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PLM

PLM-for-SME

PLM is in the focus on many companies these days. Questions how to improve processes, optimize cost and improve quality are important and PLM vendors are laser focus on that. But… with one small clarification . It works for large manufacturing companies. To transform business processes is the way PLM succeeded to deliver ROI and demonstrate clear value. It is hard to find large manufacturing company these days that is not implementing  kind of PLM. You can see multiple options – complete home made PLM system developed by IT department (usually based on some of available PLM toolkits), combination of older PDM/PLM system with some additional development and complete solutions from leading PLM companies.

However, when it comes to small manufacturing companies, the situation is very different. It is not rare to face the question “what is PLM and why do we need it?” as well as to see customers confused about the difference between PDM and PLM. The last one is a big misleading factor in PLM marketing. Few weeks ago I posted Why PLM stuck in PDM? The article raised lots of comments and opinions. The question I want to ask today is about why PLM software and strategies failed to deliver value to small manufacturing companies or so called SME (small and medium enterprises).

Speak to software vendors about PLM and SME and you will learn about top three PLM inhibitors – (1) limited financial resources, (2) lack of IT support and (3) diverse set of requirements. While PLM competition for large OEMs is getting stronger, SME becomes a very attractive opportunity for PLM to growth. It is an attractive and turbulent market with lots of innovative companies. Together with growing number of smaller suppliers. To win this market is a very interesting opportunity with significant growth potential.

SME remains a very challenging place for PLM vendors. The question about how to serve SME with PLM solutions is open for a long time. Large PLM vendors tried to serve these customers by scaling down their large PLM product suites and developing special packaged solutions. Newcomers tried to provide special applications for SME. Open source, SaaS, Out-of-the-box (OOTB) applications… After all, SME PLM marketshare remains very fragmented with lot of opportunities and no mainstream solution.

It made me think about some problems in existing PLM strategies for SME. I can see some similarity with mass customization trend in manufacturing. The time when car supposed to be “Ford” and “black” is over. Automotive and other manufacturers explored new opportunities to customize their solution to satisfy turbulent market with diverse set of requirements. So, focus on the niche markets and individual customer is important. In the past, it was a strategy Japanese firms captured marketshare in U.S. PLM vendors are trying to win PLM SME market by focusing on flexibility of their solution and OOTB applications.  The problematic part of this strategy is cost. This is where flexible PLM failed. The cost of PLM implementation is still very high. Marketing, sales, business development and implementation services are not allowing to PLM vendors to scale their PLM operations for SME.

What is my conclusion? Low cost and efficiency. When it comes to customization and fulfillment of diverse customer requirements, low cost and efficiency are “must have” components of your strategy. Flexible platforms and OOTB Apps are not enough. Cloud solved some problems related to cost and IT support but left implementation services cost open. PLM vendors need to think how to deliver PLM services at low cost or think about alternative strategies. So far, PLM vendors failed to deliver to SME. Cost of the delivery is too high. After more than a decade of “focus on flexibility”, I think it is a time for PLM vendors to find an alternative. Just my thoughts…

Best, Oleg

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bahamas-plm-vacation

I took few days of rest with the family on Paradise Island. Huge hotel and attractions facilities of Atlantis are impressing by size, location and weather (compared to snowing Boston). So, if you are all for pools, dolphins, coral reefs, multi-color fishes, this is a place to be. However, when it comes to customer facing technologies, you can quickly find yourself back in 1999.  The only one thing that will remind you 2010s will  be the allowance to use 4 devices for one internet connection purchase to connect you to the outside world. Inside of the hotel, the only thing you have is room phone line and guest services button. After few days of such experience, it made me think about some PLM and other technologies hotel can adopt sooner than later.

3D Mockup and Virtual Navigation

Hotel guide provided few pages paper map with low resolution pictures and index of POIs. You have low chance to understand the location of the attraction. Don’t even try to figure out the walking distance and time. To use this map for navigation and to plan your activities upfront is impossible. Maybe you don’t need to do it. But when you want to take kids from point A to point B, it can be useful. While most of hotel visitors keep mobile devices in their hands, to provide some digital tours (before the visits) as well as 3D walking navigation application on site can make your life much easier.

Product Sales Configuration

Well, as you can imagine, hotel is not just about rooms. It is also large amount of additional facilities, attractions and other points of entertainment you want to use. You need to spend a significant amount of time trying to understand what is available, when and decide if you want to use them. Very limited information is available upfront before your visit. It sounds like an opportunity for customizable product configuration. This tool can be used during the booking process and will allow you to choose all entertainment and other options. Some of them can be purchased and some of them just added to the portfolio for later purchase decision. Everything I said is not a rocket science for PLM and other tech today.

Process and activity planner

When you are in the hotel, you want to plan a specific activity. Sometimes your plans and interests are changing. How you can manage all these things in an easy and painless way. The only tool at your disposal today is phone with a button called “guest service” or front desk service with waiting queue.  Too bad. It sounds like a good application for one of the available project and process planning tools with calendar and scheduling options.

What is my conclusion? People are interested in services and not in technologies. The easiest way to sell technologies is to show services people can use and buy. Nice weather, beach, pools and exotic animals are nice attractions. However, services are getting more and more important these days. The available technological services will play more important role in our decision making about future vacation options. PLM and other tech business dev people looking for the opportunities beyond aerospace and defense should take a note. Also, red alert to tech managers of hotels and travel industry companies.  Just my thoughts…

Best, Oleg

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plm-industries

Let’s talk about PLM technologies. Err.. PLM is not a technology. Even more, PLM is even not a product. So, what is that? Business strategy? Product development politics? For the sake of this conversation let’s leave these debates out. I want to speak about PLM technologies that allow you to manage product data, CAD files, bill of materials, rich set of related information as well as processes around it. This technology came to us about 20-25 years ago first as a very hard-coded set of tools. You had to build it literally different for every customer. So, it supported only large customers that were able to pay for software, infrastructure and implementation. Later on, PDM/PLM turned into software toolkit. The next step in PDM/PLM technology evolution was called flexible data modeling. The first flexible (dynamic) PLM data modeling tools were released back in 1995-2000 and… not much changed since then.

So, what happened since that time? PLM vendors went to develop out-of-the-box and vertical industry solutions in a massive way. David Linthicum’s article Saleforce.com officially is out of ideas reminded me about the joke comparing technology vs. industry play. Here is the passage:

When you run out of new ways to provide innovative technology, you go vertical. That was the running joke among CTOs back in the day. It usually meant the market had reached the saturation point and you could not find new growth

I found this message very compelling to what happens in PLM industry. PLM vendors are trying to compete by providing more comprehensive set of data models, best practices, process templates. By doing so, vendors want to reduce TCO of PLM implementations. It is actually brings success and many customers are using these solutions as a starting point for their PLM implementation.

So, where is the problem? For most of the situations, PLM is still costly and expensive implementation. Services may take up to 50% of the cost.  Here is the issue – core PLM data and process modeling technology didn’t change a lot for the last 10-15 years. Data models, CAD file management, product structure, process orchestration. All these things are evolving, but very little. The fundamental capabilities are the same. And it is very expensive to develop solutions using these technologies.

You may ask me about cloud technologies. Cloud is the answer. But only partially. It solves problems related to infrastructure, deployments and updates. Cloud provides clear benefits here. However, from the implementation technology standpoint, it is very similar to what non-cloud solutions can offer. Another interesting passage from Infoworld cloud computing article explains what is the problem new SaaS/cloud products can experience when trying to displace existing vendors:

So many companies have tried this approach — many times — but most found limited success. I can’t help but think the same will occur here. Salesforce will soon discover that when you get into vertical industries, the existing foundation of industry-specific applications is difficult to displace. Although Salesforce can always play the SaaS card, most of those industry-specific providers have already moved to SaaS or are in the midst of such a move. That means SaaS won’t be the key differentiator it was when Salesforce first provided its powerful sales automation service more than a decade ago.

What is my conclusion? Efficiency and cost. These are two most important things to make PLM implementation successful. So, the technology must be improved. Data and model capturing tools, flexibility and ease of use – everything must be more efficient to support future of manufacturing processes. How to do so? This is a good topic to discuss with technology leaders and strategiest. I’m going to attend COFES 2014 in 10 days. I hope to find some answers there and share it with you.

Best, Oleg

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Will PLM Vendors Jump into Microsoft Cloud Window in Europe?

April 10, 2014

Cloud is raising lots of controversy in Europe. While manufacturing companies in U.S. are generally more open towards new tech, European rivals are much more conservative. Many of my industry colleagues in Germany, France, Switzerland and other EU countries probably can confirm that. Europe is coming to cloud systems, but much slower. I’ve been posting […]

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How PLM can join semantic enterprise graph?

April 9, 2014

Connectivity is a key these days and graphs are playing key role in the development of our connectivity. It doesn’t matter what to connect – people, information, devices. Graphs are fascinating things. Actually, I came to conclusion we live in the era of fast graph development. More and more things around us are getting “connected”. […]

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Why so hard to break PLM into components?

April 8, 2014

Product Lifecycle Management is not a software. It is business strategy and approach. One of my blog readers mentioned that in the discussion few days ago. Nevertheless, manufacturing companies are usually talking about PLM systems and platforms as something solid and unbreakable. The same picture you can see when looking on PLM online marketing materials […]

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How cloud PLM can reuse on-premise enterprise data?

April 7, 2014

Cloud becomes more and more an obsolete additional word to call every technology we develop I hardly can image anything these days that we develop without “cloud in mind”. This is absolutely true about PLM. Nowadays, it is all about how to make cloud technologies to work for you and not against you. For cloud […]

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PLM Best Practices and Henry Ford Mass Production System

April 6, 2014

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 […]

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Why PLM stuck in PDM?

April 5, 2014

I’ve been following CIMdata PLM market industry forum earlier this week on twitter. If you’re are on twitter, navigate here or search for #PLM4UM hash tag on twitter. The agenda of PLM forum is here. The following session discussed one of my favorite topics- PDM v PLM. PLM: Well Beyond Just PDM by Peter Bilello. […]

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Bill of Materials (BOM) Management: Data, Lifecycle, Process

April 2, 2014

In my recent post about bill of materials – Bill of Materials (BOM): process or technology challenge? I touched the variety of topics related to BOM organization – multiple BOMs and need to manage BOM located in different systems. My main question at the post was around how to make the work with multiple BOMs easier? […]

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