Business benefits of a PLM system

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Factors leading to PLM
• The factors causing pressure for change in processes and increasing the amount of product data:
■ Growing competition and tighter budgets ■ Internationalization of business ■ Company mergers ■ Shortening delivery times ■ Less time available for developing new products ■ Tightening quality requirements ■ Regulations and common industry standards ■ Tightening legislation
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Factors leading to PLM Growing competition and tighter budgets Tightening legislation Internationalization of business “processes need to change” “increasing product data” Regulations and common industry standards Company mergers Tightening quality requirements Shortening delivery times Less time available for developing new products 3 .

Changing mode of operations Increased manufacturing automation Changed organization Expanded Product portfolios More subcontracted work Increased customer involvement 4 .

Impacts of the changes in the business environment Major Problems: Finding the right product-related information Retaining the entirety of this information The Main Reasons: Increasing variations of the products Increasing amount of product information Increasing complexity of companies’ supply networks. 5 .

– product data are problems that feed each other.Vicious circle of deteriorating product data • Many companies have fallen into a vicious circle: – large number of items. – numerous laborious assignments caused by the maintenance of item information. 6 .

7 .Benefits of the PLM system in product lifecycle management Today’s networked companies use heterogeneous information system environment Sets great demands upon the integration of systems and the transfer of information PLM systems can improve the internal and external communication ~ the most important single benefit from a functional PLM system.

These factors: -. -. 8 .> will increase the value of existing applications. – Reuse existing information that: » have been tested rigorously. » have been used to make quality products.> will ensure that changes being made in the design work will be more rational and faultless.An important consideration in adopting PLM system • It allows for a radical reduction in many kinds of unnecessary information processing and transfer work.

A Coopers & Lybrand study from the year 1994 9 .The working time of an engineer PLM can eliminate these wastages.

• Improved information security. • Fewer corrections to information. • Fast. • Availability of latest part lists. • Improved external and internal grade of service. accurate distribution of change information.Immediate advantages with the help of a PLM system Saving time • Quick definition of the product structure. • The management of the total production load 10 . • Availability of standards. records and test results can be connected to a product. • Easier. • Increased flexibility of operation. faster documentation. • Availability of planning information. easy retrieval of parts and drawings. • Fast. • Reduced component stocks. • Certificates. Improvement in quality • Automatic acceptance and release of document changes. • Decreased amount of overlapping work. Reduction of tied-up capital • The number of different items is reduced and items are more standardized.

decrease in expenses and working capital. 2 different forms of savings: Operational savings intensification of the operative operation.Measuring the business benefits in daily operations • Converting the benefits of a PLM system directly into monetary terms is difficult. New or increased earnings possibilities strategic matters 11 .

The flow of measuring benefits Identifying typical problems Identifying causes of problems Determining indicators to measure operations Determining development potential brought by PLM 12 .

Material costs: reducing inventory tied capital Typical problems o o Causes of problems  Difficulties in retrieving and controlling product data often lead to unwanted short cuts in operations model. Procurement buys the same type of components from different suppliers for different products. The company makes overly fast and uncontrolled changes in the design of the product. Product development and sourcing each maintain large amounts of overlapping information. The company’s own component design and manufacturing is inefficient.  There are difficulties in the internal and external communication of the company regarding product data and the changes that have taken place in it. .  The product data concerning component items is not up to date and is unreliable. 13 o o o The item management of the company is not in order.

o Value of the component inventory Development potential brought by PLM  Ability to easily retrieve and maintain all necessary item information.  Reducing component stock and expanding the convertibility of components.  Reducing the items in the component warehouse and dropping their value. o Length of the cycle from purchase invoice to account sales. 14 .Material costs: reducing inventory tied capital Indicators to measure operations o The number of component items in the item base of the company divided by the products (the generic products) proportioned to the number of components in individual products.  Better management of component information and better management of component suppliers and related information.

Causes of problems • Scattered product data over several separate information management systems (with no links). Far too much work is needed to retrieve existing product data and to maintain and transfer. The reuse of existing information or experience from older products and functioning design solutions is difficult. 15 • • . • ‘Push principle’ distribution of information.Improving the productivity of labour Typical problems • The product knowledge of the product development organization depends very essentially on the individuals in the organization. • Separately maintained essential pieces of product data in separate product management systems.

• The time used in finding and retrieving information. maintaining.  Reusing of existing information.  Reducing the resources used in retrieving.Improving the productivity of labour Indicators to measure operations • The direct costs of labour related to the transfer of information and change management of products. Development potential brought by PLM  Converting individual knowledge into intellectual capital available to the whole organization.  Controlling and managing product data and product knowledge in electronic form. . and transferring product related 16 information.

• Consuming work to handle problematic situations. • Faulty product units during production or even after delivery. • Returned products for repair under guarantee. • Problematic manufacturing . • Lack of traceability in change management. Causes of problems • Complexity of products and their processes.Costs of quality Typical problems • Faulty or incomplete product design. • Shortcomings in the traceability of the orderdelivery process and of individual product content. • Slowness of change processes. 17 .

• Ability to reduce: – manufacturing defects. streamlined product processes.  Traceability of change management and design 18 history.Costs of quality Indicators to measure operations Development potential brought by PLM • Ability to produce: – quality products . – guarantee claims. – improved manufacturing processes. efficient change management.  Greater ability to improve quality with the help of efficient.  Fast. .

PLM and data warehousing as a tool to support decision-making PLM database Decision making ~daily tasks. ~user profiles. ~ files. statistical analyses 19 . ~documents. ~user activities.

Use of quantitative information for developing processes 20 .

Data warehousing The IT systems that support the different co’ functions. informed product lifecycle decisions (based on real information) 21 . Data warehousing.