Product Meets Process - InformationWeek
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1/17/2006
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Product Meets Process

Product lifecycle management apps can help you gain control over disjointed activities, but globalization and emerging compliance requirements beg for a more process-oriented approach.

Product development at one time was the purview of a hidden, select group of people endowed with the special ability to envision what customers would buy. These people made product drawings, developed bills of material and invented manufacturing processes. When this "creative" work was finished, the information was sent to other departments for execution.

The trouble with this approach was that purchasing would invariably find required materials were unavailable, manufacturing would end up buying expensive equipment to meet arguable product criteria, and sales would question why the product had to be green when surveys showed white was overwhelmingly preferred. Meanwhile, departmental silos and schedule constraints conspired against revision. In many instances, as much as 70 percent of product cost was determined with little or no input from others.

Product lifecycle management (PLM) systems have brought manufacturers a long way toward introducing order and collaboration to an unaccountable amalgamation of undefined ad hoc input steps, but there's still a long way to go. Managing a product's full lifecycle, from idea to end-of-life, now requires broader collaboration and integration than ever, with globalized manufacturing, rampant outsourcing and emerging compliance demands extending the scope of product lifecycles and compounding complexity. These demands go beyond the capabilities of current tools and require a blending of PLM with capabilities provided by business process management (BPM) and service-oriented architectures.

Design to Disposal

PLM is much more than a software application, and its processes and impact go far beyond product development activity. Similar to the conceptual framework that supports lean manufacturing, PLM is a holistic notion of good management practices focused on the product itself, with these practices crossing departmental and enterprise boundaries. PLM offers many advantages, but three stand out:

  • PLM provides a real-time environment that supports global stakeholder collaboration from product conceptual design to end-of-life disposal.
  • PLM can provide a single "version of the truth," with a repository of design revision and design-to-disposal historical information
  • PLM brings products and related processes under tighter control.

Product lifecycle management is a methodology that uses technology to collect and manage the information associated with a product throughout its life. You may have thought this was the role of CAD systems (or the many computer-aided design, engineering or manufacturing systems that may be used to develop a single product), but these are primarily engineering tools. Product lifecycle information can include design data and material lists from suppliers and their suppliers; bills of material and and their many derivatives and revisions; design-for-manufacturing input; revision history, notes and source data; marketing and sales input; cost accounting data; test and performance criteria; manufacturing process requirements; as-built information, including quality assurance data; regulatory compliance confirmation and certification; and service and use history.

The PLM vision is inclusive, going beyond product development activity to an integrated, cradle-to-grave perspective. The vision is also compelling, making PLM among the fastest-growing segments of the business software market (see "Who's Who in PLM," below). The PLM market, worth $9.65 billion in 2004, grew 10 percent that year and was on track to grow 8 percent in 2005, according to AMR Research.

Full Circle

PLM systems have two distinct but well-connected parts. The first part includes the business processes and tools that bring products to life. The second part encompasses the information specific to a discrete item or batch as the product passes through production, use and end-of-life steps.

Who's Who in PLM?

At the start of 2005, what little-known software company had 4 million users, revenue of $1 billion per year, a $3 billion revenue target, a strong vision for its future and was preparing for an IPO? The answer is UGS, a company you've probably never heard of, spun out of Electronic Data Systems in May 2004. What exactly does it do? UGS is a leader in one of the fastest-growing segments of the enterprise software market: product lifecycle management — software that lets people coordinate their work across a process that begins with a product idea and goes all the way to end-of-life disposal. What's driving interest in PLM systems is the intensified march toward globalization, with an average of 20 companies touching any given PLM process. PLM lets you "tie together companies and tap the intellectual resources of China or India," UGS CEO Anthony J. Affuso recently told BusinessWeek.

Other vendors in the PLM market include Agile Software, Arena Solutions, CoCreate Software, Dassault Systemes, Fujitsu Siemens Computers, IBM, MatrixOne and PTC.
— Peter Fingar

From another perspective, PLM has three core components: Authoring includes the mechanical, electrical and software design aspects. In today's global outsourcing environment, this can include information from any number of sources that must be blended into the end product.

Visualization lets users collaborate across a wide range of participants in real time. The primary objective is to provide a current "single version of the truth," with a complete revision history.

Business process support provides a wide range of data about the product unit or batch during and after manufacturing. This includes bills of material, process requirements, engineering change orders, quality assurance and test information, regulatory compliance data, service and warranty history, and improvement suggestions that lead back to authoring (see the "Product Lifecycle Management" diagram).

CAD systems and other authoring tools have been available for many years. It's the extended cradle-to-grave view of the product that makes PLM a useful business tool, expanding horizontally to include wider participation and vertically to include data from more of the processes and events the make up the product lifecycle.

After the Sale

The product information horizon continues to grow. Design discussions with suppliers, online input from customers, engineering change-order management, design for manufacturing, and supplier component tracking are all now parts of a product history. The list also extends to regulatory compliance information, but keep in mind it is not a department or a company that is measured, but each instance of a product.

Who would have thought it would be necessary to track the life of a car part, as now required by the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act, or to monitor the use of certain raw materials (such as heavy metals), as required by Europe's Waste Electrical and Electronic Equipment (WEEE) regulations.

In another example, the FDA has a requirement to track by lot or batch number the shipment, movement and storage of food products all the way to the retail level to determine when and by whose actions contamination may have occurred. In the medical field, the FDA requires detailed product information through design, manufacturing and use of medical devices and pharmaceutical products.

Automotive manufacturers are building information chains to gather quality assurance information with an eye toward predicting warranty exposure. Thus, a product and each of its versions really can have a life of its own, with a long list of information required, often down to the unit or batch level.

Today's PLM systems do a good job of supporting authoring and visualization activities, with well-defined operational functions such as product change collaboration, product definition and supplier management. It's in the business process support area that requirements have exploded and PLM systems are coming up short. Standard applications simply aren't flexible enough to meet specific process demands to couple and decouple large numbers of disparate systems and information sources.

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