PLM Helps Innovation And Quality Improvement

In an environment where rising costs are forcing manufacturers to innovate to rescue shrinking bottomlines, reduced time-to-value is what most companies are looking at to meet this goal. Product Lifecycle Management (PLM) is a technology that can drastically reduce the time taken for a new product to go from red to black on the balance sheet.

PLM - A necessary strategic initiative to create innovative products

The advantages that PLM offers like transparency across stakeholders, collaboration and predictability make it a necessary strategic initiative for globally–focussed companies to create innovative products.

“In general, strategic decisions are driven by financial decision makers. In order to create a globally competitive product, M&M morphed from an engineering setup to a design-driven setup. With this change, PLM became a part of the company’s competitive strategy,” explains Ashok Asawale, senior GM – Information Technology, Mahindra&Mahindra.

Providing another viewpoint to the strategy behind implementing PLM, Mangesh Kale, MD, Precision Automation and Robotics India (PARI), states, “In an environment where knowledge is being generated in conjunction to innovation, PLM is extremely important as a tool to capture and store this information, so that it can be re-used”.

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Innovation driven by the visibility that PLM provides

Given that innovation is more a necessity than a luxury today, you have to employ the right technologies to help foster this process of development. Innovation can be explained as a process of adding differential value and if companies get a bigger frame of reference in respect to a particular object, the change in point of view often leads to innovation.

“The visibility provided by PLM to all the stakeholders alters their earlier ‘siloed’ view of a process. With this added visibility, innovation automatically becomes a part of the game,” explains Asawale.

‘Big-Bang’ implementations cause change management issues

As with any enterprise solution, implementation is the main part of the battle for PLM too. Let’s look at some of the hurdles that companies need to overcome to implement a PLM solution.

As majority of users of a PLM system are designers, the thought of sharing one’s creations and having designs open to inputs from other team members doesn’t go down too well. Thus, the foremost challenge faced by most enterprises revolves around people and change management.

“Some customers implement PLM in a ‘Big-Bang’ fashion. User acceptability in this scenario becomes very difficult as they will be reluctant to use a new system,” says Ramchandra Walvekar, GM and head, PLM Practice, Wipro Technologies.

Another challenge that enterprises face is getting buy-in from all stakeholders involved. “Top management has to convince employees that this system is not intended to police them, instead it is implemented to aid the execution of their tasks in a more efficient manner,” said Kale.

RoI measured differently for strategic initiatives

For any strategic initiative, clearly defining RoI can be tricky, but both M&M and PARI give us glimpses here of how executives look at RoI with reference to PLM implementation.

“As PLM is a strategic initiative, it should not be looked at in traditional financial terms. For example, I get a certain output by investing Rs 100. However, if I put in an additional Rs 10, which helps me drop labour costs and reduce cycle time by 50 percent along with giving me guaranteed improvement in quality, PLM has given me adequate RoI,” states Asawale.

Kale has a similar take on the subject of RoI. “For us, the RoI comes from capacity enhancement and after implementing the PLM solution, we have seen a 50 percent enhancement in capacity. Thus, we have achieved a higher RoI than we expected”.

PLM leads to innovation and increased market share

Considering the fact that PLM spans the entire lifecycle of a product, integration with other enterprise applications is a business imperative. Let us see how PLM fits into the larger scheme of things at an enterprise.

“PLM primarily works on product data. To make product information available for procurement purposes, the ERP solution is used. For this purpose, the product data has to move between the PLM solution and the ERP solution. Thus, tight integration of PLM with other enterprise solutions is a must,” states Asawale.

“ERP, SCM and CRM systems have been implemented by most large manufacturers today, as they provide bottom-line savings and are therefore, no longer a competitive advantage. PLM helps companies innovate, which in turn helps increase profit margins and market share. I would not consider ERP, SCM and CRM as peers to a PLM solution. I would position PLM at a much higher level, as this is where the information is mastered and all the other systems then use this information,” opines Walvekar.

Establishing manufacturing ability early on guarantees quality

With benefits ranging from greater collaboration to helping manufacturers ‘get it right the first time’, does PLM deliver everything it promises?

“PLM makes the assumptions of various stakeholders visible, it makes their actual working visible, thus, developing transparency and aiding collaboration. This collaboration changes the vertical, ‘siloed’ environment into a single, horizontally integrated, well oiled machine,” says Asawale.

“It is the ability that PLM provides to capture a thought at the design stage, control the possible variations so that manufacturing ability is established in advance, which helps guarantee an improvement in quality,” elaborates Asawale.

“PLM definitely helps an organisation to increase market share, reduce time-to-value and cut costs. In a nutshell, PLM helps you innovate and improve the overall quality of the product,” says Walvekar.

At PARI, PLM is effectively used as a knowledge management tool, which has helped the company ‘get it right the first time’. “This process is as imperative as breathing to us. If we don’t get it right the first time, we’ll just not survive,” concludes Kale.