Product Lifecycle Management / PLM

By: Lukman Susanto - 2003

 

What is PLM.

During industrial age, many companies producing their products in large quantity to low the cost. They did not have a capable system to organise, plan or market their product systematically. Everything has been done through manual analysis and trend enforcement. The cost of launching a new product can be terribly high which may affect the company healthiness. In order to keep the cost low, they had to produce a large number of identical product. And the result ? Stocking cost, depreciation cost would later involved in their pricing. Yet, with such number, those companies must raced with each other’s competitors resulting a lower market price and losing their net profit.

Going through industrial age, making many business enterprises think twice to continue the same ways as they did to produce a product. Most of products produced during industrial age has been monitored the quality and after a while as they grew they were finally achieve the standard. This period of time has been a significant “lost” for both the business and customer as they have to go through all those experiment processes caused by inaccuracy of information flowing within all aspect of production. Huge demands of a high quality uniquely made products and the needs of providing a professional customer services for every product has enforce them to transform their traditional production approach to a better, reliable and yet unique production based on customer requests.

As Reed^#1 argued, “businesses are striving to respond to customer demands and to build customer loyalty. Enterprises must optimize product design and production cycles to reduce time to market and minimize product costs”.

This system requires involvement of all aspect of the product planning, production, as well as post-sales service.  With an integrated system covering the whole process, businesses are able to calculate precisely their cost benefit analysis which in turn will accelerate Return On Investment (ROI) process.

Claus^#2 stated, “the key success factor for companies is delivering superior products to market within extremely short timeframes. Highly accelerated product life cycles, giving them the flexibility to react quickly on short-term customer demand changes”.

PLM is a highly flexible technology specifically designed for this approach. And this is not just an option anymore for some companies as most of their competitors have implement this great, systematic, reliable and high precision system.

Benefit of PLM

Lists of PLM major benefits gathered from various sources

1. “Faster time to market as a result of shorter product cycle and lead times” ^#1,2,3,5
   It has been proven that PLM will dramatically reduce the time to market a product. In industrial age, product development life cycle was always be a linear processes; planning, feasibility analysis, user needs analysis, prototyping and development. Implementing PLM means integrating all processes above as a three dimensional concept^#6 – market oriented process.
   All components (designer, system analyst, user / client and engineer) will be involved in all development processes from the beginning in appropriate manner lined by PLM system. Reed^#1 noted, “as global enterprises have become more dependent on geographically dispersed teams and competitive pressures forces cost cutting, regularly scheduled face-to-face meetings have become less frequent”. Any issues, ideas or trend will be taken into account of product development.
2. “Better quality, more innovative products and services” ^#1,3,5
   Since a better communication between business and market / user has been performed, there are more genuine ideas about trend-setting new products or client needs arisen in every aspect of production which in turn will bring a better, more innovative product / services and influence enterprise’s decisions.
3. “Greater flexibility for mass customization and design to order products” ^#1,2
   Again, PLM will simplify mass customization process and design to order products since the production process will be based on functional transaction rather than every individual task.
4. “Improve comprehensiveness and relationships with customers, suppliers and business partners” ^#1,5,6,7
   This is a critical benefit of implementing PLM ensuring synchronised information flows between the business / enterprise, customers, suppliers and business partners. PLM will allow automatic ordering of raw material from supplier, responding unique requests from customers and exchange information from business partners.


5. “Reduction in prototyping (time and cost) of new products / product changes” ^#2,3,5
   Now, changed trends does not mean the end of the world for enterprises. As product life cycle timeframe has significantly reduced, developing a new product does not require time and cost as much as before PLM implementation. “.. earlier time to revenue with a new and enhanced products, and reductions in the time to locate and access needed information”, CIMData^#5.
6. “Fewer design flaws resulting in lower customer care costs and improve customer satisfaction” ^#1
   With collaboration support from all customer, supplier and many departments throughout the enterprise, they will be able to produce a near perfect product which satisfies all parties in development and marketing processes.
7. “Increased revenues as a result of better product acceptance in the marketplace” ^#1
   If a product produced based on market demand / request, it is more likely to be promptly accepted within the market. “PLM provides a better exchange of information and greater context within which to understand the impact of the design resulting a higher product quality and more easily manufactured designs”, added Reed^#1.
8. “Saving through the complete integration of engineering workflows” ^#3,5
   One centralised complete integrated system. PLM as part of ERP system allow integrated information within engineering processes. Supplier will automatically be warned by the system of current stock level. Customer requests will automatically be counted in product design. Standard level of product will be established by join evaluation with competitors.
9. “All people involved in product development have quick and secure access to current information through integrated environment” ^#1,6,7
   Appropriate level of access can be assigned to each individual component of development process which enable information exchange between all of them through integrated environment.
10. “Simplicity in tracking or sharing product data inside or outside of the enterprise” ^#7
    ”PLM is now being pitched as a pragmatic way for enterprises to include supplier, partners, and customer in product design and development”, stated Jennifer^#7.

SAP’s PLM Solution
Gathered from searchSAP and SAP website

After become a leader in overall ERP system, “SAP is attempting to take role with its new module PLM by concentrating on the collaborative aspects of product design”, stated Paul^#4. Specifically in this module, SAP will still have to work hard to enhance its features to compete with another well-known PLM products such as Agile, EDS, IBM or MatrixOne. mySAP PLM however, integrated with another module under SAP ERP system will ultimately be the leader of complete ERP solutions.

“mySAP PLM is the only e-business solution available today that enables collaborative engineering, custom product development, and project, asset, and quality management among multiple business partners”, stated SAP^#6.

With this system, all components of the development process including designers, suppliers, manufacturers and customers will be able to work together as a teamwork enabling the business to manage and control all product information^#8.

mySAP PLM enables business to: (Source: SAP^#8)

• Find the right information - All people involved in product development, both inside and outside the enterprise, have quick and secure access to current information.
• Involve business partners - Business partners can collaborate on the design, management, and maintenance of products and projects.
• Improve equipment and plant performance - Business get complete control over equipment planning, purchasing, operation, maintenance, and replacement.
• Leverage lessons learned - Referencing previous projects and predefined templates helps business identify the optimal mix of human and material resources.
• Manage and control changes - From customer requests to engineering changes against released production orders, change control is in business hands.

mySAP PLM can be implemented independently or together with another modules in SAP environment. This ability will certainly be a benefit for company that has been using another product for their ERP system. What more remarkable is “mySAP PLM is an open technology which can be integrated with industry standards such as HTML, XML, and WAP to ensure flexibility and interoperability”, added SAP^#9.
mySAP PLM Implementation issues

In many cases however, implementing mySAP PLM is not as easy as flipping hand, especially if company has not yet implementing any SAP R/3 system as part of their business system.

CIDEON Systemhaus AG^#10

When CIDEON wanted to implement SAP R/3 system as a system house, they were confronted with problem as they have to manage different access for its CAD documents between design engineer and various departments. After analysis and evaluation of the technical possibilities, they decided to combine the documents in the company’s SAP R/3 system using the COMPASS EDM system. For design engineers, COMPASS manages the meta data of the articles and the associated documents and locate the necessary information in the SAP-PLM system.

BRADY Label and Sign Maker^#11

BRADY has invested a huge amount of money for SAP R/3 system but this company declined to use SAP's products in two key areas: product design (PLM) and customer relationship management (CRM). The reason was very simple, SAP solutions for both areas totally different than their existing system. “SAP didn't automatically assign leads to salespeople”, added BRADY^#11. They found that SAP PLM is very inflexible i.e. “SAP would not allow Brady to use its own product development templates without extensive customization and the module doesn't handle step-by-step process automation very well. Brady wanted a system that quickly walks an engineer through a list of product development tasks on screen” ^#11.

 

References

#1        Reed Hornberger, Vice President of Horizontal Solutions, Sun Microsystems
            http://www.sun.com/solutions/third-party/cpc/cpc_02_whycpcnow.html

#2        Clause Heinrich, Executive Board Member of SAP AG
            http://www.tecnomatix.com/showpage.asp?b=1&page=615

#3        Martyn Day, Editor of CADServer
            http://www.tenlinks.com/news/articles/cadserver/plm.htm

#4        Paul Taylor, Reporter of the451.com, special to searchSAP
            http://searchsap.techtarget.com/originalContent/0,289142,sid21_gci750192,00.html

#5        CIMData Report, PLM “Empowering the Future of Business

#6        mySAP Product Lifecycle Management
            http://www.sap.com/solutions/plm/

#7        Jennifer Jones, Examining PLM’s benefits – Portfolio Management Forum
            http://www.portfoliomgt.org/read.asp?ItemID=1189

#8        mySAP Product Lifecycle Management – Business Benefits
            http://www.sap.com/solutions/plm/businessbenefits.asp

#9        mySAP Product Lifecycle Management – Key Capabilities
            http://www.sap.com/solutions/plm/keycapabilities/

#10     CIDEON Systemhaus AG
            http://www.cideon-systems.de/press/fachart/english/bhs.html

#11     Randy Barrett, SAP: Not Always the Answer
            http://www.baselinemag.com/article2/0,3959,12023,00.asp