Strategic Technology: Product Lifecycle Management Moves AheadBy Karen S. Henrie | Posted 07-25-2006
Strategic Technology: Product Lifecycle Management Moves Ahead
PLM can add value by improving a product's development, time to market, and retirement.
When Alexander Pope wrote that "hope springs eternal," he may well have had golfers in mind. A new putter or the latest wedge can take on -almost mythical proportions in the minds of most golfers, for whom a wide-eyed respect for cutting-edge technology, combined with a fervent desire to cut strokes off their game, translates to a propensity to buy.
Dan Shoenhair, director of engineering at Phoenix-based golf-equipment manufacturer Ping Inc., says, "All golfers have one similarity: They always think the next club will help them play better. We need to continually refresh the line, take advantage of new materials, and make modifications to improve equipment performance. New products are very important to our financial health, and to our competitiveness. Golfers won't buy three-year-old technology if they can buy something new."
Ping and its many rivals face intense competition in the U.S. golf-equipment market, and it's only getting tougher. Golfers are playing fewer rounds than in the past, the number of new golf courses being built each year has declined, and the market for new clubs is stagnant. These market dynamics, combined with inconsistent results from year to year, led Ping to begin pursuing a product lifecycle management strategy five years ago. Ping participates almost exclusively in the market for golf clubs and bags, which represents about a third of the $5.8 billion total U.S. golf-equipment market.
Says Shoenhair: "PLM interested us because we needed to gain efficiency in our computer-aided design, both to increase the number of new products we were bringing to market each year and to cut the time it took to do it." But Ping also foresaw the opportunity to use PLM to harness its resources across the company to get products out the door. "We like the idea of building a knowledge library to make collaboration more efficient and provide access to product data across business functions," he adds.
That, in a nutshell, is the essence of PLM, which AMR Research describes as a strategic approach to creating and managing a company's product-related intellectual capital, from the product's conception to its retirement. PLM can be used to improve both a company's product development processes and its ability to use product-related information to make better business decisions and deliver greater value to customers. It has evolved from its CAD and PDM roots to encompass a broad suite of product-related activities across many industries.
PLM is currently adding the most value to Ping's design, engineering and manufacturing processes, which makes sense given its corporate strategy. "We have to be good at marketing, but our real focus is on quality and performance," Shoenhair says. "We're much more engineering-oriented than some of our competitors."
The level of collaboration PLM allows is hugely helpful when, say, implementing new designs consistently within product platforms. When Ping brought out its new G5 family of products, says Shoenhair, "PLM allowed us to make sure that what was being designed in one segment was visible to others. We wanted all G5 putters to have a similar look and color, and we wanted the irons to look like they were in the same family as the putters." Meanwhile, detailed product information3D model information, product specifications, manufacturing instructions and the likeis all stored in a data repository and ties back to a particular product. A purchasing agent can then use that information to determine which materials to buy.
Since introducing PLM, Ping has increased the number of new products it introduces annually from 2 to 14, while the average time from inception to delivery of a new product has gone from 24 months to 9. What used to take one engineer 60 days to complete now takes 5 days. And whereas Ping was never a major player in the market for metal-wood drivers, the company recently enjoyed a string of six months during which it sold more of the pricey clubs than any of its competitors, according to Golf Datatech, a market research firm that follows the golf-equipment industry.
Now, says Shoenhair, Ping is working on a strategy to increase collaboration with suppliers. While Ping relies on PLM data internally, it still uses "e-mail or other outdated modes" to communicate with suppliers. He wants to give suppliers a window into such areas as product requirements, so they can be included earlier in the design process. Furthermore, once suppliers begin working on their own designs, Shoenhair would like for Ping to be able to look at those models and work iteratively on design together. "We might change a head design, which would change the shaft diameter we need," he says. PLM, Shoenhair believes, will prove a critical element in helping integrate Ping's suppliers.
How can we better align our product strategy and systems with our corporate performance objectives?
How might access to product information help improve our functional processes and results?
Collaboration among all the players is key in any successful PLM program.
Kent, Wash.-based Recreational Equipment Inc. was looking for ways to better manage growth and cut time-to-market for new products, without sacrificing product performance. In addition to its 80-plus retail stores, REI has a gear-and-apparel division that designs and develops products under two private-label brands: REI for outdoor sports-related equipment and clothing, and Novara for bicycles and related equipment and clothing. (All of REI's manufacturing is outsourced.)
Kevin Myette, REI's director of R&D for gear and apparel, says, "Even before pursuing PLM, we spent time, energy and resources making our private-label goods relevant" so they could compete effectively against major brands like North Face and Cannondale. "We do the research and the science, deliver products esthetically, promote them, create desire and price them appropriately." That strategy is paying off. While about 80 percent of REI's $1 billion in annual revenues still comes from store sales, the balance now comes from gear and apparel, which has gained market share relative to other brands sold in the stores, and generated higher profits.
The problem was that REI's functional areas had grown organically over time. So the various groupsnew-line management, R&D, lab testing, field testingweren't always choreographed, says Myette. Each of them had their own information stored in stand-alone product-data-management tools, CAD tools, e-mail messages and elsewhere. A team responsible for bringing out a new line of tents, for instance, might have "thrown information over the fence" to the teams charged with designing the tents, choosing materials, testing them in the lab and so forth. And finding information across product groups, about, say, which other products used zippers or screen fabrics, was time consuming and inefficient, at best. There was simply no common and consistent way to communicate about products.
Says Myette: "We needed to do something to meet the needs of the organization. Redesigning processes gave us a third of the benefit. Now we're systematizing those changes. We moved into PLM because we hit a ceiling in terms of our ability to execute."
The biggest challenge, says Myette, involved bringing people, from designers and sourcing managers to engineers and field test technicians, onboard with a more collaborative approach to product development. "Previously, people shared their work only after it was completed. Now we're asking them to be more collaborative."
The process redesign now emphasizes collaboration. Teams involved in product development now get more information, and get it earlier. In the case of tents, choosing appropriate materials, making logistical arrangements for field testing (often done by employees), and other activities now run in parallel. "The linkages between groups and their various processes supported by PLM add much more value than product data-management tools alone ever could," Myette says. As a result of its PLM efforts, REI will be able to introduce more new product lines, and more choices within products, without sacrificing quality or performance.
REI chose MatrixOne Inc.'s Accelerator Series of PLM components because it was flexible enough to support manufacturing of everything from tents to apparel. (MatrixOne was recently acquired by Dassault Systèmes.) The technology implementation has gone very smoothly. After completing a pilot last fall, REI moved into planning and implementation for production systems, which are being brought online in order of the processes as they actually occurfirst concept and R&D processes, then line planning, bill of materials, specifications and so on.
Myette acknowledges his company's PLM efforts are still relatively immature with respect to the kinds of product information it is sharing within and across product groups. "We're still focused on getting a very clear, traceable engineering specification and bill of materials in place, which is very important in the apparel world. Ultimately, we'd also like to make our processes more seamless with suppliers. Today, we still choose suppliers based purely on their ability to deliver quality products. Some still operate on a phone, a fax and a PC."
Myette's biggest challenge, for now, is managing the scope of REI's PLM efforts, including prioritizing which processes to bring onboard next. In addition to creating closer links with suppliers, he's also concerned about end-of-product-life issues, and implementing true "cradle to grave" design. "Petroleum is a finite resource, and a lot of our products are synthetic. The better we can manage the design and development process, the more likely we can choose materials that can be recycled."
How can we design our IT systems to support greater cross-functional collaboration and business process automation around product information?
Which PLM vendors offer software that is most likely to meet our needs, given our industry?
PLM has the potential to help CIOs achieve total product-data integration.
Gartner Inc. Research Director Marc Halpern envisions a much more far-reaching value proposition for PLM in the future. "As companies such as Ping adopt PLM and build comprehensive databases of product information that are fully synchronized with one version of the truth, they'll be able to use that information more broadly." He expects that much more content, including images, will be visible to marketing, for example, for use in creating sales brochures. Depending on the industry and product category, companies can also integrate more accurate, detailed product information into service manuals and user manuals. At Ping, for instance, a care-and-use booklet for a golf club could be dynamically connected to a simplified image of the original CAD drawing, along with information about how to clean it. Any change made to the CAD drawing would intuitively change in the brochure as well.
Unfortunately, achieving that level of cross-functional and cross-company integration remains a huge challenge. Says Mark Deck, a director with Boston-based management consultancy PRTM, "the ultimate vision of PLM systems is to create a single source for product information, which encompasses an overwhelming wealth of data, and becomes a massive data-integration issue." Some data originates in PLM software, while component product information may come from suppliers, manufacturing configuration data comes from ERP systems, warranty data comes from CRM, and so on. New approaches to architecture (especially service-oriented architecture) as well as the development of standards for information exchange among PLM products will help companies cope with the integration issues over the long term.
While Deck believes that "the world is heading toward the integrated product-data record and an increasing ability to solve the integration issues," it can't get there fast enough to suit many product-focused companies. Competitive, fast-paced global markets, fickle consumers, and a slew of other market and company dynamics have made PLM a life or death issue when it comes to business health.
How much data exchange can we support today between our ERP and PLM systems?
Does our current IT architecture solve our PLM-related integration problems?