It has become an essential business tool in diverse markets, but implementing product lifecycle management can be a complex process, as Martyn Day discovers
With its origins in the aerospace and automotive industries, product lifecycle management (PLM) has expanded from its engineering heartland to a wide range of sectors, such as packaged goods, clothing, food, pharmaceutical, retail and consumer electronics.
The larger and more complex the product range, the more regulation and the greater the need for collaboration and fast response times, the bigger the benefit of adopting PLM. With this growing importance and a strong association with increasing competitive edge, acquisition and implementation of PLM systems are now a chief executive and board-level decision with a view to the long term.
Spanning so many diverse industries and with a requirement for configuration and bespoke customisation, it’s almost impossible to buy a turnkey, off-the-shelf PLM solution. A company’s PLM system will have to connect both new and legacy management systems, and will require ongoing maintenance to ensure that upgrades of essential components, like ERP (enterprise resource planning) or CRM (customer relationship management), work with the PLM backbone, while looking to make use of new capabilities and innovations.
This begs the question how tightly integrated a company wants its various back-office systems to be, and how automated and embedded the workflows in the PLM system should be. To help guide a successful implementation, most firms engage experienced PLM consultants and systems integrators to define processes and assess technologies to meet their strategic business objectives.
Implementing PLM properly at any company is a process that must be planned and approached properly, with determination, to gain successful results. PLM consultants will work with a company’s management team to develop an effective roadmap, assessing business benefits and the expected returns of implementing a PLM system.
This executive-decision support starts with assessing current processes, and IT systems and process workflows, mapping these to current best practice PLM workflows, through to training, systems integration and multi-year staged deployments. Experienced consultants will know what is and what isn’t working in a variety of industries, together with the limitations and strengths of the various software solutions, but no two implementations are ever the same.
“In a PLM deployment, tensions can arise internally between departments as business requirements need to be mapped to processes,” says Luca Benporath, vice president, global PLM, manufacturing, retail and services markets, at Atos. “Often these do not always map on to the ‘out-of-the-box’ PLM functionality and processes. Companies that have bought packaged solutions and have customised them, lose the big advantage of having best practices out of the box. We, the integrator, have to manage the strategic goal, the battle within the clients and the software vendor that creates the solution, and we are also responsible for the implementation and the success.”
PLM is now a standard IT backbone for all major automotive and aerospace firms, driven by the manufacture of expensive, complex and long-life products. However, the emerging PLM adopters are in pharmaceutical (such as GSK), consumer packaged goods (Unilever) and apparel (Benetton), and are complex at the other end of the scale, producing inexpensive, short-life products, where the complexity is in the number of product stock-keeping units.
The variance in maturity of all these different markets means that, for aerospace and automotive, process standards are harmonised and related companies can deploy similar “tweaked” systems as there are established best practices. However, for emerging adopters PLM has to offer different benefits. “If you take the high street fashion chain Zara, they have to have a new product, in all sizes and colours, in each shop every week,” says Mr Benporath.
“On the flip side you have the Eurofighter aircraft which has to be maintained and supported for 40 years after the last aircraft has been sold. PLM systems have to handle lifecycles from 80 years to one week; it’s highly variable and industry processes cannot be easily harmonised. You can’t really take successful processes from one industry, such as automotive, and apply it to, say, pharmaceutical.”
Sometimes the need for an effective PLM vision and strategy is driven by regulation, and this is especially true in the pharmaceutical industry where non-compliance can seriously impact the bottom line. Several studies have identified that in the United States, Food and Drug Administration (FDA) non-compliance has led to fines totalling $20 billion levied on pharmaceutical companies since 1991, with approximately $16 billion imposed since 2005.
“Product data and regulatory submissions have to all be at hand and absolutely watertight,” says Phil Symonds, partner in the industrial, life science and construction sector at consultancy firm Deloitte. “The penal effect of non-compliance is now very big compared to the cost of deploying a PLM system. In a highly regulated industry, like pharmaceutical, where you have to have licences to operate, you can’t afford to jeopardise that in any way.”
In Europe, the pharmaceutical industry is currently preparing for new EU regulations that should come in to force in 2015/16 which will impact the artwork of every prescription and non-prescription drug, incorporating a unique 2D barcode to aid traceability. “PLM will help manage that artwork change process to meet the compliance delivery dates and provide the traceability from the barcode to the product batch information,” says Mr Symonds. “This will also assist in reducing product recalls, which can have associated costs in the millions.”
Another emerging area for PLM application is the management of embedded software within physical products, which are increasingly mechatronic in nature. While a product may ship, the software that runs it will doubtless require fixing and upgrading in the field. For instance, while the quality of the mechanical components in cars has risen, the most common quality complaints are about car electronic systems.
“Innovation in manufacturing is also now being driven by software,” says Jim Brown, an analyst at PLM research firm Tech Clarity. “Products that combine mechanical, electrical and software elements are now commonplace, but add tremendous product development complexity, which can lead to quality issues and poor productivity, and can delay time to market. Engineering firms need to track and trace, validate and verify, and manage multiple configurations. You only have to look at cars, industrial equipment, electronic or medical equipment where use is growing tremendously. This also needs to be managed as a product component in a PLM process.”
Coming up with a winning PLM vision and deployment strategy is a multi-year process. In mature markets, with established best practice with common supply chains and PLM standards, it’s possible to use a more out-of-the-box solution. However, integration and maintenance with legacy systems, especially ERP, will leave some grey zones and here PLM consultants can be an invaluable guide.
“If I took away a company’s ERP system, would the business case used to originally justify that ERP system look anything like it did 20 years ago?” asks Mr Symonds. “No. The knowledge and the use of ERP have grown so significantly that today’s business case would far outweigh the original return-on-investment proposition. In ten years’ time, PLM will be as part of our DNA as ERP systems are now.”
Reasons for PLM
01 Reduce time to market and increase productivity: competition is never far away and companies are constantly looking to reduce product development cycles of increasingly complex products, which are fabricated and sold globally. Using PLM to automate and connect systems helps bring more products to the market faster, reduces development costs, connects teams, improves quality and reduces waste.
02 Break down internal data silos: getting a comprehensive view of all the data a company creates can be all but impossible. If a company comprises poorly connected islands of automation, which rarely talk to one another and remain within departmental fiefdoms, a PLM system can transcend these barriers, organise and link essential but disparate business data, allowing informed business decisions.
03 Improve supply chain collaboration: when data is shared among stakeholders within an organisation and its supply chain, collaboration can drive business efficiencies. By addressing supply chain and manufacturing concerns in the early phases of product development, complexity can be managed, and cost and risk reduced. The introduction of cloud-based services and mobile devices is further extending the reach of PLM systems.
04 Drive innovation: beyond the actual design of physical products, PLM can drive innovation in processes and organisation, increasing competitiveness, business performance and return on investment. By capturing, managing and disseminating relevant data, a company can radically improve the manufacture, maintenance and disposal of its products. PLM supports the three pillars of innovation - people, processes and technology
05 Fulfil compliance and regulation: the costs of achieving and maintaining compliant products can be high, but non-compliance can lead to legal action, fines and even exclusion from specific regional markets. PLM systems can automatically track global compliance documents and provide auditing tools to ensure consistency, and provide accountability within everyday workflows, as well as preparing for future legislation.
Winning the race
One of the UK’s leading automotive racing organisations, Aston Martin Racing (AMR) of Banbury, Oxfordshire, uses PLM to turbocharge its outstanding performance in some of the world’s most demanding competitions.
AMR, a partnership between Aston Martin Lagonda and engineering group Prodrive, has had a strong run of results in its 2012 return to the GTE-Pro racing category. A series of podium finishes was topped by a win at the Six Hours of Shanghai endurance race in China in October. This garnered AMR second place overall in the FIA World Endurance Championship’s (WEC) GTE category.
PLM was at work behind the scenes, if not directly under the bonnet.
“The biggest gain that PLM provided was to bring control to a somewhat chaotic environment,” says Paul Doe, AMR’s chief chassis designer. “Before we used PLM, it was not uncommon for design work to be overwritten by other users or parts perhaps not fitting the car due to a clash with another component.
“Race teams tend to work at an incredible pace,” he points out. “If time is lost finding a solution, in a hectic schedule this can be more important than the extra expenditure.”
The payback, the return on the PLM investment, “is in greater efficiency that has led to a leaner design headcount, around 25 per cent fewer than before PLM”, Mr Doe says. “Also we have more parts that are right first time. The total savings have been well into six figures per year, which is significantly more than the cost of the technology.”
Asked about a bottom-line result, Mr Doe cites “a controlled virtual [engineering] environment that allows multiple designers to work on a single vehicle layout. That allows us to react faster, with more attention to detail, while increasing the quality of the output,” he says.
AMR uses Windchill from PTC.