Session 01 - Introduction To PLM and Business Value of PLM PDF

Week 1:
Introduction
Business Value of PLM Course
Dr. Korhan Sevenler & dr. John Stark
Restricted © Siemens 2020

Page 1 © Dr. Korhan Sevenler & Dr. John Stark Siemens Digital Industries Software
Welcome to the Business Value of PLM course.

And welcome to the first week of the course. It's an introduction both to the course
and to PLM.
1
Objective of the
“Business Value of PLM” Course
ü At the conclusion of this activity, participants will

be able to explain the business value of PLM and
take part in a company’s PLM activities.

This is a reminder about the objective of the Business Value of PLM Course.
As you know, at the conclusion of the course, you'll be able to explain the business
value of PLM and take part in a company's PLM activities.
2
Contents of the
“Business Value of
PLM” Course
Week 1 Introduction to “Business Value of PLM”
Week 2 The Environment of Product Companies
Week 3 Product-related Business Processes
Week 4 Product-related PLM Applications
Week 5 Product Data
Week 6 PDM and ALM Systems
Week 7 Product-related Methods
Week 8 Mid-Course Review and Midterm Exam
Week 9 Internet of Things (IoT)
Week 10 Industry 4.0
Week 11 PLM and Executives – Top Down and Bottom Up
Week 12 The PLM Initiative
Week 13 Organisational Change Management and the PLM
Initiative
Week 14 PLM in Practice
Week 15 End-of-Course Review
Here's an outline of the content of the course. As you know it's a 15-week course. As I
mentioned, this week is an introductory week. Next week the subject will be the
environment of product companies. The following week I'll look at business
processes. And then PLM applications. Followed by product data. The subject of week
6 is PDM and ALM systems. After that, I'll address methods and techniques. The
following week we'll have a mid-course review and the midterm exam. When that's
out of the way, I'll address the Internet of Things. And then Industry 4.0. Week 11
looks at executives in the context of PLM. That's followed by the PLM Initiative and
Organisational Change Management. The penultimate week looks at PLM in practice.
And in the last week, we'll have an end-of-course review.
3
Week 1:
Introduction to “Business Value of

PLM”

Let's get started with this week's subject, an introduction to Business Value of PLM.
4
Week 1: Objective
Ø At the conclusion of this activity, participants will be

able to describe why and how PLM emerged. They’ll
be able to:
Ø outline the environment of products;
Ø describe the traditional management approach,
the issues and the pressure for change;
Ø summarize new approaches and the emergence
of PLM.

By the end of today's session, you should be able to describe why and how PLM
emerged. You should be able to outline the environment of products, describe the
traditional management approach to products, and the issues and the pressure for
change. You should be able to summarise new approaches and the emergence of PLM.
5
Contents of Week 1
Lesson 1 Developing and Supporting Products
Lesson 2 The Environment before PLM
Lesson 3 The Emergence of PLM

There are three lessons this week.

Lesson 1 looks at the activities and challenges of developing and supporting products.
Then, Lesson 2 looks at the product-related environment before PLM.
Then, Lesson 3 addresses the emergence of PLM.
6
Start of Lesson 1
Developing and Supporting

Products

So let's get started with Lesson 1 of Week 1 of the course - looking at activities and
challenges of developing and supporting products.
7
Developing and
Supporting Products -
Content
A. Products
B. Developing, Manufacturing and Supporting
Products is Hard
C. Complexity of Managing Products

In this lesson, I'll address 3 subjects.

First, I'll look at products in general. No particular product, products in general.
Second, after that, I'll show that developing, manufacturing and supporting products is
hard.
Then I'll look at the overall complexity of managing products. Again, no particular
product. Products in general.
8
A. Products
Ø Importance of Products
Ø Examples of Products
Ø A Busy and Complex Product Environment

Let's start by looking at products. There are three main topics here. First, I'll address
the overall importance of products. Then I'll give some examples of products. And
then third I'll look at the typically busy and complex environment around products.
9
Importance of Products
The product is important. It’s

Øwhat the customer wants, and
Øthe source of company revenues
A company generates revenues from its portfolio

of innovative and upgraded products
ØGreat products make it the leader in its sector
ØGreat products lead to great profitability

I'll start by underlining that the product is very important. It's what the customer
wants, and it's the source of company revenues. Company revenues come from its
portfolio of products. Great products make the company the leader in its sector. Great
products lead to great company profitability. So, to put it mildly, products are very
important.
10
Examples of Products (1)
There’s a wide range of products

Ø Some tangible
Ø Some intangible

When you think about it, there's a very wide range of products. There are all sorts of
products.
Some of these products are tangible. These are products you can touch, products such
as a smart phone and a machine.
And some of these products are intangible. These are products you can't touch, such as
software.
And there's a diverse range of products. There are products as diverse as a soft drink
and a tractor.
11
Ø Products come in all shapes and sizes
Ø Sometimes products are mixes of products and services

Products come in all sorts of shapes and sizes. For example, a dollar bill is a rectangle,
about a tenth of a millimetre thick and 15 cm long. A lot of products are much larger.
For example, an aircraft may be over 70 metres long and weigh over 400 tons. And
again, there's a diversity of products. A product may actually be a service. Or a
package of services, or a bundle of products and services.
12
Products may have
Ø Packaging, labelling, literature
Ø Delivery mechanisms, connectors
Ø Different forms

The product is often more than what may seem, at first glance, to be the product. For
example, product packaging is often part of the product. Similarly with product
labelling. Another example, the product may include product literature. It may also
include wires and plugs that connect it to the outside world. A product's delivery
mechanism may be part of the product. The product may come in single or multiple
form, for example, soft drinks.
13
A Busy Product Environment - Parts
There are many products

Ø Products may be made of many assemblies
Ø Assemblies may be made of many parts and
components
Parts may range in number

Ø From a few tens of parts
Ø To a few hundred thousand parts

Most companies have many products. Each of these may be made up of very many
assemblies and very many parts or ingredients, depending on the type of product. An
assembly may also be made up of very many parts. Many products contain a lot of
parts or ingredients. At one extreme, a shampoo may only contain a few ingredients.
At the other extreme, an aircraft may contain a few hundreds of thousands of parts.
14
A. Busy Product Environment - People
Ø There are many people, with titles such as

account manager business analyst cost accountant course developer
crater CIO designer director
database administrator executive drafter environmental engineer
documentation clerk field engineer financial analyst HR manager
knowledge worker IT manager lease representative manager
assembly line worker marketer network specialist PC technician
product developer product manager programmer project manager
finance manager quality manager recycling director resident engineer
sales associate support staff salesperson service engineer
software developer technician system consultant system developer
technical support analyst test engineer validation engineer VP

There's a busy environment around products. There are many people in that busy
environment, with many titles. For example, documentation clerk, field engineer,
financial analyst, HR manager, product developer, product manager, programmer, and
project manager.
15
A Busy Product Environment - Activities
Ø There are many activities, such as

Manage the Capture product Screen ideas Evaluate proposals Prioritise projects
Portfolio ideas
Identify Specify products Define BOMs Define Design Rules Design products
requirements
Cost products Purchase parts Simulate parts Test parts Manage orders
Configure products Plan Manufacturing Make parts Assemble parts Use products
Get feedback Solve problems Make changes Replace parts Maintain products
Refurbish products Compare actual Hire people Upgrade equipment Retire products
costs
Disassemble Recycle parts Train people Report progress Measure progress
products
alliance contract preparation contract review corrective action delivery
management
risk management design control disposal document control service provision
change handling inspection leadership operations
management
analysis packaging process control supplier audit integration
project management prototyping validation quality assurance quality control
equipment purchase progress review machine set-up plant maintenance verification
product modification acquisition project planning part storage disposal

There are also many activities in the busy environment around products. For example,
risk management, design control, disposal, document control, service provision,
project management, prototyping, validation, quality assurance, and quality control.
16
A Busy Product Environment - Data
Ø There is a lot of data, and many documents, such as

Analytic models Analysis results Assembly As-built Bill of Materials
drawings configuration
CAD geometry Consumables lists Cutaways Engineering Change data
drawings
Costing data Customer Disposal lists Design Cutsheets
requirements specifications
Equipment logs Equipment data sheet Exploded views Factory layouts Failure reports
Flowcharts Formulae Functional specs Label information Ingredients list
Line lists Machine libraries Maintenance info Material certification Mounting data
NC programs Packaging standards Parts Parts lists Patent reports
classifications
Photographs Pipe specifications Pneumatic Process model Project flows
diagram
Project plans Process plans Purchasing data QA records Recipes
Regulatory rules Results of calculations Scanned Schedules Service lists
drawings
Service manuals Shop floor instructions Simulation results Sketches Software
Spare part info Specifications Standards Standard costs Status logs
Test data files Technical publications Test results Tool designs User guides
User manual Validation reports Versioning data Wiring diagram Video files
There is a lot of data, and many documents, in the busy environment around products.
For example, project plans, process plans, purchasing data, QA records, recipes,
regulatory rules, results of calculations, scanned part drawings, schedules, and service
lists.
17
A Busy Product Environment - Applications
Ø Many applications are used, such as
Requirements Management Rapid Prototyping Viewers Content Management

CAD, CAM, CAE Factory Simulation Simulation Image Management
Idea Management Robot Path Analysis Compliance Management Process Mapping
Discovery NC Programming Knowledge Management Visualisation
Concept Management BOM Management Project Management Collaboration
EDA Routing Definition ALM Data Exchange
Recipe Development Calibration Product Data Management Data Translation
Plastic Behaviour Analysis Tool Management Document Management Process Definition

Many applications are used in the busy environment around products. For example,
CAD, CAM, CAE, simulation, image management, EDA, routing definition, ALM,
and data exchange.
18
A Busy Product Environment - Techniques
Ø Many techniques and methods are used, such as
ABC Benchmarking BPR CI CWQC

DFA DFE DFM DFSS EMI
FMEA FTA GT ISO 9000 ISO 14000
JIT PDCA PY QFD Six Sigma
Teamwork TQM TRIZ VA VE

Many techniques and methods are used in the busy environment around products.
They often have acronyms, for example, DFA, DFE, DFM, DFSS, EMI, JIT, PDCA,
Pokayoke, QFD, and Six Sigma. The acronyms often have three letters, they're Three
Letter Acronyms, TLAs.
19
B. Developing, Manufacturing and Supporting
Products is Hard
ØProduct ideation is hard

ØProduct development is hard, it’s
Ø Complex, costly, time-consuming, inefficient
ØProduct Use and Support can be Hard
ØProduct use can be dangerous
C 13H 10N 2O 4 (thalidomide), Pb (plumbum), Dichlorodiphenyltrichloroethane,
blue asbestos, brown asbestos, green asbestos, white asbestos
ØProduct disposal can be hard and dangerous

In such a busy environment it's not surprising that developing, manufacturing and
supporting products is hard. Product ideation is hard. Product development is hard, it
can be complex, costly, time-consuming, and inefficient. Product use and support can
be hard. Product use can be dangerous. Product disposal can also be hard and
dangerous.
20
C. Complexity of Managing Products - Identifiers
Ø Many identifiers
Ø Name, number, description
product
part
piece a model number
article a series number
item a type number
component an company-internal number and name
element a code name
module a project name during development
sub-assembly …
Page 21
assembly © Dr. Korhan Sevenler & Dr. John Stark Siemens Digital Industries Software
Ingredient
The environment…around products is complex. There may be many identifiers for a
product. It may have many names, numbers, and descriptions. For example, a product
could have a model number, a series number, a type number, an company-internal
number and name, a code name, and a project name during development.
21
C. Complexity of Managing Products - Numbers
ØBatch (Lot) number, SKU number
4078 6179
4 078600 156263
ØSerial numbers
5 000158 063815
BN 129 405
ØSignificant (Intelligent) part numbers

L63-GE-P8 14Q1890469
L25-US-P1
14Q1890470
L25-JP-P4 L63-PO-P8
14Q1890471
L25-GE-P8 L63-PO-P8
14Q1890472

Products may also have a batch number or a lot number. They may have a SKU
number, a Stock Keeping Unit number. Sometimes the numbers will follow a serial
numbering scheme. Sometimes the numbers will follow an intelligent numbering
scheme.
22
C. Complexity of Managing Products – Keys, Languages
ØProduct key
XB123-Z456N-CD765-LKJ54-PL1N7-02
ØDescription language

A product may also have another number, a product key such as XB123-Z456N-
CD765-LKJ54-PL1N7-02. The environment around products is complex. The product
description may need to be in several languages.
23
C. Complexity of Managing Products – Meaning
ØNumber of parts
"this product is made up of seventy-seven parts"
Ø standard parts?
Ø new parts?
Ø wiring?
Ø purchased parts?
Ø different parts?
ØProduct number and part number

Ø part number 245678-01
Ø product number M2016N

The environment around products is complex. Even something as basic as the

number of parts in a product may not be simple. It may not be simple as it may refer
to standard parts, or only new parts. It may not include purchased parts. Or perhaps
only different parts are counted. And sometimes the same thing will have both a
product number and a part number.
24
C. Complexity of Managing Products – States
ØMany product states
ØUnder development
ØPreliminary
ØPrototype
ØPilot
ØProduction
ØEarly access
ØReleased
ØService
ØDiscontinued
ØObsolete

The environment around products is complex. A product may be in one of many

states such as under development, or preliminary, or prototype, or pilot, or
production, or early access, or released, or service, or discontinued, or obsolete.
25
C. Complexity of Managing Products – Versions
ØMany versions of a product
Version 1
Version 2
Release 1
Release 2
HP 2133
HP Mini 2140 Notebook PC

There may be many versions of a product, Version 1, Version 2, Version 3. Or many

releases. Release R3.2, Release R3.2. The product changes between releases.
26
C. Complexity of Managing Products – Variants and Options
ØVariants
Variant 1: 8.9-inch WXGA display; 1280 x 768 resolution
Variant 2: 8.9-inch WSVGA display; 1024 x 600 resolution
ØOptions
Carrying Case
Basic Carrying Case
Value Nylon Case
Universal Nylon Case
Executive Leather Case
The product may come in many variants. For example, Variant 1 may have a 8.9-inch
WXGA display with 1280 x 768 resolution. Whereas Variant 2 may have a 8.9-inch
WSVGA display with 1024 x 600 resolution. The product may come with many
options, such as a Carrying Case, a Basic Carrying Case, a Value Nylon Case, a
Universal Nylon Case, or an Executive Leather Case.
27
C. Complexity of Managing Products – Structures
ØMany product structures to manage
A list An Array
Bottle Assembly 1 Bottle Front label Back
Liquid shampoo label
Screw cap Assembly 2 Labelled shampoo Liquid
bottle shampoo
Front label
Assembly 3 Filled bottle Screw cap
Back label

The environment around products is complex. There may be many product structures
to define and manage. And a product architecture to define and manage.
28
In Conclusion
ØProducts are important

ØProduct development and support isn’t easy
ØThe product environment is complex

In conclusion, products are important, product development and support isn't easy, and
the product environment is complex.
29
Back up

These are Back up slides.
30
C. Complexity of Managing Products – More Numbers
ØUPC, GTIN-12
0 39047 00513 6
1 digit, a space, 5 digits, a space, 5 digits, a space, 1 digit
ØGTIN-13
9 783319 174396
1 digit, a space, 6 digits, a space, 6 digits
ØGTIN-8
4078 6179
31
C. Complexity of Managing Products – Other Numbers
3 282799 352390
311 394
ACL 3401398339609
CNK 2917-706
Art. 80653
Art. 80608
80653.210.GA.03
4 005808
4 005808 50599 505999
61518008 HR 61518008 HR
7616 9908
5141.421
95126-01
32
C. Complexity of Managing Products – Architecture
ØProduct architecture – what goes where?

33
C. Complexity of Managing Products – Portfolio
ØProduct portfolio – by industry, family, line ?

34
End of Lesson 1

That's the end of Lesson 1 of Week 1 of the course. I'll continue later with Lesson 2,
and look at the environment before PLM.
35
Start of Lesson 2
The Environment before PLM

This is the start of Lesson 2 of Week 1 of the course. The subject of this lesson is the
environment before PLM.
36
The Environment before PLM - Contents
ØThe Past Environment

ØDepartmental Approach in the Past Environment
ØDepartmental Border Issues in the Past Environment
ØSerial Workflow in the Departmental Environment
ØPiecemeal Improvements in the Past Environment
ØProduct Data Issues in the Past Environment
ØEngineering Change Management in the Past Environment
ØProduct Pains - In Public
ØProduct Pains - In Private

I'll address this subject in 9 parts. I'll start with The Past Environment. Then look at
the Departmental Approach in the Past Environment. I'll move on to Departmental
Border Issues in the Past Environment. Then I'll look at Serial Workflow in the
Departmental Environment. After that we'll review Piecemeal Improvements in the
Past Environment. And then look into Product Data Issues in the Past Environment.
The seventh part will address Engineering Change Management in the Past
Environment. And then I'll look at Product Pains. First, Product Pains In Public. And
then Product Pains In Private.
37
The Past Environment
Why’s the past environment important?

Ø Understanding the past environment helps in
understanding PLM
Ø Many companies retain some of the
characteristics of the past environment
Ø The differences compared with today’s
environment support the need for a new way of
managing products

First, I'll look briefly at the environment for managing products before PLM emerged.
You may wonder why this is an important subject. There are several reasons. One
reason is that understanding how the product environment has changed helps
understand PLM. Another is that many companies still retain characteristics of this
past environment. Another reason is that understanding just how different the past
environment was from today's environment supports the need for a different way of
managing products.
38
What was it like (1)?

Ø Second World War, Iron Curtain
Ø domestic market
Ø an agreed paradigm, departmental, multi-level
hierarchy
Ø paper-based

So what was the past environment like? It was an environment that had changed
relatively little over more than 50 years.It had its roots in the first half of the twentieth
century. After the Second World War a new geopolitical situation had emerged. The
Iron Curtain divided the capitalist West from the communist East. There was little
trade between the West on one hand, and Russia and China on the other hand. In this
environment, most product-related companies were focused on their own, domestic
market. Companies had worked out how to succeed in this environment. They had an
accepted way of thinking, a paradigm, about the way products should be managed.
Companies were organised in functional departments which worked in serial, one
after the other, first Marketing, then Engineering, then Production and finally After-
Sales. There was a multi-level hierarchy of managers. Information was on paper.
39
What was it like (2)?

Ø male engineers, slide rules
Ø female secretaries, typewriters
Ø lifetime employment
Ø formal, slow, customers waiting patiently
Ø little competition
Ø experience curve
Ø “free electrons”

Male engineers used slide rules for calculations. Female secretaries produced male
managers' memos and technical reports on typewriters. It could take years to develop
a new product, 7 years or more in the automotive industry. People waited weeks, or
months, for delivery of the product that they had ordered. As there was little
competition, and little choice for buyers of a product, manufacturers felt no need to
change.
40
Departmental Approach in the Past
Environment

The departmental paradigm for the management of a company's products can be

visualized with an organizational chart of this type. The Marketing Department
decided which products were needed. The R&D (or Engineering) Department
designed them. The Production (or Manufacturing) Department produced them. The
Service (or After-Sales) Department supported them.
41
Environment
What happens next?

Ø Each department
Ø Gets its own objectives
Ø Organizes to meet its objectives
Ø Focuses on its own activities
Ø Has its own bonuses
Ø Needs a bigger budget
Ø Defines its own guidelines

There are many good reasons for organizing a company in functional departments. For
example, departmental responsibilities can be made very clear. However, in practice,
the departmental paradigm didn't work quite as well as expected. Each Department
focused on its own activities.
42
Environment
R&D’s View
Marketing Service
Marketing VP Service VP

And each Department saw itself as the most important, as the center of the world.
Each Department saw the other departments as less important.
43
Departmental
Approach in the Past
Environment
Service’s View
Marketing
Marketing VP
R&D
R&D VP

From the R&D viewpoint, R&D has to do everything. Marketing can't be relied on to
fix product requirements, Production can't be relied on to make the changes required
by R&D. So it's really important for R&D to make sure that it does as much as
possible to be able to run great projects to develop great new products. And to be sure
it can do this, it needs to be in control of its own data, have its own applications,
control its own people, write its own departmental guidelines, take all the decisions
that affect it, and so on.
44
Departmental Approach: R&D’s World
R&D
• R&D VP
• R&D objectives
• R&D managers
• R&D specialists
• R&D projects
• R&D knowledge
• R&D KPIs
• R&D applications
• R&D data
• R&D guidelines
• R&D training
• R&D jargon
• R&D activities
• R&D equipment
Restricted © Siemens 2020 • R&D methods
So each department, such as R&D, went its own way. To be sure it was in control, it
ran its own business. Concerning data, each department structured and formatted the
data the way that fit best to its needs. To be sure data was in its preferred format, it
even recreated data that another department had already created. It developed its own
data bases to be sure it had the data it needed. It implemented its own applications, to
meet its specific needs. It used its special jargon because that made it easier for
everyone in the department. It had its own methods, its own performance indicators,
its own guidelines.
45
Departmental Approach: Production’s
World Production
• Production VP
• Production objectives
• Production managers
• Production specialists
• Production projects
• Production knowledge
• Production KPIs
• Production applications
• Production data
• Production guidelines
• Production training
• Production jargon
• Production activities
• Production equipment
Restricted © Siemens 2020 • Production methods
Each department behaved this way, not only R&D, but for example also Production.
46
Environment R&D Production
• R&D VP • Production VP
• R&D objectives • Production objectives
• R&D managers • Production managers
• R&D specialists • Production specialists
• R&D projects • Production projects
• R&D knowledge • Production knowledge
• R&D KPIs • Production KPIs
• R&D applications • Production applications
• R&D data • Production data
• R&D guidelines • Production guidelines
• R&D training • Production training
• R&D jargon • Production jargon
• R&D activities • Production activities
Ø Departmental information silos
• R&D equipment • Production equipment
Ø Departmental islands of automation • R&D methods • Production methods
Ø Duplication of data between departments,
Ø Duplication of activities between departments
Ø Contradictory versions of data in different departments
Incompatibilities at departmental borders

The result was departmental information silos, and departmental islands of

automation, duplication of data and activities between different departments,
contradictory versions of data in different departments, incompatibilities at
departmental borders.
47
Environment
R&D
ØA Hierarchy of Departments •
•
R&D VP
R&D objectives
Production • R&D managers

• Production VP • R&D specialists
• Production objectives • R&D projects
• Production managers • R&D knowledge
Service • R&D KPIs
• Production specialists
• Service VP
• Production projects • R&D applications
• Service objectives
• Production knowledge • R&D data
• Service managers
• Production KPIs • R&D guidelines
• Service specialists • R&D training
• Service projects • R&D jargon
• Production data
• Service knowledge
• Production guidelines • R&D activities
• Service KPIs
• Production training • R&D equipment
• Service applications
• Production jargon • R&D methods
• Service data
• Production activities
• Service guidelines
• Production equipment
• Service training
• Production methods
• Service jargon
• Service activities
• Service equipment
• Service methods

Each department imagined a hierarchy of departmental importance - with itself at the

top of the hierarchy.
48
Environment
Ø The Hierarchical Approach is repeated within the departments – adding to the

issues

The Hierarchical Approach was repeated within each department, adding to the issues.
Within each department, there could be Groups, and then Sections.
49
Environment
Ø Result
Ø Product development cycles got longer and
longer, costs increased
Ø Root Cause
Ø The root cause was the way the company was
organised
The end result was that product development cycles got longer and longer, and costs
increased. The root cause was the way that the company was organised.
50
Departmental Border Issues in the Past
Environment (1)

This is a picture of the departmental organisation.
51
Environment (2)
Marketing R&D
• Marketing VP • R&D VP
• Marketing objectives • R&D objectives
• Marketing managers • R&D managers
• Marketing specialists • R&D specialists
• Marketing projects • R&D projects

• Marketing knowledge • R&D knowledge
• Marketing KPIs • R&D KPIs
• Marketing applications • R&D applications
• Marketing data • R&D data
• Marketing guidelines Production • R&D guidelines

Service
• Marketing training • Production VP • R&D training
• Service VP
• Marketing jargon • Production objectives • R&D jargon
• Service objectives
• Marketing activities • Production managers • R&D activities
• Marketing equipment • Production specialists • R&D equipment
• Service specialists
• Marketing methods • Production projects • R&D methods
• Service projects
• Production knowledge • Service knowledge
• Production KPIs • Service KPIs
• Service applications
• Production data
• Service data
• Production guidelines
• Service guidelines
• Production training
• Service training
• Production jargon
• Service jargon
• Production activities • Service activities
• Production equipment • Service equipment
• Production methods
Restricted © Siemens 2020 • Service methods
People in different departments weren't encouraged to communicate together.
52
Environment (3)
•
R&D
R&D VP
?? •
Marketing
Marketing VP
• R&D objectives • Marketing objectives
????
• R&D managers • Marketing managers
• R&D specialists • Marketing specialists
• R&D projects • Marketing projects Service
• R&D knowledge • Marketing knowledge • Service VP
• R&D KPIs • Marketing KPIs • Service objectives

??
• R&D applications • Marketing applications
Marketing R&D • Service specialists
• R&D data • Marketing data
• Marketing VP • R&D VP
• R&D guidelines • Marketing guidelines • Service projects
• Marketing objectives • R&D objectives • Service knowledge
• R&D training • Marketing training
• Marketing managers • R&D managers • Service KPIs
• R&D jargon • Marketing jargon
• Marketing specialists • R&D specialists • Service applications
• R&D activities • Marketing activities
• Marketing projects • R&D projects • Service data
• R&D equipment • Marketing equipment
• Marketing knowledge • R&D knowledge
• R&D methods • Marketing methods • Service guidelines
• Marketing KPIs • R&D KPIs • Service training
• Marketing applications • R&D applications • Service jargon
• Marketing data • R&D data • Service activities
• Marketing guidelines • R&D guidelines • Service equipment
• Marketing training • R&D training
• Service methods
• Marketing jargon • R&D jargon
• Marketing activities • R&D activities
• Marketing equipment • R&D equipment
Restricted © Siemens 2020 • Marketing methods • R&D methods
People in different departments weren't encouraged to communicate together. As a

result, sometimes people in different departments didn't even know what the others
were doing. This led to all sorts of strange situations. For example, engineers, working
alone in their department, developed products for which there was no market.
Salespeople, working alone in their department, sold products that Engineering
couldn't develop.
53
Departmental Border Issues in the Past Marketing R&D F&A
Environment (4) •
•
Marketing VP
Marketing objectives
•
•
R&D VP
R&D objectives
•
•
CFO
F&A objectives
• Marketing managers • R&D managers • F&A managers
• Marketing specialists • R&D specialists • F&A specialists
• Marketing projects • R&D projects • F&A projects
• Marketing knowledge • R&D knowledge • F&A knowledge
• Marketing KPIs • R&D KPIs • F&A KPIs
• Marketing applications • R&D applications • F&A applications
• Marketing data • R&D data • F&A data
• Marketing guidelines • R&D guidelines • F&A guidelines
• Marketing training • R&D training • F&A training
• Marketing jargon • R&D jargon • F&A jargon
• Marketing activities • R&D activities • F&A activities
• Marketing equipment • R&D equipment • F&A equipment
R&D F&A
• R&D VP • Marketing methods • R&D methods • F&A methods R&D Service
• CFO
• R&D VP • Service VP
• R&D objectives • F&A objectives
• R&D objectives • Service objectives
• R&D managers • F&A managers
• R&D managers • Service managers
• R&D specialists • F&A specialists
• R&D specialists • Service specialists
• R&D projects • F&A projects
• R&D knowledge • R&D projects • Service projects
• F&A knowledge
• R&D knowledge • Service knowledge
• R&D KPIs • F&A KPIs
• R&D KPIs • Service KPIs
• R&D applications • F&A applications
• R&D applications • Service applications
• R&D data • F&A data
• R&D data • Service data
• R&D guidelines • F&A guidelines
• R&D training • R&D guidelines • Service guidelines
• F&A training
• R&D training • Service training
• R&D jargon • F&A jargon
• R&D jargon • Service jargon
• R&D activities • F&A activities
• R&D activities • Service activities
• R&D equipment • F&A equipment
• R&D equipment • Service equipment
• R&D methods • F&A methods
• R&D methods • Service methods
The Engineering/Production, Engineering/Sales, Engineering/Finance and

Engineering/Field borders were also sources of problems. Design engineers were
unable to get the cost information they wanted from Finance. Finance was unable to
get the information it needed from Engineering.
54
Serial Workflow in the Departmental
Environment (1)
Marketing Engineering Production Customers Service

The serial flow of work was another serious issue in the past environment. First
Marketing worked, then Engineering, then Production and finally After-Sales. As a
result, in the departmental environment, it could take a long time for a new product to
get to market.
55
Environment (2)
Marketing
Engineering
Marketing
Engineering
Marketing
Engineering
Manufacturing
Engineering
Marketing
Engineering
Manufacturing
Engineering
Manufacturing
Service
Customer
Service
Engineering
Marketing
Manufacturing
I'll give you an example. First, Marketing had an idea for a new product. This didn't
take long. After just 2 weeks, they handed over to the R&D department. But by with
all the to-ing and fro-ing the whole thing stretched out over 37 weeks.
5 weeks in the Marketing Department, 16 weeks in the Engineering Department, 10
weeks in Manufacturing, 2 weeks in Service and 4 weeks with the customer.
Slide 59
56
Environment (3)
Marketing Engineering Production Customers Service
ØResult of Serial Workflow:

ØLong product development time
ØMore development resources than necessary
ØAnd was it really “Serial” Workflow?

ØOr disorganized workflow?

The end result of the serial workflow between the departments was long product
development times and more development resources than necessary being consumed.
57
Piecemeal Improvements in the Past
Environment (1)
Ø The approach to performance improvement in the departmental
company
Ø Improve performance with departmental improvement projects
Our Department knows best how to improve our
Department
Marketing R&D Production Service
• Marketing VP • R&D VP • Production VP • Service VP
• Marketing objectives • R&D objectives • Production objectives • Service objectives
• Marketing managers • R&D managers • Production managers • Service managers
• Marketing specialists • R&D specialists • Production specialists • Service specialists
• Marketing projects • R&D projects • Production projects • Service projects
• Marketing knowledge • R&D knowledge • Production knowledge • Service knowledge
• Marketing KPIs • R&D KPIs • Production KPIs • Service KPIs
• Marketing applications • R&D applications • Production applications • Service applications
• Marketing data • R&D data • Production data • Service data
• Marketing guidelines • R&D guidelines • Production guidelines • Service guidelines
• Marketing training • R&D training • Production training • Service training
• Marketing jargon • R&D jargon • Production jargon • Service jargon
• Marketing activities • R&D activities • Production activities • Service activities
• Marketing equipment • R&D equipment • Production equipment • Service equipment
• Marketing methods • R&D methods • Production methods • Service methods

Another issue was the approach to performance improvement in the departmental

company. Each department launched departmental improvement projects to improve
its own performance.
58
Environment (2)
ØCharacteristics of departmental improvement projects
Marketing
Database
PDMS
Database

Among the characteristic of these proposed improvement projects, first the

improvement project had to be focused entirely on the department's own activities. It
couldn't affect the other departments. That would be unacceptable. It's not how
departmental organisations behave. The second characteristic was that the proposed
improvement project had to involve IS applications as these were seen as the future,
so obviously the way to go. The third characteristic was that it must be a mega-
project, a project that by its size alone would demonstrate the value and importance of
the department to the whole company.
59
Environment (3)
ØExample 1 Typical Issues

1. Islands of Automation
2. difficulties with cross-departmental projects
3. increasing rework
4. increasing engineering change workload Company
5. communication silos 1
6. data silos Proposal
ØExample 2 7.
8.
NPD projects coming in late
product development costs rising
Company Company
4 2
Proposal Proposal
Company
ØExample 3 Proposal for CIE

3
Proposal
Budget Request:
$M 9.88

As an example of a piecemeal improvement project, in one company, the Engineering

Department came up with a mega-project they called Computer Integrated
Engineering. It was planned to run over 10 years, and the budget was many, many
millions of dollars. The proposal was rejected by company executives. So then the
Engineering Department modified the proposal to show even more benefits. But
company executives, who were actually thinking of outsourcing all Engineering
activities, rejected the proposal again. They weren't interested in projects that could
run for a decade, and might never produce any benefits.
60
Product Data Issues in the Past Environment (1)
ØThe volume of product data

Another issue that companies had to face was the rapidly growing volume of product
data. Up until the 1990s, most of the product data was on paper. And all but the
smallest companies had thousands, or even millions, of paper drawings and other
documents describing their products. One company calculated that it needed 250,000
pages of paper to describe a new product. And, on average, it found that each of these
was reproduced 30 times. How could all this data be managed?
61
Product Data Issues in the Past Environment
(2)
ØSome issues with departmental data
Copies for
Support
Copies for
Production
Copies for
Engineering
Original

What were the issues in the departmental company in the past environment. For
example, to find specific information, people had to search through lots of paper and
many electronic files. This wasted time. Studies showed design engineers spending up
to 80% of their time on administrative and information retrieval activities. The easiest
way to give all the departments access to data was to make copies for everybody. But
then, once all these copies had been made and distributed, it was difficult to keep
them up-to-date and synchronized. When a change was needed, all the other
department's copies had to be changed, but perhaps some weren't changed. And then
errors could sneak in.
62
Engineering Change Management in the Past
Environment (1)
Engineering
Department
Design Rules
Modus Operandi 7:
Document Release Procedure
Engineering Change
Control
EC Engineering
M Change Database
Syste
m

Another issue in the departmental organization was the management of changes to

parts and products, which is often referred to as Engineering Change Management.
Before a part can be changed, the changes first have to be made to the product data,
the data and documents describing the part. With the departmental paradigm, many
companies took a departmental approach to change management.
63
Environment (2)
Effect on other components ?

Effect on documents?
Effect on Production?
Effect on use?
Change to a component Effect on Support?
Effect on disposal?
Action on components in stock?
Effect on Sales?
Effect on Catalogue?

Although changing a part may look easier, and be less creative, than creating the part,
it may actually take much more time and effort. This is because the change could have
all sorts of unwanted knock-on effects. The part may be in a product that's already in
production, and already in use. In addition to the part itself, what else is the change
going to affect? It could also affect other part of the product. And, perhaps the change
could also affect something in production, such as a machine. And, perhaps the change
could also affect something in the product's use, such as an activity of the product
user. And what if the part isn't just in one product, but in many?
64
Environment (3)
Production Dept. Service Dept.

Policy B1: Guideline G:
Change Management
Changes
Service
Database

With the departmental paradigm, many companies took a departmental approach to

change management. Companies were aware of the importance of this product data.
They knew that errors in the product data could have disastrous effects on the
product. So the Engineering Department had "its" change activity for what it saw as
"its" objects, such as Engineering documents, Engineering drawings, and the like. And
the Production Department had "its" change activity for what it saw as "its" objects,
such as parts, Production documents, Production drawings, and the like. But then
there needed to be synchronization of the changes between the departments. It
could take many months, and more than fifty different paper documents, to get a
requested change approved and incorporated into the product design.
65
Environment (4)
Changes
bypassing
the Various
system consequence
Various
consequences
s for the
on product company
documentation
Various
consequence
s on the
product
Various
consequence
s for the
customer
As change management tasks seemed uninteresting and bureaucratic, and an

inefficient and time-consuming overhead, some people avoided them. They made
minor modifications to products and drawings without following the rules. As a result,
some people who should have been aware of the changes weren't informed that they
had been made. Under the company radar, components were substituted in end
products. Hopefully, they still met specifications and customer requirements. Often,
nobody noticed until something went wrong. Or another change had to be made. By
then, configuration documentation didn't correspond to the actual product. And then
all sorts of consequences were possible, for the customer and the company.
66
Product Pains - In Public (1)

Now I'll look at some of the things that can go wrong with a product across the
lifecycle. The complex, risky, continually changing, uncertain, highly competitive
product environment makes life difficult for companies that develop, produce and
support products. In such an environment, they need to have great products that leave
competitors far behind. They need to be continually in control of their products. If
they aren't in control, and for one reason or another, they take their eye off the ball,
unpleasant consequences can occur.
Airbus 380 initial delays due to harnesses.
Boeing 737 800 Max issues.
67
Product Pains - In Public
(2)
Examples (1)
ØFord
ØSony
ØMerck
ØToyota
ØDeepwater Horizon

In 2004, Merck withdrew VIOXX, an arthritis and acute pain medication. Worldwide
sales in the previous year were $2.5 billion. In late 2009 and early 2010, Toyota
announced recalls of over eight million cars because of concerns over accelerator
pedals and floor mats. The estimated cost was $2bn. In April 2010, an explosion on
the Deepwater Horizon drilling rig led to the death of 11 people. The blowout
preventer had failed to activate correctly. BP agreed to finance a $20bn clean-up and
compensation fund.
68
(3)
Examples (2)
ØGM
ØLow-profile products
ØMars Climate Orbiter
ØCanadian Boeing 767

In 1999, NASA's $125 million Mars Climate Orbiter got too close to Mars and burned
up in its atmosphere. An investigation found a contractor's engineering team, in
Colorado, provided information about propulsion manoeuvres, in Imperial units, to the
navigation team, in California, which was using metric units. A similar incident had
occurred in 1983, when a Canadian Boeing 767 ran out of fuel. It had to glide down to
an emergency landing after someone used the wrong metric/Imperial conversion
factor to calculate how much fuel it needed to fly from Montreal to Edmonton.
69
(4)
Examples (3)
ØHubble Space Telescope
ØChallenger
ØColumbia
ØSR-111

In 1990, after the Hubble Space Telescope was deployed, images it sent back were
unexpectedly hazy. An inquiry was held. It found the telescope suffered from spherical
aberration of the primary mirror. In places, the mirror was 2 microns too flat. The
inquiry found the technical cause. A fault in the null corrector, an instrument used in
the mirror's manufacturing and testing process. There was also an investigation after
Swissair Flight 111 crashed into the Atlantic in 1998. The Canadian Transportation
Safety Board investigation found a technical cause. The accident was probably caused
by an arcing event on an in-flight entertainment network cable, which set alight
nearby flammable material. The investigation also found that aircraft certification
standards for material flammability were inadequate. They allowed use of materials
that could be ignited and propagate fire.
70
Product Pains - In Public (5)
Ø Conclusion/Moral
Ø Not easy to successfully manage products
across the product lifecycle
Ø Usually several causes leading to a problem
Ø Not just technical causes, but also
organisational causes
Ø To successfully manage products, need to
address both organisational and technical
issues
In conclusion, it's not easy to successfully manage products across the lifecycle. When
there's a problem, there are usually several causes. There are usually not just technical
causes, but also organisational causes. So, to successfully manage products, a
company needs to address organisation and management issues as well as more
technical subjects.
71
Product Pains - In Private
(1)
Some examples:
ØAir travel
ØHotels
ØOther

I looked at some of the publicly-known things that can go wrong with a product across
the lifecycle. But there are others that we all experience in our private lives. For
example in air travel. Reclining aircraft seats that don't recline? Jetways that don't
extend? And aircraft that, before take-off, hit a vehicle on the ground and have to be
taken out of service? Hotel examples such as electronic keys that don't open hotel
doors?
72
Product Pains - In Private
(2)
people making unauthorised changes
Issues projects coming in late
product release delayed
ØBusiness processes slow engineering changes
data silos reinventing the wheel
ØProduct data inconsistencies between data in R&D and Support
product labelling not corresponding to the product
conflicting lists of a customer's configuration
new products not performing as expected
ØProducts products that suddenly stop working
use of obsolete components in a new design
communication silos
ØOther a departmental mentality
lack of up-front planning
poor scheduling of projects
Restricted © Siemens 2020 poor coordination with suppliers
Taken one-by-one, Issues don't usually lead to major problems. But, together they can
lead to, at best, unnecessarily long lead times, increased product costs and reduced
product quality. Companies often group the issues in different categories. That helps
to get a better understanding.
Usually there are issues related to business processes. For example, people making
unauthorised changes, projects coming in late, product release delayed snd slow
engineering changes. Then, there are issues related to product data. Such as the "data
silo", in which the data of one department isn't easily available to people in other
departments. Another issue, having many Excel spread-sheets containing a lot of
different information, often conflicting, about a product.
73
Product Pains - In Private (3)
Conclusion/Moral
ØProduct-related issues everywhere
ØImpact performance, costs, revenues

In conclusion, with the departmental organisation, there could be product-related

issues almost everywhere. They impacted performance, costs, and revenues. To
overcome the issues, a new approach was needed.
74
End of Lesson 2

That's the end of Lesson 2 of Week 1 of the course. I'll continue later with Lesson 3,
which addresses the emergence of PLM.
75
Start of Lesson 3
The Emergence of PLM

This is the start of Lesson 3 of Week 1 of the course. The subject of this lesson is the
emergence of PLM.
76
The Emergence of PLM - Contents
Ø Introduction
Ø Macro-economic Changes
Ø Technological Changes
Ø Increased Product Complexity
Ø Macro-economic Opportunities
Ø Technological Opportunities
Ø Change and Opportunity
Ø New Approaches Proposed
Ø The Emergence of PLM
I'll address the emergence of PLM in these nine sections. I'll start with an introduction.
Then look at the macro-economic and technological changes that were going on. Then
I'll look at the effect of increased product complexity. After that I'll address macro-
economic and technological opportunities. I'll finish by looking at some of the new
approaches that were proposed, and then the emergence of PLM.
77
Introduction
From the 1970s onwards, there were many forces for

change
Ø Technological change
Ø Macro-economic change
Ø Increased product complexity
Ø Technological opportunity
Ø Macro-economic opportunity

Most companies have a high resistance to change. If everything's working more or

less well, they won't want to change. So what made them accept the need to change to
PLM? The main reason is that the environment for products changed so much that
they couldn't ignore the change. From the 1980s onwards, there were many forces for
change. Technological changes. Macro-economic changes. Increased product
complexity. New technological opportunities. New macro-economic opportunities. As
a result, there was pressure on products from all sides. The product environment
became increasingly complex with many interwoven factors and inter-dependencies
being affected by many overlapping changes.
78
Pressure on Products
from All Sides
New Technologies
• Mechatronics
• World Wide Web
Market
Regulations • Demanding
• Health Customers
• Environment Product • Customization
• New
• Safety Geographical
Markets
Competition
• New Competitors
• Low-cost Competitors

There was pressure on products from all sides. Pressure from new technologies,
pressure because of new markets, pressure due to new regulations, and pressure from
new competitors. It wasn't just that there were many changes for companies to
respond to. It was also that the changing product environment was difficult to
understand. It wasn't obvious how it would evolve in the future.
Slide 82
79
Companies were squeezed by
Strong Forces
C
AB
R
BP M PDM
CA PPM
E
CA D QFD
CA M SPC
DF A VR
DF M
ED I 6S
EM EA
FM
ISO
Global Economic
Advances in
Forces
Technology
WWW, Internet of Things, mobile Globalisation, China, customisation,

telephony, RFID, Cloud, Big Data, traceability, sustainability, etc.
Analytics, Social Technology, etc.

Companies were being squeezed by strong forces. On one side, technologies such as
the Web, the Internet of Things, mobile telephony, RFID, the Cloud, Big Data,
Analytics, and Social Technology. On the other side, by forces such as globalisation,
China, the rise of customisation, traceability, sustainability, and so on. Companies
managing products across the lifecycle were faced with an increasingly complex
changing environment.
80
Companies were in a
complex, changing
Environment

Companies found themselves in a complex, changing environment.
81
Opportunities and Pressure lead to
Change
ØThe changes and the pressure drove companies to change
ØThe potential opportunities led companies to change

The changes and the pressure drove companies to change. Meanwhile, the potential
opportunities led them to change. Among the changes that companies faced, some
could be seen as global economy drivers pushing PLM. A company's executives
would look at them and say, "we must do PLM because the world has changed".
Among the changes that companies faced, were others that could be seen as
technological advances pulling PLM. A company's executives would look at them and
say "we should do PLM because the world has changed". The changes and the
pressure drove companies towards PLM. The potential opportunities led them towards
PLM. The pressure acted like a stick forcing them to change. The opportunities acted
like a carrot encouraging them to change.
82
Macro-economic Changes
Examples of macro-economic changes

Ø Globalisation
Ø Geopolitical
Ø The Environment
Ø Regulatory
Ø Management theories
Ø Business models
Ø Intellectual Property

Among examples of macro-economic changes were globalization, geopolitical

changes, environmental pressures, climate change, regulatory changes, new
management theories, and new business models.
83
Macro-economic Changes (1)
Globalisation
Ø 1980s
Ø more customers
Ø more competitors

Globalisation started in the 1980s. That's more than a generation ago. Globalisation
affected many companies developing, producing and supporting products. As a result
of globalisation, they could sell their products and services worldwide. They could
find many new customers and increase sales. But, also as a result of globalisation,
they were faced with competitors all over the world.
84
Geopolitical
Ø Soviet Union, China

Geopolitical changes also affected the product environment. For example those
resulting from the end of the Soviet Union in 1991. The end of the Cold War led many
countries to take different roles in the global economy. Another geopolitical change
was the emergence of China as a major manufacturer.
85
ØThe Environment
Ø Green politics, Global Warming
ØRegulatory
Ø Traceability, recalls, directives

Other changes affecting products were primarily environmental and social. For
example, moves towards sustainable development, recycling directives, product
traceability and regulatory requirements.
86
Lean Six
ØManagement theories Six
Sigma
Sigma
for
Lean For
ØLean, Six Sigma Dummie
For
Dummie
Dummie
s
s
s
ØBusiness models
ØLow-cost, leasing, auctions
ØIntellectual Property
ØSource of value

Some of the changes in the product environment were due to changes in the way that
companies were managed and operated. Although all companies are different, they
have many characteristics in common. At any given time, it's considered that there's a
"best way to operate". During the late 20th Century, many companies adopted and
adapted to management theories such as "Lean".
87
Technological Changes
New technologies causing revolutionary change

ØBiotechnology Revolution
ØNanotechnology Revolution
ØElectronics Revolution
ØComputer Revolution
ØCommunications Revolution
ØInternet Revolution

In the middle and late 20th Century, new technologies appeared and caused massive
change. They were considered as revolutionary. Examples from the last few decades
include the Biotechnology Revolution, and the Nanotechnology Revolution, and the
Electronics Revolution. Each of these revolutions led to changes and new products,
and other revolutions. For example, the transistor, which was invented in the late
1940s, led to thousands of electronic products throughout the second half of the 20th
Century. The first electronic quartz watch appeared at the end of the 1960s. Today,
more than 75% of watches are electronic. Less than a quarter are mechanical.
88
Technological Changes need more than
Technology (1)
And the people …

ØCompany 1
Ø"With CAD, I can't see if engineers are making progress"
ØCompany 2
Ø"Before CAD, engineers locked drawings away in a drawer every
evening"

Talk of Revolutions such as the Computer Revolution and the Internet Revolution is
very high-level. In practice, technological change needs more than technology. One
Engineering Manager said he didn't like CAD because he could no longer see the
progress that engineers were making on their projects. Before, when he walked round
the Engineering Office, he could see the progress on the drafting tables. With CAD, he
couldn't make sense of what he saw on a screen.
89
Technological Changes need more than
Technology (2)
Example of response to a new technology

From Paper to CAD
ØTraining to use the system takes time
ØWell-adapted use takes much longer
ØMany unexpected side-effects
ØFull adaptation takes many years

Other effects of the change from paper to CAD include the need for training to use the
system, the time taken for getting expert with the system, and avoiding unexpected
side-effects. Full adaptation takes many years.
90
Increased Product Complexity
The increasing complexity of products:

• increased competition
• more innovation

With so many macro-economic and technological changes, by the end of the 20th
Century, the environment for developing and supporting products was changing
significantly. Companies were faced with all sorts of challenges with products.
Competition was increasing. New competitors appeared around the world.
91
Increased Product Complexity

• increased competition
• more innovation

The functionality of products kept on increasing, complicating their definition,

realization, support and disposal. Making things more difficult. Products were getting
increasingly complex with more and more parts and functions. Although they were
getting more complex, they still needed to be easy to operate. Phones changed from
traditional telephones to smart phones, with much more functionality. But they still
needed to be easy to operate.
92
Increased Product Complexity (1)

• increased functionality

Another change was that some companies started to develop mechatronic products,
containing mechanical, electrical, electronic and software components. They're more
complex than, for example, purely mechanical products. The mechatronic component
mix was more difficult to manage. Another change was that some companies started
to offer complete solutions, as well as individual products. A solution is made up of
several products, and the interfaces between them. This added a new layer of
challenges
93

• mechatronics
• solutions

The lifetimes of many products, for example, smart phones and computers, decreased
greatly. This also complicated product development and support.
94

• shorter product lives

Meanwhile, the lifetimes for some other products, got longer. Some product lifetimes
approached a hundred years. For example, the B-52 first flew in 1952. Its original
lifetime was extended until it was expected to fly beyond the year 2040. The support
of products with long lifetimes, such as aircraft, power stations and telephone
exchanges, is complex. Many changes occur in the product development and support
environment during the lifetimes of these products.
95

• longer product lives

Even though product development and support was becoming more complex,
customer expectations rose. With so many manufacturers from around the world
proposing great products, customers no longer wanted second-rate, or third-rate,
products. Customer demands implied better products, more customisation, faster
availability, better service, and painless disposal. This further complicated product
development and support.
96

• rising customer expectations

Business was becoming more complex. Products were becoming more complex.
There was more uncertainty in developing products. There was more and more
legislative pressure about product liability, health, safety and the environment. This
was all putting more and more strain on companies.
All these changes made it difficult for them to develop long-term product plans. The
price of failure was high. Why take the risk?
97
Increasing risk:

98
Macro-economic Opportunities
5 macro-economic opportunities :
• Globalisation
• Pollution
• Sustainable Development
• Global problems
• Millennials

I'll look now at some macro-economic opportunities in the product environment. I'll
look at the following five macro-economic opportunities, globalisation, pollution,
Sustainable Development, global problems, and Millenials.
99
Macro-economic Opportunities (1)
• Globalisation

Globalisation is increasing the number of potential customers for many companies.

The world population is expected to rise from 7.4 billion in 2016 to about 9 billion in
2040. That means even more customers in the future. Seven billion or nine billion, it's
a huge number of potential customers for a company's existing and future products. A
great opportunity for the company!
100
•Pollution

Overcoming pollution is a huge challenge. For example, in May 2016, the World
Health Organisation announced that air pollution causes more than 3 million
premature deaths worldwide each year. That's a great opportunity for companies that
can significantly reduce pollution.
101
• Sustainable Development

The third macro-economic opportunity I'll look at is Sustainable Development, which

was defined in 1987, by the Brundtland Commission, as "development that meets the
needs of the present without compromising the ability of future generations to meet
their own needs". It offers great opportunities for companies with products meeting
the requirements of Sustainability and the Circular Economy.
102
• Global problems

There are also great opportunities for products that would help solve the many
problems facing the world. For example, helping solve Global Warming, which
threatens to flood many cities and states. Or providing clean water and electricity to
more than a billion people who live without safe drinking water and electricity.
103
•Millennials

And finally, a human resource opportunity - hiring people from the Millennial
Generation. Unlike previous generations, they've grown up in a digital world of
computers, Internet, the Web, smart phones and other digital technologies. They see
the world differently from previous generations, and can see new opportunities for
products and services.
104
Technological Opportunities
8 technological opportunities :
• Smart/Connected Products; Internet of Things (IoT)
• Radio Frequency Identification (RFID) Technology
• Social Technology
• Mobile Technology
• Big Data and Analytics
• The Cloud
• 3D Printing
• Knowledge Management

New technologies offer the promise of new products. And currently there are many
new technologies that offer opportunities for new products. I'll now look briefly at
eight of them. I'll start with Smart/Connected Products and the Internet of Things.
Then I'll look at Radio-frequency identification, social, mobile, Big Data and
analytics, the cloud, 3D printing, and knowledge management.
105
Technological Opportunities (1)
• Smart/Connected Products; Internet of Things (IoT)

First, Smart Products. In addition to their primary functionality, these products have
all sorts of "Smart" functionality. As an example, to illustrate what that means, a
washing machine has primary functionality to wash clothes. A smart washing
machine, equipped with a scanner, can read the labels on clothes, and select the most
appropriate washing and drying cycle. When Smart Products are connected to the
Internet, they become "Connected Products". They're the "Things" of the Internet of
Things. Then for example, over the Internet, as you leave work, you can switch on the
heating and run the bath in your home.
106
• Radio Frequency Identification (RFID) Technology

The second technological opportunity I'll look at is Radio-frequency identification,

RFID, technology. Products can be tagged with RFID chips. They can then provide
information about the product when they're scanned. This allows products to be
tracked throughout their lifetime. And their real-world performance information can
be fed into the development of future products.
107
• Social Technology

Social technology can be used across the product lifecycle. For example, in the
ideation phase, it can be used to crowd source for new products, functions and
features. Then, for example, it can be used to co-develop the product with the
members of an external community.
108
• Mobile Technology

Mobile technology can also be used across the product lifecycle. It enables, for
example, designers of fashion goods to travel throughout the world, be creative
anywhere, and deliver new designs within minutes of their creation. Another example,
service workers can connect to their company's central database from the customer
sites where they're working.
109
• Big Data and Analytics

• The Cloud
• 3D Printing
• Knowledge Management

Next, there are opportunities with Big Data and Analytics. Companies create, receive
and can access huge quantities of Big Data every day. Once all the Big Data has been
organised, analytics offer fact-based insight into activities across the product lifecycle.
The company can use analytics to better understand products, and predict what
customers will want next.
With Cloud technology, the CIO can offer best-in-class applications on a shared Cloud
infrastructure. So users won't have to wait years for their company to provide
applications on corporate infrastructure.
With 3D printing technology, product development can be speeded up as prototypes
are made on 3D printers connected directly to CAD applications.
Another opportunity is with Knowledge Management. One application of this
addresses the knowledge in the heads of a company's employees. Each year, maybe 10
or 15 % of them leave or retire, taking with them the knowledge of why, and how,
many activities in the company are carried out. And why particular decisions were
taken for particular products. Knowledge Management techniques can ensure this
knowledge is captured and not lost.
110
Change and Opportunity
Companies are faced by change, yet want to seize the

opportunities. The environment they are in is:

Companies want to seize the opportunities in the product environment. But the
environment isn't an easy one. It's changing, risky, global, uncertain and highly
competitive.
111
Change and
Opportunity (1)
There's pressure from many sides:
Fluctuating Protectionism Code of

Commodity Federal
Prices Regulations
Sustainable New
Development Technology
Rising Fluctuating
Customer Exchange
Expectations Rates
The
Consumer
Protection Company’s Trade Barriers
Act
Products

There's pressure on the company and its products from many sides. For example, from
shareholder demands to increase value, from influences of financial markets, from
fluctuating exchange rates, from fluctuating commodity prices, from new technologies
and from deregulation.
112
Change and Opportunity
(2)
Yet there are huge opportunities if a company can develop and support the great
products that customers want
To be able to achieve that, they need a great product deployment capability

Yet there are huge opportunities if a company can develop and support the great
products that customers want. To be able to achieve that, they need a great product
deployment capability. They need to be continually in control of their products. That's
what PLM offers them. That's why PLM is of such great business value.
113
New Approaches Proposed
From the early 1980s, in response to the changes

and opportunities, many new approaches were
proposed

I've been talking about many changes that have been happening since the early 1980s.
Similarly I've been taliking about many opportunities coming on stream from the early
1980s. In response to the many changes and many opportunities, many new
approaches have been proposed since the early 1980s.
114
New Approaches Proposed (1)
1982 W. Edwards Deming published "Out of the Crisis"
1983 Theodore Levitt wrote an article called ‘Globalization of Markets’
1985 Michael Porter published "Competitive Advantage"
1986 Robert Cooper published "Winning at New Products"
1987 The Brundtland Commission reported on Sustainable Development
1987 The International Organization for Standardization published ISO 9000
1989 Robert Camp published "Benchmarking: The Search for Industry Best Practices That
Lead to Superior Performance"
1990 The world’s first website and server went live at CERN
1990 James Womack published "The Machine That Changed the World"

For example, as you see here, in 1982 W. Edwards Deming published Out of the
Crisis. The following year, Theodore Levitt wrote an article called Globalization of
Markets. In 1985, Michael Porter published Competitive Advantage. Later, Robert
Cooper published Winning at New Products. The Brundtland Commission reported on
Sustainable Development. The International Organization for Standardization
published ISO 9000. Robert Camp published Benchmarking: The Search for Industry
Best Practices That Lead to Superior Performance. In 1990, the world's first website
and server went live at CERN.
115
New Approaches Proposed (2)
1991 The Cold War ended
1992 Publication of "Engineering Information Management Systems: Beyond CAD/CAM to

Concurrent Engineering Support"
1993 Joseph Pine published "Mass Customization: The New Frontier of Business
Competition"
1993 Michael Hammer published "Reengineering the Corporation"
1996 John Kotter published "Leading Change"
1997 Clayton Christensen published "The Innovator's Dilemma: When New Technologies
Cause Great Firms to Fail"
2000 The European Commission published proposal C365E for the Restriction of
Hazardous Substances (ROHS)
2001 Emergence of PLM
2004 Publication of "Product Lifecycle Management: 21st Century Paradigm for Product
Realisation"
In 1991, the Cold War ended. The following year, saw the publication of Engineering
Information Management Systems: Beyond CAD/CAM to Concurrent Engineering
Support. This was followed by Mass Customization: The New Frontier of Business
Competition, Reengineering the Corporation, and Leading Change. In 1997, Clayton
Christensen published The Innovator's Dilemma: When New Technologies Cause
Great Firms to Fail. 2001 saw the emergence of PLM. And in 2004, the first book
about PLM, Product Lifecycle Management: 21st Century Paradigm for Product
Realisation was published.
116
The Emergence of PLM
Between 1980 and 2000, the environment of

products changed enormously.
In response to the changes, the way that it was
managed had to change.
In response to the changes, PLM emerged in 2001.

Between 1980 and 2000, the environment of products changed enormously. In

response to those changes, the way that companies managed products had to change.
And in response to the changes, PLM emerged in 2001.
117
Emergence of PLM (1)
The 21st Century (1)

• A greatly changed environment for products
• No Iron Curtain. China a major manufacturer. India big in
software. Japan's products known for high quality.
• Globalised. Outsourcing. Extended Enterprises.

Environment.
• Female engineers and CEOs

• Cross-functional business processes, e.g., Engineering
Change Management
The 21st Century environment of products differed greatly from that of the latter part
of the 20th Century. There was s greatly changed environment for products. There was
no longer an Iron Curtain. China had become a major manufacturer. India was big in
software. Japan's products were known for high quality. The environment was
globalised. There were female engineers, CFOs and CEOs. There were cross-
functional business processes, such ss Engineering Change Management.
118
The 21st Century (2)

• Technological revolutions. The Internet and the World
Wide Web
• Electronics, computers and software everywhere
• Platform products. Product development times cut

• CAD, CAM and PDM for development, manufacture
and support
• Digital information. Digital Transformation
The 21st Century environment of products differed greatly from that of the latter part
of the 20th Century. There has been technological revolutions. There was the Internet
and the World Wide Web. Electronics, computers and software were everywhere.
Product development times had been cut. Companies used CAD, CAM and PDM
systems for product development, manufacture and support. A Digital Transformation
was underway.
119
2001: Emergence of the PLM paradigm

And, in 2001, the PLM paradigm had emerged.
120
End of Lesson 3

That's the end of Lesson 3 of Week 1 of the course.
121
End of Week 1

And it's also the end of Week 1 of the Business Value of PLM Course.
122

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Week 1:

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Welcome to the Business Value of PLM course.

ü At the conclusion of this activity, participants will

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Introduction to “Business Value of

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Ø At the conclusion of this activity, participants will be

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Lesson 1 Developing and Supporting Products

Lesson 2 The Environment before PLM

Lesson 3 The Emergence of PLM

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There are three lessons this week.

Developing and Supporting

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In this lesson, I'll address 3 subjects.

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The product is important. It’s

A company generates revenues from its portfolio

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There’s a wide range of products

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Ø Products come in all shapes and sizes

Ø Sometimes products are mixes of products and services

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Products may have

Ø Packaging, labelling, literature

Ø Delivery mechanisms, connectors

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There are many products

Parts may range in number

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Ø There are many people, with titles such as

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Ø There are many activities, such as

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Ø There is a lot of data, and many documents, such as

Ø Many applications are used, such as

Requirements Management Rapid Prototyping Viewers Content Management

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Ø Many techniques and methods are used, such as

ABC Benchmarking BPR CI CWQC

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ØProduct ideation is hard

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ØSignificant (Intelligent) part numbers

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ØProduct number and part number

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The environment around products is complex. Even something as basic as the

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The environment around products is complex. A product may be in one of many

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There may be many versions of a product, Version 1, Version 2, Version 3. Or many

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ØProducts are important

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These are Back up slides.

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