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Benchmark Study 2007

The Potential Benefits of Product Lifecycle Management in the Automotive Industry

© Copyright ITM/Cranfield/UMTRI/IBM 2007

Prof. Michael AbramoviciStefan Schulte

Prof. Rajkumar RoyShyam Durai

Ulrich Naumann (Germany)Dr. Christoph Leszinski (Germany)John Kitchingman (UK)Karen Newman (USA)Steve Nykerk (USA)Dr. Olaf Steinbrink (Germany / USA)

Bruce BelzowskiAssistant Research Scientist

© Copyright ITM/Cranfield/UMTRI IBM 2007

1Preface

Despite the strategic importance of engineering – which plays a leading part as a key source for innovation – Product Lifecycle Management (PLM) is on few top-management agendas. Although PLM is increasingly establishing itself as a standardized management approach in engineering, many managers only see PLM as a new way of saying PDM and do not take advantage of the process change improvement that PLM supports.

Much of the reluctance of managers to implementing large strategic engineering changes is due to previous over-reaching attempts of e-business initiatives and the increased focus on shareholder value. Today short-term, profitable projects and quick reactions to market changes as well as coping with complicated existing structures dominate the everyday life of many managers.

It is not that managers do not see PLM as an approach that can fundamentally improve current processes and provide new ways of performing tasks. It is just that the idea of implementing a PLM initiative that involves significant process and technology change is daunting in today’s automotive climate. Yet many companies recognize the importance of implementing PLM strategies because of the opportunities PLM provides in terms of reducing time to market and global access to information, and more specifically in improving the change process, quality, and part re-use.

Because the automotive industry has been one of the leading industries in the introduction of new management strategies and information technology systems, we decided to carry out this Benefits of PLM study on this industrial sector in order to learn from the pioneers’ gained experience.

This study is the new edition of an investigation initially carried out under the leadership of Prof. Abramovici of the Ruhr-University in Bochum (Germany) in 1999 ("Benefits of PDM") and in a revised version in 2004 (“Benefits of PLM”). It has continuously been extended to Automotive companies based in Austria and the Czech Republic since then. In 2006 Prof. Roy of Cranfield University led the introduction of UK participants into the study to combine with the German, Austrian and Czech results. With this extension the documentation of ‘Benefits of PLM’ has become stronger.

In 2007 we introduced the study to 13 Automotive companies in the U.S.. The present report focuses on the recorded U.S. data, and also links it to the key elements of the consolidated European results.

Preface


2Preface

The data in this study was obtained from a combination of in-depth interviews and surveys with directors and managers with expertise in the fields of engineering and information technology. Their experiences reflect the knowledge of numerous other experts from their own companies.

We have questioned OEMs as well as large supplier companies, which are involved in developing automotive components by using different engineering tools. Because all the companies in the study have a global footprint, their opinions represent companies actively engaged in engineering processes that cross many geographic boundaries.

Due to the underlying methodology, which was already successfully tested in several comparable studies, the results of the investigation raise no claim to statistically secure representative statements. They simply show a condensed snapshot of a body of experts in the automotive industry.

This document sums up this study‘s most important conclusions. For confidentiality reasons, no company specific information will be presented but will instead be aggregated. The presented findings only show the general trends and require being commented on and interpreted more closely.

The results should help the participants to better understand today‘s PLM approaches. The study should, thanks to a company's measurable success factors, continue to make the process of implementing PLM understandable and give suggestions for best practice strategies on implementing PLM.

Discussions and comments as well as sharing of ideas and experiences between the participants is intended in this study. On request, the authors can set up their own workshops with the involved companies at their desired location.

We would like to warmly thank all parties for their dedicated participation in this study. Of course we are available for further comments and to continue our dialogue. A very special thank you goes to our sponsor and partner IBM Global Business Services, who played a large role and made this study possible.

We hope that all participants found this study to contain useful suggestions for their own PLM planning that could help improve the benefits gained by using PLM

Bruce M. BelzowskiAssistant Research ScientistUniversity of Michigan Transportation Research InstituteAnn Arbor, Michigan


3Overview

PLM in the Automotive Industry ……………………....A Changing Automotive IndustryPLM: A Management ApproachPLM Components

Project Organization …………………………………..The Project TeamAims of the ProjectA Methodical ApproachThe Participants

Participants’ state of maturity ………………………...State of PLM MaturityState of PLM Maturity in all Dimensions

Status of PLM Use …………………………………….Basic Strategies of PLM UsersEngineering Sophistication of PLM UsersUsage of PLM Functions PLM IT Environment

Level of PLM-Integration ……………………………..IT System and Data IntegrationProduct Lifecycle IntegrationCustomer and Supplier Integration

Real PLM Benefits …………………………………....Product Lifecycle PerformanceProduct Development PerformancePLM Users‘ Company Success

Successful PLM Introduction …………………………Successful PLM Introduction Strategies Successful PLM Project ManagementSuccess Factors and Risks when Introducing PLM

PLM Study Summary Notes ………………………………..

45 79

1112131420

212225

2627293234

38394446

49505558

59606366

67

Contents


4Overview

PLM in the Automotive Industry

A Changing Automotive Industry

PLM: A Management Approach

PLM Components

Project Organization

Participants’ state of maturity

Status of PLM Use

Level of PLM-Integration

Real PLM Benefits

Successful PLM Introduction

PLM Study Summary Notes

Contents

PLM has become a significant lever for business success in an increasingly demanding market environment. But PLM is much more than just a tool – it’s a philosophy and a management approach.

A PLM IT environment is made up of data creating and IT backup systems orchestrated by an appropriate architecture and strong business and IT governance. There is no PLM system!

Key Messages of this Chapter:


5A Changing Automotive Industry

The four largest challenges in the automotive industry in the next four years (according to experts)(descending priority)

3 Increasing customer requirements and a growing product portfolio whilst maintaining high product quality

1 Globalisation and covering new emerging markets outside the U.S.

4 Fuel economy and alternative technologies

Market demand and increasing competition pressure to reduce expenses and require business processes and distributed departments to be better integrated.

Automotive manufacturers and suppliers are pressured by the need to be more productive to innovate while constantly reducing costs

pressure to innovate cost pressure

rising pressure for productivity in the

automotive industry

customers request more functions

legal requirements in the areas of safety, emissions, and fuel economy

danger of not being able to keep up with new technologies and to lose market share

current business models no longer work, inhibiting global collaboration to innovate

prices, after taking inflation into consideration, remain constant in all basic vehicle classes

consumers are not usually ready to pay more for new technologies

the competition to keep prices low is increasing

2 Cost competitiveness and productivity of workforce


6A Changing Automotive Industry

Challenges the automotive industry has to face in all areas of the business

Employees

Organisation and Strategy

Data

IT-Systems

Products

Processes

Covering new global markets outside the U.S. while dealing with increasing foreign competitionReducing costs while dealing with fluctuating resource prices driven by global demandNew positioning as integrators and systems suppliers by moving expertise and outsourcing

Cross company (global) thinkingPressure through unions and increasing medical costsInnovation throughout the organization must be widely distributed driving internal and external collaborationManaging intercultural differences as globalization progresses

Increasing variety and rising individual customer requirements, while developing products within a global context Simplifying the increasing range of productsDemand for “green technologies”Ensuring product quality whilst pressure on cost and time to market is increasing

Process re-engineering required for a flexible reorganized companyProcess standardizationContinuity of technical and managerial company processesCooperation: Suppliers, partners, and customers being integrated into the processes

Product data management in globally distributed development environmentsComplex data structures being exchanged with suppliers, partners, and customers without loss of quality Integrating multidisciplinary data models into a networked product reference modelDesigning virtual prototypes for product verification

Integrating and replacing old legacy systemsIntegrating engineering and business applicationsMaking a homogenous, cooperative PLM-IT-environment which reaches past company boundariesIntegrating mechanical, electrical and software engineering IT environments


7

IT projects have allowed companies to institute new ways of performing tasks and organizing companies.(consolidation of experts’ statements – descending order by number of statements)

support / enablement of process re-engineering

support of global engineering and collaboration

improved data accuracy

increased level of standardization

increased level of process automation

improved efficiency

Achievements through major IT projects

Organizational Approaches

Most participants think of PLM as information management (linking and providing product data) along the entire lifecycle of a product – starting from generation of ideas to the end of the product lifecycle.

Most participants consider PDM for CAD data management not as part of PLM.

Few participants consider PLM as an environment that enables product and process development.

Few participants referred to a cultural change in understanding and implementing PLM.

Understanding PLM(consolidation of experts’ statements)

Typical elements of defining PLM

IT has been become a critical success factor driving business benefits. As shown in this report PLM has become a significant lever for business success. But PLM is much more than just a tool – it’s a philosophy and a management approach.

Definition of PLM (by IBM)

PLM is a strategic management approach consisting of integrated methods and tools for the cooperative development, maintenance and use of all relevant engineering information in the entire distributed product lifecycle.

Basically all participants consider a process driven approach to PLM as a crucial success factor for PLM introduction (see later chapter) but still seem to define it more from an IT and tool perspective. IBM considers PLM much more as a management approach which drives for an implicit adherence to a process driven approach.



8

3D-CAD construction

VPDvirtual product development

VPCvirtual product

creation

EE-VPCvirtual product

creation for extended

companies

extended enterprise

product data management

EE-PDM

CAD-data management

EDM

product data management

PDM

enterpriseproduct data management

E-PDM

drawing management

ZVS

Interfaces/semi-integration

Focus: data and process management

2D-CAD construction

Focus: product / process digitalization

time

1980 2002

PLMCIM

2004-07

In the evolution shown above, the systems and underlying management approaches grew together from 2D/3D CAD to virtual product creation and can be referred to as product/process digitalization. Data and process management also grew closer together from simple management of drawings to Product Data Management (PDM). But apart from a few integrated solutions, gaps in between the two approaches existed in the mind set of executives, organizations, processes and systems.

In the last few years the boundaries between the two parallel paths of development merged and formed Product Lifecycle Management (PLM).

study“Benefits of PDM“

1999-2000

Study “Benefits of PLM“2004-07 (ongoing)

Evolution and converging of IT approaches in engineering


VPD: virtual product designVPC: virtual product creationEE-VPC: extended enterprise virtual product

creation


9

PLM is a strategic management approach driven by engineering across all areas of the business

integratedby PLM

engineeringprocesses

IT systems product strategy

engineeringorganizationproduct data

business management organisation

engineering IT system environmentengineering organisation

SCM

CRM

CRM: customer relationship management SCM: supply chain management

e-business

e-markets

product lifecycle management (PLM)

cross company management approaches

enterprise resource management (ERM)

business management IT system environment

inte

rfac

ein

terf

ace

product development product use

interface

actual product

engineering processes

business management processes

Building blocks of a company specific PLM solution

PLM dimensions

PLM addresses a multitude of dimensions

PLM Components


10PLM Components

A PLM IT environment is made up of data creating and IT backup systems orchestrated by an appropriate architecture and strong business and IT governance. There is no PLM system!

Layout of a characteristic PLM-IT environment

Information Federation –Management of PLM Enterprise Information Relationships

Product Architects(OEM and/or Suppliers)

Project Management(OEM and/or Suppliers)

Business Process Modeling – e.g. Portfolio Planning, Engineering Change, Part Reuse

Engineering Specialists(OEM and/or Suppliers)

PLM Framework

Engineering Specialists(OEM and/or Suppliers)

Architectural Foundation

Business Decision Support

Flexibility and Responsiveness

Integration

People Cooperation - Role-based PLM Workplace (Portals)

Require-mentsMgmt.

Program and Portfolio Mgmt.

Enterprise PDM

Data Mgmt.

Mechanic Authoring

ERP

Data Mgmt.

Electrical Authoring

Data Mgmt.

Software Authoring

Data Mgmt.

Analysis & Simulation

Other Enterprise

Applic.EAM

Enterprise Application SystemsPLM Application Systems


11Overview



The Project Team

Aims of the Project

A Methodical Approach

The Participants


Status of PLM Use


Real PLM Benefits



The objectives of this study are to determine the actual benefits of PLM and to identify how to best introduce it into the automotive industry.

Overall 52 companies have participated since 2004Europe: 39 companies

USA: 13 companies (16 participants but only 13 provided full data)

The participating companies are OEM: 32%

Tier 0,5 supplier: 6%

Tier 1 supplier: 56%

Tier 2 supplier: 6%

Contents



12The Project Team

The Project Team

Dipl.-Ing. Ulrich NaumannIBM Global Business Services - Germany

[email protected]

Prof. Dr.-Ing. Michael AbramoviciITM – Chair of IT in Mechanical Engineering

Ruhr-University Bochum

www.itm.rub.de

Prof. Rajkumar RoyProfessor of Decision Engineering

Cranfield University

www.cranfield.ac.uk

Mr. John KitchingmanIBM Global Services – UK

e-mail: [email protected]

Mr. Bruce BelzowskiAssistant Research Scientist

University of Michigan

Transportation Research Institute

www.umtri.umich.edu

Phone: (+1) 734 936 2704


Ms. Karen NewmanIBM Global Business Services – USA



13Aims of the Project

The objectives of this study are to determine the actual benefits of PLM and to identify how to best introduce it into the automotive industry.

Objectives of this Study

Establishing the current state of PLM use and integration in theautomotive industry.Identifying PLM‘s current achieved benefit.Analysing PLM‘s impact on the company‘s performance. Identifying the most successful PLM users’ best practices for introducing PLM.Determining the most important PLM trends.Identifying what challenges and opportunities remain.


14A Methodical Approach

A methodical approach in four steps

Personal interviews with PLM experts, representing their companies

Acquiring data: business survey based on a list of questions

□ Defining thequestioned company‘s state of PLM maturity, based on the PLM indicators:- level of usage- level of integration

□ Historical analysis of PLM implementation (2003)

□ PLM Forecast (2011)

Determining the influence of the state of PLM maturity on the company‘s lifecycle and economic success

1 2 3 4

Identifying the best practices for implementing

strategies



Step 1: Acquiring data

Layout of the list of questions for acquiring data(Interview and Web Survey)

Geographical distribution of the participating companies

Fragenkatalog

Questionnaire

for the Study “Benefits of PLM” in the Automotive Industry

Contact:

Stefan Schulte Dr. Christoph LeszinskiPhone: +49 (0) 234 / 32 28755 Phone: +49 (0) 175 / 18 61 105E-Mail:[email protected] E-Mail: [email protected]

Outline

EuropeanParticipants

U.S.Participants

Enterprise information

PLM integration

PLM and the extended enterprise

PDM within PLM

PLM technology integration

Business performance and PLM benefits

PLM case studies and Best Practices



Step 2:Defining the questioned companies’ level of PLM maturity

participants‘ processed list of questions2.1

Analysing the individual interviews and web surveys

allocating the interview results


engineering organisation

product strategy

product data

IT systems

2.2

Allocating the experts statements on the PLM dimensions

level of PLM maturity indicator

level of PLM use

level of PLM integration

2.3

Allocating the experts statements on the level of PLM use and integration

leve

l of P

LM u

se


2.4

Determining the normal level of maturity and PLM positioning based on the level of PLM maturity indicator

PLM stragglers

PLM champions

Advanced PLM users



Step 3:Determining the influence of the PLM level of maturity on the company‘s lifecycle and economic success

Level of PLM maturity

quality

expenses

time

Analysing the influence of the level of PLM maturity on the

lifecycle performance

economic success

Analysing the influence of the lifecycle performance on the

business‘s success

Lifecycle performance indicators

Indicators for quality:processing quality

applied developing methods

product quality/complexity

data quality

employee expertise

Indicators for expenses:product development expenses

IT expenses

processing expenses

occupied capacity

Indicators for time:processing flexibility

product development/innovation time

time to market, adherence to delivery dates

Amount of value adding activities

Continuous information

Economic success indicators1)

Market success:market share

Efficiency:return on investment

profit margin

1) Due to incomplete financial data from U.S. participants the represented results are limited

leve

l of P

LM u

se


PLM stragglers

PLM champions

Advanced PLM users



Step 4:Identifying the best practices for implementing strategies

best practices

successful PLM introduction strategies

successful PLM project management

e.g.:

documenting the PLM strategy

planning for quick wins

involving the top management

reengineering the processes

e.g.:

time frame for preparing and implementing the project

project expenses

involving external service providers

deviating from the project‘s schedule



Group of companies to identify and statistically analyze best practices based on their level of PLM maturity

Level of PLM maturity

Standard analysis:Comparing advanced users‘ and stragglers‘average and counted entries.

qualitative illustration

champions

advanced users

stragglers

separator for classification

The companies were split into groups so that the best practices could be identified. The two groups are advanced PLM users and PLM stragglers. Individual company placement is based on the level of PLM maturity.

Outstanding companies (champions), which were in the advanced users group, were viewed separately, so that the best approaches for realising a PLM strategy could be identified.

PLM stragglers

advanced PLM users

PLM champions

PLM stragglers

advanced PLM users

Extended analysis:Additionally differentiating the champions, when these break away from the advanced users.

Differentiating the participants for the statistical analysis

Splitting the companies into groups

company positions

Examples for applied color schema for results presentation

PLM champions

PLM stragglers

advanced PLM users

Categorization of U.S. participants

PLM champions

PLM stragglers

advanced PLM users

Categorization of European results

Indication of other result categories

new parts

slightly modified parts

standardized parts


20The Participants

Distribution of the interview participants according to their company’s position in the supply chain

OEM

32%

Tier 0,5 supplier

6%

Tier 1 supplier

56%

Tier 2 supplier

6%

Distribution according to the company‘s position in the supply chain

Engineering service providers and entire vehicle

producers

Extract of participants –(Europe)

List of participants (U.S.)BorgWarner, Inc.

Dana Corporation

Eaton Corporation

Ford Motor Company

Daimler Trucks North America (Freightliner)

General Motors Corporation

Harley-Davidson Motor Company

International Truck and Engine Corporation

Lear Corporation

Michelin North America, Inc.

Siemens VDO Automotive Corporation

Tenneco Inc.

TRW Automotive

Valeo

Yazaki Corporation

Aston Martin Lagonda

Behr GmbH & Co.

Bentley Motors Ltd

Bertrandt AG

BMW AG

Brose Fahrzeugteile GmbH & Co.

Claas KGaA mbH

Continental Teves AG & Co. oHG

Cooper-Standard-Automotive GmbH

DaimlerChrysler AG

Delphi Automotive Systems Deutschland GmbH

Faurecia

Jaguar Land Rover

Johnson Controls GmbH

Lear Corporation GmbH & Co. KG

Lotus Cars

Linde AG

Nissan Technical Center Europe LTD

Mann+Hummel GMBH


21Overview




State of PLM Maturity

State of PLM Maturity in all Dimensions

Status of PLM Use


Real PLM Benefits



Companies differ in their PLM level of maturity Our experience with allocating over 30 global automotive manufacturers and suppliers into 3 PLM levels of maturity allows companies to benchmark their PLM efforts. Roughly half of the researched companies are leading PLM users and approximately 10% are champions

PLM maturity is measured on 5 major dimensions with advanced users and champions having higher scores on these dimensions: Product strategy, Product data, Engineering organization, Engineering processes, IT Systems

Comparisons with previous studies show marked improvement in the level of integration by both European and U.S. firms

Contents



22State of PLM Maturity

The PLM level of maturity in the automotive industry varies extremely. Roughly half of the researched companies are leading PLM users and approximately 10% are champions.

PLM level of maturity participant classification(U.S. and European participants)

PLM Champions

Advanced PLM Users

PLM Stragglers

U.S. Europe

Level of PLM Integration

Leve

l of P

LM U

sage



PLM users have recognized the need for integrated solutions and have, compared to 1999, improved their level of integration.

leve

l of P

DM

use

level of PDM integration

PDM level of maturity in 1999 taken from the study “Benefits of PDM“ carried out mainly in Germany

PDM stragglers

advanced PDM users

PDM champions

leve

l of P

DM

/PLM

use

level of PDM/PLM integration

PDM level of maturity Europe 2006 compared to PLM level of maturity U.S. 2007

optim

isatio

n axis

PLM U.S.2007

leve

l of P

DM

/PLM

use

level of PDM/PLM integration

PDM level of maturity in 1999 compared to PLM level of maturity in Europe 2006

optim

isatio

n axis

PDM 1999

PLM Europe2006

The distribution is very similar to the European results with a slightly higher

focus on PLM functionality

Since 1999 a strong focus was put on integration of PLM functions

PLM Europe2006



PLM champions have a high, well-balanced level of PLM use and integration.

Condensed Benchmark FindingsPLM users differ in their level of PLM maturity.

PLM users differ in some of their basic strategies.

Advanced PLM users are more aware of what they need to do to successfully implement PLM.

Advanced PLM users offer increased engineering sophistication.

Advanced PLM users are successfully integrating data, applications, processes, and departments.

Cross-enterprise collaboration and integration continues to be a challenge.

The combined direct and indirect benefits of advanced PLM implementations offer clear opportunities and rewards .


leve

l of P

LM u

se

PLM stragglers…largely have an average level of PLM functions, but only have limited integration solutions.

Advanced PLM users...have an above-average level of integration, but only use average PLM methods and tools.

PLM champions…show a high, well-balanced level of integration and use. They are strategically ideally set up.


25


leve

l of P

LM u

se

State of PLM Maturity in all Dimensions

PLM champions represent excellent results in all PLM dimensions. Stragglers show lower scores across the board.

Participants’ current state of PLM maturity split up according to the PLM dimensions(U.S. participants – averages in each classification group)

PLM stragglers

0,33

0,39

0,400,41

0,45

0

1product strategy

IT systems



product data

advanced PLM users

0,52

0,62

0,610,67

0,61

0

1product strategy

IT systems



product data

PLM champions

0,71

0,73

0,860,95

0,54

0

1product strategy

IT systems



product data


26Overview




Status of PLM Use

Basic Strategies of PLM Users

Engineering Sophistication of PLM Users

Usage of PLM Functions

PLM IT Environment


Real PLM Benefits



Advanced PLM users primarily pursue technological leadership and focus on customers, while PLM stragglers have a focus on cost reduction;

strategically and conceptually pursue a high level of component reuse considering readily available as well as slightly modified parts;

apply “Design for X” and innovative product development methods more intensively than the stragglers;

utilize PLM functionalities more intensively along the life cycle than PLM stragglers and also apply a variety of extended PLM functions;

spend less money on IT, focus on integrated PLM / ERP IT environments and provide web based access;

tend to use commercially available solutions with adaptations, with a move toward more off the shelf solutions in the future.


Contents


27

22

22

Basic strategies of PLM users

Advanced PLM users and champions primarily pursue technological leadership and focus on customers, while PLM stragglers have a focus on cost reduction.

20070: unimportant

5: very important

2011

0: unimportant

5: very important

advanced PLM users and champions

PLM stragglers

Differentiating market strategies(averages in each classification group)

Trends

All PLM users have a strong focus on their customers

All PLM users put increasing focus on technological leadership

The advanced PLM users and champions consider all listed aspects of their strategy as being of higher importance than the PLM stragglers, though the Stragglers see increasing importance over the next 4 years as well.

First to market 3,2 3,8

technology leadership 3,0 4,0

costs reduction 4,4 4,6

First to market 4,0 4,1

customer focus 4,7 4,9

technology leadership 4,6 4,9

Cost reduction 4,2 4,5

customer focus 4,2 4,7


28

OEMs' PLM strategy is largely influenced by internal requirements, while suppliers have to align themselves with OEM guidelines.

OEMs Suppliers

14% 16%software vendors

0% 0%external service providers

7% 44%suppliers/OEMs

0% 3%consumer

11% 7%competition

54% 21%internal requirements and processes

Variables which influence the company wide PLM strategy 2007(U.S. participants - averages in each classification group)

14% 9%development partners

Software vendors were identified as most influencial factor for OEMs in 2006 European study

Basic strategies of PLM users


29Engineering Sophistication of PLM Users

Advanced PLM users strategically and conceptually pursue a high level of component reuse considering readily available as well as slightly modified parts.

already available/standardised parts

new parts

slightly modified parts

PLM champions

PLM stragglers

advanced PLM users

Component reuse in new developments(consolidated European and U.S. participants1) - averages each classification group)

30%32%

38%

33%35%

32%

44%

28%

27%

1) We do not expect quick significant changes of these numbers but rather a slow shift towards increasing re-use across all regions. Therefore, consolidation of European and US data should provide a realistic picture.

all users

38%32%

30%


30

PLM champions and advanced PLM users apply “Design for X” methods more intensively than the stragglers

Using “Design for X" methods (averages in each classification group of all PLM users)

design for manufacturing 82%

92% 100%

Europe

U.S.

design for assembly 77%Europe

U.S. 100%

design for service Europe

U.S.

53%

58% 91%

design for quality Europe

U.S. 42%

82%

84%

European participants 2006

U.S. participants 2007



design for manufacturing 80% 100%

design for quality 43%20%

design for service 86%20%

design for assembly 100%100%

advanced PLM users and champions 2007

PLM stragglers 2007


31

Advanced PLM users are leaders in using innovative product development methods.

Using innovative product development methods(averages in each classification group)

PLM championsadvanced PLM usersPLM stragglers

behaviour modelling

interdisciplinary modelling

configured DMU3

parametric geometry modelling

design in context2

digital test bench4

digital product master

1Digital product master: Central, standardised information carriers for all product data in the entire product lifecycle. 2Design in context: Cooperative product design through company internal and external project participants on a joint,

current development base (information pool), with all project data, relevant for the development. 3Configured DMU: Digital mock up enhanced by configuration management functions (configurable digital prototypes

for virtual product creation).4Digital test bench: Digital engineering test bench for testing and analysing virtual prototypes.

2007 U.S. participants2006 European participants

100%

100%

83%

50%

100%

83%

83% 100%

100%

50%

33%

100%

33%

67% 100%

67% 100%

50%

100%

European participants 2006 PLM championsadvanced PLM usersPLM stragglersU.S. participants 2007

100%

100%

23%

80%

62%

93%100%

77%

100% 71%

46%

71%80%

64%80%

62%

71%

42%

80%

50%



32Usage of PLM functions

The use of PLM functions decreases rapidly after the completion of the product creation. Leaders and champions utilize PLM functionalities more intensively along the life cycle than PLM stragglers.

Utilization of PLM core functions along the product lifecycle(U.S. participants - averages in each classification group)

document/data management

product structure/ variant mgmt.

configuration management

classification and search functions

release-/changemanagement

project management

development production sales/deliveryprocurement service

research/ marketing

no use (0% - 20%)

little use (20% - 40%)

average use (40% - 60%)

high use (60% - 80%)

full use (80% - 100%)

PLM stragglers

Advanced PLM users and champions


33

PLM Stragglers rarely use any extended PLM functions; whereas, PLM Leaders and Champions apply a variety of extended PLM functions today.

Utilization of extended PLM functions along the product lifecycle(U.S. participants - averages in each classification group)

requirement traceability

engineering collaboration

direct material sourcing

product portfolio management

decision support

digital factory

maintenance, repair & overhaul (MRO)

development production sales/deliveryprocurement service

research/ marketing

no use (0% - 20%)

little use (20% - 40%)

average use (40% - 60%)

high use (60% - 80%)

full use (80% - 100%)

Usage of PLM functions

PLM stragglers

Advanced PLM users and champions


34

Overall, advanced PLM users spend less money on IT. Quantity does not necessarily imply quality.

IT Expenses(averages in each classification group)

IT expenses/employees and year in €

(European participants1))

3.441

PLM champions

8.460

PLM stragglers

4.441

advanced PLM users

1) Due to incomplete financial data from U.S. participants the results are based on 28 participants of 2004 European study

IT expenses as percent of sales

(U.S. participants)

PLM stragglers

advanced PLM users

1,71,5

PLM IT Environment

By consequently applying best practices of a successful PLM implementation and mitigating risks (see in later chapter) advanced PLM users achieve better results with less expenses.


35PLM IT Environment

Despite of the trend of increasing product complexity and demands, basically all users have already started to consolidate their Engineering IT landscapes.

Number of operative/data creating IT-systems in engineering(U.S. participants – average number in each classification group)

Number of product data management systems in engineering(U.S. participants - averages in each classification group)

advanced PLM users

PLM stragglers

PLM champions

2003

119

10

2007

15

7

4

2011

10

4

1

2003

10

8

1

2007

97

1

2011

4

21

Increasing product complexity and demands result in a decrease in operative IT systems (e.g. E-CAD, DMU, etc.).

advanced PLM users

PLM stragglers

PLM champions


36

Advanced users focus on integrated PLM / ERP IT environments providing web based access

PLM IT Environment

20112007

PLM IT environment system architecture(U.S. participants - averages in each classification group)

15%

70%

15%

U.S. 2007

Web based access to central PLM system components(Share of all entries in %)

The trend to completely web based systems will be more of a focus for the US participants than the European participants.

Trend U.S. 2011

17%

75%

8%

various systems40% 17%

75% 0%

central ERP system0% 0%

13% 0%

integrated ERP/PLM environment

0% 50%

0% 71%

centralized PLM environment60% 33%

13% 29%

82

18

Trend Europe 2010

Core system with partial web access

no web based access to the system

complete web based system

advanced PLM users and Champions

PLM stragglers

Core system with partial web access

complete web based system




37

Currently, advanced users and champions tend to use commercially available solutions with adaptations, with a move toward more off the shelf solutions in the future.

D: home grown system/interfacesC: externally developed individual solutionB: commercial system with adaptationsA: commercial system without any adaptations

PLM stragglers

advanced PLM usersand champions

Degree of standardisation of the implemented PDM solutions (averages in each classification group)

D 27%

C 18%

B 55%

U.S. 2007 Trend U.S. 2011

B 67%

A 33%

D 6%

Trend Europe 2010

B 94%

D 43%

B 43%

D 6%

U.S. 2007 Trend U.S. 2011Trend Europe 2010

B 94%

C 14%

D 14%

B 72%

C 14%

Advanced PLM users will have converted their PDM systems to commercial systems and replaced old internally or externally developed systems

D: home grown system/interfacesB: commercial system with adaptations

European participants 2006U.S. participants 2007

PLM IT Environment


38Overview




Status of PLM Use


IT System and Data Integration

Product Lifecycle Integration

Customer and Supplier Integration

Real PLM Benefits



All participating companies are planning to use PLM functionalities company wide and across the extended enterprise by 2011.

Although no user has achieved a full integration of processes and functions across departments, the advanced PLM users show a clearly better level of company wide integration.

Cross-enterprise data and process integration challenge both advanced users and stragglers. The advanced PLM users have already achieved a better level of integration and apply more sophisticated techniques to communicate along the supply chain.

Contents



39

The trend towards broader application of PLM methods is steady. All participating companies are planning to use PLM functionalities company wide and across the extended enterprise by 2011.

Participants self assessed level of PLM integration in 2007 and 2011(U.S. participants - averages in each classification group)

CAD data management

PDM

company wide PLM

cross enterprise PLM

2007

18%

54%

92%

92%

2011

100%

100%

100%

100%



40

Advanced PLM users are integrating engineering applications more than the stragglers.

production planning0 8633

CAM2029 15

testing / prototyping3343 29

virtual product creation


PLM stragglers

integrated in the PLM environment integrated in the ERP environment

real product creation

Allocating engineering applications to PLM and/or ERP system environments based on their integration(U.S. participants - averages in each classification group in %)

simulation / calculation4045 0

requirements management29 0

CAQ14 0

project management2029 14 20

factory planning 33 4314

resource planning 33 710

bill of material management100 86 60 80

CAD 14100 83

DMU 17 100 80

visualization 29 100 86



41

Integration approach A

CAD CAE DMU PDM

PLM environment

PPS BOM CAQ . . .

ERP system inter-faces

Point to point Interfaces between PLM environment in engineering and ERP systems used in business do not lead to the degree of integration in terms of stability, flexibility and scalability which special integration solutions (see below) reach. The systems focus on different things: PLM environments focus on product development and its dynamic processes, whereas ERP systems concentrate on the availability and securing of resources. The advantage of this integration approach is that the effort and expenses for implementing these interfaces is low.

The three most important integration approaches for PLM/ERP environments

Advanced PLM users are pursuing integration of the PLM and ERP environments, in order to secure process and data continuity.

Integration approach B

By using an integrated PLM/ERP solution, many companies achieve high process and data consistency along the product lifecycle. But given today’s technologies, particularly where the engineering domain is concerned, this approach tends to sub-optimize certain processes and tasks and drives for additional local applications to ensure high productivity.

CAD CAE DMU . . . PPS BOM CAQ . . .

Integrated PLM/ERP environment

Local systems

Integration approach C

CAD CAE DMU PDM

PLM environment 1

PPS BOM CAQ . . .

ERP system 1

CAD CAE DMU PDM

PLM environment 2

PPS BOM CAQ . . .

ERP system n

Companywide integration solution

Companies operating worldwide with complex products and business relationships need to embrace varied systems while still working to deliver consolidated reporting and process orchestration environments to users and business leaders. Service oriented approaches have emerged as the reasonable way to leverage the strength of such an environment by enabling reuse and improved sharing of information across the extended enterprise and enabling faster and more flexible coupling and decoupling of applications in order to increase the ability to innovate to improve business flexibility, collaboration and efficiency.

Partners / Supplier Network



42

While every company is utilizing interdisciplinary data models today, advanced PLM users and champions have already achieved a well balanced share. PLM stragglers expect to reach this goal by 2011.

Interdisciplinary data integrated in a shared or networked data model(U.S. participants - averages in each classification group)

N: Non-technical DataS: SoftwareE: Electric / ElectronicM: Mechanical Data

PLM stragglers

advanced PLM usersand champions

N 13%

M 33%

2007 2011

E 25%

M 25%

N 20%

M 80%

2003

N 25%

S 25%

N 12%

E 38%

M 50%

2007 2011

E 24%

M 29%

E 20%

M 80%

2003

N 29%

S 18%

E 20%

S 10%

E 27%

S 27%



43

The status of current information management practices are similar for all PLM users. But advanced PLM users consider those practices to be more of a barrier for executive decision making.

Characterization of information management(U.S. participants - averages in each classification group)


PLM stragglers

support of executive decision making

barrier facilitator

100%

50%50%

0%

100%

33%67%

0%

100%

0%100%

0%

17%

100%0%

83%

67%

83%17%

33%

67%

83%17%

33%

67%

17%83%

33%

attributes describing current information

barrier

facilitator

tardy timely

inaccurate accurate

fragmented consolidated

un-analyzable analyzable

irrelevant relevant

inaccessible accessible

non-electronic electronic



44Product Lifecycle Integration

Advanced PLM users show a slightly higher level of integrating non-technical departments into the engineering environment. Still, no user has achieved a full integration of processes and functions across departments.

0 1

degree of integration in the engineering environment

2 3 4

maintenance, repair & overhaul (MRO)

enterprise resource planning (ERP)

customer relationship management (CRM)

supply chain management (SCM)

requirement traceability management (RTM)

service & support

Integrating non-technical departments into the engineering environment(averages in each classification group)

0 no integration

1 communication between the departments

2 exchange of information over system interfaces

3 shared database

4 integrated processes and functions

advanced PLM users and PLM champions

PLM stragglers



advanced PLM users and PLM champions

PLM stragglers


45Product Lifecycle Integration

Advanced PLM users tend to outsource more value shares in production than PLM stragglers but less in other areas. They expect significantly increasing shares particularly in development, procurement, and service/after sales over the next 4 years.

Outsourcing of added value shares per lifecycle-phase(U.S. participants - averages in each classification group)

research/ marketing

development procurement production delivery service

4%

13%

6%

15%

3%8%

20%

9%

28%

37%

7%

33%

advanced PLM users

PLM stragglers

research/ marketing

development procurement production delivery service

5%

15% 14%18%

15%11%

25%

10%

33%37%

17%

37%

2007

2011


46Customer and Supplier Integration

Cross-enterprise data and process integration challenge both advanced users and stragglers. Advanced PLM users are focusing more on process integration while the stragglers are focusing more on data integration.

data exchange and interfaces 60% 29%

confidentiality (IP protection) 14%20%

multi-CAD management 14%20%

integrated configuration management (incl. change and release management) 43%20%


The top challenges relating to the relationship with customers and suppliers (U.S. participants - average of classified results - multiple entries possible)

PLM stragglers

reduce parts, foster reuse and common parts 0%20%

building a common PLM strategy 0%40%

30% of all companies and 50% of suppliers have multi-CAD environments

30% of all companies (50% of all suppliers) use standard interfaces and formats

25% of suppliers work in OEM systems

Suppliers have accepted the multi-CAD environment as the cost of doing business, but they still see it as an added cost that significantly affects their staffing and financial returns.

Management of multi-CAD environments is still a challenge


47Customer and Supplier Integration

OEMs dominate the form of collaboration along the supply chain. Half of the advanced PLM users apply KPIs to measure the success of this collaboration.

Percentage of companies using KPIs to measure the success of cross-enterprise collaboration(U.S. participants - averages in each classification group)

25%

50%

advanced PLM users

PLM stragglers

Approaches to cross-enterprise resolution of design issues (consolidation of listed approaches)

Some companies have already established tight, online collaboration with their suppliers and customers

Most companies apply standards and gate processes

Most companies apply quality management techniques and design reviews

Trends in resolving design issues

The OEM‘s influence on the chain of suppliers

OEM Tier 1 supplier

Tier 2 supplier

Defines the form of collaboration and data exchange format.

Offers access to its own data management systems in order to integrate the suppliers.

Passes on the OEM‘s specifications and data exchange requirements.


48

Advanced PLM users apply more sophisticated techniques to communicate requirements along the supply chain.

Communication of assembly constraints to customers and suppliers(average of classified results in % - multiple entries possible)

verbal communication 40% 42%

paper-based communication 28%20%

no communication 0%8%

CAD-based communication 57%40%

Communication of product interfaces to customers and suppliers(average of classified results in % - multiple entries possible)

design evolution tracked by system 0% 42%

data integrated into and communicated via BOM 42%25%

data shared electronically 100%100%


PLM stragglers


PLM stragglers

Customer and Supplier Integration


49Overview




Status of PLM Use


Real PLM Benefits

Product Lifecycle Performance

Product Development Performance

PLM Users‘ Company Success




The strategic use of PLM drives cost reductions as well as adding value by reducing lead times, improving quality and supporting enterprise knowledge management. All users report realization ofsignificant benefits. Still differences in between PLM stragglers and advanced PLM are reported:

Advanced PLM users focus on speed of innovation, while PLM stragglers focus on decreasing the costs of innovation.

Non Value-added engineering time continues to be an issue in PLM. Advanced U.S. PLM users report less non value-added time than the stragglers. Advanced European users report even less non value-added time than the advanced U.S. users.

Although many influencing factors exist, advanced PLM users are economically more successful.

Contents


50Product Lifecycle Performance

Summary of the benefits of using PLM considering its quantifiability

monetarily measurable

quantifiable not quantifiable

not monetarily measurable

reduced material and personnel costs

reduced project costs

reduced non value-adding tasks

reduced IT maintenance costs

reduced number of product changes

improved parts re-usage

more variants with less parts

lead time reduction

reduced customer complaints

faster order to delivery

better adherence to delivery dates

improved data quality and availability

improved flexibility of company organization

higher market shares

improved product quality

support of product innovation

standardized processes

optimized flow of information and processes

improved communication and collaboration

Improved re-usage of expertise

Efficient application of PLM provides benefits along the product lifecycle. Still, the calculation of a business case is challenging as many achievable benefits are not quantifiable.

“Does PLM save you time? Engineers will say no, but take it away and they will see the value.”

We did an initial study and we tried to quantify hard dollars but can’t tell if we are achieving them or not. It is all anecdotal.

Our customers want to dictate. When they work with you they aredemanding consistency across the globe, especially for engineering changes process. We had no solution, now we have it but how do you measure this on a score card?

Some expert statements on the challenge of quantifying benefits



1 reducing the product creation costs

2 reducing time for developing and the time until the introduction onto the market

3 higher market shares

Time

Qualitative illustration

advanced PLM users

PLM stragglers

cash flow

2

1

3

Qualitative illustration of achievable cost and time impacts through PLM along the product lifecycle

The strategic use of PLM drives for cost reduction as well as adding value by reducing lead times and improving quality. Overall, the perception of benefits achieved through PLM tends towards cost reduction but reliable measures are widely lacking.

Implementation of PLM to reduce costs or add value(U.S. participants - average of classified results in % - multiple entries possible)

Most of the experts’statements were

based on gut feeling rather than measures.

Emphasize added value 40% 29%

Equal 29%20%

Emphasize cost reduction 42%40%


PLM stragglers



Thanks to PLM, all users realized significant benefits, including higher levels of a process standardization, improved data flow and exchange, increased re-usage of data and knowledge, better geographical integration, reduced number of changes and improved product quality.

PLM stragglers

The actual achieved benefits of the introduction of PLM, distinguished by PLM dimensions(U.S. participants - averages of top 3 picks in each classification group in %)

Reduced number of product changes 128

higher ability for innovative products 30Prod

uct optimized product quality 68

IT

integration of legacy systems 00

lower IT maintenance 34

Org

aniz

atio

n

geographic integration 16 12

collaboration and comunnication 34

Dat

a

data quality 34

re-use of data and knowledge 1216

data flow and exchange 1216

Proc

esse

s

availability of information 98

reduction of non-value activities 60

standardization of processes 1816

advanced PLM users and PLM Champions



PLM contributes significantly to the innovation process. It is interesting to note that advanced PLM users focus on speed of innovation, while PLM stragglers focus on decreasing the costs of innovation.

PLM stragglersadvanced PLM users and PLM Champions

faster rollout of innovations 1129

decreasing the number of variants

115

developing mass customized products 5 11

effective use of platform strategies 10 11

decreasing innovation costs 19 33

Increasing the amount of reused parts

33 17

extending the product economic life-time 60

The impact of PLM on product innovations(U.S. participants - averages of top 3 picks in each classification group in %)



PLM provides positive effects on enterprise knowledge management.

reusing internal know-how 1423

Documentation of factual and process knowledge 2927

workflows for knowledge collection, structuring and distribution 2114

decision making support 718

use of management information systems 75

use of enterprise knowledge portals 09

Supporting knowledge management by using PLM(U.S. participants - averages of top 3 picks in each classification group in %)

Cross-location communication

Documented knowledge as a basis for developing new products

Supporting product development in the strategy phase

Further positive side effects

management of intellectual property 215

PLM stragglersadvanced PLM users and PLM Champions


55Product Development Performance

Non Value-added engineering time continues to be an issue in PLM. Advanced users have less.

How daily work time is distributed in engineering(averages in each classification group)

Cre

ativ

e tim

e

degree of standardisation

non value-adding engineering work

formalismno standardization

administration

communication

searching for and accessing information

PLM stragglers

advanced PLM users

value-added engineering time

non value-added engineering time

15%

17%

15%

18%

21%

12%

49% 53%

47%51%

The effects of standardization on non value-adding engineering work(Qualitative illustration)

PLM stragglers

advanced PLM users

16%

19%

21%

29%

24%

20%

27% 44%

56%

73%

2007 U.S. participants2006 European participants

The degree of standardization influences the share of creative

engineering work. A healthy compromise between no

standardization and formalism needs to be found and supported

by workflow components to maximize value adding

engineering work.



All PLM users show a similar distribution of product changes along the lifecycle, though the diversity of participants’ product portfolio may influence the results.

Distribution of the number of product changes in product creation(averages in each classification group in %)

3328

36

27

20

11

13

21

design detailing testing after SOP(first 6 months)

10%

15%

20%

25%

30%

35%

40%

5%

0%

PLM stragglersadvanced PLM users

PLM stragglersPLM champions and advanced PLM users



31

23

30

1917

14

6

design detailing testing after SOP(first 6 months)

10%

15%

20%

25%

30%

35%

40%

5%

0%

20

Most European OEMs participating in 2004 were focused on

passenger cars where the participating U.S. OEMs in 2007

represent passenger cars, commercial vehicles and motor

cycles which impacts these results.



Having a thorough product concept reduces the time spent on product development as a share of the overall time to market.

Interaction in time between concept, product development and "time to market "(Observation of all of the interviewees in ascending order according to the share of time needed for the concept and development phases)

0%

20%

40%

60%

80%

100%

questioned participants

Share of concept development in product development

Share of product development in “time to market“

stragglersadvanced users

2007 U.S. participants (qualitative trends supported by limited data)

1) share of concept development in product development

2) Share of product development in “time to market“

0%

20%

40%

60%

80%

100%

champions

stragglersadvanced users

questioned participants

2006 European participants

PLM stragglers

advanced PLM users

55%2)55%1)

60%2)50%1)

Application of PLM functionalities during the

concept phase will help reduce the overall

development time as share of the total time to

market

Time to market

Development time

Time for concept development

1) Share of concept development in product development

2) Share of product development in “time to market“


58

Advanced PLM users and champions secure their investments through ROI calculations and tracking. Although many influencing factors exist, advanced PLM users are economically more successful.

Return on investment (ROI) for PLM investments1)

80

57

7

share of companies which have carried out a ROI calculation in %

PLM champions

advanced PLM users

2835

return on investment in months(averages of entries)

PLM champions

PLM stragglers

advanced PLM users

PLM Users‘ Company Success

1) Due to incomplete financial data from U.S. participants the results are based on 28 participants of 2004 European study

advanced PLM users

PLM stragglers

Profit margin1)

(Profit margin development: average increase per year)

0,01

0,04

profit margin

-12,9%

14,9%

profit margindevelopment

2000

2024

2006

21

30

Market shares1)

(Averages of entries in %)


59Overview




Status of PLM Use


Real PLM Benefits


Successful PLM Introduction Strategies

Successful PLM Project Management

Success Factors and Risks when Introducing PLM


Overall, advanced PLM users basically hold to the project plan and strictly stick to their PLM expenses. Stragglers significantly exceed project time and costs.

Advanced PLM users in the U.S. (compared to their European counterparts) report a trend to be more conservative when it comes to implementing new technologies first.

A successful PLM initiative is process and not IT driven. Having a clear PLM strategy, including top management and future users support is imperative for success. Advanced PLM users put more emphasis on change management, quick wins and clear scoping. Users not accepting PLM is the main cause for a failed PLM introduction.

Contents



60Successful PLM Introduction Strategies

The success of a PLM initiative starts with a clearly defined and documented strategy and a sufficient time frame to put it into effect.

advanced PLM users

PLM stragglers

2008 2009 2010 2011

Companywide documentation of the PLM strategy(averages in each classification group in %)

Advanced PLM users do not speak of a PLM project in connection to introducing PLM, but of a PLM programme which is set up of many subprojects with clear boundaries.

Time frame for putting the PLM strategy into effect(qualitative representation of U.S. survey results – targeted time frame to put PLM strategy into effect)

Advanced PLM users tend to plan for a longer time frame to put their PLM strategy into effect than PLM stragglers

time

PLM stragglersadvanced PLM users

yes

no

33%

U.S. 2007

67%

Europe 2006

36%

64%

Europe 2006

86%

14%

U.S. 2007

33

17%

83%

2012



The greatest PLM success can be attained with a top-down strategy and closely involved top management.

PLM stragglers advanced PLM users

Involving top management when implementing a PLM strategy(averages in each classification group in %)

top management determines the PLM strategy (top-down)

0 50

0 18

important decisions are coordinated between TM and the PLM project team

50 50

44 70

TM is not involved/interested in the PLM strategy

017

023

TM supports PLM strategy, PLM team makes decisions33 12

33 0

Europe 2006 Europe 2006

U.S. 2007 U.S. 2007



Advanced PLM users in the U.S. report a trend to be more conservative when it comes to implementing new technologies first.

PLM stragglers

advanced PLM users

users who only implement new technologies after clear standards have been established

users who implement new technologies after someone else has tested them

users who implement new technologies first

Users who try to stay with current environments as long as possible

Strategic approach when introducing new PLM technologies(averages in each classification group in %)

20%

80%

6%

35%

47%

6%

47%

Trend 2010

40%40%

20%

17%

83%67%

33%

67%

33%

75%

25%

20%

80%

European participants

2003

U.S. participants

2007 2011

Advanced PLM users report a big shift to be more conservative when it comes to implementing new technologies. Stragglers, on the other hand, display a trend towards implementing new technologies first

Advanced European PLM users report they are significantly more aggressive when it comes to implementing new technologies first. Cultural differences might influence this behavior.


63Successful PLM Project Management

Intensive project preparation reduces time for implementation efforts.

Average time needed for the most important activities in PLM programmes.

18% 18% 46% 18%

9% 23% 54% 14%PLM stragglers

27% 25% 30% 18%

21% 21% 38% 20%PLM champions and advanced PLM users

5

9

5

5

project duration 24

3

12

2

project duration 22

5

status analysis

project preparation

pilot stage

implementation, system customizing, data migration

2006 European and 2007 U.S. participants

(distribution of time over project phases in %)

2007 U.S. participants

(duration of project phases in months)

The timelines imply stragglers being more successful in project

execution but high deviations from the initial project goals – as shown

in following results - prove differently.



Advanced users stick strictly to their PLM expenses and basically hold to the project plan. Stragglers significantly exceed project costs and time

PLM champions and advanced

PLM usersPLM stragglers

Deviating from the project plan in the last PLM activity(averages in each classification group in %)

system integration

system functionality

project time

project costs

+3

-30

+2

+71

+47

+10

-30

+300

+3

+7

+37

+13

+4

+12

-12

-16

advanced PLM users and PLM championsPLM stragglers

European participants 2006 advanced PLM users and PLM championsPLM stragglers


Europe



Advanced PLM users tend to invest more in education and project management supporting a successful PLM introduction but in general expenses are equally distributed across all PLM users.

Distribution of expenses for the most important PLM activity(averages in each classification group in %)

Share of the project costs for external services(averages in each classification group in %)


39 4545



191928


advanced PLM usersPLM stragglers

Europe 2006 Europe 2006U.S. 2007

PLM stragglers

(no reliable data from 2007 U.S. participants available) advanced PLM users

software31

2927

hardware16

817

implementation35

3439

education / training10

227

project management10

128

Advanced PLM users utilize external services more effectively


66Success Factors and Risks when Introducing PLM

A successful PLM initiative is always process and not IT driven. Including top management and users is imperative for success. Overall, all users responded similarly but the advanced users put more emphasise on change management, quick wins and clear scoping.

PLM stragglersadvanced PLM users and PLM champions

Success factors for introducing PLM (averages in each classification group)

not important

very important

not important

very important

top management commitment 5 4,7

initiative is process-, not IT-driven 4,3 4,3

division / user involvement 4,7 4,7

consideration of quick wins 4,3 3,8

assessing potential for improvements 3,9 4

clearly defined responsibilities 4,1 4,2

clear democracy of scope 4,3 3,8

costs (hardware, software, implementation) 3,6 3,7

detailed assessment before implementation 3,4 3,3

ROI analysis for prioritization of activities 3,4 3,3

4,3accompanying change management 3,7

Prioritization

All PLM users see the same top three success factors

Advanced European PLM users and PLM champions provided an almost identical prioritization of the top five success factors as the same U.S. user group

1. not important2. somewhat important3. moderately important4. important5. very important


67Success Factors and Risks when Introducing PLM

A lack of user acceptance is a main cause for failed PLM implementations. PLM stragglers often fail whilst migrating data. Overall, the advanced PLM users are more sensitive to risk management.

Risks when introducing PLM(averages in each classification group)

PLM stragglersadvanced PLM users and PLM champions

not risky very risky not risky very risky

user acceptance 4,7 4,3

insufficient PLM project management 4,0 3,5

too much focus on technical details 4,1 3,2

missing communication 4,6 3,8

complex data migration 3,9 4,0

missing cost transparency 3,3 2,7

too large project steps 3,6 3,3

Other seen risks

no clear process structure

no close links to external service providers possible during the duration of the project

understanding PLM differently due to geographic, international and cultural distribution of the company

issue resolution turnaround

lack of Top Management involvement/direction

1. not risky2. somewhat risky3. moderately risky4. risky5. very risky

An expert statement: „People are used to ad-hoc [working], but PLM implies additional business control that people are not used to. So we will have to change the culture to adjust to PLM.“


68PLM Study Summary Notes




Status of PLM Use


Real PLM Benefits


PLM Study Summary NotesKey Messages about the Success of PLM Implementation

Key Messages about the Challenges of PLM Implementation

Contents


69Key Messages

PLM is slowly making inroads into manufacturer and supplier engineering organizations.

Key messages about the success of PLM implementation

Managers understand the need for PLM in order to meet business pressures

PLM maturity, at least within companies, can be seen in almost half of the automotive manufacturers and suppliers in the study.

All users report significant benefits from their PLM implementations.

Based on previous studies, companies show marked improvement in their PLM integration.

Advanced PLM users:

show technology leadership and customer focus

achieve a higher level of parts reuse

focus more on process than on data integration

focus more on the speed than the cost of innovation

more intensively use advanced design technology

more intensively use PLM across the organization and apply extended PLM functions

employ more sophisticated processes to link to their partners, though cross-enterprise collaboration is generally weak

spend less money on IT

focus on integrated PLM / ERP IT environments and provide web based access to their users

tend to use commercially available solutions with adaptations

hold to the project plan and strictly stick to their PLM expenses.


70Key Messages

There are a number of key issues that keep companies from leveraging PLM capabilities

Key messages about the challenges of PLM implementation

A successful PLM initiative is process and not IT driven.

Having a clear PLM strategy, including top management and future users support is imperative for success.

PLM needs to be understood in the broad perspective of a management philosophy that combines data creation/management, IT architecture, and business knowledge.

Advanced PLM users put more emphasis on change management, quick wins and clear scoping.

Advanced PLM users view their information management as a barrier to executive decision making.

Non value-added engineering time continues to be an issue in PLM.

Despite its often broad definition and perspective, PLM has beenlimited to the design and engineering functions.

Cross-enterprise data and process integration as well as integration of non-technical functions into the PLM environment challenge both advanced users and stragglers.

Not having sound and reliable measures of PLM success make it difficult to promote its advantages.

benchmark study 2007umtri.umich.edu/sites/default/files/benefits-of-plm_us report_final_… ·...

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