PTC's Heppelmann Declares 'New Era of Manufacturing'14 Jun, 2012 By: Nancy Spurling Johnson
At PlanetPTC Live customer event, the CEO says technology will drive the strategy that sets manufacturers apart.
No longer can a manufacturer set itself apart solely by being operationally efficient. To succeed in today’s manufacturing market, a company needs to gain competitive advantage through its products and service.
Those were the words of Jim Heppelmann, president and CEO of PTC, at the company’s PlanetPTC Live annual customer gathering in Orlando, Florida, early this month. Declaring a “new era of manufacturing” driven by technology, Heppelmann explained, “Over the past few decades, global manufacturers have made massive investments in technology and process change aimed at improving operational efficiency. Today, however, we are reaching the limits of the competitive edge these investments can deliver. Manufacturers need to be operationally efficient to stay in the game, but they can no longer achieve meaningful advantage from that alone.
“The time has come for a new source of competitive advantage — product and service advantage — from technology and process change that improves strategy decision-making across the enterprise, from engineering to the supply chain to sales and service networks.”
Heppelmann believes that technologies — specifically, PTC’s CAD and lifecycle management software solutions — are the key to this undertaking. PTC is trying to determine how its customers can set themselves apart, he said. What are the best ways to carry out each part of the product-development process, how can those processes be integrated across the company — and how can we transform those processes?
During his keynote presentation at PlanetPTC Live, Heppelman highlighted PTC’s new tagline, which emphasizes the company’s focus on developing tools to help manufacturers gain competitive advantage through product innovation as well as through services provided after the sale.
Heppelmann put forth that the world is poised to enter what The Economist magazine recently labeled a “third industrial revolution.” In this new era, a concerted focus on strategy will lead a renaissance in global manufacturing.
According to PTC, software technologies will transform the way companies create and service products by enabling them to make better, smarter, and faster strategy and planning decisions. These decisions relate to how products are designed and engineered, how a supply chain is optimized, how quality and compliance is assured throughout the manufacturing process and, ultimately, how service is efficiently delivered against a product once sold. Individually, these planning decisions help deliver a strategy that supports a brand. Collectively, they are the new source of competitive advantage.
“A new era is upon us,” Heppelmann concluded. “To win in the new century requires a new way of thinking. For manufacturers, it’s about making fundamentally smarter strategy decisions.”
Global and Growing
PTC has been working aggressively to develop a generation of software that supports this new direction, including the modular Creo solution for creating and using CAD data, now in version 2.0; Windchill for product lifecycle management (PLM), including supply chain management (SCM) and service lifecycle management (SLM); and Integrity, the application lifecycle management (ALM) solution acquired last year from MKS that manages development of the software that drives so many of today’s products.
PTC’s own strategy is paying off in terms of steady financial growth and market expansion. Total revenue grew 19% in 2011 to nearly $1.2 billion and is forecast to grow another 9% in 2012.
Heppelmann shared PTC’s revenue growth for 2009–2011, as well as the company’s 2011 revenue breakdown by vertical market and geographic region.
At the Orlando event, PTC shone the spotlight on Whirlpool — a customer that Heppelmann said “uses nearly every kind of PTC technology to put innovation at the center of its product development” — to illustrate the role of software in supporting new business strategy and growth. At 100 years old, Whirlpool is the largest appliances manufacturer in the world — yet the company has set its sights on further growth through global expansion.
Jeff Burk, PMO director, global products organization at Whirlpool, explained, “We need to become better at what we do, instill more innovation in our products, move faster, reuse platforms across different products. We will need a single source of the truth” in terms of the data that supports the product development. "Ultimately, we need to bring speed, accuracy, and predictability to the product-development process."
Products such as the Whirlpool Maxima washer and dryer are equal parts mechanical systems, electronic controls, and software algorithms — sometimes as much as a million lines of code, Burk said. Development of each cannot happen in a silo, but rather demands a software platform in which the manufacturer can understand and manage not only the separate development of each, but more importantly, the dependencies between them and how one much adjust when a change occurs within another — and communicate information and updates to all parties involved.
PTC’s Bill Berutti, EVP, application lifecycle management and service lifecycle management, might have been stating the obvious when he said, "Managing how all that comes together is complicated," but that his company’s mission is to help customers manage that complexity.
In addition to managing mechanical, electrical, and application development, Berutti said, requirements planning is essential to product development. "When requirements go wrong, lots of bad things can happen," that lead to wasted time and money, he said, adding that early 20% of product-development cost is due to poorly defined requirements and planning early in the process. “Requirements are more than engineering, and we need to address requirements across the product lifecycle.”
With the latest version releases, Windchill and Integrity will combine to offer end-to-end requirements traceability all the way through the product lifecycle. The new Relationship Explorer maps out requirements and how they relate to all parts of lifecycle and allows users to visually navigate between related parts, documents, CAD designs, requirements, and change objects. It takes out complexity and lets you see how requirements affect what you need for your specific job, Berutti said. That is but one example of the progress the company has made in integrating Windchill and Integrity over the past year.
New PLM and ALM integration: Specifications managed in Integrity can be synchronized with Windchill.
Service lifecycle management will bring product development full circle by enabling manufacturers to plan and deliver services in the field after a product is purchased. Part of Windchill, it captures feedback from repair technicians and customers to track product failures, which can lead to reduced warranty claims and continual product improvements that ultimately have a big impact on the bottom line, PTC reported.
With all the talk about lifecycle management, one might assume that PTC has put CAD development on the back burner. Rather, Creo 2.0 introduced in April has made significant leaps over the first version. (Cadalyst will aim to cover Creo developments in an update coming soon.)
Mobile and Cloud Developments
Unlike its aggressive push to develop integrated lifecycle management solutions, PTC is taking a more conservative approach to developing cloud-based and mobile applications. PTC executives report that the company is listening carefully to what customers are requesting in terms of mobile apps, and focusing its efforts accordingly. One example is the new Windchill Mobile app for iOS devices, which delivers instant “anytime, anywhere” access to current product and process information; and Creo View, coming soon, for visualizing electrical and mechanical CAD data.
The word cloud was conspicuously absent from PTC presentations, observed one journalist at an executive Q&A session. Is the company not pursuing cloud-based applications?
Heppelmann responded: “In 2004, we launched Windchill PLM in the cloud — and it's still there,” he said, citing partners who are still offering it. "Maybe we were ahead of our time. ... We're looking at different delivery models. We're more in the mode of following the pull, selling what customers want to buy."
About the Author: Nancy Spurling Johnson
In her easy-to-follow, friendly style, long-time Cadalyst contributing editor Lynn Allen guides you through a new feature or time-saving trick in every episode of her popular AutoCAD Video Tips. Subscribe to the free Cadalyst Video Picks newsletter, and we'll notify you every time a new video tip is published. All exclusively from Cadalyst!