Small Is Beautiful

Dec. 21, 2004
Product Lifecycle Management (PLM) software is growing down-market as midsize -- even small companies -- seek the best way to optimize both the product and the process.

Why is PLM spreading rapidly from its traditional roots of managing enterprise complexity, collaboration and integration for large manufacturing companies? Analysts and vendors have the obvious response: The convergence of growing awareness, new, easy-to-implement solutions and the compelling collaborative pressures of globalization. IBM Corp.'s John Lindner reaches under the obvious: "Beneath all of the belabored rationales -- all of it correct -- on why smaller companies are moving to PLM is something so simple that it usually goes unstated. Smaller companies tend to have unique advantages in executing strategy -- even a PLM strategy." (Lindner is IBM's PLM business leader for consumer packaged goods, White Plains, N.Y.) "Now with PLM solutions better, faster and lower in cost, there are fewer reasons why smaller organizations can't reach for the dramatic benefits reported by the traditional early adopters -- those behemoths of aerospace, automotive and shipbuilding." In an AMR research report, analyst Kevin O'Marah presents some of the possibilities with PLM implementation:

  • Engineering changes -- 90% faster
  • Material sourcing -- 2% to 5% materials savings
  • RFO response -- 60% faster
  • Configure/engineer to order errors -- 90% lower
  • Documentation -- 80% cost reduction
Lindner also cites the flexibility and agility that are more typical of small and midsize companies. "Those characteristics, if present, can simplify PLM deployment and bring a faster return on investment. In addition, small and midsize firms tend to have fewer legacy systems. Their absence can simplify and enhance the deployment and performance of PLM systems." To make sure the PLM "secret" gets out to smaller companies, UGS, an industry leader, is courting engineering students. A $14 million grant from the Plano, Texas-based PLM provider is giving engineering students at Northern Illinois University a broad exposure to the spectrum of UGS software for CAD, CAM, CAE and collaborative visualization. UGS says its Global Opportunities in PLM (GO PLM) program is intended to provide the future engineers firsthand experience with current PLM industry standards for managing the entire lifecycle of a product from concept, through production, delivery, maintenance and retirement. In 2003, the commercial value of GO PLM in-kind grants exceeded $2 billion. Solutions Offer Speed The major PLM attraction for small and midsize customers stems from the rapidly growing variety of solutions specifically designed for fast and easy deployment and rapid ROI. Even small, family-run firms find easy justification. For example when IBM announced its small to midsize solution, one of its first customers was St. Louis-based Jomico, a family-operated precision sheet metal job shop. Mike Saputo, president, says "IBM Express made PLM a tangible goal instead of a long term vision." "Success in enhancing product development with PLM doesn't require a huge investment that will take years to yield profits," says think3 Inc.'s Daniel P. Meyer, vice president, worldwide marketing. As a provider of product development solutions for midsize manufacturing firms, he advises a better way. "You can start from where you are, leverage your investment, and build a competitive advantage a step at a time." Avoiding such multi-year efforts also eliminates the tradition of extensive, on-going service engagements to massively customize a technology platform, adds provider Parametric Technology Corp.'s (PTC) Jay Muelhoefer, director of Windchill product marketing. The replacement: PLM-in-a-box -- modular prepackaged solutions that target specific PLM type functions and are quick and easy to install. Typically designed to facilitate collaboration and data access, the modules help support business process issues in outsourcing and globalization. Even small and midsize firms yearn for PLM's collaboration benefits, notes Muelhoefer. For example, the outsourcing of design is becoming increasingly prevalent regardless of company size. OEMs may outsource 80% or more of the design of an automobile. And in some instances even competitors will collaborate on common parts and components. In-the-box isn't the only answer. Another is the Web-based PLM service, such as one from IBM. With this service, IBM combines e-business hosting services with IBM business consulting providing PLM strategy, business process transformation and implementation services. Last month another answer for small to midsize companies emerged from Agile Software Corp., San Jose -- Agile On Demand PLM. The solution is subscription based. Muelhoefer says PTC, Needham, Mass., is evolving a series of PLM-in-a-box solutions for Windchill such as PDMLink. The idea is to transform functions that used to be customized and treat them as standard parts of the application. Customers now can easily and quickly implement sets of capabilities that can solve various specific business problems. In combination with the software packages, PTC also offers packaged services. The net effect is to sharply define the implementation time and cost needed to gain specific capability, adds Muelhoefer. For example, Windchill ProjectLink is PTC's out-of-the-box collaborative project management solution that can be up and running in as little as two weeks. PTC positions the approach as especially suitable for small organizations that can't take on the risk of doing some kind of larger project that would impact all of their business processes and take a long time to deploy. Muelhoefer says PTC started augmenting its product design solutions with PLM (Windchill) in 1998 and initiated the in-the-box approach in 2001. He says PTC's goal is to provide its ProENGINEER (CAD) users a seamless transition to PLM. In the latest release of ProEngineer Wildfire, an embedded Web browser facilitates PLM deployment and use. The point, says Muelhoefer, is to quickly make end-users more productive. "The typical ProEngineer user seeking a data management solution will add PDMLink. Then a second addition will involve adding change management and configuration management within that module. That's often followed with PTC's ProjectLink so that they can add on a layer of collaboration outside their enterprise. With ProjectLink, they can also do portfolio management and Six Sigma processes." Muelhoefer says in-the-box solutions reduce deployment cost by several orders of magnitude, and the implementation time shrinks from months to week. Further savings derive from the ease of maintaining and updating the system. PTC's boxed modules include standardized integration capability with other enterprise applications such as ERP. Adding An Enterprise View While the evolving design of PLM solutions obviously makes the concept more approachable for small to midsize companies, is the market responding? Has easy deployment and rapid ROI brought new PLM acceptance? PTC reports that in-a-box modules now account for about half of its Windchill PLM revenues. Other out-of-the-box solutions are coming from companies without the computer-aided design heritage. For example, Omnify 2.5 from Lowell, Mass.-based Omnify Software offers bi-directional interfaces with both design and enterprise software. Other vendors pursuing similar solutions include Agile Software and MatrixOne. Latham, N.Y.-based Plug Power Inc. is representative of PTC's PLM-in-a-box users. Founded in 1997, the company designs, develops and manufactures onsite fuel cell power generation systems. The challenges: sharpening a focus on customer needs in a business sector characterized by rapidly changing technology, says Jeff Zemsky, PLM program manager. The process constants: continuous testing with extensive documentation complicated by unending change. Those challenges drove the need for PLM. "We had no enterprise view of what changes were occurring. By starting our PLM system with PDMLink, we can have document and change management, and a complete record of our progress can be accessed throughout the organization." In the absence of legacy PDM or ERP systems, employee acceptance was not an issue. "We were advancing from paper-based tools. It was a very easy transition," notes Zemsky. "We built our system on ProENGINEER, starting in 1998 and began using PTC's in-a-box PLM solutions in 1999. "The important thing -- for us -- is that PLM is about product. PLM's central issue is about bringing a product to market. That encompasses far more than manufacturing efficiency on the plant floor, manufacturing systems management or revenue pipeline management. It is about using and sharing product data from concept to end of life." Zemsky describes wins on almost every level of product development and manufacturing. "Our PLM system allows manufacturing engineers to work concurrently with the design process. In the past, manufacturing engineers would have to wait for physical prototypes. Now they're starting at the front-end stages of the design. "The manufacturing engineers can contribute to manufacturability issues while the product is still in the design stage. That enabled us to allocate fewer engineers to the manufacturing process." Zemsky says manufacturing chargeable defects were reduced by 80%. He says the weekly engineering change notice meeting now takes one hour instead of nine! That was made possible by the PLM system enabling engineering managers to review the engineering change notices on-line before the meetings. Zemsky says PLM's biggest challenge is business-process related. "You've got to have a good handle on the business process you're trying to facilitate. There has got to be a unanimous agreement among all of the stakeholders."

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