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Product Lifecycle Management To the Rescue
Collaborating during product-development cycles can create efficiencies.
For the rest of the January 2002 issue of CRM magazine please click here
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Traditionally, when a company in the business of complex product design and manufacturing wanted full visibility into the process, it faced the inefficient procedure of co-locating as many internal and partner resources as possible. Product lifecycle management (PLM) seeks to offer a better way, by providing collaborative systems that keep information flowing smoothly and accurately between the critical participants in the research and development process and beyond.

Once a discipline dominated by providers such as Agile Software Corporation of San Jose, Calif., and Parametric Technology Corporation of Needham, Mass., PLM is attracting attention as a growth market for a variety of enterprise software vendors. AMR Research estimates the 2001 PLM market at more than $1.7 billion, which the company credits to an increased awareness of the costs of new product development. AMR pegs such development and introduction expenses as high as 40 percent of revenue for some manufacturers. While PLM remains primarily a concern for extremely large enterprises, AMR observed growing uptake among companies with less than $1 billion in annual revenue. Those companies now account for more than one third of PLM spending.

At its core, PLM is a knowledge management exercise, concerned with bringing requirement specifications, design documents, manufacturing plans, and post-release product support and evolution documents into a common repository. By making those critical documents available at all phases of the project to all of the stakeholders, companies hope to reduce communication costs and delays, reduce redundant re-engineering time, and improve how early-stage designers and engineers understand the real-world performance and challenges of the products they create. The result, says AMR Research Principal Kevin O'Marah, is the development of more generalized, reusable assembly platforms, shorter development cycles, more frugal component counts and possibly lower warranty-service charges.

Beyond a simple repository, PLM tools must be flexible enough to allow users to understand the content and functional application of documents from parts lists to computer-aided design sketches to specification sheets, so prior art can teach a lesson for today's project. "To reuse a design document and that [assembly] platform is not just saving engineering time, but it is a relationship between parts that has already been tried...and you end up with a final cost of goods sold that's lower," O'Marah says.

Cross-discipline software vendors are drawing a bead on PLM, because they see an opportunity to expand on existing strengths. "Close integration with CRM applications comes into the game because you need to get feedback from the field, the sales and services [organizations] and requirements coming directly from customers," says Stephan Schindewolf, director of PLM business development at SAP AG.
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Getting in Sync

Lockheed Martin, which has already successfully employed the Metaphase PLM system (now owned by EDS) to improve design efficiencies in its development proposal for the Joint strike Fighter, is also putting the finishing touches on an implementation of CADIM software from Germany's Eigner + Partner. The company's missiles and fire control unit needed to unify new-product operations at its main Dallas and Orlando, Fla., facilities and replace legacy systems and processes that were out of sync. In the new environment, system engineers will store design specifications in the CADIM repository, which mechanical designers then turn into assemblies using a CAD tool, ProEngineer. The integration between CADIM and ProEngineer allows parts lists and cost breakdowns to be created automatically.

The impact of simply having a single source of wisdom about a product's lifecycle looms large for Lockheed Martin, which hopes to offer suppliers a direct window into the design lifecycle process soon. "If we're bidding 20 vendors to buy a bolt, we [won't] have to put together 20 bid packages and stand at the fax machine all day," says Mark Miller, product data management project manager. "We will know what's current because we update only in one place. A vendor who wants to know 'Am I working with the latest drawing?' can look in the database and do it in a few minutes, rather than play phone tag with the designer or procurement."

To close the product design loop, the firm also will collect failure histories and service reports in the CADIM system, not only to identify the components that tend to fail most often in order to make improvements with the next revision, but also to help optimize the allocation of service parts and repairs in a predictive fashion. "With warranty, you want to know what's out there and how it was built so if it will need repair, you know exactly what units need to be upgraded and where they are," Miller says.

Companies interested in adopting PLM face significant challenges deciding where to start, according to O'Marah. "[Users] love the idea of collaboration, but there is no road map," he says, adding that most of the benefits of PLM fall under softer ROI categories. "People tend to buy off on the big vision, and it's fair to get excited, but there is not a tight road map for payoff or a business case in the CFO's style."

To ease the obvious potential for standards conflicts and reduce supplier anxiety at having to buy a separate PLM software suite to interact with each of its major customers, some PLM vendors are looking to build complete Web portal environments to reduce seat license worries. "In a true PLM environment, it wouldn't matter what CAD system [the customer] was operating in," says Guy Hicks, vice president of marketing communications for EDS, which touts its Team Center product-management suite as a possible solution.

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