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Articles - Publication Date 2.1.2004
The PLM Revolution
Like most of manufacturing's epochal transitions, the product lifecycle management (PLM) revolution is driven by the auto industry and its evolving need to become more collaborative, adaptive, flexible and responsive. And that's just the beginning of a revolution that turns information into a more usable and accessible tool. Automotive and aerospace, the experts say, are the PLM bellwethers for the rest of manufacturing.
By John Teresko
PLM's rapid evolution in autodom says something special not only about OEMs and suppliers, but also about an emerging business challenge that's becoming prevalent throughout manufacturing. Its characteristics: increased product complexity, greater reliance on outsourcing, and a growing need for collaboration with a rapidly expanding list of business partners.
By reorganizing and restructuring with PLM strategies, the automotive sector is seeking to bring greater revenue vitality to its business model. It is attaining performance improvements with competitive relevance that go beyond mere cost cutting. For example, the time-to-market gains with PLM can benefit customer satisfaction directly and translate into gains in market share.
In terms of potential impact on manufacturing, PLM ranks beside Henry Ford's innovations with mass production, says John Moore, vice president and general manager, ARC Advisory Group, Dedham, Mass. But when Henry Ford led the mass production revolution in manufacturing, his dream with projects such as the River Rouge facility was vertical integration.
Now, with PLM, the mode is one of horizontal collaboration with a vast array of business partners and suppliers working in concert to design and manufacture vehicles. (Some attempts have even been demonstrated to have suppliers assemble the whole product.)
Today's business model is definitely not Henry Ford's idealistic dream of virtually everything in the product, including the steel, being produced by the automaker. Today's reality is a horizontal merging of collaborative effort from both within and without the corporation. ARC's Moore notes that automotive suppliers can be eight tiers deep. That's why PLM, as an information facilitator, has the potential to drive a revolution in all of manufacturing.
First, A Definition
How do the experts define PLM (product lifecycle management)? According to the University of Michigan's PLM Development Consortium, "PLM is an integrated, information driven approach to all aspects of a product's life from its design inception, through its manufacture, deployment and maintenance and culminating in its removal from service and final disposal." Simply put, says Michael W. Grieves, the consortium's co-director, "PLM is the integration of business systems to manage a product's lifecycle."
Market analysts emphasize that PLM is more than a set of technologies or software solutions. For example, to CIMdata Inc., Ann Arbor, Mich., PLM represents "a business approach to solving the problem of managing the complete set of product and plant definition information and the processes through which it passes. The PLM process includes creating and changing that information, managing it through its life and disseminating and using it throughout the lifecycle of the product." PLM is as much about how a manufacturing company works as it is about what is being created, says CIMdata.
Grieves also positions PLM as a step beyond lean manufacturing. He says that PLM is the use of information to minimize the resources of a manufacturing organization while identifying the strategic issues that enable better customer satisfaction. PLM uses information to couple optimized manufacturing with the rest of the product's lifecycle.
It's tempting to label PLM as only a cost saving measure. After all, consider one metric from General Motors Corp. "In product development, IT projects like PLM have helped pare a billion dollars of cost over the past three years," says GM's Terry S. Kline, global product development process information officer. GM's PLM provider is UGS PLM Solutions, an EDS company.
More Than Cost Savings
While GM was cutting those costs, an even greater benefit of PLM was its significant role in dramatically shortening time-to-market, that key metric denoting the lapsed time from idea to saleable product. Kline says PLM's role in reducing that measure from 48 months to 18 has helped the c
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"PLM is the integration of business systems to manage a product's lifecycle."
-- Michael W. Grieves, PLM Development Consortium
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