The meaning of lifecycle

PLM was invented by IBM/Dassault in 2000, yet some vendors claim to have been in the business for the last eight years. Charles Clarke tidies up the definition of this problematic acronym.

The CAD industry is so keen on marketing mantras that most sane engineers reckon CAD marketing people come from a different planet, or at the very least inhabit a parallel universe.

Back in the 1980s the mantra was ‘the factory with a future’ (prizes for anyone who can guess the vendor). we quickly moved on to ‘the paperless factory’, through ‘concurrent engineering’, ‘conceptual engineering’ and ‘collaborative engineering’ to where we are today with ‘product lifecycle management’ (PLM).

We banged on about ‘top down design’, ‘bottom up design’, ‘design synthesis’ and now we have ‘horizontal modelling’. It’s no wonder the poor customer is confused and running scared.

Real engineers tend to get interested in the CAD du jour about every three to five years depending on the technology refreshment cycle.

Today they are being hit from all sides with the great news about PLM, but the potential customer gets a different story depending on who he talks to first. The resulting system can be significantly different depending on whether it’s being driven by a need for CAD/CAM, PDM (product data management) or ERP (enterprise resource planning).

Such is the popularity of the PLM acronym that a ‘PLM software’ search on Google gets you 10,700 hits. Thankfully the majority of the page one hits are from IBM/Dassault and UGS, but there are many also-rans.

My interest in this notion came from the recent claim by a prominent PDM vendor that it had been in the PLM business for the last eight years and as we all know PLM was only invented by IBM/Dassault in 2000.

Because PLM is the fashionable acronym of the moment for engineering and manufacturing software companies, many peripheral organisations are jumping on the bandwagon (Microsoft will be offering PLM next). At best this confuses the customer – when most don’t even know what PLM stands for, let alone what it can do for them – and at worst it is skewing the concept into the general IT arena.

Some would argue that PLM is only directly relevant to maybe 1,000 firms worldwide in the automotive/ aerospace sectors where traceability is required from cradle to grave; this is real product lifecycle management.

It is more recognisable for normal mortals outside the aerospace/defence sector when you consider the car from concept to scrapping.

Today the green lobby has such an influence on the automotive industry that the use of natural fibres and recycling and disposal considerations have a real influence on design. And every company, large or small, in the supply chain has its own subset of requirements of PLM technology.

During the past five years, businesses have invested serious money in initiatives aimed at improving operational efficiencies and productivity. While considerable improvement has been made in lowering costs (primarily indirect costs), operational efficiency and productivity are not the key challenges facing business today.

Instead, finding ways to increase revenues and to a lesser extent, reduce direct costs has taken centre stage. However, there is a huge disconnect in the amount and focus of IT spending today and its linkage to the key business issues.

Almost 80 percent of IT spending in durable goods industries is targeted at controlling indirect costs such as order, inventory and supply chain management. Only 20 per cent is targeted at revenue enhancement and direct cost control. Much of this imbalance is due to the mistaken idea that operational systems such as ERP, SCM and CRM can impact the revenue and direct cost areas, positively.

Revenue and direct costs are directly proportional to product competitiveness which is a function of design and hence the effectiveness of CAD/PLM.

PLM enables continuous product innovation. The most efficient operat-ional systems will make no difference to revenues and direct cost if the products being developed are not competitive. Operational systems can only provide very limited revenue enhancement. The key to lowering direct costs is to address the real source of the product cost in the first instance – the early decisions that are made on how a product should be developed. In many capital projects about 85 per cent of a product’s direct cost is locked in after only 15 per cent of the development work has been done.

Decisions made early in the process have the greatest impact on direct cost. Issues pertaining to modular design, component reuse, and outsourcing will have a much more far-reaching and significant impact on product costs than inventory management and supplier logistics programmes.

PLM is about building on a core set of best-of-breed applications. These provide a secure foundation and technologies to enable collaboration, and extend those capabilities through solutions integration. The other part of the offering is middleware and consulting – only major vendors like EDS and IBM/Dassault and their partners have this kind of experience.

All vendors offering any part of the PLM solution have the right to refer to themselves as PLM vendors in much the same way as any company offering drafting can refer to themselves as a CAD vendor. Companies like IBM/ Dassault and EDS with arguably a more legitimate claim on the PLM high ground, offer more of the PLM solution. Fortunately these vendors provide a modular approach so for all sizes of company and all types of user ‘you pays your money and takes your choice.’

PLM is an IT business strategy the goal of which is to transform intellectual property (IP) from ideas to profits. The business mission of PLM is to enhance and accelerate innovation by developing and delivering products that exceed customer expectations. The fundamental PLM system focus requires the construction of a rich IP asset management system where product knowledge is completely accessible to, and interoperable with, all users and applications.

Far from just being about traceability PLM is relevant to every company interested in continuous innovation, minimising investment and maximising revenue at every stage of the product lifecycle.

<b>A reader replies</b>

Sir:

I read Charles Clarke’s Design Engineering article, ‘The meaning of lifecycle’, with interest.

However I feel a number of points need to be clarified. First, Charles says some it could be argued that the benefits of Product Lifecycle Management (PLM) are only relevant to maybe 1000 firms worldwide within the automotive/aerospace sectors, where traceability is required from cradle to grave. It is of course true that PLM, with its proven record for tracking parts from initial design to product demise, is of invaluable benefit to these sectors. However, it is important to recognise that there are many other, often considerably smaller, vertical sectors within manufacturing and engineering that can, and are, benefiting from such technology. Within my own company’s customer portfolio there are major players within the pulp and paper, pharmaceutical supply, and machine parts industries, all actively using our PLM solution d2order to great effect.

Secondly, I feel it important to point out that the term PLM was established several years before 2000 when the concept and technology was being championed by IBM/Dassault, as cited by Charles in his article. My professional roots are in CAD CAM and stretch back more years than I care to recollect. I certainly remember the term PLM being actively spoken about and developed as far back as the mid ’90s. It is true that the analysts and vendors have often lacked any consensus as to what true PLM really stands for in terms of concept and functionality. However, I have always taken the stance that the term speaks for itself – it is about the whole lifecycle of a product from conception to disposal. This is certainly the bedrock behind our core product d2order.

Charles rightly points out that, today, the green lobby has such an influence on the automotive industry that the use of natural fibres and recycling and disposal considerations can have a real influence on design. And this can only be a good thing from an environmental perspective. And with the WEEE directive on the horizon, it is beneficial to embrace PLM in order to keep a track of all goods produced and every original materials/parts supplier in order to remain on the right side of regulatory compliance.

I concur wholeheartedly with Charles’ passing comment on PLM as an IT business strategy that aims to transform intellectual property (IP) from ideas to profits. As he points out; “The fundamental PLM system focus requires the construction of a rich IP asset management system where product knowledge is completely accessible to, and interoperable with, all users and applications.”

Indeed, PLM is relevant to any company that wishes to push for continuous innovation, minimal investment and maximum revenue at every stage of the product lifecycle. PLM is not just about traceability, although it excels in this regard. In summary, PLM should be a serious consideration not just for the automotive and aerospace big boys, but for any business that wants to ensure total traceability and integration within the organisation and, as is becoming more and more the case, throughout its customer and supplier network.

Bob Clements

Managing Director

in2grate

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