While ERP systems are often viewed as all-encompassing, particularly for companies in the manufacturing sector, new software is emerging that tackles a broad range of functions largely untouched by traditional applications. Dubbed PLM, for product life-cycle management, the software manages products from conception to manufacturing to service and retirement.
For the most part, the companies that use PLM make things: the automotive, aviation, high-tech, and apparel industries are among the early adopters. But the software also can be useful for construction firms and other companies that deal with complex designs. Even such “products” as power plants, which have a long life cycle, can benefit from software that aggregates the reams of data that pertain to repair, maintenance, and other aspects of their life cycle. PLM, as Kevin O’Marah, vice president of PLM at consulting firm AMR Research, notes, is “the system of record for your products — it’s the documentation of everything that constitutes the product.”
But PLM is more than just a documentation system. Like ERP, PLM is a set of interconnected modules, each of which addresses a specific function. But whereas ERP is designed to handle primarily transactional data, PLM manages all the unstructured data associated with product design and manufacture. It includes basic computer-aided-design (CAD) data, the foundation of most products designed today, but goes beyond drawings to provide, for example, a digital, collaborative project environment that allows computer-based design to extend well beyond one person’s desktop. Postdesign, product specs can be shared with suppliers and customers. PLM software can also simulate the manufacturing process so that mechanical designers and engineers can try out virtual manufacturing workflows to see which will prove most efficient.
Like ERP, PLM software can be used by finance, sales, manufacturing, and service groups — any constituency that needs product information, including cost per unit and service history: the software presents a customized set of views and associated data to each type of user.
Of special importance to financial executives is PLM’s ability to act as a digital bloodhound, sniffing out wasteful or excessive spending on, for example, research and development. “Companies are extremely haphazard in the way they measure the results of R&D spending,” reports O’Marah. Despite the fact that “R&D budgets are a sacred cow,” he adds, in today’s climate no arena is immune to cuts.
PLM can save money in the product-development process by encouraging engineers to make smarter decisions about which parts should be “standard” and which should be custom designed.
IBM, which offers its own PLM portfolio with Dassault Systemes, its business partner of 22 years, claims to have saved its customers more than $1 billion while doubling on-time delivery for some customers and reducing cycle time from 72 to 16 weeks for new products. “We’re real believers in this technology because it’s worked for us,” says Edward Petrozelli, general manager of IBM’s PLM division.
One of PLM’s strongest selling points is enhanced collaboration. “We can check dimensions and engineering valuations online in real time with customers or among our own support engineers around the world,” says Rich Marando, director of advanced engineering and technology at automotive supplier Dana Corp.’s Structural Solutions Group, based in Reading, Pa. “This technology is the wave of the future. It compresses our new vehicle programs by a phenomenal amount of time.”