19 April 2012
Where are the SMEs?
When it comes to product lifecycle management (PLM), size and scope matter, as Dr Charles Clarke reports
There is general consensus that the first time the PLM acronym was coined was about the turn of the millennium, yet very little has changed in product lifecycle management system take-up across industry, and particularly in the SME sector. But maybe things are about to change, with Autodesk entering the fray, having now launched Autodesk PLM 360, more of which later.
Similarly, among large companies in the know, there is general agreement over what PLM means and what it can do. But there's a serious lack of understanding in the user community and there is still a significant schism in the PLM church. On the design or geometry generation side of manufacturing, PLM is 'just another name for PDM' (product data management), which has been around since the 1980s – most engineering professionals understand what that means and what it can do.
On the enterprise software side of manufacturing, PLM is about 'cradle to grave' product management and tracking. Or, as SAP puts it: "PLM is software that provides the single source of truth for all product-related information." Although, by implication, to SAP, geometry is only a very small part of the overall business process. So what's happening?
As users, we have been bombarded with PLM messages from major CAD/CAM vendors for the last 12 years, yet few SMEs have taken the leap of faith. This is largely because PLM is seen as a 'Big CAD' data management and manufacturing control solution that is expensive, time consuming to implement and risky for small enterprises.
Certainly, few SMEs are using big ticket PLM products like CATIA, Siemens NX or PTC, and it's very noticeable that Autodesk and SolidWorks have so far shied away from PLM in their messaging. So it seems the challenge for suppliers is to condition PLM for SMEs, rather than just the large automotive, aerospace and defence concerns that have the time and resources to deploy large-scale PLM applications.
This challenge has been met to some extent by 'on-demand' hosted PLM solutions that offer quick start-up and relief from the complex IT infrastructures that normally surround enterprise PLM solutions. In addition, on-demand applications offer a range of 'big company' PLM capabilities without requiring dedicated IT personnel, or any major changes in company practice.
Today, SMEs (and larger companies) can use a range of hosted PLM solutions offered, for example, by Agile (now owned by Oracle), Arena Solutions and PTC, along with on-demand collaboration software. "The PLM on demand product that we introduced about five years ago was probably a little too early for the market," says Richard Allan, channel business development director at PTC. "It was ideal for companies that didn't want to invest in an in-house PLM system, but it was probably too early for the mentality of the market and the available hardware technology."
Haves and have nots
That said, the PLM market seems to be polarising into the 'haves' and the 'have nots'. A formative distinction was made back in 1997 when Dassault Systèmes acquired SolidWorks. Companies now well into PLM were described back then as being enterprise- or process-centric. These were companies trying to collaborate and share data within and across enterprises. At the other end of the scale were the design-centric companies whose interest in computer automation was purely geometric.
These distinctions are still largely valid. The difference today, however, is in the general acceptance of the concepts of PLM, even within small companies. Also, according to Mike Burkett, research VP at analyst Gartner and formerly of AMR Research: "PLM is not just for big companies, but for small companies with significant complexity."
How so? Last month, Autodesk entered the market with Autodesk PLM 360, a cloud-based PLM system developed for companies that need a simpler approach to PLM. PLM 360 is instant-on and easily configurable to meet product-lifecycle process needs across any organisation. It is also the first cloud-based PLM solution focused on business applications beyond engineering and BoM management. As a result, employees in a range of roles can get better access to product and project-related information.
"Our customers deserve modern technology to help solve the needs of their increasingly complex and global businesses," says Robert 'Buzz' Kross, senior VP, design, lifecycle and simulation at Autodesk. "Autodesk PLM 360's simple, flexible, cloud-based approach will radically improve the ability for companies to gain the full benefits of PLM, helping them to become more competitive and grow their businesses."
"We've found Autodesk PLM 360 to be a welcome expansion of our digital prototyping workflow," states Rob Ferber, CEO at early adopter Electron Vault, a clean-tech energy-storage provider. "Given the high costs and expertise associated with traditional PLM, we just didn't want to go there until now. Autodesk's accessibility, rapid deployment and ease of use reduce the complexity of managing PLM processes across our global teams."
In fact, PLM 360 takes a highly configurable, zero-programming approach to system configuration. Dozens of pre-installed apps automate business processes across the lifecycle. With intuitive drag-and-drop functionality, users can tailor apps or build their own, without having to purchase additional modules.
According to Autodesk, PLM 360 is also a true 'multi-tenant' cloud application. Users and managers will never have to worry about upgrades and broken customisation; the application is always up-to-date and compatible with any customer-specific configuration. IT professionals are freed from non-strategic system management since users access PLM 360 from a fully managed data centre that provides security, high performance and disaster recovery. Additionally, the cloud-based foundation offers users anytime, anywhere access, from virtually any mobile device or web browser.
All this sounds great but users of cloud-based products, like WordPress and Netsuite, are a little sceptical. "We use Wordpress for web/newsletters – this is a cloud-based tool with plenty of apps, and we find all the time that you install one app and it conflicts with another," comments Nigel Hobden, founder of Random Group. "There is also the problem of keeping pace with the different browsers. I just scheduled a collection from UPS and suddenly the 'print label' button doesn't work in Google Chrome. The issue with the cloud is that changes are made without reference to the users. I find this sort of conflict all the time."
And there is another point: strictly speaking, Autodesk PLM 360 is not the only cloud-based PLM system. Kenesto is a new, US-based start up. Its system is 100% cloud-based and allows users in all manufacturing business departments to create processes and manage work easily. With Kenesto, users create processes graphically by simply naming participants and attaching documents, drawings, BOMs and any other information. Kenesto then manages the flow of that process through the enterprise, keeping information secure and delivering enhanced visibility business-wide.
Kenesto automates common manufacturing processes, including engineering change orders, requests for quotation and new product introductions. Processes like these share attributes with many common tasks, including the need to share intellectual property securely, the requirement to involve people outside R&D and the desire to include vendors and suppliers in the process.
Kenesto is small; Autodesk is big. Kenesto's CEO is Mike Payne who was the chief architect of Pro/Engineer, SolidWorks and SpaceClaim, so I wouldn't bet against him.
Nevertheless, in contrast to traditional PLM industry pricing, Autodesk PLM 360's subscription model does also simplify purchasing. Full function access for the first three users is free, with additional users priced at US$75 per month on an annual contract. According to Autodesk, this represents a staggering one-tenth the cost of comparable functionality from conventional PLM providers.
All well and good, but what do SMEs that have taken the PLM plunge think? Take US garden gnomes manufacturer – well, flying pigs and planters actually – Hayes Co of Wichita. This company recognised that it had to change its way of working to keep up with the fickle nature of the market for lawn products and stay profitable. In this business, last year's bestseller can quickly become this year's bargain-bin reject. The challenge for Hayes is to sift a few successful products from the thousands of designs submitted by freelancers.
In the past, designers might submit, at the company's behest, two dozen preliminary sketches. Hayes' in-house modelling shop would build a prototype from each. At this point, marketing, sales and manufacturing departments would start suggesting changes. Each set of changes would require a new prototype. Yet there was no easy way to record who requested changes or why.
Nor did Hayes keep any centralised records of dimensions, weights, material costs, or even drawings. If someone wanted to buy a batch, the company had to reverse-engineer from the sample (how are they still in business, I hear you cry).
This meant prototypes would be express shipped back and forth to Wichita. Then came more changes and more prototypes. Because much of the manufacturing was done overseas, the prototype then had to be shipped again. Without a database of product information, the company also ran the risk of poor communications with its manufacturing and design partners, which could result in costly mistakes at the factory. This was product lifecycle mayhem.
To deal with its problems, Hayes chose the Matrix10 PLM package from MatrixOne (now owned by Dassault Systèmes), because it required minimal customisation and was suited to tracking consumer goods. Designers now load digital sketches of concepts into Matrix10 through a web interface. A quarter of the concepts are eliminated at this stage. The rest receive full digital renderings, and a second review narrows the field by half. Surviving designs are translated into physical prototypes that Hayes' salespeople can take on the road. Everyone involved at the manufacturing stage can access full design and technical information on every product. And at the shipping stage customers can check packaging dimensions and the number of items in a carton – important for the tightly-run distribution systems of Wal-Mart and other retailers.
PLM implementations can be pricey, but here's the clincher: Hayes spent roughly $250,000 to license and implement its Matrix10 package. But it has saved $200,000 in express-shipping charges alone since installing the system. Prototype costs are also down significantly, and the company's eight product managers are handling more than twice the new concepts they did a year earlier.
Users say the major benefits of PLM are workflow management and synchronisation of data across enterprises. PLM is not rocket science: it's just joined-up thinking and taking every opportunity to allow computers to take the strain internally and externally.
Enterprise-centric versus design-centric – which gives the right service to the user? At a recent presentation it was suggested that all these new, powerful and affordable design systems were doing designers out of a job. In fact, the opposite is true – fast systems mean that you know you've got it wrong sooner. So, far from making engineers redundant, fast systems improve product quality and hence business sustainability – and jobs. Who really cares which centricity is right, as long as the job gets done and it's the best job you can do?
How the big guys do IT
Weatherford International is one of the world's largest providers of equipment and services for drilling and production sectors in the oil and gas industry.
It uses an Oracle ERP system, with PTC's Windchill system as the PLM front end. Users create parts with CAD, and Weatherford's PLM-driven 'release to production' (RTP) process controls approvals before transferring the parts information to ERP. Key engineering and manufacturing personnel receive notification automatically when a new or updated part design reaches 'released' status.
"The systems are so intertwined," says Bill Droke, IT director at Weatherford, "that ERP users interact with our PLM tools and data without really knowing it."
There are now more than 2,000 day-to-day PLM users at Weatherford. The product database holds nearly a million part masters and more than a million secondary part numbers. Each month, Weatherford users add 6,000 new part numbers, 2,000 part revisions and 1,000 engineering change requests to the system. By Droke's estimate, 85% of Weatherford's business transactions now occur through the ERP/PLM systems. As he puts it: "If Windchill is unavailable, our ability to respond to business demand is severely impacted."
Quality of product data is also all-important, says Lewis Lawrence, Weatherford's PLM process owner. "I may be stating the obvious here, but the information contained in PLM is what gives the system value. Bad data is worse than no data. Inconsistent data is bad data. The system doesn't create data, nor does it fix it. Quality in, equals quality out," Lawrence adds. "Good data: priceless."
PTC is offering WM readers the opportunity to try out its Windchill system for 30 days free of charge – go to www.ptc.com/go/windchill10.
Dr Charles Clarke
Dassault Systemes UK Ltd
Parametric Technology (UK) Ltd
SAP (UK) Ltd
Siemens PLM Software
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