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1 July 2006

Next-generation PLM

Small companies can run with the Big Boys as improved tools make global collaboration a reality

By Bob Felton

In retirement, Lee Iacocca marveled at the business controls in place at Ford Motor when he joined the company decades earlier. “When I arrived at the end of the war, the company was a monolithic dictatorship. Its balance sheet was still being kept on the back of an envelope, and the guys in purchasing had to weigh the invoices to count them.”

The arrival of computers dramatically improved record-keeping on the business side, but global manufacturers continued to struggle with the demands of sharing design and production information worldwide. Stanford University engineering professor Hua Lee likes to tell this story about Volvo, 50 years later:

“In the mid-1990s, the Swedish car manufacturer found itself with excessive stocks of green cars. To move them along, the sales and marketing departments began offering attractive special deals, so green cars started to sell. 

“But nobody had told the manufacturing department about the promotions. It noted the increase in sales, read it as a sign that consumers had started to like green, and ramped up production.”

End result: More green cars.

Costly non-communications

As of 1999, according to a report issued by the Research Triangle Institute, “imperfect interoperability [of software] imposes at least $1 billion per year on the members of the U.S. automotive supply chain. By far, the greatest component of these costs is the resources devoted to repairing or reentering data files that are not usable for downstream applications. This estimate is conservative because we could not quantify all sources of interoperability costs.”

Today, thanks to the Internet, information can go anywhere instantly, avoiding Volvo-like snafus—if you know who needs it and if it arrives in a usable format.

Enter Product Lifecycle Management (PLM) a descendent of the first drafting programs. From conceptual, shoes-on-the-desk brainstorming through recycling of an abandoned product at the end of a long-life, PLM software packages aim to capture every discrete fact about a product’s life in real time, even as engineers, suppliers, and fabricators worldwide design it; archive those facts as context-sensitive software objects; and dispatch them instantly to whoever has the need-to-know, from the marketing group to the users’ plant maintenance department.                           

Properly deployed, PLM is not only a device for keeping track of ongoing design work, but it offers a competitive advantage. As Fortune magazine noted when commenting on Lockheed-Martin’s defeat of Boeing when a 2003 Department of Defense contract was up for grabs, “The way the technology works to orchestrate product design amongst a cadre of geographically dispersed experts is breathtaking: It allows a company’s employees from production, testing, quality control, marketing, and customer service to work simultaneously on product design. It also allows them to interface with global suppliers involved in parts and materials handling, and manufacturing processes. ‘Program information is presented in real time across multiple time zones, with the net effect being round-the-clock engineering of the F-35,’ explained Thomas Burbage, executive vice president and general manager of the JSF program. ‘It brings a level of efficiency never before achieved in the development of such a complex product.’ ”

Or as Nalin Joshi, PLM Practice Lead for Tata Consultancy Services, said, “The old way of sending out a drawing for comments is over.” Literally, designers all around the world are working on the same page.

Globalization drives innovation

Practically, the once-reigning model of vertically integrated manufacturing has been abandoned. As noted by NIST researchers in the Manufacturing Systems Integration Division, the group responsible for developing an open standard for PLM data-sharing, “The aerospace and automobile industries now see themselves as system integrators; their role is not to manufacture all of the underlying parts and components but to purchase them from a global marketplace. In this new context, managing variety and providing mass customization have become the driving forces in organizing design and manufacturing organizations.”

Modern PLM applications descend from drafting programs used in the aerospace and automotive industries, with their use of entities. These led in turn to Project Data Management, or PDM applications, which formalized and made possible the manipulation of the entity information attached to visual elements. PLM supersedes both, serving as a data bridge between every step from drafting and analysis to digital manufacturing.

It isn’t necessary for a company to move all of its business processes to PLM before it can begin to exploit its benefits, either. “You need a repository,” a single location where all of a project’s data is stored, said Tata’s Joshi. Once a repository has been created, applications can be adapted one at a time to its use. “The way that companies embrace PLM matters, and it’s possible to begin realizing benefits immediately,” he said, with savings arising from re-use of drawing details, elimination of error, prompt identification of potential conflicts between interacting parts, and support for lean manufacturing.

Mart Yeager, Engineering Systems supervisor, Siemens PTD, said of the system used in Siemens’ manufacturing facilities, “With our old system, item data—from applications such as Office, AutoCAD, and Acrobat—and documentation were not synchronized. The data was stored in various locations on network servers, engineers PCs, aperture cards (microfilm), and file cabinets, and it had become difficult to locate current documentation. This also led to problems determining the responsible person in the event of any queries. Assembly operatives were using print books of standard documents despite the fact that receiving and inspection required a new print for each delivery, and bills of materials were created on AutoCAD documents for history and archive.”

Looking forward, Yeager said “The solution has better positioned Siemens PTD to improve productivity and manufacturing yields, which in the long term can help to increase our competitive edge in all markets.”

Thinking smaller

Once available to only large, well-heeled companies, PLM suppliers are targeting the small and mid-size design and manufacturing firms that serve large companies, enlarging the reach of smaller companies even as competition is intensified.

 According to a March 2006 report issued by Aberdeen Group, “Benchmark research shows many SMEs are responding to the product innovation challenge by proactively focusing on product-related processes by planning for PLM solutions. Those that have done so are achieving significant performance improvements, including increased revenues (19%), reduced product cost (17%), and decreased product development cost (16%).

CIMdata, a consulting firm specializing in PLM, verifies small and mid-size companies are migrating to PLM. “According to recent statistics … the worldwide Product Lifecycle Man-agement (PLM) market experienced an excellent year in 2005 and demonstrated significant growth. CIMdata research shows the overall PLM market grew 8.7% to reach $18.1 billion in 2005. PLM investments are forecast to continue their climb over the next five years, reaching an estimated $26.3 billion by 2010, for a compound annual growth rate of approximately 7.7%.”

But smaller companies, Aberdeen warned, “… face some unique challenges with PLM arising from their size, including the cost of implementation, the need to change business processes, and a lack of internal resources.”

Instead of company-wide replacement of applications, the typical small-company PLM package relies on the in-place software applications—Microsoft Office, say, and AutoCAD—and provides version control and interoperability. CIMData describes the benefits: “In addition, the PLM solutions that are supporting today’s mid-size manufacturing enterprise usually work with a wide variety of software applications and with paper documents. They are usually delivered on a mix of computers, workstations, and associated hardware. Typical users include managers, administrators, and end-users from a variety of departments including engineering, manufacturing, purchasing, marketing, sales, quality, and information technology that all need to create, capture, access, share, and/or manipulate product related information. Our research has shown that PLM solutions improve communication and cooperation between these diverse groups and form the basis for organizations to support their product lifecycle activities. The key PLM factors to consider for mid-size manufacturing enterprises are the solution’s ability to deliver out-of-the-box applications and solutions based on best practices that are easily tailored to support the enterprise’s product related information creation and management requirements.”

Aberdeen said small and mid-size firms are typically wary of investment in unfamiliar software—especially those that require operational changes—but that a changing marketplace is forcing their hands. “The benefits of PLM are available to SMEs, but these companies have been slower in making progress on the PLM adoption curve. SMEs tend to be more conservative, often waiting for new solutions to be well proven before adopting them. While many of the core capabilities of PLM applications have proven track records, today’s expanded PLM solutions that enable collaboration, control, and communication of product innovation data and processes mark a recent shift from defining PLM as a group of traditional design-related tools.

“However, SMEs are now planning to act: 17% of small to medium-size manufacturers indicate that they will be pursuing PLM solutions in the next 12 months. The top areas of investment are control-oriented solutions, including those that improve control over product data and related product development projects.”

Looking ahead

Leon McGinnis, director of Georgia Tech’s Product & Systems Lifecycle Management Center, identifies four trends in PLM. First, PLM applications are moving outside their traditional areas of aerospace and automobile manufacturing, a shift that obliges software vendors to acquaint themselves with new manufacturing domains. A single application, created to accommodate the design and manufacturing realities of new markets isn’t necessarily ready out-of-the-box to optimally support manufacturers. 

Second, vendors are working to integrate those tools with a broad range of in situ design applications, especially analysis and modeling packages. They’re coming, but it will be years before PLM packages work seamlessly within even one specific industry. Third, even as vendors create tools to support distributed, global collaboration, they are themselves consolidating vertically in order to support beginning-to-end design and production of PLM applications—a necessary step toward assuring application integration. Last, open standards for data-sharing are now in development.

Though today’s PLM applications tend to be closed, proprietary systems that link in-place applications, NIST’s Sudarsan Rachuri believes the emergence of open, standardized data objects used by all PLM packages is inevitable. “Given this nature of complexity, we need interoperable standards. Otherwise, we’re going to have people talking different languages and huge tumult, so that is what we’re focusing on.” Like McGinnis, though, he said data is industry specific and, necessarily, a standard is years away.

Different needs means different development and collaboration tools and strategies and, more importantly, a different way of understanding discrete pieces of information; context becomes vital, imposing domain-specific constraints. “Family history” means one thing to the genealogist, for example, and something quite different to the cancer researcher.

For each domain or industry, then, data has a unique taxonomy. “How do you define context grammar?” asked Rachuri. “What we are after is interoperability from the syntactic level to the semantic level. That is the final idea of doing this.”

About the author

Bob Felton is a freelance writer based in Wake Forest, N.C. His e-mail is bob@civilcommotion.com