes with their own system only – you need to follow the vendor portfolio to get the full benefit  or sometimes the system is positioned as an overlay to existing systems in the company, therefore less invasive.

Presentation from Martin Eigner – explaining the overlay concept based on Aras

Providing the single version of the truth is often associated with this approach. The question is: Is the green bin on the left the single version of the truth?

The Coordinated – Single Version of the Truth – problem

The challenge of a coordinated approach is that there is no thorough consistency checking if the data delivered is representing the real truth. Through serious review procedures, we do our best to make sure every deliverable has the required content and quality. As information inside these deliverables is not connected to the outside world, there will be discrepancies between reality and what has been stored. Still, we feel comfortable enough as an organization to pretend we know where the risks are. Until the costly impossible happens !

The connected enterprise

The ultimate dream of a digital enterprise is that everything relevant is connected in context. This means no more documents or files but a very granular information model for linking data and keeping it in context. We can apply algorithms and automation to connected data and use Artificial Intelligence to make sense of massive amounts of data.

Connected data allows us to share combined sets of information that are relevant to a particular role. Real-time dashboarding is one of the benefits of such an infrastructure. There are still a lot of challenges with this approach. How do we know which information is valid in the context of other information? What are the rules that describe a valid product or project baseline at a particular time?

Although all data is stored as unique information objects in a network of information, we cannot apply the old mechanisms for a coordinated approach all the time. Generated reports from a connected environment can still serve as baselines or records related to a specific state, such as when the design was approved for manufacturing, we can generate approved Product Baselines structures or Bill of Materials structures.

However, this linearity in lifecycle for passing information through an enterprise will not exist anymore. It might be there are various design alternatives and the delivery process is already part of the design phase. Through integrated virtual simulation and testing, we reach a state that the product satisfies the market for that moment and the delivery process is known at the same time

Almost immediately and based on first experiences from the field, new features can be added virtually tested and validated for the next stage. We need to design new PLM infrastructures that can support this granularity and therefore complexity.

The connected – Single Version of the Truth – problem

The concepts I described related to the connected enterprise made me realize that this is analogue to how the brain works. Our brain is a giant network of connected information, dynamically maintaining associations, having different abstraction levels and always pretending there is one truth.

If you want to understand a potential model of the brain, please read On Intelligence from Jeff Hawkins. With the possible upcoming of the Quantum Computer, we might be able to create performing brain models.

In my earlier post: Are we blocking our future,  I referred to the book; The Idiot Brain: What Your Head is Really Up To from Dean Burnett, where Dean is stating that due to the complexity of stored information our brain continuously adapts “non-compliant” information to make sure the owner of the brain feels comfortable.

What we think that is the truth might be just the creation from the brain, combining the positive parts into a compelling story and suppressing or deleting information that does not fit.  Although it sounds absurd, I believe if we are able to create a connected digital enterprise we will face the same symptoms.  Due to the complexity of connected information, we are looking for the best suitable version, and as all became so complex, ordinary human beings will no longer be able to distinguish this

 

Conclusion:

As part of the preparation for the upcoming PDT Europe 2018, I was investigating the topics coordinated and connected enterprise to discover potential transformation steps. We all need to explore the future with an open mind, and the challenge is: WHERE and HOW FAST can we transform from coordinated to connected? I am curious if you have experiences or thoughts on this topic.

 

 

changeBusiness is changing and becoming digital as you might have noticed. If you haven´t noticed it, you might be disconnected from the world or work in a stable silo. A little bit simplified and provocative otherwise you would not read further.

The change towards digital also has its effect on how PLM is evolving. Initially considered as an extension of PDM, managing engineering data, slowly evolving to an infrastructure to support the whole product lifecycle.

The benefits from a real PLM infrastructure are extremely high as it allows people to work smarter, identify issues earlier and change from being reactive towards proactive. In some industries, this change in working is they only way to stay in business. Others with still enough margin will not act.

Note: I am talking about a PLM infrastructure as I do not believe in a single PLM system anymore. For me PLM is supported through a collection of services across the whole product lifecycle, many potentially in one system or platform.

Changing from an engineering-centric system towards an infrastructure across the departmental silos is the biggest challenge for PLM. PLM vendors and ERP vendors with a PLM offering are trying provide this infrastructure and mainly fight against Excel. As an Excel file can easy pass the border from one department to the other. No vision needed for Excel.

A PLM infrastructure however requires a vision. A company has to look at its core business processes and decide on which information flows through the organization or even better their whole value chain.

Building this vision, understanding this vision and then being able to explain the vision is a challenge for all companies. Where sometime even management says

“Why do we need to have a vision, just fix the problem”

also people working in departments are not looking forward to change their daily routines because they need to share information. Here you here statements like

“Why people feel the need to look at the big picture. I want to have my work done.”

So if current businesses do not change, will there be a change?

Innovation

Here I see the digital world combined with search-based applications coming up. Search based applications allow companies to index their silos and external sources and get an understanding of the amount of data there exists. And from these results learn that there is a lot of duplicated data or invalid information at different places.

This awareness might create the understanding that if instead of having hundred thousands of Excels in the organization, it would be better to have the data inside a database, uniquely stored and connected to other relevant information.

I have described this process in my past three posts and agreed the context remains complex if you are not involved or interested in it.

To grasp this concept first of all, you need to have the will to understand it. There is a lot of strategic information out there from companies like Accenture, Capgemini and more.

Next if you want to understand it in a more down-to-earth manner it is important to listen and talk with your peers from other companies, other industries. This is currently happening all around the world and I invite you to participate.

Here is a list of events that I am attending or planned to attend but too far away:

October 7th Stockholm – ENOVIA user conference

imageHere I will participate as a panel member in the discussion around the concept of zero files. Here we want to explain and discuss to the audience what a data-centric approach means for an organization. Also, customers will share their experiences. This conference is focusing on the ENOVIA community – you can still register here

October 14th-15th Paris – Product Data Technology 2014 conference

pdteuropeHere I will speak about the PLM future (based on data) and what PLM should deliver for the future generations. This conference is much broader and addresses all PLM related topics in a broader perspective

October 28 Product Innovation conference in San Diego

picongressI have always enjoyed participating to this conference as like the PDT2014 it brings people together for networking and discussions. Mostly on business topics not on IT-issues.

November 26 Infuseit seminar in Copenhagen

imageRelative new in the Nordics Infuseit, a PLM consultancy company, is able to attract an audience that wants to work on understanding the PLM future. Instead of listening to presenters, here you are challenged to to discuss and contribute to build a common opinion. I will be there too.

 

Conclusion: It is time to prepare yourself for the change – it is happening and be educated an investment that will be rewarding for your company

What do you think – Is data-centric a dream ?

observation Two weeks ago I received through the PLM group on LinkedIn, the following question from Nathalie: “Do you know any specific examples of what some companies have done to get their users ready, excited or more committed to the new PLM system?”

When digging in my mind and planning to give a quick answer, I realized it was an interesting question with a contradiction embedded: users and excitement for a new PLM system.

This week I was attending the SmarTeam User Group meeting in the Netherlands, where an excellent presentation was given by Simon and Hessel from a Dutch company called  Meyn (Poultry processing) about their PLM implementation. They shared their excitement !

Combined with an interesting discussion on Oleg’s blog with Frank, I believe I have the ingredients to answer the above question more complete.

PLM is not exiting for users

myplm I think this is fact number one. When you go to tradeshows or PLM exhibitions, you see usually only 3D CAD demos, nobody tries to demonstrate PLM functions and features in detail. As a side step, I believe the best PLM system should be almost invisible for the user. Users want to work in their own environment with applications like CAD, Excel (BOM handling apps), Office, FEA tools, Simulation tools and more.

ERP has a more clear value proposal, if you want to define and schedule your manufacturing and manage the financial transactions, everyone has accepted that you need ERP. User acceptance is not relevant, users have to work with the provided interface as otherwise production or accounting will fail, there is no alternative.

In contrary, the clear value and definition of PLM are not clear to user. For that reason these users do not get excited when confronted with PLM. They have been surviving without implementing PLM, so they believe there is an alternative.

 

But we know there are PLM benefits?

My previous post – PLM in the mid-market a mission impossible? – lead to a discussion with Oleg and Frank coming with anew and interesting view point. Frank mentioned that in the German area, many mid-market companies do PLM without purchasing an enterprise PLM system from the known vendors.

coopThe discussion focused on granularity, as all of us believed that a set-by-step approach towards PLM best practices, driven by people who understand the company very well, is the key to success. For this approach you need people inside the customer’s organization who can formulate the vision assisted by consultants working very dedicated in that industry. It requires a different type of consultant as those active in the big enterprise projects.

Instead of implementing PLM as a standard process, in this approach the customer drives and leads the activities where they see benefits in their overall business process. To achieve this, the company must have has a clear vision, where they want to be in the next 5 – 10 years.

Next implementations steps should fit in this strategy and prioritized based on different parameters and these steps are not always with a focus on PLM.

And here lies the key for successful PLM implementations.

my_way The implementation might be based on an academic approach around a core PLM data model and best practices. Mid-market offerings are around an OOTB (Out-Of-The-Box) quick implementation –  the PLM system/implementer leads.

Something the management of likes to hear; quick and with little customization, which would translate in lower costs of implementation and disruption of the organization. But then, the end-users start to complain. There is too much change their standard way of working and they do not see the advantages – keying in more data in a system does not help them.

No_roi The introduction of PLM brings more complexity and as the new system has to prove itself, there is not big enthusiasm from the average user. The management can push, like in the ERP situation, but in general also the management is anxious to learn if this OOTB-approach brings the benefits and when it fails they ask the vendor where the estimated ROI can be found.

Concluding you will be lucky if users get excited form the OOTB approach.

sel_a In the second and granular approach, the company defines their strategy and vision, not necessary a 100 % PLM vision. This strategy need to be clear and shared with the employees in the company, especially for those who are affected by changes.

Next together with implementation partners, who bring in the know-how and possible software tools, a part of the company’s process is addressed and improved. It can be in any area, changing the CAD engine, automate BOM handling, connect sales to engineering or connect after sales/service to engineering.

Many of these areas of interest have different solutions, some are extensions of the CAD environment, some of them are extensions of the ERP environment and some of them are extensions of the IT-platform used in the company.

This approach is not sold by the PLM vendors, as they want to introduce their system as the IT-platform, wrap around the CAD and even capture the definition of the MBOM and initiation of the Item master.

A step-by-step approach based on different granular components, every time in the direction of the company’s strategy, plus all the time feed-back to the end-users on the positive impact of the change, is for me the key to success. In my previous post I was looking for a global provider for these required components.
With the step by step approach with granular solutions, we get users involved and excited.

 

And this brings me the to the presentation from Meyn

meyn The first time I got involved with Meyn was in October 2004. At that time they had chosen to move from their BaaN-2D CAD infrastructure to a new environment with BaaN – 3D CAD (CATIA). Simon presented their target strategy and vision: moving away from being an Engineering To Order company to become primarily a Configure To Order company.

ENOVIA SmarTeam was chosen to manage the 3D CAD and to connect the information to BaaN. Initially Meyn started in the classical PLM approach, but already after a few months, the understanding was there, they need have step-by-step approach, focused on results for the new CATIA users, without communicating around a complete PLM focused project.

So they followed a stepped approach, they called them waves.

Moving from Engineering to Order to Configure to Order is not software implementation. It requires rationalization of your products; convert them into modular, configurable parts. For this you need to be an engineering expert, not a software expert.

But when it comes to implementation of this concept in the software, you need both experts. And through this collaboration, a methodology for skeleton design was established which was driven by Meyn. And the reason the users were excited was, that they were doing real engineering, the benefits were significant visible.

roi Customer project related engineering time (typical ETO), which was in the beginning their core activity, became around 30 % of the time. More time could be spent on developing new machines in a modular way. With almost the same amount of engineers the turn-over of the company had more than doubled. A win-win environment which makes also the end-users excited.

Still the backend with ERP at Meyn remained almost the same similar to the time they were working in the 2D environment. And the most interesting conclusion at the end of the presentation was, they are still using the same slide with the vision and they can explain why each step was taken and justify it by measurable benefits.

And this brings me to the answer of the question

“Do you know any specific examples of what some companies have done to get their users ready, excited or more committed to the new PLM system”?

  • The management needs to have a clear vision where they want to be as a company in the future. This is not an IT-vision, but a business vision which explain why changes are needed. This vision should be clear to the employees. Communicate!
  • Where possible provide metrics!
  • Do not talk about a PLM system; it can be also in other tools. Talk about improvement steps in the business processes contributing to the vision. The PLM system is the information backbone, not the front-end. Management and implementers should talk business functionality not IT functions and features. Do not talk in applications!
  • Build step by step user scenarios with focus on methodology and user understanding. Implementations with a function-feature focus are hard to accept by the users. Talk business!
  • The management should present their vision again and again, supported by metrics what has been accomplished and what has been learned for the future – repeat!

Conclusion

There are thousands of mid-market companies that have a vision to improve their business. The PLM system should never be the topic of discussion with the end users; it is the change in working methods that is important, supported by various systems -CAD/ERP/CRM – and almost invisible …….. PLM

The company Meyn is an example of this approach. Simon and Hessel are working for Meyn as engineers improving their company’s business. Unfortunate it is not their business to explain all around the world, how PLM supports business change in a mid-market company. I was glad to attend their session last week.

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