PLM as the Enterprise Backbone Part 2: Product Portfolio & Program Management

By Brian
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Imagine a group of automotive executives sitting around a table and examining a new vehicle on-screen presented in its entirety as a totally accurate geometric 3-D virtual model. They are discussing the windshield. Using Product Lifecycle Management (PLM) technology and simulation, they have uncovered an issue.

There is going to be a problem inserting the windshield into place, which will either bump up the cost of the vehicle program or require a revision of the design. The initial windshield design was based on new styling, safety and fuel efficiency concepts which are to be used to differentiate the vehicle’s brand. It is critical to the company’s strategy that this be preserved.

Resources from other projects need to be realigned to complete the rework for both the product design and the manufacturing and assembly processes, and the windshield vendor and suppliers of adjoining components need to be notified of the change and involved in resolving the issue. Finally, cost saving opportunities need to be assessed across the whole vehicle program to maintain adherence to the program’s business targets. There are multiple derivatives (2-door, 4-door, convertible) and regional variants for individual country regulatory requirements that will need to be included in the assessment.

Planning the future rather than reflecting the past
This blog article continues the discussion of PLM as the Enterprise Backbone: Emerging with Advantage, with a focus on portfolio and program management capabilities offered by an enterprise approach to PLM. A PLM enterprise backbone anchors all enterprise systems (ERP, SCM, MRP, CRM) around a forward view of a company’s product and market strategy.

Competitive corporations establish their market strategies based on their portfolio of products, and their manufacturing and sourcing strategies that support them. Using ERP or MRP systems 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.

Companies that position new and innovative products will lead coming out of the current economic downturn, over those that simply retrench and rationalize their previous products, manufacturing footprints, and supply chains. Today’s challenging economic times necessitate tighter data mastering and integration across these mission critical systems. It is the ability to manage a product portfolio with program management capabilities that enables this forward looking market capability at the enterprise level.

Product Portfolio and Program Management processes need to be managed and configured based on strategic alignment, financials, revenue and market segmentation analyses, as well as the:

  • Customer needs and market requirements for each targeted market segment
  • Product architectures, product lines and product derivatives / configurations
  • Manufacturing strategies and tooling platforms
  • Sourcing and standard parts strategies

Here is Product Portfolio and Program Management reduced to its essential elements:

 

A. Analysis includes defining business and market needs, requirements and technical targets across product, manufacturing and sourcing functions.

Executives assess risk versus opportunity for each initiative through financial analyses. Simulations are run on product and manufacturing models to validate the platform strategies and to define the approved parts and tooling / assembly components into a master catalog. PLM tools provide an integrated capability to track market requirements through the configurable cross-systems design (powertrain, electrical / electronic, entertainment, heating / cooling, braking, etc), and their simulation analysis of the functional and logical architectures as well as manufacturing systems.

B. Planning and Control takes this analysis capability through a process to define the product / market strategy, and the required product and manufacturing platforms and sourcing programs that define product portfolio.

Strategy Review Board and Investment Review Board processes manage ongoing portfolio investments and decision making. The PLM tools enable the workflow and approval processes, while providing 3D models of the products and manufacturing systems for those reviews, as well as the ability to define the sourcing strategies and aggregated spend opportunities afforded by the product and manufacturing platforms.

C. Product Development and Launch Execution Systems use the parts and supplier master data defined by this strategic portfolio to quote, design and solve project and launch issues and customer orders.

A central data base contains the parts and supplier masters, but also the product and manufacturing portfolio data, as well as all the product and manufacturing simulation and test data used to define and execute the business strategies. Strategic management of the product portfolio is actively maintained by business line and product line executives, against their rolling business plans.

How parts and assemblies for the products get requirements defined, parts sourced, selected or designed, and manufactured determines the overall cost, timing and quality of any given product launch. In addition, acquisitions can be more effectively consolidated into ongoing operations and product-market strategies if the enterprise PLM backbone has been mapped across product development, manufacturing and sourcing systems.

Current economic business cycles necessitate companies maintain a tight integration across their mission critical systems so that investments and projects can be appropriately prioritized and sized across the product portfolio. A key enterprise PLM capability for this is to have executive level dashboards that support management of the development pipeline to reprioritize or cancel projects in early phases, and to maintain ongoing oversight of strategic and mission critical programs.

Executives need to be able to assess risk versus opportunity for each product initiative, on an ongoing basis. For companies with severe risk and exposure on large-scale projects (for example in aerospace and defense, or large infrastructure projects), visibility to program status against contract deliverables is often critical.

Dassault Systèmes PLM solutions support resolving my opening scenario of the windshield insertion issue. Having done the analysis and planning work described above, management of the product program and its derivatives as an integrated portfolio of projects in a PLM environment should be straight forward. A single view access to the related derivatives and regional variants can be accessed through the PLM solution, and resources can be reassigned from lower priority or less strategic programs.

  • Interactive live 3D model review and revision sessions can be held on the internet with globally dispersed teams, both internal to the OEM, and with the vehicle program’s affected suppliers.
  • Design alternatives can be directly reviewed against the program requirements to assure adherence to the costs, styling, branding and energy efficiency objectives tasked to the program.
  • Simulations and analyses can be run on the revised parts, and compared directly with the prior tests and analyses.
  • Issue tracking can provide an ability to directly reassess program and launch readiness to make sure that all critical items are addressed and closed out prior to production ramp-up.

This description of product and program portfolio management is the initial foundation of enterprise PLM.

Having enabled the analysis and planning capabilities through PLM, companies are then poised to reap the greatest advantages PLM offers for sourcing, extended enterprise collaboration, eco-design / sustainability, regulatory compliance, and integrated new product market launch.

Stay tuned to the next article in this series; I will cover the basis of direct materials sourcing and extended enterprise collaboration, when PLM is positioned as the enterprise backbone.

Best,

Brian

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