PLM is good for small business. If you can afford it…

PLM is good for small business. If you can afford it…

To speak about value of PLM is a tough job. I did it many time in my previous life – single point of truth, information management, streamline processes, innovation, yada, yada, yada… Recent Engineering.com article – PLM and Managing a Company’s IT  by Jon Gable of Adaptive Corp. is very good example of selling PLM values.

The idea is to apply PLM across the business and maximizing the value. PLM integrates various aspects of the business together by providing system to store data. A visionary workflow “from requirement to production” is the greatest PLM dream. PLM will manage information flow between people during the process of design, engineering and manufacturing. Then hope that end result is compliant and PLM saved money during the development.

All this can happen in an ideal product development world where processes are clarified, people are trained and everyone is aligned with the process and the tool. Then the magic will happen – engineer will refer to requirement when he will be making changes and coordinate ECO with manufacturing. I’ve seen that working in large companies. This is what people call an ideal PLM solution – every step is connected.

However, to achieve such level of orchestration is hard and requires lot of groundwork. The software should be installed and configured. Data should be imported and reflect the reality of organization and what all existing data silos connection and integration. The process should be prepared and to include all what ifs and else situations. It is not simple, but possible.

However, the reality of manufacturing organization is different –  lack of resources, overlapping roles, missing processes and stressful schedule. You can probably understand why for many organizations, PLM is mission impossible. Especially for small organizations – engineers and IT people will put few spreadsheets together and move forward.

My favorite part of Engineering.com article is about small businesses. Here is the passage:

Many small businesses may be unsure if they are ready for a comprehensive PLM solution. The price may be too high for an enterprise-level PLM solution. Also, a small firm may see capabilities they are unlikely to need.

But according to Gable, a PLM solution will actually save money in the long run. The alternative of purchasing individual pieces of software to address issues as they arise may eventually add up to cost more than a PLM package over time. So, while PLM may offer more than is required at the start, it could ease the organizational burden on a company as it grows.

To better understand which specific PLM package may be best for a given operation, however, and how exactly to integrate that package, it may be necessary to utilize the services of a third party that can properly guide the process. Gable pointed out that once a firm does begin using PLM to handle its overall product-to-market processes, that firm can recover the energy spent on IT issues and focus on product innovation.

So, the good news – PLM can bring value to small organization too. But the cost and complexity of such endeavor can be huge. The decision about PLM implementation won’t be easy and risk will be too high. And this is what I can see happening with many companies. The overall perception is that PLM implementation is getting more affordable, but it is still expensive in absolute numbers.

What is my conclusion? To make PLM happen, companies should invest money and resources first. It is hard and the size of the investment brings an additional risk level. This is current situation with PLM implementations in many small manufacturing companies. PLM system is still an expensive undertaking. The paradigm of orchestrating processes and data is just complex. So, the new paradigm is needed. The one that can help people organize process without forcing to spend six figures cost. Just my thoughts…

Best, Oleg

Want to learn more about PLM? Check out my new PLM Book website.

Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased

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  • Badari Panuganti

    This is a very interesting topic since it is a bit paradoxical:
    PLM does, as you rightly point out above and in your other excellent articles, require defining complex processes, training people, configuring software, managing organization change etc. Enterprise PLM systems typically pose these challenges to any organization implementing this. At the same time though, for smaller organizations, defining methodologies(processes on a system), bringing people onto a common page, training etc is not as difficult or complex. Also, it is probably the same person who owns mutlple domains(in PLM and in product development) and so decision making is easy.
    As an empirical evidence, SmarTeam was highly successful because on one side it provided in a small package all the needed solution elements and on the other side, just one person could define all key processes both from the system side and also the function (department) side.

  • beyondplm

    Badari, thank you for sharing your thoughts.. Indeed, SmarTeam in the past had this small footprint allowing to define processes by relatively small group of people. The only difference is that back 10-15 years ago when SmarTeam was used widely, most of the processes happened in a single organization located in 1-3 places. it is completely different now. Product is more complex, multiple locations, partners, contractors and other tools. The environment is getting much more complex to organize and manage. New distributed tools are needed to make it happen.