This weekend I want to come back to basics. You can ask why to do so. With such a high amount of information about PLM everyone and tools can help you to find information either by search or even synthesis or summary of long articles and videos, I still believe there is a need in a human way to talk about important PLM topics in order to explain things.
Product lifecycle management (PLM ) is a very complex and multi-faceted discipline. I often meet people online and offline asking basic questions and trying to build their path in PLM. Depending on the level of people’s familiarity with the subject, it is very hard to find basic answers to simple questions and to decide what is the right thing to do. I thought PLM book website can be the answer, but that project was too big and PLM was was changing so fast, so I decided to keep my PLM education passion on Beyond PLM blog and focus on my OpenBOM business.
For recent years I gathered a lot of experience helping manufacturing companies of different sizes with their PLM activities. I discussed PLM tools and projects and with thousands of people and organizations. I’m working on PLM playbook that can help engineering organizations and manufacturing companies to find their way into PLM. I will talk about it later. Today, I want just to break the ice and focus on 5 Must-Ask Questions About Product Lifecycle Management (PLM):
(1) What is PLM, and what does it stand for?
PLM is not software, technology, vision, framework, or strategy as it is very often presented. PLM is a way to organize the data and processes to help you effectively to get to bring the output of your product lifecycle. For a small business or individual, it covers the organization of data and communication methods. For larger businesses, it is a wider business strategy including management of data, processes, and business from product conception, design, and development to manufacturing, distribution, and service.
PLM includes mechanisms to manage product data, related documents, and change processes as well as helps to “work together” (collaborate) with contractors and suppliers. It is the foundation of all processes in an organization and it provides a system and methods for sharing information about products in different lifecycle stages, which represents a single source of truth about the product and all related activities.
PLM is often associated with PLM software, which creates some level of misunderstanding. Depending on the implementation of PLM in each company, PLM (software) can play different roles and be integrated with other software packages such as ERP, CRM, MES, and others.
(2) What are the benefits of PLM for business?
Every company wants to manufacture better, faster, and cheaper. The goal of product lifecycle management (PLM) is to support this activity and without organizing your PLM, you won’t be able to do anything. Thre is one big misunderstandings happes often to many people. It is a narrow view of PLM as a software. It is very historical thing and it is a result of many years selling PLM only to large enterprises. I can see people that mistakenly think that they can build products and sell them to customers without product lifecycle management (PLM). While you might not call your Excel spreadsheet PLM, in fact, this is exactly what you do. PLM helps to organize product information and processes from ideation to design and then until you stop supporting these products. For some companies, it ends when you sell products and for others, it goes much longer until products are decommissioned.
Therefore benefits of PLM are naturally aligned with the goals of better, faster, and cheaper. These benefits include improved data management, collaboration, process efficiency, product quality, faster time to market, and reduced cost. Overall, customer satisfaction must be included as well.
Ultimately, if you build products, you have “PLM” regardless of your decision to have it or not. Therefore, the only thing you can decide is how to do so – more efficient or not. To some companies, a single Excel file can solve the problem (I doubt it, but it is possible) and complex industrial enterprises require millions of dollars in investment in strategies, and multiple enterprise systems integrated together to support their product lifecycle management activities.
(3) What are the key components of PLM?
As I mentioned above, PLM includes methods to support end-to-end product lifecycle, and how sometimes people call it “PLM holy grail” to cover all aspects of product development, manufacturing, and support.
However, when you start with product lifecycle management, you should focus on the following key aspects and elements of a “minimum PLM” organization:
- Idea, requirements, or specification (can be a paper, list of requirements, or idea)
- Design data (includes whatever you have to make your product design)
- Bill of Materials (includes data about everything you build or buy to make a product)
- Change management (methods to perform and track changes)
- Production planning (everything to buy materials, components, build parts and assemblies)
- Quality control (to validate everything you do follows the spect, design, and requirements)
- Documentation and certification (to produce the documentation needed to sell the product)
- History and maintenance (to preserve information about what you build and help customers)
(3) What are the differences between PLM and other enterprise systems?
This is a question that creates tons of confusion and debates usually because it is the place where people argue about what product lifecycle management includes. If you think PLM is a holistic system to organize all your product-related activities, it includes all systems that are needed to make it happen. But it means PLM is a strategy method to organize data and processes. On the other side, if a PLM is a specific software then it usually focuses on a more narrow scope of topics.
Here is what is usually included in PLM (software):
- Manage data about the product and all its elements and components in all lifecycle states
- Change management (including revisions and changes processes)
- Collaboration, communication, and analytical tools
The core difference between product lifecycle management and other tools is that PLM software focuses on the “product and its data” as first-class objects. Everything in PLM systems starts from the definition of the product and then comes down to all other processes and activities. Similarly to that, CRM software starts from a “customer”, and ERP software starts from business activities and objects such as general ledger, finance, and material transactions. The borders between different enterprise systems are blurring these days and can be depedent on the PLM strategy of the company. Modern software also redefines these borders by introducing new technologies and disciplines to organize product lifecycle management-related activities.
(4) What are the challenges of defining company PLM and implementing PLM software?
To define a PLM is a serious work for any company regardless the size and complexity because it impacts all aspects of company activities. Therefore, it must be approached holistically with the involvement of all stakeholders involved in all business activities – design, production, sales, finance, customer support, and maintenance. I will omit all the challenges of product lifecycle management that are the same as any IT project in the company. But I want to focus on specific challenges companies need to overcome to build an effective product lifecycle management strategy and system.
- To build a single source of truth about product data, connected and intertwined with all related information as the foundation of PLM
- Organize product data management (PDM) to manage and organize product data records
- Organize a consistent and holistic change management process covering all aspects of the product lifecycle – definition, production, sales, and maintenance.
- Connect product lifecycle management activity to business outcome and business measurement (KPI) covering not only product design but the entire product development process including supply chain management and other disciplines and processes.
The main problem of all these challenges is related to the need to organize this as a holistic method, connecting all pieces of the product lifecycle and product data management together.
(5) How to measure the ROI and evaluate the effectiveness of PLM
Everything in the business must be measured. Therefore to measure ROI and effectiveness, you need to set up the right system of KPIs. Without that, you will find it very hard to answer the question about PLM ROI and effectiveness. The approaches companies can take maybe be different. One is simply add PLM software to your cost center and consider all expenses related to PLM as part of the cost to run the business. Although you can do it, I don’t recommend this approach. Indeed you cannot run your business without PLM (even if it is not well defined), I recommend defining a granular set of business KPIs that can be tracked using PLM system to help you to optimize the business processes.
To do so, you need to focus on your business performance and expenses to understand where your specific business can improve its activities. It can be sales process improvements or it can be an inventory of expensive components. You might find that a change processes taking too much time and slowing down the manufacturing activity or you can find that the design of the product can be optimized based on customer feedback.
I hope you noticed that many of the examples I brought up above require data to be available and connected between different company and product lifecycle activities. To get customer feedback, you need to connect many data points in your PLM strategy and enterprise systems. To validate you have the wrong supplier, you need to create an effective digital thread of information across multiple departments and systems. There are many examples, but one answer – building a system of KPIs to measure your product’s lifecycle is an important step in answering questions about PLM ROI and effectiveness.
What is my conclusion?
PLM is a complex discipline covering a product’s lifecycle and helping manufacturing companies of any size organize their business processes. It must be organized holistically to cover all aspects of the product’s lifecycle – planning, design, engineering, manufacturing, supply chain, and customer support. Without holistically organized data management and document management, focus on computer-aided design, selection of PLM system (software), organizing product data, and process management, your holistic PLM strategy won’t be successful. You need to build your PLM playbook to make it happen. Just my thought…
PS. I will be coming up with a PLM playbook to help manufacturing companies build a holistic PLM activity and successful PLM strategy. Stay tuned.
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital-thread platform with cloud-native PDM & PLM capabilities to manage product data lifecycle and connect manufacturers, construction companies, and their supply chain networks. My opinion can be unintentionally biased.