As was highlighted by Cambashi’s Mike Evans last month (see PLM: an introduction in TM Feb 2012) globalised industry is engaged in relentless innovation – high tech manufacturing particularly so. Vendors must develop new products and product versions quickly and continuously despite the constraints of downward pressure on prices and stringent regulations governing electrical and electronic equipment.
That means finding ways to accelerate and improve product design and development to get new products into production faster and more cost-effectively, and manage the whole product lifecycle – managing customer experience, as Evans suggested, but also ensuring compliance with WEEE, ROHS and other regulations.
Failing to recognise the above pressures could be damaging. Delays in bringing new products to market, for instance, can have a severe business impact for time and money spent on innovation is wasted if someone else commercialises a similar idea first. In addition failure to comply with industry standards can incur fines, re-work or product write-off – all in addition to reputational injury.
The problem for many product oriented businesses today in that product development and commercialisation processes are disjointed and inefficient. Evans eluded to this with his comments on the imbalance between global IT spend on design authoring as opposed to product data management software, and the persistence of a divide between product data tools and business process technology like ERP.
But this barrier to integrated product development and commecialisation is amplified when you consider that different divisions within large organisation and supply chain partners often use distinct systems, processes and ways of handling product data. This creates a barrier to collaborative working and increases the chance of weak links in the value chain causing design problems and delays.
IDC’s December 2011 report, The Product Value Chain in Manufacturing revealed that “On average, about 20% of projects are over time or budget, and more than onethird of product companies have experienced at least one runaway project. Overall, nearly 50% of the resources allocated to product development and commercialisation are wasted.”
In an industry which increasingly works to lean principles this is shockingly wasteful and a new, streamlined approach to managing the product value chain is clearly needed. That approach is now emerging, combining product authoring and data management technologies with the capabilities of Enterprise Resource Management as Evans suggested. Oracle terms this, Enterprise Product Lifecycle Management (Enterprise PLM).
A strategic issue
Enterprise PLM is a strategic approach to managing the lifecycle of a product throughout its full value chain in a company or across company boundaries. The approaches includes all processes; from requirements gathering through design, prototyping, certification, production, customisation, distribution and retirement. It unites all the partners in the value chain by providing a single, collaborative software platform.
Enterprise PLM is much more than just a technology solution. It represents a new, strategic approach to the product value chain that emphasises process efficiency, inter-organisational collaboration, rapid innovation, rigorous quality control, risk mitigation and cost-effectiveness.
Organisations that take an Enterprise PLM approach reap many advantages, including:
- Higher product quality
- Faster time to market
- A leaner value chain
- Better compliance with industry regulations
- Increased profitability for every product
- Better management insight into product-related processes throughout the value chain
Again as Evans pointed out in PLM: an introduction, product lifecycle management is not a new concept. Historically, designers and engineers have used CAD and collaboration software to work on product design and prototyping, developing innovative products as quickly and efficiently as possible. But this isolation of the design function is limiting.
Case Study: Sun Microsystems
Oracle acquired Sun Microsystems on January 27, 2010. Since then it has helped developed the company’s hardware and software components, producing such pioneering engineered systems as the SPARC SuperCluster T4-4.
At the time of acquisition, Sun Microsystems was managing product data within its engineering division, but the wider processes of the product value chain were characterised by a lack of standardisation and a reliance on aging and manual systems. Data sharing was difficult, keeping costs high and preventing the realisation of process efficiencies.
By extending Oracle Enterprise PLM to its new acquisition, Oracle was able to:
- Create a single version of truth for product information
- Replace Product Data Management legacy systems with Enterprise PLM
- Standardise processes and centralise access to product records
- Consolidate design specification management and access
- Implement automated supplier package generation
- Cut time to update from CAD to ERP
As a result, Oracle has reduced or eliminated manual data entry in many areas, lowered development costs and accelerated time to market for its new products, instigating true ‘Art-to-Part’ production with a clear flow from CAD concept to the finished product on the manufacturing floor.
David Burton, Director, PLM, Applications Development IT, Oracle states: “In just nine months and under budget, we standardised the processes across all hardware platforms and centralised access to product data across the product value chain. We decreased the average change cycle time by 25 per cent and were able to process a 38 per cent higher number of production engineering change orders.”
Oracle has pioneered the concept and delivery of Enterprise PLM, creating a world-class suite of software solutions that together provide a single product record and a comprehensive platform for complete product lifecycle management across the value chain.
Based on the market-leading Agile PLM suite, acquired by Oracle in 2007, Oracle Enterprise PLM also features best-inclass software solutions for project portfolio management, document visualisation, product serialisation management and business intelligence. With Oracle Enterprise PLM solutions, companies can move fragmented engineering and design processes into informationdriven product value chains with outstanding development processes, 360-degree visibility into product information, and real-time collaboration across the entire product network.
This combination of accelerated innovation through improved idea management and collaboration with better product portfolio management and analytics, data consolidation and cleansing and design for supply with product cost management is a powerful tool for a single organisation.
But the scope of Oracle Enterpise PLM reaches beyond this to include outsourced manufacturing product collaboration, supply risk analytics, and spend consolidation capabilities. It aims to align the value chain through portfolio and business planning, analytical enterprise quality management, accurate and clean product data publishing for rapid product commercialisation.
“Historically, designers and engineers have used CAD and collaboration software to work on product design and prototyping, developing innovative products as quickly and efficiently as possible. But this isolation of the design function is limiting.”
Glenn Neland, vice president of worldwide procurement for Dell and an Oracle Enterprise PLM used commented on his experience of the technology as being “rich and collaborative.” He went on to say that it “has improved communication with our internal divisions and supplier network, by ensuring that all product content information is centrally aggregated in a single global system and that all product changes are instantly disseminated and tracked across the global supply chain.”