Executing PLM Strategy in a Disruptive Business Climate Dr. Marc Halpern, P.E. Research Vice President Manufacturing Advisory Services This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2012 Gartner, Inc. and/or its affiliates. All rights reserved. Global Volatility Demands Greater Product Lifecycle Management Focus Changing Market Demographics Environmental Stress Disruptive Technology Source: Baker, Bloom and Davis (2011)n(voxeu.org) Economic Uncertainty 1 Key Topics • What five business trends show greatest promise to address today’s challenges? • How is Product Lifecycle Management (PLM) evolving to support the emerging business trends? • Which priorities and practices enable the greatest chance for successful PLM implementations? 2 Key Topics • What five business trends show greatest promise to address today’s challenges? • How is Product Lifecycle Management (PLM) evolving to support the emerging business trends? • Which priorities and practices enable the greatest chance for successful PLM implementations? 3 1. Incorporate Software to Deliver the Value of Manufactured Products Processors on Wheels Physical Software Hybrids Soft Products • 10 million lines of code • 50 ECUs • 30,000 calibration parameters • Four or more vehicle BUS systems • Virtualized physical products • Software replaces mechanical HMIs • Electromechanical human-machine interfaces • Unlimited virtual products on PCs and mobile devices 2. Employ Social Media to Accelerate Product Innovation – Networked Cocreation 3. Leverage Product Life Cycle Analytics to Continuously Learn and Improve Brand Value Customers pleased? On time? On budget? Meeting specs? Revenue as expected? Quality targets met? Ideation Concept Detailed Production Ramp-up Service/ Design Design Support Retire Postretire Phases 4. Identify Opportunities for Products as Services to Produce New Revenue Streams Entertainment Tapes and DVDs Video streaming Automotive Car auction Zipcar renting Recreation Buying books E-readers 5. Implement Manufacturing 2.0 to Become More Agile and Fulfill Local Market Needs Degree of Contract Manufacturing Rate of NPDI Global Coordination Dynamic Multitier Collaboration Manufacturing 2.0 Manufacturing SOA Supporting: Multiple Manufacturing Styles Demand-Driven Manufacturing Multienterprise Collaboration Orchestration of Multivendor Services User-Centric Interface User Implementation Mobile Workforce Sensor Networks Dynamic Supply Single-Tier Network Collaboration Dynamism Static Internal Collaboration Manufacturing 1.0 (MES) Multisite MES MTS Single-Site (Owned) Local Execution ATO/ETO Multisite (Owned) Product/Manufacturing Complexity Multisite (Owned and Contracted) Product Mix Number of Manufacturing Styles Key Topics • What five business trends show greatest promise to address today’s challenges? • How is Product Lifecycle Management (PLM) evolving to support the emerging business trends? • Which priorities and practices enable the greatest chance for successful PLM implementations? 9 PLM is More About Discipline, Process, and Culture Than Software PLM is a discipline for guiding products and product portfolios from ideas through retirement to create the most value for businesses, their partners, and their customers PLM Addresses Product Costs and Revenue Cost-Reduction Enablers Revenue Growth Enablers COST CATEGORIES PLM SCM CRM ERP MES OPPORTUNITIES PLM SCM CRM ERP MES Material/part selection Identify New Selling Opps Production planning Differentiate Products Manufacturing Operations Diversify Product Sets Selling Access New Markets Service Increase Capacity Greatest Impact Notable Impact / Supporting Role Lower or no Impact PLM – Addressing the Global-Value Chain Design Define Post-Retire Retire Strategy Supply Governance Manufacture Content Capture, Control, & Reuse Ramp-up Service & Support Market Value Product Portfolios Profitable Supply Customer Needs Demand Insights Demand Data Materials Sourcing Product-Process Design Product IP and Data Mgmt. 12 Supply Network Supply Data Mapping Some Enabling PLM Application Classes to Five Business Trends # Business Trend Some related PLM and MES Software apps. Key Elements of IT Foundation 1 Embedded Software systems engineering, requirements mgmt., virtual prototyping, simulation and test data mgmt. software development environment, enterprise application integration 2 Networked Co-creation PLM/Mfg. cloud computing, neutral CAx formats, PDM Social networking, Collaboration software, enterprise content mgmt., portals 3 Continuous Improvement customer needs mgmt., process analytical tech., quality mgmt. systems, LIMS, sustainable design, PDM, product cost mgmt. BI/analytics technology, enterprise asset mgmt., enterprise content mgmt., search, data warehouse 4 Products as Services systems engineering, requirements mgmt., virtual prototyping, simulation and test data mgmt. ERP, CRM, software development and validation environment, web application servers 5 Manufacturing 2.0 Operations intelligence, synchronized BOMs, MPM framework, EAM service-oriented architecture, enterprise asset mgmt., 2-Tier ERP 13 Hype Cycle for Manufacturing Product Life Cycle Management and Production, 2011 expectations System Engineering Software Operations Intelligence SOA in Manufacturing MRO PLM Functionality Manufacturing Process Management Framework Energy Management in Manufacturing Sustainable Design PLM Asset Performance Management Product Cost Management Modeling, Simulation and Virtual Prototyping Synchronized Bills of Materials IT/OT Convergence in Manufacturing Two-Tier ERP Strategy for Manufacturing Operations Customer Needs Management Cloud Computing in PLM and Manufacturing MES Applications CAD-Centric Design Enterprise Manufacturing Data Management Intelligence Process Analytical Process Data Historians Technology Manufacturing Process Validation Regulatory Compliance Functionality Within PLM ISA-95 Integration Standards Virtual Factories Enterprise Asset Management Value-Chain-Centric PDM PLM-Centric Team Collaboration Parts and Materials Search and Selection Formula/Recipe Management Factory Scheduling Product Portfolio and Program Management Quality Management Systems LIMS Simulation and Test Data Management EH&S Applications Technology Trigger Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment As of July 2011 Plateau of Productivity time Years to mainstream adoption: less than 2 years 2 to 5 years 5 to 10 years more than 10 years obsolete before plateau PLM Market Dynamics Scope Oracle Corporate and Back Office SAP Aras, Selerant, Sopheon, other specialty PLM vendors, Microsoft Dassault Systemes, PTC Siemens New Product Development Autodesk Scale Small Enterprise Large Enterprise Key Topics • What five business trends show greatest promise to address today’s challenges? • How is Product Lifecycle Management (PLM) evolving to support the emerging business trends? • Which priorities and practices enable the greatest chance for successful PLM implementations? 16 Gartner Survey Shows Manufacturers Invest Big in PLM Software and Services Industry Participation Others 11% Aerospace and Defense 10% ($ Millions) Consumer Goods 31% High Tech 14% Automotive 16% Estimated Spending on PLM Software per Deployment Machinery 18% 62 Participating Companies Industry 50% of deployments Minimum spending spent at least reported Consumer Goods $2.4 million $300,000 Machinery $2.7 million $500,000 Automotive $7.2 million $1 million High Tech $3.2 million $100,000 Aero & Defense $2.3 million $300,000 Others $2.7 million $200,000 Best Practice PLM Deployments No. Best Practice Manufacturer Benefits Achieved 1 Focus on building business capability at the mindset layer U.S.-based healthcare manufacturer More systematic team-centric NPD processes with less dependence on skilled individuals 2 Mind-set layer of "macro" level elements International beverage company Instituted phase-gate process, yielding major quality advances 3 Evangelize the "configuration" mind set broadly Parts and equipment supplier Removed redundancy from product portfolio accelerated growth 4 Don't outsource configurational thinking Parts and equipment supplier Clear corporate thought leadership cultivated greater global cooperation 5 Triangular governance for IT implementation activities Apparel and footwear company Streamlined NPD processes yields shorter time to market 6 Engage suppliers in the PLM business transformation European machinery manufacturer Reduced incompatible and redundant product data improved NPD collaboration 7 Continue configurational thinking during change management U.S.-based healthcare manufacturer Helped institutionalize processes for capturing and reusing produce content This research was conducted in collaboration with Satish Nambisan, Lally School of Management, Rensselaer Polytechnic Institute and Robert G. Fichman Carroll School of Management ,Boston College Five Top Suggestions for Manufacturers of Products with Embedded Software 1. Use marketing intelligence, requirements analysis, and systems engineering to define products 2. Prioritize supply chain collaboration for software development and compatibility 3. Plan for software demands that are appropriate for product service life 4. Start software development earlier in the product development cycle 5. Enable software development tools as part of value chain PLM SW application stack. Five Top Suggestions for Manufacturers of Recipe/Formula-based Products 1. Use marketing intelligence and “formulation architecture” to define products 2. Managing specifications should be the backbone that links production planning with product development 3. Prioritize supply chain collaboration for raw material quality and traceability 4. Invest in infrastructure that streamlines variant artwork and packaging for variant formulas/recipes 5. Use PLM to harmonize “equivalent items” in diverse material masters when multiple ERPs are active 20 Summary • What five business trends show greatest promise to address today’s challenges? • 1) SW delivers product function, 2) Social networking supports innovation, 3) Business intelligence to improve continuously, 4) products as services, 5) manufacturing 2.0 • How is Product Lifecycle Management (PLM) evolving to support the emerging business trends? • Enterprise centric to value-chain centric, increasingly systems centric, greater accessibility through standards and “the cloud.” • Which priorities and practices enable the greatest chance for successful PLM implementations? • Align PLM and job performance metrics to business goals, engage business leaders, business operations, and IT, Configurational thinking across business and technical priorities 21 Gracias! !‫תודה‬ Grazie! email: marc.halpern@gartner.com phone: 1-203-316-6894 22 Tack!