The drivers and factors influencing PLM adoption and ...

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PLM as a business approach and the associated enterprise solution ... product lifecycle management is not only the implementation of a software layer that ...
The drivers and factors influencing PLM adoption and selection Merin Jacob [email protected]

Jonnro Erasmus [email protected]

Council for Scientific and Industrial Research, Integrative Systems Group Copyright © 2015 by M Jacob and J Erasmus. Published and used by INCOSE with permission.

Abstract. Product Lifecycle Management (PLM) combines enterprise-wide product and process innovation improving the manufacturing industry’s ability to meet the need for shorter product lifecycles, satisfying customers’ expectations and adhere to stricter regulatory, environmental and safety requirements. Unfortunately, despite its global success, the adoption of PLM is struggling to gain traction in South Africa. This makes it difficult for local engineering and manufacturing firms to compete in the global market and maintain proper control of their products as they progress through the different life stages. This paper presents the drivers and factors to consider during selection and implementation of a PLM business approach.

Introduction Product lifecycle management enables an enterprise to be in control of its products regardless of the lifecycle phase and current ownership of the product. PLM addresses and improves the activities of product portfolio management, development, realization and support, to enable a company to reduce product-related costs, engineering changes, product recalls, warranty and recycling costs. It shares many of the objectives of systems engineering, but extends some of the methodologies and processes to industries where the product is not typically a system consisting of many parts, such as fashion, food and beverage production (Grieves, 2012). Though those products certainly adhere to the definition of system, systems engineering as a discipline is less relevant due to the simplistic nature of the products (INCOSE, 2011). However, the technical management processes and lifecycle considerations of systems engineering are as relevant as with more complicated product systems. Thus, as an enabler for engineering and manufacturing of most products, PLM is becoming essential for enterprises to be competitive in a rapidly globalising world of more customised products (Kroes et al., 2009). This article provides a guide for the planning and implementation of the PLM business approach. It starts with a brief overview of the definition and scope of PLM, followed by the typical goals of adoption and implementation. With the goals in mind, PLM solution selection and implementation strategies are discussed. The typical capabilities offered by PLM solutions are listed, to allow practitioners to perform a comprehensive evaluation of the most suitable solution. PLM as a business approach and the associated enterprise solution implementation represents a significant organisational change endeavour. As with most such large changes, it is critical that the objectives and expectations are properly determined and documented, the programme is formally managed and the potential impact on the operations is well understood. Thus, it becomes an enterprise engineering endeavour. To account for this, the widely used Open Group

Architecture Framework (The Open Group Architecture Forum et al., 2011) will be used to explain some of the concepts to consider during selection and implementation.

Enterprise engineering as an enabler of change Enterprise engineering as a discipline was born from the need to design enterprises as a comprehensive and coherent system, instead of allowing the continued ad-hoc emergence of enterprises (de Vries et al., 2013). Martin (1995) stated that “Enterprise Engineering is an integrated set of disciplines for building or changing an enterprise, its process and systems.” Hoogervorst (2009) argues that good enterprise design is essential for high performance and that enterprise engineering is underpinned by the fields of enterprise ontology and architecture. Enterprise Ontology The Open Group defines an enterprise as the highest level of organisation currently under consideration and typically includes all missions and functions (The Open Group Architecture Forum et al., 2011). Thus, enterprise in this sense is the equivalent of the system-of-interest of the current endeavour. By considering it as a system, an enterprise is composed of system elements which can roughly be categorised into people, processes or tools. The Open Group Architecture Framework (TOGAF) considers 35 element types (meta-objects), divided into architecture domains, as shown in Figure 1.

Figure 1: Representation of the TOGAF9 Content Metamodel (The Open Group Architecture Forum et al., 2011)

Even though the enterprise is composed of physical elements, the enterprise itself is not a physical entity. The elements that the system consists of, are in most cases independent, but brought together to achieve a specific goal. Therefore, an enterprise is a complex system, consisting of many interrelated elements with nonlinear relationships (Bennet, 2011). However, an enterprise consumes, produces and incorporates many other systems, making it a system of systems. Harmon (2005) argues that an enterprise is best described as an intelligent complex adaptive system of systems (ICASOS). Enterprise Architecture Ontology only allows for description and definition of the elements of the enterprise. By its nature though, a system’s behaviour is not only a result of its components, but also emerges from the relationships between those components (Green and Bossomaier, 1993). The term “system” covers a very wide spectrum though, from tiny biological systems to galaxies, or even abstract systems such as mathematical models. Most systems share some common characteristics, including the following (Baianu, 2011):  Systems are abstracts of reality;  Systems have structures, defined by its parts;  Systems have behaviour, such as the processing of material, information or energy;  The parts of the system have functional and structural relationships. Enterprise architecture is a way of depicting the current or desired elements of the enterprise system and the relationships between those elements. Zachman (1987) stated that such architecture descriptions are created to manage complexity and change. TOGAF provides a meta-model that shows the standard relationships between its 32 meta-objects (The Open Group Architecture Forum et al., 2011). This meta-model is the starting point for creating catalogues, matrices and models of an enterprise, to ensure that relationships between enterprise elements are captured according to the framework principles.

PLM definition and scope Product lifecycle management is a means for enterprises to keep control of its products from the initial idea, through development, realisation and utilisation, until the eventual end-of-life. This approach calls for planning of the entire life of the product, by already considering during development how the product will be produced, supported and retired (Grieves and Tanniru, 2008). Thus, PLM brings together and aligns the domains of innovation management, engineering, technical management, manufacturing and logistics. It should be noted that product lifecycle management is not only the implementation of a software layer that integrates the product data from various business applications. Although data integration is essential, PLM is a business approach and philosophy that affects the core business, from ideation to after-sales support of products (CIMdata, Inc., 2012). The scope of PLM includes the following (Stark, 2011):  Managing a well-structured and valuable product portfolio;  Improving the financial return from the product portfolio;  Providing control and visibility over products throughout the lifecycle;  Managing product development, support and disposal projects effectively;  Managing feedback about products from customers, products, field engineers and the market;  Enabling collaborative work with design and supply chain partners, and with customers;

 Managing product-related processes so that they are coherent, joined-up, effective and lean;  Capturing, securely managing, and maintaining the integrity of product definition information. Making it available where it’s needed, when it’s needed;  Knowing the exact characteristics, both technical and financial, of a product throughout its lifecycle. As explained, product lifecycle management is not only a software tool. It is a complete business approach and thus will have an impact on all enterprise domains. This is not to say that it will affect all business units, but rather that it will change the following elements in the chosen sphere of business:  Business processes;  Applications and software tools;  Information management tools;  People and roles;  Special techniques and methods;  Equipment and facilities;  Measurement and metrics;  Structure of the PLM organisation;  Enterprise change management.

Strategic business objectives driving PLM adoption Product lifecycle management not only brings together all the parties involved with the realisation of the product, but it also offers the producer of the product the opportunity to provide its customers with after-sales services. By capturing the original expectations and linking those expectations with specific characteristics of the product, the organisation can respond to changes in the market much faster and more effectively. Apart from the improved product control, the implementation of product lifecycle management also presents the following potential benefits (Stark, 2011):  Reduce product related costs;  Improves the ability to manage and utilise multi-disciplinary engineering data  Increased ability to capture and manage intellectual property;  Reduce risk throughout the product lifecycle;  Improves innovation and time-to-market;  Enables collaboration across the design chain and supply chain;  Assists compliance with regulations;  Provides one version of the truth about a product;  With accurate, consolidated information about mature products available, low-cost ways can be found to extend their revenue-generating lifetimes;  Typical current targets for PLM are to increase product revenues by 30% and decrease product maintenance costs by 50%.

PLM implementation strategies Due to the scope of product lifecycle management, implementation represents a major business change and should be managed accordingly. Therefore, the implementation should be supported by executive management, planned properly and the objectives, scope and strategy

should be clearly defined. Table 1 shows different implementation approaches and typical results thereof. Table 1: Different implementation approaches (Stark, 2011)

Approach Uncoordinated cherry-picking and lemon squeezing A short-term plan A three-year strategy and plan Integrated vision, strategy and plan

Time period 6 months

Productivity Development change cycle change +4% -3%

Product cost change -3%

1 year 3 years 5 years

+12% +40% +100%

-9% -28% -41%

-10% -39% -80%

It is shown that a three to five year implementation, with proper planning, typically results in significant improvements in productivity, time to market and cost reduction. Stark (2011) advocates a five-step strategy for PLM implementation: 1. Collect and assemble the information with which the strategy will be developed; 2. Formulate and describe alternative strategies for implementation and identify the resources and policies to be applied; 3. Evaluate the potential strategies and select the most appropriate; 4. Communicate the selected strategy to everyone who will be affected; and 5. Implement the implementation plan. However, PLM implementation is often very disruptive to the operations of the enterprise, like most large change management endeavours. Furthermore, it is often very difficult to convince all parties involved and affected that the change will be beneficial to them. An option is to gradually introduce PLM into the business, by implementing on a specific project or organisational unit first, then expanding to a single programme or additional units, before finally rolling it out to the entire enterprise. Garetti et al. (2005) recommends this approach, to benefit from the following:  Experimental learning first, in order to push users to modify their working attitudes towards the new reengineered processes;  Training on the use of software tools, together with practical use cases derived from the literature, afterwards. To focus efforts on those business units that will give the most benefit, it is useful to make use of the concept of core versus non-core business competencies. Business competencies are the groups, teams or units in the organisation that perform one or more functions and deliver outputs by performing business processes. Non-core competencies are typically those functions performed by most enterprises. These competencies usually support the core business and do not deliver any special value. It has been shown that non-core competencies typically comprise approximately 80% of the business competencies, but also represent the greatest cost saving opportunity. Core competencies only comprise about 20% of the business and represent opportunities for innovation and growth (LEADing Practice, 2013). Core competencies are those functions that directly contribute to the primary output of the business and are further categorised according to the value of the competencies. Core competencies are further divided into two classes. Core-competitive competencies are those that are done by all competitors in a specific market, and do not give any one of them a distinct

competitive advantage. Core-differentiating competencies are those functions that give an organisation its competitive advantage. By combining the approach suggested by Stark (2011) with the recommendation of Garetti et al. (2005) an enhanced implementation strategy can be formulated: 1. Determine requirements; perform evaluation and select a single software suite that will determine all future engineering software acquisitions. This software selection should support the type of research and development that the company wants to do in the foreseeable future. 2. Purchase the collaborative product data management module of this suite and the bare minimum modules that will form a good starting point. 3. Develop the business and value model, based on the company business plan and objectives, showing the targeted product, service and operation transformation. 4. Develop the core-differentiating business processes necessary to realise this business model. 5. Implement and deliver training on the out-of-the-box processes and software tools for the non-core competencies. 6. Adopt, standardise and implement the core-competitive business processes across the entire company. 7. Adapt and implement the core differentiating business processes and determine impact of possible configuration and customisation requirements on engineering software.

PLM solution selection Product lifecycle management comprises the processes and practices associated with managing a product throughout its lifecycle, from its conception through design and manufacturing stages, to service and decommission. Product lifecycle management software provides a central repository for all data and assets that enables workers to collaborate on products in real time. When effectively implemented, PLM software can merge business systems, people and data processes to facilitate a streamlined approach to product development. Today’s top-rated PLM software solutions are both comprehensive and collaborative; such as software that tracks and records information from various sources and departments, making that information available to suppliers, engineers, marketing teams and other departments that are vital to product development. Product lifecycle management software is also able to manage product design (both 2D and 3D design elements), oversee the production pipeline, work in real time and significantly reduce the costs associated with regulatory compliance. PLM software should also effectively manage bill of materials (BOMs) (Top 10 Product Lifecycle Management Software Report, 2015). The top three PLM solutions hold approximately 57% of the global market and an even higher portion of the South African market (Slansky, 2014). As mentioned, the selection of a PLM software suite should be a long-term decision and be based on the functionality required by the business. Table 2 shows the typical functionality offered by the large PLM software suites. This table can be used to determine what functionality is required by the enterprise, to ensure an informed decision is taken, which will serve the enterprise well even with future expansion. These functionalities can be evaluated according to a value matrix, similar to what is proposed by Erasmus (2014).

Table 2: Typical functionality offered by PLM solutions Level 1 Functionality Engineering design

Level 2 Functionality Parametric Drafting

Level 3 Functionality Parametric solid modeling 2D design, layout, drafting, annotation and documentation Class A shape design Industrial equipment Advanced surface modeling Reverse engineering and surface reuse Electrical and fluid system Electrical design 3D electrical design design Systems generative 3D electrical Wire harness documentation and formboard Energy, process and utilities Technical communication for energy, process and utilities Nuclear, offshore, power generation, wind Fluid systems design Generative piping and tubing Piping and tubing design Mechanical engineering Mechanical surfaces Body in white modeling Generative shape optimizer Mechanical surface design Aerospace and defence Aeroengines, aerostructures, avionics, ballistics and blast, composite structures, landing gear, space systems Transportation and mobility Body in white, brake systems, chassis, crashworthiness, ground vehicles, interiors, mechanisms, powertrains, tires Mechanical systems 3D design 3D tolerancing and annotation Drafting and annotation Mechanical design Structural part and assembly design Aerospace Sheet Metal Design Cast and Forged Part Design Composites Fiber Modeler Composites Manufacturing Preparation Fabricated Part Design Plastic Part Design Structure Detailed Design Structure Functional Design Model Based Definition Composites Engineering Fasteners Design Marine and offshore Ship Structures, Marine Structures, Component Analysis Technical Communication for Marine and Offshore

Systems engineering

Electronic engineering

Systems Architecture Modelica Systems Simulation Embedded Systems Systems Safety Analysis Requirements Engineering Circuit boards Transportation and Mobility High Tech

Robotics Programming

Tooling Engineering Analysis

Manufacturing

Simulation

Jigs and Tooling Design Mold Tooling Design Static Dynamic Electro-Magnetic Thermal Fluid Numerical Control Finished Design Analysis Modeling Multidiscipline Simulation and Optimization Systems Level Modeling and Simulation Human-product Interaction Injection molded parts Dynamics

Flexible Circuit Board Electro-Mechanical Circuit Board Electronics Acoustics, Circuit Boards, Computers & Peripherals, Hand-held Devices, Microelectro-mechanical Systems, Paper Feeding, Semiconductor Technical Communication for High Tech Robotics Arc Welding, Robotics Offline Programming, Robotics Spot Welding, Robot Task Definition, Robotics Virtual Commissioning

Transient and Steady-state Fluid Flow and Heat Transfer NC Programming Part Modeling, Tool Design, Inspection Programming Stress Analysis/Finite Element Method Structural, thermal, flow, motion, optimization and multiphysics analyses Build and manage large analysis model assemblies Plastic Filling Process Acceleration Weight of Moving Components

Conclusion There are increasing advantages to product lifecycle management and although implementation of PLM is not easy and can be time consuming, companies must meet the increasing demands of their customers. They need to rapidly and continually improve their products and services and to achieve this they will turn to PLM. By using the software functionality table presented in this article, enterprises will be able to choose a suitable vendor according to the specific requirements of their company. With the selection made, it is crucial that all further business process development and software acquisitions should be done with this selection in mind. The value of PLM lies in the ability to integrate the work of multiple disciplines and functions of the enterprise, enable collaboration across the supply chain and to streamline the management of the product throughout its lifecycle. It is essential that all product information is available to all parties who should have access to it.

Collaboration across the supply chain is rapidly increasing in importance. For this reason, regardless of the specific capabilities desired within the enterprise, the determining factor during PLM software suite selection may be the industry the enterprise operates in. If the majority of suppliers use a specific PLM or CAD solution, it makes sense to opt for that same one, to facilitate product information exchange. If the enterprise is a tier two or three supplier itself, the PLM solution of its clients should be the main factor to consider during PLM selection. Once implementation starts, it is advisable to start small and expand as success if achieved and value is shown. This allows for minimal disruption to the operations of the enterprise and to create change champions along the implementation project.

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Biography Jonnro Erasmus has worked as an industrial and systems engineer in the electricity, transport and manufacturing industries. He has also had the responsibility of managing interdependent risks between major construction projects of both public and private enterprises. He specialises in the use of requirements and functional analysis to identify risks and opportunities in business systems and engineering organisations. Jonnro holds a bachelor of engineering from the University of Pretoria and a master of engineering from the University of Johannesburg. He is also a registered professional engineer with the Engineering Council of South Africa. Merin Jacob is a student at the University of Pretoria and has worked as a systems engineer in training. Her responsibilities included the initial documentation regarding product life-cycle management, design improvements of the freight rail wagon system, and initial documentation for the mining, manufacturing and transport industries. Merin is specializing in design of mechanical systems and is currently working towards a bachelor’s degree in mechanical and aeronautical engineering from the University of Pretoria.