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IBM Global Business Services
A Cup Half Full: PLM in the automotive industry
September 2008
PLM for the Automotive Industry | 22-Sep-082 © Copyright IBM Corporation 2008
IBM Global Business Services
Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
PLM for the Automotive Industry | 22-Sep-083 © Copyright IBM Corporation 2008
IBM Global Business Services
PLM in the Automotive industry
Joint study with:- Automotive Analysis Division, University of Michigan Transportation Research
Institute (2007)- Cranfield University (2006)- Ruhr University Bochum (2006/2004/2000) - IBM
We conducted a combination of in-depth interviews and surveys with directors and managers with expertise in the fields of automotive engineering and information technology.
Findings are “indicative,” but the sample is not large
PLM for the Automotive Industry | 22-Sep-084 © Copyright IBM Corporation 2008
IBM Global Business Services
Who did we talk to?
16 USA automotive OEMs and suppliers39 European automotive OEMs and suppliersFindings focus on 2006 & 2007 data (2004 data available) The participating companies are: - OEM: 32%- Tier 1 supplier: 62%- Tier 2 supplier: 6%
Euro
pe P
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9)
Dana CorporationEaton CorporationFord Motor CompanyGeneral Motors CorpValeoYazaki CorporationBorgWarner, Inc.Tenneco Inc.
TRW AutomotiveLear CorporationMichelin North America, Inc.International Truck and Engine CorpSiemens VDO Automotive CorpDaimler Trucks North AmericaHarley-Davidson Motor CompanyU
.S. P
artic
ipan
ts(F
ull L
ist)
Aston Martin LagondaBehr GmbH & Co.Bentley Motors LtdBertrandt AG BMW AGClaas KGaA mbHDaimlerChrysler AGDelphi Automotive SystemsDeutschland GmbHFaurecia
Jaguar Land RoverLotus CarsJohnson Controls GmbHLear Corporation GmbH & Co. KGLinde AGNissan Technical Center Europe LTDMann+Hummel GMBHCooper-Standard-Automotive GmbHBrose Fahrzeugteile GmbH & Co.Continental Teves AG & Co. oHG
PLM for the Automotive Industry | 22-Sep-085 © Copyright IBM Corporation 2008
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We categorized the 52 participants into PLM Champions, Advanced PLM Users and PLM Stragglers
PLM Champions
Advanced PLM Users
PLM Stragglers
U.S. EuropeLevel of PLM Integration
Leve
l of P
LM U
sage
Advanced PLM users have an above-average level of integration, but only use average PLM methods and tools
• PLM champions are the leading edge of the Advanced users, show a high, well-balanced level of integration and use. They are strategically ideally set up. Top 10% are champions
PLM stragglers… largely have an average level of PLM functions, but only have limited integration solutions
There is a gap today between leaders and stragglers
Combined PLM Champions & Advanced Users
PLM for the Automotive Industry | 22-Sep-086 © Copyright IBM Corporation 2008
IBM Global Business Services
IBM defines Product Lifecycle Management (PLM) as a strategic management approach for running the business, not just an engineering tool
integratedby PLM
engineeringprocesses
IT systems product strategy
engineeringorganizationproduct data
consisting of integrated methods and tools for the cooperative development, maintenance and use of all relevant engineering information in the entire distributed product lifecycle
PLM is not a single tool, technology, or packaged product
PLM is a “strategic management approach”
PLM integrates systems and processes
PLM for the Automotive Industry | 22-Sep-087 © Copyright IBM Corporation 2008
IBM Global Business Services
A PLM environment typically includes a variety of integrated systems, processes and tools
PLM processes often have a high degree of variation between organizations, locations or projects.
PLM transformation initiatives are challenged by these barriers and may cause problems during execution
To collaborate on enterprise projects these disparate systems cause major challenges for product & process definition
Market/Sales Order Process
ERP Ownsolution
Ownsolution
Ownsolution SAP SAP
CAD
CAE
PDM
E-BOM
MPM
M-BOM
Reqm;ts.
Specials
Ownsolution
Ownsolution
Ownsolution SAP SAP
Engineering
Org 1 Org 2 Org 3 Org 4 Org 5
Operations
Decision point—mandate system commonality (“rip & replace”)or integrate existing systems through SOA (“best of breed”)!
Decision point—mandate system commonality (“rip & replace”)or integrate existing systems through SOA (“best of breed”)!
PLM for the Automotive Industry | 22-Sep-088 © Copyright IBM Corporation 2008
IBM Global Business Services
Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
PLM for the Automotive Industry | 22-Sep-089 © Copyright IBM Corporation 2008
IBM Global Business Services
PLM Benefits are realized across many areas for both PLM Stragglers and Advanced Users
Significant reported benefits include:
• higher levels of process standardization
• improved data flow and exchange
• increased re-usage of data and knowledge
• better geographical integration
• reduced number of changes
• improved product quality
PLM stragglers
Reduced number of product changes 128
higher ability for innovative products 30Prod
uct optimized product quality 68
IT
integration of legacy systems 00
lower IT maintenance 34
Org
aniz
atio
n
geographic integration 16 12
collaboration and comunnication 34
Dat
adata quality 34
re-use of data and knowledge 1216
data flow and exchange 1216Pr
oces
ses
availability of information 98
reduction of non-value activities 60
standardization of processes 1816
Advanced PLM users
PLM for the Automotive Industry | 22-Sep-0810 © Copyright IBM Corporation 2008
IBM Global Business Services
PLM Champions and Advanced Users are much more proficient in even doing ROI evaluations, and thus see better returns
80
57
7
share of companies which have carried out a ROI calculation in %
PLM champions
advanced PLM users
28
35
return on investment in months(averages of entries)
PLM champions
PLM stragglers
advanced PLM users
PLM for the Automotive Industry | 22-Sep-0811 © Copyright IBM Corporation 2008
IBM Global Business Services
One of PLM’s major goals is to improve innovation
“PLM enables collaborative product development work environments that bring together expertise from multiple organizations. These are environments where people can develop new, innovative products and services, and design and establish innovative business, manufacturing, and support processes”
- Peter Bilello, senior consultant, CIMdata
Source: http://aecnews.com/articles/786.aspx http://www.ngmanufacturing.com/pastissue/article.asp?art=271207&issue=218
“Today’s PLM solutions provide essential support for innovation. PLM has steadily evolved from engineering-centric solutions focused on engineering data management to extended enterprise intellectual asset management solutions that support the collaborative creation, management, dissemination, and use of project definition information from concept to decommission .”
- John MacKrell, senior consultant, CIMdata
PLM for the Automotive Industry | 22-Sep-0812 © Copyright IBM Corporation 2008
IBM Global Business Services
Advanced PLM users focus on speed of innovation, while PLM stragglers focus on decreasing the costs of innovation
PLM stragglersadvanced PLM users and PLM Champions
faster rollout of innovations 29
decreasing the number of variants
11
115
developing mass customized products
5 11
effective use of platform strategies
10
decreasing innovation costs
11
19 33
Increasing the amount of reused parts
33 17
extending the product economic life-time
60
The impact of PLM on product innovations
PLM for the Automotive Industry | 22-Sep-0813 © Copyright IBM Corporation 2008
IBM Global Business Services
Advanced PLM users lead in using innovative product development methods
PLM championsadvanced PLM usersPLM stragglers
European participants 2006
PLM championsadvanced PLM users
PLM stragglers
U.S. participants 2007
2007 U.S. participants2006 European participants
parametric geometry modelling
design in context2
digital test bench4
digital product master
behaviour modelling
interdisciplinary modelling
configured DMU3
100%
100%
83%
50%100%
83%83% 100%
100%
50%33%
100%
33%67% 100%
67% 100%50%
100%100%100%
23%80%
62%
93%100%
77%
100% 71%
46%71%80%
64%80%62%
71%42%
80%
50%
PLM for the Automotive Industry | 22-Sep-0814 © Copyright IBM Corporation 2008
IBM Global Business Services
Advanced PLM users obtain about 10% more reuse (for Slightly modified and Existing) than the stragglers
Advanced users also:- Pursue a high level of component reuse- Reusing readily available as well as slightly
modified parts
Component reuse in new developments(consolidated European and U.S. participants1 - averages each classification group)
PLM-champions
PLM-stragglers
Advanced PLM users
30%32%
38%
33%35%
32%
44%28%
27%
All PLM users
38%32%
30%
Existing/standardized parts
New parts
Slightly modified parts
PLM for the Automotive Industry | 22-Sep-0815 © Copyright IBM Corporation 2008
IBM Global Business Services
PLM is a strategic management approach for running the business; it is not just an engineering tool We believe that the fundamental difference between leaders and stragglers in the automotive industry is in the way they think about PLMLeveraging product development methods are in much greater use of PLM LeadersPLM benefits are being achieved by all, but advanced users are getting better benefits from their more comprehensive approach to PLM
What is going on?
The best benefits come from thinking of PLM in terms of a comprehensive, strategic change process management approachThe fact that Advanced PLM users report lower IT costs means that automotive companies should aim for more comprehensive PLM benefits, and not just aim at lowering costs.PLM as a management strategy needs to be at the core of how the business fundamentally operatesAn innovation focus will lead to a larger business impact for an automotive company than focusing on cost cutting alone
What are the implications?
PLM for the Automotive Industry | 22-Sep-0816 © Copyright IBM Corporation 2008
IBM Global Business Services
Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
PLM for the Automotive Industry | 22-Sep-0817 © Copyright IBM Corporation 2008
IBM Global Business Services
PLM
PLM functionally overlaps with other enterprise systems, and needs to be integrated
ERPCRM
SCM
SRM
Source: Alan Mendel 2007 presentation
PLM for the Automotive Industry | 22-Sep-0818 © Copyright IBM Corporation 2008
IBM Global Business Services
Integrating non-technical departments into the engineering environment(averages in each classification group)
Advanced PLM users show a slightly higher level of integrating non-technical departments into the engineering environment. No user has achieved a full integration.
degree of integration in the engineering environment
maintenance, repair & overhaul (MRO)
enterprise resource planning (ERP)
customer relationship management (CRM)
supply chain management (SCM)
requirement traceability management (RTM)
service & support
Advanced PLM Users and PLM Champions
PLM Stragglers
European Participants 2006
U.S. Participants 2007
Advanced PLM Users and PLM Champions
PLM Stragglers
0 no integration
1 communication between the departments
2 exchange of information over system interfaces
3 shared database
4 integrated processes and functions
0 1 2 3 4
PLM for the Automotive Industry | 22-Sep-0819 © Copyright IBM Corporation 2008
IBM Global Business Services
Advanced PLM users are integrating engineering applications morethan the stragglers in the physical environment
production planning0 8633
CAM2029 15
testing / prototyping3343 29
virtual product creation
advanced PLM users and champions
PLM stragglers
real product creation
simulation / calculation4045 0
requirements management29 0
CAQ14 0
project management2029 14 20
factory planning 33 4314
resource planning 33 710
bill of material management100 86 60 80
CAD 14100 83
DMU 17 100 80
visualization 29 100 86
(U.S. participants - averages in each classification group in %)
PLM for the Automotive Industry | 22-Sep-0820 © Copyright IBM Corporation 2008
IBM Global Business Services
Big changes are expected in the consolidation of their Engineering IT landscapes
Number of product data management (PDM) systems in engineering(U.S. participants - averages in each classification group)
2003
10
8
1
2007
9
7
1
2011
4
21
advanced PLM users
PLM stragglers
PLM champions
PLM for the Automotive Industry | 22-Sep-0821 © Copyright IBM Corporation 2008
IBM Global Business Services
Currently, advanced users and champions tend to focus on commercially available solutions with adaptations, with a move toward more off the shelf solutions in the future.
Degree of standardization of the implemented PDM solutions (averages in each classification group)
D 27%
C 18%
B 55%
U.S. 2007 Trend U.S. 2011
B 67%
A 33%
D 6%
Trend Europe 2010
B 94%
D 43%
B 43%
D 6%
U.S. 2007 Trend U.S. 2011Trend Europe 2010
B 94%
C 14%
D 14%
B 72%
C 14%
D: home grown system/interfacesC: externally developed individual solutionB: commercial system with adaptationsA: commercial system without any adaptations
D: home grown system/interfacesB: commercial system with adaptations
European participants 2006 U.S. participants 2007
Advanced PLM Users and Champions PLM Stragglers
PLM for the Automotive Industry | 22-Sep-0822 © Copyright IBM Corporation 2008
IBM Global Business Services
Advanced users are focusing on providing web based access in theU.S.
Web based access to central PLM system components(Share of all entries in %)
15%
70%15%
U.S. 2007
The trend to completely web based systems will be more of a focus for the US participants than the European participants.
Trend U.S. 2011
17%
75%
8%
82
18
Trend Europe 2010
Core system with partial web accessno web based access to the system
complete web based system
Core system with partial web access
complete web based system
European participants 2006
U.S. participants 2007
PLM for the Automotive Industry | 22-Sep-0823 © Copyright IBM Corporation 2008
IBM Global Business Services
Advanced PLM users are focusing more on integrated workflow processes, while stragglers are focusing more on data integration
data exchange and interfaces 60% 29%
confidentiality (IP protection) 14%20%
multi-CAD management 14%20%
integrated configuration management (incl. change and release management) 43%20%
The top challenges relating to the relationship with customers and suppliers (U.S. participants - average of classified results - multiple entries possible)
advanced PLM users and champions
PLM stragglers
reduce parts, foster reuse and common parts 0%20%
building a common PLM strategy 0%40%
PLM for the Automotive Industry | 22-Sep-0824 © Copyright IBM Corporation 2008
IBM Global Business Services
Advanced PLM users apply more sophisticated techniques to communicate requirements along the supply chain, however communication is still not high
Communication of assembly constraints to customers and suppliers(average of classified results in % - multiple entries possible)
verbal communication 40% 42%
paper-based communication 28%20%
no communication 0%8%
CAD-based communication 57%40%
Communication of product interfaces to customers and suppliers(average of classified results in % - multiple entries possible)
design evolution tracked by system 0% 42%
data integrated into and communicated via BOM 42%25%
data shared electronically 100%100%
advanced PLM users and champions
PLM stragglers
PLM for the Automotive Industry | 22-Sep-0825 © Copyright IBM Corporation 2008
IBM Global Business Services
Participating companies are planning to use PLM functionalities company wide and across the extended enterprise by 2011
Self assessed level of PLM integration
CAD data management
PDM
company wide PLM
cross enterprise PLM
2007
18%
54%
92%
92%
2011100%
100%
100%
100%
USA participants only
Companies are optimistic about reaching full integration by 2011
PLM for the Automotive Industry | 22-Sep-0826 © Copyright IBM Corporation 2008
IBM Global Business Services
Automakers are challenged to integrate their separate enterprise IT systems on which they run their businessIntegration along the supply chain also remains a difficult challengeAutomakers are optimistic about achieving strongly integrated capabilities within 5 yearsCompanies are taking different approaches to PDM customizationAdvanced users focus on PLM workflow processes, not on data integration
The major integration effort within an enterprise will be integrating its key enterprise systems, which often means PLM and ERPIt is unclear which approach to PDM customization will succeed or dominateBusiness focused scenarios can highlight PLM integration success, as opposed to a data integration approach
What are the implications?What is going on?
PLM for the Automotive Industry | 22-Sep-0827 © Copyright IBM Corporation 2008
IBM Global Business Services
Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
PLM for the Automotive Industry | 22-Sep-0828 © Copyright IBM Corporation 2008
IBM Global Business Services
PLM success can best be attained with a top-down strategy that closely involves top management
PLM stragglersadvanced PLM users and champions
Involving top management when implementing a PLM strategy(averages in each classification group in %)
top management determines the PLM strategy (top-down)
0 50
0 18
important decisions are coordinated between TM and the PLM project team
50 50
44 70
TM is not involved/interested in the PLM strategy
017
023
TM supports PLM strategy, PLM team makes decisions33 12
33 0
Europe 2006 Europe 2006
U.S. 2007 U.S. 2007
PLM for the Automotive Industry | 22-Sep-0829 © Copyright IBM Corporation 2008
IBM Global Business Services
A lack of user acceptance and communication are main causes for failed PLM implementations.
Risks when introducing PLM(averages in each classification group)
PLM stragglersadvanced PLM users and PLM champions
not risky very risky not risky very risky
user acceptance 4,7 4,3
insufficient PLM project management 4,0 3,5
too much focus on technical details 4,1 3,2
missing communication 4,6 3,8
complex data migration 3,9 4,0
missing cost transparency 3,3 2,7
too large project steps 3,6 3,3
1. not risky2. somewhat risky3. moderately risky4. risky5. very risky
An expert statement: “People are used to ad-hoc [working], but PLM implies additional business control that people are not used to. So we will have to change the culture to adjust to PLM.“
PLM for the Automotive Industry | 22-Sep-0830 © Copyright IBM Corporation 2008
IBM Global Business Services
A successful PLM initiative has top management commitment, as well as a clear process and business focus, rather than being IT-driven
PLM stragglersadvanced PLM users and PLM
championsSuccess factors for introducing PLM (averages in each classification group)
not important
very important
not important
very important
top management commitment 5 4,7
initiative is process-, not IT-driven 4,3 4,3
division / user involvement 4,7 4,7
consideration of quick wins 4,3 3,8
assessing potential for improvements 3,9 4
clearly defined responsibilities 4,1 4,2
clear democracy of scope 4,3 3,8
costs (hardware, software, implementation) 3,6 3,7
detailed assessment before implementation 3,4 3,3
ROI analysis for prioritization of activities 3,4 3,3
4,3accompanying change management 3,7
1. not important2. somewhat important3. moderately important4. important5. very important
PLM for the Automotive Industry | 22-Sep-0831 © Copyright IBM Corporation 2008
IBM Global Business Services
PLM champions reduce the scope of the project to the advantage of the project plan (cost and time).
Clear scope and small project range guarantee the adherence of the project plan.
“Quick Wins” with clearly arranged project scope and user groups
Compared to Advanced Users, PLM Stragglers significantly exceed project costs and time. There is also a significant loss of System Functionality.
PLM Champions and Advanced PLM UsersPLM Stragglers
Deviating from the project plan in the last PLM activity(averages in each classification group in %)
system integration
system functionality
project time
project costs
+3
-30
+2
+71
+47
+10
-30
+300
+3
+7
+37
+13
+4
+12
-12
-16
Advanced PLM Users and PLM Champions
PLM Stragglers
European Participants 2006
Advanced PLM Users and PLM Champions
PLM Stragglers
U.S. Participants 2007
PLM for the Automotive Industry | 22-Sep-0832 © Copyright IBM Corporation 2008
IBM Global Business Services
PLM should be tied to the overall corporate strategy, however leadership is reluctant to buy into large projectsIt might be easier to justify PLM projects as small IT projects limited to engineering, but then the full benefits of PLM do not materializeIt is better to approach PLM as a major change project for the entire business culture, but that makes it more difficult to get buy-in
What are the implications?
Comprehensive change projects like PLM need support and top management coordination, as well as compelling business casesPLM projects also need strong end user support from the engineers and planners who will work with the system when it goes liveAdvanced PLM teams focus on quick wins with clear scope to show business valueFocus on change management processes is an attribute of successful implementations
What is going on?
PLM for the Automotive Industry | 22-Sep-0833 © Copyright IBM Corporation 2008
IBM Global Business Services
Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
PLM for the Automotive Industry | 22-Sep-0834 © Copyright IBM Corporation 2008
IBM Global Business Services
Conclusion
Automotive industry’s PLM cup is “half full”Some are doing PLM well, and all are improvingMost are getting benefitsIntegration and implementation is still a major challengeFocus on the small quick wins with process focus, such as engineering change
We are optimistic that PLM will continue to be a driving force for the innovation needed to meet the rapidly changing demands on automakers today and into the future
PLM stragglers need to imitate the leaders:who tend to think “innovation” and “process transformation” for the business as a wholeand not think just “tool” and “cost savings” for the engineering department