Peter A. Bilello, President Tel: +1.734.668.9922 Email: p.bilello@cimdata

Copyright © 2012 by CIMdata, Inc. 1

www.CIMdata.com

Copyright © 2012 by CIMdata, Inc.

Global Leaders in PLM Consulting

What does a successful PLM Implementation look like?PLM Innovation 201222 February 2012—Munich, Germany

Peter A. Bilello, President Tel: +1.734.668.9922Email: [email protected]


Our Mission...Strategic consulting for competitive advantage in global markets

CIMdata is the leading independent global strategic management consulting

and research authority focused exclusively on the PLM market.

We are dedicated to maximizing our clients’ ability to design and deliverinnovative products and services

through the application of PLM.


Our Clients… A sampling of CIMdata’s international industrial clients

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Strategic business approach NOT just technologies Consistent set of business solutions

Collaborative creation, use,management & dissemination ofproduct related intellectual assets All product/plant definition information – the virtual product

MDA, AEC, EDA, CASE, analysis, documentation, … All product/plant process definitions – the virtual processes

Processes that plan, design, produce, operate, support, decommission, recycle …

Supports the extended enterprise Spans full product/plant lifecycle, from concept to end of life

Our Definition of PLM...PLM – integrating people, processes, information, and business systems

Full Lifecycle


PLM spans the life of any “product” Manufactured products—automobile, computer, pill, soda, hat Projects—building, bridge, highway Plants—oil refinery, offshore platform Assets & Facilities—airport, railway system,

utility distribution network (e.g., electricity, telecoms, water, gas)

Others…

What Products Are We Talking About?Companies can’t afford to only think about traditional discrete products!


The Reasons for Investing in PLM Typical Cost Baselines Quantitative and Qualitative Measurements

Topics to be Discussed


For Business Performanceand Opportunities

For the Organization

For the Users

For the Product or Service

For Process Performance

Why Companies Invest in PLM…Main PLM benefit categories


PLM lowers costs PLM provides more business opportunities Enables innovation, predictability, company flexibility, and

better management PLM enables Quality Assurance PLM speeds business PLM supports industry regulations and requirements Provides access any time, anywhere to valid information and

proves the capability to satisfy regulators PLM maintains a traceable system of record

Benefits for Business Performance Product lifecycle cost and opportunities


Improve corporate communications Support organizational change Allow product developers to easily re-use parts, designs, &

processes

Re-use proven designs with confidence Avoid prototyping and testing Avoid re-using failures and repeating the same old mistakes

Benefits for the OrganizationFacilitate effectiveness of the organization

“Up to 80% of the work done in an engineering department isidentical or very similar to work done previously”

From Research by Arthur D Little


Retain configurations (too often dispersed) Manage engineering change processes Achieve faster response to customer queries Facilitate rapid product improvements early in product

development cycle Reduce the severity of errors and product changes late in the

product cycle Facilitate longer production runs Cut plant down-time with PLM and project management Facilitate hand-off of product data

Benefits for the Product or ServiceControl product configurations


PLM software & maintenance Hardware (additional needed for PLM) & maintenance

What gets charged to PLM?

PLM appraisal, selection, and implementation planning

Solution implementation Including data migration

Training Business and system administration

Cost Model for PLM SolutionsTypical cost elements


Internal costs for: System selection Appraisal & justification Implementation planning

Internal cost of subject matter experts E.g., development of requirements

Cost of lost user productivity E.g., time away from job

External consultancy Training (internal and external) Data and process modeling

Selection & Implementation CostsThese costs are usually much more than the software itself (1 of 2)


Testing Integration with applications Tailoring and/or customization

Including system configuration

Data capture, cleaning & migration Business and system administration Cultural/organizational change management

Selection & Implementation CostsThese costs are usually much more than the software itself (2 of 2)


People improve in areas that are measured—the reverse is also true To realize full benefits of PLM you may have to change how you measure &

reward personal & organizational success

Measuring performance helps to: Pinpoint problems and to find solutions Communicate progress and benefits to the entire

organization Prevent or diminish “negative talk” that may

undercut the success of a PLM implementation

If it is important to your organization, then measure it!

Metrics—Why Measure?They often play a critical part in PLM program success


Business Metrics PLM Project Metrics Time to access data Plant down-time for maintenance Cost of changes No. of standard parts/no. of

special parts No. of successful bids/month Tooling costs or assembly costs Scrap, inventory rates, or re-work

rates Warranty costs, returns, or MTBF

Software delivered against plan Tasks completed on time Cost of IT resources Number of processes (workflows)

implemented Quantity of legacy data migrated Number of licenses delivered Number of users implemented Number of users trained Number of PLM solution errors

reported

Examples of MetricsApplicability & importance vary by company & PLM project


When, where, and how people are using solutions The effect of technologies on the business & its processes How well the business objectives for a project have been

satisfied If sponsors are receiving a return on investments Areas that need improvement Requirements for future implementations of technologies &

processes The ongoing success of your business solutions They should measure costs & savings

Metrics Help You Understand…Some of the reasons why metrics are important


“The mistake people make is over-analysis of ROI. You need only a few key measurements that reflect the business and that you can leverage consistently over time.”

David Linthicum, “Does ROI Matter,” Infoworld.com, 20 Feb 2006

Use a few metrics that are meaningful to users & management Measure what is important to your customers Measure what is important to your business Select a variety of metrics—for delivery, cycle times, quality,

and waste Where possible, relate metrics directly to Key Process

Indicators (KPIs)

Choose Metrics CarefullyPoorly conceived metrics may create wrong behavior!


Metrics Must be Used with CautionYou may achieve unexpected or undesirable results

“The problem with any metric is that you maximize what you ask for at the expense of everything else.

Be careful what you ask for; you just might get it.

Generally, optimizing any single metric or small cluster of metrics results in a sub-optimal solution overall.”

Gene Rogers, Boeing, “Does ROI Matter,” Infoworld.com, 20 Feb 2006


Don’t Misuse Your Benefits DataHow true it is!

“If you torture data sufficiently, it will confess to almost anything.”

Fred Menger, chemistry professor (1937- )


Strategic benefits may be the largest of all, e.g.: PLM may be a catalyst for cultural changes PLM enables management initiatives such as BPR, CE, TQM, CALS/CITIS

Use group judgment to get a rough estimate If it can’t be estimated reasonably, it can’t form part of the

cost/benefit analysis, NPV, or ROI Try to understand it better, & communicate this to the

decision-makers and users Enhanced understanding will reduce risk & improve the

future operation of PLM and the company

Some Benefits are Difficult to EstimateQualitative issues that PLM may support


Product Oil well equipment

Business Problem Modular design-build process Diverse technologies and systems Design assembly at multiple sites

Benefits associated to PDM implementation Searching for valid/current designs

5 days to minutes Executing design reviews

5 days to 1 day

FMC Technologies, USAPLM benefits example


Product Elevators

Business Problem Unable to manage complex product configurations while at

the same time meeting customer requirements

Benefits associated to PDM implementation Reduced the time required to configure and design a custom

elevator From 75 days to 15 days (80% reduction)

Thyssen Ascenseurs, FrancePLM benefits example


Product Leading provider of “Low Floor” transit buses

Benefits Enabled Engineering to triple production

With NO increase to Engineering staff! CAD data vaulting eliminated:

“Lost” data Copies of data becoming incorrect

CAD data vaulting enabled: Assembly based concurrent engineering

Solid Modeling/Assemblies resulted in: Faster design process Better quality through “design-in-context” of the assembly—fewer mistakes in mfg.

New Flyer, CanadaPLM benefits example


Products Large assortment of food products

Benefits Time to develop labels reduced from 45 to 7 days due to earlier visibility of

recipe information Increased productivity while decreasing product cost Can now track supplier certification, corrective action reports, plant locations,

and products and specifications instantly

Heinz, USAPLM benefits example


You cannot maximize benefits by improving one of these 3 in isolation

Applying new technologies in out-of-date ways just allows you to create errors & take bad decisions more quickly

People are adept at using tools incorrectly—they have to be trained in the tools & the processes

3 Key FactorsPeople, technologies, and processes interrelate

People

ProcessesTechnologies


Success = vision + organization + process + vendor(s) + approach + environment

Use a broad vision and approach People want a business solution, not another system

Educate senior management & initial team Support and do not undermine company culture Select a partner; someone who understands your business

needs and has a proven solution and track record Scope should be well defined and understood

Required functionality at each stage precisely specified

Use pilot projects; the key to success Pilots per discipline, or department are often possible

Keys to Successful ImplementationsImportant aspects and issues


CIMdata Strategic consulting for competitive advantage in global markets

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Peter A. Bilello, President Tel: +1.734.668.9922 Email: p.bilello@cimdata