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1
PLM vision 2016
and beyond
Antti Saaksvuori
2 PLM vision 2016 and beyond
Copyright owned by Sirrus Capital Ltd. Helsinki Finland.
ISBN 978-952-67529-1-4
Antti Sääksvuori
PLM vision 2016 and beyond
Sirrus Publishing 2011 Helsinki
Finland
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Product liability: The publisher cannot guarantee the accuracy of any information about dosage and
application contained in this book. In every individual case the user must check such information by consulting the relevant literature.
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Table of Contents
Introduction ......................................................................................... 5
Executive summary ................................................................................ 6
PLM today (2010) ................................................................................... 7
Most significant PLM GAP’s today ......................................................... 8
PLM in 2016 ....................................................................................... 11
PLM system usage and functionality development ............................. 11
PLM implementation approach in 2016 .............................................. 13
Industry specific development ............................................................. 16
Manufacturing ................................................................................. 16
Service sector ....................................................................................... 19
SME’s .................................................................................................... 21
SME’s in 2011 ....................................................................................... 22
SME PLM challenges ............................................................................ 23
SME’s in 2016 ....................................................................................... 24
Industries looking into PLM ................................................................. 27
Utilities sector .................................................................................. 27
Construction industry ...................................................................... 28
4 PLM vision 2016 and beyond
Clothing, footwear and apparel industry ......................................... 29
Food, process and consumer packaged goods (CPG) industry ........ 31
Geographical expansion ....................................................................... 34
RIC- Russia, India, China ................................................................... 34
About the author .................................................................................. 36
Appendix A. Saaksvuori PLM Maturity Model .................................. 37
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Introduction
PLM in general is in a very interesting phase. The concept itself is much
widely and deeply understood on a global scale. Its potential in
business development is shared and recognized by business
management far better than 3-5 years ago.
Many countries having long tradition on continuous business
development use PLM as a standard way of working. For example in
Finland the Finnish CADCAM association executed a study in August
2010 showing that 70% companies in Finland employing more than
500 people have already invested in a PLM solution. In addition, 17%
consider the issue or they have a deployment in progress. Overall, this
makes the total adaption rate almost 90%. However, small business
companies are significantly lower in percentage, at least for now.
All in all, I see PLM in a stage where it has solid footprint in many
western economies and in certain fields of business, with extremely
high development potential and a lot of new virgin ground to cover in
the East, in the SME sector, and in completely new business verticals.
This paper is a vision on what PLM could be in 2016. It is outlook
estimation, not a scientific study. The contents of this paper is based
on 15 years of PDM/PLM experience, dozens of PLM related projects
and assignments in numerous customer companies that produce
different type of products. The content of this paper is based also on
academic collaboration, numerous seminars and events, discussions
and contacts with PLM experts all over the globe. There is also a lot of
recent research, academic and commercial, supporting the vision
presented in this paper.
6 PLM vision 2016 and beyond
Executive summary
In most western economies manufacturing business PLM has reached
a mature phase in its evolution, some may call it PLM1.0. Most of
large, multinational, frontline manufacturing (incl. also electronics
manufacturing, pharmaceutical etc.) corporations have structured PLM
processes and a supporting PLM IT-system implemented - at least to
certain parts of the organization.
By 2016, PLM will evolve significantly and break through to new
domains within a corporation, such as executive decision making,
innovation and customer involvement and to full product lifecycle
support, not only product definition lifecycle.
By 2016, PLM will increase its footprint in the service industry and
conquer new domains; such as the SME field, utilities, construction,
fashion and footwear businesses and break into process, food and
consumer packaged goods businesses. We will also see the rise of new
PLM system solutions coming from Russia, India and China.
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PLM today (2010)
Manufacturing business PLM in most western economies has reached
a mature phase in its evolution, some may call it PLM1.0 or level3 PLM
based on the Saaksvuori 5 level PLM maturity scale. (See appendix A).
Most of large, multinational, frontline manufacturing (incl. also
electronics manufacturing, pharmaceutical etc.) corporations have
structured PLM processes and a supporting PLM IT-system
implemented - at least to certain parts of the organization. They
manage the lifecycle of the product definitions (product process) as
well as certain parts of the actual product unit lifecycle (installed base)
in a structured way, naturally depending on the business model in use.
The current PLM set-up in these frontline manufacturing companies
include mature methods and tools for management of product related
information, product development processes and integration of
various product development and engineering related applications.
All in all, the understanding of PLM as a concept and its level of
maturity has increased considerably during the past 5-7 years. Many
studies have also shown the ROI of PLM true. PLM brings considerable
business benefits in discreet manufacturing type of business producing
complex products, consisting of large number of components with high
rate of changes. Thorough understanding of PLM and mature PLM
processes supported with an IT-system are common nominators of
successful new product introduction, product profitability, high quality
products and altogether nominators of successful business.
However, even still today the understanding of PLM is limited, and very
much IT and PLM-system driven. Very few companies have a holistic
understanding of PLM as a way to operate in product development and
product management as well as a way to manage and lead product
portfolio and related processes. Naturally there is also geographical
variation in PLM understanding and utilization based on the
8 PLM vision 2016 and beyond
engineering and business culture and tradition in each country. West
European countries with long engineering tradition drive the PLM
development, North America as well as some Asian countries like
Japan and Korea, again with significant engineering tradition come
close behind and in most aspects the rest of the world is at the to-be-
implemented stage what comes to PLM 1.0.
The most extensive PLM usage – process and systems coverage – with
the highest level of implementation is today in the large and global
corporations in the aerospace and automotive industry as well as some
electronics companies.
The leading service sector companies (Telco’s, IT-services and
insurance) in West Europe especially in the Nordic countries, have
fairly developed PLM processes implemented with some level of PLM-
IT-system support. In the service industry, the PLM understanding is
very much driven by a need for stable and precise product definition
and support for mass customization and product configurability in the
sales interface. International organizations in the service area, such as
Telemanagement forum, have also made an impact in the PLM
development by facilitating ongoing continuous PLM process and
standard development.
Most significant PLM GAP’s today
In general, the utilization of PLM functionality has increased relatively
quickly. In the early 2000’s PLM understanding was limited to product
development, the management of product related data in the
engineering context i.e. product definition data. Today, implemented
PLM processes and systems often cover also purchasing,
manufacturing, after sales and service parts of the organization and
processes. Leading companies have also recognized the end of life of a
product has been as a separate process.
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The most significant weakness of existing commercial PLM IT-solutions
is poor support of product lifecycle activities outside actual product
development process. The early stages of the product lifecycle, the
idea phase of the product development, when the product is very
much on a conceptual level is poorly supported. This is commonly due
to very traditional methods of managing product related requirements.
In many companies these requirements of different type are managed,
prioritized, validated and sorted then happens “something undefined”
and then we have a drawing, items and a BOM. The process of
transferring requirements directly to a drawing, BOM and items is not
easy and straightforward job and therefore not easy to standardize to
the level needed by the current IT systems.
Even though PLM and ERP systems have more functionality overlap
than ever, the PLM ERP role-play and functional set-up is extremely
hard to implement without large-scale customization. This is due to
traditional focus of ERP’s to the order-delivery and of PLM to the
product development process. Building a lifecycle management bridge
between these two systems is very demanding even today. In practical
terms this means that PLM systems manage the definition of a product
i.e. the product on a conceptual level (items, BOM set-up, drawings
and other documentation, configuration etc.) during a product lifecycle
and when the product needs to be realized i.e. manufactured, sourced
or assembled this is usually under ERP responsibility. Naturally there
are gray areas in between e.g. prototyping and 0-series production.
The lifecycle support for actual product units ends to the delivery of
the product unit. E.g. maintenance and service activities as well as
installed base management cannot be included in to the lifecycle
management set-up with current ERP systems due to the current ERP
base philosophy. ERP are designed to be transaction processing
systems and thus not designed to able to manage the evolution of a
product instance (item / BOM changes with serial numbers etc.).
Another significant gap is more on the PLM concept side. Many
companies struggle with integrating mechanic, electronic and software
10 PLM vision 2016 and beyond
components and in some cases service elements in the PLM concept
and have hard time managing all these as items in the PLM system.
These entities, very different by nature, are hard to manage together
and if the PLM concept cannot be build to cover all of these entities, it
is obvious that the PLM system is not able to manage them either.
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PLM in 2016
PLM system usage and functionality development
The established PLM1.0 set-up is in most cases limited to the area of
product development process. The main focus of PLM 1.0 is to manage
the product definition i.e. the evolution of product definition and
related information) including the; Items and BOM’s, Drawings and
design documents, version information in some cases even supplier
items, modularity and configuration information (configuration rules),
external product documentation, product descriptions etc. In practice
this means that the PLM is known only to the engineers of the product
development organization and thus their tool.
By 2016 we will see PLM break through to new domains with in a
corporation:
First of all, in 2016 PLM will facilitate the executive decision
making. Top management of every company producing
tangibles, software or services wants to be able make more
informed lifecycle decisions of their product portfolio than
today i.e. they want to have more, better and more coherent
information regarding their products. In this sense, PLM will
provide better reporting and information consolidation
features. Using PLM (standardized processes and product
information (including KPI’s) and PLM system) executive
management and business control functions are able to
monitor the performance of their products in the market,
make comparisons between the products in the portfolio,
12 PLM vision 2016 and beyond
monitor and steer the performance of the product
development, analyze different e.g. BOM costing alternatives
or up-sell scenarios of certain product upgrades based on
installed base information etc.
Secondly in 2016 PLM will facilitate innovation and customer
involvement in product development. This is something PLM
has promised for number of years. However, companies using
PLM and companies providing PLM systems have had no idea
how to use the possibilities brought by PLM to leverage the
product innovation and customer involvement in Product
development. Today many PLM 1.0 companies operate in the
traditional way of collecting requirements to be the basis of a
new product version or a completely new product. The process
of collecting requirements usually has far too much emphasis
on the technical issues and evaluating the value of an
individual requirement. Companies are not able to build a
bridge between these crumbles of requirements and customer
experience. The breakthrough of social media and other
electronic forums make it possible to involve existing and
possible to-be-customers in more inspiring way. In 2016 PLM
will connect crowds in these electronic forums and social
media to the product development and innovation of product
and service producers using PLM functionality and such
concepts as bill of functions – BOF (rather than bill of
materials) representing the to be product under evaluation.
Another possibility that will be utilized in this respect is the
possibility to create 3D models and illustrations (animations)
with the modern 3D design systems in generic view formats
and have them analyzed, commented and even further
innovated by the crowds in the social media.
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Thirdly, in 2016 PLM will facilitate the lifecycle aspect a
product in more depth. A set of closely integrated PLM
processes, practices and tools (more advanced PLM-ERP
integration) will facilitate making important product related
analyses such as the forecasting and control of lifecycle costs,
or the compliance of products with existing and upcoming
regulations and legal constraints for example regarding certain
raw materials and recycling of raw materials. Legal frameworks
like TREAD Act in the USA, REACH for the chemical industry in
EU, Regulators like FDA and EFSA require companies to ensure
that the processes and documentation of product is done
according set regulations.
Another set of PLM functionality in this area will support the
assessment of resources and energy consumption throughout
the lifecycle, for example EU regulated energy certificates or
risks analyses to executed.
The above described development will be led by the manufacturing
and electronics industries in the B-to-C and in some cases B-to-B
business due to nature of the products and processes in question
(stable definition, moderate level of configurations). However, the
service industries have all the possibilities listed, on their behalf as well
as, but first they need to reach the PLM1.0 level.
PLM implementation approach in 2016
Today PLM process and product information standardization and
harmonization is ongoing process in many companies. The practical
outcome of the trend is that the common and harmonized company
14 PLM vision 2016 and beyond
best practices in the PLM area will be implemented throughout large
corporations causing PLM system down scaling. Up today, many large
corporations have had number of PLM or product information related
system in use. The drive towards one PLM scales down the existing
PLM systems and in the end, most companies are looking for 1-2
systems used throughout the entire corporation. Implementation vise
this means that in 2016 we will see less PLM system instances running
the companies on PLM1.0 level.
Most companies are not planning to reduce the number to only one
PLM system. Due to very practical reasons, lack of corporate wide PLM
concepts and limited PLM system capabilities, there are no systems
currently available that can manage simultaneously HW, electronic and
SW and service related information efficiently. One other practical
reason for not having only one PLM system in place is the challenge of
having corporate wide master data and product development
paradigms implemented simultaneously in only one system.
The introduction of PLM is a very complex process involving numerous
organizational units and roles, processes and resources and IT-systems.
The PLM 1.0 implementation has been in most companies’ laborious
process lasting 24-36 months in many cases executed by trial and error
method. This is in a sense very understandable, before the first PLM
implementation wave the understanding of PLM was very low and was
in the hands of very few individuals, even is a large corporation. The
main focus of many PLM 1.0 implementations has been in the
harmonization of the organization, processes, complex and scattered
product data. The scale of the transformation as well as its complexity
usually was underestimated and the harmonization is often realized for
only one site e.g. the HQ-site. Brach sites and subsidiaries in other
cities or countries often have a different perception of terms, methods,
processes and data structures. This is often a result of company
takeovers and acquisitions.
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The PLM understanding has developed a lot in 2016. This results to
shorter PLM project durations. This is mainly due to the change from
big projects to smaller, more focused projects. Project implementation
is accompanied by permanent process re-engineering. Companies
have realized that there is a lot of undeveloped potential in the
harmonization of the organization
16 PLM vision 2016 and beyond
Industry specific development
Manufacturing
In 2016 PLM in the manufacturing business especially in the capital
goods manufacturing / engineer to order area will focus to:
1. Solution business model support – product <> service
convergence
A critical success factor in 2016 in the manufacturing industry will the ability to provide more profitable services in addition to the tangible good i.e. to create meaningful packages resolving ever larger business challenges in the customers daily business. However, this combination of tangible and intangible items such as services and software in terms of the extended product increases the complexity in managing the product lifecycle. The creation, delivery and maintenance of customer solution combine tangible products, software and pure services in a challenging way in PLM sense. These entities, very different by nature, need to be designed and managed together. This puts pressure on PLM concept, process and system development as well as to development of solid product architectures covering all different product types. In order to make it possible to design and manage this kind of entities efficiently together companies will need more advanced information models, which will cover both tangibles and intangibles. In practical terms this means that services and software need to be productized to the detail hardware has been productized, defined and documented. Only
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through this kind of development, it will be possible to manage software and services in a PLM system with conjunction to hardware.
2. Innovations
Companies see systematic and continuously ongoing innovation as
one key success factor of their future. PLM processes must support
ongoing innovation as well as VOC (voice of customer) and VOM
(voice of market) implementation to the product portfolio. The
practical outcome of in the PLM sense must be more agile and
better controlled product development facilitating the systematic
transformation of customer inputs, requirements, innovations to
product features. In 2016 this transformation process also will
include transparent decision making and customer input allocation
to product features and functions i.e. traceability of how the
requirements or inputs ended up to be product functions and
which of the inputs did not end up to the product road map at all
and why. This kind on transparent and traceable chain of inputs
and events is necessary in order to analyze the decisions and their
impact to the product performance later on.
Social media and customer involvement
To support the continuous innovation and to integrate customers
better into the product development we will see in the coming
years a breakthrough in the modelling and design tools of product
development. There is a huge potential out there. Customers and
crowds know many things better than design engineers. The big
problem issue at hand up to this day has been – how to involve
customers and crowds to the design process in an efficient and
meaningful way. One of the practical real life problems has been
how to visualize and concretize the feature / function under design
in order gather feedback on the design. The new 3D design tools
with animation and highlight features make this possible. Design
18 PLM vision 2016 and beyond
engineers are able the create draft designs and ask the crowd or
selected reference group or lead customer their feedback through
electronic channels or even social media. These drafted designs
with comments and feedback can be turned into final designs
extremely quickly and much ripe for the markets when examined
from the customer perspective.
3. Sustainability / Re-cycling / Closed loop PLM and material
contents management
Refurbishing is already very important business for many capital
goods manufacturers having large installed base. In the installed
base management and design for refurbishing PLM can be a
tremendous support. Exact product information and
documentation, the knowledge of the product to be refurbished is
a key enabler the successful implementation of refurbishing
business.
National and international regulators put constantly more and
more pressure on the management of hazardous materials.
The trend is quite obvious; we will experience a constant growth of
the level of information management of certain materials in
product BOM’s as well as the product specifications. Companies
across different business verticals need to manage this information
with efficient and precise manner with easy reporting and analysis
possibilities.
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Service sector
In the service sector we will see the gradual expansion of PLM 1.0. The
leading service companies with high volume standard services are
struggling with their product definitions, product changes, demands
for product configurability. For example, a teleoperator having 100
million mobile subscriptions and 50 million broadband subscriptions
simply cannot afford simple change management problems in the
product definition. A minor mistake in the product change
management and version compatibility can result an immediate
landslide of 10000 additional support calls per day.
All in all, service production and delivery is becoming more and more
industrialized. The global megatrend towards a service society and the
ever-growing demand for services in the market, especially in the
European and American economies, puts pressure to develop new
services, produce and deliver the services more efficiently and with
lower cost. In addition to the growing need of service volume, the
need to customize service for the individual customer remains.
The spectrum of various service products is extremely vast. It is
obvious that if the volume of service delivery is small and the variation
of the service content is large regarding a certain service, it is not
feasible to put huge effort in creating very comprehensive service
definitions and making a standard and automated service delivery
process.
Service sector PLM in 2016 includes re-thinking the service-“product”
and the service product development process. This requires – Service
is a ”product” mindset – adaption and understanding in the product
management and product development organizations. The people
responsible service development and management need to
understand that services can be developed and defined as precisely
and carefully as f. ex. in manufacturing business.
20 PLM vision 2016 and beyond
In practice this means that in the service development and
management of leading service sector companies in 2016 we will see:
Emergence of new service definition methods and
tools, including structural service definition utilizing
manufacturing type of product definition methodology
like BOF – bill of functions type of presentation of
product functionality and functionality hierarchy. The
reuse of existing service functions / modules across
various products.
Emergence of new processes and tools for creating,
documenting and maintaining service definition,
including PLM systems and formal product
development and change management processes
covering the entire service portfolio in a common and
harmonized way
management practices and models. A set of new
product management methods become enabled when
more formal and common (i.e. not only verbal)
product definition is in use. The allocation of product
revenue and cost to certain modules and products.
Portfolio management, product comparison and e.g.
what if analyses based on structural and formal
product definition
The outcome of the described development in the area of a new
service product development process is a carefully defined and
documented, modular, configurable and easily repeatable service
product that can be managed using a standard PLM system. One of
the most important tools in the service PLM systems will be the BOF –
Bill of functions management, which will used to manage the service
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product content and functionality, configurability as well as the
changes in the service product.
SME’s
It is quite obvious that we will see expansion of PLM 1.0 (as described
above) in the SME sector. In order to see large scale expansion of PLM
systems in the SME sector we need lighter business models from PLM
system providers and more straightforward implementation processes
as well as ready to be implemented PLM concepts to facilitate the
overall PLM thinking in the company. SME’s do not have the
development muscle themselves; they need readymade solutions for
their problems. Most of the PLM system providers and their VAR’s
have not been able to put forward clear and simple product
management frameworks and templates to be supported by the PLM
systems. For example in the CRM area many system providers are able
give ready-made segmentation models and customer information
management models scaled to fit for the business in question to be
used as baseline templates for the system implementation. Until we do
not have this kind of support for the SME’s in the PLM side the PLM
expansion will be slow. However by 2016 we will not see
Salesforce.com type of cloud computing explosion in the PLM sector
due to the fact that the this level of standardization cannot be reached
in the product development area , products are hugely different in
different companies and the needs and requirements for PLM process
support varies a lot between business verticals.
22 PLM vision 2016 and beyond
SME’s in 2011
Today the SMEs face the same increasingly complex product
management environment most of the larger businesses. In many
cases the SME’s are not OEM’s, they don’t own the end product, they
are rather suppliers to multiple OEM’s i.e. they are in the downstream
in the value chain. In practice, this means that they need to collaborate
with number of large partners having somewhat different business
approaches and ways to operate and naturally different systems and
product information set-up.
The basic PLM benefits are available to SMEs, but the SME’s are much
slower in adapting new business processes. SMEs tend to be more
conservative, often waiting for new solutions to be well proven before
adopting them. While being conservative still the SME’s want to
secure their basic success factors – agility and cost efficiency in order
to stay in the game with increasing sourcing from the low cost
countries.
In this development work, PLM is an excellent tool for the agile and
development oriented SME’s. Basically a vary standard out of the box
type PLM 1.0 implementation can improve their performance directly
in:
Product information management. Complex product
information in a networked business environment requires
automated methods for information management.
Improved product development execution. Faster product
development project through put times, use of cross-
functional teams, and networked resources require excellent
control and communication and information management in
order to prevent mistakes and rework. Management of
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deliverables, approvals, and status extend core product
information management with business process automation
and project management capabilities to coordinate activities in
addition to just information. Quick response to market and
OEM demands with very limited resources are critical to SMEs.
Collaborative design. The increased focus on optimizing
product lifecycle impacts earlier in the design process – for
example, design for manufacture, design for sourcing activities,
design for refurbishing and design for lifecycle services – are
creating a demand for broader participation in design
processes. In addition, many companies are including suppliers
and other third parties in the design process to leverage
external expertise.
SME PLM challenges
SMEs face challenges when considering or implementing PLM,
however, that are common for smaller-sized organizations. They
simply do not have the same resources available than large
corporations. For a SME looking in to PLM the most significant
challenges are:
Lack of available internal resources with deep enough PLM
understanding. Smaller companies may be able to approve
funding for software and implementation, but face problems in
assembling the resources for the task. Usually SMEs also lack
the depth in technical resources required to implement a new
solution. These resources, however, are more readily available
from the outside because they do not need the same level of
24 PLM vision 2016 and beyond
familiarity with the business and the industry as functional
resources.
Lack of suitable external resources to support the PLM
implementation. The large-scale PLM implementations have
been traditionally the domain of the large, global,
multinational consulting firms. In too many cases, a SME
looking for a skilled implementation partner cannot find a
suitable partner having enough skills and vision what is needed
in a case of a lean SME implementation. The global giants are
not able to downscale their operation and the local and
smaller consultants simply do not have the skills and
experience.
Cost and complexity of implementation. Implementations of
enterprise software solution suites are in many cases far too
heavy for SME needs. To achieve successful adoption,
companies must assess their business processes, identify the
changes to be targeted and the solutions to be deployed, and
train users to take advantage of them. An implementation may
also involve integration with existing systems although many
smaller companies choose to integrate PLM solutions relatively
loosely in early implementation phases.
SME’s in 2016
Because so many of the leading large-scale manufacturing companies
have the PLM 1.0 implemented, the PLM system suppliers see the SME
sector much more potential customer than in the early 2000’s. This
25
puts pressure in developing new approaches and new solutions and
business models for smaller companies.
By 2016 the development oriented SME’s (in Europe) mostly in the
manufacturing sector have PLM 1.0 implemented. This has happened
through new PLM solutions focusing on solving the SME related
implementation problems mentioned in the chapter SME PLM
challenges. These new PLM system solutions have SME specific
business approach, licensing, SaaS cutting the initial cost of
implementation. The new system solutions have ready to be
implemented templates and best practice models for the most
beneficial areas of SME type of PLM implementation; management of
complex product data in highly collaborative supply chain.
The consultants supporting the SME’s in the implementation of PLM
system solutions also have also a set of new methods in use. The global
Accentures, HP’s, TCS’s are not traditionally the most suitable
implementation partners to the SME’s looking for a quick, ready and
lean implementation. By 2016 there will be more local, skilled
implementation partners available with a pragmatic set of tools to
fulfill the fairly standard and simple SME needs.
In 2016 there are cloud solutions available also in the PLM area, the
cloud computing capabilities in the PLM area will develop in the SME
sector first. The most significant obstacles in the expansion of cloud
computing in the PLM area are:
Variation in the product definition – the products are
and will defined in some many different ways that
having a relatively standard approach is quite
demanding
Integrations – In the PLM area, most of the
implementations need quite extensive integration to
multiple CAD’s and ERP. Standalone PLM does not
meet the needs of many companies.
26 PLM vision 2016 and beyond
Product configurability needs – in many cases products
are configured at least to some extent. It is very
demanding to have standardized approach to the
configurations.
Information security – product IPR’s are in the core of
each company. Having them in the cloud is and will be
for some companies a mental barrier.
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Industries looking into PLM
By 2016 we have seen the fact that PLM as a business concept and an
IT-system is not only usable in the manufacturing and electronics
industries. In late 1990’s We have already seen PLM moving to
Utilities sector
In the Utilities, sector companies typically possess assets in the field
worth billions. In most cases their view to PLM is twofold:
1. Fault free operation of very complex systems and regulation
compliance using carefully defined processes and practices. In
practice this means precise and smooth management of the
installed base information.
2. On time, in budget construction of new facilities with
numerous contributors in the process. EPC (Engineering,
Procurement & Construction) firms responsible for plant
design and construction, regulators introducing new and strict
regulatory standards and dozens of suppliers supplying very
important components.
At the moment PLM1.0 is not widely in use in the utilities sector. Most
of the companies have many dedicated systems per site, in many cases
build in house for their specific purposes. However, standard PLM
solutions could bring tremendous boost in efficiency in both of the
challenges.
28 PLM vision 2016 and beyond
Due to the fact that Utilities sector companies have steady and highly
regulated business they are slow to adapt new concepts. Despite this
the companies are under pressure to increase efficiency. By 2016 we
will see not PLM breakthrough but PLM emergence in much larger
scale in the utilities sector as well.
By 2016 the most innovative utilities companies we use have PLM in
use in the installed base management managing the factory site
information including process equipment information, equipment
traceability, supplier information, spare part and consumables
compatibility information, maintenance history etc.
On very significant supporting factor enabling the PLM development in
the utilities sector, is that the engineering companies designing the
plants, the system and equipment providers providing the plant
equipment are using more and more advanced PLM approaches. In the
field of plant design, modeling, delivery and O&M (operation and
maintenance) we are also experiencing entirely new methods and
standards such as f. ex. IEC 81346 created for plant lifecycle
management.
Construction industry
On one hand, the PLM challenges of the construction industry are a lot
like in the utilities business: On time, in budget construction of new
facilities, apartment houses, offices, commercial centers, factories, and
warehouses with numerous contributors and component suppliers in
the process.
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As the utilities business, the construction industry is slow to adapt new
processes and concepts in their way to operate. Today in 2011 PLM is
not widely used in the construction business. Despite this fact it is
quite obvious that standard PLM system solutions could make a huge
impact in the collaboration network of dozens of suppliers, designers,
engineers, sub-contractors and regulators in simplifying change
management, offering view tools to latest designs and design changes,
keeping track on approved suppliers and standardizing components.
PLM systems with PLM1.0 type of functionality could be easily
launched to manage in-work product structures, digital mockups,
engineering BOMs available to construction planners or customers
before a design release, providing valuable early insights to on-going
project development.
By 2016 the most innovative construction companies will have PLM in
use in the project based change and documentation as well as BOM
management. The companies will have PLM implemented for the
management of approved suppliers and standard components, as well
as, in the collaboration network information sharing.
Clothing, footwear and apparel industry
Clothing, footwear and apparel industry is lot like all other component
- assembly based industries with certain clear and industry specific
characteristics. There is a huge need for precise and up-to-date
product definition, the products are constantly changing, the new
designs need to be introduced to markets within months and there are
many collaboration partners in the process.
One of the most important PLM drivers in the clothing industry today is
virtualization and 3D design. Virtual 3D designs and prototypes make it
30 PLM vision 2016 and beyond
possible to shorten the design cycle of many products in this industry
due to the fact that so much of the traditionally Europe and America
based manufacturing has shifted to Asia bringing in new challenges
related to design and prototyping. Using 3D models and virtual
prototypes it is considerably quicker to finalize the designs than
sending goods back and forth between continents.
The utilization of social media and customer involvement is the other
major driver of PLM development in the clothing industry. In this trend
the virtualization plays an important role as well. Cloth and footwear
manufacturers need to involve their customers – i.e. in many cases the
consumers to the design process. The new virtual 3D tools make this
possible. Designers draft designs and ask the crowd or selected
reference group their feedback through social media. These drafted
designs with comments and feedback can be turned into final designs
extremely quickly and much ripe for the markets when examined from
the customer perspective. Other dimension to the same issue is the
possibility to create individual designs to shoes for example to create
unique set of sneakers though manufacturer website using virtual 3D
tools.
By 2016 we will see expansion of PLM1.0 to the large multinational
clothing, footwear and apparel companies with fairly standard item,
BOM and change management features added with industry
characteristic functionality such as use of 3D models in prototyping,
virtual showrooms designed for distribution channels and B-to-B e-
commerce as some cases directly to consumers.
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Food, process and consumer packaged goods (CPG) industry
The characteristics of PLM in CPG and process industries are quite
different from in the discrete manufacturing. Discrete manufacturing
is characterized by individual or separate unit production with low
volume and very high complexity or high volumes of low complexity,
with high emphasis on part and assembly quality, NPI and time-to-
market speed and cost cutting. In process manufacturing, the relevant
factors are ingredients, not parts; formulas, not bill of materials; and
bulk, not individual units or configurations. In many areas of process
industry f. ex. In the food and drug processing the packaging,
traceability and regulation compliance has very high emphasis
In 2011 there are still very few CPG companies that have
“implemented” PLM to the same level than manufacturing industry.
Part of the reason is that the CPG industry is still a technologically
reactive industry and developed ideas through scientific
experimentation. Many process companies have culture of exploring,
testing and analyzing using scientific methods rather than streamlined
processes and product development funnels, large number of front
line companies still use laboratory notebooks to manage and
document the R&D results.
Fierce price competition, battle of the top of mind of consumers, continuous efforts of increasing R&D productivity, increased safety and traceability requirements drive the product innovation of development of PLM in the process and CPG area. Many process and CPG companies have taken note of the vast improvements PLM has brought into manufacturing industries. CPG companies are beginning to understand how they can also benefit from such solutions to help them drive product innovation.
32 PLM vision 2016 and beyond
In 2016 we will see much larger PLM penetration if the process and CPG industries. PLM implementations will facilitate product success excellence in three areas:
1. 1 reducing product development cycle time and increasing productivity
2. Increasing product development innovation and again facilitating the use of social media in crowd sourcing and consumer based innovation
3. Reusing information related company assets. By 2016 we will see PLM solutions supporting the following processes in the process and CPG industries:
Product development and design: streamlined and carefully designed development processes producing precise product definitions are in use in leading process and CPG companies. PLM solutions manage the Product Data Records (PDR) and IT-supported information management facilitates sampling, approvals, regulation and traceability of decisions and documentation for regulative purposes
Packaging design and labeling: Leading companies have integrated packaging design and labeling functions to product design, virtual design tools are standard to every company.
Traceability: Traceability is an essential requirement for CPG companies. They must manage product information with the objective of consistently meeting or exceeding regulatory standards to avoid or quickly manage any crisis that could damage their brand. The PLM system supported lifecycle management ensures compliance by enabling full traceability throughout the development phases and manufacturing, through to suppliers. This gives companies a process to react quickly during product recalls.
Regulatory issues, sustainability and environmental issues and safety: PLM will make it possible to manage and access product related information coming from various sources, such
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as developers, analysts, toxicologists, microbiologists, and procurement for regulative purposes and in order to support ever growing demand in the consumer base for sustainability and environmental issues.
Procurement: PLM systems enable the delivery of real-time
raw material costs to the formulators at the point when they select the supplier from which they will source the ingredient for this product formula. By selecting the lowest ingredient cost when the product is first formulated, formulators lock in the cost for the life of the product.
34 PLM vision 2016 and beyond
Geographical expansion
RIC- Russia, India, China
PLM-system software solutions have traditionally been alma mater of
Europe and USA based software companies, many of them having
roots in the CAD software business. This set-up is changing also on a
fast pace as we have seen the change in the bulk manufacturing. A lot
of things are happening the emerging countries what comes to PLM
software engineering.
With the manufacturing and low cost country sourcing many Europe
and USA / Canada based manufacturing OEM’s in the PLM1.0
utilization level have expanded their PLM implementations to cover
their own subsidiaries in Asia as well as their suppliers and contract
manufacturers. In practice this means that the same PLM software
solutions, the Enovias, Oracles, Siemens, PTC software suites used by
the OEM are used in the Asian sites and by Asia suppliers as well.
Many of the large and most innovative manufacturing companies
owning product IPR’s the RIC area are facilitating the development of
RIC based new PLM software suites through venture capital funds and
direct investments. In Europe and USA we have seen a lot of
consolidation recently in the PLM system software field. There are
fewer PLM system providers the western countries than before.
By 2016 we will see new PLM systems developed in the RIC countries
with high software development capability taking large market shares
in the larger manufacturing companies RIC area as well penetrating the
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SME sector with light business models, low cost licenses, local support,
local language and GUI experience and significant cultural advantage.
36 PLM vision 2016 and beyond
About the author
Antti Saaksvuori is a management consultant focusing on product
lifecycle management, product and service development, product
management, product and portfolio strategies as well as service
development and service productization.
Antti Saaksvuori is the author of a widely acclaimed book on Product
Lifecycle Management (Springer; 3rd edition ISBN 978-3540781738),
he has performed consulting work for a variety of companies in
industries as diverse as telecommunications, manufacturing, software,
logistics, insurance and healthcare. He has an engineering degree from
Helsinki University of Technology.
For more information on the subject – check: www.plm-info.com /
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Appendix A. Saaksvuori PLM Maturity Model
Saaksvuori PLM maturity model
Unstructured
The PLM topic has been recognized and its importance agreed. Work must be done to define
and develop the PLM concept and standards. However, at present, there are no defined
approaches concerning lifecycle management; all lifecycle and product management issues
are resolved by individuals on a case-by-case basis.
Repeatable but
intuitive
Lifecycle and product management processes have developed to the stage where similar
procedures are followed by different people undertaking the same task within one
organization (i.e. the processes function on ad hoc bases, corporate wide procedures or
definitions do not exist). There is no formal development, definition, training, or
communication of standard processes; all responsibility is left to individuals. There is a high
degree of reliance on individual knowledge and therefore errors occur.
Defined
Processes and basic concepts are standardized, defined, documented, and communicated
through manuals and training (on corporate level, in all business units – geographical,
functional units). However, the human factor is important, there is no end-to-end PLM
process supporting IT systems, all work is completely or partially manual from the process
point of view. IT systems support individual parts of processes. The PLM processes or basic
PLM concepts are not best-of-the-breed, nor are they uniform throughout the corporation,
however they are formalized. There is common understanding of the to-be model how PLM
shall be executed in the future.
Managed and
measurable
It is possible to monitor and measure the compliance between processes and to take action
where processes are not functioning well. Processes and concepts are under constant
improvement and provide best practices. IT systems support PLM processes well. Process
automation is used in a partial or limited way. Processes and concepts are developed through
clear vision throughout the corporation. The state of uniformity of processes is clear.
Optimal
Processes and concepts have been refined to the level of best practice, based on continuous
improvement and benchmarking with other organizations. IT is used in an integrated manner
and process automation exists on an end-to-end basis.