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The (R)evolution of PLM, Part 1: Enabling Live R&D and Engineering

John McNiff, VP Solution Management, Line of Business R&D/Engineering
SAP

In Part 1 of this three-part series, we explore why manufacturers must embrace live PLM. In Part 2, well examine the new dimensions of a product-centric enterprise. And in Part 3, well look at the role of digital twins.

We often think of evolution as a linear process: starting with amoebas, proceeding to fish, progressing to four-legged animals, and culminating in humans. But we know that’s not how it works. Instead, evolution is the continual adaptation of each organism to its particular environment and, possibly, behaviors.

PLM concept on keyboard buttonProduct lifecycle management (PLM), for its part, has primarily been a linear endeavor, starting with design and engineering and extending through manufacturing, service, and disposal. But linear PLM is no longer sufficient. Increasing demand for product individualization, accelerating design cycles, and the rapid buildout of Internet of Things(IoT) networks are all placing incredible environmental pressures on the old way of doing PLM.

In fact, PLM needs to more closely resemble evolution. Today, PLM must continuously sense and respond in as near to real time as possible, with all end-to-end activities from design, to manufacturing, to service, and including business functions like sales and financials interconnected and synchronized.

In short, to survive in the digital economy and to achieve “live” R&D and engineering, manufacturers will have to embrace an extended “live” PLM, enabled by a digital product innovation platform.

Rapid Transformation
PLM is being transformed by three drivers: demand for customized products, increasingly rapid design cycles enabled by embedded technology, and new data streams from a growing plethora of IoT sensors.

These drivers affect business-to-consumer (B2C) and business-to-business (B2B) markets, as well as discrete and process industries, in different ways. Consumer-driven markets like automotive or apparel and footwear have long pursued customization, for example, but today’s digitalization means personalization can occur with far greater speed and scale. Industrial markets like mill products and aerospace and defense, meanwhile, are achieving customization through software-enabled configuration.

But regardless of industry, manufacturers must pursue live PLM in three key areas:

1. Understanding Customer Demands
Customer demand is a new dimension for PLM. In the past, PLM was largely concerned with developing an engineering definition that manufacturing could use to build the product. But with the rise of individualized products, design and engineering must potentially address a lot size of one.

As a result, it’s the sales configuration that drives manufacturing. Which means design and engineering must get much closer to the sales process. You need clearer insights into what customers desire and into how successful your designs are from a sales, and not merely an engineering, perspective.

These insights have been difficult to attain because the data was unavailable or it existed in different places and formats. Today, smart products are embedded with software and sensors that gather data on product usage and customer behavior. Social media and other customer touch points capture customer sentiment. And in-memory computing platforms can harmonize this data in a single location. So design and engineering can understand in real time what customers prefer, what they’re buying, how they’re using products, and how products are performing in the field.

2. Recognizing How Product Design Affects End-to-End Processes
Products that formerly had long design cycles, like cars and airplanes, now include more embedded software and electronics. This enables, for instance, Tesla owners to boost their battery capacity through an over-the-air upgrade.

Likewise, products are embedded with more and more IoT sensors. So manufacturers can not only understand how their products are performing in the field, they can also capture customer usage patterns and environmental factors like ambient temperature and humidity to help them optimize product design.

But these advances can lead to significant changes in all business processes. For starters, they mean much shorter design cycles. They also allow companies like Harley-Davidsonto let customers custom-configure motorcycles in hundreds of ways, and then build those products on-the-fly without retooling production. That requires a manufacturing process tightly integrated with marketing (website), sales (dealerships), service (performance-enhancing parts), finance (market-of-one price tags), and more.

They allow companies like Kaeser Compressors to transform from a seller of products to a provider of services. Instead of simply making air compressors that it sells to its industrial clients, the company now outfits client sites with its air compressors, which it then operates, charging a fee for the amount of compressed air consumed. That requires an entirely new profitability model.

3. Deploying a Digital Product Innovation Platform
Ultimately, to achieve live PLM, manufacturers will need to implement a digital product innovation platform that integrates business silos and enables the harmonization and analysis of structured and unstructured data.

You want to get to a point where you have a live dashboard of your product portfolio, where you can see the assets in the field, where you can see customer-demand signals, and where design and engineering, manufacturing, supply chain, sales, and service can all collaborate. That will enable you to instantly determine, for example, that your product isn’t malfunctioning because of a design flaw but because of a hardware and software incompatibility.

Live PLM is about leveraging connective technologies, harmonizing and analyzing vast data streams, making accurate predictions, and taking decisive action all in as near to real-time as possible. There are few (if any) companies that are consistently practicing live PLM across their portfolios today. But for first time, we have the technology to achieve it. The opportunity now is to take steps toward live PLM before your competitors do.

For more information please visitwww.sap.com/solution/internet-of-things.html

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