PLM: Great Hope or Great Hype?

8 Mar, 2006 By: Jeffrey Rowe

Concept will succeed only when vendors and customers come to see it as it was intended

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By now I’m sure you’ve been bombarded by insistent claims that PLM (product lifecycle management) is “The Next Big Thing.” PLM is so big, in fact, that it might rival mass production with its potential impact on manufacturing -- although in a very different way. Where mass production sought to vertically integrate new ideasduring product manufacturing, PLM seeks to provide horizontal collaboration throughout a product’s lifecycle – from concept to disposal.

But in all honesty, can PLM truly provide everything vendors are promising? Is PLM a great technological hope or just another great hype?

One Word: Process

It seems that every vendor defines PLM in a manner that best suits its respective product lines and business practices, and not necessarily the processes of the customers they are trying to serve -- and therein lies a big part of the PLM problem. PLM should address processes and not just products -- neither the vendors’ products nor their customers’. Too few vendors today stress process over product.

To date, the two largest manufacturing market segments to embrace PLM are automotive and aerospace. These two industries were among the first to implement and integrate PLM into their businesses to address the sheer complexity of the products they produce and the multitudinous suppliers they deal with -- either one of which can be reason enough to consider PLM.

Quite a bit of confusion persists about exactly what makes up a PLM system. The question is somewhat loaded. If asked of ten people, it would likely elicit ten different answers -- all of which could be correct. To complicate the situation, many vendors promote PLM packages that in fact are not comprehensive enough to be considered PLM.

Real PLM

My definition of a PLM system is always evolving, but I do feel that a true PLM system must include most of the following subsystems or modules:

  • BOM (bill of materials) processor
  • Configuration management
  • Computer-aided process planning
  • Database management
  • Data communications
  • Simulation
  • Visualization
  • APIs (application programming interfaces)

The PLM system ideally should be tied to SCM (supply chain management) and ERP (enterprise resource planning) systems, and herein lies the reason that PLM implementation can be tricky. The biggest challenge in successfully deploying a PLM system on any scale is understanding and managing the myriad data formats that come into play throughout the product-development lifecycle.

I think a much better model of PLM is not as a peer system to other systems, such as ERP, SCM and CRM (customer relationship management), but rather as the backbone intellectual-property ecosystem of an enterprise. Although these other systems deliver indirect cost-reducing improvements, none of them has any measurable impact on top-line, revenue-enhancing results, and they have only minor impact on lowering direct costs. The only way to positively affect top-line revenues is to develop and build innovative, higher-quality products, and PLM is the only system of the four that addresses this.

In this context, PLM is transforming ideas to profits, capturing customer experiences and generating ideas for new products. Along the way, the intellectual property undergoes several transformations -- such as ideas to concepts, concepts to prototypes, prototypes to products, and so on -- and interacts with the other systems. Ideally, a well-implemented PLM system provides a framework that lets all the other systems and disparate groups of users easily interact with and add value to the intellectual property of an enterprise.

This definition of PLM -- an intellectual property asset manager that can be used universally within an organization -- gets to the heart of what PLM was always envisioned to be, but thus far has been executed by very few PLM vendors.

Keys to Success

Ultimately, the success of PLM depends on two things. First, vendors must be truthful about their PLM systems’ capabilities as well as what their customers can reasonably expect in terms of overall benefits and ROI. Second, customers must determine the true needs of their organizations and how they expect PLM to fit in with existing and future IT infrastructure. Only then will customer expectations and vendor promises come together and improve processes and future products through intellectual property asset management.

More vendors must work to tie their PLM subsystems directly to business processes, as stated previously. And, because no two business models are exactly alike, PLM systems must be customizable and fine-tunable to meet individual needs in terms of which PLM components are included, how to integrate and implement the components, and the best way to deal with the various data generated during a product's lifecycle.

In the end, we must use PLM technology to optimize and exploit how people internal and external to a business interact with information. Simply put, this is called workflow -- a complex chain of processes that transforms thoughts into actions and, ultimately, into tangible products. Ultimately, PLM is as much about business strategy as it is about a product’s lifecycle.

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