PLM as the Enterprise Backbone: Emerging with Advantage

By Brian

Coming through the ENOVIA side of the house where our focus has been on business processes (across engineering, purchasing, program management, finance, etc), Bill of Materials (BOM) management, and engineering change management, it is easy to feel lost in the shuffle as Dassault Systemes builds out its “3D Lifelike Experience” branding of PLM. Recently, however, I’ve realized that there is a key positioning of PLM that can bring this all together by placing PLM as the enterprise backbone.

Doing this doesn’t necessitate companies having a single monolithic structure that houses all enterprise functions in one system, but rather allows each to focus on their particular value-adding function.

It is the 3D / virtual experience afforded from PLM, coupled with the extended business processes, which provides a unique and superior enterprise foundation.

I will be posting a blog series that emphasizes the building block nature of PLM as the overarching enterprise foundation, supporting other enterprise applications and business functions.

3D PLM solutions have evolved to the point where they need to be positioned as the enterprise backbone supporting Enterprise Resource Planning, Supply Chain Management, and Customer Relationship Management systems (Figure 1).

Product Lifecycle Management Positioned as the Enterprise Backbone

Product Lifecycle Management Positioned as the Enterprise Backbone

A recent article by Jim Brown, a blogger at Manufacturing Business Technology, stresses the value of doing this all in one system, and laments that fact the neither PLM nor ERP vendors provide such a capability. Single systems and architectures may sound nice, but asking one system to optimize both transactional (ERP) and innovation (PLM) competencies of corporations can only lead to sub-optimization.

Emerging with Advantage from the Global Economic Crisis

A PLM enterprise backbone anchors all enterprise systems around a forward view of a company’s product and market strategy in ways that are just not feasible in an ERP system, by their very transactional nature. Competitive corporations establish their market strategies based on their portfolio of current and new products, and their manufacturing platforms and sourcing strategies that support them.

Using ERP, MRP or any other enterprise system as the enterprise backbone would be equivalent to driving out of your rear-view mirror, and would reflect an emphasis on yesterday’s strategies and product lines.

As markets recover from today’s global economic contraction, companies that position new and innovative products will ‘emerge with advantage’ over those that simply retrench and rationalize their previous products, manufacturing footprints, and supply chains. This really highlights the fundamental difference and opportunity in managing an enterprise backbone from PLM rather than ERP. With limited investment funds, forward looking companies should focus their investments in a PLM enterprise foundation.

The ability for companies to emerge with advantage from this economic crisis will be a function of how the following competitive competencies are managed:

1. Product Portfolio and Program Management
2. Direct Materials Sourcing and Extended Enterprise Collaboration
3. Eco-Design / Sustainability and Regulatory Compliance
4. Integrated New Product Market Launch

Today’s challenging economic times necessitate tighter data mastering and integration across these mission critical systems. Over the next few months, I will present in this blog series these four components as a foundational enterprise PLM capability and critical to emerging from this economic crisis with renewed global advantage. And of course, I will base this enterprise capability on the 3D basis of PLM.

Best,

Brian




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4 responses to “PLM as the Enterprise Backbone: Emerging with Advantage”

  1. Jim Brown says:

    Brian,
    Thanks for continuing the disucssion. Anyone interested in more depth on this discussion can download a paper on the topic from the Tech-Clarity website at http://www.tech-clarity.com/publications.htm
    Best,
    Jim Brown, Tech-Clarity

  2. Brian Chambers says:

    Jim: You made some great recommendations and conclusions in your white paper on the complementary roles of ERP and PLM. In this series I will cover a number of points that you also addressed, and build on the PLM role of “3D Lifelike Experience”, as well as maintaining the part and BOM master, to support key innovation business processes. It is this strategic positioning of PLM, as a forward looking basis for executing a product-market strategy across a portfolio of products, that I hope to capture. In this manner, execution takes on a very different meaning in a PLM context.

  3. Russ Blaesing says:

    Brian: I understand your mental model and theoretically it makes sense from a product development/management perspective. I may be missing your positioning, as I think using PLM as an Enterprise backbone wouldn’t work in large part.

    Company knowledge workers participate in numerous data flows and collaboration “beyond the product”. HR, office management, sales management, etc. are simple things to consider here. Products from Dassault Systems are excellent in their niche, but inevitably will be limited to a product perspective.

    ShareVis’ recent white-paper and my related blog post (http://www.spsworkflow.com/blog/post/2009/04/21/Product-Lifecycle-Management-(PLM)-and-Workflow-e28093-Recent-ShareVis-White-Paper.aspx) give a different perspective on this. I sit in the middle between your position and ShareVis as I think a hybrid approach using portal/workflow technology is the better way to provide consistency across technologies/data and drill down into high-end (and very necessary) systems.

  4. Brian Chambers says:

    Russ:

    First, thank you for your note, and second my apologies for not responding earlier.

    We may not be aligned on the core positioning of PLM as an Enterprise Backbone.

    Product development, as understood across a number of key industries, essentially establishes the cost and resource basis for an enterprise. Designs, materials, suppliers, manufacturing assumptions all get locked-in to a high degree in the development phase. Some studies have tied this to as much as 80% of a company’s product cost structure.

    With that logic in mind, it is critical that companies approach there product development system and processes with that awareness and framework. Managing the (1) portfolio of development projects and programs, (2) sourcing and supplier collaboration, (3) regulatory compliance / avoidance, and (4) market launch and after-market processes for the revenue and cost basis compels executives to define their product development tools, systems, processes and methods for the optimal strategic impact. These are the four pillars that a PLM Enterprise Backbone needs to address.

    Defining PLM as an Enterprise Backbone is intended to accomplish this.

    BTW – PLM is not *the* enterprise backbone, so the others that you reference are totally consistent with the positioning logic that you’ve provided for them.

    Since we see each other locally, here in Ann Arbor, Michigan, let’s discuss this more directly and then consider making a joint post to each others blogs.

    Best regards,

    Brian

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