IT in manufacturing: PLM – an introduction

Posted on 6 Feb 2012
Mike Evans, research director , Cambashi

To give readers a grounding for the following extended article on Product Lifecycle Management software offerings, Mike Evans, research director at industry technology analyst firm Cambashi, gives an overview of the PLM software landscape, the purpose of the technology and the extent of its penetration in manufacturing.

What is PLM?

An exact definition of Product Lifecycle Management (PLM) remains elusive. However, the business idea it expresses is quite simple.

The concept encompasses all of the processes and software engaged in creating and managing product data from the initial identification of requirements through to the disposal of the product at the end of its life. The term PLM could therefore stretch its definition to encompass almost every business process and it has existed as a concept since long before supporting software began leveraging greater speed and insight.

It is an observed trend within manufacturing that traditional processes to identify, create, design, introduce, operate and dispose of products are being impacted by a series of business drivers. These drivers include rising customer savviness, shorter product-to-market windows, longer product life expectations, after-sales upgrades, regulation and more. And in response, companies are transforming themselves to create products and services that provide better customer experience and generate continuing revenues.

PLM processes differ industry by industry. New product introduction processes in industries such as consumer packaged goods and pharmaceuticals are quite different from those in discrete manufacturing. In addition, the size and geographical spread of a company, and where processes sit in the supply chain, from raw materials to the final product will alter PLM approaches.

The core mission of PLM tools may also change depending on the stage in the lifecycle at which it is applied. For example, when a product is in its early stages, many alternative designs are possible and tools need to maintain and evaluate many versions of the “design truth”. When the product is released to manufacture, all the downstream users need just one version of this truth.

Most PLM products help some sub-set of all the PLM processes in all industries, but no-one yet has a full deck of cards and confusingly, different software suppliers use the term PLM to describe quite different software portfolios.

The Product Lifecycle Management Landscape
The Product Lifecycle Management Landscape

Who’s using it?

World-wide, companies spend about US$22bn of their software budgets on tools that help R&D and engineering teams develop designs and processes that manufacture new products. Only about 20% of that is spent on tools that manage rather than author design data and four times that amount is spent on applications like Enterprise Resource Planning that support business processes in the rest of the enterprise.

To consider the state of deployment for the PLM concept, it is better to look at these types of software separately. Today, most engineers design with CAD, many of them using some kind of Product Data Management tool to assist release management and engineering change control.

Traditional design authoring software suppliers, whether generalists like Autodesk, Dassault Systèmes, Siemens and PTC, or specialists in vertical industries – Aveva in plant design; Bentley in architecture, engineering and construction; ESRI in infrastructure; Mentor in electronics – are extending their software to support product data enabled enterprise applications. At the same time enterprise applications developers like SAP are extending their product data models to include information such as geometry and test data.

The challenge for manufacturers is to implement a strategy that focuses the enterprise onto improving customer experience of their products. Typically, for every engineering software user, there is an order of magnitude more enterprise application users who also need product data. But the scope of just what can be achieved through greater cross enterprise interaction with product data is still only being realised to any extent in large companies. The battle is on to see which software developers will best support manufacturers with their next generation of tools.