Daimler PLM Dilemma – PDM First

Daimler PLM Dilemma – PDM First

This week Siemens PLM announced – “Daimler AG has selected CAD Software from Siemens as their standard for their worldwide vehicle development“. The event of such size is notable in the PLM space and generated a significant amount of buzz and publications. Despite the fact most of publications talked about what was a decision base for Daimler AG, my favorite quote was from Graphic Speak article:

All the MCAD/PLM vendors want the major automotive manufacturers as their customers, for both the bragging rights and the additional sales to the supply chain. But automotive is not the big story in the next few years for PLM. Recently PTC disclosed to business analysts information on their current competitive campaigns. They listed the number of targeted customers by existing PLM platforms. “In-house or home-grown” was in second place, with Siemens PLM the only vendor with more installations in the PTC cross-hairs. Real market growth is not coming from a few large vendors who have been using PLM for years, but from the thousands of smaller manufacturers who will leap-frog from a “PLM system” based on AutoCAD, Excel, email, and Windows Explorer to state-of-the-art engineering IT. This larger market is wide-open.

CAD and PDM History

For many years, CAD system was a leading software component in the overall strategy related to the design and engineering world. The decision about CAD was always one that set up the agenda to work with a vendor. At the same time, PDM was an appendix to a CAD kingdom. PDM integration with CAD system was considered as strategically important. The ability of PDM to be connected and used together with CAD environment was one of the key decision points for many companies. The importance of CAD (design) data was absolutely undoubted.

New Horizons of Product Data

In my view, last 10 years, introduced some changes in the priorities of engineering IT. The importance of “integrated solutions” raised significantly. The driver behind that is the understanding of manufacturing companies about how to control cost. The importance of product data management beyond CAD and design became clear for large OEMs and even smaller companies. The amount of product data outside of design environment outgrows the amount of CAD data. The introduction of lightweight data formats like JT, XVL and others decreased the dependencies of people outside of the design department on CAD data. Today, PDM system is a platform used to support expanded product data scope. Most of these systems are heavily customized. In includes the complication of CAD-PDM integration. However, the importance of the global product data management is growing.

PLM Platforms and Cost of Change

CAD/PLM vendors noticed the importance of vertical integration in the beginning of 2000s. This factor led them to decisions about the future platform strategies. All PLM vendors spent significant resources over the past decade to modernize and re-architecture their platforms – TeamCenter Unified, Enovia V6, Windchill. Lots of money was spent to introduce modern backbones, expanded portfolios and integration strategies. However, the reality in the field is heterogeneous software landscape. It leads to a question of “change cost” as the most important element of the future PLM decision.

What is my conclusion? Cost is important. In 2000s , the decision CAD vs. PDM was almost always CAD +  any PDM Integration. Which means – CAD First. We learned something new this week. PDM and Data Management becomes more and more important. The cost of global product data platform change and potential IT disruption is much bigger compared to the cost switching to another CAD. So, in 2010s, the math CAD <or> PDM is different and the answer is probably PDM change + IT cost. Which means PDM and product data backbone first. This is an important difference, which will have an implication on engineering and manufacturing software decisions of the current decade. PDM system position can give some advantages in the PLM giant wars for large automotive and aerospace OEM accounts. Questions about cost of change and untapped PLM markets are more interesting, in my view.

Best, Oleg

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  • Manuel Joseph

    That is correct. PDM is now the priority. I think, no one is worrying about cad because of new technologies avalable in them such as synchronous technology, creo or Catia’s new v6. It’s no become easy to exchange in formation between cad systems. In PDM, it’s not possible thus the talk about cost and complexities to move from a system to another.
    What do you think?

  • Ramesh Sugavanam

    Product Development is an enterprise function and engineering is one component of it. The key to enabling this is the integrated enterprise product data and CAD data is a sub-set of that product data. CAD data integration plays an important role in ensuring the right information that describes a part / item or material at any given time is accessible to all parties engaged in product development within and outside the enterprise, on and off the system. Furthermore, as you mentioned heterogeneous CAD data is a realty that has to be dealt with especially when product development spreads across multiple organizational entities in a distributed and extended value chain. There are many solutions and options to arrive at the optimal product information flow and product development processes across the extended enterprise and multiple disciplines but is there a solution that would be addressed by the packaged PLM applications without customization? Cost will be an important driver in any IT implementation including PDM / PLM. In addition to that driving optimizations and traceability in information flow and reuse without customizing the of-the-shelf-life applications is emerging as a key goal in many PLM implementations. In my opinion PLM software applications have still ways to go to deliver to those needs without customization and thereby reduce the total cost of ownership.

  • beyondplm

    Manuel, Thank you for your comment! I agree. I think, problem with PDM or product data outside of CAD environment are much more complicated and cost to solve them is higher today. Best, Oleg

  • beyondplm

    Ramesh, thank you for such detailed insight. I agree with you. Lots of solutions are available today in “PLM space”. However, the cost of PLM solutions needs to be different. The question of customization is one of the most important. PLM vendors have tried to focus on “packaged”, “OOTB”, “Industry” solutions during the last years. The results is doubtable, in my view. PLM customizations are killing customers and lead to increased cost of PLM solutions. You can take a look on some of my previous posts – http://plmtwine.com/2010/02/26/is-plm-customization-a-data-management-titanic/

    Best, Oleg

  • Orleth

    Hallo Oleg
    I do not think that it is cheaper to change CAD for Daimler. I think they still have no chance to make a change from Teamcenter Enterprise to Teamcenter UA. There is no flexibility to create Object structures in the way they need it. In my opinion it would be easier to make a soft migration to the new CAD by using first a new PLM-Plattform. The start of new CAD projects would be the right time to work with the new cad system. Small changes could be done with the old System and older ending projects could run out smothly. It could last years to end the old CAD. But the costs could be worth to make it soft. In the case with Siemens an Daimler their is a good chance to change long living running projects because of the abillity of the Sychronous technology.But there is still more work to do than making a change with a new PLM like Aras.
    Siemens still has no chance with their new SOA orientet Teamcenter strategie and the Teamcenter is a product which isn’t made new. Their is software from different partners working. There is no chance to make an installation from internet. There is a bad ability with a Internet client. There isn’t a cloud ready PLM and there is a strategie to have lizenzfee of everything. I know from friends, that there is no chance for Daimler to make the change to a newer Teamcenter now.

  • beyondplm

    Orleth, thanks for your insight. Let assume you are right. What was behind the Daimler decision to move from CATIA to NX? Best, Oleg

  • Oliver Grüner

    I guess this one has probably all dimensions, except religion plays no role. Certainly, the Daimler decision must have been supported by a strong business case.
    However, I do believe that Daimler has primarily done something else here – they have sent a clear message to Dassault saying “you are not going to mandate changes to our processes plus to or dictate major changes to our architecture!”. Process, commercial aspects, technology, number of integrations, brainwash users and teach them on new interfaces – all this because a partner decided how the future looks like.
    Not to forget that the supply base must have the capacity and be willing to follow, too. Well, this is quite an assumption.
    I guess it is appropriate that an upgrade would require some replacements or adjustments to internal inftastructure or procedures. But in this particular case, Daimler had the choice of paying the bill for something they neither wanted nor requested, or to decide to pay for something else based on their own decision.
    They have decided for option 2. Let us see how many will follow.
    Cheers
    Oliver

  • beyondplm

    Oliver, thank you for your comments and insight! I understand the challenge of changing PDM infrastructure in order to have ENOVIA V6 implemented in Daimler is the main reasons of decision towards NX. For many years, CAD as a design environment was considered as the application defining engineering IT. However, today, it seems to me CAD conversion problems cost less than overall data/IT infra. The change towards V6 on a PDM side will cost more and significantly impact the data management infrastructure. So, Daimler decided NX. You asked the most important question- how many will follow? The CATIA/NX is one of the most often used configurations in auto-industry today. Best, Oleg

  • Raymond Meeks

    The Daimler anouncement was based on two strong willed companies have differnet views of the future. Daimler has invested about $2 billion into their high Customized PDM enterprise tool. None of the PLM Vendors today have a tool that can replace it. The same with Ford’s and GM’s BOM home grown solutions. DS has changed the architecture of V6 to integrate all product development tools including PDM. This impacts an entire business in the event of change. Daimler decided that the risk and cost was not worth and decided to opt for a company of “Yes, Customer, whatever you say customer” and old technology. DS is betting on the cloud and Siemens is speaking out both sides of their mouth claiming they will have it too, but it is just a dream.

    BTW, Daimler said the exact same thing about V5 to DS. Also, they just expanded and extended the V5 contract with DS and said that CATIA will still be used in areas that UG does not have a competitive solution. So that excludes all the BiW, Knowledge driven templates, Manufacturing, CAE, etc.

    The annoucement was nothing more than the middle finger to DS. We will see the outcome. There is a major risk to DS and its V6 solution. It may be ahead of its time and this bad press may be another stumbling block into its adoption. Only time will tell.

  • beyondplm

    Raymond, thanks for your comment! The announcement presented incompatibility between Daimler investment in PDM and DS V6 platform. Time will show what actions will be taken on both sides, and results will influence both Siemens and DS strategies. Best, Oleg

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