PLM Strategies-PLM's Growing Pains1 Jan, 2006 By: Kenneth Wong
Two Experts Comment on the Future of PLM
Marc Halpern, director of PLM research for the Gartner Group (www.gartner.com), frequently receives queries from befuddled CIOs (chief information officers). The conversations often begin with, "So, tell me about the trends in PDM or CPC or PLM or whatever the heck the market is calling it these days."
The Forces Behind PLM
PLM (product lifecycle management) may be immune to the raging hormones of a pimply teenager, but, like any adolescent approaching maturity, it confronts something of an identity crisis. So many interested parties nurture different constructs of PLM that if PLM were a person, it might be asking the existential question, "Who am I?" right about now. It's not the CIOs' fault that they can't keep up with the influx of acronyms going in and out of the lifecycle. It's the market that's to blame.
"What's unfortunate is that there are certain vendors," Halpern says, refraining from naming them, "that promote the notion that CAD, simulation, virtual modeling and some support for PDM equal PLM. Everyone gets a little lazy and lets the vendors call the shots. So the vendors define it based on functionalities they are already offering; that way, they can claim to be market leaders."
In Halpern's view, the product lifecycle encompasses much more: "It includes all the creation and management of product content, and synchronizing it for the stakeholders so they can make informed decisions," he says. "It's managing the evolution of the product and managing the activities that have a direct impact on how a product morphs—that's the PLM framework."
The Agnostic Approach to Lifecycle
When I ask Halpern to comment on PLM software architecture trends, the first thing he brings up is SOA (service-oriented architecture). "It's going to have an influence on PLM," he believes, "because users will want an environment where they can plug into many different types of applications and activities that support the lifecycle."
Dr. Hao He, the CTO of SoftTouch Information Technology (www.softtouchit.com), published an article on SOA for O'Reilly Web site ("What Is Service-Oriented Architecture?" http://webservices.xml.com/pub/a/ws/2003/09/30/soa.html). He contrasts SOA with OOP (object-oriented programming), using CDs as an analogy: "So, in object-oriented programming style, every CD would come with its own player and they are not supposed to be separated. This sounds odd, but it's the way we have built many software systems." SOA, often referred to as application agnostic or application independent, is an alternative programming principle, where the software architecture makes it possible for one to, in a manner of speaking, play a CD on any of a number of CD players. Dr. He has generated some criticism from those who think his CD example does not accurately reflect the principles of OOP, so don't take the CD analogy too literally.
Unlike the traditional point-to-point software architecture, SOA is made up of loosely coupled—or joined—applications that are highly interoperable. "If SOA becomes more mainstream and enough vendors write interfaces for it," predicts Halpern, "it will provide PLM software the freedom to interact with more types of applications with greater agility."
We Gather Here Today to Join ERP and PLM
"Because larger companies in particular are using hybrid strategies, where they use ERP (enterprise resource planning) to manage their business requirements and PLM for management of products and allocation of resources, you'll see a mix of companies adopting an ERP system like SAP for their overarching enterprise backbone, with PLM as an element in the business flow," says Halpern.
The marriage of ERP and PLM, he predicts, will be on everyone's mind in the next two to three years. The success of this match depends on two primary factors: whether ERP guardians such as SAP (www.sap.com) will put more investment into their own PLM products, and whether best-of-breed PLM vendors will be able to issue products that better interface with leading ERP systems.
Anything You Can Do, I Can Do Better
Ken Amann, director of research at CIMdata, views PLM as "a strategic business approach throughout the lifecycle, not just the technology." For more, see "Pinning Down PLM," January 2005 (http://manufacturing.cadalyst.com/PLMarchives). "Today," says Amann, "if somebody asks you to differentiate the base vaulting or data-management capabilities of, say, UGS (www.ugs.com), Dassault Systèmes (www.3ds.com) and MatrixOne (www.matrixone.com) products, it would be difficult to identify significant differences. Fifteen years ago, data vaulting was new stuff; today, it's pretty much a given." It's because over time some core functionalities of PLM products have become commoditized. The next area of competition for the vendors, then, is in the introduction of tailor-made solutions that cater to specific industries: footwear, apparel, consumer goods packaging, fast food, healthcare, insurance, banking and so on.
"Years ago, the vendors were building technology; today, they are building business solutions," Amann says. "The underlying functionalities remain the same, but they are adding industry knowledge and best practices. They'll fine-tune the core technology so it supports the standards of a particular industry, uses the terminology of that industry, and so on."
When retail, electronic goods and other industries that rely heavily on variety began flirting with PLM—it's a reciprocal flirtation, I'm told—portfolio management became more important than ever. "Managing the product portfolio may not be such a big deal for someone making gasoline," says Amann, "but for someone trying to market 43 different kinds of soap or shampoo around the world, it's critical."
"There's a difference between product portfolio management and process portfolio management," Amann clarifies. "When you're managing the product portfolio, you make
decisions on what products you should bring to the market. You consider if they'll fit the customers' demands. Given the
product family you have, you calculate what variations you're going to make, what your product mix is going to be, what new ideas you'll invest in, whether you have the resources to do it and so on. Process portfolio management, on the other hand, is more like classic project management, but involves looking at the whole repertoire of projects and managing them in a consistent manner."
Watch the Wildcards
Amann says one doesn't need a crystal ball to see where PLM is heading. There are certain telltale signs: "Look at the mergers and acquisitions. Watch the vendors that are developing new technology, watch the markets they are going after. Are they doing it directly? Through partnerships?"
Continue to keep an eye on China, the world's factory floor, and India, the world's back office. Their economies, while fueling global collaboration, also add a measure of uncertainty. Halpern says, "We shouldn't think that in China and India the status quo will remain. As they become more successful, they'll be confronting more infrastructure needs and rising costs." Amann remarks, "If there's a change in government philosophy in China, that can impact the PLM market. If a new leader decides to change the way the country deals with foreign investment or intellectual property, it will affect the revenue opportunities." For more, see "Made in China, Parts I and II," October 2005 and November 2005 (http://manufacturing.cadalyst.com/PLMarchives).
"My opinion," says Halpern, "is that we have a very globally interdependent economic system, so even if there's a major disruption in globalization, it's not going to reverse the progress; it might slow it down or temporarily halt it."
The Paradox of PLM
"The demand for better lifecycle-management support is going to continue," says Halpern. "Increasingly, companies expect PLM to provide a more organized way to grow revenue, to have greater visibility to the activities in the company, to make sure assets and resources are being applied in ways that senior leadership wants. But sometimes randomness and uncertainty can be a good thing. In some cases, they lead to discoveries and innovations unplanned for. Having a level of control and visibility is a positive thing, but maybe we're sacrificing something as well."
The apple that fell on Sir Isaac Newton's head was probably never planned. Christopher Columbus's misguided search for the West Indies led him to America. So, as I check on PLM's progress this new year, a question occurs to me: Is it possible to create a highly controlled environment that fosters creativity?
Kenneth Wong is a former editor of Cadence magazine. He explores innovative use of technology as a freelance writer. E-mail him at email@example.com.
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