PLM STRATEGY IN MANUFACTURING INDUSTRY

PRODUCT LIFECYCLE MANAGEMENT
STRATEGY IN
MANUFACTURING INDUSTRY
PROJECT REPORT
MANAGEMENT INFORMATION SYSTEMS
MBA(PT)2011-14 -SEC B-Group:5
Deepak Bal (Roll No – 67)
Harmeet Singh Bhatia (Roll No - 71)
Kanwar Pal Singh (Roll No – 74)
Mandavi Sharma (Roll No – 76)
Gordhan Meghwal (Roll No - 106)

Product Lifecycle Management IIFT, New Delhi
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Group 5, section B, MBA PT 2011-2014
CRM –Customer Relationship Management
ERP –Enterprise Resource Management
SCM –supply chain Management
PLM- Product Lifecycle Management
Enterprise IT Systems

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Introduction - PLM______________________
Manufacturing industries are facing growing challenges. They are under continuous
pressure to increase their production by increasing efficiency. Market globalisation and an
increase in customer demands has forced companies to produce more complex and
individualized products in a shorter lead-time. One of the key points of the success of such
kind of enterprise structures is the ability to communicate about and around the product,
internally as well as externally. Products generate a large amount of information, so the
classical communication systems phone/fax/email used by 90% of companies are not
structured enough to enable efficient cooperation.
Product Lifecycle Management (PLM) is first of all an enterprise strategy. It involves
managing all the data concerning a product, throughout its lifecycle, and all the internal and
external factors involved in the development of this product. PLM manages data, people,
business processes, manufacturing processes, and anything else pertaining to a product.
PLM technology is engineering-centric. It is primarily concerned with enabling the creation,
innovation, and collaboration around new products and line extensions. PLM software helps
define physical items.
According to the Aberdeen Group, nearly 80% of product costs are decided in product
development leaving transaction-based applications (like ERP) with direct influence over
only 20% of the total costs.

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PLM Methodology _____________________
I. Identification of concerns/pain areas/needs
This analysis can be implicit and explicit. In the implicit mode the company is aware of some
of the pain areas or needs for a PLM system. In explicit mode, a detailed analysis phase is
done by interviewing and observing the experts. The company can chose either one or both
the approached to conclude on the areas of concerns or improvement. The observation
show how the technical data/s are use in the company, their purposes, their process. Some
of the areas of concerns for manufacturing industries include –
− Data Duplicity
− Tedious data search
− No Secured data sharing and access
− Delay in Implementation change
− Unable to track design changes across all levels
− In efficient project tracking
− Unable to get accurate cost of projects
II. Formulation of solution
The goal of this step is to formalize the “to be” business processes that will respond to the
identified needs/concerns. A careful re-search is done on the collected information/data
and analyzed by subject matter experts or consultants to arrive on a “to be” process. Many
customized/templates tools can be used to quickly arrive at results. Some of the solution
could be –
− Product Data Management ( PDM )
− (design) Change Management
− Standardisation of Design
− Project Management
− Knowledge capture and re-use

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III. Demonstration on ROI/Benefits; POC
The solution vendor then has an informal discussion with the major stake holders on the
probable solution. Once there is a concurrence on the same a detailed demo-presentation
or Proof of concept (POC) has to be done to all stake holders. The POC or demonstration
highlights the major pain area/concerns faced by the organization and the proposed
solution to address this issue. A detailed ROI is presented to the stakeholders. The major
benefits of PLM include -
− approximately 40% to 60% reduction of time searching for data
− Development cycle reduction by 40%
− data/knowledge/ Intellectual Property re-use significantly increased
− Improved communication across all departments in an Better resource utilization
− Greater Design efficiency
− Less scrap & rework
− Standards and regulatory compliance
IV. Describing a deployment and adoption plan
The deployment plan lists in detail the phase wise implementation process. This includes
timeline for deployment of various software tools to achieve specific business processes.
The plan highlights the software license required, implementation schedule, resources
required, etc. A typical deployment plan can be as follows-
− Product Data Management; 3-4 months, 3 software specialist
− Change Control ; 2-3 months, 3 Engineering process specialist
− Knowledge Management ; 2-3 months, 3 Engineering design specialist
− Design standardization; 2-3 months, 3 Engineering design specialist
− Connection with ERP system; 3-4 months, 3 software specialist
− User Training; 1 month
− System go-live

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V. Go-live
As this stage or date the actual usage by the organization starts. The organization from this
date starts to completely follow the new system. Since adequate training has been imparted
during the deployment phase, the users are in a comfortable to quickly adopt the new
system.
VI. Post Go-live support
The solution vendor provides “post production” (after go-live), to ensure a smooth
transition to the new processes. Any bugs, technical issues, training issues are addressed
during this stage.
VII. Post Go-live assessment
A comprehensive feedback and assessment is done to measure if the “to be” process have
been achieved. Corrective steps are taken to ensure that the process remain on track. This
assessment can be periodically for a year, before declaring the PLM deployment a complete
success.

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PLM Implementation_____ ______________

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Product Data Management
Product Data Management ( PDM ) enables enterprise organizations to track and manage
the creation, change and archival of all information related to a given product, including
Computer-aided design ( CAD ) models, drawings, specifications and other associated
documents in single, centralized data repository.
Program Management
Program Management provides comprehensive functionality to reduce project costs,
improve profit margins and shorten product development cycles.
Project Management
Project Management provides up-to-the-minute visibility into projects and programs,
enabling enterprise organizations to plan and manage resources, mediate risk and maximize
profitability.
Virtual Product Development
Virtual Product Development (VPD) is an approach that takes a design at the earliest
concept stage and fully evaluates design specifications and usage scenarios, and then uses
this information to guide the development process. VPD continues to expand in its
usefulness and application adding new efficiencies to product development processes.
These efficiencies have become a key factor in an organization’s success in today’s
marketplace.
Manufacturing & Supply Planning
Manufacturing & Supply Planning improves management, coordination and communication
with suppliers, making it easier to manage relationships across a distributed, multi-tiered
supplier network

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PLM Cost_____________________________
The overall cost of a PLM solution varies depending on the provider and several factors,
such as the number of users and your individual business goals. In a comprehensive chart
provided by PLM Technology Guide, the elements of PLM are shown with their percentage
of the total initial cost of implementing a PLM solution. This chart also shows the type of
cost for each element — whether it is a one-time capital investment, annual recurring
expense, one-time expense, or initial post-go-live support.
Software - 30% of initial cost, Cost dependent on:
− Number & type of users
− Required functionality or functional modules
− Deployment option: On-premise or on-demand
− Floating licenses or named user licenses
− List price and discount
Hardware - 8% of initial cost, Cost dependent on:
− Number of users & sites
− Configuration & performance requirements
− Quantity of data and required disk space
− Required system availability and uptime
− Deployment option: On-premise, hosted or on-demand
− List price and discount
Education and Software Selection - 8% of initial cost, Cost dependent on:
− Understanding of PLM & PLM Market
− Duration & thoroughness of evaluation
− Involvement of an external PLM consultant
Process Optimization - 8% of initial, cost dependent on:
− Number of processes & methodology
− Size of organization & understanding of PLM
− Documentation of existing practices and processes
− Involvement of an external PLM consultant

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Implementation Services - 25% of initial cost, Cost dependent on:
− Required configuration and/or customization
− Contract terms: Fixed price or time & material
− Hourly rate and discount
Training - 5% of initial cost, Cost dependent on:
− Training delivery: Vendor or Train-the-Trainer
− Training material: Standard or custom
− Training location: Vendor, on-site, and/or web-based
Data Migration - 5% of initial cost, Cost dependent on:
− Approach: Manual or automated
− Number of source systems
− Type of data: Metadata, structured data and files
− Quality & quantity of data

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PLM Software Model____________________
Traditional Model:
In this approach the PLM software can be licensed from the software vendor. Under a
software license agreement, a licensor grants a licensee certain rights in a software product
while the licensor not only retains full ownership of the software, but can restrict what the
licensee does with the software in many critical respects. These restrictions are typically
designed to (i) protect the licensor’s potential market for the software; and (ii) protect the
licensor’s intellectual property rights in the software.
Hosted Solutions:
A hosted environment is offered to customers on a subscription basis and includes the
information technology infrastructure (hardware and software) and support services
necessary to deliver the solution. Applications are hosted at a highly secure data center and
accessed
over the Internet. The use of a hosted solution eliminates the cost and complications of
traditional client server software, while providing the most current application software
with the latest technology and security features.
Software as a Service (SaaS)
SaaS is a software delivery method that provides access to software and its functions
remotely as a Web-based service. Software as a Service allows organizations to access
business functionality at a cost typically less than paying for licensed applications since SaaS
pricing is based on a monthly fee. Also, because the software is hosted remotely, users don't
need to invest in additional hardware. Software as a Service removes the need for
organizations to handle the installation, set-up and often daily upkeep and maintenance

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Benefits of PLM Software________________
PLM Software supports the product development process, integrating people, data,
processes and business systems and providing a product information backbone for
companies and their extended enterprise. The benefits of PLM software focus around time,
cost and quality. These benefits include:
− Faster time-to-market
− Fewer Errors
− Less scrap & rework
− Greater productivity
− Greater Design efficiency
− Better product quality
− Decreased cost of new product introduction
− Insight into critical processes
− Better reporting and analytics
− Standards and regulatory compliance
− Improved design review and approval processes
− Improved communication
− Reduced product cost and greater profitability
− Better resource utilization
− Improved integration and communication with extended supply chain

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Return on Investment (ROI)______________
PLM ROI includes improved quality, streamlined operations, and greater efficiency.
According to AMR/Gartner, ROI can be broken down into three categories, each occurring at
different time intervals - immediately, within the 1st year, and well into the future.
Immediate: Infrastructure savings — Accrue immediately after go-live. Often the result of
improved collaboration and better IT efficiency.
Next Year: Improvement in established operating metrics — Accrue 6-12 months after go-
live. Based on widely used and genereally well-benchmarked operating metrics.
+5 years: Strategic competitiveness impacts — Accrue 3-5 years after go-live. Includes
savings on internal programs and process as well as improved strategic position.

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PLM & Other Enterprise IT Solutions_______
Supply Chain Management (SCM) applications help you adapt to market dynamics through
value creation and delivery along the supply chain. Specific goals include reducing inventory
by matching supply with demand, increasing the transaction speed by exchanging data in
real time, and growing sales by implementing customer requirements more efficiently.
Customer Relationship Management (CRM) applications help businesses manage and
deliver customer value, and improve competitive advantage and profitability through
detailed understanding of customer purchasing attributes and marketing intelligence. CRM
covers the full sales cycle, including pre-sales, after-sales, and product support.
Enterprise Resource Management (ERP) is used to manage the logistics of getting a product
to market once a design is released, PLM,(being largely CAD based) is used to achieve
control over design and development information. ERP technology is manufacturing-centric.
It is focused on controlling the parts in inventory, capacity planning, and production
schedules needed to efficiently produce a product

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Functions of Various Enterprise IT Solutions_

PLM STRATEGY IN MANUFACTURING INDUSTRY

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