How to measure PLM?

Some of my PLM friends like to say – PLM is a journey and not some kind of software. Well, I’m not sure to agree about “journey”, but I can take PLM as a process. A process, which includes all stages of product development, manufacturing, support, and maintenance. And PLM implementation is a transformation process in which you often turn the current (bad and obsolete) process in a new one.

As every process. it needs to be measured. Because this is a way you will get some metrics about your process and will be able to build KPIs to improve it. For example, if you want the time of ECO turnover to go down, you better find a way to measure the turnover time for every ECO. The same about other things.

You probably heard the phrase “you can’t manage what you can’t measure”. It is often attributed to W. Edwards Deming, the statistician and quality-control expert credited with having launched the Total Quality Management (TQM) movement. It is also sometimes attributed to Peter Drucker – one of the world’s most famous management consultant.

You can find some controversy around the phrase. Here is the examples of some criticism in the article – Why “You Can’t Manage What You Can’t Measure” is Bad Advice. The article brings a few entertaining examples. Check them out. But the conclusion is in the following passage.

[the story] perfectly illustrates one of the most central problems afflicting business managers today, in an era of Big Data and sophisticated, algorithmic decision-making: Quantifying things has now become an easy way to escape responsibility for using ordinary human judgment, or for taking a considered, intelligent point of view.

Both men, however, were far too smart ever to have said anything so simplistic and misleading. In fact, one of the “seven deadly diseases” of management that Deming himself warned about was running a business on visible figures alone. Nothing becomes more important just because you can measure it. It becomes more measurable, that’s all.

Another article, while agree that measurement is a key to management of a process or activity speaks about how to form performance indicators. Check this out – Using Metrics to Measure Business Performance.

The art and science of developing key performance indicators are beyond the scope of this post, however, measuring activities and outputs is a fundamental step. And although you cannot manage what you do not measure, be careful that your measurements emphasize certain activities over other equally important but unmeasured activities.

Let me come back to PLM and Digital Transformation, which becomes some sort of “new PLM” these days. Check all vendor presentations and you will see how many things that were presented as “PLM” before now replaced with a digital transformation slogan.

The question I want to ask for both – old and new PLM. How too measure it? I’m not alone with this question. I came across the webinar announcement by CIMdata – Anyone Measuring Digital Transformation?

Digital transformation is associated with the deployment of a host of recent and emerging technologies and concepts, such as digitalization, Internet of Things, analytics, machine learning, artificial intelligence, digital twin, digital thread, virtual reality, augmented reality, mixed reality, and blockchain. This list is only likely to grow with accelerating cross-disciplinary invention and innovation, and, the manufacturing businesses will be continually bombarded with them in the name of digital transformation.

The main question is, if digital transformation is a journey that a manufacturing business embarks on to remain competitive and profitable, then, is there a systematic way of approaching it through strategic planning to follow a roadmap that produces tangible results over a period of time in terms of profitability and competitiveness. The question underlying that question is, how does one measure digital transformation? Is it necessary to measure digital transformation? What are the metrics that could be used to measure digital transformation?

It is interesting how CIMdata introduces the topic. You can think about two product lifecycle and then the process of PLM implementation (or maybe I need to call it now digital transformation). As I said many times- you might not have a PLM system in a company, but you have product lifecycle process and you do PLM. So, how to measure both – product lifecycle and transformation/implementation? How much digital transformation every company need (or want)? What is the speed of transformation? Is it even important and how it will affect the business?

What is my conclusion? PLM implementation is often an expensive project. As a company, you need to align goals and figure out how to measure results. As much as simple it sounds, it is not what I can see often happens. To be put a system of KPIs can help, but also can be overwhelming. Where is the right balance? Usually, the work that needs to be done by consulting and lead business analysts in the company. Just my thoughts…

Best, Oleg

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.