Supply chain data intelligence & PLM paradigm shift

Supply chain data intelligence & PLM paradigm shift

In the old manufacturing days, engineering activity was very much disconnected from manufacturing. Long development cycle provided enough luxury and time to have so called “over the wall engineering” strategy. But, things are going to change. I shared my thoughts about this transformation process in my article published earlier today on GrabCAD blog – Bill of Materials Engineering Challenges in the Era of Digital Transformation .

Process are changing and it is very much connected to fundamental manufacturing shift. The demand for cost optimization, mass customization, global manufacturing and supply chain is creating a new requirements how to engineering and product development needs to be managed.

I called it “PLM paradigm shift” in my State of PLM 2017 presentation few months ago I did at CONTACT Software customer conference in Germany. Learn more here and check my slide deck here.

This is a slide I want you think about. In the past, the main function of PLM to protect data, control access and orchestrate processes.

It is not enough anymore. The new and much more important function is going to dominant engineering and manufacturing software – data intelligence. To protect data is not enough. To use data to provide and support decision support – this is what manufacturing companies are expecting from software vendors.

In such context, I found Forbes article – How Artificial Intelligence Is Revolutionizing Business In 2017 can give you a very important perspective on business transformation. Don’t be confused by “AI” buzzword. In a simple words AI means use of data for better decision  support analysis and feedback loop into decision process. Check more here.

Here is my favorite passage:

Customer-facing activities including marketing automation, support, and service in addition to IT and supply chain management are predicted to be the most affected areas by AI in the next five years. Demand management, supply chain optimization, more efficient distributed order management systems, and Enterprise Resource Planning (ERP) systems that can scale to support new business models are a few of the many areas AI will make contributions to the in the next five years. 

This is where it gets really interesting. Supply chain and distributed order management system. These areas of activity are getting very complex for most of manufacturing companies. Complex relations with suppliers of engineering and standard parts, complexity of relationships and orders, dependencies and schedule. Multiple it with the complexity of products and you get modern manufacturing company. But here is the thing – most of these systems are using very old and practically outdated system of siloed databases, batch updates, multiple enterprise databases and systems.

The opportunity is to use data about product fused together with information from ordering and supply chain system to create an intelligence ordering, supply chain and production system. PLM system will come on top of the pyramid providing intelligent decision support tool about what manufacture ,where to do and supplier and contractors to us. Think about it as a kind of “navigation” system for the business.

What is my conclusion? PLM value proposition is going to change from a system controlling data to a system providing data to systems managing day-to-day decisions about production, manufacturing and supply chain. Without this information most of ERP and SCM systems will be dead. Data fusion between PLM and other domains will drive future innovation in manufacturing companies. 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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