Business benefits of a PLM system

Factors leading to PLM

The factors causing pressure for change in processes and increasing the amount of product data:
Growing competition and tighter budgets Internationalization of business Company mergers Shortening delivery times Less time available for developing new products Tightening quality requirements Regulations and common industry standards Tightening legislation
2

Factors leading to PLM

Growing competition and tighter budgets Tightening legislation Internationalization of business

processes need to change increasing product data

Regulations and common industry standards

Company mergers

Tightening quality requirements

Shortening delivery times

Less time available for developing new products

Changing mode of operations

Increased manufacturing automation

Changed organization

Expanded Product portfolios

More subcontracted work

Increased customer involvement

4

Impacts of the changes in the business environment

Major Problems: Finding the right product-related information Retaining the entirety of this information The Main Reasons:

Increasing variations of the products

Increasing amount of product information Increasing complexity of companies supply networks.
5

Vicious circle of deteriorating product data

Many companies have fallen into a vicious circle:
large number of items, numerous laborious assignments caused by the maintenance of item information, product data are problems that feed each other.

Benefits of the PLM system in product lifecycle management

Todays networked companies use heterogeneous information system environment Sets great demands upon the integration of systems and the transfer of information

PLM systems can improve the internal and external communication

~ the most important single benefit from a functional PLM system.

7

An important consideration in adopting PLM system

It allows for a radical reduction in many kinds of unnecessary information processing and transfer work.
Reuse existing information that: have been tested rigorously, have been used to make quality products.

These factors: -- > will ensure that changes being made in the design work will be more rational and faultless, -- > will increase the value of existing applications.
8

The working time of an engineer

PLM can eliminate these wastages.

A Coopers & Lybrand study from the year 1994

9

Immediate advantages with the help of a PLM system

Saving time Quick definition of the product structure. Decreased amount of overlapping work. Availability of latest part lists. Fewer corrections to information. Fast, easy retrieval of parts and drawings. Availability of planning information. Easier, faster documentation. Improved external and internal grade of service. Improvement in quality Automatic acceptance and release of document changes. Fast, accurate distribution of change information. Certificates, records and test results can be connected to a product. Availability of standards. Improved information security. Increased flexibility of operation. Reduction of tied-up capital The number of different items is reduced and items are more standardized. Reduced component stocks. The management of the total production load

10

Measuring the business benefits in daily operations

Converting the benefits of a PLM system directly into monetary terms is difficult.

2 different forms of savings:

Operational savings
intensification of the operative operation. decrease in expenses and working capital.

New or increased earnings possibilities

strategic matters

11

The flow of measuring benefits

Identifying typical problems

Identifying causes of problems

Determining indicators to measure operations

Determining development potential brought by PLM

12

Material costs: reducing inventory tied capital

Typical problems
o
o

Causes of problems
Difficulties in retrieving and controlling product data often lead to unwanted short cuts in operations model, The product data concerning component items is not up to date and is unreliable, There are difficulties in the internal and external communication of the company regarding product data and the changes that have taken place in it. 13

The item management of the company is not in order, The companys own component design and manufacturing is inefficient, Procurement buys the same type of components from different suppliers for different products, Product development and sourcing each maintain large amounts of overlapping information, The company makes overly fast and uncontrolled changes in the design of the product.

Material costs: reducing inventory tied capital

Indicators to measure operations
o The number of component items in the item base of the company divided by the products (the generic products) proportioned to the number of components in individual products, o Length of the cycle from purchase invoice to account sales, o Value of the component inventory
Development potential brought by PLM Ability to easily retrieve and maintain all necessary item information,

Reducing component stock and expanding the convertibility of components,

Better management of component information and better management of component suppliers and related information, Reducing the items in the component warehouse and dropping their value.
14

Improving the productivity of labour

Typical problems
The product knowledge of the product development organization depends very essentially on the individuals in the organization, Far too much work is needed to retrieve existing product data and to maintain and transfer, The reuse of existing information or experience from older products and functioning design solutions is difficult.

Causes of problems
Scattered product data over several separate information management systems (with no links). Separately maintained essential pieces of product data in separate product management systems. Push principle distribution of information. 15

Improving the productivity of labour

Indicators to measure operations
The direct costs of labour related to the transfer of information and change management of products. The time used in finding and retrieving information.
Development potential brought by PLM

Converting individual knowledge into intellectual capital available to the whole organization, Controlling and managing product data and product knowledge in electronic form, Reusing of existing information, Reducing the resources used in retrieving, maintaining, and transferring product related 16 information.

Costs of quality
Typical problems
Faulty or incomplete product design, Faulty product units during production or even after delivery, Problematic manufacturing , Returned products for repair under guarantee. Consuming work to handle problematic situations.

Causes of problems
Complexity of products and their processes, Lack of traceability in change management. Slowness of change processes. Shortcomings in the traceability of the orderdelivery process and of individual product content. 17

Costs of quality
Indicators to measure operations
Development potential brought by PLM

Ability to produce:
quality products ,

improved manufacturing processes.

Ability to reduce:
manufacturing defects, guarantee claims.

Greater ability to improve quality with the help of efficient, streamlined product processes. Fast, efficient change management, Traceability of change management and design 18 history.

PLM and data warehousing as a tool to support decision-making

PLM database Decision making

~daily tasks, ~user profiles, ~user activities, ~ files, ~documents.

statistical analyses

19

Use of quantitative information for developing processes

20

Data warehousing
The IT systems that support the different co functions. Data warehousing.

informed product lifecycle decisions (based on real information)

21