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"
Datastay has developed an industry leading
PLM application to give you the
framework on which to manage all of your product lifecycle efforts."
Source : Datastay
PLM Fundamentals:
A Framwork for Approaching PLM Initiatives
Product Lifecycle Management (PLM) is also known as :
product and portfolio management,
manufacturing process management,
product data management,
product life cycle management,
product lifecycle ,
product lifecycle system,
product design,
PDM,
PDM system,
PLCM,
PLCM system,
PLM system,
PLM,
CAx,
CAx system,
PPM ,
PPM system,
MPM,
MPM system.
Executive Summary
Product Lifecycle Management as a strategic initiative is a growing issue
faced many manufacturers. Organizations however often approach the issue of PLM
from a software centric perspective that may result in lower than expected
return-on- investment. Some organization may even focus on PLM improvements that
do not present the greatest potential impact.
This whitepaper discusses a ground-up approach to PLM that can help
organizations who are looking at the issue of PLM for the first time, as well as
those that are assessing decisions that have already been implemented. It
suggests an emphasis on the strategic considerations that must be given to any
PLM approach based on the following key principles:
- The fundamental objective of every PLM initiative is to maximize
the profits that are contributed by each product to the organization's
bottom line.
- Every organization already has a PLM system in place which guides
how products are managed across their lifecycle, from concept through to
eventual market withdrawal.
- A strategic approach to PLM requires a comprehensive assessment of
the processes that make up the PLM system in order to determine possible
areas of improvement.
- Any process improvements that are undertaken as part of a PLM
initiative must be strategic in nature and affect the organization's bottom
line by:
Increasing profits contributed by a product at a given time
during it's lifecycle through any combination of enhancement to revenue or
reduction to costs.
Reducing the time it takes to introduce new products
to market.
- The choices as to which, if any, software tools or system an
organization should employ in its PLM initiatives should be entirely
based on the review and assessment of the current PLM system.
The Datastay Approach to PLM
Introduction
Over the last three or four years, volumes have been written about product
lifecycle management, most commonly referred to by the acronym PLM. While many
organizations have begun looking at a PLM strategy, there is still a lot of
confusion as to what PLM is, what its value proposition is, and consequently how
to calculate a return on a PLM investment.
The Confusion Surrounding PLM
The reason much of this confusion exists lies in the fact that PLM is not a
specific application or piece of software. This however is still the general way
organizations look at their PLM strategy and is most likely the result of two
specific causes. First, much of the information written about the subject
focuses on the specific technologies or tools that may comprise a PLM strategy,
and secondly much of the literature about PLM is produced by vendors who sell
software or services and define PLM in accordance with their objectives.
One of the most commonly accepted definition of PLM is presented by CIMData
which describes PLM as a "strategic business approach that applies a consistent
set of business solutions in support of the collaborative creation, management,
dissemination, and use of product definition information across the extended
enterprise from concept to end of life " integrating people, processes, and
information .." While eloquent, many people and organizations as a whole still
find it difficult to take the theoretical concept and apply it in practice to
their unique situation in order to see how they can leverage PLM to add value to
their organizations.
To eliminate some of the confusion surrounding PLM it is helpful to try and
set aside any current ideas of what PLM is, specifically those ideas that are
entrenched around any given set of technologies or tools. Reframing the issue
from this perspective will permit a ground up
investigation of what is
involved in taking an idea or concept through to market introduction and
eventual retirement " which is what PLM is supposed to facilitate. This applies
to tangible products such as computers or cars, as well as intangible products
such as financial assets or insurance policies, regardless of whether they are
for business or consumer markets. From this vantage point it becomes easier to
assess an organizations approach to managing their products' lifecycle, identify
where in that lifecycle the pain points or inefficiencies lie, and then
determine what tools may be employed to address them; this also greatly
simplifies the process of calculating an ROI for any PLM software deployment
The Product Lifecycle
What is PLM?
The first step in our exercise is to look at what the product lifecycle is in
order to get a better understanding of what managing it is all about. The actual
concept is relatively simple. Every product that gets introduced to the
marketplace goes through a series of steps starting when the product is first
conceptualized, then proceeding through design, development, validation,
production, and support, until it is eventually retired or withdrawn from the
marketplace. At each of these steps several tasks must be performed, often by
multiple people, who each create, modify, or rely on a variety of information
relating to that product. PLM refers to the management of this product related
information and how it is used by the people that rely on it in completing their
respective tasks.
You Already Have a PLM System
This description of PLM also lets us conclude something else that is very
important for our exercise. Every organization that brings a product to market
already has a PLM system in place. While some readers may laugh at the idea that
their company has a system at all, the truth of the matter is that every company
has a specific set of processes it employs to convert ideas into revenue. This
process may be full of inefficiency, redundancy and frustration, but an
underlying system definitely exists.
The goal of every product-lifecycle management initiative must therefore be
how to better the current system. To do so, what must be undertaken is an
analysis of the current product related processes and the tools used to
facilitate them. The completion of this groundwork is vital to the success of
any PLM initiatives by first clarifying the root causes of any inefficiency and
waste, and then subsequently for the building of an ROI for any PLM investments
or decisions to be made.
A simple framework can assist organizations as they undertake the process of
assessing their PLM system and defining their specific PLM goals and objectives.
The reason this framework is such an excellent tool, is that is ensures that due
attention is given to all aspects of the product lifecycle, while also visually
shedding light on how PLM choices directly impact bottom line and organizational
success. The following section of this whitepaper will utilize this framework
and illustrate how to successfully approach any PLM initiative
The Product-Lifecycle-Curve Framework
Introduction
Figure 1.0, referred to as the Product Lifecycle Curve, illustrates the
amount of profit a product contributes to an organizations bottom-line as it
passes through time. While the actual curve for any particular product may look
somewhat different, the general characteristics will be the same for most.
The Investment Phase
From the moment a product is conceptualized, resources are devoted to its
design development and validation. These vital and costly processes are
represented on the product lifecycle curve as the initial dip into negative
profitability. This part of the curve (and the lifecycle) can be referred to as
the Investment phase. The investment phase is a very important part of the
product lifecycle because every decision and the execution of these decisions
directly impact the success and failure of the product.
Market Introduction
After some time the design and development efforts during the investment
phase come to fruition in the form of a product that can be sold in the
marketplace. The curve crosses the horizontal axis once the first sale of the
product occurs. This crossing point is referred to as market introduction At
this point sales of the product result in revenues and the profit contributed by
the product may start to grow.
The Growth Phase
As time passes, more profit is generated from a growth in product sales. This
phase of the product lifecycle is adequately referred to as the growth phase,
which is illustrated as the upward trend on the curve immediately following
market introduction. The key issues organizations must face during the growth
phase are two-fold. First, they must maximize the sales of the product, and
secondly they must support those customers who purchase it. As a result the
processes that must be managed during the growth phase are slightly different
than those managed during the investment phase. At this point management of
production, sourcing, product changes/fixes, quality, and support become more
important to the success of the product.
The Maturation Phase
The final phase of a products lifecycle is referred to as the maturation
phase. This phase differs from the growth phase in that at maturation, sales of
the product stop growing and the profit generated from it may actually begin to
fall. The maturation phase is represented as the part of the curve that begins
where the curve stops trending upward. During the maturation phase the key issue
the organization faces is how to sustain profitability of the product for as
long as possible. As in the growth phase of the lifecycle, during the maturation
phase the key process that must be managed include production, quality and
customer support. Each is essential to sustaining the profitability and ensuring
the overall success of the product.
Market Withdrawal
Eventually the product is withdrawn from the marketplace as it stops to
generate any significant profits. A successful product will at a minimum have
generated a net profit across its useful life. Visually this is illustrated when
the area under the growth and maturation part of the curve is greater than the
area above the investment part
Using the Product Lifecycle Curve Framework
The preceding section provided an introduction to the product lifecycle
curve. In the next part of our exercise, we will look at how to use this
framework to assess a PLM system, identify where improvements to the system are
possible, and quantify / qualify any improvements to justify any PLM related
investments.
Reviewing the PLM System
The first step in putting our framework into practice involves performing a
comprehensive review of the current PLM system. This is done by answering
several questions about the current processes used to manage a product through
its lifecycle. Table 1 presents a list of the types of questions that may be
asked. In answering these questions, it is important to address the specific
tasks involved in the process as well as to detail the people and tools which
are utilized.
Table 1 " Reviewing the PLM System : Identifying Underlying PLM Processes
Investment Phase
• How are products conceptualized? What/Who is the source of ideas?
•
What is the process for justifying or validating a product idea or concept?
•
How are customer requests for new products handled?
• How are concepts turned
into plans and designs? What tools are used to do so? Who performs the product
design?
• How is feedback from customers, suppliers and third parties
incorporated into the design of the product?
• What regulatory issues are
relevant to the design and development process? How are these regulatory
requirements addressed?
Growth & Maturation Phase
• How is product information shared within and outside the organizations? How
are sales efforts supported by this information?
• How are customer request
about the product managed? What information does the customer need to
effectively use the product?
• How does production know what to produce? How
do they know when a change to the product has occurred? How is sourcing managed?
• How is quality ensured? How are quality issues addressed? How are on-going
compliance or regulatory issues managed?
• How are service or warranty issues
handled?
Identifying Potential Improvements
Once the review of the current PLM system is complete it becomes possible to
assess the underlying processes and identify where improvements are possible. In
doing so it is important to focus on how the improvement will directly and
positively impact the actual lifecycle of the product. The product lifecycle
curve can assist in illustrating this point.
Understanding Improvements and Their Impact
The result of improving a process used to manage a product through its
lifecycle is represented on the product lifecycle curve as a shift either
upwards or to the left in the area of the curve that is impacted by that
process. For example, if a design process that occurs during the investment
phase is improved, than that part of the curve would shift. Improvements to
processes that occur during the growth and maturation phases would have similar
effects to those respective parts of the curve.
The product lifecycle curve shows the profit generated by a product at
different times in its lifecycle. Therefore, any upward shift to the curve
indicates a process improvement that has led to some combinations of an increase
in revenue or a decrease in cost at that point in the products life. Since no
revenues are generated during the investment phase any upward shifts to this
part of the curve can only be the result of cost reductions. Each organization
must frame their assessment of potential process improvements in this light.
A leftward shift to the product lifecycle curve also indicates greater
profitability at all points across the shifted part of the curve. The cause of
this type of shift is however slightly different. Leftward shifts to the curve
are the result of achieving reduced time-to-market by completing the investment
phase faster. The effect of this is earlier market introduction so that the
growth phase of the lifecycle can begin sooner. This is the second consideration
against which organization must frame their assessment of potential process
improvements.
Figure 2 shows a product's lifecycle curve that has been shifted both up and
to the left across all three phases of its lifecycle. The previous two
paragraphs discuss how different process improvements could directly cause these
shifts. What should also be considered when assessing potential process
improvements is how they may also indirectly affect the products lifecycle.
While much harder to quantify, these types of indirect effects can also be
represented on the product lifecycle curve. For example, faster market
introduction results not only in the ability to start generating profits sooner,
but potentially can lead to greater market penetration and competitiveness. This
would translate onto the lifecycle curve as a steeper angle across the growth
phase.
After assessing and identifying the potential areas of improvement in the
current PLM system, decisions must be made about which improvements to try and
achieve, and how they may be achieved. By using the framework of the product
lifecycle curve we have been able to visually assess the impact of the
improvements that may be strived for in order to determine which may have the
greatest impact. In fact it may even be possible to plug realistic values into
the graph to try and generate a concrete quantitative analysis of any particular
improvement's impact.
Implementing PLM Improvements
The final step in our exercise is to implement the desired improvements.
While many may be simple changes to the way things are currently done, others
may require investments in new technologies or systems. The extensive literature
provided by both PLM solution vendors and industry analysis can now be
utilized to assist in the identification of applicable tools or solutions. With
a solid understand of any desired improvements and their corresponding impact on
the profitability of the organization, it becomes much simpler to assess,
compare and justify the selection of any such offerings.
Summary
The preceding exercise discussed an effective approach to assessing an
organizations product lifecycle management system. It also prescribes the
methodology by which to identify and justify any potential changes to the
system. This approach can be used by any type of organization and it purposely
does not rely upon or suggest and any specific software solutions, tools or
approaches. It is applicable for organizations that already have spent millions
on PLM related investments, as well as those that may be first considering the
issue. Furthermore, it can used in an ongoing fashion to help organization
identify further room for improvement or to validate a current system
The Datastay Approach to PLM
Datastay's PLM Suite is a web based software solution that allows
organizations to improve various processes used to manage products through their
lifecycle. Offering the most flexible and easy to use product lifecycle
management suite available, Datastay's feature-rich PLM platform provides
several modules that offer specific solutions to common business problems across
the product lifecycle. Each module seamlessly integrates into a collaborative
work environment to provide all users with a single point of access and a common
interface across the PLM tools that they use.
With an internal drive for innovation and success that is applied to each
customer engagement, Datastay is able to provide manufacturers with solutions
that fit their needs, and result in both rapid and high return on investment. To
learn more about Datastay PLM and what it can do for you, please call us today
at 1-866-980-DATA or email our sales team at
sales@datastay.com
Datastay PLM " Capture More Value.