Broadening The PLM Footprint

Adoption of product lifecycle management (PLM) technology is reaching record levels, with analysts predicting sustained growth for the next five years. Management in a widening number of industry sectors are viewing PLM as a critical enterprise investment -- to collaboratively integrate people, processes and business systems with information.

According to statistics compiled by the consulting/research firm CIMdata, the PLM market experienced a stronger-than-expected 13.5% growth rate to reach an estimated $24.3 billion in 2007 for software and related services. The increase exceeds earlier forecasts and involves companies of all sizes in a growing number of industries, notes Ken Amann, CIMdata's director of research. Motivating factors start with CIMdata's research findings that implementations can quickly develop returns on investment of 100% to 300%, while economists continue predictions of possible global economic downturn.

"PLM's demonstrated value during economic uncertainty provides a strong set of incentives for a broader scope of companies to investigate what PLM technologies can do to support their evolving business models," observes Bill Carrelli, vice president of strategic marketing with Siemens PLM Software. His reference also alludes to how PLM enables the more efficient use of manufacturing resources, a capability that facilitates greater product variety from existing production resources.

A PLM platform approach can facilitate dealing with the vast amounts of information from a finite element simulation, such as the aircraft fuselage shown above.

"A competitive strategy motivating manufacturing companies today is the desire to provide customers with greater [product] choice and to meet that goal with existing production equipment," Carrelli says. He believes the broader scope of today's PLM solutions enables manufacturing managers to collaboratively reach upstream into the early stages of portfolio management as well as downstream into the integration with manufacturing. "Enhanced productivity of existing resources is the result of PLM's ability to integrate the various value chains," he notes.

"With PLM, multiple views of the product can be quickly and easily shared among different people of the organization in real time," Carrelli continues. "The collaboration features allow people to communicate, share ideas and interact dynamically around a particular product."

In addition to PLM connecting people, Carrelli says that PLM's collaborative capability is rapidly being enhanced with an increasing number of applications that go beyond such traditional point solutions as CAD, CAM, simulation and PDM. "While supporting a broader range of users, PLM is also providing management with an enhanced visibility of product and process costs."

PLM as a Platform

According to Carrelli, PLM is evolving into a platform that facilitates making decisions about the product, its profitability and how to allocate resources along the way. "Users are regarding PLM as a product and process innovation platform side by side with their business platforms such as ERP or supply chain management." He says PLM has progressed to a state where it really does offer a platform that supports the entire digital enterprise -- the entire product-in-process activity.

"The platform concept," explains Carrelli, "helps manufacturers leverage core products to meet local or regional requirements in today's global market. That gives a manufacturer a broader footprint by facilitating the use of a core product that can be varied to meet local needs and requirements."

Comprehensive PLM Market Growth History and Forecast
(Estimated for 2008 to 2012)The Estimates include both software (license + maintenance) and services: Source CIMdata

Carrelli says the platform concept also helps another aspect of the process of getting close to the customer -- setting up production sites and suppliers to serve offshore customers. "Supplying global markets via local plants offers major cost savings," adds Carrelli. "PLM as a platform offers the means of collaboration and innovation among global partners. The approach is especially effective if global partners are becoming a bigger part of the design and innovation process. PLM provides the vital collaboration link as manufacturing companies restructure and refocus themselves for the future."

"While the design cycle time in automotive could extend from three to five years, it's typically weeks in the fashion world."
-- Kathleen Mitford, vice president vertical marketing strategy, PTCThe platform trend is especially evident among PLM's early adopters in the automotive, aerospace and machinery sectors, Carrelli observes. "They're in the early stages where they're just beginning to think about PLM differently -- as a platform concept." He cites aerospace giant Boeing as an example, pointing to its recent agreement to extend deployment of Teamcenter, Siemens PLM Software's PLM solution. "It signals a move from a data management-centric view of PLM to deploying PLM more broadly across their product development processes and retiring legacy systems of the previous implementation."

New solution capabilities are providing the important underpinning for the new era in the PLM market. One example is Teamcenter 2007, introduced by Siemens PLM Software late last year. The intent: new ease of use with features to significantly lower the total cost of ownership for PLM technology. It incorporates a service-oriented architecture.

Another example is Dassault Systemes' V6 program. Ed Miller, president of CIMdata, refers to it as Dassault's PLM 2.0 vision. "The V6 platform is a major announcement for Dassault Systemes. With V6, the company is incorporating and leveraging the best aspects of its MatrixOne, SmarTeam and VPLM suites on one platform." In addition it is adding the capabilities of 3DLive to unify user interaction and access to all of Dassault Systemes' PLM solutions, including Catia, Delmia and Simulia.

The rapidly expanding circle of PLM implementations is expanding to encompass users in retail, footwear and apparel, notes PTC's Kathleen Mitford, vice president of vertical marketing strategy. PTC's customers in the sector include JCPenney, Oxylane Group, Agron Inc. and Appleseed's. PTC's activity in this vertical market began seven years ago with Nike, the footwear manufacturer, adds Mitford. "The big push began about three years ago," she says. FlexPLM is PTC's Web-based retail solution.

PLM Mindshare Leaders' Presence 2007(Market presence information represents CIMdata's estimates)Source: CIMdata

Cycle time is the challenge that all of these companies have in common, says Mitford. "While the design cycle time in automotive could extend from three to five years, it's typically weeks in the fashion world. The development cycle can range anywhere from six weeks to 52 weeks."

Another issue is cost pressure, as manufacturers seek ways of getting a better value product to their customers at a lower cost. "More and more the cost issue leads to setting up global product teams -- and the PLM technology to facilitate and track the global process," Mitford notes.

Initially the PLM tracking process involved only offshore manufacturing. Now PLM has increasingly become a support tool for both offshore product development and manufacturing.

"PLM's capability to facilitate tracking and collaboration is an important solution for the apparel sector," Mitford says. "Typically the fashion product is a complex line with many accessories, all of which have to reach the customer simultaneously, regardless of the global source."

PLM's Next Five Years

CIMdata's research forecasts continuing investment growth over the next five years, increasing at a compound annual growth rate of approximately 9.8% and expanding the market size to $40 billion by 2012.

"Executive-level recognition of the significant business value of PLM will continue to drive the increased implementation of the approach," says Miller. "Increasingly, many of these far-reaching systems extend beyond engineering design to a broader range of activities -- from early-stage product strategy development and planning, to product engineering and manufacturing engineering, and through to product maintenance and support." He explains that the impact of this broader PLM footprint is that many diverse, previously isolated disciplines and pockets of automation are now being tightly integrated, with processes optimized for the entire enterprise and across the full product lifecycle.

"The V6 platform is a major announcement for Dassault Systemes. With V6, the company is incorporating and leveraging the best aspects of its MatrixOne, SmarTeam and VPLM suites on one platform."
-- Ed Miller, president, CIMdataPLM's broadening focus is also beginning to include the process industries, adds Joe Prang, CEO of Conformia Software Inc., which offers solutions for the biotech, pharmaceutical and life sciences. "The next 10 years in pharmaceutical and biotech development will see a shift from point applications to comprehensive integrated information environments," adds Anjali Kataria, Conformia's founder and chief marketing officer. Prang also sees PLM's industry-specific trend continuing. He describes a natural rationale: "While Conformia's focus is on recipes and formulations, discrete products implementations must contend with bills of materials and part numbers."

Considering the far-reaching business impact of PLM, the approach has become a critical enterprise investment," notes Miller. "PLM is now widely regarded as a do-or-die' competitive necessity in a turbulent global economy where companies leveraging these solutions will likely be among the top performers in the coming years," he says.

Michael Lynch, CEO of Right Hemisphere, offers a tip for those beginning the PLM journey: "Start by thinking of PLM as an enterprise strategy, not a software package, and then build a stack of components in the different areas of your business, and then bridge them all together for the needs of the business."

Right Hemisphere's business focus is on providing the visual communication and collaboration to bridge PLM systems with business applications. Product information publishing and distribution is the category. "The idea is to increase top line revenue by taking product information and quickly turning it into business information," Lynch explains.

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