Posts tagged as:

Manufacturing

henry-ford-assembly-line

If you are in PLM business, I’m sure you are familiar with term called “best practices”. The term is widely used to explain how PLM system can be deployed, how to manage data and how to organize and optimize product development processes. So, where are roots of PLM best practices and why PLM vendors like them so much? Remember, the original PLM (and even PDM) systems started as a glorified data management toolkit with elements of CAD and ERP integrations. To get such system in product was very expensive and it required lot of time and implementation services. The reason is simple – every manufacturing company is different. It takes time for service provider to understand company landscape, processes, data requirements, legacy systems and suggest a solution. Put heavy price tag next to this activity. You can think about this process as something similar to organizing mass production assembly line. It is costly and complicated. Once you’ve get it done, your objective will be simple – run it to the largest possible quantity without re-configuration (which will cost you money, again). The same happened with first large PLM implementations.

The invention of “best practices” helped to figure out how to move from heavy and complicated PLM assembly line to more configurable and flexible mechanisms of PLM deployment. Technologically, toolkit approach was a underline product foundation. PLM companies and especially service providers and PLM consultants liked the approach. To create OOTB (out-of-the-box) pre-configured environments was relatively easy based on the practices gathered from existing large customers. However, to get it to the field and implement wasn’t so simple. Marketing and sales used OOTB environments to demonstrate and make sales. However, implementations and fine tuning was failing to apply it after that. The implementation devil was in details and service teams were required to bring to production. Similar to manufacturing mass production environment, customizing and services was a straightforward answer to solve the problem of product and requirement diversity.

As we know from the history of manufacturing, mass customization won and left mass production system in a dust. What was clear innovation 100 years ago was replaced by new forms of manufacturing, customization and flexible manufacturing units. I believe this is still very hot topic in the industry and every manufacturing company. The diversity of product requirements is skyrocketing, product lifecycle is getting even shorter. To produce PLM system that will fit this type of environment is probably one of the most important innovation that might happen in engineering and manufacturing software technologies these days.

What is my conclusion? I think software companies can learn something from the history of manufacturing companies. The move from from mass product to mass customization is one of them. PLM software made a turn from from complicated preconfigured assembly lines to expensive data management toolkits that require services. Manufacturing is getting different these days. Next step can be hardly achieved by pure technology or process organization. My hunch it is going to be a hybrid of new data management technologies empowered by crowdsourcing and customer innovation. Just my thoughts…

Best, Oleg

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How not to miss PLM future?

by Oleg on March 23, 2014 · 6 comments

plm-future-strategy

The world around us is very disruptive these days. Nothing stands still. You cannot stop innovation and progress. Engineering and manufacturing software is not fastest changing domains. It explained by slow changing process, high level of complexity in product development and significant capital investment manufacturing companies made in existing PLM and other enterprise software. Nevertheless, to think PLM will stand still is probably a mistake that potentially can happen in the community PLM vendors and experts.

I’ve been reading Google CEO Larry Page Spoke At TED article. Unfortunately, TED didn’t stream his talk, so everything based on twitter stream. My favorite passage was related to the Page’s explanation about why companies are failing. Here is the quote:

“The main thing that has caused companies to fail, in my view, is that they missed the future,” Page said.

larry-page-why-companies-miss-future

The article made me think about what potential “future” that PLM companies can miss today in our fast moving engineering and manufacturing software ecosystem. So, I decided to look into my ‘crystal ball’ today and pickup top 3 things that potentially can be missed by PLM vendors:

1- Downturn in premium price of PLM software

The price of PLM software is a challenging factor. Which is true, in general, about enterprise software. I think, customers are worrying about what will be total cost of ownership for PLM software. Result – huge interest to develop ‘predictable business models’, which include scalable parameters identifying how to pay for PLM software. The strategic mistake that can be done by PLM vendors is to miss the point where new TCO models will be conflicting with existing business and revenue models.

2- Switch from data ownership to openness and data share business values

Openness is another heavily discussed topic in engineering software. The demand of customers is not be locked on a specific vendor. The situation when company is using software from different vendors is not rare and if we include supply chain scenarios, openness requirements is probably one of the most critical. However, most of business models today are fundamentally assuming customer lock on a particular type of software, file types, databases, etc. Technology and business disruption in this space can remove lock and become a surprising factor for existing vendors.

3- The importance of vertical integration.

Integration of enterprise business and information systems becomes more and more important. Manufacturing and production environment is moving towards digital forms of mass customization. The involvement of engineers into the process of manufacturing is getting more tight. The future cost saving is in even deeper optimization between product design and manufacturing. By missing the importance of these aspects existing vendors can be outperformed by modern cloud (and not only) vendors and newcomers.

What is my conclusion? Some people calling what happens these days in manufacturing as the next industrial revolution. I don’t want to put specific stickers. Nevertheless, engineering and manufacturing business is getting even more competitive. Internet, cloud, diverse competition, cost pressure and new business models – this is only short list of disruptive factors that will be very important in the future of digital manufacturing. Just my thoughts…

Best, Oleg

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Amazon is an absolutely marketshare leader in cloud computing. Because “cloud” is such a big and vague word these days, we must clarify and say “public cloud”. So, you may think for most of us, cloud is equal to Amazon. AWS EC2 allows us to spin new servers quickly and provide great services to everybody interested in development of SaaS packages.

Not so fast… Questions are coming too. I can see two major ones – cost and strategy. I’ve been posted Cloud PLM and battle for cost recently. Amazon public cloud is coming with challenging cost sticker to some of us. Strategy question is connected to many factors – PLM PaaS opportunity, security and storage alternatives. Finally, with huge respect to Amazon, I’m not sure how many CAD / PLM companies are interested in catholic marriage between cloud PLM platforms and AWS. To provide PLM solution independent from Amazon IaaS and to control data storage is  an interesting option for many vendors and partners. How to do so? I think, this is part of strategy for every PLM vendor these days looking how to develop long term relationships with manufacturing OEMs and suppliers.

My attention caught Gigaom article – Want to beat Amazon in the cloud? Here are 5 tips. Read the article. It provides some interesting opportunities how to compete AWS. It raises the point that in 2014 AWS became an elastic service commodity competing on cost. This is an interesting quote explaining that -

But fast-forward to 2014: there are dozens of IaaS providers offering similar capabilities. The selling points — like self-service, zero CAPEX and elasticity — that once made the cloud look exciting are not as appealing anymore, and they are no longer the differentiating factors. In the current context, selling cloud for its self-service capabilities is similar to Microsoft trying to sell the latest version of Windows only for its graphical interface.

Cost is important. However, for enterprise, value is often even more important. Therefore, speaking from the perspective of PLM players, my favorite passage is related to how to support scale-up and shared storage:

AWS’s philosophy of throwing more VMs at an application is not ideal in many scenarios. It might work wonders for marketing websites and gaming applications but not for enterprise workloads. Not every customer use case is designed to run on a fleet of servers in a scale-out mode. Provide a mechanism to add additional cores to the CPU, more RAM and storage to the VM involving minimal downtime. The other feature that’s been on the wish list of AWS customers for a long time is shared storage. It’s painful to setup a DB cluster with automatic failover without shared storage.

Here is my point. I think, CAD and PLM vendors will have to discover how to provide a balanced and scalable cloud platform. This platform will have to answer on questions how to scale from the solution for small manufacturers and mid-size companies to enterprise OEMs and Tier 1 suppliers. The border between these segments is vague. It is hard to develop two distinct PLM offerings and support two separate platforms. It was hard in the past on premise software and it is even more complicated on the cloud.

What is my conclusion?  PLM providers will have to discover how to grow up from AWS-based offering and develop scalable cloud PLM platforms. It must include diverse options for data storage as well as computing power. So, to beat Amazon can be not such a dream option for PLM vendors like it looks from the beginning. Just my thoughts…

Best, Oleg

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PLM, Mass Customization and Ugly BOM Vertical Integration

March 19, 2014

A car can be any color as long as it is black. This famous Henry Ford quote speaks about how manufacturing handled customization in the past. That was the era of mass production. The idea of limited customization options combined with high level of standardization and high volumes of batch production allowed to decrease cost and […]

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PLM and 25 years of Internet

March 13, 2014

It has been 25 years of Internet anniversary yesterday. Lots of article covering this event were flown around earlier this week. The Independent article – 25 years of the World Wide Web: Tim Berners-Lee explains how it all began covers the story together with world wide web inventor Tim Berners-Lee. Even we all know about how […]

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JIT’s impact on PLM and BOM management

February 21, 2014

JIT (Just in Time) is a well-known approach in manufacturing industry. In a nutshell, JIT is a production strategy to reduce inventory and associated cost. The philosophy of JIT is related to processing and transactions of inventories, which adds additional cost. By removal (or reducing) of inventories, you can reduce a total cost of production. You […]

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PLM Role in Different Manufacturing Environments

February 9, 2014

One thing doesn’t fit all in engineering and manufacturing. Every manufacturing company is trying to innovate and differentiate the way they design and build their products. It comes in variety of ways and PLM system can play different roles depends on the type of manufacturing. PLM vendors are trying to deliver software tailored to a […]

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The Role of PLM in Hollow Corporations

February 5, 2014

Do you know what means “hollow corporation”? My readers from UK and Europe should be familiar with the term. This is a model for a company that outsource majority of their production activity. A compatible U.S. buzzword is “virtual business”. There are few references defining what is “hollow corporation”. Business glossary here defines it as a business […]

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PLM: Manufacturing Big Data Ngram Dream?

February 3, 2014

My attention was caught this weekend by thedailybeast article with funny title – Why Big Data Doesn’t Live up to the Hype. I read the article and on my long travel during the weekend skimmed over the book  Uncharted: Big Data as a Lens on Human Culture by Erez Aiden and Jean-Baptiste Michel mentioned in this […]

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PLM and Magic of MBOM planning

January 21, 2014

Manufacturing BOM (MBOM) is an interesting topic. After all design and engineering operation,  MBOM defines how product is going to be actually manufactured. While most of PLM / ERP debates about MBOM are going around “who owns what”, the most fascinating part that I found in MBOM is related to the nature of manufacturing planning. The […]

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