“PLM & System Overlaps” by CIMdata’s President Peter Bilello

CIMdata PLM Industry Summary Online Archive

24 February 2011

CIMdata News

“PLM & System Overlaps” by CIMdata’s President Peter Bilello

Columns From: Time Compression, Peter Bilello President from CIMdata Inc.

Posted on: 2/24/2011

Product lifecycle management (PLM) provides manufacturing companies with well-understood benefits in managing their product-related intellectual property, in particular their complete product definition from concept to end of life. To the confusion of users, long-accepted distinctions between PLM and other enterprise-level applications have begun to blur at the edges. This is known in the software business as “boundary blur.” Many decision makers tell us at CIMdata they find this a significant challenge. The once-crisp edges of software capabilities have become fluid as software developers push added functionality into the “spaces” occupied by other enterprise applications. For the foreseeable future, this blurring and overlap will only increase. For users, the blur-and-overlap problem highlights the need to develop a strategy for choosing and implementing enterprise-level applications and overall integration framework. Companies adopt PLM at a healthy rate; CIMdata analyses project sales rising to U.S. $34.5-billion by 2014, a compound annual growth rate (CAGR) of 8%.

Companies around the world tell us PLM makes them more competitive. As benefits accrue with improved competitiveness, however, there is an obvious corollary: Developing sound and unambiguous enterprise-level information-integration strategies can be expected to confer larger benefits with each passing year. For those who delay, the reverse may well prove true.

PLM spans all phases of product-development, from front-end concepts through manufacturing and on to maintenance, support, logistics, and eventual disposal. This transparently links every part of the company concerned with product development and its management and support. This enables close collaboration among all organizational units that create, manage and/or use product information—especially those responsible for product development. This offers solutions to a variety of challenges, the most basic of which is verifying progress on assigned tasks. In design and engineering: who is doing what. But to be effective, collaboration on a company’s intellectual assets must be comprehensive, running throughout the organization and beyond, to its suppliers, partners and even customers.

Effective collaboration also goes deep—into any support and staff department that touches customers or impacts quality or on-time delivery. Given all this, the need should be apparent for a top-level, carefully thought through strategy for handling all the product–related information assets—in all their varieties, formats and sources. Executives of most companies (users and PLM software developers) know this. They readily acknowledge the need to take action and even the urgency. However, from discussions with PLM solution suppliers and users, we know that some are not following through by resetting priorities and reallocating resources. We expect this picture to change for the better as companies’ margins continue to recover this year and into 2012.

Some explanation is in order for overlap and boundary blur. It is common throughout the world of enterprise software regardless of which overall domain. The domains are:

• The creation and management of the virtual product, i.e., all product-related intellectual assets: PLM, product data management (PDM), engineering document management (EDM), etc.
• The creation and management of the physical product, i.e., the physical production systems and related assets: enterprise resource planning (ERP and its predecessor, manufacturing requirements planning or MRP), manufacturing execution systems (MES), customer requirements management (CRM), logistics / supply chain and supplier relationship management (SCM/SRM), and inventory control.

In other words, PLM is an engine to create, optimize and manage intellectual assets or the virtual product. ERP etc. focus on the physical assets and production. The difference is crucial because it imposes a need for a strategy that uses both but keeps them from becoming tangled with each other. Not to mention systems for process planning, maintenance management and even business intelligence.

Turning overlaps into interlocks

The goal of any information strategy is to turn troublesome overlaps into valuable interlocks that leverage the company’s assets. However, this does not imply snipping and clipping around the edges while enterprise-level applications are purchased, installed or taken live. It is true that much of the overlap and “blur” is due to functionality duplicated in other applications. But a sizable portion is also due to connectivity and misunderstandings about how business processes cross organizational lines and system boundaries.

For all the obvious reasons, any boost in connectivity is welcome. But where connectivity is allowed to grow without a strategy, it can disrupt the exchange and reuse of information that courses through the organization’s (digital) central nervous system. To put it bluntly, absence of an enterprise-level information-integration strategy might open the way for information turf wars and jockeying for resources, clout and control. Though rare in well-run organizations, their appearance should not be overlooked when information-integration strategies are implemented.

The default for an information-integration strategy is a hand-off to corporate or divisional information technology (IT) units. Unfortunately, this may not work. In many cases, we have seen IT stay on the sidelines as information-integration strategies are discussed. IT’s role may just be advisory. They tend to be overloaded with transactions—accounts receivable/payable, payroll, benefits and the like, the so-called “business apps,” plus bills of materials (BOMs) and related items from manufacturing. Many IT units are staff organizations reporting to the chief financial officer (CFO)—even though IT is usually responsible for ERP/MRP, MES, CRM, logistics, SCM, et al. These “manufacturing” systems are much more transaction-oriented than applications that generate and analyze product-related intelligence assets. For example, computer-aided design/computer-aided manufacturing (CAD/CAM); electronic design automation (EDA); finite-element modeling and analysis (FEM/FEA); computer-aided process planning (CAPP); design for manufacturing/assembly (DFMA); and maintenance/repair and operations (MRO) plus simulation/“digital manufacturing” and many others.

Enterprise-level software developers challenge information-integration strategies—inadvertently—largely because they take a “center of the universe” approach to marketing. When users demand that enterprise-level applications “play nice with each other,” developers worry that their products might not be the center of the universe. So they provide the requested connectivity and replicate other solution suppliers’ capabilities closest to their own. Which results in boundary blur and overlap. Where these capabilities and functionalities overlap, users can become confused. With that, a well-thought-out strategy becomes necessary. Competing sales pitches echo, reverberate and finally converge; promised benefits become nearly indistinguishable amid competing claims that most any operation could be managed with their application. Common sense says otherwise.

Benefits of Good Strategy to PLM Users

No one would disagree that ANY improvement in the product development process can help overcome the lingering challenges of the Great Recession of 2008-10 (intensely competitive markets, thin profit margins / tight credit, limited resources, insufficient time, and worried customers). The potential improvements include:

• Rationally organizing the intellectual property without concern for source or format. PLM brings “doing more with less” into product development.
• Easing the stress on designers, engineers and their managers while speeding up their work. PLM links them to their peers anywhere in the organization. It also helps customers leverage their efforts, which can only add to everyone’s bottom line.
• An antidote for impending retirements of the Baby Boomers. PLM can capture their knowledge and experience before they’re lost forever.

Can developing this strategy be postponed?

Become a member of the CIMdata PLM Community to receive your daily PLM news and much more.

Tell us what you think of the CIMdata Newsletter. Send your feedback.

CIMdata is committed to your privacy. Your personal information will never be sold or shared outside of CIMdata without your express permission.