The untapped potential of Product Lifecycle Management
Written by Dave Green (pictured, right) PLM Capability Lead, Europe and Africa, HCL Technologies
Product Lifecycle Management – much more than just data
Product development has traditionally been seen as the responsibility of Research and Development (R&D) or engineering departments. Hand-in-hand with product development comes Product Lifecycle Management (PLM); a function which is often wrongly positioned as product data management and thus rarely used to its full potential. This means that uptake of PLM processes has been limited and many enterprises are therefore not reaping the benefits that they can deliver.
However PLM is starting to find its way onto the executive agenda, as its ability to satisfy important health, safety or product stewardship issues is being noticed. Indeed, any solution that reduces organisational stress and improves compliance is welcome. Yet as PLM becomes more popular, it’s important that businesses apply it correctly to see tangible benefits. Applying technology to PLM processes can have a major positive impact, but only if it has a business process focus; successful PLM projects place processes before technology. Companies that focus too much on software can easily lose sight of the bigger picture and fail to achieve the successes that PLM can bring.
Elevating PLM to its rightful place
As product development has been the mainstay of R&D and engineering, these departments are often the ones that own the relevant technologies that support the process; such as mechanical Computer Aided Design (mCAD), Product Data Management (PDM) and visualisation tools. By elevating product development to PLM it becomes an enterprise-wide function; one which can deliver benefits across the entire business rather than limiting them to certain areas. PLM can support many other lines of business in their work, for example:
• Marketing – helping teams to analyse customer trends and market needs
• Procurement – allowing teams to take advantage of common parts for bulk buying, early visibility of design to reduce lead times, and relationships with key Original Equipment Manufacturers (OEMs)
• Finance – getting this department actively involved in crucial product costing
• Human resources – ensuring the organisation’s skills evolve apace with the latest technologies
• Health, safety and environment – helping teams to support sustainability of material choices and product
If you get this process right, as Apple has consistently done, then you become a global leader. Get the process wrong however, and you can quickly fall from grace, as Nokia did. It was Nokia that developed the smartphone back in 1996 and the touch screen prototype soon after, almost 10 years before Apple released the iPhone in 2007. Despite spending huge amounts on R&D, it failed to translate that into products consumers really wanted to buy in terms of functionality, quality and price.
Technology is only half the answer
Enterprises are faced with vast technological choice to support their PLM processes; from traditional mCAD/PDM type vendors to modern Enterprise Resource Planning (ERP) vendors extolling the virtues of an integrated platform. But before technology comes the process; the roadmap for successful PLM projects begins with internal teams. Examples are marketing, finance and procurement and, increasingly, external Original Equipment Manufacturers (OEMs) and customers. Starting out this way gets relevant stakeholders involved in a cohesive approach, rather than considering the technology first and trying to shoehorn people and processes around it second.
The next part of any roadmap will depend in many ways on the industry a business operates in. Consumer packaged goods organisations might want to focus on recipe development, product compliance, packaging and labelling; whereas a discrete manufacturer may be more focused on getting an engineering Bill of Materials (BOM) to a manufacturing BOM, supporting early procurement and tooling. For many businesses, Project and Portfolio Management (PPM) solutions provide the glue holding these complex machinations together, allowing teams spread geographically to collaborate and bring successful products to market more quickly.
Smooth delivery is as important as the destination
Finally, organisations must consider how to deliver PLM solutions to the business. In other parts of the software market, Software-as-a-Service (SaaS) solutions are rapidly growing in prominence, but there may be a reluctance to expose your precious product innovation to the cloud. Yet if there are no such security worries around putting sensitive procurement or financial data in the cloud, this is misplaced concern. A recent Gartner report found that “disruptive business models and evolving software priorities will transform the product design and life cycle management software market by year-end 2016.” Those businesses that currently have on-premise solutions, or indeed none at all, may well want to look at the cloud now.
Considering employing PPM tools and SaaS solutions in the delivery of PLM processes can minimise disruption, shorten implementation timelines and reduce the total cost of ownership. But to really successfully introduce PLM to an organisation, business leaders must see it as an enterprise-wide business process and avoid placing it in a silo which restricts the benefits it can deliver. Understanding how individual stakeholders and lines of business are going to access data and use it will help to inform the process, and eventually influence the decisions taken on technology.
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”