The widespread adoption of computer-aided design technologies some 25 years ago led naturally to a requirement for systems to manage the data being created by those technologies. Indeed, the Product Data Management (PDM) applications that grew out of this need drove further quality and productivity benefits by supporting information exchange between the multiple disciplines involved in complex product development projects. From their origins (usually attributed to the automotive industry in the mid-1980s), these systems have expanded to cover all of the creation and control of data associated with a product, from its inception to the end of its production. In turn, Product Lifecycle Management (PLM) technology has become one of the key enterprise applications for manufacturers.
PLM has followed a similar evolutionary path to the other key enterprise-scale computing applications (Enterprise Resource Planning, Supply Chain Management and Customer Relationship Management). That is to say that the technology began to drive workflow and even organisational changes, which in turn drove technology improvements that enabled further workflow enhancements. The result is that today, like its companion applications, PLM is about the entire interaction of technology, process, and organisational structure and roles.
Understandably, this evolution has taken a long time. Large companies with long-established processes for developing and supporting complex products have tended to deploy PLM in a way that controlled risk and allowed them to absorb the advantages of PLM in an incremental, manageable way. Along the way, PLM applications have exploited emerging technologies, and steadily gained in scope and functionality to meet the challenges of multi-organisation product development efforts and supply chains.
Cambashi has monitored the PLM market for many years. Our most recent studies strongly suggest that a combination of pressures is posing a major challenge to the established approaches of PLM solution providers. At the same time, there is a substantial opportunity for the latter to harness new technologies and drive major changes in PLM processes over the next few years – that is, bring about a new set of step advances in the industry.Addressing global supply chain complexity
The first of the pressures on the sector is the growing complexity of global supply chains. The changing global economic landscape – shaped by the relative maturity of the Western economies and the resulting shift in target markets – is forcing manufacturers and their suppliers to re-evaluate their supply chains in ways they would not have envisaged five years ago. ‘Global competitive pressures’ have been invoked as drivers for change for a long time. However, the need to serve new geographies, mitigate soaring material and energy costs, manage the risk of natural disasters and accommodate rapidly rising labour costs in emerging markets has never been higher on executive’s agendas. Companies realise that to develop efficient, flexible supply chains is it is critical to speed the adoption of supporting technologies, including PLM, throughout what is now more of a supply network than a ‘chain’. The challenge for PLM technology developers is to provide solutions with the necessary scalability, modularisation and global access.Smarting up
The second major challenge for PLM solutions is how to handle embedded software. The increasing prevalence of smart devices in almost every sector means that software must be accommodated as a product ‘component’, presenting new challenges for PLM technologies.
The automotive industry is both a leader in this respect – most new vehicles now have over 100 processors and several million lines of code – and a familiar example. As in the early days of PDM and then PLM, we expect the automotive industry to drive developments with respect to embedded software. Previously, good integration between PLM and software lifecycle management software was adequate, but the growing interdependence between software and the physical aspects of the product makes an even more holistic approach necessary.Overlapping enterprise applications
The third area that is seeing increasing change is the overlap between enterprise applications. The intertwined evolution of technology and process improvements has led to a situation where reaping the benefits of IT-enabled processes is constrained by the existence of enterprise application ‘silos’. ERP, CRM, SCM and PLM tend to exist in virtual isolation from each other. They are also usually underpinned by manufacturing operations applications like Manufacturing Execution Systems (MES), adding further complexity.
The transformation of enterprises into industry networks requires increasingly responsive and flexible intra-enterprise and inter-enterprise information exchange. The new information flow needed to support these evolving business networks will challenge the boundaries of traditional PLM, CRM, ERP, SCM and MES, which will become increasingly blurred. As a result, application software developers in each domain must review their product and market strategies. This means revisiting the functionality of their packages, deciding which ‘new’ areas outside their usual silo to expand into and how to differentiate themselves. Merger and acquisition activity and in-house development have already given all of the larger enterprise application developers wider portfolios than their original focus, and the pace of ‘cross-category’ evolution will only increase.Accommodating new technologies
The fourth area that the PLM industry needs to tackle (alongside the other enterprise application domains) is that of progress in the underlying technologies. The technology frameworks for application development and deployment have moved on substantially since PLM became a mainstream enterprise application.
To achieve the scalability, functional coverage and reach to support wide-ranging business networks, we expect PLM suppliers to exploit generic functional components, data management and exchange mechanisms. Adding to this will be the use of advanced user interface technologies available ‘off the shelf’ to drive web, cloud and mobile capabilities.
Progress in the software industry has always seen new entrants exploiting new technologies to ‘leapfrog’ existing suppliers’ offerings. Accordingly, we see market leaders like Dassault, PTC and Siemens continuing to enhance and extend their solutions. Among the newer players in this space, Autodesk is receiving particular industry attention for its cloud-based PLM 360 solution. It claims to address many of the issues that have, in Autodesk’s view, hindered a stronger development of PLM by being highly configurable, easy to use and deploy, and relatively inexpensive. This throws down the gauntlet to the existing market leaders, as it is likely to make PLM available to companies that were hitherto daunted by its cost and complexity. Will it also prove that a cloud-based, flexible infrastructure is capable of large-scale ‘serious’ PLM? The immediate future promises to be an exciting period for the PLM industry.
Tony Christian, Director, Cambashi
Tony brings to Cambashi wide ranging experience in engineering, manufacturing, energy and IT. His early career was in technical R&D roles, after which he moved into computer-aided engineering. He has led teams responsible for designing and rolling out manufacturing control systems at British Aerospace, served as director of the UK consulting and systems integration division at Computer Sciences Corporation (CSC), and was services and technology director at AVEVA Group, with responsibility for the company’s worldwide consulting and managed services business. Cambashi
Cambashi, a leading global industry analyst and market consulting firm, prides itself on delivering compelling insights on the use of IT to address critical business issues in manufacturing, process, distribution, energy, utilities and construction industries. Cambashi’s experienced team partners with clients to clarify and validate decisions, assess trends and articulate the drivers of value that impact businesses. Cambashi tailors its services to the needs of each client to improve collaboration and profitability across an organisation and is known for being highly responsive, meeting deadlines and delivering high value.
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