How do you streamline product development and improve your ability to innovate? For a growing number of manufacturers, the answer lies in a new application called product lifecycle management:

A new application is generating buzz and big business, and it goes by the name “product lifecycle management” or PLM for short. According to AMR Research, manufacturers across a wide range of industries will spend about $2.3 billion on PLM application suites this year. Why are manufacturing companies willing to put so much at stake? Because PLM promises to dramatically enhance a company’s ability to innovate, bring products to market and steer clear of errors.

PLM applications can allow everyone in an organization—along with key suppliers and customers—to access all of the information generated throughout a product’s lifecycle. An automotive company or aerospace manufacturer, for instance, could accelerate the launch of new models in several ways. First, product engineers could use PLM to quicken the pace of executing and reviewing engineering modifications across an extensive design chain. Meanwhile, purchasing agents can collaborate more effectively with suppliers to reclaim parts. And executives can gain a bird’s eye view of all pertinent product information, from specifics about the manufacturing line to parts failure rates gathered from warranty data.

Realizing PLM’s vast potential is no easy feat, however. To unleash the benefits that seamlessly flowing information brings, companies must meet the challenge of integrating many isolated databases and better aligning the efforts of people from various business functions. More of a strategy than a system, PLM aims to facilitate the integration and sharing of product information between applications and among different groups, such as engineering, purchasing, manufacturing, marketing and sales.

While PLM initiatives usually come from the engineering department, its deployment should not be left to engineers. A higher-level approach is needed. For PLM to work, chief information officers (CIOs) must tackle tricky issues such as setting data standards and planning an integration architecture that will allow formerly disparate pieces of information to be presented to everyone in a format they can utilize. Currently, the various business functions produce and process product data in different ways. For instance, manufacturing, engineering and purchasing use three different versions of a bill of materials—a list of parts and subassemblies comprising a product—with purchasing also referring to approved vendor lists and catalogs.

If the CIO does not step in early in the deployment process, “there’s a much higher probability that each functional tower would decide on what’s best for them rather than searching for a global solution,” says Dennis Charest, vice president of e-business and IT at Hamilton Sundstrand, an aerospace and industrial products subsidiary of United Technologies. And the outcome would be inconsistent standards and possibly, a flubbed deployment.

To make sure that PLM initiatives are effectively carried out in the company, CIOs must assume the role of both chief planner and troop leader. First, they must devise the technology game plan, designing the infrastructure to back up integration across applications and assisting in vendor selection. Second, they must guide the staff, with the help of some business executives, through the arduous process of altering business processes. Finally, because of the tough economic climate, they must pinpoint the areas where PLM can bring the most immediate gains. “This is yet another thing that’s going to cost big money,” says Kevin O’Marah, vice president of PLM at AMR Research. “It’s up to the CIO to watch out for where PLM can really be meaningful.”

PLM—a broader version of the engineering-focused PDM or product development management—represents a huge undertaking for CIOs, and so far only a few are beginning to tackle its challenges. Most companies are still in the initial stages of deployment, even firms in early-adopter industries such as automotive, consumer-packaged goods and aerospace. Most frequently, deployments start in engineering, beginning with the drawing up of collaborative design platforms and the streamlining of the engineering change order (ECO) process. Succeeding steps usually involve boosting the efficiency of supplier relationships. Still relatively uncharted territory is incorporating information about customer requirements and post-sales data into the bigger PLM landscape.

“We’re in the real early stages,” explains Michael Grieves, director of IT programs for the Center for Professional Development at the University of Michigan’s College of Engineering. “Most of this is still collaborative engineering. You don’t yet see pieces of information from beyond the factory door being tied back in.”

But some early adopters are already seeing results. Since deploying PLM, Hamilton Sundstrand, for example, has produced more interchangeable parts, increased the flexibility in engineering job roles and reduced ECOs by up to 15%. Meanwhile, Flextronics, an electronics manufacturing services provider, has used PLM to better serve its customers—primarily high-tech and electronics manufacturers. Helping them meet their time-to-market goals, the company has accelerated the process of approving engineering changes—which can reach several hundred for a single product—from a week to less than a day. Flextronics’ next PLM objective is to incorporate some supplier management capabilities—such as quality tracking tools—across the organization.

Indeed, the potential of PLM to flow all the information produced throughout a product’s lifecycle to all members of an organization cannot be realized without the guidance of CIOs. By acting as chief architect and leader, CIOs can guide their companies through the challenging transition process to eventually claim the fruits of PLM—a streamlined product development process and an enhanced ability to innovate.

Source: There’s a New App in Town
Beth Stackpole
CIO Magazine, May 15, 2003
www.cio.com/archive/051503/app.html