Strategic Direction

Information backbone: Strong PLM investment

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, (2007),"Information backboneStrong PLM investment", Strategic Direction, Vol. 23 Iss 8 pp. 32 - 34
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 Innovations

Information backbone
Strong PLM investment

ecent statistics compiled by consulting and research firm CIMdata, Inc., show that

R the worldwide product lifecycle management (PLM) market grew 10.4 percent to
reach $20.1 billion in 2006. PLM investments are forecast to exceed an estimated
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$30 billion by 2011. This stronger than expected growth rate is attributed to continued
recognition of the value of PLM in improving companies business performance.
PLM is not just a set of technologies, but a strategic business approach that applies a
consistent set of business solutions in support of the collaborative creation, management,
dissemination, and use of product definition information across the extended enterprise from
concept to end of life integrating people, processes, business systems, and information.
PLM forms the product information backbone for a company and its extended enterprise. The
PLM industry encompasses investments in many different types of technologies and services.
CIMdata segments the overall PLM market into two primary sub-sectors: PLM information
authoring and analysis applications (Tools), and collaborative Product Definition management
(cPDm). Historically, the Tools sector has received the largest amount of investment, and in
2006 $13.2 billion was spent worldwide on PLM Tools such as mechanical computer-aided
design (MCAD), computed-aided manufacturing (CAM), electronic design automation (EDA),
engineering simulation and analysis, technical publishing, and others. Growth in this sector
was primarily driven by investments in EDA (up 11.9 percent) and mid-range MCAD (up 11
percent). Areas such as high-end MCAD and simulation and analysis experienced relatively
lower growth. However, the fastest-growing sector of PLM is for expenditures on cPDm, which
covers technologies and approaches such as PDM, collaboration and visualization, data
exchange, portfolio management, compliance management, strategic sourcing, enterprise
application integration, workflow, functional applications such as configuration management,
and solutions for specific industries or businesses.
Reinforcing the growing strength of the PLM market, CIMdatas finding show that there are
six companies with revenues of over $1 billion. The company also highlights companies that
have distinguished themselves as PLM Mindshare Leaders. These companies are
typically considered to be at the forefront of the market in terms of either revenue generation
or thought leadership. With broad-based capabilities that support a full product
lifecycle-focused solution, this group for 2006 includes, in market revenue order, Dassault
Syste`mes (which in 2005 was acquired MatrixOne), UGS (which in early 2007 was acquired
by Siemens), PTC, SAP, and Agile.

Expanding reach of PLM

According to CIMdata, across a broadening range of industries, some of the worlds largest
enterprises are improving top-line revenue growth and bottom-line performance as they

PAGE 32 j STRATEGIC DIRECTION j VOL. 23 NO. 8 2007, pp. 32-34, Q Emerald Group Publishing Limited, ISSN 0258-0543 DOI 10.1108/02580540710759151
 transform their business processes. However, impressive gains are likewise being
experienced by smaller and mid-size firms using PLM to boost productivity and improve
competitiveness. This is being helped by the growth of supplier-developed packaged
solutions and PLM solution providers fine-tuning their product suites and pricing models to
better meet mid-market requirements for PLM adoption.
For example, Lotus Cars, a long term CATIA user, has now expanded its design tools to
include a full PLM solution from IBM and Dassault Syste`mes. To build efficiency, ROI, and
ultimately happier customers, the company decided to implement an extended, integrated
PLM toolset for end-to-end product creation: CATIA V5 for design, DELMIA for production
performance, and ENOVIA SmarTeam for collaborative product data management.
Lotus reports that before implementing the integrated PLM, its creation and design change
requests involved numerous employees and countless hours. For instance, it took 14
designers to create an underbody and 150 hours to change the material thickness. But on a
recent project it completed a design with only six engineers and implemented a change
request in eight minutes. Similarly, with its PLM toolset, the company recently turned around
a new vehicle layout in under 24 hours. The customer proposed the idea at the end of one
day, and the team presented the project the next at a 9:30 a.m. meeting.
DELMIA provides an integrated virtual manufacturing environment that engineers use to
quickly spot issues and find solutions before production, saving time and money. This has
reduced the number of physical prototypes Lotus requires to validate vehicle assembly.
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ENOVIA SmarTeam centralizes data and organizes intelligence into nodes, linked to
different vehicle zones. Consequently, when Lotus engineers begin a new vehicle design,
they can get a head start by transferring knowledge nodes to the next model.

On-demand option
The ongoing expansion of PLM adoption has further been helped by suppliers (such as
Arena Solutions, Aras and Contact Software) who have differentiated themselves by
focusing on small and midsized businesses.
For example, Arena Solutions is a leading provider of on-demand product lifecycle
management solutions for manufacturing companies. As an on-demand, secure
Internet-based PLM service, Arena PLM provides an alternative to complicated, lengthy
and expensive traditional PLM software deployments. This service, which has reportedly
been a adopted by over 15,000 users across companies at all stages of development,
enables product manufacturers and global outsourced supply chains to streamline their
outsourcing, improve operational efficiencies, and speed time-to-market.
Foundry Networks, a recognized leading provider of high-performance enterprise and
service provider switching, routing, security, and Web traffic management solutions, has
standardized on Arena PLM to manage product data for all of its products. This greatly
simplifies collaboration by enabling its entire global supply chain to work concurrently from a
single, centralized product record that is easily accessed over the Internet. With real-time,
24 7 access to complete and accurate product records, costly errors and lost time due to
manual re-entry is eliminated, allowing Foundry to bring higher quality products to market
faster, while lowering its product development costs. And because the PLM seamlessly
integrates with the companys Oracle ERP, Foundry can guarantee data consistency
between systems, so eliminating costly and time-consuming manual data re-entry
processes and ensuring that material components are ordered based on the most current
information. In addition to managing product design and development data, the PLM system
enables Foundry to design its products to meet compliance regulations such as RoHS
(Restriction of Hazardous Substances).
According to Foundry, the on-demand model liberates it from maintaining costly IT
infrastructure and allows it to focus on what it does best, developing innovative networking
products.

j j
VOL. 23 NO. 8 2007 STRATEGIC DIRECTION PAGE 33

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Keywords:
Product life cycle,
Product management,
Computer aided design,
Product innovation,
Data management systems,
Simulation
j j
PAGE 34 STRATEGIC DIRECTION VOL. 23 NO. 8 2007
Extended capabilities
CIMdatas research also identifies that application suppliers focused on specific
technologies and functions that are part of an overall PLM environment continue to
expand the PLM footprint. Suppliers such as Accept Software, Centric Software,
RuleStream, and Eurostep are examples of companies that are adding extended
capabilities and value to PLM implementations.
Accept Software provides a comprehensive web-based solution for enterprise product
planning and innovation management. Its Accept 3608 software platform provides the
capacity to manage requirements and cross-product dependencies in the context of
products, portfolios, competitors, and resources. It therefore allows distributed product
teams, including product managers, strategic planners, and product engineers, to
collaborate in making and implementing the best decisions about which products to build
and which features to include.
Overall, the digital environment provides a formalized platform alternative to haphazard
product roadmap planning and development activities typically done through a loose
collection of spreadsheets, email, technical documents, marketing analyses and
presentations
Early adopters include leading IT firms like BEA Systems Inc., Mercury Interactive Corp. and
Veritas Software (acquired by Symantec Corp. last year). BEA Systems uses Accept 3608 to
provide a centralized view of its entire product development lifecycle and to guide the
expansion of its product portfolio into new markets. Actuate Corporation uses the system to
plan and develop multiple major product releases simultaneously. Other customers use it to
manage and integrate requirements and features with product roadmaps in portfolios in
industries as diverse as software, business process outsourcing, and manufactured goods.
Simulation and analysis
Finally, CIMdata reports that the area of simulation and analysis continues to receive
substantial emphasis, with expanded solutions to manage these environments and integrate
them more fully into a full PLM program emerging. Suppliers such as MSC have been quite
visible in driving this transition as well as the integrated simulation and analysis initiatives at
major broad-based PLM suppliers like Dassault Syste`mes and UGS.
For instance, a full suite of PLM technology from UGS has been extensively deployed by Eclipse
Aviation in its development of the innovative Eclipse 500 aircraft; a six place, twin-turbofan jet
aircraft has been developed and introduced at an industry-changing price model.
Eclipse designers have modelled the entire aircraft, down to the last rivet, in NXe software.
While all product information, from digital models to the last scrap of paper documentation,
is managed within Teamcenterw software, which also permits visualization, digital mock-up
and validation capabilities. The company reports that the digital mock-up and validation
capabilities proved vital in meeting time frames. To optimize this aircraft for weight, cost and
maintainability requires many, many design iterations. Typically, optimization is done by
building and testing metal mock-ups and revising the design based on the results. By doing
this work digitally, it cut an enormous amount of time out of the design cycle. Also, with
Teamcenter, Eclipse is able to use digital models for its frequent design reviews
Yet another area where the digital product information is particularly useful for Eclipse is
plant design. Since the company is building a facility, it has the opportunity to customize the
building for its unique needs. Through the PLM system the company has been able to import
aircraft models into Tecnomatix and then design factory spaces around them, simulating
different arrangements to find the ones that work best.
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