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The Critical Realities Driving PLM Initiatives

May 27, 2009

By Alaine Portnoy, VP of Marketing, Omnify Software

Continuous technology advances, increased customer demands, growing compliance standards, global outsourcing, and economic pressures are just some of the reasons that today’s manufacturers need to implement controlled product design and development processes. Developing more complex, higher quality products, in less time leaves little to no room for inefficiencies if a company wants to meet product delivery goals and maintain a competitive standing in the market.
Product Lifecycle Management (PLM) is becoming the technology of choice for manufacturers looking to improve overall product development. PLM software provides a system to centralize product data, standardize business processes and streamline communication of information across distributed product development teams. PLM helps manufacturers meet today’s market demands and maintain a competitive advantage by helping to improve design efficiencies, shorten development cycles, increase product quality, meet compliance, and speed time-to-market.
If you are realizing any of these market pressures, you may want to consider executing a PLM initiative for your organization.
Reality No 1: Technology Advances and Complex Product Designs
Product content information is constantly changing throughout the design-to-manufacturing process. Keeping up with this continual change is critical for effective design and on-time delivery of quality products. Is your company able to keep up with your current environment?
 Many companies manage product information via manual processes with information stored in various locations and formats (Excel spreadsheets, Access databases, home grown systems, file cabinets, etc.). Without a centralized location to retrieve and manage product information, engineering resources are wasted on searching for information, data is shared and documented manually which opens up a greater opportunity for errors, and there is no synchronization of information between engineering and manufacturing so what is designed is not always what is built. 
PLM software is designed to manage product data throughout the product life cycle from concept through design to manufacture and support, by means of an automated process. PLM provides a central location to track and manage product information such as component data, Bill of Materials (BOMs), product documentation, engineering changes and revisions, quality issues, and compliance data, enabling easy and secure access to information by all appropriate team members.
PLM technology eliminates issues related to the disconnect between engineering and manufacturing where manufacturing is often not aware of new product releases and revisions and engineering is unaware of design issues impacting manufacturing and procurement processes. By facilitating the direct sharing of data between engineering tools (CAD/CAE) and business systems (ERP/MRP/CRM), engineers gain visibility into business-level information that they typically would not have access to such as vendor status, lead times, and costs, which helps them to make better design choices. In addition, automatically sharing data with business systems, such as product changes, ensures manufacturing receives the most current design information for more efficient production processes.
As product designs become even more complex and the pace of technology advancements accelerates, time-consuming and error-prone manual processes will not suffice in bringing competitive products to market. Looking at ways to automate and streamline processes is critical for success.
Reality No 2: Increased Customer Demands
Customer demands are higher than ever. There is a precedent that the products they purchase are to be of the highest quality, leverage the latest technology, meet their specific requirements, and are affordably priced.
How can manufacturers meet their customers’ demands while maintaining product quality and low cost?
As the demand for custom products delivered in a much faster timeframe increases, processes need to be in place to manage information and ensure customer needs are met without sacrificing product quality.  Implementing efficient and controlled product development processes with PLM software helps manufacturers get quality products to market faster by reducing time spent searching for information, decreasing design cycles, and ensuring accurate product information is available to design and manufacturing teams.
PLM also shortens the gap between the design engineer and the customer by providing direct access to quality information. Visibility into product issues and direct customer feedback offers key product information to help engineers design higher quality products that meet customers’ actual needs and keeps manufacturers ahead of the curve on new product designs.
Reality No 3: GrowingCompliance Requirements and Industry Standards
Regulatory requirements such as Restriction of Hazardous Substances (RoHS), Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), the Food and Drug Administration’s (FDA) 21 CFR Part-11 and 21 CFR Part-820 regulations, Federal Aviation Administration (FAA), and International Organization for Standardization (ISO) standards create additional pressures for manufacturers. Companies are faced with challenges on how to handle their product design and development to meet existing and impending guidelines.
In order to meet and maintain compliance, manufacturing companies need collaborative software solutions to ensure that information sharing and data classification is completely accurate and accessible to all product development parties. PLM can alleviate the costs and pains of compliance by automating the data management process, enabling manufacturers to easily identify, track, store, and report pertinent compliance information.
Reality No 4: Outsourcing
With the increase in outsourcing both locally and offshore, companies must implement processes to effectively communicate constantly changing product information with their outsource partners. 
PLM technology is built on the concept of sharing data with the extended enterprise, helping manufacturers meet challenges they face with outsourcing. PLM facilitates the secure sharing of product information among internal and external design and development teams, streamlining communication of information such as new products, changes, revisions, and configurations. With a PLM system in place, manufacturers can be assured that accurate product information is available securely and in real-time so that external partners can truly function as a seamless extension of their product development team.

Reality No 5: Economic Pressures
How will your organization stand up during economic uncertainty? Economic pressures have companies analyzing product development practices and making necessary improvements to create a lean and efficient environment. Are your current practices sufficient?
PLM technology supports greater efficiencies by streamlining the communication of information across the enterprise, ensuring data is accurate across all internal and external teams, and instills controlled processes. Manufacturers that have best practices in place with PLM realize many benefits that impact the bottom-line and help endure a tough economy such as: reduced scrap and re-work, better resource allocation, improved product quality and innovation, shortened product development cycles, and decreased time-to-market. 
Case in Point
A leading manufacturer of oxide single crystals, Crystal Technology, was experiencing increased pressure from customers for solutions to be delivered in a much faster timeframe. With a staff of 150 people working to deliver a number of highly customized product lines involving various product development teams, this manufacturer decided to take a look at their existing product development processes and find ways to improve efficiencies. They soon realized that a PLM system was what they needed to manage all of their in-depth product information and create a collaborative environment across the enterprise.
Crystal’s processes were all manual and paper-based. Sharing information among the multiple product development teams - internal and external - needed to be automated so that information could be available throughout the organization for faster reviews and evaluation. Crystal wanted a central repository that would be the ‘bearer of the truth’ for all data. With many product lines, and mostly customized products (each part is a custom application), they required a solution that could manage a large amount of part information such as specifications, package size, and specific output. Crystal needed to make sure the path they selected for designing new products enabled the re-use of some of their parts to cut cost and eliminate the re-design of previously available product subsets.
Crystal was looking to automate their processes in order to streamline product development and change management information between their Infor ERP Baan system and Cadence® OrCAD® design environment. “We were looking for continuity of information among these systems with some consideration for migrating information to our outsource partners, whether on the manufacturing or design side,” said Frederic Garderes, Director of Supply Chain Management for Crystal.
In addition, some of Crystal’s electronic assembly design is outsourced. They wanted a system that would simplify the packaging of information for output to their Contract Manufacturing (CM) partners including Bill of Materials (BOMs), part information, assembly instructions, and test specifications.
After initially exploring their existing Infor ERP Baan system as a potential solution, Crystal realized that a Product Lifecycle Management (PLM) system was what they needed to manage all of their in-depth product information. “Although it is excellent for our manufacturing environment, we found that Baan did not have the features we needed for managing our detailed design information nor did it have the level of access control we required,” commented Mr. Garderes.
Efficient Design Processes
Crystal implemented a PLM system which is now the master database for all of their parts from cradle to grave. The PLM solution helps Crystal to create more efficient design processes by providing engineers with instant access to information from their desktop through a direct interface to OrCAD. All of the detailed part, BOM, and document information that is stored and managed in the PLM environment is now available right at the fingertips of Crystal’s design engineers. The PLM system also facilitates communication of information to Crystal’s outsource design partners. Crystal can now easily package required information from the PLM system to send to their CMs and avoid redundancies.
Engineering Change Orders (ECOs) are implemented and controlled within the PLM tool and automatically pushed to Infor ERP Baan. “By controlling all of our engineering changes in the PLM environment, I will see who made a change and if there is a mistake, allowing me to catch issues early on,” commented Mr. Garderes. Crystal currently has 28 workflows in place for a specific product team where changes are reviewed and approved in the PLM database and then automatically released from document control to Baan, eliminating any previous inconsistencies due to manual entry of data.
Making supply chain information available at the time of design was another process Crystal wanted to implement to improve efficiencies. “We wanted Approved Vendor Lists, costs, suppliers on the AVL, and potential switches from supplier to supplier available to engineers to better meet customer requirements and save on costs,” said Garderes. “Having all of this data available in one view in the PLM system lets engineers know the inventory on hand and on order, who the supplier is, the availability, etc. so they can make better design choices.” Supply chain parameters are also updated in the PLM system. For example, if there is a change in the lead time for a part, that change is made in the PLM system and automatically routed to Baan. A similar process is in place for cost information.”
Meeting Compliance
As an ISO 9001:2000 and ISO 140001 registered company, Crystal is required to document certain procedures and maintain adequate records to conform to both regulations. By providing an automated process for documenting items such as ECOs, parts maintenance, and document maintenance, the PLM system provides a more effective solution for Crystal to pass future audits and maintain their accreditation. Crystal is also required to meet Restriction of Hazardous Substances (RoHS) requirements and uses the PLM system to identify, track and report compliance information to meet RoHS guidelines. “Our PLM product does a great job of helping us identify non-compliant BOMs and items, and is of great support consequently to map the conversions,” stated Mr. Garderes.
Time and Cost Savings
Implementing the PLM solution has helped Crystal meet their goal to improve product development processes and effectively meet customer demands while maintaining its focus on quality and cost leadership. “We are very satisfied with the results of our PLM implementation,” stated Mr. Garderes. “We have been able to reduce our ECO cycle by 16%, from 12 to 10 days, and this is trending towards even further reduction.”
Crystal is realizing significant time savings in finding information. Centralizing product information within the PLM system allows Crystal to retrieve historical and current information much faster than previous manual searches that consisted of diving into file cabinets. Now this information is available with a simple mouse click.
In addition, the company has achieved substantial cost savings, running at a return rate of approximately 2.5 times their investment over the first five years, with a projected ROI rate of 6.25 thereafter. “We have estimated a substantial cost savings of about $250,000 over a 5-year period due to the enhancements made to our product development processes.”
Closing Thoughts
It is quite clear that today’s market requires manufacturers to look at ways to improve their overall product development processes. Often, companies delay investing in enterprise technology such as PLM due to perceived cost and time issues. Today’s PLM technology is changing that landscape with more cost-effective solutions that can be easily implemented and deployed, often without an interruption in current processes. There is some planning involved in selecting and implementing a solution, but the benefits far outweigh the investment by helping manufacturers meet product development goals and maintain a competitive edge in the market.
For more information, contact Alaine at or view
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