PLM - Highlevel Overview

PLM Scope To make fair and accurate comparisons, it is important to clearly define the scope of PLM. At the same time it is important to understand that not all companies define the scope of PLM the same way. Some PLM vendors, mainly those who have their origin in CAD, CAM and/or CAE (CAx) and still have these tools in their portfolio, include them in the scope of PLM to be able to report larger revenues. Some industry analysts also include these tools to make the PLM market look bigger. ThePLM Technology Guide defines the scope of PLM more narrowly - as illustrated below - and only includes aspects related to the management of information and processes created and used throughout the life of a product (see also “What is PLM?“). . Four different capability levels: Foundational Capabilities, which correspond to the traditional PDM capabilities, extended capabilities, integration capabilities and strategic capabilities. The importance and value of PLM varies throughout the lifecycle of a product. It is most important from ideation to product launch, i.e. during the development and design of a product, and has lower importance between product launch and the end of production, i.e. during manufacturing and distribution, when ERP takes over the dominant role. Finally PLM gains a little more importance again in product support and maintenance.

Most manufacturing companies distinguish two main process chains: The operational process chain and the technical process chain. ERP systems largely address the operational process chain, whereas below PLM Systems automate and enable predominantly the technical process chain.

PLM Systems

Product	Client Focus	Vendor
Accolade	Small-Medium	Sopheon
Agile Advantage	Small-Medium	Oracle/Agile
Agile e6	Medium-Large	Oracle/Agile
Agile 9	Medium-Large	Oracle/Agile
Aras Innovator	Small-Medium	Aras Corp
Arena	Small-Medium	Arena Solutions
Enovia MatrixOne	Medium-Large	Dassault Systemes
Enovia SmarTeam	Small-Medium	Dassault Systemes
BPMplus	Small-Medium	Ingenuus
ProductCenter	Small-Medium	SofTech
SAP PLM	Medium-Large	SAP
Teamcenter Engineering	Medium-Large	Siemens PLM Software
Teamcenter Enterprise	Medium-Large	Siemens PLM Software
Teamcenter Express	Small-Medium	Siemens PLM Software
Teamcenter Unified	Medium-Large	Siemens PLM Software
Windchill	Medium-Large	PTC
Windchill On-Demand	Small-Medium	PTC

Processes that are usually automated with PLM systems include:
Management

• New Product Development and Introduction (NPDI)
• Program Management
• Project Management
• Requirements Management
• Change Management(ECR/ECO)

Sales and Marketing

• Portfolio Management
• Proposal Response

Engineering

• Concept Development
• System Design
• Detailed Design
• Configuration Management
• Variant Design and Generation
• Verification and Validation
• Design Outsourcing

Sourcing

• Early Sourcing
• Component and Supplier Management

Quality Assurance and Regulatory Affairs

• Quality and Reliability Management
• Regulatory Compliance

Manufacturing

• Manufacturing Process Management
• Tooling Design and Manufacture
• Manufacturing Outsourcing

Customer Service and Support

• Product Support Analysis and Planning
• Technical Information Creation and Delivery
• Performance Analysis and Feedback

Change Process The change process is the process of requesting, evaluating, planning and implementing of changes to a product or process. Usually the change process consists of three phases: Identification of an Issue Engineering Change Request (ECR) Engineering Change Order (ECO) The process flow diagram below depicts a best-practice, closed-loop change process with activities and deliverables (courtesy of Metafore).

Business Problems PLM Can Solve

Typical business problems PLM can solve include:
Innovation/New Product Development:

• Bringing new products to market takes too long
• The product development pipeline is too small or nonexistent
• Undesirable mix between new and established products (Stars and Cash Cows)
• Not enough revenue generated from new products
• New product development projects are often over budget and over schedule
• Little or no visibility over status of new product development projects

Change Management:

• It takes a long time to process change orders through the organization
• Many people have to sign off on change orders
• Difficulty determining the impact of changes on products, documents, manufacturing procedures and production equipment
• Affected parties (internal, customers, suppliers, etc) are not notified of changes

Information and Intellectual Property Management:

• Difficulty to search, access and retrieve existing information
• Little or no re-use of existing information and parts
• Significant effort to re-create documents and drawings that cannot be found
• Little information security
• No or little protection of intellectual capital

Compliance:

• High cost and large effort to meet and adhere to all regulatory and environmental rules and requirements (SOX, FDA, EPA, ISO, ITAR, RoHS, REACH, WEEE, ELV, etc.)
• Difficulty to keep track of and meet all the different international regulations (US, EU, Japan, etc)
• Large effort to prepare for audits
• Risk of non-compliance
• Product redesign and changes to meet regulatory requirements
• Large effort to determine all materials used in a product

Business Inefficiency:

• Redundant or duplicate parts and resulting excess inventory
• Spend significant time and effort to re-enter data in various systems
• Spend significant time and effort to distribute information internally and externally
• Need significant space to storage paper files and documents
• Large paper consumption for printing and copying

Quantitative and Qualitative Benefits of PLM

Business Level Benefits
The following benefits can be expected as a result of implementing a PLM system. These results were determined in user surveys and show actual improvements attained (Source: VDI 2219 Guideline).

Benefit Area	Improvement
Time-to-Market	~ 30% Reduction
Cost of Quality	~ 20% Reduction
Product Development Costs	~ 24% Reduction
Product Costs	Up to 20% Reduction
Change Management Costs	Up to 40% Reduction

Task Level Benefits
The following benefits have been determined empirically. Generally not all listed benefits will be achieved cumulatively, and some may be redundant.

Task	Avg Time w/o PLM	Avg Time with PLM	Typical Improvement
Searching and retrieving information (data, documents, drawings, emails, etc)	2 hours/day	Minutes……	~ 90%
Gathering the complete history of a product or document (such as the DHF)	4 hours	15 Minutes	> 90%
Where used analysis	Up to 8 hours	Minutes	> 90%
New part setup (get new part number, find and enter associated data)	1 hour	10 Minutes	~ 80%
BOM creation	Up to 4 hours	Up to 1 hour	Up to 90%, depending on complexity of BOM
Change order creation and processing	8 Hours	1 hour	~ 90%
Data re-entry into various forms and business systems	1 hour/day	0	100%
Handling of paper documents (copying, printing, distributing, vaulting, etc)	1/2 hour/day	0	100%
Recreation of lost information (data, documents, drawings, etc)	1/2 hour/day	0	100%

After determining the specific benefits an organization can achieve they have to be converted in monetary savings to create a business case and to calculate the ROI/NPV that can be achieved through the use of PLM.

The Cost of PLM

The overall cost of a PLM solution is comprised of several elements and dependent on a number of factors.

Cost Element	Cost Type	%1)	Cost Dependent On n
Software	One-time capital investment	30%	Number of users Type of users: Authors and viewers Required functionality or functional modules Deployment option: On-premise or on-demand Licensing method: Floating licenses or named user licenses List price and discount
Software maintenance	Annual recurring expense	6%	Number of users Type of users: Authors and viewers Required functionality or functional modules Deployment option: On-premise or on-demand Licensing method: Floating licenses or named user licenses List price and discount
Hardware	One-time capital investment	8%	Number of users Number of sites Required configuration Desired performance Quantity of data and required disk space Required system availability and uptime Deployment option: On-premise, hosted or on-demand List price and discount
Education and software selection	One-time expense	8%	Number of system included Understanding of PLM Market knowledge Duration Thoroughness of evaluation Involvement of an external PLM consultant
Process optimization	One-time expense	8%	Number of processes Size of organization Documentation of existing practices and processes Methodology Understanding of PLM Involvement of an external PLM consultant
Implementation services	One-time expense	25%	Required configuration and/or customization Contract terms: Fixed price or time & material Hourly rate and discount
Training	One-time expense	5%	Training delivery: Vendor or Train-the-Trainer Training material: Standard or custom Training location: Vendor, on-site and/or web-based
Data migration	One-time expense	5%	Approach: Manual or automated Number of source systems Type of data: Metadata (item master, etc), structured data (BOM, assemblies, etc), files (CAD models, drawings, documents, etc) Quality of data Quantity of data
Post-go-live support	Annual recurring expense	5%	Duration Type and level of support Required response time Required system availability Hourly rate and discount

¹⁾ Approximate share of total initial cost (one-time capital investments, first-year software maintenance, one-time expenses and initial post-go-live support)
xxx
xxx
Based on the different elements and dependencies it is obvious that the cost of a PLM solution can vary widely. We know of companies that have implemented PLM for a few users and with limited functionality for less than $10,000, but there are also companies that have implemented extensive PLM functionality for tens of thousands of users and have spent millions of dollars.
As a rule of thumb we have found in numerous projects that the initial cost for a complete PLM solution will generally be in the range of $4,000 to $6,000 per user (for capital investments and one-time expenses). Where in this range the overall cost falls depends largely on the number of users and the implemented functionality. The more users, the lower the cost per user, and the more extensive the functionality, the higher the cost per user.

Courtesy - PLM Websites