Category "Product Lifecycle Management"

Firstly, credit where credit is due. This article was inspired by fellow PLM soldier Rob Ferrone who includes the title “Digital Plumber” in his LinkedIn profile.

How does the plumbing analogy fits into PLM? A generalized definition of plumbing from Wikipedia:

“Plumbing is any system that conveys fluids for a wide range of applications” (Interestingly derived from the Latin word plumbum or lead – these were the first pipes used for water delivery).

Of course, the term has subsequently been extended to cover any system that facilitates the flow of fluids, information, air etc. For example, people talk about “a problem with the plumbing of my heart” when referring to arterial blockages. Or “Our network plumbing is inefficient” meaning that there are bottlenecks in the passage of data in the network.

So, how does this extended definition apply to PLM and why is it important to pay attention to “PLM Plumbing”. Let me try my own definition:

PLM Plumbing – The art and science of optimizing background systems to ensure that information, processes and workflows in a PLM system flow efficiently as possible for a user.

It is important to split this definition into two parts because really, we are talking about two different participants in a PLM system. Let’s examine the sides below.

The User

What does a user want out of a PLM system? Here is a partial list of features or behaviors that are likely to result in great User adoption:

  • Intuitive user interface
  • Minimal button clicks
  • Fresh, modern look
  • Easy access to help screens, tooltips and other aides
  • Presentation of the right information
  • Easy “drill down capabilities” for looking up details
  • Dashboards and reports
  • Responsive screens (no “slow load”)
  • Use on any device
  • Work anywhere anytime
  • Accessible and intelligent search capability (users compare to Google)
  • Simple and easy to understand workflows
  • Simple process to create objects with uncluttered forms

The list above is obviously incomplete and high level. Also, many of the requirements are functions of the underlying software and its design, and cannot be changed easily, certainly not at a specific implementation.

The PLM Plumber

So, what are PLM Plumbers? They are the heroes of a PLM Implementation, constantly working in the background to provide Users with all their requirements. They take care of the “plumbing”; all the background setup, infrastructure and configurations that a User does not want to deal with but allows for efficient data flow.

Here are a few areas where an expert PLM Plumber can have an impact:

Infrastructure Design

A crucial part of any PLM implementation is ensuring that a robust infrastructure supports the system. Not designing this correctly can have implications for user performance and hence acceptance. Another complete blog could be written about this subject but, suffice to say the PLM plumber is an expert at these matters – this is the essence of plumbing. (Just a word of warning, don’t create something analogous to the title picture of this article)

Device Availability

It is a fact of modern life that everybody expects to be able to conduct business anywhere, anytime. More and more business interactions are migrating to smart devices – should not PLM? The system can be configured and enabled to allow for this. In terms of the plumbing, this may entail some behind the scenes IT systems (VPN, Mobile web pages, device security etc.). Include in implementations!

Workflows and processes

Often committees design convoluted and complicated workflows that are then implemented in a PLM system. The result of this is that Users do not understand them, are frustrated when they don’t work and make multiple mistakes. It is the duty of the PLM Plumber to simplify and streamline workflows and processes – Users will appreciate this. And, reduce the number of clicks to approve a workflow.

User Entry Forms

Another irritation to Users is the large forms that needs to be completed when creating an object in PLM. Multiple fields with lots of information are presented. The average user completes the mandatory fields only (those with *) and hits create. So why have the non-mandatory fields in the first place? It is the duty of the PLM Plumber to fight against unnecessary fields.

Organization and Security

This is an important part of any PLM Implementation and one where the PLM Plumber can have a large impact because most PLM systems must be configured from scratch when it comes to the security model. It should be noted that nothing is more annoying to a user than to get a message such as “the user is not authorized for this function”. Not only is it a blow to their ego, it also is one of the events guaranteed to result in non-adoption. Of course, there are good reasons to have security in place, one must prevent unauthorized actions in the system. This is where the PLM plumber comes in by designing a good security policy that balances corporate policies with User convenience. The actual design is transparent to the User, they want to get their job done.

Reports and Dashboards

All Users want certain information from the system that will allow them to effectively do their job. Each User may require a different set of information, presented in a certain manner. Here is where the PLM Plumber can become very useful by configuring the correct reports and dashboards for Users. In general, Users don’t want to be bothered with this task – they want to see the results.

The Art

Note that my original definition included the word “art”. This may seem an overreach when discussing a technology such as PLM, but it can be defended. For example, faced with trying to balance complexity and simplicity in a workflow the PLM Plumber applies his art and produces an elegant result. Consider also Reports and Dashboards – is not the correct design of a sleek dashboard an art?

Conclusion

Here is to Plumbing in PLM. Just as Plumbers create complex, background, invisible systems that deliver fluids, so does a PLM Plumber deliver information to Users in an efficient manner. Embrace your destiny!

Visit www.tatatechnologies.com to learn more about our PLM offerings and how we can help customers use the best technology for their needs.

As-Is

Traditionally, a PLM implementation was carried out using large internal servers and associated IT infrastructure – what is now termed “on-premise”. Such implementations would be configured and customized to suit the processes and requirements of the business. Although most PLM customers would pay lip service to “Out of the box (OOTB)”, most would immediately turn around and apply customization’s.

So, what are the problems associated with this model? Let’s list a few of them:

Upgrades

Because an on-premise installation is static it is normally frozen at the level at the time of installation. The software vendors are constantly improving their offerings and normally have an annual upgrade cycle. Large implementations with multiple customizations and external connections are very difficult to upgrade (not least of the problems is that the original software vendor does not support customizations). This leads to the situation that these environments often are several years behind the latest release and are hugely expensive to upgrade when this becomes an imperative.

Underlying hardware and software

A PLM installation is dependent on underlying operating systems, databases and browsers. If these are upgraded or changed often the PLM environment will not operate

Supplier compatibility

A typical automotive or aerospace supplier (and there are many) runs at least 5 different versions of the same CAD package. This is required to make sure that they have the required version for each OEM they supply to. Large OEMs have lengthy and update cycles and are not synchronized. Of course, anyone who has touched a CAD file with the wrong version, will understand the potential pain.

In addition, suppliers must maintain a unique connection for each OEM they work for and must manually extract and upload data from these connections. Definitely wasted effort.

Software Bugs

Ever submitted a ticket about a software bug to a PLM company? The first response from their technical support will be – Can the error be replicated in an OOTB environment, we do not support customized environments? So, if the error is in a customized environment, you will largely be on your own trying to solve the problem.

Technical Team

To maintain a large on-premise PLM implementation, an organization needs a dedicated technical team. These resources are difficult to recruit and expensive to maintain.

Technology Access

Technology is constantly improving, including PLM applications. So, what holds back companies from using the latest? In a large majority of cases the answer is – we cannot move until our major customers move.

To-Be

Consider that Salesforce was founded in 1999 and in just over twenty years has revolutionized CRM applications. A large part of their success – a cloud-based Software as a Service (SaaS) offering on a multi tenet architecture.

The PLM landscape is showing a shift toward a cloud-based SaaS model, similar to Salesforce. Its adoption is still small but growing.

So how does a cloud-based SaaS PLM approach overcome all the problems associated with the on-premise model? Here is a list.

Automatic upgrades

As the software vendor is responsible for upgrading the environment, every user is automatically up to date with the latest version – no more expensive, lengthy upgrades. Everybody always has the latest technology.

Simplified IT

Because all the complicated software behind a cloud-based PLM is transparent to the customer and users, IT requirements for a cloud-based system are greatly simplified. Usually these are restricted to browsers and workstation operating systems. Also, no more large IT team to support the PLM implementation.

Supplier Collaboration

This is one of the largest benefits. No more running multiple versions: everybody is automatically on the same release and patch level. The other potential huge benefit from a cloud PLM is the concept of a single license have access to multiple tenets – in this scenario a user would log out of his tenet, log into an OEM tenet, retrieve data or collaborate and then use the same license to access his tenet. No more custom connections, ftp or email!

Objections?

Of course, there will always be objections to progress. Here are a few:

Cloud security is a large technical topic and beyond the scope of this article. However, lets revisit the example of Salesforce mentioned earlier. Is not a company’s contacts, sales leads, pipeline and revenue forecasts very valuable and sensitive? All stored on the Salesforce cloud. Probably of equal value is engineering data and associated documents, so why not have them on the cloud?

It is true that a cloud-based application such as PLM requires a larger and reliable Internet connection. But think of the on-premise servers that are been saved.

Cloud based SaaS model allows little or limited configuration/customization possibilities. This goes to the heart of another age-old PLM debate – change business processes to suit the system or change the system to suit the business. Organizations always pay lip service to the former (“We want OOTB”) but adopt the latter (“Can we implement our smart part numbering system”). A cloud PLM will keep everybody honest.

The Future of PLM

This short article probably does not completely cover the topic but makes some compelling arguments. The future of PLM is on the cloud! Let’s embrace our destiny!

Visit www.tatatechnologies.com to learn more about our PLM offerings and how we can help customers use the best technology for their needs.

Many of the PLM solutions available bill themselves as a platform. It is interesting to look at whether the platform strategy is an advantageous approach for a PLM system. The rest of this blog post will examine the question.

In the strict definition, a PLM system need not be a platform; it comprises a collection of processes and technologies that support Product Development through its entire lifecycle. Therefore, PLM and platform do not necessarily go together, it could consist of point solutions.

What is a platform?

In the technology and software world, a platform is defined as a single underlying application that forms a backbone for the overall application. This platform can then be used to install user apps which provide different capabilities. The main characteristics of a platform are as follows:

  • Multiple capabilities are included in a single technology suite. In the case of PLM, examples may include CAD data management, project management, BOM etc.
  • Ideally, the various apps in the platform would communicate seamlessly with each other
  • A platform has an underlying database which is keeping track of all the various objects
  • Users are presented with a single interface, regardless of their function and activities

PLM as a platform

Let’s look at PLM as a platform

In this scenario, all the required PLM functionality is incorporated into one system (usually from a single vendor) and users access the system vis a unified interface. The important feature of this approach is that interconnections between apps are the responsibility of the PLM vendor.

PLM as point solutions

Let’s look at PLM as point solutions

In this scenario, all the required PLM functionality is made up of multiple point solutions (usually from different vendors) and users access the various systems individually. The owner of the overall PLM process is responsible for interconnections between the various applications.

Which is the better approach?

Both approaches are used by organizations, some deploying hybrid solutions. Let’s look at the advantages and disadvantages of each landscape:

PLM as a platform

PLM as point solutions

So, which is better? The true answer is probably situation specific and depends on an organization’s maturity, size, business model and other factors. Keep an open mind!

Visit www.tatatechnologies.com to learn more about our PLM offerings and how we can help customers use the best technology for their needs.

As a follow up to the BOM in Excel article, what would constitute a perfect system for managing Bills of Material (BOM) in a PLM system?

Let’s divide the capabilities of this ideal system into three categories; mandatory, essential and nice-to-have.

For the sake of definition, a Part is an end item in a BOM structure, and an assembly is a collection of Parts arranged in a BOM structure. Also, this discussion is restricted to eBOM; other types of BOM’s is a much larger topic.

Mandatory

  • Manage Parts making up the BOM
  • Manage Part Attributes such as Date Created, Owner, Make/Buy etc.
  • Manage Documents or Files associated with the Part (CAD, Drawings, Specs etc.)
  • Manage BOM structures of Parts, with indent capability
  • Handle version and revision levels for all Parts
  • Handle version and revision levels for all Assemblies
  • Allow for search capability on Parts and Assemblies
  • Enable reuse of existing Parts in new Assemblies
  • Facilitate comparison of current BOM structures
  • Allow for “where used” enquiries or reports
  • BOM structure export to facilitate external system integration
  • Collapse / expand indented levels
  • One BOM for all – accessible by all users

Essential

  • Manage lifecycle of BOM (In design, Released, In Production, etc.)
  • Distinguish between various types of Parts in Assemblies (Designed, Bought, Complete, In Work, Customer etc.)
  • Allow for comparison between various versions and revisions of BOM
  • Enable BOM view based on release date and different release configuration
  • Duplicate BOM (Save As) allowing for alterations and edits during the process
  • BOM templates for generic products
  • Allow for BOM variants and configurations
  • Based on configuration rules, resolve to exact BOM
  • BOM costing (roll up)
  • Launch BOM selections into Digital Mockup session
  • Enable clash and interference analysis

Nice to Have

  • Pictorial BOM
  • Search in BOMs
  • Part Classification to facilitate reuse
  • BOM weight roll up
  • Link BOM to Requirements
  • Allow for BOM visualization
  • Specific views dependent on user or context

Obviously, each of these requirements is a complete topic in of itself. Also, additional requirements may exist.

Tata Technologies is a global engineering company that helps organizations engineer better products. Visit www.tatatechnologies.com or contact info.americas@tatatechnologies.com.

The Challenge

Often when listening to a CIMdata presentation, their consultant will offer a tongue in cheek remark: “the most widely used PLM tool is Excel”. So, is it true? It is worth examining the issue in more detail.

Before proceeding, a better definition of the title is in order. The more accurate formulation – “Does an Excel spreadsheet contain the master definition of the eBOM during product design in your organization?”

There are two crucial points in this question

  1. Master definition implies that the BOM of record for final design is maintained in a spreadsheet
  2. eBOM is distinct from the mBOM maintained in an ERP system. Organizations generally do not use Excel for this purpose.

The Reality

BOM

So how prevalent is the master Excel BOM? If you are reading this article, you can answer silently for yourself. Aside from that, let us look at two data points:

Tata Technologies has conducted a PLM benchmark assessment at approximately 150 different organizations over the last 4 years. Based on our results, approximately 75% of these organizations use Excel in one form or another to control the eBOM.

Try a Google search on “Bill of Materials” and access the results for “Images”. Count how many of the images show Excel. By my informal count, at least 60% of the images from that search are Excel sheets of one form or another.

So, the prevalence of using Excel for eBOM would seem to be very high. Is that good or bad? Let’s examine that question in following sections.

The Good

Excel is perhaps one of the great inventions of the IT revolution. It is conceptually a simple tool but can be used in sophisticated applications. For generating and specifying a simple eBOM, it has the following merits.

  1. It is flexible and can be formatted in various was to portray an eBOM structure. The inherent layout of rows and columns is convenient for defining a structure
  2. One can add many columns to define and specify the various attributes of Parts in the eBOM
  3. Because Excel can easily perform calculations, the spreadsheet can automatically give aggregate results like total cost, total or sub assembly weights, total selling price, margins etc.
  4. It is a readily available tool across all businesses because of the persuasive nature of MS Office and everybody knows how to use it. Probably most businesses see it as an economical and inexpensive tool; dependent on budgets this may or may not be true
  5. Although it takes a little bit of dedicated formatting, the eBOM can show indented levels and collapsed sub-assemblies
Excel BOM
Excel BOM

The Bad

Of course, Excel may have some strengths, it has some significant weaknesses when it comes to eBOM management:

  1. It is difficult to do a BOM compare in Excel. Such functionality is required when two versions of the BOM need to be compared to see the differences
  2. Change Management in any Product Development environment is always a big challenge. While it may be possible to do revision control on an Excel spreadsheet (e.g. in SharePoint), it is impossible to do change control on individual parts in the eBOM
  3. Excel has no safeguards against anyone inadvertently deleting line items or details out of the eBOM.
  4. Calculations and formulas in Excel must be constantly checked to see they cover the correct ranges as changes will compromise these. Many companies have fallen to the problem of Excel formula mistakes
  5. By their nature, Excel spreadsheets are difficult to control and can proliferate easily, resulting in multiple copies. Which one is then the master?
  6. Excel eBOMs are always entered manually into ERP systems; requiring considerable effort and allowing the possibility of errors

The Ugly

Even if the “Bad” above is manageable, there are some situations where it is impossible to even consider using Excel for eBOM. Here are some of those situations:

  1. Large complex eBOM with part counts in the 200 and above range. No human can reasonably manage this in an Excel worksheet.
  2. Situations were the product has multiple configurations or variants. Because the number of resolved eBOM’s grow exponentially with the number of variants, it becomes impossible very quickly to manage
  3. When multiple downstream users must access the eBOM. This compounds the proliferation problem
  4. When the eBOM changes rapidly – keeping everybody up to date becomes impossible
  5. An eBOM is the very core of Product Development. Why use a half-baked tool?
  6. Excel cannot connect to any digital representation of the Part (3D model, Drawing, Specs etc.). This is a major shortcoming!

The Change

So, are you comfortable driving an automobile knowing that 66% of the eBOM sub-assemblies are managed in Excel?

There is technology that overcomes all the Bad and the Ugly. It exists today and is proven. The change to these systems may be difficult and potentially expensive but given the critical nature of an eBOM to a Product Development organization, it must be embraced!

Watch for the next article.

Tata Technologies is an engineering services company dedicated to engineering a better world. Visit our website at www.tatatechnologies.com

The Problem

Before computers, engineering designs where carried out by armies of draftsmen toiling over drawing boards in vast offices. Some may still express nostalgia for those days, but like all else, change came along. Today sophisticated computer programs allow engineering designs to be created in a full 3D virtual world with great degrees of precision. In the initial phases of the 3D modeling revolution there was a great debate over 2D vs 3D and because software vendors feared rejection over adoption, they included capacity to derive 2D drawings from the 3D model. The CAD programs essentially allowed the production of documents equivalent to what could be produced by a draftsman. But 3D CAD programs have continuing to improve in terms of functionality and capability; so much that all the information (and more) that used to be communicated via a 2D Drawing can be included in the single 3D model. Such an approach is far more efficient.

However, when asked organization after organization will admit to releasing and maintaining 2D Drawings for all sorts of purposes.

So, if technology has moved on beyond the 2D drawing, why are they still widely used in the industry?

The Technology

If you dig into the reasons why 2D Drawings still exist, various technical reasons are commonly offered:

  1. Dimensioning and tolerancing cannot be fully completed on a 3D model
  2. Tabled parts are difficult to create in 3D
  3. Consumers of drawings do not have the capability to view 3D
  4. 3D models cannot be printed out

Current Technology has an answer to all these problems:

  1. CAD software has core modules that can create a fully annotated model in 3D with all information included
  2. Design tables or configurations can achieve this very easily
  3. All major vendors offer viewers for 3D formats; the most basic of these are normally free.
  4. Viewers remove the need for printing; beside printed copies are uncontrolled and can lead to errors

It can easily be demonstrated that any technical objection can be overcome with correct tool deployment.

So, why do 2D drawings still exist?

The Culture

If you dig a bit further, other reasons start emerging from the shadows:

  1. We have always used drawings
  2. It would be difficult to retrain the shop floor
  3. Our suppliers don’t have the capability to use 3D models
  4. It would take years to redesign our processes

Finally, here are the true reasons why 2D drawings still exist and they are all cultural in nature. It is similar to the neighbor who trudges down the driveway in the snow and picks up a hard copy newspaper. Just sit up in bed and pick up a Smartphone!

So, how do you address the cultural issues?

The Change

Here is a high level journey from 2D to 3D

2D to 3D
  1. Technology – Choose the best technology
  2. Best Practices – Figure out how to take information in2D to 3D
  3. Impact – Evaluate impact to downstream processes
  4. Strategy – Design a strategy to replace 2D Drawings
  5. Planning – plan the transition and the OCM (more on that later)
  6. Implement – roll out the transition and goodbye to drawings

Here are some more critical elements of the journey

Best Practices – answer questions like Current information on Drawings? Critical vs Non-Critical? Common standard for GDT information? Company Standards?

Downstream Impact – In a complex organization, there are probably many users of 2D Drawings both within and without the organization. It is important to identify all these users before suddenly removing drawings!

Strategy – the various strategy components that must be considered include how to convert 2D information to 3D; technology purchase; repurpose downstream systems; training courses required; Project Plan; what to do with legacy data

Planning – As noted previously, the biggest obstacle to converting from 2D to 3D is cultural resistance. A well prepared organizational change methodology (OCM) and plan is vital. Considerations include communication, training, support and identifying champions.

Good luck!

Tata Technologies is a global engineering company that helps organizations engineer better products.
Visit www.tatatechnologies.com or contact info.americas@tatatechnologies.com

Does your engineering organization struggle with the following challenges?

  1. Crucial engineering data in several different systems resulting in disconnected information
  2. Manual processes that rely on human intervention
  3. Multi CAD environment requiring translations and inefficient transactions
  4. Lack of visibility of data for downstream consumers

If these challenges are something you face everyday, then you probably have considered a Product Data Management (PDM) system. This will store all your data in a single repository and help with automating workflows. But buying and implementing a PDM system seems costly and time consuming; how are you going to get started?

Teamcenter Rapid Start is the answer to all these questions. It is a preconfigured installation of Teamcenter with the following features:

  1. By using preconfigured templates, the system is simple and fast to deploy
  2. Best in class industry configurations to support engineering processes
  3. Included training allowing users to quickly become familiar with the system
  4. An implementation can be up and running to full productivity in two weeks

Lets have a look at all the components that make up a Teamcenter Rapid Start installation:

Multi-CAD and ECAD data managementFind, reuse and share data across a multi-CAD design chain

Teamcenter Rapid Start Multi-CAD data management capabilities enables you to effectively and efficiently manage, control and share MCAD data across the entire design and supply chain. Regardless of the CAD tools used, this environment provides you with a single view of product data as well as engineering processes and status. Teamcenter visualization extends this into an even more collaborative environment. Teamcenter handles all major CAD systems including NX, Solidworks, CATIA V5 and Autodesk Inventor.

Document management Create and manage documents in conjunction with product development

Teamcenter Rapid Start includes standardized document management features so you can create and manage documents in conjunction with PDM processes and data.

Related documents are associated with products, and you can synchronize the attributes between documents and PDM.

Teamcenter Rapid Start delivers a standard integration with Microsoft Office to extend the scope and coverage to the desktops of numerous professionals and users outside of the Engineering department. This includes the managed creation and update of Technical Publications, process sheets, Customer Requirements, manufacturing set-ups, test specifications, and many other Document Management applications.

Simple process managementPreconfigured processes like design release and change, based on PDM best practices

Teamcenter Rapid Start provides you with basic workflow capabilities to streamline product development by automating and synchronizing processes. You can:

  1. – Review, comment and approve/reject parts and documents
  2. – Capture and audit date and timestamp information
  3. – Manage cross-functional review teams (notifications, quorums, etc.)
  4. – Automate vital business processes and reduce manual intervention

Preconfigured roles and functionalityStart quickly with best practices to automate everyday tasks across the business

Teamcenter Rapid Start offers preconfigured groups and roles with appropriate access permissions to simplify common tasks.

  1. – The standard set of roles support the tasks done every day in an organization
  2. – For example — start a new project, issue an ECO or review a design
  3. – These tasks are easily started using a number of shortcut links in the “I Want to” area of the user interface.

Further, the tasks are automated by ‘Wizards’ to make them smooth and natural, and consistently repeatable in operation for reliable, efficient processes.

Teamcenter Rapid Start can get you up and running with PDM quickly by offering:

  1. A single installation process for server and client results in in a fully configured environment ready to use
  2. Standard organization and roles, preconfigured database, workflows, reports, security model, … so you have the capabilities you need as soon as you complete the installation
  3. Ongoing updates and support are simple, fast and effective

The other huge advantage of Teamcenter Rapid Start is that it offers a seamless path to complete PLM – supported by Teamcenter, the industry leader in PLM systems.

Contact us today to learn more about Teamcenter Rapid Start and get started with improved data management.

Do any of the questions below apply to your organization:

  • Do you own existing Dassault Systemes software products and are up to date with maintenance?
  • Do you need to transform your digital engineering processes?
  • Are you interested in implementing the true Digital Twin concept?
  • Is the technology that you are using for Digital Product Definition out of date?
  • Does your company have strategic initiatives like Lean Manufacturing, Flawless Launch, Model Based Engineering or similar?
  • Is your company expanding or looking to put new products on the market?

If the answer to any of these questions is Yes, then you should be looking at the Customer Transformation Program (CTP) from Dassault Systemes.

Dassault Systemes  launched a Customer Transformation Program for 2019 which is designed to transform the businesses of all their existing customers. This is a limited-time sales initiative program starting January 21, 2019 and ending December 31, 2019.

The program offers existing customers a voucher that makes them eligible for a discount on qualified new purchases of software from Dassault Systemes extensive range of productivity enhancing solutions. Customers can earn up to 35% off purchase of qualified new software – an exciting incentive to get up to date with the latest technology.

The future focus of Dassault Systèmes is on the innovative 3DEXPERIENCE platform, a disruptive technology that can completely transform your business. As a result, the largest discounts are for platform products, on premise or in the cloud.

As an example, a customer may have an existing Dassault Systemes CATIA V5 software and his installed base entitles them to a voucher good for 35% discount on a new product up to an amount 0f $35,000. Assume a new opportunity arises and the customer requires SIMULIA to run advanced simulations. If the list price of what is required is $100,000, then this can be purchased for $65,000 by applying the voucher.

As a trusted advisor, Tata Technologies can help navigate through the CTP program. Dassault Systemes has been investing billions into innovative technologies and helping organizations face business challenges. Please engage us to discover how your business can be transformed.

Visit www.tatatechnologies.com or contact info.americas@tatatechnologies.com

In the previous posts regarding PLM ROI ( Part 1, and Part 2, we introduced the hierarchy of strategic objectives, business targets and business costs. Examples were provided of all these categories.

In this post, lets look at some examples of how to calculate business costs and how savings can be derived from these. We will look at two examples: time searching for documents and manufacturing rework. The first example represents an efficiency gain and the second is a cost saving.

Time searching for documents or information

Assumptions:

  • Burden rate for engineer = $70/hr
  • Number of engineers = 120
  • Hours per week = 40
  • Weeks per year = 48
  • Time spent looking for documents (before PLM) = 2 hrs/week
  • Time spent looking for documents (after PLM) = 1.5 hrs/week

Cost:

  • Before PLM – $806,400 (this is obtained by multiplying the first five quantities together)
  • After PLM – $604,800 (this is obtained by multiplying the first four and the last quantities together)

Savings:

$201,600

Manufacturing Rework

Assumptions:

  • Manufacturing Costs = $2,290,000,000
  • Rework as a % of manufacturing costs = 1%
  • % of rework costs resulting from engineering (before PLM) = 25%
  • % of rework costs resulting from engineering (after PLM) = 20%

Cost:

  • Before PLM – $5,725,000
  • After PLM – $4,580,000

Savings:

$1,145,000

A few comments on these example calculations:

  1. The majority of the business costs can be calculated using addition or multiplication
  2. Efficiency gains are normally smaller than cost savings because of the nature of production centered businesses
  3. Calculation of ROI for PLM can easily be handled in a spreadsheet; this can also be used to produce graphs

Of course, anyone looking at these calculations will immediately have two questions: what is the source of the raw data and how do you arrive at the savings?

Here are some suggestions for deriving the data required:

  1. In the case of the time spent looking for documents, one can conduct interviews and ask participants to estimate the quantity
  2. A more efficient way of doing this is by sending out a online survey to selected individuals
  3. It is possible that IT have logs of various systems and can derive data on time spent in these systems
  4. Manufacturing rework is often recorded in the official accounts of the organization and can be derived form this source
  5. Alternatively, rework may be tracked on the shop floor to measure efficiency
  6. In the case of savings, there are industry benchmarks available from research firms who track this information
  7. Often, participants will be able to give ranges of what they think the savings will be
  8. If an organization has an issue or quality tracking system, then this can be a useful source of data

Once all the savings are calculated, it is a matter of spreadsheet manipulation to produce results and graphs. Below is an example of a cash flow projection:

Tata Technologies has a complete suite of tools that can help with ROI calculations. Consult any of your contacts in our organization or email

info.americas@tatatechnology.com

© Tata Technologies 2009-2015. All rights reserved.