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Last time in the series Learning from the past to understand the future, we zoomed in on how the 3D CAD-structure in the mid-market had to evolve. In a typical Engineering To Order (ETO) scenario, it makes sense to extract from the 3D CAD-structure a BOM-structure to collect all the individual parts that are needed for manufacturing. Combined with the drawings generated based on the 3D CAD assemblies/parts, the complete manufacturing information could be provided. Let’s have a look.
The BOM in ERP (part 1)
To understand what most mid-market companies have been doing, I created the image below. When you click on it, you will have an enlarged version.
Note: for educational purposes an extremely simplified example
There is a lot to explain here.
First, on the right we see the 3D CAD assembly, two phantom assemblies, grouping the wheels and the axle. And at the end, the individual parts, i.e. chassis, axle, and wheel. The 3D CAD-structure is an instance-based structure; therefore, there are no quantities in the structure (all quantity 1)
For the individual parts, there are drawings. Also, for the product, we have an assembly drawing. The drawings are essential as we want to have them in the ERP-system for manufacturing.
Finally, the physical parts, now with a different ID than the drawing as we learned this one-to-one relation created a lot of extra work. The physical parts are often called Items or Materials (SAP naming). Unfortunately, for engineering, there is a different meaning behind Materials. Still, SAP’s data model was not built with an engineering mindset.
The physical part structure, which we call the BOM contains quantities. Most PDM-CAD-integrations can filter out phantom assemblies and summarize the parts on the same level
I am still reluctant to call the Part-structure an EBOM as the design of the product has been mainly focusing on extracting manufacturing information, parts, and drawings.
The BOM in ERP (part 2)
In customized PDM-implementations, some implementers created an interface from the BOM-structure to ERP, so the ERP-system would have the basic definition of the parts and a copy of the relevant drawings.
Now manufacturing could create the manufacturing definition without the need to go into the PDM-system.
Some “clever” – Dick Bourke would say “smart – therefore lazy” – proposed to “draw” also manufacturing entities in the 3D CAD-structure, so the PDM-CAD-interface would automatically deliver manufacturing parts too inside the ERP. In the example below, we added paint for the body and grease needed for the axels.
Although “smart, a new problem was introduced here – the 3D CAD-structure, instance-based, always has quantities 1. The extracted BOM would have rounded numbers when considering design parts. Now the grease comes with an estimate of 0.025 kg, assuming quantities are based on SI-units. We could also add other manufacturing information to this BOM, like 0.3-liter paint. Anyway, the result would look like below:
Important to notice from the diagram here: There are placeholders for grease and paint “drawn” in the 3D CAD-structure – parts without a geometrical definition and, therefore, not having an associated drawing. However, these parts have a material specification, and therefore in the BOM-structure, they appear as Materials.
Next in the BOM-structure, the engineers would enter the expected/required quantity – which is no longer a rounded number.
At this stage, you cannot call the BOM on the left an EBOM. It is a kind of hybrid structure, combining engineering and manufacturing data. A type of BOM we discover a lot in companies that started with a type of ETO-product.
The ETO-product
Many companies that developed specialized machinery have started with a base product, from where they developed the custom solution – their IP. Next, with more and more customers, the original solution was extended by creating either new or changed capabilities.
I worked a lot with companies that moved to the full definition of their products in 3D CAD, creating a correct 3D CAD-structure per customer order. Instead of creating new BOM variants, companies were often tempted/forced to make the configuration inside the 3D CAD-model.
Every time one of the configurations of the part would change, or a new configuration was added, the file has to be revised.
And if the change was at level five of a 3D CAD-structure, many assembly files needed to be updated. The versioning problem illustrates the challenge of managing configurations inside a 3D CAD-file, meanwhile creating complexity for the PDM/PLM-system.
Last week Tech-Clarity published the highlights of their survey: Bringing Custom-Engineered Products to Market with a link to the full report, sponsored by Propel.
As you can imagine, this survey is more about PLM collaboration, breaking down the silos and acting agile. Unfortunately, the report does not expose required methodologies, like modularity and “common sense” engineering practices that we discuss here. Still worthwhile to read as the report addresses precisely the type of companies I am referring too here.
If we look at the methodology of custom-engineered products, let us look at how their “best practice” from the past is blocking the future.
When a new customer request is coming in, sales engineering is looking for the best match of delivered products. Hopefully, 80-90 % remains the same, and engineering has to focus only on the differences.
First, the best-match 3D CAD-structure is copied to a new project. As you can see most 3D CAD-systems provide the functionality to create a derived structure from an original 3D CAD-structure. From there, a traditional ETO-process starts as described at the beginning of this post. We complete the 3D CAD-structure with manufacturing in mind, generate the BOM and drawings, and we can deliver. In the case of purchase parts, the generated BOM often contains already the supplier part number in the 3D CAD-structure as we are focusing on this single delivery.
The disadvantage of this approach that in theory, we have to check if the structure that we reused is really the best so far, otherwise we introduce errors again.
The second disadvantage is that if one supplier part in the structure becomes obsolete and needs to be revised, the company has to go through all the 3D CAD-structures to fix it.
Also, having supplier parts in the 3D CAD-structure makes it more difficult to standardize, as the chosen supplier part matched the criteria for that customer at that time. Will it match the criteria also in other situations?
From ETO to BTO to CTO
Many companies that started with custom-engineered products, the ETO-approach, want to move towards a Configure To Order (CTO) approach – or if not possible at least Build To Order (BTO). More reuse, less risk, instead of creating every time a new solution for the next customer, as discussed before.
This is not a mission impossible; however, often, I have seen that companies do not set the right priorities to move towards a configure to order environment. There are a few changes needed to become a configure to order company (if possible):
- Analyze your solution and define modules and options. Instead of defining a full solution, the target now is to discover a commonality between the various solutions. Based on commonality, define modules and options in such a manner that they can be used in different situations. Crucial for these modules is that there is a standard interface to the rest of the product. Every company needs to master this specific methodology for their products
- Start defining products from a logical structure, defining how products, modules and options are compatible and which combinations are allowed (or preferred). For companies that are not familiar with logical structure, often a configured EBOM is used to define the solutions. Not the optimal way; however, this was the first approach most companies took ten years ago. I will explain the configured EBOM below.
- A product definition and its modules now should start from a real EBOM, not containing manufacturing characteristics. The EBOM should represent the logical manner of how a product is defined. You will notice this type of EBOM might be only 2 – 3 levels deep. At the lowest level, you have the modules that have their own lifecycle and isolated definition.
- You should no longer use supplier part numbers in your EBOMs. As the engineering definition of a module or option should not depend over time from a single supplier. We will discuss in the next post the relation between EBOM parts and the Approved Manufacturer List (AML)
To conclude for today
Changing from ETO to CTO requires modularity and a BOM-driven approach. Starting from a 3D CAD-structure can still be done for the lowest levels – the modules, the options. In a configure to order process, it might not be relevant anymore to create a full 3D-representation of the product.
However, when we look forward, it would be greatly beneficial to have the 3D-representation of every specific solution delivered. This is where concepts as augmented/virtual reality and digital twin come in.
Next time more on the BOM-structures – as we have just touched the upcoming of the EBOM – enough to clarify next week(s).
The last month I haven’t been able to publish much of my experiences as I have been in the middle of several PLM selection processes for various industries. Now in a quiet moment looking back, I understand it is difficult for a company to choose a PLM solution for the future.
I hope this post will generate some clarity and may lead to some further discussion with other experts in the audience. I wrote about the do’s and don’ts of PLM selection in 2010, and most of it is still actual; however, there is more. Some of the topics explained:
Do you really need PLM ?
This is where it starts. PLM is not Haarlemerolie, an old Dutch medicine that was a cure for everything since the 17th century. The first step is that you need to know what you want to achieve and how you are aiming to achieve it. Just because a competitor has a PLM system installed, does not mean they use it properly or that your company should do it too. If you do not know why your company needs PLM, stop reading and start investigating.
….
If you are still reading this, you are part of the happy few, as justifying the need for PLM is not easy. Numerous of companies have purchased a PLM system just because they think they needed PLM. Or there was someone convinced that this software would bring PLM.
Most of these cases there was the confusion with PDM. Simply stating: PDM is more a departmental tool (engineering – multidisciplinary) where PLM is a mix of software, infrastructure to connect all departments in a company and support the product through its entire lifecycle.
Implementing “real” PLM is a business change, as people have to start sharing data instead of pushing documents from department to department. And this business transformation is a journey. It is not a fun journey, nicely characterized in Ed Lopategui’s blog post, the PLM Trail.
Although I believe it is not always that dramatic, Ed set the expectations right. Be well prepared before you start.
Why do companies still want PLM, while it is so difficult to implement?
The main reason is to remain competitive. If margins are under pressure, you can try to be more efficient, get better and faster tools. But by working in the old way, you can only be a little better.
Moving from a sequential, information pushing approach towards an on-line, global information sharing manner is a change in business processes. It is interaction between all stakeholders. Doing things different requires courage, understanding and trust you made the right choice. When it goes wrong, there are enough people around you to point fingers at why it went wrong – hindsight is so easy.
Doing nothing and becoming less and less competitive is easier (the boiling frog again) as in that case the outside world will be blamed, and there is nobody to point fingers at (although if you understand the issue you should make the organization aware the future is at stake)
Why is PLM so expensive?
Assuming you are still reading, and you and your management are aligned there is a need for PLM, a first investigation into possible solutions will reveal that PLM is not cheap.
When you calculate the overall investment required in PLM, the management often gets discouraged by the estimated costs. Yes, the benefits are much higher, but to realize these benefits, you need to have a clear understanding of your own business and a realistic idea how the future would look like. The benefits are not in efficiency. The main benefits come from capabilities that allow you to respond better and faster than by just optimizing your departments. I read a clarifying post recently, which is addressing this issue: Why PLM should be on every Executive’s agenda !
From my experience with PLM projects, it is surprising to learn that companies do not object to spend 5 to 20 times more money for an ERP implementation. It is related to the topic: management by results or management by means.
PLM is not expensive compared to other enterprise systems. It can become expensive (like ERP implementations) if you lose control. Software vendors have a business in selling software modules, like car resellers have a business in selling you all the comfort beyond the basics.
The same for implementation partners, they have a business in selling services to your company, and they need to find the balance between making money and delivering explainable value. Squeezing your implementation partner will cause a poor delivery. But giving them an open check means that, at a certain moment, someone will stand up and shutdown the money drain as the results are no longer justifiable. Often I meet companies in this stage, the spirit has gone. It is all about the balance between costs and benefits.
This happens in all enterprise software projects, and the only cure is investing in your own people. Give your employees time and priority to work in a PLM project. People with knowledge of the business are essential, and you need IT resources to implement. Do not make the mistake to leave business uncommitted to the PLM implementation. Management and middle management does not take the time to understand PLM as they are too busy or not educated / interested.
Make business owners accountable for the PLM implementation – you will see stress (it is not their daily job – they are busy), but in the longer time you will see understanding and readiness of the organization to achieve the expected results.
We are the largest – why select the largest ?
When your assignment is to select a new enterprise system, life could be easy for you. Select a product or service from the largest business and your career is saved. Nobody gets blamed for selecting the largest vendor, although if you work for a small mid-sized company, you might think twice.
Many vendors and implementers start their message with:
“…. Market leader in ABC, though leader in XYZ, recognized by 123”
The only thing you should learn from this message is that this company probably has delivered a trustworthy solution in the past. Looking at the past you get an impression of its readiness and robustness for the future. Many promising companies have been absorbed by the larger ones and disappeared. As Clayton Christensen wrote in The Innovators Dilemma:
“What goes up does not go down”.
Meaning these large companies focus on their largest clients and will focus less on the base of the business pyramid (where the majority is), making them vulnerable for disruptive innovation.
Related to this issue there is an interesting post (and its comments), written by Oleg Shilovitsky recently: How many PLM vendors disappear in disruption predicted by Gartner.
My observation: the world of PLM is not in a moment of sudden disruption at this moment.
Still when selecting a PLM vendor it is essential to know if they have the scale to support you in the future and if they have the vision to guide you into the future.
The future of PLM is towards managing data in a connected manner, not necessary coming from a single database, not necessary using only structured data. If your PLM vendor or implementer is pushing you to realize document and file management, they are years late and not the best for your future.
PLM is a big elephant
PLM is considered as a big elephant, and I agree if you address everything in one shot that PLM can do. PLM has multiple directions to start from – I wrote about it: PLM at risk – it does not have a single job
PLM has a huge advantage compared to a transactional system like ERP and probably CRM. You can implement a PLM infrastructure and its functionality step by step in the organization, start with areas that are essential and produce clear benefits for the organization. That is the main reason that PLM implementations can take 2 – 3 years. You give the organization time to learn, to adapt and to extend.
We lose our flexibility ?
Nobody in an organization likes to be pushed in a cooperate way of working, which by definition is not as enjoyable and as flexible as they way you currently work. It is still an area where PLM implementations can improve: provide the user with an environment that is not too rigid and does not feel like a rigid system. You seen this problem with old traditional large PLM implementations for example with automotive OEMs. For them, it is almost impossible to switch to a new PLM implementation as everything has been built and connected in such a proprietary way, almost impossible to move to more standard systems and technologies. Late PLM implementations should learn from these lessons learned.
PLM vendor A says PLM vendor B will be out of business
One of the things I personally dislike is FUD (Fear, Uncertainty and Doubt). It has become a common practice in politics and I have seen PLM vendors and implementers using the same tactics. The problem with FUD is that it works. Even if the message is not verifiable, the company looking for a PLM system might think there must be some truth in this statement.
My recommendation to a company that gets involved in FUD during a PLM selection process, they should be worried about the company spreading the FUD. Apparently they have no stronger arguments to explain to you why they are the perfect solution; instead they tell you indirectly we are the less worst.
Is the future in the cloud ?
I think there are two different worlds. There is the world of smaller businesses that do not want to invest in an IT-infrastructure and will try anything that looks promising – often tools oriented. This is one of my generalizations of how US businesses work – sorry for that. They will start working with cloud based systems and not be scared by performance, scalability and security. As long all is easy and does not disturb the business too much.
Larger organizations, especially with a domicile in Europe, are not embracing cloud solutions at this moment. They think more in private or on-premise environments. Less in cloud solutions as security of information is still an issue. The NSA revelations prove that there is no moral limit for information in the sake of security – combined with the fear of IP theft from Asia, I think European companies have a natural resistance for storing data outside of their control.
For sure you will see cloud advocates, primarily coming from the US, claiming this is the future (and they are right), but there is still work to do and confidence to be built.
Conclusion:
PLM selection often has a focus on checking hundreds of requirements coming from different departments. They want a dream system. I hope this post will convince you that there are so many other thoughts relevant to a PLM selection you should take into account. And yes you still need requirements (and a vision).
Your thoughts ?
Related articles
- CIMdata Publishes PLM Geography Report (detroit.cbslocal.com)
First of all happy new year to all of you. As there is no “End of the World” risk anymore in the near future , we can start looking forward and set our goals for the next 5 years or is it a 7-years plan Oleg ?.
Christmas, the moment the light returns on the Northern hemisphere, plus the food , cycling and the preparations for the next Product Innovation conference in Berlin were the drivers for this blog post.
The title might give you the impression that it is an IQ-quiz: “Which word does not fit in this sequence”? Well, It’s not, they are all related. Let’s put them in a chronological order.
Frogs
Frogs existed first, and were exploring the world before us humans. Paleontologists assume they had no notion of what was global. In their world it was probably a few ponds in size. For certain, they did not have anything to do with innovation. At that time, survival depended on the slow process of evolution.
Millions of years later, the first Homos appeared on the earth surface; Homo Sapiens, Homo Erectus, Homo Ludens and perhaps more. They all had something in common: Instead of waiting for the evolution which was ongoing, they started in parallel to innovate. First by walking upright, using a more advanced language to communicate and learning to have tools to achieve more. Their world was still within a reasonable walking distance and probably they started to eat frogs.
Human evolution
This evolution continued for thousands of years. Human beings started to spread around the world and in waves they brought innovation. They built stone temples, learned to sail, discovered gunpowder, electricity, the universe, the internet and more. It is interesting to see that every time a major innovation was born, these innovators enriched their region in wealth and culture, using their innovation as a competitive advantage to dominate their neighbors.
In many cases 1000 years later, this innovation became a commodity and other civilizations stood up with their innovation and dominated their regional environment which became bigger and bigger in size. Where possible they made use of the cheap resources (modern word for what was initially called slaves) to enrich their civilization. For certain, the most civilized were eating frogs!
Market expansion – innovation pace
During the last century, the pace of innovation went faster and faster. New ways of communication and transportation became available and affordable, which made it impossible for innovations to stay within a specific civilization. Innovation became available for everyone around the world and the domination shifted towards companies and markets.
Companies with a strategy to innovate, discovered that there were new ways needed to respond faster than before to market opportunities. This was the driving force behind PDM, as an first attempt to get a better grip and understanding of their fast evolving, more complex products, that require more and more global collaboration between design teams.
PDM is now accepted as critical by all manufacturing companies around the world, to guarantee quality and efficiency. Customer focus became the next demand from the market and interestingly enough, the demand for frogs decreased.
However this wave of innovation was followed by a wave with even greater impact on the global society. New technologies, the availability of internet and social media, suddenly changed society. Combined with the financial crisis in the US and Europe, it became clear that the way we worked in the past is no longer the way to survive in the future.
Faster and global
PLM was introduced early this century as a new strategy to become more customer-centric, being able to respond faster and better to market demands by bringing innovation to the market before the competition. PLM requires a different approach by companies to work internally and interact with the (global) outside world. The need to implement the PLM vision requires change and as it cannot be considered as an evolutionary process over several generations, it will be a business change. However, in general, human beings do not like rapid change. Here the frogs come back into the picture, now as the boiling frog metaphor.
It is based on 19th century anecdote describing a frog slowly being boiled alive. The premise is that if a frog is placed in boiling water, it will jump out, but if it is placed in cold water that is slowly heated, it will not perceive the danger and will be cooked to death. The story is often used as a metaphor for the inability of people to react to significant changes that occur gradually. This metaphor is very applicable for the classical approach companies bring their products to the market, where innovation is more a lucky coincidence than a result of a strategy.
Here it all comes together again.
Innovation is the only way for companies to avoid becoming a commodity – not able to differentiate for your potential customers. Now the title of this post should be clear: “Do not be a boiling frog, use PLM to support your innovation and become available for the global market”
As the new year has started and it is still time to extend your good intentions, add Innovation, PLM and Change to your survival list.
I look forward to your comments and hope to discuss with you the relation between PLM and Innovation during the upcoming Product Innovation event in Berlin, where I present a session with the title: “PLM loves Innovation ?”
(when you know me, you know the answer, but there are always surprises)
Related articles
- Are we as dumb as “Slowly Boiling Brainless Frogs”? (1) (blogs.redding.com)
Sorry for the provoking title in a PLM blog, but otherwise you would not read my post till the end.
In the past months I have been working closely with several large companies (not having a mid-market profile). And although they were all in different industries and have different business strategies, they still had these common questions and remarks:
- How to handle more and more digital data and use it as valuable information inside the company or for their customers / consumers ?
- What to do with legacy data (approved in the previous century) and legacy people (matured and graduated in the previous century) preventing them to change ?
- We are dreaming of a new future, where information is always up-to-date and easy to access – will this ever happen ?
- They are in the automotive industry, manufacturing industry, infrastructure development and maintenance, plant engineering, construction and plant maintenance
- They all want data to be managed with (almost) zero effort
- And please, no revolution or change for the company
Although I have been focusing on the mid-market, it is these bigger enterprises that introduce new trends and as you can see from the observations above, there is a need for a change. But also it looks like the demands are in a contradiction to each other.
I believe it is just about changing the game.
If you look at the picture to the left, you see one of the contradictions that lead to PLM.
Increasing product quality, reducing time to market and meanwhile reducing costs seemed to be a contradiction at that time too.
Change ?
Although PLM has not been implemented (yet) in every company that could benefit from it, it looks like the bigger enterprises are looking for more.
the P from PLM becomes vague – it is no longer only the product that has the focus, it is also the whole context around the product that might influence it, that they want to take in consideration
the L from PLM remains – they still want to connect all information that is related to the lifecycle of their products or plants.
the M from Management has a bad association – companies believe that moving from their current state towards a managed environment of data is a burden. Too much overhead is the excuse to not manage dat. And their existing environments to manage data do not excel in user-friendliness. And therefore people jump towards using Excel.
Next
So if the P is not longer relevant, the M is a burden, what remains of PLM ?
Early June I presented at the Dassault Systems 3DExperience forum the topic of digital Asset Lifecycle Management for owners / operators. One of the areas where I believe PLM systems can contribute a lot to increase business value and profitability (quality and revenue – see using a PLM system for Asset Lifecycle Management )
Attending the key note speech it was clear that Dassault Systems does not talk about PLM anymore as a vision. Their future dream is a (3D) lifelike experience of the virtual world. And based on that virtual model, implement the best solution based on various parameters: revenue, sustainability, safety and more. By trying to manage the virtual world you have the option to avoid real costly prototypes or damaging mistakes.
I believe it is an ambitious dream but it fits in the above observations. There is more beyond PLM.
In addition I learned from talking with my peers (the corridor meetings) that also Siemens and PTC are moving towards a more industry or process oriented approach, trying to avoid the association with the generic PLM label.
Just at the time that Autodesk and the mid-market started to endorse PLM, the big three are moving away from this acronym.
This reminds me of what happened in the eighties when 3D CAD was introduced. At the time the mid-market was able to move to mainstream 3D (price / performance ratio changed dramatically) the major enterprises started to focus on PDM and PLM. So it is logical that the mid-market is 10 – 15 years behind new developments – they cannot afford experiments with new trends.
So let’s see what are the new trends:
- the management of structured and unstructured data as a single platform. We see the rise of Search Bases Application and business intelligence based on search and semantic algorithms. Using these capabilities integrated with a structured (PLM ? ) environment is the next big thing.
- Apps instead of generic applications that support many roles. The generic applications introduce such a complexity to the interface that they become hard to use by a casual user. Most enterprise systems, but also advanced CAD or simulation tools with thousands of options suffer from this complexity. Would not it be nice if you only had to work with a few dedicated apps as we do in our private life ?
- Dashboards (BI) that can be created on the
fly
representing actual data and trends based
on structured and unstructured data.
It reminded me of a PLM / ERP discussion I had with a company, where the general manager all the time stated the types of dashboards he wanted to see. He did not talk about PLM, ERP or other systems – he wanted the on-line visibility - Cloud services are coming. Not necessary centralizing all data on the cloud to reduce it cost. But look at SIRE and other cloud services that support a user with data and remote processing power at the moment required.
- Visual navigation through a light 3D Model providing information when required. This trend is not so recent but so far not integrated with other disciplines, the Google maps approach for 3D.
So how likely are these trends to change enterprise systems like PLM, ERP or CRM. In the table below I indicated where it could apply:
As you can see the PLM row has all the reasons to introduce new technologies and change the paradigm. For that reason combined with the observations I mentioned in the beginning, I am sure there is a new TLA (Three Letter Acronym) upcoming.
The good news is that PLM is dynamic and on the move. The bad news for potential PLM users is that the confusion remains – too many different PLM definitions and approaches currently – so what will be the next thing after PLM ?
Conclusion: The acronym PLM is not dead and becomes mainstream. On the high-end there is for sure a trend to a wider and different perspective of what was initially called PLM. After EDM, TDM, PDM and PLM we are waiting for the next TLA
May 24th, 2008 was the date I posted my first blog post as a Virtual Dutchman aiming to share PLM related topics for the mid-market.
I tried to stay away from technology and function/feature debates and based on my day to day observations, describe the human side of the PLM – what people do and why . All from a personal perspective and always open to discuss and learn more.
Looking back and reviewing my 86 posts and 233 comments so far, I would like to share a summary around some of the main topics in my blog.
PLM
In 2008, PLM awareness was much lower – at that time one of the reasons for me to start blogging. There was still a need to explain that PLM was a business strategy needed beside ERP and PDM.
PLM will bring more efficiency, and in better quality, new innovative products to the market due to better collaboration between teams and departments.
At that time the big three, Dassault Systemes, Siemens and PTC were all offering a very CAD-centric, complex approach for PLM. There was no real mid-market offering, although their marketing organizations tried to sell as-if a mid-marketing offering existed. Express, Velocity, ProductPoint where are these offerings now ?
Now, In 2012 there is an established PLM awareness as everyone is talking about (their interpretation of) PLM and with Autodesk, a company that knows how to serve the mid-market, also acknowledged there is a need for PLM in their customer base, the term PLM is widespread
The new PLM providers focus on a disconnect between PDM and PLM, as in particular the handling of enterprise data outside the PDM scope is a white space for many mid-market companies that need to operate on a global platform.
PLM & ERP
In the relation between PLM and ERP, I haven’t seen a big change the past four years. The two dominating ERP originated vendors, SAP and Oracle were paying attention to PLM in 2008 in their marketing and portfolio approach.
However their PLM offerings in my perception, haven’t moved much forward. SAP is selling ERP and yes there is a PLM module and Oracle is having PLM systems, but I haven’t seen a real targeted PLM campaign explaining the needs and value of PLM integrated with ERP.
Historically ERP is the main IT-system and gets all the management attention. PLM is more considered something for engineering (and gets less focus and budget). Understanding PLM and how it connects to ERP remains a point of attention and the crucial point of interaction is the manufacturing BOM and the place where it is defined. The two most read posts from my blog are: Where is the MBOM and next Bill of Materials for Dummies – ETO, indicating there is a lot of discussion around this topic.
I am happy to announce here that in October this year during PLM Innovation US, I will present and share my thoughts in more detail with the audience, hoping for good discussions
New trends
There are three new trends that became more clear the past four years.
The first one to mention is the upcoming of Search Based Applications (SBA). Where PLM systems require structured and controlled data, search based applications assist the user by “discovering” data anywhere in the organization, often in legacy systems or possible in modern communication tools.
I believe companies that develop an integrated concept of PLM and SBA can benefit the most. PLM and ERP vendors should think about combining these two approaches in an integrated offering. I wrote about this combined topic in my post: Social Media and PLM explained for Dummies
The second trend is the cloud. Where two-three years ago social media combined with PLM was the hype as a must for product innovation and collaboration, currently cloud is in focus.
Mainly driven and coming for the US, where the big marketing engine from Autodesk is making sure it is on the agenda of mid-market companies.
In Europe there is less a hype at this moment, different countries and many languages to support plus discussions around security take the overhand here.
For me a cloud solution for sure is lowering the threshold for mid-market companies to start implementing PLM. However how to make the change in your company ? It is not only an IT-offering. Like a similar discussion around Open Source PLM, there is still a need to provide the knowledge and change push inside a company to implement PLM correct. Who will provide these skills ?
The third trend is the applicability of PLM systems outside the classical manufacturing industries.
I have been writing about the usage of PLM systems for Owner/Operators and the civil / construction industry, where the PLM system becomes the place to store all plant related information, connected to assets and with status handling. Currently I am participating in several projects in these new areas and the results are promising
People and Change
I believe PLM requires a change in an organization not only from the IT perspective but more important from the way people will work in an organization and the new processes they require.
The change is in sharing information, making it visible and useful for others in order to be more efficient and better informed to make the right decisions much faster.
This is a global trend and you cannot stay away from it. Keeping data locked in your reach might provide job security but in the long term it kills all jobs in the company as competiveness is gone.
The major task here lies with the management that should be able to understand and execute a vision that is beyond their comfort zone. I wrote about this topic in my series around PLM 2.0
Modern companies with a new generation of workers will have less challenges with this change and I will try to support the change with arguments and experiences from the field.
Audience
Since February this year, WordPress provides much more statistics and interesting is the map below indicating in which countries my blog is read. As you can see there are only a few places left on earth where PLM is not studied. Good news !!
Although most of my observations come from working in Europe, it is the US that provides the most readers (30 %) , followed by India (9 %) and on the third place the UK (6 %).
This might be related to the fact that I write my blog in English (not in 100 % native English as someone commented once).
It makes me look forward to be in October in Atlanta during the PLM Innovation US conference to meet face to face with many of my blog readers and share experiences.
Conclusion
Reading back my posts since 2008, it demonstrated for me that the world of PLM is not a static environment. It is even that dynamic that some of the posts I wrote in the early days have become obsolete.
At the end of 2008 I predicted the future of PLM in 2050 – here we are on the right track.
There is still enough blogging to do without falling into repetitions and I am looking forward to your opinion, feedback and topics to discuss.
Related articles
- PLM misconceptions (virtualdutchman.com)
During this summer holiday, I was looking back on recent implementations and sales efforts related to PLM. Some had particular challenges regarding the PLM implementation and the relation to the IT department. The role of the IT-department was crucial, but always in a positive manner ? Judge yourself.
First this statement:
In many mid-market companies the choice for PLM is not that clear.
Let me explain what I mean by a typical mid-market company – it is not based on size or turn-over. For me a mid-market company is a company, not allocating the resources to have an overall strategic department and in addition the IT-department is limited to a team of people with a main focus to keep the company operational – ERP first.
The impact of this situation is twofold:
- From one way new business initiatives will mostly come from departments, either sales, marketing, engineering, production, service or IT. Companywide business initiatives are not likely to come from a separate department as each department is working on their own issues.
- Secondly IT often has a tendency to ‘standardize’ on certain environments. Some quotes:
“We love/hate Microsoft”
“SharePoint is our standard”
“If it is not Linux it is not reliable”
“Our ERP provider has also a PLM module, so this is going to be the standard”
And this standardization is often at the end the business killer
So where does PLM come from in a mid-market company ?
Example 1: The IT-department in company XYZ had the opinion there was a need to provide a company infrastructure for document management – people complained about not being able to find the right information. Related to the CAD system in use, it often became a kind of PDM implementation with extended document management. The IT-department provided the infrastructure (we need Oracle / SQL /DB2 – based on their standards) and engineering was allowed on top of that infrastructure to define their PDM environment.
As most of the people involved in this project were very familiar with computers, the implemented system was highly customized, due to specific actions the engineers wanted and what IT envisioned users would require. The overall thought was that other users would automatically get enthusiastic when seeing this implementation
In contrary: the regular users refused to work with the new PDM system – too complex, it takes too much time to fill in information and in situations of heavy customization some users became afraid of the system. Making one mistake was hard to undo and could have a chain reaction of events further down in the organization. They preferred the traditional method of sending documents or Excels to the other departments and getting face-to-face feedback. Of course in case of missing information or a mistake this could be clarified easily too.
Conclusion from all the PLM pessimists: PLM is too complex, PLM is hard to implement.
My intermediate conclusion: Good will to improve the company’s business is important, however you need business people to define and lead the implementation.
Example2: IT in a company ABC developed a custom PLM infrastructure for their users and everyone was happy, till …… business changed. Where several years ago, the users decided that the standard PLM software was not good enough as some details were not supported and the standard system PLM system was able to do too much, IT generously decided to build a complete, nice user environment for their company.
Everybody happy for three years, till recently, due to acquisitions, outsourced contracting (engineering and manufacturing), the IT-department has to hire more people to support more and more custom connections and data exchange. Now in an overheated state they are looking for ways to use PLM standard software instead, however IT does not want to write off the previous investments that easy, the users are not aware of the problems in changing business and the future PLM decision is again driven by IT and not by business,
Internal conclusion: The IT-department was very helpful for the end users, who appreciated the simple to-the-point interface – whispering: Therefore never a change process took place anticipating strategic changes upcoming. The result a kind of dead end.
My intermediate conclusion: If you are a mid-market company and you are not in software development, stay out of it. It is always a temporary and people dependent (who can/will leave at some time).
Just two examples out of many, typically for mid-market companies. I think also larger enterprises sometimes demonstrate the same problematic. Good IT-people and IT-department are crucial for every company. The challenge is to keep the balance between business and IT. The risk is that due to the fact that there is a lack of business strategy resources, the IT-department becomes the business standard.
Conclusion: PLM is about business change and PLM is not an IT-tool. However a PLM implementation requires good and intensive support from IT. The challenge for every company is that the IT-department often has the most skilled people for a company-wide implementation, however the business drivers and strategy should come from outside.
Your thoughts ???
Recently i noticed two different discussions. One on LinkedIn in the CMPIC® Configuration Management Trends group, where Chris Jennings started with the following statement:
Product Lifecycle Management (PLM) vs CM
An interesting debate has started up here about PLM vs CM. Not surprisingly it is revealing a variety of opinions on what each mean. So I’m wondering what sort of reaction I might get from this erudite community if I made a potentially provocative statement like …
“Actually, PLM and CM are one and the same thing” ?24 days ago
It became a very active discussion and it was interesting to see that some of the respondents saw PLM as the tool to implement CM. Later the discussion moved more towards system engineering, with a focus on requirements management. Of course requirements management is key for CM, you could say CM starts with the capturing of requirements.
There was some discussion about what is the real definition of PLM and this triggered my post. Is the definition of PLM secured in a book – and if so – in which book as historically we have learned that when the truth comes from one book there is discussion
But initially in the early days of the PLM, requirements management was not part of the focus for PLM vendors. Yes, requirements and specifications existed in their terminology but were not fully integrated. They focused more on the ‘middle part’ of the product lifecycle – digital mockup and virtual manufacturing planning. Only a few years later PLM vendors started to address requirements management (and systems engineering) as part of their portfolio – either by acquisitions of products or by adding it natively.
For me it demonstrates that PLM and CM are not the same. CM initially had a wider scope than early PLM systems supported, although in various definitions of PLM you will see that CM is a key component of the PLM practices.
Still PLM and CM have a lot in common, I wrote about is a year ago in my post: PLM, CM and ALM; not sexy ! and both fighting to get enough management support and investments. There is in the CMIP group another discussion open with the title: What crazy CM quotes have you heard ? You can easily use these quotes also for the current PLM opinion. Read them (if you have access and have fun)
But the same week another post caught my interest. Oleg’s post about Inforbix and Product Data Management. I am aware that also other vendors are working on concepts to provide end users with data without the effort of data management required. Alcove9 and Exalead are products with a similar scope and my excuses to all companies not mentioned here.
What you see it the trend to make PLM more simple by trying to avoid the CM practices that often are considered as “non-value add”, “bureaucracy” and more negative terms. I will be curious to learn how CM practices will be adhered by these “New Generation of PDM” vendors, as I believe you need CM to manage proactively your products.
What is your opinion about CM and PLM – can modern PLM change the way CM is done ?
In the past months, I have talked and working with various companies about the topic of Asset Lifecycle Management (ALM) based on a PLM system. Conceptual it is a very strong concept and so far only a few companies have implemented this approach, as PLM systems have not been used so much outside the classical engineering world.
Why using a PLM system ?
To use a PLM system for managing all asset related information ( asset parameters, inventory, documents, locations, lifecycle status) in a single system assures the owner / operator that a ‘single version of the truth’ starts to exist. See also one of my older posts about ALM to understand the details.
The beauty lies in the fact that this single version of the truth concept combines the world of as-built for operators and the world of as-defined / as-planned for preparing changes. Instead of individual silos the ALM system provides all information, of course filtered in such a way that a user only sees information related to the user’s role in the system.
The challenge for PLM vendors is to keep the implementation simple as PLM initially in its core industries was managing the complexity. Now the target is to keep it extremely simple and easy to used for the various user roles, meanwhile trying to stay away from heavy customizations to deliver the best Return on Investment.
Having a single version of the truth provides the company with a lot of benefits to enhance operations. Imagine you find information and from its status you know immediately if it is the latest version and if other versions exists. In the current owner / operator world often information is stored and duplicated in many different systems, and finding the information in one system does not mean that this is the right information. I am sure the upcoming event from IDC Manufacturing Insights will also contribute to these findings
It is clear that historically this situation has been created due to the non-intelligent interaction with the EPC contractors building or changing the plant. The EPC contractors use intelligent engineering software, like AVEVA
, Bentley, Autodesk and others, but still during hand-over we provide dumb documents, paper based, tiff, PDF or some vendor specific formats which will become unreadable in the upcoming years. For long-term data security often considered the only way, as neutral standards like ISO-15926 still require additional vision and knowledge from the owner/operator to implement it.
Now back to the discussions…
In many discussions with potential customers the discussion often went into the same direction:
“How to get the management exited and motivated to invest into this vision ? The concept is excellent but applying it to our organization would lead to extra work and costs without immediate visibility of the benefits !”
This is an argument I partly discussed in one of my previous posts: PLM, CM and ALM not sexy. And this seems to be the major issue in western Europe and the US. Business is monitored and measured for the short term, maximum with a plan for the next 4 – 5 years. Nobody is rewarded for a long-term vision and when something severe happens, the current person in power will be to blame or to excuse himself.
As a Dutch inhabitant, I am still proud of what our former Dutch government decided and did in the after the flooding in 1953. The Dutch invested a lot of money and brain power into securing inhabitants behind the coast line in a project called the Delta Works. This was an example of vision instead of share holder value. After the project has been finished in the eighties there was no risk for a severe flooding anymore and the lessons learned from that time, brought the Dutch the knowledge to support other nations at risk for flooding. I am happy that in 1953 the government was not in the mood to optimize their bonus ( an unknown word at that time)
Back to Asset Lifecycle Management ….
Using a PLM system for asset lifecycle management provides the economical benefits by less errors during execution (working on the right information), less human involvement in understanding the information ( lower labor costs) and lower total cost of ownership (less systems to maintain and connect by IT).
But these benefits are in no relation with risk containment. What happens if something goes really wrong ?
If you you are a nuclear plant owner, you are in global trouble. A chemical plant owner or oil company can be in regional trouble, but they also will suffer from the damage done to their brand name globally. Other types of plant owners might come away with less, depending on the damage they potential ‘embank’
The emerging visionaries
For that reason, it is enlightening to see that some companies in Asia think different. There the management understands that they have the opportunity to build their future in a more clever way. Instead of copying the old way EPC contractors and plant owners work together, they start from a single version of the truth concept, pushing their contractors to work more integrated and clever with them. Instead of becoming boiling frogs, they are avoiding to fall into the same trap of many owners / operators in European and US based companies: “Why change the way we work, it does not seem to be so bad”
It requires a vision for the long term, something that will lead to extra benefits in the long term future: more efficient management of their assets, including risk containment and therefore being more competitive. If European and US-based companies want to be dominating in this industry they will need to show their vision too ..
Tomorrow I am attending the European Chemical Manufacturing Masters conference in Berlin, where I hope to learn and discuss this vision with the participants. I will keep you updated if i found the vision …..
I don’t know if it is the time of the year, but suddenly there is again in the PLM world a discussion which is related to the theme of flexibility (or the lack of flexibility). And I do not refer to some of the PLM supplier lock-in situations discussed recently. In a group discussion on LinkedIn we talked about the two worlds of PLM-ERP and that somehow here we have status quo do to the fact companies won’t change the way they manage their BOM if they are not forced to do or see the value.
Stephen Porter from Zero Wait-State in his blog wrote an interesting post about using PLM to model business processes and I liked his thoughts. Here the topic, flexibility was brought into the discussion by me.
Then Mark Lind from Aras responded to this post and referred to his post on Out-Of-The-Box (OOTB) PLM which ended in a call for flexibility.
However, reading this post I wanted to bring some different viewpoints to Mark’s post and as my response became too long, I decided to post it in my blog. So please read Stephen’s post, read Mark’s post and keep the word flexibility in the back of your mind.
My European view
As I have been involved in several OOTB-attempts with various PDM / PLM suppliers, I tend to have somehow a different opinion about the purpose of OOTB.
It is all about what you mean with OOTB and what type and size of company you are talking about. My focus is not on the global enterprises – they are too big to even consider OOTB (too many opinions – too much politics).
But the mid-market companies, which in Europe practice a lot of PLM, without having a PLM system, are my major target. They improve their business with tools fitting in their environment, and when they decide to use a PLM system; it is often close related to their CAD or ERP system.
In this perspective, Mark’s statement:
Now stop and think… the fundamental premise of OOTB enterprise software is that there’s an exact match between your corporate processes and the software. If it’s not an exact match, then get ready to customize (and it won’t be OOTB anymore). This is why the concept of OOTB enterprise PLM is absurd.
I see it as a simplification – yes customers want to use OOTB systems, but as soon as you offer flexibility, customers want to adapt it. And the challenge of each product is to support as much as possible different scenarios (through configuration, through tuning (you can call it macros or customization) Microsoft Excel is still the best tool in this area
But let’s focus on PLM. Marc’s next statement:
It doesn’t matter if we’re talking about Industry Accelerators or so called ‘best practice’ templates
Again is simplifying the topic. Most of the companies I have been working with had no standard processes or PLM practices as much of the work was done outside a controlled system. And in situations that there was no Accelerator or Best Practice, you were trapped in a situation where people started to discuss their processes and to-be practices (losing time, concluding the process was not so easy as they thought, and at the end blame the PLM system as it takes so long to implement – and you need someone or something to blame). Also her Stephen promotes the functionality in PLM to assist modeling these processes.
PLM is a learning process for companies and with learning I mean, understanding that the way of working can be different and change is difficult. That’s why a second, new PLM implementation in the same company is often more easy to do. At this stage a customer is able to realize which customizations were nice to have but did not contribute to the process and which customizations now could be replaced by standard capabilities (or configured capabilities). A happy target for PLM vendors where the customer changes from PLM vendor as they claim the success of the second implementation. However I have seen also re-implementations with the same software and the same vendor with the same results: faster implementation, less customization and more flexibility.
I fully agree with Marc’s statement that PLM implementations should be flexible and for me this means during implementations make sure you stay close to the PLM standards (yes there are no ‘official’ standards but every PLM implementation is around a similar data model.)
As the metadata and the created files represent the most value for the customer, this is where you should focus. Processes to change, review, collaborate or approve information should always be flexible as they will change. And when you implement these processes to speed up time-to-market or communication between departments/partners, do an ROI and risk analysis if you need to customize.
I still see the biggest problem for PLM is that people believe it is an IT-project, like their ERP project in the past. Looking at PLM in the same way does not reflect the real PLM challenge of being flexible to react. This is one of my aversions against SAP PLM – these two trigrams just don’t go together – SAP is not flexible – PLM should be flexible.
Therefore this time a short blog post or long response, looking forward to your thoughts
As a follow-up of my holiday thoughts, I want to discuss this time the various interpretations of PLM that exist. Of course we have the ‘official’ definitions of the consultancy companies like CIMdata and 2PLM ( I took an American and European example). They describe clearly that it is a business approach, not necessary a set of technologies and tools to implement.
Then we have the PLM vendors, where Dassault Systems and Siemens claim their visionary leadership. Looking at their websites, it is hard to find an explicit message. They both claim PLM brings innovation (how ?) , where Dassault Systemes has a strong message around 3D and virtual product development and Siemens focuses more on efficiency and better collaboration benefits. I am not going in depth into PTC and Aras or other PLM vendors as I am only taking two examples per type of company, but look at their websites and find out how (and if) they describe PLM as a business approach.
For a PLM definition at SAP you have to dig a little deeper and I got even more surprised when searching through the Oracle web site. Here it was difficult to find a generic PLM message. There was the list of acquisitions (which make me wonder if this means they are all integrated) and there was the list of industries and only when drilling down into the industries, you will find PLM related information. Here I still have the feeling that these companies understand there is a need for PLM, but that it is not in their veins, they want to manage product data as a ‘single version of the truth’ – which is not a bad idea and I will come back on that later – but they want to manage different data.
Also upcoming are the generic PLM on-line solutions (Arena and PLM+), which for me still are somehow a contradiction to what consultancy companies describe as PLM. Instead of a bussiness approach it is an IT-solution. In parallel there are more dedicated on-line solutions that support a specific business process (where PLM practices are embedded) – like for Apparel, CPG.
For these type of solutions, I have a more positive opinion as they are lowering the threshold to implement PLM in a certain industry. However the biggest skepticism I have for these types of solutions is the degrees of flexibility it will offer the implementing company to be different from standard best practices. As all companies have their uniqueness in being competitive, will they be able to support this ?
And then there was the press release from Zero Wait-State which struck me:
Zero Wait-State is launching a new website that will provide a central location for Product Lifecycle Management software and partner reviews. This site will be a valuable resource for companies trying to assess different PLM solutions and which partners to work with. The site will be driven by users and allow them to share their experiences with different software products and implementation partners.
See the full press release here: Zero Wait-State Announces New Website for PLM and Service Provider Reviews.
I believe in these times of product selection and reviews certainly a good initiative. Where do we find vendor independent reviews of various PLM products ? Bringing PLM to social communities.
But ……
Here I want to take a step back. What is the essence of PLM and how do you know as a company you want to implement PLM ?
The majority of mid-market companies are not looking for a PLM system. Most of the mid-market companies have the impression that PLM is complex and expensive and typical mid-market vendors like Autodesk or SolidWorks are not pushing PLM (try for fun to search for PLM on their websites).
So will a mid-market company be able to select a PLM product through communities in the same manner as you select a consumer product ?
I believe the main challenge for a PLM implementation is not the software, but the business change.
In a company where most people are thinking (and rewarded) departmental, it is difficult to implement a new system that affects all departments. Creating the single version of the truth for product data is one of the basics for PLM. Try to get an agreement with sales, engineering, production and service who will be responsible for which part of the BOM. SAP’s single version of the truth is much more a statement from an IT-infrastructure point of view not focusing and pushing a change of business processes.
I believe, and this is also based on discussions and comments from colleagues focusing on the mid-market, that many mid-market companies are implementing basics of PLM, not always using a ‘certified’ PLM system or PLM vendor, but a pragmatic solution (customization / piece of software) which connects parts of the product information. These solutions are usually extensions on top of the CAD data management environment or the ERP system.
And here PLM vendors have a mission. Provide building blocks (services) that allow mid-market companies to connect data between departments based on known standard authoring tools. For classical PLM industries (Automotive/Aero/Fabrication & Assembly) the major CAD systems and virtual product development plus analysis software are major disciplines to manage. Other industries also have their authoring tools. Connecting them through services and provide an easy to implement backbone for product information. This should be not a big-boom effect in the mid-market, but more an evolution – moving to PLM 2.0 or beyond ?
Will this come from PLM providers or IT-providers ?
Conclusion:
For the mid-market it is not about which PLM, but more about who can provide a gradual business change from sequential and departmental business processes towards company-wide processes, where people share and collaborate around the single version of data. So which PLM should be called which provider …..
I am looking forward to your opinion.
Jos Voskuil's Weblog 
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