Modern PLM - Enabling Innovation-Driven Growth

Tim Burks, Principal, PwC
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Tim Burks, Principal, PwC

Business leaders frequently tell us that innovation is critical to achieving growth. They expect innovation to create competitive advantage–by driving new products and getting them to market faster–that provides ever increasing revenues, all while meeting customers’ changing needs.When asked about their goals for improving product innovation capabilities, many executives talk about enabling breakthrough innovations or establishing portfolio excellence. Those are certainly noble and strategic goals, but they often are far afield from the practical realities faced by development organizations looking to efficiently execute on the next generation of products.

What’s missing in their strategies? How do you bridge the gap between those lofty strategic innovation goals and day-to-day development challenges? The answer may surprise you, but for many companies, it’s modern Product Lifecycle Management (PLM). PLM has come a long way from the 1980s and 1990s-style Product Data Management (PDM) platforms, defining BOMs and managing engineering change orders. Fortunately, modern PLM does much more, both up and downstream, and touches new and different user groups and business processes.

In the hands of savvy companies, PLM can be a real game-changer, enabling increased collaboration within companies and with partners, wrapping some structure around ideation, and ultimately boosting R&D, product development, and manufacturing efficiency. Combined these PLM benefits create opportunities for sustainable innovation.

  PLM has created a rapid-fire feedback loop that connects consumers, OEMs, and suppliers in near real-time   

Here are a few ways that companies have “pulled the PLM lever” to better manage the innovation funnel and the resulting product data:

● Capturing the “voice of the customer” and feeding it directly into the product development process
● Making partners equal members in the engineering change process, and reducing engineering change cycle time (down 50 percent)
● Proactively managing total product compliance, addressing FDA trade, conflict minerals, and other compliance requirements
● Significantly increasing BOM accuracy with strategic ODM (Original Design Manufacturing) partners (up 70 percent)

Enabling Collaboration

The design–source–make process is more complex than ever with product development activities being shared between multiple parties in different time zones. In other words, innovation has become a team sport. In response, leading companies invest in collaboration certainly with customers and suppliers, but even with competitors–to remain competitive and bring products to market faster.

Our Strategy & (formerly Booz & Co.) 2013 Global Innovation 1000 study found that companies spent 8 percent of their R&D budgets on digital tools. More importantly, it found that companies that were heavy users of those tools were 77 percent more likely to outperform their competitors with low or moderate usage. One of the major drivers of that improved performance was improved collaboration provided by digital technologies.

Today’s PLM solutions provide functionality to connect internal teams and external partners, design centers, suppliers, manufacturers, and even customers, in ways that were not possible before. Improved visualization capabilities and the prevalence of powerful mobile devices make engineering drawings, and even 3D models, readily available on the shop floor or the receiving dock or in the field.

Not long ago, a question about a part’s dimension required chasing engineering drawing via email, and then having a powerful machine to view them. Now, the same answers are found by searching the specs and rotating the models, and acted on by red-lining the BOMs, all on a tablet or phone that goes anywhere the employee goes.

These capabilities have led to near real-time collaboration. We’re at an inflection point, with more robust PLM practices and broader adoption just around the corner, extending this direct access to information to a larger community of users and decision–makers.

Structuring not Stifling Creativity

Used correctly, modern PLM systems can provide structure for ideation, capturing a company’s creative bursts while creating a more sustainable R&D process.

Historically innovation was unstructured by design and milestones were loose, as long as the “next big thing” got thrown over the wall often enough; manufacturing and supply chain teams were left to figure out how to make it better, faster, and cheaper.

Today’s world is less forgiving. Expectations for innovation are rising as companies face competitive pressures to drive down lead times and bring products to market faster. To keep up, leading companies are adding structure to the front end of product development, and using PLM processes and systems to capture and develop ideas, assess their financial feasibility, and then transition seamlessly to further develop and eventually commercialize the winners.

The improved collaboration we mentioned earlier is invaluable during ideation too. Brainstorms can happen at any time or place. A designer can jot down notes about a new idea, upload a photo of whatever triggered the idea or make a sketch on the back of the proverbial napkin—and others can comment on them or link them to other relevant ideas. Setting cost targets can happen sooner, and other speed bumps can be smoothed out before they become bigger problems.

This type of feedback loop allows good products to be more quickly green-lighted, tested, and launched. Similarly, the not-so-good products can be ferreted out before too much is invested in their development. Modern PLM can help manage the innovation funnel and improve overall product development flow.

Inviting Disruptive Design

PwC’s 2016 US CEO Survey shows that executives are looking at their businesses differently than they used to. CEOs plan to speed up their organizations to read and respond faster. Compared with peers globally, U.S. CEOs are more likely to shed some activities and plan on in-sourcing or partnering to beef up other areas in 2016. In doing so, U.S. CEOs talk about the growing need to develop organizational agility - an always-on, creative interaction with customers and partners that’s shifting to the guts of the organization.

For U.S. CEOs, the desire to form strategic alliances has reached a five-year high. This in turn emphasizes the need to strengthen data analytics, where 73 percent of CEOs see the greatest return in engagement with a wider group of stakeholders. Partnerships mean exchanging knowledge and information, thus pushing the concept of interoperability to the forefront, especially for players in Internet of Things ecosystems.

Modern PLM capabilities can help companies keep pace, enabling strategies such as design-anywhere build everywhere, and in some cases even become the disruptor. For example, feeding social media into PLM has created a rapid-fire feedback loop that connects consumers, OEMs (Original Equipment Manufacturer), and suppliers in near real-time. At the same time, PLM can help share and manage 3D printing files that let companies produce high quality prototypes, quickly and inexpensively, forcing competitors to raise their own game.

If you haven’t looked at PLM recently, you may be surprised to see how much it has evolved. It still plays the critical product data management role, only better than it used to. More importantly, it may be the missing link in your innovation strategy, helping to align internal and external teams and processes and providing that critical missing piece to actually take your product development capabilities to the next level.

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