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It's Time to Revise Your Definition of PLM

by SAP's Ulrich Eisert | SAPinsider

April 1, 2006

Many PLM implementations focus only on R&D challenges. Ulrich Eisert, SAP’s head of mySAP PLM Solution Management, outlines a broader set of four PLM challenges, explains how mySAP PLM integrates systems and processes to meet these challenges, and offers advice for natural starting points for beginning or extending your PLM implementation.

Ulrich Eisert
Head of Solution Management,

Q What are the top challenges R&D organizations and business groups are attempting to address with a product lifecycle management (PLM) system?

The first challenge — which is true for almost all PLM implementations, whether from SAP or a competitor — is support for product-development processes in a collaborative environment. You will find that many PLM implementations more or less focus only on R&D challenges, and therefore limit the scope of PLM to areas such as structure management, document management, and change management for the product-development stage. This, in my mind, is a terrific starting point for any PLM implementation, but it is only that — a starting point.

The second challenge, which we are seeing from more and more top-performing companies, is the management and sharing of product-related data, not just in the engineering or R&D community, but throughout the enterprise and over the entire life cycle of a product. The data generated from a PLM implementation truly builds the foundation for all subsequent product-development processes, be they costing, planning, manufacturing, service management, maintenance, or others. Product-related data needs to be shared across the enterprise, and that requires a technological backbone that stores, sorts, and distributes that data for everybody.

The third challenge we're seeing is a real need to provide tools around visibility and control. With all the different elements in a product's life cycle — starting with ideas and market requirements, followed by business cases and technical requirements, then on to development projects, products, market releases, and eventually market retirements — a company must have the tools in place to control each of these phases for every product. In order to make educated decisions, visibility into the performance of all objects is required.

And there's a fourth challenge we should mention, as well — the increasing need for compliance management. Compliance isn't everything, but everything is null and void if a product and the practices employed to produce it are not compliant with government and industry mandates.

Q How can companies maintain visibility, control, and compliance at the macro and micro level in today's manufacturing world, where everything is so geographically dispersed? An "internal" R&D department, for example, might actually be spread across different countries, or even different continents.

Globalization presents challenges for both internal and external collaboration. When we look at internal collaboration, companies need a technical infrastructure in place that allows them to have one logical instance for metadata that can be leveraged worldwide, plus a distributed environment for actual files. In order to store files close to the end user — to minimize the wide area network traffic and speed up system performance — it's really about having the right infrastructure in place along with the PLM system.

When we talk about external collaboration, however, the right infrastructure alone is not sufficient. So that's why you need to have a dedicated collaboration platform, one that gives you much better control of who has access to parts of the product structure, parts of your specification documents, and so on. SAP's collaboration platform is built in a way that you can, at any time in the development process, export product-related information to the platform and begin collaboration with your external business partners. As soon as you're pleased with the result, you can bring back the parts of the collaborative work you need into your backbone system. And since you can do this under change control, it's a very safe and controlled way to collaborate with external business partners.

This collaboration scenario is for short-term business partnerships or for situations where you do not yet have a certain amount of trust in the partner relationship. If you have a long-term partner, though, it might be a better option to just allow the partner direct access to your PLM system. Then it comes down to a question of access control, where SAP offers sophisticated mechanisms to figure out who has access to which objects.

Q Having a PLM system that integrates with other business applications and provides everybody with access to up-to-date product data makes sense for SAP customers. But how much of this is a trend across the industry?

SAP is not alone in this. Gartner defines PLM as "software with a coherent framework that supports the processes necessary to create, evolve, and support product families from idea through retirement." In the earlier part of the decade, this meant only those processes associated directly with product engineering, but today, Gartner reports that companies are demanding that their PLM solution integrate across the enterprise, including with those departments and partners not directly responsible for engineering. Gartner has recognized SAP, of all the vendors, as the leader in terms of completeness of vision.1

Q Beyond integration with enterprise systems, does mySAP PLM have all the important components of other PLM solutions, such as document management?

Document management is a powerful capability within mySAP PLM, with a simple interface and an easy system to import documents. These features are also available in other solutions. But what makes SAP's solution even more powerful is that it enables document management in the context of other business processes. With SAP's Easy Document Management, for example, you can easily create and access documents, but also have the advantage of a structured and controlled document management system that can cross into all the other business processes (see Figure 1).

Figure 1

SAP Easy Document Management Enables Users to Intuitively Create, Control, and Access Product- or Process-Related Documents, Designs, and Reports

For example, if you are doing a development project and have access to related documents — say, product specifications and meeting minutes and exception reports — all in one repository and in the context of your development project, why not leverage the existing investment and bring all these types of document repositories into the mySAP PLM solution? Then, not only do you have one consistent document repository, but you can easily link documents to business processes — project management for a development project, for example. This also could be product structure management when you build your product within mySAP PLM.

But here is the bigger benefit: Because you are using SAP to manage these documents, other groups throughout the enterprise can access them as well. Now we are back to the issue of visibility and control. And remember that document management is just one part of mySAP PLM — a very important part, but only one part.

Q Standard business applications — the SCM, ERP, and CRM solutions of the world — manage very tangible business processes. PLM applications, however, are challenged to manage something as hard to define as "innovation." How does SAP address these intangibles?

In the past, companies often have looked at the innovation process as some kind of art. Certain results show up, certain ones don't, and there is no way to quantify why. While factors such as creativity and imagination cannot be captured on a spreadsheet, you still need to manage the other elements of the innovation process as you would any other business process. There are elements — including process definitions, evaluation criteria, and available resources — over which you do have control, and you need to impose more structure and make these more predictable. This is much of what is at the heart of SAP's new product development and introduction (NPDI) initiative — what I like to call industrialized innovation.2

To enable well-run NPDI, companies ideally must have a PLM solution in place that functions at two levels. First, there is the operational level of control and visibility through a single object. For example, if I'm a product manager responsible for two products in the development pipeline and five that are in the marketplace, I'm interested in these products as single instances. I want to make sure that the NPDI process for every one of them is perfect — I want to have complete operational control of them.

But there's a more strategic level, too. Somebody in the company is responsible for a bigger portion of the overall portfolio — maybe it's the product line manager or even the CEO. Those people need an aggregated view, where it's not sufficient that a single project runs smoothly, in time, and on budget; it's more important for these folks to figure out if they're invested in the right project. That way, they can spend most of their resources and money on the projects with the greatest potential or that contribute most to their overall business goals.

So these two things are linked: If you don't have control at the operational level, you won't have control at the strategic level.

Q We've talked about the challenge of the R&D and engineering communities with regard to PLM. What is SAP's challenge?

There is still a lack of awareness in the marketplace that SAP not only has a complete PLM solution, but one that goes steps beyond other best-of-breed PLM solutions. But the message is getting out there.

In the end, this is what sets mySAP PLM apart from the competition: process integration, the ability for customers to leverage their existing investments both into applications and the SAP NetWeaver platform, and the ability to reduce the number of systems and interfaces across your solution landscape. And if you reduce the number of systems, you reduce TCO — all while supporting, managing, measuring, and optimizing your innovation processes.

How to Implement mySAP PLM: Starting Points

Here are some natural ways you can begin or extend your PLM implementation. And if you are an existing SAP customer, always keep in mind that you can leverage what you already have in place to complement your PLM initiative.


You are a customer new to SAP


You are a customer running SAP solutions (e.g., mySAP ERP for Financials or Human Capital Management), but not in manufacturing

  • Begin with SAP Project Management, and extend later toward Portfolio Management or Idea and Concept Management

  • Start with SAP Document Management (e.g., by using SAP Easy Document Management), and extend toward cFolders to share documents with external business partners

  • Use Document Management as a starting point to manage complete product definitions, leveraging Product Structure Management and CAD interfaces, if required


You are a customer using SAP solutions in material requirements planning (MRP) and manufacturing

  • Extend Product Structure Management

  • Add Document Management

  • Add CAD integration to capture design from the beginning*

  • Use Engineering Change Management (ECM) to track how product structure evolves and is released

  • Add Compliance Management using the SAP Environmental Health and Safety (EH&S) solution

  • Use product costing for complete product structures or even in the development phase
* For more information about SAP's support for CAD integration, see Thomas Klee's article "Fully Integrate Product Design Into Your Business Processes for Faster Time-to-Market" in this issue of SAP Insider (

1 Marc Halpern and Kenneth Brant, "Magic Quadrant for Product Life Cycle Management, 3Q05 (G00129564)," Gartner Research (Sept. 30, 2005).

2 For more information on SAP's support for NPDI, see Doug Macdonald's article "How Well Does Your Company Innovate and Bring New Products to Market?" in this issue of SAP Insider (

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