Relative Value vs. Absolute Value of PLM

I was reading an amazing post by Larry Cheng: Relative Value vs. Absolute Value. This made me think  about how we are developing PLM today. It seems like we are doing this with very absolute values: PLM allows you to cut costs, optimize processes, increase profits, etc. From the technology standpoint, PLM allows you to manage product data in a traceable way, handle changes etc.

What is the problem? I think that PLM sticks to the ecosystem of “Enterprise Software”. We tried to put it into this ecosystem in the first place, so this is actually what created the problem in the first place. Enterprise software is perceived as expensive with costly implementations and ROI that is not simple. So, with PLM being perceived as “the most expensive dish on the table” (sorry, Larry’s post put me into a food mode):)… I think we need to find a new way for PLM to get into an organization and we need to make sure to focus on PLM values in relative way. So, how can you do this?

Here are a few of my ideas that I wanted to share with you:

  1. Take PLM out of “Enterprise Software bundle” and position it as a productivity software for product development
  2. Combine PLM capabilities with Office Tools – approach IT and business directly. In today’s economy, many companies are struggling with the cost of enterprise software implementation and are looking for good alternatives
  3. Don’t sell “process orientation” – focus on “task completion” and management of the work that needs to be done.

I imagine that you might find this a bit strange and the way that we think of PLM in terms of ‘Out of The Box’, but maybe it’s time to change?

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  • Oleg,

    Great post on the Relative vs. Absolute value. I am currently mid-implementation at a customer site, and we are using the PDM tool to keep track of tasks assignment and completion through workflow notifications and logic assignment. Still have a ways to go, but it is promising to provide some relative value that is easy to see the ROI on.

  • Daniel, thanks for your comment! Welcome to plmtwine discussion… You are absolutely right. It’s very important to provide value compared to what people/organization is doing today… Best, Oleg

  • Bhushan

    Hi Oleg,
    Good Thought >> Take PLM out of “Enterprise Software bundle”. I agree to that.
    Recently i gone through some Books & Article on PLM- Every article was talking about the Absolute Values of PLM.For PLM Growth >> We need to talk in Relative Terms.
    – Thanks for putting up the Thought.

  • Bhushan, Thanks! Your got my point. In my view, PLM behaves like single entity in universe. In fact, I see many competitive situation where competitors are not running to say “I’m PLM too”… Best, Oleg.

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  • Johan

    Oleg,

    With regards to the observations and comments made they are very true. I have tried to implement PDM with a CAD program but the connection to the ERP was horrible; hence it died an early death. The integration needs to be seamless. One point I would like to mention is that when PLM is designed to address the Life Cycle of the product, add-on and thinking about it as a project management tool (long term though). So the feedback loop is arranged via the same methods used for example, MS Projects. I have found also that Costs related to poor assembly, production, design is not registered very well within organizations. This cost structure is vital to learn from all costs related to running a company and product lines and have the desire to improve itself every day, every product.

  • Johan, thanks for your comments! Actually what I learn from what you said is that PLM have poor connection to organization and therefore at high risk to fail… is it correct conclusion? Regards, Oleg

  • Johan

    Hello Oreg,
    Yes I believe this is the core of it.

    PLM like any other part of the chain, the weakest link fails first. Whether this failing is due to a poor human interface, bad management of Data, incompatibility towards other programs that are used and ran in the company, it remains critical. When implemented with care I would assume it will generate benefits quickly and for long periods of time and for many products.
    What data is used and put into the system, how it is used how much weight is given to the specific data (by different departments) I think is business, market and organizational driven. Adaptation from the organization (people ) is crucial!
    Undoubtedly the benefits are there.

  • Johan, in my view PLM is weakest link in enterprise chain is because of 1/lots dependencies on organization’s system; 2/lots of dependencies on people; 3/lots of dependencies on business processes. All these together make PLM the weakest link in enterprise software chain… great discussion! Best regard, Oleg

  • johan

    Oleg, I understand your point of view and I think that there are possible ways around these obstacles.
    1: as you mention, dependencies but when you focus on the output of PLM and not its integration (hence to immediately face the limitations of the software you want to integrate with)you minimize that objection.
    2: People, yes, make it simple (but not simpler) easy and logic. Sometime use of words-phrases is what stops people from wanting to implement it because it doesn’t resonate with their thinking process and thus it is perceived as difficult or ‘not functional’
    3: see answer 1 and in addition, allow tailoring of the software to a certain degree.
    In my opinion; Which Management does not want to make (extra) invisible costs visible these days? Product Life-Cycle Management has it all and maybe it should be called Product Life-Cycle Monitoring instead of management. Really, can you manage a Product Life-Cycle? or can you at best monitor it? The advantaged is that the data out of the Monitoring process will be the basis for future ideas, designs, production-assembly, re-use, etc. Shorter time to Market, reduced costs for design-manufacturing, better products, reduced use of natural resources due to smart design etc.
    When a product design is initiated it starts with the form-document which lists all the requirements. With perimeters like, target costs, functionality, life time, serviceability, necessary compatibilities, packaging, communication to the market-users etc. In my opinion what PLM can-should provide us with the results of perimeters met or not and gives a structure to retrieve why. Looking only at ‘how much did it cost to design-build and market it and how much do we earn’ is too short sighted in my opinion. Looking at a long term we need to know how realistic and close we are to the initial ideas and perimeters that were set out, why are we off and how do we implement this to future products and or designs. This feedback loop not only can but WILL generate more profits and faster.
    Should PLM find itself at the border of different departments, R&D and Engineering, Financial department, maintenance and service groups and possibly the marketing sales group?
    All of these departments deal with the product and its Life-Cycle.

    johan.

  • Johan, great point. I liked what you cal monitoring vs. management. I think for many customers it can simplify implementation cycle. One of the things most of PLM implementation is trying to achieve is connection between initial requirements and result (so called closed loop). If we will have this closed loop, we can future build decision making scenarios and/or analyzes what need to be improved in product lifecycle. I think, most of so-called “global PLMs” are struggling to close the loop. Depends on organization, people, technologies landscape in organization, skills, politics and many other factors they can be successful in closing PLM-loop inside of organization and value chain.
    Best, Oleg.

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