CHAPTER 1

Introduction—The Path to PLM

Productivity is driven in waves. We create new ways of doing things or newthings to do that drive a new wave of productivity. Some waves of productivityare driven by a seminal invention such as the steam engine, the automobile, orthe computer. Other waves are driven by our approach to the way we do things,such as the assembly line, the multidivisional or M-form corporation, or leanmanufacturing.

As the newest wave in productivity, Product Lifecycle Management—popularlyreferred to as PLM—emerged in the last few years fully formed, or so itseemed. PLM was first piloted in the automotive and aerospace industries: twosectors with complex, manufactured products. The electronics industry, which hasproduct management issues that focus more on software configuration than thecomplex product configurations of the automotive and aerospace industries, wasalso an early adopter of PLM or PLM-like technologies. With the success of PLMin these three industries, interest in PLM has spread to businesses as diverseas consumer packaged goods (CPG), industrial goods, medical devices, and evenpharmaceuticals.

PLM is an outcome of lean thinking—a continuation of the philosophy thatproduced lean manufacturing. However, unlike lean manufacturing, PLM eliminateswaste and inefficiency across all aspects of a product's life, not solely in itsmanufacture. PLM is focused on using the power of information and computers todeliberately pare inefficiencies from the design, manufacture, support, andultimate disposal of a product. Wherever possible, PLM enables the movement ofinexpensive information bits in place of expensive physical atoms, a conceptpopularized by Nicholas Negroponte.

In doing this, PLM takes "lean" to the next level. Lean manufacturing is acontinual process that works at taking out the inefficiencies in themanufacturing process. However, as lean manufacturing efforts find and eliminatewaste, products are being produced less efficiently at other phases ofdevelopment. PLM uses product information, computers, software, and simulationsto produce the first product as efficiently and as productively as the lastproduct throughout the design, development, and delivery process.

Lean manufacturing requires considerable resources because changes that improveproduction cause equipment to be reconfigured, machines rearranged, and materialrelocated as the lean manufacturing engineers test their hypothesis that thisnew method will decrease waste. Once the system is set in place, PLM uses littlein the way of resources, since this same process is done digitally.

Testing lean approaches is time intensive, so only the most promising ideas forstreamlining the manufacturing process can be tried. The wall clock ticks awayas the new configurations are set up, production commences, and the results areevaluated. PLM does not operate under the same time constraint. PLM can simulatewall clock time, and it can do multiple versions of it simultaneously, so allhypotheses can be tested, not just the most promising.

Finally, lean manufacturing can only take an organization so far. The mostefficiently produced product resulting from the best lean manufacturingprocesses can be flawed as a result of design failure or failure in actual use.It is nothing more than efficiently produced scrap that is a waste of time,energy, and material. Productivity increases in the production of scrap are adisappointing, but logical, result of a limited approach to lean manufacturing.

Lean Thinking–Globally!

Seeing what lean thinking can do on the manufacturing floor has left companieseager to extend these benefits of lean into other parts of the organization.But, to do so, lean will have to be accompanied by an integrated approach toproduct information and the tools and techniques needed to enable thatintegrated approach. The level of productivity that PLM can drive promises to beenormous, as evidenced by the attention it has received in a short period oftime.

PLM has attracted worldwide attention on a global basis; it is not solely anAmerican or European initiative. It is being adopted by organizationseverywhere. We expect organizations based in the more industrial Asian countriessuch as Japan and Korea to be early adopters of PLM. However, organizations insuch diverse countries as India, Malaysia, and China are also not only adopters,but innovators of PLM.

PLM is able to raise the bar on productivity because it allows for the completeintegration of everything related to a product or service—both internaland external—into the organization producing it. As you'll learn as youread this book, PLM uses information technology and organizational practices andprocesses to improve efficiencies both within and across functional areas.Dividing work along functional areas, such as engineering, manufacturing, sales,and service, is an organization's method of dividing tasks in order to simplifycomplexity.

In the past, a great deal of effort and focus has been placed on increasingefficiencies within these functional areas. Although improvements can always bemade within the various functional areas, these initiatives suffer from the lawof diminishing returns. The high-return projects have been identified andremediated. This is especially true of those companies that have embraced SixSigma project teams, where their mantra is continual improvement.

In fact, PLM initiatives are becoming an option for Six Sigma teams looking forareas of improvement. Because PLM generally originates in a specificdepartmental area, it may be natural simply to view PLM as a functional areainitiative. PLM projects can naturally start in engineering, because that iswhere product information originates, and there are a substantial number ofopportunities to make improvements through better organization of productinformation. However, as we shall see throughout this book, the biggeropportunity is to use PLM to enable better information flow across the entireorganization.

Functional areas can easily become isolated silos, with little communication orcoordination among them. Attempts to optimize performance within these silos canactually lead to substantial underperformance across the whole organization andits related supply chain.

PLM holds the promise of improving productivity through a cross-functionalapproach, using product information. By linking different functional...