FT.com / Technology - Product lifecycle management: Benefits of being streamlined

FT.com / Technology - Product lifecycle management: Benefits of being streamlined

Product lifecycle management: Benefits of being streamlined
Geoff Nairn

Published: March 14 2007 09:36 | Last updated: March 14 2007 09:36

Product lifecycle management goes way beyond design. Downstream functions such as production and marketing are important, while regulations on recycling and traceability are forcing manufacturers to take an interest in their products after they have been sold.

“PLM is morphing to be much more than just building better tools for engineers,” says Walter Donaldson, general manager of IBM’s PLM business.

The software includes not just computer-aided design but also tools to improve downstream functions, often characterised by disjointed processes and archaic systems.

“A lot of investment in PLM is now based on this downstream impact,” says Mike Burkett, research director at AMR Research, who is credited with popularising the term PLM.

He gives the example of Motorola, which engineers its products to use fewer parts and fewer vendors. “That makes a strategic difference,” he says

In similar fashion, Toyota says it has saved $1,000 on the cost of making each vehicle by standardising commodity components.

PLM makes these types of cost-saving initiative easier, as one of its key functions is to bring together all information on parts and products, which are traditionally spread over many systems.

The strategic difference PLM can make is shown in the aerospace sector.

Analysts say that Boeing’s success in winning orders owes much to its use of “digital tooling” to build its latest aircraft, the 787 Dreamliner.

The Dreamliner project is the first time Boeing has used PLM technology on such a scale, from inception to production and product support.

Its PLM software, from French vendor Dassault Systèmes, cut the time needed to develop the 787 from five years – the time it took to develop its predecessor, the 777 – to four.

In December, workers at Boeing’s factory in Washington state were shown, via a giant screen, a simulation of how the Dreamliner’s myriad parts will come together. The aircraft’s first flight is due this year.

Boeing’s success contrasts with that of its rival Airbus, whose new aircraft, the A380 has hit delays, forcing the European manufacturer to scale back the project.

Airbus also makes heavy use of Dassault’s PLM software but, crucially, different Airbus facilities have been running different versions of it. The resulting incompatibilities meant wiring harnesses designed in one Airbus factory did not fit in the fuselage that was being built in another.

This is the downside of digital manufacturing: one of the benefits is that no prototype is needed, but had Airbus built a physical prototype, the problem might have been spotted sooner and the solution would have been much cheaper and quicker.

“PLM offers a new way of working because you can eliminate prototypes, which are one of the biggest costs at the engineering stage,” says Heinz Mayer, chief engineer for information management at Magna Steyr, an Austrian car maker.

Magna Steyr is best known as the manufacturer of the BMW X3 but it also makes vehicles for other carmakers, including the new Fiat Bravo, which is being built without prototypes.

Magna Steyr has grown rapidly to become the largest carmaker in the world without a brand. Brand-name manufacturers turn to Magna Steyr to turn out low-volume vehicles that would take too long to develop themselves.

The engine and badge are supplied by the brand-name manufacturer, but everything else in cars such as the Saab 93 Cabrio or the BMW X3 has been developed and manufactured by Magna Stehr.

Mr Mayer says its PLM software, supplied by US vendor Agile Software, plays an important role in reducing the time and cost of developing cars, particularly when it comes to the inevitable design changes.

“By linking our PLM system to our production planning and manufacturing systems, we can immediately offer design options to our manufacturing planners,” he says.

This trend to outsource not just manufacturing but also product development is gathering force in many industries.

About 90 per cent of the work on the Boeing 787 has been outsourced and its partners collaborate using the PLM software from Dassault. Airbus is now planning to outsource more work to its “risk-sharing partners”.

Compared with building a new aircraft, the challenges involved in bringing a new toothpaste to market can seem trivial. Yet PLM is also emerging as a powerful tool for the consumer products industry.

In the US, 35,000 consumer products are introduced each year, yet more than 80 per cent of them fail to meet the financial objectives set by the manufacturer, says Daniel Staresinic, who heads the consumer products practice of UGS, a US-based PLM company.

He argues that the use of PLM can reduce the time needed to get a product to market, and so there is a greater chance that the product will live up to expectations.

One trend in the consumer products sector is customising items to the requirements of specific retailers, typically with special packaging or promotions – a toothbrush bundled with the toothpaste, for example.

The design element in these customised products is trivial, but nevertheless can create big headaches for manufacturers who have to decide not just if they can make the customised product but whether they can deliver it on time.

Mr Staresinic says the use of PLM for this application can reduce the decision time by 50 per cent and the “execution time” by 30 per cent or more.

Copyright The Financial Times Limited 2007