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The time is right for PLM

by Dave Hannon

March 30, 2011

By Dave Hannon

I know a little bit about engineers. I know they are usually very smart people. I know they are an extremely important (possibly THE most important) part of any manufacturing business. I know they are very technically minded.

And I know they don’t like to be told what to do. Ever.

In my years of covering the procurement function, I heard from more than a couple purchasing professionals how the engineering departments in their organizations didn’t want to use the parts or suppliers that purchasing recommended, but rather wanted to hand procurement a bill of materials full of their hand-picked parts and suppliers and say “buy this.”

But that sounded a bit extreme, so to further understand the relationship between engineering and the rest of the supply chain, I sought out engineers’ perspectives anywhere I could – from a former colleague who worked at an engineering magazine; from friends and relatives who were engineers (here in the Boston area, there’s no shortage); and from professional contacts who had engineering experience. And the overall impression I came away with was engineers are very demanding, but it’s not because they want to be pain in the neck or because they are arrogant. Engineers are very reluctant to compromise for a good reason: they take pride in their work. They are willing to “own” the responsibility for the product’s design and, in many cases, the quality. And if your butt is on the line, you want to be making your own choices.

But the product development process is changing, just like a lot of other business processes. The silos are being broken down and engineering was perhaps the tallest silo of them all. No longer does engineering use its own software to design a product and throw it over the wall to the manufacturing organization at leading companies. No today’s product development process involves more input from a variety of internal organizations like marketing, sales, procurement, and compliance. It may involve outside consultants and vendors contributing pieces of the design. And the manufacturing may be done by one or multiple contract manufacturers on another continent.

Those are the realities of manufacturing today – more integrated and closed-loop processes. And integrated processes require integrated information systems. Just as the organizational silos need to come down, so do the IT barriers. Engineering software today must be closely integrated with other internal systems to expedite product development and ensure all parts of the company are working off the same information.

In short, PLM is, at its core, all about integration. "The increasing relevance of PLM across industry verticals, growing complexity of products requiring cross-industry expertise, and growing need of the end user for expansion have raised the bar for PLM vendors to both be affordable and provide a seamlessly working portfolio of PLM apps," says Sanjeev Pal, a research manager at IDC in a recent brief on the PLM market.

As you might have heard, SAP released the latest version of its PLM software at the PLM 2011 conference in Orlando last week. And while I’m not an expert on PLM software functionality, as you might expect from an ERP vendor, one of the themes of SAP’s release is that the new PLM software manages product development from idea through manufacture and integrates all of the other syst ems required – including CAD systems – seamlessly. It manages the integrated process, not just the various steps along the way.  

And that level of integration and data-sharing can go a long way towards bringing engineers closer to the rest of the supply chain and streamlining the product development process. 

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