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Three weeks ago, I closed my PLM-twisted mind for a short holiday. Meanwhile, some interesting posts appeared about the PLM journey.

  • Is it a journey?
  • Should the journey be measurable?
  • And what kind of journey could you imagine?

Together these posts formed a base for a decent discussion amongst the readers.  I like these discussions. For me, the purpose of blogging is not the same as tweeting. It is not about just making noise so others will chime in or react (tweeting), it is about sharing an opinion, and if more people are interested, the discussion can start. And a discussion is not about right or false, as many conversations happen to be nowadays, it is about learning.

Let’s start with the relevant posts.

How to measure PLM?

The initial discussion started with Oleg Shilovitsky’s post about the need to measure the value of PLM. As Oleg mentions in his comments:

“During the last decades, I learned that every company that measured what they do was winning the business and succeeded (let’s count Google, Amazon, etc ..)”

This is an interesting statement, just measure! The motto people are using for digital businesses. In particular for the fast-moving software business. Sounds great, so let’s measure PLM. What can we measure with PLM? Oleg suggests as an example:

“Let’s say before PLM implemented a specific process, sales needed 2 days to get a quote. After PLM process implementation, it is 15 min.”

So what does this result tell us? Your sales can do 64 times more sales quotes. Do we need fewer salespeople now? We do not know from this KPI what is the real value for the company. This because there are so many other dependencies related to this process, and that makes PLM different from, for example, ERP. We do not talk about optimizing a process as Oleg might suggest below:

“Some of my PLM friends like to say – PLM is a journey and not some kind of software. Well, I’m not sure to agree about “journey,” but I can take PLM as a process. A process, which includes all stages of product development, manufacturing, support, and maintenance.”

Note: I do not want to be picky on Oleg, as he is provoking us all many times with just his thoughts. Moreover, several of them are a good points for discussion. So please dive into his LinkedIn posts and follow the conversation.

In Oleg’s follow-up post on measuring the value, he continued with Can we measure the PLM-journey which summarizes the comments from the previous post with a kind of awkward conclusion:

What is my conclusion? It is a time for PLM get out of old fashion guessing and strategizing and move into digital form of thinking – calculating everything. Modern digital businesses are strongly focused on the calculation and measurement of everything. Performance of websites, metrics of application usage, user experience, efficiency, AB testing of everything. Measurement of PLM related activity sounds like no brainier decision to me. Just my thoughts…

I think all of us agree that there needs to be a kind of indicative measurement in place to justify investments in place. There must be expected benefits that solve current business problems or bottlenecks.

My points that I want to share with you are:

  • It is hard to measure non-comparable ways of working – how do you measure collaboration?
  • Do you know what to measure? – engineering/innovation is not an ERP process
  • People and culture have so much impact on the results – how do you measure your company’s capability to adapt to new ways of working?

Meanwhile, we continue our journey…

Is PLM a never-ending journey?

In the context of the discussion related to the PLM journey, I assume Chad Jackson from Lifecycle Insights added his 3 minutes of thoughts. You can watch the video here:

Vlogging seems to become more prevalent in the US. The issue for me is that vlogs only touch the surface, and they are hard to scan for interesting reusable content. Something you miss when you are an experienced speed-reader. I like written content as it is easier to pick and share relevant pieces, like what I am doing now in this post.

Chad states that as long as PLM delivers quantified value, PLM could be expanding. This sounds like a journey, and I could align here. The only additional thought I would like to add to this point is that it is not necessary expanding all the time, it is also about a continuous change in the world and therefore your organization. So instead of expanding, there might be a need to do things differently: Have you noticed PLM is changing.

Next Chad mentions organizational fatigue. I understand the point – our society and business are currently changing extremely fast, which causes people to long for the past. A typical behavior I observe everywhere: in the past, everything was better. However, if companies would go back and operate like in the past, they would be out of business. We moved from the paper drawing board to 3D CAD, managing it through PDM and PLM to remain significant. So there is always a journey.

Fatigue comes from choosing the wrong directions, having a reactive culture – instead of being inspired and motivated to reach the next stage, the current stage is causing already so much stress. Due to the reactive culture, people cannot imagine a better future – they are too busy. I believe it is about culture and inspiration that makes companies successful – not by just measuring.  For avoiding change, think about the boiling frog metaphor, and you see what I mean

 

Upgrading to PLM when PDM falls short

At the same time, Jim Brown from Tech-Clarity published a PTC-sponsored eBook: Upgrading to PLM when PDM fall short, in which as he states:

This eBook explains how to recognize that you’ve outgrown PDM and offers several options to find the data and process management capabilities your company needs, whether it’s time to find a more capable PDM or upgrade to PLM. It also provides practical advice on what to look for in a PLM solution, to ensure a successful implementation, and in a software partner.

Jim is mentioning various business drivers that can drive this upgrade path. Enlarge the image to the left. I challenge all the believers in measurable digital results to imagine which KPIs they would use and how they can be related to pure PLM.

Here the upgrade process is aiming at replacing PDM by PLM something PLM vendors like. Immediate a significant numbers of licenses for the same basic PDM functionality – for your company hard to justify there is no additional value.

In many situations, I have seen that this type of PDM upgrade projects became advanced PDM projects – not PLM. The new PLM system was introduced in the engineering department and became an even bigger silo than before as other disciplines/departments were not willing to work with this new “monster” and preferred their own system. They believe that PLM is a system to be purchased and implemented, which is killing for a real PLM strategy.

Therefore I liked Oleg Shilovitsky’s post: 3 Reasons for Not Growing Existing PDM Into the Full PLM System.  Where Oleg’s points were probably more technology-driven, the value of this post was extended in the discussion. It became a discussion where various people and different opinions which I would like to have in real-time. The way LinkedIn filters/prioritizes comments makes it hard to have a chronological view of the discussion.

Still, if you are interested and have time for a puzzle, follow this discussion and add your thoughts

Conclusion

During my holidays, there was a vivid discussion related to the PLM value and journey. Looking back, it is clear we are part of a PLM journey. Some do not take part in the journey and keep on hanging to the past, those who understand the journey are all seeing different Points Of Interests – the characteristics of a journey

Unfortunate one more time and old post with some new comments in green as I am not yet able to type at regular speed. I promise this will be the last reprise as I am sure in one week from now I will be double-handed again. The reason I chose this six-year-old post is that the topic is still actual, however, at that time, digital transformation was not yet in fashion for PLM.

If you look at the comments to the article at that time (Feb 2013), you will see some well-known names and behaviors.  What I can state for the moment – there are still people doubting there is a need for PLM, there are still people blaming technology  for the lousy perception of PLM, and there is a large group of silent companies out there that have implemented the basics of PLM, perhaps not as advanced as vendors/consultants have suggested, and they are reaping the benefits.

The main question in upcoming blog posts; “Is this enough ?” Happy rereading!

How come PLM is boring? – Feb 2013

PLM is a popular discussion topic in various blogs, LinkedIn discussion groups, PLM Vendor web sites, and for the upcoming Product Innovation Congress in Berlin.  I look forward to the event to meet and discuss with attendees their experience and struggle to improve their businesses using PLM. (Meanwhile, PI PLMx London has passed – for a review look here –The weekend after PI PLMx London 2019)

From the other side, talking about pure PLM becomes boring. Sometimes it looks like PLM is a monotheistic topic:

  • “What is the right definition of PLM ?” (I will give you the right one)
  • “We are the leading PLM vendor” (and they all are)
  • A PLM system should be using technology XYZ (etc., etc.)
  • Digital Transformation and IoT have come into the picture now

Some meetings with customers in the past three weeks and two different blog posts I read recently made me aware of this ambiguity between boring and fun.

PLM dictating Business is boring

Oleg Shilovitsky´s sequence of posts (and comments) starting with A single bill of materials in 6 steps was an example of the boring part. (Sorry Oleg, as you publish so many posts, there are many that I like and some I  can use as an example). When reading the BOM-related posts,  I noticed they are a typical example of an IT- or Academic view on PLM, in particular on the BOM topic.

questionWill these posts help you after reading them? Do they apply to your business? Alternatively, do you feel more confused as a prolific PLM blogger makes you aware of all the different options and makes you think you should use a single bill of materials?

I learned from my customers and coaching and mediating hundreds of PLM implementations that the single BOM discussion is one of the most confusing and complicated topics. Moreover, for sure if you address it from the IT-perspective.

The customer might say:
“Our BOM is already in ERP – so if it is a single BOM, you know where it is – goodbye !”.

A different approach is to start looking for the optimal process for this customer, addressing the bottlenecks and pains they currently face.  It will be no surprise that PLM best practices and technology are often the building blocks for the considered solution. If it will be a single BOM or a collection of structures evolving through time, this depends on the situation, not on the ultimate PLM system.

Note: meanwhile Oleg has further materialized his thinking through OpenBOM, and he has not lost his speed of publishing

Business dictating PLM is fun

Therefore I was happy to read Stephen Porter´s opinion and comments in: The PLM state: Penny-wise Pound Foolish Pricing and PLM (unfortunate this post has disappeared) where he passes a similar message like mine, from a different starting point, the pricing models of PLM Vendors. My favorite part is in his conclusion:

A PLM decision is typically a long term choice so make sure the vendor and partners have the staying power to grow with your company. Also make sure you are identifying the value drivers that are necessary for your company’s success and do not allow yourself to be swayed by the trendy short term technology

Management in companies can be confused by starting to think they just need PLM because they hear from the analysts, that it improves business. They need to think first to solve their business challenges and change the way they currently work to improve. Moreover, next look for the way to implement this change.

Not:e Stephen wrote at that time an interesting series of post and promised a revival. However I haven’t seen new posts. Did anyone of my readers see new materials that I missed?

Changing the way to work is the problem, not PLM.

It is not the friendly user-interface of PLM system XYZ or the advanced technical capabilities of PLM system ABC,  that will make a PLM implementation easier. Nothing is solved on the cloud or by using a mobile device. If there is no change when implementing PLM, why implement and build a system to lock yourself in even more?

abbThis is what Thomas Schmidt (VP Head of Operational Excellence and IS at ABB’s Power Products Division) told last year at PLM Innovation 2012 in Munich. He was one of the keynote speakers and surprised the audience by stating he did not need PLM!

He explained this by describing the business challenges ABB has to solve: Being a global company but acting around the world as a local company. He needed product simplification, part reduction among product lines around the world, compliance, and more.

Note: Thomas Schmidt meanwhile moved forward in his career, identifying himself as Experienced “Change Leader”, digital transformation, mentor and coach

Another customer in a whole different industry mentioned they were looking for improving global instant collaboration as the current information exchange is too slow and error-prone. Besides, they want to capitalize on the work done and make it accessible and reusable in the future, authoring tool independent. However, they do not call it PLM as in their business nobody uses PLM!

Both cases should make a PLM reseller´s mouths water (watertanden in Dutch), as these companies are looking for critical capabilities available in most of the PLM systems. However, none of these companies asked for a single BOM or a service-oriented architecture. They wanted to solve their business issues. Moreover, for sure, it will lead to implementing PLM capabilities when business and IT-people together define and decide on the right balance.

Unfortunate here we still see a function-feature approach – if it is not there, we will build it

Management take responsibility

Combining PLM and new business needs is the responsibility of management in these companies. It is crucial that a business issue (or a new strategy) is the driving force for a PLM implementation. PLM is not about automating what we have.

In too many situations, the management decides that a new strategy is required. One or more bright business leaders decide they need PLM (note -the strategy has now changed towards buying and implementing a system). Together with IT and after doing an extensive selection process, the selected PLM system (disconnected from the strategy) will be implemented.

I believe we read something about such a case recently

Moreover, this is the place where all PLM discussions come together:

  • why PLM projects are difficult
  • why it is unclear what PLM does.

PLM Vendors and Implementers are not connected anymore at this stage to the strategy or business. They implement technology and do what the customer project team tells them to do (or what they think is best for their business model).

Successful implementations are those where the business and management are actively involved during the whole process and the change.  Involvement requires a significant contribution from their side, often delegated to business and change consultants.

PLM Implementations usually lead to a crisis at some moment in time, when the business is not leading, and the focus is on IT and User Acceptance. In the optimal situation, business is driving IT. However, in most cases, due to lack of time and priorities from the business people, they delegate this activity to IT and the implementation team. So here it is a matter of luck if they will be successful: how experienced is the team?

Will they implement a new business strategy or just automate and implement the way the customer worked before, but now in a digital manner? Do we blame the software when people do not change?

Some notes here: I believe the disconnect between management/PLM vendors and on the other side meanwhile, people in business has become more prominent, due to the digital transformation hype. The hype is moving faster than the organization. Second point: I will not talk about people change anymore – organizations can change – people can adapt within a specific range. It is up to the organization where to push the limits.

 

Back to fun

imageI would not be so passionate about PLM if it was boring. However looking back the fun and enthusiasm does not come from PLM. The fun comes from a pro-active business approach knowing that first the motivating the people and preparing the change are defined, before implementing PLM practices

I believe the future success for PLM technologies is when we know to speak and address real business value and only then use (PLM) technologies to solve them.

PLM becomes is a  logical result not the start. And don´t underestimate: change is required. What do you think – is it a dream ?

????

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.

 

I am writing this post during the Easter weekend in the Netherlands. Easter / Passover / Pascha / are religious festivities that happen around this time, depending on full moons, etc. I am not the expert here, however, what I like about Easter is that is it is an optimistic religious celebration, connecting history, the “dark days,” and the celebration of new life.

Of course, my PLM-twisted brain never stops associating and looking into an analogy, I saw last week a LinkedIn post from Mark Reisig, about Aras ACE 2019 opening with the following statement:

Digital Transformation – it used to be called PLM,” said Aras CEO Peter Schroer, as he opened the conference with some thoughts around attaining sustainable Digital Transformation and owning the lifecycle.

Was this my Easter Egg surprise? I thought we were in the middle of the PLM Renaissance as some other vendors and consultants talk about this era. Have a look at a recent Engineering.com TV-report: Turning PLM on its head

All jokes aside, the speech from Peter Schroer contained some interesting statements and I want to elaborate on them in this post as the space to comment in LinkedIn is not designed for a long answer.

PLM is Digital Transformation?

In the past few years, there has been a discussion if the acronym PLM (Product Lifecycle Management) is perhaps outdated. PTC claimed thanks to IoT (Internet of Things) now PLM equals IoT, as you can read in  Mark Taber’s 2018 guest article in Digital Engineering: IoT Equals PLM.
Note: Mark is PTC’s vice president of marketing and go-to-market marketing according to the bio at the bottom of the article. So a lot of marketing words, which  strengthens the believers of the old world, that everything new is probably marketing.

Also during the PDT conferences, we discussed if PLM should be replaced by a new acronym and I participated in that discussion too – my Nov 2018 postWill MBSE be the new PLM instead of IoT? is a reflection of my thoughts at that time.

For me, Digital Transformation is a metamorphosis from a document-driven, sequential processes towards data-driven, iterative processes. The metamorphosis example used a lot at this moment, is the one from Caterpillar towards the Butterfly. This process is not easy when it comes to PLM-related information, as I described in my PI PLMx 2019 London Presentation and blog post: The Challenges of a Connected Ecosystem for PLM. The question is even: Will there be a full metamorphosis at the end or will we keep on working in two different modes of operations?

However, Digital Transformation does not change the PLM domain. Even after a successful digital transformation, there will be PLM. The only significant difference in the future – PLM boarders will not be so evident anymore when implementing capabilities in a system or a platform. The upcoming of digital platforms will dissolve or fade the traditional PLM-mapped capabilities.

You can see these differences already by taking an in-depth look at how Oracle, SAP or Propel address PLM. Each of them starts from a core platform with different PLM-flavored extensions, sometimes very different from the traditional PLM Vendors. So Digital transformation is not the replacement of PLM.

Back to Peter Schroer’s rebuttal of some myths. Note: DX stands for Digital Transformation

Myth #1: DX leverages disruptive tech

Peter Schroer:

 It’s easy to get excited about AI, AR, and the 3D visual experience. However, let’s be real. The first step is to get rid of your spreadsheets and paper documentation – to get an accurate product data baseline. We’re not just talking a digital CAD model, but data that includes access to performance data, as-built parts, and previous maintenance work history for everyone from technicians to product managers

Here I am fully aligned with Peter. There are a lot of fancy features discussed by marketing teams, however, when working in the field with companies, the main challenge is to get an organization digital aligned, sharing data accessible along the whole lifecycle with the right quality.

This means you need to have a management team, understanding the need for data governance, data quality and understanding the shift from data ownership to data accountability.  This will only happen with the right mix of vision, strategy and the execution of the strategy – marketing does not make it happen

 

Myth #2: DX results in increased market share, revenue, and profit

Peter Schroer:

Though there’s a lot of talk about it – there isn’t yet any compelling data which proves this to be true. Our goal at Aras is to make our products safer and faster. To support a whole suite of industrial applications to extend your DX strategy quite a bit further.

Here I agree and disagree, depending on the context of this statement. Some companies have gone through a digital transformation and therefore increased their market share, revenue, and profit. If you read books like Leading Transformation or Leading Digital, you will find examples of companies that have gone through successful digital transformations. However, you might also discover that most of these companies haven’t transformed their PLM-domain, but other parts of their businesses.

Also, it is interesting to read a 2017 McKinsey post: The case for digital reinvention, where you will get the confirmation that a lot of digital initiatives did not bring more top-line revenue and most of the times lead to extra costs. Interesting to see where companies focus their digital strategies – picture below:

Where only 2 percent of the respondents were focusing on supply chains, this is, according to the authors of the article, one of the areas with the highest potential ROI. And digital supply chains are closely related to modern PLM – so this is an area with enough work to do by all PLM practitioners– connecting ecosystems (in real-time)

Myth #3: Market leaders are the most successful at DX

Peter Schroer:

If your company is hugely profitable at the moment, it’s highly likely that your organization is NOT focused on Digital Transformation. The lifespan of S&P 500 companies continuing to shrink below 20 years.

How to Attain Sustainable Digital Transformation

– Stop buying disposable systems. It’s about an adaptable platform – it needs to change as your company changes.

– Think incremental. Do not lose momentum. Continuous change is a multi-phase journey. If you are in or completed phase I, then that means there is a phase II, a phase III, and so on.

– Align people & processes.  Mistakes will happen, “the tech side is only 50% of DX” – Aras CEO.

Here I agree with Peter on the business side, be it that some of the current market leaders are already digital. Look at Apple, Google, and Amazon. However, the majority of large enterprises have severe problems with various aspects of a digital transformation as the started in the past before digital technologies became affordable..

Digitization allows information to flow without barriers within an organization, leading to rapid insights and almost direct communication with your customers, your supply chain or other divisions within your company. This drives the need to learn and build new, lean processes and get people aligned to them. Learning to work in a different mode.

And this is extremely difficult for a market leader – as market leader fear for the outside changing world is often not felt. Between the C-level vision and people working in the company, there are several layers of middle management. These layers were created to structure and stabilize the old ways of working.

I wrote about the middle management challenge in my last blog post: The Middle Management dilemma. Almost in the same week there was an article from McKinsey: How companies can help midlevel managers navigate agile transformations.
Conclusion: It is not (only) about technology as some of the tech geeks may think.

Conclusion

Behind the myths addressed by Peter Schroer, there is a complex transformation on-going. Probably not a metamorphosis. With the Easter spirit in mind connected to PLM, I believe digital transformations are possible – Not as a miracle but driven by insights into all aspects. I hope this post gave you some more ideas and please read the connected articles – they are quite relevant if you want to discover what’s below the surface.

I was happy to take part at the PI PLMx London event last week. It was here and in the same hotel that this conference saw the light in 2011  – you can see my blog post from that event here: PLM and Innovation @ PLMINNOVATION 2011.

At that time the first vendor-independent PLM conference after a long time and it brought a lot of new people together to discuss their experience with PLM. Looking at the audience that time, many of the companies that were there, came back during the years, confirming the value this conference has brought to their PLM journey.

Similar to the PDT conference(s) – just announced for this year last week – here – the number of participants is diminishing.

Main hypotheses:

  1. the PLM-definition has become too vague. Going to a PLM conference does not guarantee it is your type of PLM discussions you expect to see?
  2. the average person is now much better informed related to PLM thanks to the internet and social media (blogs/webinars/ etc.) Therefore, the value retrieved from the PLM conference is not big enough any more?
  3. Digital Transformation is absorbing all the budget and attention downstream the organization not creating the need and awareness of modern PLM to the attention of the management anymore. g., a digital twin is sexier to discuss than PLM?

What do you think about the above three hypotheses – 1,2 and/or 3?

Back to the conference. The discussion related to PLM has changed over the past nine years. As I presented at PI from the beginning in 2011, here are the nine titles from my sessions:

2011       PLM – The missing link
2012       Making the case for PLM
2013       PLM loves Innovation
2014       PLM is changing
2015       The challenge of PLM upgrades
2016       The PLM identity crisis
2017       Digital Transformation affects PLM
2018       PLM transformation alongside Digitization
2019       The challenges of a connected Ecosystem for PLM

Where the focus started with justifying PLM, as well as a supporting infrastructure, to bring Innovation to the market, the first changes became visible in 2014. PLM was changing as more data-driven vendors appeared with new and modern (metadata) concepts and cloud, creating the discussion about what would be the next upgrade challenge.

The identity crisis reflected the introduction of software development / management combined with traditional (mechanical) PLM – how to deal with systems? Where are the best practices?

Then from 2017 on until now Digital Transformation and the impact on PLM and an organization became the themes to discuss – and we are not ready yet!

Now some of the highlights from the conference. As there were parallel sessions, I had to divide my attention – you can see the full agenda here:

How to Build Critical Architecture Models for the New Digital Economy

The conference started with a refreshing presentation from David Sherburne (Carestream) explaining their journey towards a digital economy.  According to David, the main reason behind digitization is to save time, as he quoted Harvey Mackay an American Businessman and Journalist,

Time is free, but it is priceless. You cannot own it, but you can use it. You can’t keep it, but you can spend it. Once you have lost it, you never can get it back

I tend to agree with this simplification as it makes the story easy to explain to everyone in your company. Probably I would add to that story that saving time also means less money spent on intermediate resources in a company, therefore, creating a two-sided competitive advantage.

David stated that today’s digital transformation is more about business change than technology and here I wholeheartedly agree. Once you can master the flow of data in your company, you can change and adapt your company’s business processes to be better connected to the customer and therefore deliver the value they expect (increases your competitive advantage).

Having new technology in place does not help you unless you change the way you work.

David introduced a new acronym ILM (Integrated Lifecycle Management) and I am sure some people will jump on this acronym.

David’s presentation contained an interesting view from the business-architectural point of view. An excellent start for the conference where various dimensions of digital transformation and PLM were explored.

Integrated PLM in the Chemical industry

Another interesting session was from Susanna Mäentausta  (Kemira oy)  with the title: “Increased speed to market, decreased risk of non-compliance through integrated PLM in Chemical industry.” I selected her session as from my past involvement with the process industry, I noticed that PLM adoption is very low in the process industry. Understanding Why and How they implemented PLM was interesting for me. Her PLM vision slide says it all:

There were two points that I liked a lot from her presentation, as I can confirm they are crucial.

  • Although there was a justification for the implementation of PLM, there was no ROI calculation done upfront. I think this is crucial, you know as a company you need to invest in PLM to stay competitive. Making an ROI-story is just consoling the people with artificial number – success and numbers depend on the implementation and Susanna confirmed that step 1 delivered enough value to be confident.
  • There were an end-to-end governance and a communication plan in place. Compared to PLM projects I know, this was done very extensive – full engagement of key users and on-going feedback – communicate, communicate, communicate. How often do we forget this in PLM projects?

Extracting More Value of PLM in an Engineer-to-Order Business

Sami Grönstrand & Helena Gutierrez presented as an experienced duo (they were active in PI P PLMx Hamburg/Berlin before) – their current status and mission for PLM @ Outotec. As the title suggests, it was about how to extract more value from PL M, in an Engineering to Order Business.

What I liked is how they simplified their PLM targets from a complex landscape into three story-lines.

If you jump into all the details where PLM is contributing to your business, it might get too complicated for the audience involved. Therefore, they aligned their work around three value messages:

  • Boosting sales, by focusing on modularization and encouraging the use of a product configurator. This instead of developing every time a customer-specific solution
  • Accelerating project deliverables, again reaping the benefits of modularization, creating libraries and training the workforce in using this new environment (otherwise no use of new capabilities). The results in reducing engineering hours was quite significant.
  • Creating New Business Models, by connecting all data using a joint plant structure with related equipment. By linking these data elements, an end-to-end digital continuity was established to support advanced service and support business models.

My conclusion from this session was again that if you want to motivate people on a PLM-journey it is not about the technical details, it is about the business benefits that drive these new ways of working.

Managing Product Variation in a Configure-To-Order Business

In the context of the previous session from Outotec, Björn Wilhemsson’s session was also addressing somehow the same topic of How to create as much as possible variation in your customer offering, while internally keep the number of variants and parts manageable.

Björn, Alfa Laval’s OnePLM Programme Director, explained in detail the strategy they implemented to address these challenges. His presentation was very educational and could serve as a lesson for many of us related to product portfolio management and modularization.

Björn explained in detail the six measures to control variation, starting from a model-strategy / roadmap (thinking first) followed by building a modularized product architecture, controlling and limiting the number of variants during your New Product Development process. Next as Alfa Laval is in a Configure-To-Order business, Björn the implementation of order-based and automated addition of pre-approved variants (not every variant needs to exist in detail before selling it), followed by the controlled introduction of additional variants and continuous analysis of quoted and sold variant (the power of a digital portfolio) as his summary slides shows below:

Day 1 closed with an inspirational keynote; Lessons-Learnt from the Mountaineering Experience 8848 Meter above sea level  – a mission to climb the highest mountain on each of the continents in 107 days – 9 hours – setting a new world record by Jonathan Gupta.

There are some analogies to discover between his mission and a PLM implementation. It is all about having the total picture in mind. Plan and plan, prepare step-by-step in detail and rely on teamwork – it is not a solo journey – and it is about reaching a top (deliverable phase) in the most efficient way.

The differences: PLM does not need world records, you need to go with the pace an organization can digest and understand. Although the initial PLM climate during implementation might be chilling too, I do not believe you have to suffer temperatures below 50 degrees Celsius.

During the morning, I was involved in several meetings, therefore unfortunate unable to see some of the interesting sessions at that time. Hopefully later available on PI.TV for review as slides-only do not tell the full story. Although there are experts that can conclude and comment after seeing a single slide. You can read it here from my blog buddy Oleg Shilovitsky’s post : PLM Buzzword Detox. I think oversimplification is exactly creating the current problem we have in this world – people without knowledge become louder and sure about their opinion compared to knowledgeable people who have spent time to understand the matter.

Have a look at the Dunning-Kruger effect here (if you take the time to understand).

 

PLM: Enabling the Future of a Smart and Connected Ecosystem

Peter Bilello from CIMdata shared his observations and guidance related to the current ongoing digital business revolution that is taking place thanks to internet and IoT technologies. It will fundamentally transform how people will work and interact between themselves and with machines. Survival in business will depend on how companies create Smart and Connected Ecosystems. Peter showed a slide from the 2015 World Economic Forum (below) which is still relevant:

Probably depending on your business some of these waves might have touched your organization already. What is clear that the market leaders here will benefit the most – the ones owning a smart and connected ecosystem will be the winners shortly.

Next, Peter explained why PLM, and in particular the Product Innovation Platform, is crucial for a smart and connected enterprise.  Shiny capabilities like a digital twin, the link between virtual and real, or virtual & augmented reality can only be achieved affordably and competitively if you invest in making the source digital connected. The scope of a product innovation platform is much broader than traditional PLM. Also, the way information is stored differs – moving from documents (files) towards data (elements in a database).  I fully agree with Peter’s opinion here that PLM is conceptually the Killer App for a Smart & Connected Ecosystem and this notion is spreading.

A recent article from Forbes in the category Leadership: Is Your Company Ready For Digital Product Life Cycle Management? shows there is awareness.  Still very basic and people are still confused to understand what is the difference with an electronic file (digital too ?) and a digital definition of information.

The main point to remember here: Digital information can be accessed directly through a programming interface (API/Service) without the need to open a container (document) and search for this piece of information.

Peter then zoomed in on some topics that companies need to investigate to reach a smart & connected ecosystem. Security (still a question hardly addressed in IoT/Digital Twin demos), Standards and Interoperability ( you cannot connect in all proprietary formats economically and sustainably) A lot of points to consider and I want to close with Peter’s slide illustrating where most companies are in reality

The Challenges of a Connected Ecosystem for PLM

I was happy to present after Peter Bilello and David Sherburne (on day 1) as they both gave a perspective on digital transformation complementary to what I submitted. My presentation was focusing on the incompatibility of current coordinated business systems and the concept of a connected ecosystem.

You can already download my slides from SlideShare here: The Challenges of a Connected Ecosystem for PLM . I will explain my presentation in an upcoming blog post as slides without a story might lead to the wrong interpretation, and we already reached 2000 words. Few words to come.

How to Run a PLM Project Using the Agile Manifesto

Andrew Lodge, head of Engineering Systems at JCB explained how applying the agile mindset towards a PLM project can lead to faster and accurate results needed by the business. I am a full supporter for this approach as having worked in long and waterfall-type of PLM implementations there was always the big crash and user dissatisfaction at the final delivery. Keeping the business involved every step seems to be the solution. The issue I discovered here is that agile implementation requires a lot of people, in particular, business, to be involved heavily. Some companies do not understand this need and dropped /reduced business contribution to the least, killing the value of an agile approach

 

Concluding

For me coming back to London for the PI PLMx event was very motivational. Where the past two, three conferences before in Germany might have led to little progress per year, this year, thanks to new attendees and inspiration, it became for me a vivid event, hopefully growing shortly. Networking and listening to your peers in business remains crucial to digest it all.

 

Happy New Year to all of you. A new year comes traditionally with good intentions for the upcoming year.  I would like to share my PLM intentions for this year with you and look forward to your opinion. I shared some of my 2017 thoughts in my earlier post: Time for a Break. This year will I focus on the future of PLM in a digital enterprise, current PLM practices and how to be ready for the future.

Related to these activities I will zoom in on people-related topics, like organizational change, business impact and PLM justification in an enterprise. When it happens during the year, or based on your demands, I will zoom in on architectural stuff and best practices.

The future of PLM

Accenture – Digital PLM

At this moment digital transformation is on the top of the hype curve and the impact varies of course per industry. For sure at the company’s C-level managers will be convinced they have the right vision and the company is on the path to success.

Statements like: “We will be the first digital industrial enterprise” or “We are now a software company” impress the outside world and often investors in the beginning.

 

Combined with investments in customer related software platforms a new digital world is relative fast created facing the outside world.  And small pilots are celebrated as significant successes.

What we do not see is that to show and reap the benefits of digital transformation companies need to do more than create a modern, outside facing infrastructure. We need to be able to connect and improve the internal data flow in an efficient way to stay competitive. Buzzwords like digital thread and digital twin are relevant here.

To my understanding we are still in the early phases of discovering the ideal architecture and practices for a digital enterprise. PLM Vendors and technology companies show us the impressive potential as-if the future already exists already now. Have a reality check from Marc Halpern (Gartner) in this article on engineering.com – Digital Twins: Beware of Naive Faith in Simplicity.

I will focus this year on future PLM combined with reality, hopefully with your support for real cases.

Current PLM practices

Although my curiosity is focused on future PLM, there is still a journey to go for companies that have just started with PLM.  Before even thinking of a digital enterprise, there is first a need to understand and implement PLM as an infrastructure outside the engineering department.

Many existing PLM implementations are actually more (complex) document management systems supporting engineering data, instead of using all available capabilities of a modern PLM systems. Topics like Systems Engineering, multidisciplinary collaboration, Model-Based Enterprise, EBOM-MBOM handling, non-intelligent numbering are all relevant for current and future PLM.

Not exploring and understanding them in your current business will make the gap towards the future even bigger. Therefore, keep on sending your questions and when time allows I will elaborate. For example, see last year’s PLM dialogue – you find these posts here: PLM dialogue and PLM dialogue (continued). Of course I will share my observations in this domain too when I bump into them.

 

To be ready for the future

The most prominent challenge for most companies however is how to transform their existing business towards a modern digital business where new processes and business opportunities need to be implemented inside an existing enterprise. These new processes and business opportunities are not just simple extensions of the current activities, they need new ways of working like delivering incremental results through agile and multidisciplinary teams. And these ways of working combined with never-existing-before interactivity with the market and the customer.

How to convince management that these changes are needed and do not happen without their firm support? It is easier to do nothing and push for small incremental changes. But will this be fast enough? Probably not as you can read from research done by strategic consultancy firms. There is a lot of valuable information available if you invest time in research. But spending time is a challenge for management.

I hope to focus on these challenges too, as all my clients are facing these challenges. Will I be able to help them? I will share successes and pitfalls with you, combined supporting information that might be relevant for others

Your input?

A blog is a modern way of communicating with anyone connected in the world. What I would like to achieve this year is to be more interactive. Share your questions – there are no stupid questions as we are all learning. By sharing and learning we should be able to make achievable steps and become PLM winners.

Best wishes to us all and be a winner not a tweeter …..

 

 

questionaireThe 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 ?

image

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.

NoChangeMoving 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.

No_roiWhen 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.

pm

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 ?

marketleaderWhen 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.

observationMy 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 ?

flexibleNobody 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.

imageMy 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.

cloudLarger 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 ?

Last year, I read Clayton Christensen’s book “The Innovator’s dilemma – When New Technologies Cause Great Firms to Fail “. I was intrigued how his theory also applies to PLM and wrote about it in a blog posts last year.

hbrRecently, I attended an HBR Webinar “Innovating over the Horizon: How to Survive Disruption and Thrive , which raises serious implications for PLM. As presented by Clayton Christensen and Max Wessel, both professors in the Harvard Business School, I foresaw numerous consequences demanding attention.

I’d like to highlight some observations for you:

  • Disruptive innovation will hit any domain – so also the PLM domain
  • You are less impacted if your products/services are targeting a job to be done
  • ERP has a well defined job – so not much discussion there
  • PLM does not have a clear job – so vulnerable for disruption
  • Will PLM disappear?

Disruption explained

image

The above diagram explains it all. Often products come into the market with a performance below customer expectations. The product will improve in time, and at a certain moment it will reach that expectation level.  Through sustaining innovation, the company keeps improving their product(s) to attract more customers, and start delivering more than a single customer is asking for.

slideplmThis is for sure the case in PLM. All the PLM vendors are now able to deliver a lot of functionality around global collaboration, covering the whole product lifecycle. Companies that implement PLM, just implement a fraction of these capabilities and still have additional demands. Still the known PLM vendors nearly always win when a company is searching for a new PLM solution.

Disruption comes from other technologies and products. In the beginning, they are not even considered by companies in that product space as a possible solution. As these products improve in time at a certain moment, they reach that level of functionality and performance, a potential customer can use these products to address their demands.

imageAt this stage, the disrupters will nearly always win the battle. The reason is that they are more close to what the customer wants than the incumbents. Their product performance and price point are most likely to be more attractive than the incumbents´ portfolio.

Translating this to PLM it would mean: “Do not look for PLM systems as they already provide too much functionality, way above the line of customer desire”

As a PLM consultant, I need to provide some second thoughts to keep my job. There is much more behind Prof. Christensen’s theory, and I recommend before agreeing with what I write, read his books ! And although there is a horizontal time axis where the disruptive technology comes in, it does not indicate it will be this year or next year.

If you are aware that disruption can kill your business, how likely is it that it will happen in your business and when?

Professor Christensen makes two key points:

  1. Disruption will always happen, but this does not mean it is going to be fast and totally overtaking the old products. It might be a slower process as expected and incomplete. Here, I was thinking about disruptive cloud technology, which came in fast on the consumer level, but will it reach the business level too, in the same manner that it overrules the classical PLM platforms ? I am not sure about that (yet)
  2. If your company’s value is on delivering products, instead of delivering means to get the job done for your customer, you are extremely vulnerable for disruption.

As companies are looking to get their job done in the most efficient manner, they will switch at any time to new solutions that provide a better way to get the job done, often with a better performance and at a lower price point.

ERP has a well defined job

I realized that this is one of the big differences between PLM and ERP. Why is there such a discussion around the need for PLM and I do not catch the same messages from the ERP domain ?  Maybe because I am a PLM consultant?

ERP has a clear mission: “To get the job done – deliver a product as efficient and fast as possible to the customer”. ERP is an execution system.  Although ERP vendors as well are delivering more than their individual customers ask for, the job is more clear defined.

PLM does not have a clear job

For PLM, it becomes fuzzy. What is the job that PLM does ? Here, we get a lot of different answers. Have a look at these definitions from some vendors.

Quote from the Siemens website

CIMdata calls PLM “the most effective investment you can make to achieve product leadership.” AMR Research says “Companies committed to time to value in product innovation certainly cannot succeed without a sound PLM foundation.”

Quote from PTC’s website

Product Lifecycle Management, or PLM, is a driver of successful product development, and a strategic contributor to business value across the enterprise. PLM helps product manufacturers manage complex, cross-functional processes, coordinating the efforts of distributed teams to consistently and efficiently create the best possible products

Quote from the Autodesk website

For companies of any size, Autodesk PLM 360 helps to streamline your business processes for more efficient product development, improved profitability, and higher product quality.

I also reviewed the websites from the other PLM vendors, and I can confirm: None of them is talking in a clear way which job needs to be done. All PLM solutions are around technology and products.

Companies want to get the job done

And here I come back to the webinar’s conclusion. If you want to secure your future as a company, you need to focus on the job to be done. And even better, focus on the experience to do the job and the best integration of these experiences in a total framework. See the slide below:

image

My interpretation is that PLM has not even reached level 1.  Still many companies are struggling to understand the fundamental need(s) for PLM.

Interesting to see is that Dassault Systemes in their messaging and approach is already targeting level 2 – the experiences. If potential customers will embrace the experience approach without passing level 1, is something to observe.

Will PLM disappear ?

2050In my December 2008 blog post PLM in 2050 and recently in The Innovator’s dilemma and PLM,  I wrote that I believe PLM as it is currently defined, will disappear. Perhaps made redundant by a collection of disruptive technologies. Main reason is that PLM does not do a single, clear job.

One of these disruptive candidates to my opinion is Kenesto. They deliver “social business enterprise software to empower teams” as stated on their website. Kenesto is not considered as a competitor of classic PLM, starting on a different trajectory. For sure there will be more disruptive candidates aiming at different pieces of the PLM scope.

What do you think: 

  • Does PLM have too many jobs ?
  • Will PLM survive disruption ?

image

clip_image002[4]Last week I attended the Product Innovation Conference in Berlin, an event that revitalized the discussions and information exchange around PLM.

I have been blogging about this event since it started in London 2011, the year after in Munich and Atlanta and now in Berlin. The event has grown in size, both for the amount of speakers and participants. There were many parallel sessions per interest stream, and for that reason I cannot give a full overview of the event as I did in my previous blog posts.

This time I will describe only my personal highlights, being aware there was much more to learn. A nice service to the more than 350 attendees is that they will be able to see all sessions online soon as they were all recorded.

Some of my personal highlights

The first keynote speaker was Steve Wozniak and for me one of the guys that changed my professional life. The Apple IIe was my first personal affordable computer to explore a new world of automation, the peeks and pokes, the analog/digital converter, programming and application software, like Visicalc. I somehow feel the same excitement with 3D printing. How is this going to affect our future life?

clip_image004[4]The Apple IIe was an innovation and Steve Wozniak led us through the successes and failures he experienced within Apple. Steve´s presentation was a clear motivation for all of us to think different, to have your goals in mind. Do not focus on the common sense or be part of the organization. There will be failure but also success if you are clear about your goals. Engineers should follow their creativity and be original, instead of copying books. Creativity and Innovation are like humor (some have it and some will never have it). It was a good inspiring start for the two days, and these themes came back several times.

During the rest of the day, I learned about The Human Factor and Managing Cultural Change by Dagmar Heinrich, which can lead to damaged bike or car.

Stan Przybylinski provided interesting statistics and insights about investments in discrete manufacturing related software around the world (US, Japan, Germany, India, China) demonstrating there is still an enormous gap between the traditional economies in the west and the emerging countries.

clip_image006[4]An excellent presentation was given by Caterpillar – Beth Hinchee representing the PLM / business side, John Berg representing the IT/Infrastructure side, combined with Accenture Rüdiger Stern – Innovation and Product Development Lead.

Their presentation was a blueprint how large PLM implementations should be executed, and it was a confirmation of what I am preaching.

steppedAs a PLM implementation is always about changing the way a company works, you need to make sure you have a strong involvement from both business and IT. Without a third party that brings in the best practices, the coaching and moderation between the two disciplines it often fails due to different viewpoints and a different focus. The role of the consultancy partner is to be the glue, the motivator and source of bringing outside experience from other implementations into the discussion. As normally a company might have experience with one or two PLM implementations, a consultancy firm should be able to bring in much more experiences from all their customer engagements.

In the afternoon Michael Grieves, author of Virtually Perfect: Driving Innovative and Lean Products through Product Lifecycle Management talked about the value of innovating starting from virtual products, and how they contribute to faster mature, better validated products, benefitting from a lower overall investment for innovation. He also stated it is more important to focus on practices instead of standardized processes inside PLM. clip_image008[4]

This matched perfectly with my presentation; Innovation loves PLM, explaining the huge value that PLM brings for Innovation in relation to the company’s culture and approach towards open innovation.

The two closing keynotes sessions from the afternoon were interesting. Peter Bilello from CIMdata talked about The Future of PLM: Enabling Radical Collaboration. For me the first time I saw such a change from CIMdata, now looking forward to the upcoming generation instead of presenting more common, consolidated PLM wisdom. My blog buddy Oleg wrote about it in more detail in his recent blog post: Product Development as we have known it is dying.

The last session of the day was from Marc Chapman: Designing the World Land Speed Record. It was inspiring for all of us, demonstrating the beauty and challenges of engineering when trying to break the world land speed record. See more at bloodhoundssc.com. Not so much PLM related, but full of challenges and a need for innovative approaches.

And after a network session with drinks and a short night

clip_image010[4]The next day started with an inspiring speech, please pay extra attention to this topic. Massoud Hassani, born in Afghanistan, is striving for awareness of the global land-mine problem through his innovative decommissioning device Mine Kafon. Traditional mine discovery and detonation programs are expensive. Affected countries and the UN are not spending significant money to solve the problem as an exploding mine is no longer world news (unless it is a famous person).

Still people get injured or killed by these mines – forgotten victims. Have a look at Massoud´s project on kickstarter.com and get inspired where you can contribute. Massoud’s initial design was based on his childhood experiences, knowledge gained at the design academy and now looking for engineering support to optimize his extreme low cost, but innovative solution.

Some other sessions from the second day: The lessons learned from previous failed PLM projects by Andritz: When Things Go Wrong: How to Put Them Right. They decided not to follow the common approach that many companies try to make: one size (type of PLM) fits all, learning from their failed PLM project now rolling out several PDM systems.

clip_image012[4] This presentation somehow has a connection to what Marc Halpern from Gartner mentioned. One of my favorite opening statements he made about PLM upgrades was:

“Upgrading your PLM system, is like rewiring the house with the electricity on”.

As Gartner’s focus is more on the IT-side of the business, he explained that current PLM implementations cannot be maintained in the long term future as they become too expensive and complex to maintain. He mentioned the risk when selecting one provider for PLM, you would suffer probably from being locked-in by the vendor. This made me think what about if you would implement SAP PLM ? The SAP message is clear: one single platform for PLM and Execution!

The counter approach from this vendor lock-in is the approach to work towards open standards. Here, I attended the session EUROSTEP: Achieving business benefits by using PLM standards such as STEP and PLCS.

Currently I am involved in several projects where standardization of data for the long term and efficient data exchange between various systems is important. It is somehow a battle against all odds. Standardization is making small steps forward, but it requires companies to have a long-term vision and most of the time they chose for the short-term proprietary data formats from their software vendors. As time and less complexity is money – the problem will come later for the next generation of managers and software.
Of course this always has to be considered in the context of the dynamics of your industry – the longevity of data plays an important role.

clip_image014[4]Second last keynote speaker of the day was Prof. Martin Eigner, a long term visionary and icon when it comes to PLM. Prof. Eigner provoked the audience again that almost no company actually has implemented PLM.

Most companies are stuck with a form of PDM combined with complex customizations. They do not keep it simple – PLM is for Product Development and definition and ERP is only for execution. Companies tend to invest in their expensive ERP systems which have less impact on the future business as PLM and Innovation have.

Companies should invest much more in the design process as here it is where almost 70 % of the costs are defined and innovative products are born. To innovate better we should add Model Based engineering which includes the steps of systems engineering into the design process. Mr. Eigner was talking about a new term for PLM: sysLM. His speech was consistent and logical for all of us. But why do companies not adopt this vision?

I will come back to that in my conclusion.

clip_image016[4]The last keynote speech was from Doug McCuistion, program manager from the NASA Curiosity Mars Exploration mission. Doug guided us through all the challenges the mission went through. He shared with us the reasons for the mission, the complexity and challenges of the landing procedure and the upcoming discoveries expected. It was the last session of the congress and I feel sorry for those who had to leave earlier for their travels as it was the most inspiring session of the congress. Going for the almost impossible and such a contrast to the “boring” world of PLM.

And here comes the link between NASA´s Curiosity project and Prof Eigner´s PLM presentation.

The Curiosity project is a challenge, not on this planet, it is on the edge of what is possible and has no competition (or it must be budget cuts by the government). For most other companies, the challenge lies on this earth, and they want to stay ahead of the competition. Here it is about being able to fund your innovation and assure future funding by introducing innovative products to the market that generate enough margin to invest in the future. PLM presentations seem to be “boring” as the business value is not clear for the management (the do not attend PLM conferences), they get more enthusiastic from short-term financial figures.

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One of the (younger) attendees told me that it was impressive to see so many PLM icons at this conference, but where is the new generation of PLM to-be icons ?

Fixing this disconnect is probably related to the magic we need to find to bring Innovation and PLM to the next generations.

Who starts ???

My conclusions:

  • The conference has become a “must” for companies looking for experiences related to PLM. Why and how PLM contributes to your business
  • Companies are looking for their second PLM implementation trail. Learning from their previous mistakes they learned it is not an IT-only project, business should be leading, cloud becomes an option.
  • The awareness of a new upcoming generation of workers. Everyone is aware of it, still at PLM conferences we are waiting for the first thought leaders of this generation to speak.
  • Excitement comes from innovations that seem to be unachievable. Some go extremely fast, some detonate mines and some go to Mars, the rest has to be achieved in a competitive and global market.
    Innovation loves PLM.

dontmissPLM is a popular discussion topic in various blogs, LinkedIn discussion groups, PLM Vendor web sites and for the upcoming Product Innovation congress in Berlin.  I look forward to the event to meet and discuss with attendees their experience and struggle to improve their businesses using PLM.

From the other side talking about pure PLM becomes boring. Sometimes it looks like PLM is a monotheistic topic:

  • “What is the right definition of PLM ?” (I will give you the right one)
  • “We are the leading PLM vendor” (and they all are)
  • A PLM system should be using technology XYZ (etc, etc)

Some meetings with customers  in the past three weeks and two different blog posts I read recently made me aware of this ambiguity between boring and fun.

PLM dictating Business is boring

Oleg Shilovitsky´s sequence of posts (and comments) starting with A single bill of materials in 6 steps was an example of the boring part. (Sorry Oleg, as you publish so many posts, there are many that I like and some I  can use as an example). When reading the BOM-related posts,  I noticed  they are a typical example of an IT- or Academic view on PLM, in particular on the BOM topic.

questionWill these posts help you after reading them ? Do they apply to your business ? Or do you feel more confused as a prolific PLM blogger makes you aware of all the different options and makes you think you should use a single bill of materials ?

I learned from my customers and coaching and mediating  hundreds of PLM implementations, that the single BOM discussion is one of the most confusing and complex topics. And for sure if you address it from the IT-perspective

The customer might say:
Our BOM is already in ERP – so if it is a single BOM you know where it is – goodbye !”.

A different approach is to start looking for the optimal process for this customer, addressing the bottlenecks and pains they currently face.  It will be no surprise that PLM best practices and technology are often the building blocks for the considered solution. If it will be a single BOM or a collection of structures evolving through time, this depends on the situation, not on the ultimate PLM system.

Business dictating PLM is fun

Therefore I was happy to read Stephen Porter´s opinion and comments in: The PLM state: Pennywise Pound Foolish Pricing and PLM where he passes a similar message as mine, from a different starting point, the pricing models of PLM Vendors. My favorite part is in his conclusion:

A PLM decision is typically a long term choice so make sure the vendor and partners have the staying power to grow with your company. Also make sure you are identifying the value drivers that are necessary for your company’s success and do not allow yourself to be swayed by the trendy short term technology

Management in companies can be confused by starting to think they just need PLM because they hear from the analysts, that it improves business. They need to think first to solve their business challenges and change the way they currently work in order to improve. And next look for the way to implement this change.

Changing the way to work is the problem, not PLM.

It is not the friendly user-interface of PLM system XYZ or the advanced technical capabilities of PLM system ABC,  that will make a PLM implementation easier. Nothing is solved on the cloud  or by using a mobile device. If there is no change when implementing PLM, why implement  and build a system to lock yourself in even more?

abbThis is what Thomas Schmidt (VP Head of Operational Excellence and IS at ABB’s Power Products Division) told last year at PLM Innovation 2012 in Munich. He was one of the keynote speakers and surprised the audience by stating he did not need PLM !

He explained this by describing the business challenges ABB has to solve: Being a global company but acting around the world as a local company. He needed product simplification, part reduction among product lines around the world, compliance and more.

Another customer in a total different industry mentioned they were looking for improving global instant collaboration as the current information exchange is too slow and error prone. In addition they want to capitalize on the work done and make it accessible and reusable in the future, authoring tool independent. But they do not call it PLM as in their business nobody uses PLM !

Both cases should make a PLM reseller´s mouths water (watertanden in Dutch), as these companies are looking for key capabilities available in  most of the PLM systems. But none of these companies asked for a single BOM or a service oriented architecture. They wanted to solve their business issues. And for sure it will lead into implementing PLM capabilities when business and IT-people together define and decide on the right balance.

Management take responsibility

And here lies the management responsibility of these companies. It is crucial that a business issue (or a new strategy) is the driving force for a PLM implementation.

In too many situations, the management decides that a new strategy is required. One or more bright business leaders decide they need PLM (note -the strategy has now changed towards buying and implementing a system). Together with IT and after an extensive selection process is done, the selected PLM system (disconnected from the strategy) will be implemented.

deaf_blindAnd this is the place where all PLM discussions come together:

– why PLM projects are difficult

– why it is unclear what PLM does.

PLM Vendors and Implementers are not connected anymore at this stage to the strategy or business. They implement technology and do what the customer project team tells them to do (or what they think is best for their business model).

Successful implementations are those where the business and management are actively involved during the whole process and the change.  And this requires a significant contribution from their side, often delegated to business and change consultants.

PLM Implementations usually lead to a crisis at some moment in time, when the business is not leading and the focus is on IT and User Acceptance. In the optimal situation business is driving IT. However in most cases due to lack of time and priorities from the business people, they delegate this activity to IT and the implementation team. And here it is a matter of luck if they will be successful:

  • how experienced is the team ?
  • Will they really implement a new business strategy or just automate and implement they way the customer worked before, but now in a digital manner ?
  • Do we blame the software when the people do not change ?

Back to fun

imageI would not be so passionate about PLM if it was boring. However looking back the fun and enthusiasm does not come from PLM. The fun comes from a pro-active business approach knowing that first the motivating the people and preparing the change are defined, before implementing PLM practices

I believe the future success for PLM technologies is when we know to speak and address real business value and only then use (PLM) technologies to solve them.

PLM becomes is a  logical result not the start.

And don´t underestimate: change is required.

What do you think – is it a dream ?

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