Recently, I have been pondering the value of Product Lifecycle Management. Has it evolved to a point where there is no question about the necessity of it? At the Oracle Value Chain Summit I attended a session with David Rudzinsky, the CIO of Hologic. He was very passionate about the benefit and value of PLM and even asserted that it offers more value and benefit than ERP which could be a controversial opinion is some circles. I also read an article from Jos Voskuil where he discussed his surprise around finding companies and individuals that were still unsure about the value of PLM at the Product Innovation event in Berlin. I will concede that PLM value can be somewhat difficult to quantify versus some other technology investments but it is an essential ingredient in the product development process. I was trying to think of a way to better illustrate this when I remembered “It’s a Wonderful Life” and how the Jimmy Stewart learned to appreciate his value by seeing what life would be like without him. While some companies are certainly living today without PLM I thought it would be interesting to look at what companies that are using PLM would do if they no longer had it. This article will review what removing PLM from the product development process looks like. I will also relay the opinion of some of our clients when asked about this scenario in there companies and hopefully this will paint a clearer picture of the value and essential nature of PLM in the product development process.

I have written and read numerous articles on PLM value and I am not sure that any of them really nailed the issue. It is a complex beast and quantifying the specific return on investment can be very challenging. First you have to baseline your “as is” process which few companies will do and then measure the delta. The problems arise in that many times with process improvement technology you just move the bottleneck. By improving one process you expose the inefficiency of the next and it becomes a process of chasing your tail and delivering no real value. The holy trinity of product development is faster time to market, lower cost, and higher quality. Any process or technology that can facilitate these three things simultaneously is considered a high value. The problem is that these three outcomes can be affected by numerous variables so solving one issue doesn’t necessarily guarantee ultimate success. For example an inefficient supply chain can be your ultimate cause for high cost, slow delivery and poor quality. PLM can help you identify the issue but ultimately finding a better supplier is the true solution to the issue. PLM provides information that allows a company to address their inefficiencies and in some cases it can aid in speeding things up but it is usually a secondary element in resolving the challenges of effective product development. So to truly appreciate the value it offers taking it away might be the best approach to illustrate it impact.

I happen to have a real world example we can observe to learn of the impact of product development without PLM. I am working with a client who has been acquired by a larger company. As part of the acquisition a portion of the company will continue to operate under the original name of the company with some specified “emerging technology” that remains excluded from the acquisition. This company has operated with PLM for the past six years and has all of their product structure captured in PLM and is using it for their entire bill of material and change order process. The acquiring company is taking ownership of all existing technology platforms so they will be effectively starting over although they will have access to their legacy data from the PLM system. This company will have limited capital so any investment in technology will be difficult given the nature of their resources. I had the opportunity to interview the PLM administrator about the transition and he was encouraging the new entity to strongly consider investments in a new PLM system. His perspective on the need for PLM was as follows, “If they don’t do anything of significance they will be ok” (without PLM). He also added “The more you do the harder it gets, the later you try and implement PLM the worse it is.” He stated that even with Excel once changes start it will take too much time to document. He described this method as a click above a Big Chief tablet and a pencil.

I mentioned the Hologic presentation at the Value Chain Summit as another example highlighting the critical need for PLM. The presentation is available on the Oracle site but I have provided a link for convenience. As an early adopter of PLM the lack of PLM was less of an issue for them versus my previous example but they did identify a couple of key business drivers that caused them to adopt PLM or as they termed it PDM back in 1999. As a growing concern they were experiencing an increased volume of Engineering Change Orders (ECO) and this was creating high overhead and longer cycle times. FDA regulations also played a strong role in exposing their legacy systems. They had a need for a single system of record that spanned engineering and manufacturing and PLM is the only system in their opinion that met this criteria. Their main objective was breaking down the silos inside their company between Design, Manufacturing, Supply Chain, Quality, Customer Service and Field Services. PLM allowed them to accomplish this objective and by doing so they were able to ultimately reduce ECO cycle times from 45 days to 4 while improving labor efficiency 50-100% across multiple departments. One quote sited in the presentation sums it up, “Agile (PLM) has provided Hologic with a consistent documentation control process. It imposes a strict process, yet it is flexible enough to enable us to make the changes necessary to meet our business demands.” Rudzinsky went on to identify their PLM system as the most critical of Hologic’s business systems since all product information flows from this system to all others including ERP. PLM makes their ERP and CRM systems more valuable.

PLM value continues to be somewhat elusive and hard to quantify. While challenging it is not impossible to quantify. Hopefully, if your company is without PLM or considers it a lower priority system it won’t take the real world equivalent of driving a car into a tree and having hallucinations to recognize the true necessity of PLM. When implemented properly it becomes the central component in a well-designed product development process that leverages best in class technology for design, customer relationship management, and ERP. PLM becomes the repository of all product information and controller of all process and this ensures that communication is properly executed and that all product development is documented. Without this structure companies will constantly struggle to access information, recreate information that already exists, make mistakes repeatedly and fail to improve their products. It is certainly possible to run a company without PLM but I cannot think of a good reason to try.