A blog by Oleg Shilovitsky
Information & Comments about Engineering and Manufacturing Software

Industry Solutions and PLM Strategic Cross-Road

Industry Solutions and PLM Strategic Cross-Road
olegshilovitsky
olegshilovitsky
16 March, 2010 | 3 min for reading

The question of industry specific solutions in PLM was always interesting for me. Time ago, I asked in one of my posts about what will be the future of PLM vendors – to become industry specialists or to provide technological platforms for product development? So, I decided to put some of my thoughts about that with hope to clarify the current state and the future of Industry PLM.

In the early days, PDM/PLM started as a solution for very large manufacturing firms (i.e. Boeing, Airbus, Honda, GM…) that allowed to manage very complex product development. It was heavily customized and built to the specific organization. At the same time, EDM (Engineering Data Management) and Product Data Management (PDM) transformed into more reliable solution that can be beneficial to the smaller companies (Suppliers and smaller OEMs).

PLM – top down vs. bottom up move.
I can identify two parallel trends in PLM development. One was clearly top down one. The bigger companies, typically OEM in aero-space and automotive domains proliferate in their PLM strategies, mostly to Tier0 and Tier1 partners. Their primary interest to complement their product development processes and make their own life easier. In parallel, the idea of PLM got some traction in the eyes of smaller manufacturers. Most of them started to seek for a solution to manage product development. They are not necessarily called it PLM, but their primary interest was to find an easier way to manage product development without spending outstanding amount of moneys on PLM. The need for affordable PLM was clearly identified by PLM vendors and race to provide solutions to target larger industry audience with PLM began.

Segmentation vs. Fragmentation
What strategy will allow to make a PLM delivery to the broader manufacturer’s audience? In my view, this is an ultimate question all PLM providers were asking themselves for the last 5 years. For the companies working mostly with the “big outfits”, the obvious way to segment them into specific niches, classify and provide a diverse solution. This is the moment when some PLM industry wizards came with the idea of industry segmentation. The fundamental assumption was that “industry niches” have different product development practices and require a different solution. I have to say, that such segmentation allows them to develop a significant industry traction. However, my take on this is that in the real life segmentation is not as clear as marketing wizards wanted to see it.  When it is almost clear on OEM level, on the supplier level, industrial complexity is much higher. It made me think, “fragmentation” will be more appropriated definition. There are different groups of customers. Industry belonging exists. However, this is not always a primary or unique identification of customer needs. Additional context, such as, size, regulation, company location (inshore, offshore), type of design and manufacturing practices can be used to identify them in addition to the industry belonging.

Industry vs. Product Development Languages?
I think, industry language is very important. However, this is not the only way to differentiate PLM solutions. Manufacturing companies are struggling with multiple challenges and needs. Some of them, such as, control of product cost, global deployment, cross-company business processes are not unique among the specific industry. On the other side, I do see some very interesting examples of PLM solutions created for the specific industry.

PLM In The Cross-Road
I think PLM industry is in the cross-road and will need to take some important strategic and technological decisions soon. On the one side, there are specific industry needs and opportunities. The best way to solve it is to develop dedicated industry solutions. On the other side, PLM realizes that general collaborative and data management solutions may have cross industry approach. Even more, there is a growing competitive pressure from non-PLM vendors to provide a solution, especially in collaboration space.

What is my conclusion? PLM vendors will need to identify what are the core values for the PLM industry in the 2010s. There are technology, infrastructure, horizontal solutions and industry verticals. These are elements of PLM puzzle that need to be presented as a future PLM strategy.

Just my thought…
Best, Oleg

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