a cup half full: plm in the automotive · pdf fileconclusion. 3 plm for the automotive...

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A Cup Half Full: PLM in the automotive industry

September 2008

PLM for the Automotive Industry | 22-Sep-082 © Copyright IBM Corporation 2008


Agenda

PLM Study Overview

Significant PLM benefits are being achieved today

PLM Integration is a BIG challenge

PLM implementation approaches are improving

Conclusion



PLM in the Automotive industry

Joint study with:- Automotive Analysis Division, University of Michigan Transportation Research

Institute (2007)- Cranfield University (2006)- Ruhr University Bochum (2006/2004/2000) - IBM

We conducted a combination of in-depth interviews and surveys with directors and managers with expertise in the fields of automotive engineering and information technology.

Findings are “indicative,” but the sample is not large



Who did we talk to?

16 USA automotive OEMs and suppliers39 European automotive OEMs and suppliersFindings focus on 2006 & 2007 data (2004 data available) The participating companies are: - OEM: 32%- Tier 1 supplier: 62%- Tier 2 supplier: 6%

Euro

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Dana CorporationEaton CorporationFord Motor CompanyGeneral Motors CorpValeoYazaki CorporationBorgWarner, Inc.Tenneco Inc.

TRW AutomotiveLear CorporationMichelin North America, Inc.International Truck and Engine CorpSiemens VDO Automotive CorpDaimler Trucks North AmericaHarley-Davidson Motor CompanyU

.S. P

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ist)

Aston Martin LagondaBehr GmbH & Co.Bentley Motors LtdBertrandt AG BMW AGClaas KGaA mbHDaimlerChrysler AGDelphi Automotive SystemsDeutschland GmbHFaurecia

Jaguar Land RoverLotus CarsJohnson Controls GmbHLear Corporation GmbH & Co. KGLinde AGNissan Technical Center Europe LTDMann+Hummel GMBHCooper-Standard-Automotive GmbHBrose Fahrzeugteile GmbH & Co.Continental Teves AG & Co. oHG



We categorized the 52 participants into PLM Champions, Advanced PLM Users and PLM Stragglers

PLM Champions

Advanced PLM Users

PLM Stragglers

U.S. EuropeLevel of PLM Integration

Leve

l of P

LM U

sage

Advanced PLM users have an above-average level of integration, but only use average PLM methods and tools

• PLM champions are the leading edge of the Advanced users, show a high, well-balanced level of integration and use. They are strategically ideally set up. Top 10% are champions

PLM stragglers… largely have an average level of PLM functions, but only have limited integration solutions

There is a gap today between leaders and stragglers

Combined PLM Champions & Advanced Users



IBM defines Product Lifecycle Management (PLM) as a strategic management approach for running the business, not just an engineering tool

integratedby PLM

engineeringprocesses

IT systems product strategy

engineeringorganizationproduct data

consisting of integrated methods and tools for the cooperative development, maintenance and use of all relevant engineering information in the entire distributed product lifecycle

PLM is not a single tool, technology, or packaged product

PLM is a “strategic management approach”

PLM integrates systems and processes



A PLM environment typically includes a variety of integrated systems, processes and tools

PLM processes often have a high degree of variation between organizations, locations or projects.

PLM transformation initiatives are challenged by these barriers and may cause problems during execution

To collaborate on enterprise projects these disparate systems cause major challenges for product & process definition

Market/Sales Order Process

ERP Ownsolution

Ownsolution

Ownsolution SAP SAP

CAD

CAE

PDM

E-BOM

MPM

M-BOM

Reqm;ts.

Specials

Ownsolution

Ownsolution

Ownsolution SAP SAP

Engineering

Org 1 Org 2 Org 3 Org 4 Org 5

Operations

Decision point—mandate system commonality (“rip & replace”)or integrate existing systems through SOA (“best of breed”)!

Decision point—mandate system commonality (“rip & replace”)or integrate existing systems through SOA (“best of breed”)!



Agenda

PLM Study Overview




Conclusion



PLM Benefits are realized across many areas for both PLM Stragglers and Advanced Users

Significant reported benefits include:

• higher levels of process standardization

• improved data flow and exchange

• increased re-usage of data and knowledge

• better geographical integration

• reduced number of changes

• improved product quality

PLM stragglers

Reduced number of product changes 128

higher ability for innovative products 30Prod

uct optimized product quality 68

IT

integration of legacy systems 00

lower IT maintenance 34

Org

aniz

atio

n

geographic integration 16 12

collaboration and comunnication 34

Dat

adata quality 34

re-use of data and knowledge 1216

data flow and exchange 1216Pr

oces

ses

availability of information 98

reduction of non-value activities 60

standardization of processes 1816

Advanced PLM users



PLM Champions and Advanced Users are much more proficient in even doing ROI evaluations, and thus see better returns

80

57

7

share of companies which have carried out a ROI calculation in %

PLM champions

advanced PLM users

28

35

return on investment in months(averages of entries)

PLM champions

PLM stragglers

advanced PLM users



One of PLM’s major goals is to improve innovation

“PLM enables collaborative product development work environments that bring together expertise from multiple organizations. These are environments where people can develop new, innovative products and services, and design and establish innovative business, manufacturing, and support processes”

- Peter Bilello, senior consultant, CIMdata

Source: http://aecnews.com/articles/786.aspx http://www.ngmanufacturing.com/pastissue/article.asp?art=271207&issue=218

“Today’s PLM solutions provide essential support for innovation. PLM has steadily evolved from engineering-centric solutions focused on engineering data management to extended enterprise intellectual asset management solutions that support the collaborative creation, management, dissemination, and use of project definition information from concept to decommission .”

- John MacKrell, senior consultant, CIMdata

http://aecnews.com/articles/786.aspx

http://www.ngmanufacturing.com/pastissue/article.asp?art=271207&issue=218



Advanced PLM users focus on speed of innovation, while PLM stragglers focus on decreasing the costs of innovation

PLM stragglersadvanced PLM users and PLM Champions

faster rollout of innovations 29

decreasing the number of variants

11

115

developing mass customized products

5 11

effective use of platform strategies

10

decreasing innovation costs

11

19 33

Increasing the amount of reused parts

33 17

extending the product economic life-time

60

The impact of PLM on product innovations



Advanced PLM users lead in using innovative product development methods

PLM championsadvanced PLM usersPLM stragglers

European participants 2006

PLM championsadvanced PLM users

PLM stragglers

U.S. participants 2007

2007 U.S. participants2006 European participants

parametric geometry modelling

design in context2

digital test bench4

digital product master

behaviour modelling

interdisciplinary modelling

configured DMU3

100%

100%

83%

50%100%

83%83% 100%

100%

50%33%

100%

33%67% 100%

67% 100%50%

100%100%100%

23%80%

62%

93%100%

77%

100% 71%

46%71%80%

64%80%62%

71%42%

80%

50%



Advanced PLM users obtain about 10% more reuse (for Slightly modified and Existing) than the stragglers

Advanced users also:- Pursue a high level of component reuse- Reusing readily available as well as slightly

modified parts

Component reuse in new developments(consolidated European and U.S. participants1 - averages each classification group)

PLM-champions

PLM-stragglers

Advanced PLM users

30%32%

38%

33%35%

32%

44%28%

27%

All PLM users

38%32%

30%

Existing/standardized parts

New parts

Slightly modified parts



PLM is a strategic management approach for running the business; it is not just an engineering tool We believe that the fundamental difference between leaders and stragglers in the automotive industry is in the way they think about PLMLeveraging product development methods are in much greater use of PLM LeadersPLM benefits are being achieved by all, but advanced users are getting better benefits from their more comprehensive approach to PLM

What is going on?

The best benefits come from thinking of PLM in terms of a comprehensive, strategic change process management approachThe fact that Advanced PLM users report lower IT costs means that automotive companies should aim for more comprehensive PLM benefits, and not just aim at lowering costs.PLM as a management strategy needs to be at the core of how the business fundamentally operatesAn innovation focus will lead to a larger business impact for an automotive company than focusing on cost cutting alone

What are the implications?



Agenda

PLM Study Overview




Conclusion



PLM

PLM functionally overlaps with other enterprise systems, and needs to be integrated

ERPCRM

SCM

SRM

Source: Alan Mendel 2007 presentation



Integrating non-technical departments into the engineering environment(averages in each classification group)

Advanced PLM users show a slightly higher level of integrating non-technical departments into the engineering environment. No user has achieved a full integration.

degree of integration in the engineering environment

maintenance, repair & overhaul (MRO)

enterprise resource planning (ERP)

customer relationship management (CRM)

supply chain management (SCM)

requirement traceability management (RTM)

service & support

Advanced PLM Users and PLM Champions

PLM Stragglers

European Participants 2006

U.S. Participants 2007


PLM Stragglers

0 no integration

1 communication between the departments

2 exchange of information over system interfaces

3 shared database

4 integrated processes and functions

0 1 2 3 4



Advanced PLM users are integrating engineering applications morethan the stragglers in the physical environment

production planning0 8633

CAM2029 15

testing / prototyping3343 29

virtual product creation

advanced PLM users and champions

PLM stragglers

real product creation

simulation / calculation4045 0

requirements management29 0

CAQ14 0

project management2029 14 20

factory planning 33 4314

resource planning 33 710

bill of material management100 86 60 80

CAD 14100 83

DMU 17 100 80

visualization 29 100 86

(U.S. participants - averages in each classification group in %)



Big changes are expected in the consolidation of their Engineering IT landscapes

Number of product data management (PDM) systems in engineering(U.S. participants - averages in each classification group)

2003

10

8

1

2007

9

7

1

2011

4

21

advanced PLM users

PLM stragglers

PLM champions



Currently, advanced users and champions tend to focus on commercially available solutions with adaptations, with a move toward more off the shelf solutions in the future.

Degree of standardization of the implemented PDM solutions (averages in each classification group)

D 27%

C 18%

B 55%

U.S. 2007 Trend U.S. 2011

B 67%

A 33%

D 6%

Trend Europe 2010

B 94%

D 43%

B 43%

D 6%

U.S. 2007 Trend U.S. 2011Trend Europe 2010

B 94%

C 14%

D 14%

B 72%

C 14%

D: home grown system/interfacesC: externally developed individual solutionB: commercial system with adaptationsA: commercial system without any adaptations

D: home grown system/interfacesB: commercial system with adaptations

European participants 2006 U.S. participants 2007

Advanced PLM Users and Champions PLM Stragglers



Advanced users are focusing on providing web based access in theU.S.

Web based access to central PLM system components(Share of all entries in %)

15%

70%15%

U.S. 2007

The trend to completely web based systems will be more of a focus for the US participants than the European participants.

Trend U.S. 2011

17%

75%

8%

82

18

Trend Europe 2010

Core system with partial web accessno web based access to the system

complete web based system

Core system with partial web access

complete web based system

European participants 2006

U.S. participants 2007



Advanced PLM users are focusing more on integrated workflow processes, while stragglers are focusing more on data integration

data exchange and interfaces 60% 29%

confidentiality (IP protection) 14%20%

multi-CAD management 14%20%

integrated configuration management (incl. change and release management) 43%20%

The top challenges relating to the relationship with customers and suppliers (U.S. participants - average of classified results - multiple entries possible)


PLM stragglers

reduce parts, foster reuse and common parts 0%20%

building a common PLM strategy 0%40%



Advanced PLM users apply more sophisticated techniques to communicate requirements along the supply chain, however communication is still not high

Communication of assembly constraints to customers and suppliers(average of classified results in % - multiple entries possible)

verbal communication 40% 42%

paper-based communication 28%20%

no communication 0%8%

CAD-based communication 57%40%

Communication of product interfaces to customers and suppliers(average of classified results in % - multiple entries possible)

design evolution tracked by system 0% 42%

data integrated into and communicated via BOM 42%25%

data shared electronically 100%100%


PLM stragglers



Participating companies are planning to use PLM functionalities company wide and across the extended enterprise by 2011

Self assessed level of PLM integration

CAD data management

PDM

company wide PLM

cross enterprise PLM

2007

18%

54%

92%

92%

2011100%

100%

100%

100%

USA participants only

Companies are optimistic about reaching full integration by 2011



Automakers are challenged to integrate their separate enterprise IT systems on which they run their businessIntegration along the supply chain also remains a difficult challengeAutomakers are optimistic about achieving strongly integrated capabilities within 5 yearsCompanies are taking different approaches to PDM customizationAdvanced users focus on PLM workflow processes, not on data integration

The major integration effort within an enterprise will be integrating its key enterprise systems, which often means PLM and ERPIt is unclear which approach to PDM customization will succeed or dominateBusiness focused scenarios can highlight PLM integration success, as opposed to a data integration approach

What are the implications?What is going on?



Agenda

PLM Study Overview




Conclusion



PLM success can best be attained with a top-down strategy that closely involves top management

PLM stragglersadvanced PLM users and champions

Involving top management when implementing a PLM strategy(averages in each classification group in %)

top management determines the PLM strategy (top-down)

0 50

0 18

important decisions are coordinated between TM and the PLM project team

50 50

44 70

TM is not involved/interested in the PLM strategy

017

023

TM supports PLM strategy, PLM team makes decisions33 12

33 0

Europe 2006 Europe 2006

U.S. 2007 U.S. 2007



A lack of user acceptance and communication are main causes for failed PLM implementations.

Risks when introducing PLM(averages in each classification group)

PLM stragglersadvanced PLM users and PLM champions

not risky very risky not risky very risky

user acceptance 4,7 4,3

insufficient PLM project management 4,0 3,5

too much focus on technical details 4,1 3,2

missing communication 4,6 3,8

complex data migration 3,9 4,0

missing cost transparency 3,3 2,7

too large project steps 3,6 3,3

1. not risky2. somewhat risky3. moderately risky4. risky5. very risky

An expert statement: “People are used to ad-hoc [working], but PLM implies additional business control that people are not used to. So we will have to change the culture to adjust to PLM.“



A successful PLM initiative has top management commitment, as well as a clear process and business focus, rather than being IT-driven

PLM stragglersadvanced PLM users and PLM

championsSuccess factors for introducing PLM (averages in each classification group)

not important

very important

not important

very important

top management commitment 5 4,7

initiative is process-, not IT-driven 4,3 4,3

division / user involvement 4,7 4,7

consideration of quick wins 4,3 3,8

assessing potential for improvements 3,9 4

clearly defined responsibilities 4,1 4,2

clear democracy of scope 4,3 3,8

costs (hardware, software, implementation) 3,6 3,7

detailed assessment before implementation 3,4 3,3

ROI analysis for prioritization of activities 3,4 3,3

4,3accompanying change management 3,7

1. not important2. somewhat important3. moderately important4. important5. very important



PLM champions reduce the scope of the project to the advantage of the project plan (cost and time).

Clear scope and small project range guarantee the adherence of the project plan.

“Quick Wins” with clearly arranged project scope and user groups

Compared to Advanced Users, PLM Stragglers significantly exceed project costs and time. There is also a significant loss of System Functionality.

PLM Champions and Advanced PLM UsersPLM Stragglers

Deviating from the project plan in the last PLM activity(averages in each classification group in %)

system integration

system functionality

project time

project costs

+3

-30

+2

+71

+47

+10

-30

+300

+3

+7

+37

+13

+4

+12

-12

-16


PLM Stragglers

European Participants 2006


PLM Stragglers

U.S. Participants 2007



PLM should be tied to the overall corporate strategy, however leadership is reluctant to buy into large projectsIt might be easier to justify PLM projects as small IT projects limited to engineering, but then the full benefits of PLM do not materializeIt is better to approach PLM as a major change project for the entire business culture, but that makes it more difficult to get buy-in

What are the implications?

Comprehensive change projects like PLM need support and top management coordination, as well as compelling business casesPLM projects also need strong end user support from the engineers and planners who will work with the system when it goes liveAdvanced PLM teams focus on quick wins with clear scope to show business valueFocus on change management processes is an attribute of successful implementations

What is going on?



Agenda

PLM Study Overview




Conclusion



Conclusion

Automotive industry’s PLM cup is “half full”Some are doing PLM well, and all are improvingMost are getting benefitsIntegration and implementation is still a major challengeFocus on the small quick wins with process focus, such as engineering change

We are optimistic that PLM will continue to be a driving force for the innovation needed to meet the rapidly changing demands on automakers today and into the future

PLM stragglers need to imitate the leaders:who tend to think “innovation” and “process transformation” for the business as a wholeand not think just “tool” and “cost savings” for the engineering department

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