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ValidatingthePossible
April2011 April 2011
JohnMacKrell,VicePresident j.mackrell@cimdata.com John MacKrell Vice President j mackrell@cimdata com Tel:+1.734.668.9922
CIMdatasMission
Strategicconsultingforcompetitiveadvantageinglobalmarkets
CIMdata is the leading independent global strategic management consulting and market research authority focused exclusively on PLM. l i l PLM We are dedicated to maximizing our clients ability to design and deliver innovative products and services through the application of PLM.
ROI&BenefitsareDrivenby3Factors
Recursiverelationshipamongpeople,technologies,andprocesses
People
Technologies
Processes
ROIBalance:Costsvs.Benefits
Arealandquantifiableanalysisisrequired
Costs C
Copyright 2011 by CIMdata, Inc.
Benefits B fi
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ROIHighlights
UnderstandingtheimpactofPLM
Determineandaddressbusinessopportunities PLMbenefitsreceivedbyanytwocompanieswilldiffer PLM benefits received by any two companies will differ understandyours Theappraisalmethodcausestheteamtobetterunderstand thebusiness Benefits&ROIhelpmanagement:
Makeeducatedinvestmentdecisions Reducetheriskofwrongdecisions Avoidgettingthewrongsolution
Peopleimproveinareaswheretheyaremeasured
PLM TheDefinition
PLM integratingpeople,processes,businesssystems,andinformation
Strategicbusinessapproach
NOTjusttechnologies Consistentsetofbusinesssolutions
Collaborativecreation,use, management&dissemination
Allproduct/plantdefinitioninformation thevirtualproduct
MDA,AEC,EDA,CASE,analysis,documentation, MDA AEC EDA CASE analysis documentation
Allvirtualproductprocesses
Processesthatplan,design,produce,support,
FullProductLifecycle
Supportstheextendedenterprise Spansfullproduct/plantlifecycle,fromconcepttoendoflife
Copyright 2011 by CIMdata, Inc.
PLMSpanstheProductLifecycle
PLMtouchesallphasesofaproductslifeandtheentirevaluechain
Conceptual Design Product Engineering Portfolio Management Requirements
Planning
Disposal& Recycling Maintenance &Repair Inservice Operation Sales& Distribution Test& Quality
Buildand Produce
PLM SolutionsInformation Management across Media, Process, Time, Geography, & Enterprise
Copyright 2011 by CIMdata, Inc.
PLMCosts
TheobvioussideoftheROIequation
Costs
Copyright 2011 by CIMdata, Inc.
Benefits
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CostModelforPLMSolutions
Typicalcostelements
PLMappraisal,selection,and PLM appraisal selection and implementationplanning Solutionimplementation Solution implementation Training Businessandsystemadministration Business and system administration
SoftwareCosts
Variouscostaspectsexist
Clientlicenses
Subscriptionlicensingmaybepossible OrnoneatallwithOpenSource
Serverlicenses
PLMsoftwaremodules,e.g.,documentmanagement,partsmanagement, f d l d productstructure,engineeringchangemanagement,etc.
Softwaremaintenanceorsubscription p
Annualfee,usuallya%ofvalueofinstalledSW
Databasemanagementsoftware
Formetadata
Other:
Applicationintegration Application integration View&markup,collaboration,etc.
Copyright 2011 by CIMdata, Inc.
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Selection &ImplementationCosts
Thesecostsareusuallymuchmorethanthesoftwareitself
Internalcostsforsystemselection,appraisal&justification, implementationplanning Internalcostofsubjectmatterexperts Costoflostuserproductivity(timeawayfromjob) Externalconsultancy Training(internalandexternal) Dataandprocessmodeling Integrationwithapplications Tailoringand/orcustomization Datacapture&cleaning Businessandsystemadministration
Copyright 2011 by CIMdata, Inc.
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CostFactors
MaincostdriversfortheimplementationofPLM
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PLMBenefits
MetricsquantifythebenefitsintheROI
Costs
Copyright 2011 by CIMdata, Inc.
Benefits
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MetricsHelpYouUnderstand
Someofthereasonswhymetricsareimportant
When,where,andhowpeopleareusing PLM Theeffectof PLMonthebusiness&itsprocesses The effect of PLM on the business & its processes Howwellthebusinessobjectivesforaprojecthavebeen satisfied Ifsponsorsarereceivingareturnoninvestments Areasthatneedimprovement A th t di t Requirementsforfutureimplementationsoftechnologies& processes Theongoingsuccessofyourbusinesssolutions
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NatureofMetrics
Metricsshouldmeetanumberofcriteria
Theyshouldmeasuredirectcost,time,countsavings Theyshouldbemeasuredbothbeforeandaftertheprojectis They should be measured both before and after the project is implemented(tosetbaseline) Theyshouldbereportedautomatically(vs.manually) They should be reported automatically (vs manually)
Facilitatetheprocess Assuretimelyreporting
Theyshouldbeevaluatedtoensuretheydon'tcreatean unwantedbehavior
Cantheybemanipulatedtoshowinappropriateresultsorhideproblems Dotheyviolatehowpeoplearemotivated
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GuidingYourPLMProgram
Indicatorsofprogramprogressprovidedirection
PLMprojectmetricstrackthePLMprogramsprogress PLMbusinessmetricshelpyouunderstandhowwellthePLM PLM business metrics help you understand how well the PLM programissupportingtheenterprises businessobjectives,e.g.,
Cost Quality Timetomarket Time to market
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ExampleBenefits
Examplerangesofbenefitsbasedonactualexperiences
Timetomanufacturing10%to50%reduction Engineeringchangeprocess10%to70%reduction g g g p Designreviewprocess50%to80%reduction Increasedproductivity10%to20%increase Increased productivity 10% to 20% increase Productdevelopmentcosts25%to40%reduction Newpartnumbers5%to15%reduction Timetofindinformation75%to90%reduction Designerrors10%to25%reduction Timetodesign15%to70%reduction Travelcostfordesign20%to35%reduction
Copyright 2011 by CIMdata, Inc.
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BenefitsforBusinessPerformance
Winagainstthecompetition
Enablesinnovation,predictability,companyflexibility,and bettermanagement
Respondmoreswiftlytonewchallenges,newmarkets,etc. Goodmanagementdependsonrapidaccesstofullanduptodate information CompaniesfirsttoharnessPLMwillraisebarriersofentryfortheir competitors Enablecommunicationswithpartnercompanies E bl i ti ith t i Supportglobalmanufacture,assembly,orservice Supportglobalproductexecution
Companies who continue to ignore PLM will learn all about it from their biggest competitors ll b i f h i bi i
Copyright 2011 by CIMdata, Inc.
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BenefitsforBusinessPerformance
QualityInitiatives
PLMenablesQualityAssurance
Upholdareputationforexcellenceandreliabilitythroughproductlifecycle Qualityimpactslegal,contractual,liability,costsavings,competitive,human resource,andenvironmentalissues Supporttotalqualitymanagementinitiatives&otherinitiatives Support total quality management initiatives & other initiatives
ISO 9000 Objectives: To supply quality products that dont come back, to customers who do.
David HoyleISO 9000 Handbook Hoyle
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BenefitsforBusinessPerformance
Regulatoryissues
PLMsupportsindustryregulationsandrequirements
Industryrequirements,e.g.,QS9000,FDA,RoHS,WEEE,REACHregulations Environmental,health,andsafetyconsiderations
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BenefitsfortheOrganization
Facilitateeffectivenessoftheorganization
Improvecorporatecommunications
Integrateproductdevelopmentacrossdivisionsofacompany Breakdowngeographicalbarriers Provideconcurrentaccesstoallenterpriseresources Accesstoallproductdata(e.g.,thetechnicallibrary)fromeverydesk Access to all product data (e g the technical library) from every desk
Supportorganizationalchange
Corporatereorganizations Corporate reorganizations Acquisitions Implementingconcurrentengineering&otherinitiatives Businessprocessreengineering Automationandenforcementofnewbusinessprocesses
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PLMBuildingKnowledge
Creating &managingyourintellectualassetstoenableinnovation Traditionally, the knowledge of the organization is the sum of that which is held by its people
Intellectual Assets (Incorporate Principles)
Knowledge
( (Patterns) ) Information (Relationships) ( p)
Data (Items) ( te s)
Adapted from Knowledge Management by Gene Bellinger http://www.systems-thinking.org/kmgmt/kmgmt.htm
Copyright 2011 by CIMdata, Inc.
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DataReuseCreatesValue
Yourintellectualassetsneedtobeleveraged
Allowproductdeveloperstoeasilyreuseparts,designs,& processes
Up to 80% of the work done in an engineering department is identical or very similar to work done previously previously
From Research by Arthur D Little
Themoreyourdataisusedandreusedthemorevalueit producesforyourenterprise
Reuseprovendesignswithconfidence Avoidprototypingandtesting Avoidreusingfailuresandrepeatingthesameoldmistakes Avoid re using failures and repeating the same old mistakes
Copyright 2011 by CIMdata, Inc.
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BenefitsforUsers
PLMisattractivetousers
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BenefitsforUsers
Empoweringtheorganizationwiththerightinformation
Empowersworkers
Provideseasyaccesstoknowledge&expertise
Reducesburdenofadministrativetasks
Automatestracking Recordswho,what,where,when,etc. Automaticallylinksrelatedinformation(e.g.,viewabledatatogeometric model,modelstospecifications) , p ) TransfersBOMstoERP,avoidrekeying Automaticversioningandrevisiontracking
Encouragesuseofacommonterminology Improvespersonalproductivity
Copyright 2011 by CIMdata, Inc.
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BenefitsfortheProductorService
Improvecustomersperceptionofproducts&services
Morequicklyrespondtocustomer queries
Navigatethroughdata Searchandfind Discoverrelatedinformation
Costs
Defined Costs
100%
50%
Whencommittedcostsarehighand incurredcostsarelow
0% Time
Engineering
Manufacturing
After-Sales
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BenefitsfortheProductorService
Facilityproductionandmaintenance
Facilitatelongerproductionruns
Cuttimetoproduction,timetocommissioned Benefitfromprofitmarginonadditionalproduction Gainvaluefromlargermarketsharefortheproduct
CutplantdowntimewithPLMandprojectmanagement
Iftheproductisaplantorfacility,cutnonproductivetime Opportunitytoimproveplannedmaintenance Opportunity to improve planned maintenance
Facilitatehandoffofproductdata
Apetrochemicalplantowner operatorestimatesthecostofmoving A petrochemical plant owneroperator estimates the cost of moving informationbetweenhookup&commissioningintooperationsat$10million
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BenefitsforBusinessProcess
Streamlinedesignreviewsandapprovals
Supportsreviewteamshavingacollectivecompetency greaterthanthatofthedesigners
E.g.,includerepresentativesof E g include representatives of marketing,purchasing,manufacturing, servicing,test,inspection,reliability, q qualityassurance y
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BenefitsforBusinessProcess
Improvechangeprocessing(1of2)
Makechangesearlierintheprocess
Improvedaccesstodesigninformation Workwithmoreuptodateinformation Supportconcurrentprocesses
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BenefitsforBusinessProcess
Improvechangeprocessing(2of2)
Majorprocessforcontrolofaproduct
Implementusingworkflow
Trackstheimpactofachange
Costandtime Partanddocumentrelationships Whereusedinvestigations
NC
PART
3D
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BenefitsforBusinessProcess
Increaseefficiencybystreamliningprocesses
Improvethepurchasingcycle
Effectivepurchasingdependsonmanagingdataandprocessesaswellasgood crossfunctionalcommunications
Speedworkorders
Workorders,withallrelevantreferencedocumentationanddatainafolder, distributedelectronically
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BenefitsforBusinessProcess
Increaseefficiencybystreamliningprocesses
Improvecrossfunctionalintegrationandcollaboration
Thepurchasingcycle profitfromlargerdiscounts,fewersuppliers,reduced inventory,fewererrorsresultinginscrap Changemanagementcycle
Speedresponseinemergencies S d i i
Predefineprocessestoaccessacompletedataset
Encourage&enablecontinuousimprovement Encourage & enable continuous improvement ofprocesses Enablebusinesstransformation Enable business transformation
Supportprocesschange&integrationwithlowerrisk
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ExamplesofMetrics
Applicability&importancevarybycompany&PLMproject
BusinessMetrics
Timetoaccessdata Time to access data Plantdowntimefor maintenance Costofchanges No.ofstandardparts/no.of specialparts p p No.ofsuccessfulbids/month Toolingcostsorassemblycosts Scrap,inventoryrates,orrework rates Warrantycosts,returns,orMTBF Warranty costs returns or MTBF
PLMProjectMetrics
Softwaredeliveredagainstplan Software delivered against plan Taskscompletedontime CostofITresources Numberofprocesses (workflows)implemented Quantityoflegacydatamigrated Quantity of legacy data migrated Numberoflicensesdelivered Numberofusersimplemented p Numberofuserstrained NumberofPLMsolutionerrors reported d
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BenefitsofOpenSource
MinimizecostofPLMlicenses
LowercapitalexpenseforPLMshortenspayback period&lowersupfront risks
BeclearthatjustbecauseyoudonthavetobuyPLMlicenses, youdon thavetobuytheinfrastructure(database,operating you dont have to buy the infrastructure (database operating environment,visualizationtools,otherproductdesign software,etc.) Reducesoftwaremaintenance&tailoringcosts ReduceTotalCostofOwnership p
Decreaseinitialstartupcosts&ongoingcosts
ResultisimprovedROI,achievedmorequicklywithbetter InternalRateofReturn(IRR)
Copyright 2011 by CIMdata, Inc.
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PartingAdvice
Howtrueitis!
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CIMdata
Strategicconsultingforcompetitiveadvantageinglobalmarkets World Headquarters
3909 Research Park Drive Ann Arbor, MI 48108, USA Tel:+1.734.668.9922 Fax:+1.734.668.1957
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