Enterprise software can be a major point of complexity for manufacturers, particularly in the way it seems to change at an incredible speed. In order to help work through some of those changes in product lifecycle management (PLM) software packages, we spoke with Richard Mizuno, a partner at Kalypso. He has over 25 years of consulting and business experience, serving the oil and gas, oilfield services, chemicals, manufacturing, and engineering and construction industries.
Q: Let’s start with a basic history of PLM. Where did they start, and how has that changed in more recent years?
A: I think PLM really took off and probably became most popular originally in the sectors of manufacturing where there were complex systems involved, such as airplanes and cars. A lot of the bigger PLM vendors came out of the CAD or engineering space — because companies that are building these complex pieces of equipment are heavy CAD users, they had an environment where they had to manage all this data.
If you look at the different manufacturing sectors, aerospace, defense and automotive were probably on the early end, and they started making major investments in PLM as early as the ‘80s, for example. A number of things were driving it — one is the complexity of the product and the need to collaborate across their ecosystems and the need to manage CAD and all the other information related to the product.
They had complex products that got iterated upon and configured differently for various purposes, and as their ecosystems for manufacturing expanded, there was this need to collaborate with suppliers. All of that led to a need for PLM to help manage not only the core product data, but also to enable collaboration with their ecosystem partners and suppliers.
The next wave was in high-tech, like semiconductor manufacturers or PC manufacturers, and industrial machinery. Similarly, these are highly-configurable products with a fair amount of complexity. In these sectors you have the same business requirements, which is being able to manage the complexity and configuration of the variants, but the specific risk factors may not have been as high as with the complex systems-type products.
Q: Clearly, the industries that utilize PLM, and the use cases, have changed over time. What about the way companies implement and deploy these systems?
A: The nuts and bolts of it aren’t materially different now versus 10 or 15 years ago. Because of the big ERP wave in the ‘90s and early 2000s, I think there’s a lot more knowledge and comfort in implementing local systems. What’s happened that is different is that PLM is really moving beyond the engineering function. As PLM has helped companies control and manage their product-related data over the lifecycle of their products, I think companies have realized that the data has value beyond engineering. Therefore the implementations of PLM have become larger, a little more complex and require the engagement of multiple functions, like quality, finance and supply chain, not just engineering and manufacturing.
Q: When it comes to day-to-day manufacturing operations — the plant floor — how does PLM fit in?
A: We see two or three genres of interaction between PLM and manufacturing systems. On the very advanced end, some companies basically feed iterated or updated design information to the MES and CNC machines. As you release the latest bill of material, you’re also releasing all the tooling and manufacturing instructions and so forth with it. Most of our clients, at the very least, are looking at being able to basically push a button and then publish or feed a bill of material into their manufacturing systems. That’s becoming very common, and almost every set of requirements I see from somebody who’s looking at PLM has that on the list.
A little more mundane opportunity is that most manufacturing companies have a series of procedures and policies and standards. They also have quality systems or document management systems that their plant floor people can access. That can be for quality procedures or testing procedures, as well as the latest print for a product. Some companies are looking to PLM to replace or augment those types of applications. If the latest print is available out in the PLM system, why would you need to add it to a separate system that may or may not actually have the latest print in it? Why don’t you just access the PLM system directly?
The other thing we’re seeing is that even beyond manufacturing, there is this desire to tie quality-related information and quality processes like problem reporting and corrective action processes back to the actual core data. Oftentimes, a problem with a product in the field isn’t necessarily a manufacturing problem. Manufacturing might have built it right, but the design of the product didn’t actually live up to expectations out in the field. That’s one of the impetuses you’re seeing right now around wanting to integrate the quality lifecycle processes with product development and PLM.
Q: Where do you see the PLM marketplace heading in the near future?
A: From a pure PLM technology standpoint, we’re seeing two things that are interesting. The natural evolution of PLM that we’re seeing is that it needs to become an enterprise-class application, and the software vendors need to continue enhancing the core platform to make it as capable as ERP is to fit into their IT landscape. As an example, there are some packages that are pretty popular in the market today that aren’t certified to work in virtualized IT environments. In the longer term, as more and more companies choose to use things like VMWare, you almost have to have your application certified to work in that environment. That’s just part of the natural evolution of the platform.
The other thing we’re seeing is that there are other types of platforms becoming available. For example, there are more cloud-based, or on-demand type, PLM capabilities available in the marketplace. That is providing different types of solutions and different types of platforms, that companies looking to use PLM can take advantage of. These come with different trade-offs of functionality and price points that I think will continue to expand the types of use-cases that PLM can be applied to and the types of companies PLM can be applied to.
We’re also seeing that while PLM has been traditionally focused on the product data, the technology is being applied to different types of use cases. For example, we help companies use PLM technology to facilitate improvements in the order management process, or the quality management process, taking advantage of the collaboration and the document/knowledge management capabilities that are inherent in PLM.
If you think about ongoing business operations, there’s a whole lot of ‘management of change’ processes that a company needs to execute effectively, and some companies are using PLM technology to help manage a whole suite or a whole spectrum of business change processes — not just engineering change, but capital projects, new product launches and so on.
What that would imply to me is that in the next 5-10 years, you’re going to see more and more use of PLM technology in those types of cases, but you’ll also see the platforms of these packages being expanded or made more flexible to accommodate a wider variation of use cases beyond just traditional product development and engineering.
Q: And in your opinion, what does Kalypso bring to the PLM table that others might now?
A: As we’ve discussed, PLM is becoming a cross-functional tool. It is becoming another wave of enterprise applications for companies — it’s not just an engineering tool, it’s not just a departmental tool. It’s really a business system that could provide broad capability and benefit to the company, sitting alongside ERP and CRM and other types of enterprise applications.
Kalypso thrives in helping companies improve their innovation capability and their new product development processes, and in that regard we don’t focus exclusively on the technology, but are trying to help companies to find what the best business models and business processes are that could take advantage of that technology and meet the goals of that business with the technologies being just one of the levers in that process.