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Simply put, if your company has anything beyond the simplest products and supply chain, you can benefit from product lifecycle management (PLM). From my experience and research, asking whether a manufacturer should implement PLM is like asking whether a person should visit the doctor. While some companies might need urgent care to address major problems, almost every company could use a preventative, holistic health program to improve product profitability. PLM is a broad suite of tools with many ways to help improve product-related processes.
A PLM system can solve a huge range of problems, from improving poor internal engineering efficiency to enabling cross-enterprise collaboration to driving innovation and top-line growth. So, the question shouldn't be if PLM can help, but diagnosing what problems a company has or improvements it needs and which PLM capabilities to apply. The first step a company should take, much like the first step a doctor takes with a patient, is to understand general health. Just like a good doctor visit, a PLM implementation can address both current problems and provide insights to improve overall health and wellbeing.
The symptoms of complexity (and how to treat them with PLM tools)
Most manufacturers suffer from increased complexity. Tech-Clarity's graphic on managing the five dimensions of product complexity with PLM shows that both products and product development complexity have increased dramatically over the last 10 years. Products are more complex due to new materials, increased variability, the shift to "smart" products and more. The business of developing and delivering products has also become more difficult due to global markets, intense cost pressure, expanding sustainability regulations and globally dispersed production and design operations. It's no wonder that some companies might be feeling a bit sick.
Symptom 1: Manufacturing and design errors
One of the most straightforward signs that a company needs to implement a PLM process and PLM software is that they are simply unable to control their product data. They have difficulty determining which versions of product-related files are current and end up ordering or producing the wrong things. If product data is not managed, the ensuing chaos causes costly mistakes.
Symptom 2: Poor engineering and design efficiency
Another easily recognizable issue is poor productivity because engineers can't easily find data. This comes from information being lost from step-to-step in the process, people working on the wrong information or reinventing the wheel because searching for information is futile. Engineers must be able to access the right information quickly and in the right context. If they can't, they won't be able to make good decisions.
Symptom 3: Siloed information and lack of early information sharing
Another telltale sign of trouble is that product data is locked up in engineering. Product profitability requires a coordinated effort from multiple disciplines including marketing, procurement, manufacturing, quality and others. Typically, those departments have to wait until a product is almost fully designed before they get to see it, provide feedback and plan for their part in supporting the product. If engineering can't share product information with others early -- and do so in a way that is easily understood -- the company suffers from additional inefficiency, rework and delayed time to market.
Symptom 4: Out-of-control projects
Developing new products is a team effort and teammates increasingly sit in different offices around the world. In addition, many teams now include suppliers, customers or other third parties to address short lead times and increase innovation. Keeping this disparate team organized, focused on the right tasks, sharing status and reviewing deliverables can be daunting. Companies without strong project and program management suffer from errors, poor quality and commercialization delays.
Symptom 5: Integration errors across design domains
Products are getting harder to develop because they now typically incorporate mechanical, electrical and software components. Tech-Clarity's survey Developing software-intensive products finds that the amount of software in products, the importance of the software to deliver product capabilities and the level of product innovation resulting from software has grown for the vast majority of manufacturers. And manufacturers plan to continue increasing it. Unfortunately, the resulting complexity has driven significant, negative business impacts. Product companies that don't have strong, timely collaboration and systems-oriented PLM tools will continue to suffer from quality, time to market, rework, cost and efficiency issues due to the difficulties in integrating mechanical, electrical and software design processes and deliverables.
Signs that you have opportunities to improve corporate health with PLM tools
While many manufacturers initially adopt PLM tools to fix existing problems, the highest value often comes from the proactive measures that manufacturers can put in place with PLM technology to improve product innovation, product development and engineering outcomes. These are similar to a doctor's recommendations intended to improve health and quality of life today while taking the right steps to prevent future problems.
Sign 1: Inability to act globally
Successful manufacturers are more likely to act globally, taking advantage of design expertise across the globe and simultaneously introduce products that meet differing requirements across geographies. Designing products that meet local needs and regulations requires strong collaboration from local resources. Leveraging global design expertise demands the ability to hand off information between disparate teams. Companies without strong collaboration capabilities will not be able to take advantage of global opportunities.
Sign 2: Lackluster innovation
Customers reward a company's innovation with higher sales volumes, higher margins and better brand loyalty. Unfortunately, many companies aren't able to take advantage of innovation because they don't have good processes to capture the best ideas, identify the most beneficial ones, turn those into actionable product requirements, and manage those through conceptual design, detailed engineering, and product commercialization. Product companies that can't harness innovation from inside their organizations and the market around them will fall behind the innovation curve and suffer from lackluster performance.
Sign 3: Just too late
In most industries, time to market is essential to profitable products. Having an innovative idea brought to market too late threatens to reduce profits. Likewise, slow response to competitive moves can result in lost market share and low brand value. Companies that aren't able to rapidly develop products leave their profitability to the mercy of the market.
Sign 4: Suboptimal products in the market
Another common area where companies underperform is in the product investments they make. Too often product development is driven by gut feelings and strong opinions as opposed to sound, logical decision-making. Companies that don't manage their product portfolio decisions based on objective facts and rational criteria are destined to invest in low-margin products, have poor innovation, poorly utilize resources, and have product portfolios that are misaligned with the market and corporate strategy.
Identifying with all of the above
Most companies have a lot of room for improvement in their PLM processes. Fortunately, PLM tools help address all of these symptoms and improve overall corporate health. In fact, addressing one problem typically helps in others as well. For example, driving higher engineering efficiency can help with time to market. It can also give engineers more time to iterate on designs to develop better, more innovative approaches instead of taking the "safe" approach and delivering lackluster results. PLM initiatives tend to address more than just the symptom they are intended for; they set up a foundation for future improvements as well.
Most companies first recognize the need for PLM based on the symptoms of complexity identified above. They feel the pain and need to act. But investing in PLM tools, like a good health program, provides much more holistic benefits that improve overall business performance. In fact, PLM beyond managing CAD shows that top performers "leverage more advanced PLM processes, including cost and quality management." The fact is the more of PLM technology that companies utilize, the more value they get. So, if you recognize these symptoms in your business -- and I suspect all but a few companies do -- it's time to prescribe PLM. It's good medicine for healthy profits.
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