Session 02 - PLM Environment

Week 2:
The Environment
of
Product
Companies
B U S IN E S S V A L U E O F P L M C O U R S E
DR. KORHAN SEVENLER & DR. JOHN STARK
Welcome to the second week of the Business Value of PLM course.

Today's course is titled The Environment of Product Companies.
1
Contents of the
“Business Value of
PLM” Course
Week 1 Introduction to “Business Value of PLM”
Week 2 The Environment of Product Companies
Week 3 Product-related Business Processes
Week 4 Product-related PLM Applications
Week 5 Product Data
Week 6 PDM and ALM Systems
Week 7 Product-related Methods
Week 8 Mid-Course Review and Midterm Exam
Week 9 Internet of Things (IoT)
Week 10 Industry 4.0
Week 11 PLM and Executives – Top Down and Bottom Up
Week 12 The PLM Initiative
Week 13 Organisational Change Management and the PLM
Initiative
Week 14 PLM in Practice
Week 15 End-of-Course Review
Restricted © Siemens 2020
Page 2 © Dr. Korhan Sevenler & Dr. John Stark Siemens Digital Industries Software
This is a reminder of the outline of the content of the course. As you know it's a 15-
week course. Last week was an introductory week. This week the subject is the
environment of product companies. Next week I'll be looking at business processes.
And then PLM applications. Followed by product data. The subject of week 6 is PDM
and ALM systems. After that, I'll address methods and techniques. The following
week we'll have a mid-course review and the midterm exam. When that's out of the
way, I'll address the Internet of Things. And then Industry 4.0. Week 11 looks at
executives in the context of PLM. That's followed by the PLM Initiative and
Organizational Change Management. The last-but-one week looks at PLM in practice.
And in the last week, we'll have an end-of-course review. But now let's get started
with this week's subject, the environment of product companies.
2
Objectives of Week 2
At the conclusion of this activity, participants will be able to:
Øsummarise the scope and activities of PLM;

Øexplain the PLM Paradigm;
Øgive examples of the benefits and value of PLM;
Ødiscuss the spread of PLM.

By the end of today's lesson, you should be able to summarise the scope and activities
of PLM, explain the PLM Paradigm, give examples of the benefits and value of PLM,
and discuss the spread of PLM.
3
Contents of Week 2
Lesson 1 What is PLM?
Lesson 2 Concepts, Consequences and Corollaries of PLM
Lesson 3 The Value of PLM. Where PLM?

There are three lessons this week.

Lesson 1 answers the question, What is PLM?
Then, Lesson 2 looks at the concepts, consequences and corollaries of PLM.
Then, Lesson 3 addresses the value of PLM. It also addresses the spread of PLM.
4
Start of Lesson 1
What is PLM?

Slide 5
So let's get started with Lesson 1 of Week 2 of the Business Value of PLM course -
answering the question, What is PLM?
5
Lesson 1
What is PLM?
A. What is PLM?
B. PLM as a Paradigm and a Paradigm Change

In this lesson, I'll address 2 subjects. First, I'll answer the question, What is PLM?
Second, after I've answered the question, What is PLM?, I'll look at PLM as a
Paradigm and a Paradigm Change.
6
A. What is PLM?
Different ways of looking at a subject.

The question is answered:
1. With a definition
2. By explaining the letters of the acronym
3. Through activities in the scope of PLM
4. With the PLM Grid

I'll start by answering the question, What is PLM? I'll answer the question in several
ways. I'll gives definitions of PLM and of a PLM Initiative. I'll look at the meaning of
the letters P, L and M in the PLM acronym. I'll look at the scope of PLM. I'll introduce
the PLM Grid, which describes activities in the scope of PLM.
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1. The Definition of PLM
Ø Product Lifecycle Management, PLM, is the business activity of managing, in the most effective
way, a company's products all the way across their lifecycles; from the very first idea for a
product all the way through until it is retired and disposed of.
Ø PLM is the management system for a company's products. It doesn't just manage one of its
products. It manages, in an integrated way, all of its parts and products, and the product portfolio.
PLM manages the whole range, from individual part through individual product to the entire
portfolio of products.
Ø At the highest level, the objective of PLM is to increase product revenues, reduce product-related
costs, maximise the value of the product portfolio, and maximise the value of current and future
products for both customers and shareholders.

I'll start with the book definition of PLM. Product Lifecycle Management, PLM, is the
business activity of managing, in the most effective way, a company's products all the
way across their lifecycles; from the very first idea for a product all the way through
until it is retired and disposed of. PLM is the management system for a company's
products. It doesn't just manage one of its products. It manages, in an integrated way,
all of its parts and products, and the product portfolio. PLM manages the whole range,
from individual part through individual product to the entire portfolio of products. At
the highest level, the objective of PLM is to increase product revenues, reduce
product- related costs, maximise the value of the product portfolio, and maximise the
value of current and future products for both customers and shareholders.
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What is PLM? Vs. How to do PLM?
Ø What is PLM?
Ø "The business activity of managing … "
Ø "The management system for a company's …. "
Ø How to do PLM?
Ø The PLM Initiative

It's important to distinguish between What is PLM? and How to do PLM?.

What is PLM? was answered on the previous slide. PLM, is the business activity of
managing, in the most effective way, a company's products all the way across their
lifecycles; from the very first idea for a product all the way through until it is retired
and disposed of.
How to do PLM?
That's another question. The answer is through the PLM Initiative.
9
Definition of the PLM Initiative
The PLM Initiative of a company is an initiative with two

objectives:
Ø to improve the product-related performance of the

company
Ø to put in place, or to improve, the capability to manage
products across their lifecycles

How to do PLM? The answer is through the PLM Initiative.

The PLM Initiative of a company is an initiative with two objectives. The first is to
improve the product-related performance of the company. The second is to put in
place, or to improve, the capability to manage products across their lifecycles.
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PLM vs PLM Initiative
Product Lifecycle Management

Ø "to manage"
Ø An ongoing activity
PLM Initiative
Ø "to put in place"
Ø A temporary activity

Looking at those two definitions, of PLM and of the PLM Initiative, you can see that,
a PLM Initiative is a temporary activity whereas PLM is an on-going activity. A
company always needs to do PLM. It always needs to manage its products. But a
company doesn't always needs to have a PLM Initiative. It only needs a PLM
Initiative when it wants to set up, or improve, its PLM environment. So you see that
there's a clear distinction between PLM and the PLM Initiative.
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Targets for the PLM Initiative
Example 1:
increase rate of introduction of new products
Example 2:
increase revenues by extending product life
Example 3:
reduce development time for new products
Other examples:
increase revenues from services on existing products
increase annual number of innovative new products

A PLM Initiative needs targets for performance improvement. Different companies

will have different targets, depending on their objectives. Examples of targets include
to increase the rate of introduction of new products, to increase revenues by extending
product life, to reduce development time for new products, to increase revenues from
services on existing products, and to increase annual number of innovative new
products.
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2. The Acronym of PLM
ØProduct
ØLifecycle
ØManagement
Product Lifecycle Management

Now I'll answer the question, What is PLM?, in another way. By looking at the
acronym, byooking at the three letters of the acronym, P for Product, L for Lifeycle
and M for Management.
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The Acronym of PLM: The P (1)
P for Product
Ø Tangible
Ø Intangible
Ø A wide range of products
ØAll managed by PLM

I'll start with the P of PLM, the product. So what does "product" imply? I'm not
talking here about any specific product. I'm talking about any product. As you know,
there are all sorts of products. Tangible products. Intangible products. There's a very
wide range of products. There are products as diverse as a drink and a dollar bill. A
tractor and a biscuit. But whatever the product, it can be managed by PLM.
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P for Product
Ø All shapes and sizes
Ø Mixes of products and services

There are products of all shapes and sizes. A dollar bill is a tenth of a millimetre thick
and 15 cm long. It weighs about a gram. Many products are much larger. For example,
aircraft may be over 70 metres long and weigh over 400 tons. But whatever the shape
and size of the product, it can be managed by PLM.
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P for Product
Ø Packaging, labelling, literature
Ø Connectors, delivery mechanism
Ø Single or multiple form

The product is often more than what seems, at first glance, to be the product. For
example, product packaging is often part of the product. So is product labelling. And
the product may include product literature, such as a user manual or regulatory
documentation.
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P for Product
Ø Many products
Ø Many assemblies
Ø Many parts, components
A lot of parts
Ø From a few tens of parts
Ø To a few hundred thousand parts

Most companies have many products. Each of these products may be made up of very
many assemblies and very many parts, or constituents, or ingredients, depending on
the type of product. An assembly may also be made up of very many parts. It's not
only the product that is managed by PLM. It's also all the assemblies, parts and
ingredients.
Many products, like toothpaste, only contain a few ingredients, Others contain a lot of
parts. Some products, such as a car, contain a few tens of thousands of parts. But
whatever the number of parts, the product can be managed by PLM.
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P for Product
Ø The product: what the customer wants, and buys
Ø The source of a company's revenues
Ø Without the product ….
ØThe product is important!

The product is important. The product is the source of a company's revenues. Without
a product, the company won't have any customers, and won't need to exist. Without a
product, there won't be any related services.
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The Acronym of PLM: The L (1)
L for Lifecycle
Ø The lifecycle of Man
Ø The Marketing lifecycle
Ø An Environmental lifecycle
ØA Product Lifecycle

I'll now look at the L of PLM, lifecycle. What does that mean? Well, the concept of a
lifecycle has been around a long time. William Shakespeare even wrote of the
lifecycle of Man in 1599. That's more than 400 years ago. Many companies have used
a similar concept when talking about PLM. They've said that PLM is about managing
the product throughout its lifecycle, "from cradle to grave" or "from sunrise to sunset".
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L for Lifecycle
Ø The 5 phases of the product lifecycle
Use Disposal
Ideation Definition Realisation Recycling
Service Retirement

By definition, there are five phases in the product lifecycle. In each of these five
phases, the product is in a different state. During the first phase, ideation, the product
is just an idea in people's heads. The second phase is the definition phase. The third
phase is the realisation phase. During the fourth phase, the customer uses the product.
Eventually the product gets to the fifth phase, in which it's no longer useful. It's retired
by the company, and disposed of by the customer.
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L for Lifecycle
Ø Two views of the product lifecycle
Ø User
Ø Manufacturer

As seen by the user of the product, there are five phases of the product's lifecycle,
ideation, definition, realisation, use, and disposal. As seen by the product
manufacturer, there are also five phases in a product's lifecycle. These are slightly
different, ideation, definition, realisation, support or service, and retirement.
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The Acronym of PLM: The M (1)
M for Management
Ø Activities
Ø organisation and co-ordination of resources
Ø setting objectives
Ø decision-taking
Ø control of results
Ø Objectives

Management includes activities such as organization and co-ordination of resources,

setting objectives, decision-taking and control of results. These management activities
occur across the product lifecycle. Management activities also include setting of
objectives. The objective of PLM is that the product is managed in all lifecycle
phases. The objective is to be sure that everything works well, and that the product
makes good money for the company.
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The Acronym of PLM: The M (2)
M for Management
Ø Management in all the lifecycle phases
Use Disposal
Ideation Definition Realisation Recycling
Service Retirement

The objective of PLM is that the product is managed in all lifecycle phases. In the first
phase of the lifecycle, the product has to be managed when it's an idea. In the second
phase, it has to be managed when it's being defined. In the third phase, the product has
to be managed when it's being realised. In the fourth phase, it has to be managed when
it's in use. In the fifth phase, the product has to be managed at disposal time.
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3. Activities in the Scope of PLM
ØProduct Lifecycle Management, PLM, is the

business activity of managing, a company's
products all the way across their lifecycles
ØA very high-level definition
ØWhat are the lower-level activities that make up
the business activity of PLM?

Product Lifecycle Management, PLM, is the business activity of managing, a

company's products all the way across their lifecycles. That's a one-sentence, very
high-level definition of PLM. Under the PLM umbrella, there are many lower-level
product-related activities.
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Activities in the Scope of PLM
Lower-level activities (1)
Ø Product Portfolio
Ø Manage the portfolio; maximise the value
Ø Manage each product across the lifecycle
Ø Manage product-related projects
Ø Develop new products for each market
Ø Manage feedback
Ø From customers, from field engineers

Under the PLM umbrella, there are many lower-level product-related activities.
Activities such as managing the product portfolio, maximise the value of the product
portfolio, managing each product across the lifecycle, managing product-related
projects and developing new products for each of the company's markets.
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Activities in the Scope of PLM
Lower-level activities (2)

Ø Manage collaboration
Ø With partners, customers
Ø Manage product-related processes
Ø Manage product definition information
Ø Make it available when and where needed
All these activities, and many others, are in the scope of

PLM.

And then there are other lower-level activities, such as managing collaboration with
partners and customers, managing product-related business processes, managing
product definition information - making it available when and where needed. All these
activities, and many others, are in the scope of PLM.
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4. Resources in the Scope of PLM
– The PLM Grid
The scope of PLM is shown on the PLM Grid a 5 *

10 grid or matrix.
ØOn the horizontal axis are the five phases of the
product lifecycle
ØOn the vertical axis are the ten components
(product data, the PDM system, other PLM
applications, activities, people, etc.) that have to be
addressed when managing a product across the
lifecycle
Another way of understanding PLM is by reference to the PLM Grid. This is a 5 * 10

grid or matrix.
On the horizontal axis are the five phases of the product lifecycle. On the vertical axis
are the ten components (product data, the Product Data Management system, other
PLM applications, activities, people, etc.) that have to be addressed when managing a
product across the lifecycle.
Slide 28
27
This slide shows the PLM Grid. You can see it's a 5 * 10 grid or matrix. On the
horizontal axis are the five phases of the product lifecycle. On the vertical axis are the
ten components that have to be addressed when managing a product across the
lifecycle.
28
The PLM Grid (1)
ØComponent #1, the company’s products, whatever they are: cars; beverages; robots;
syringes; electronic components. They have to be managed in all phases of the lifecycle to
make sure that everything works well. And that they make good money for the company.
Products are at the heart of PLM. PLM is focused on products.
ØComponent #2, business processes. In every company, there are many business
processes related to the product as it is ideated, defined, realised, supported and retired.
There are processes such as New Product Development (NPD), Engineering Change
Management (ECM), Idea Management, and Product Complaint Management.
ØComponent #3, product data. Examples of product data include descriptions of ideas,
Computer Aided Design (CAD) data, recipes, specifications, wiring diagrams, regulations,
label information, master data, test data, tool data, packaging instructions, service manuals,
on-board sensor data (Big Data from the Internet of Things), disassembly plans, disposal
lists and recycling permits. Product data defines and describes the product. The volume of
product data can be huge. A company may have terabytes or petabytes of product data.

I'll now address some of these components in more detail.

The first component on the PLM Grid is the company's products, whatever they are.
They could be cars, food, robots, syringes, electronic components, whatever. They
have to be managed in all phases of the product lifecycle to make sure that everything
works well. And that the products make good money for the company. Products are at
the heart of PLM. PLM is focused on products.
The second component is the company's business processes. In every company, there
are many business processes related to the product as it is ideated, defined, realised,
supported and retired. Processes such as New Product Development, NPD, and
Engineering Change Management, ECM.
The third component on the PLM Grid is the company's product data. Examples of
product data include descriptions of ideas, recipes, specifications, wiring diagrams,
regulations, label information, test data, tool data, packaging instructions, service
manuals, on-board sensor data, disassembly plans, disposal lists and recycling permits.
29
The PLM Grid (2)
Ø Component #4, the PDM system, one of the most important PLM applications. Product data is all-
important. The PDM system gets this strategic resource under control, making it available, whenever
it’s needed, wherever it’s needed, however it’s needed, by whoever needs it.
Ø Component #5, PLM applications. There are many applications in the PLM environment. They
include Idea Management, CAD, requirements management, process planning, analytic applications
that work on Big Data, and waste management applications.
Ø Component #6, “Facilities and Equipment”. These are used in all phases of the product lifecycle.
They’re used to define the product, to produce it, to service it, and to dispose of it. Examples of
facilities include laboratories, service centres, repair shops and recycling centres. Examples of
equipment include 3D printers, 3D scanners, test rigs, NC milling machines, robots, and shredders.

The 4th component is the company's Product Data Management, PDM, system, one of
the most important PLM applications. Product data is all-important. The PDM system
gets this strategic resource under control, making it available, whenever it's needed,
wherever it's needed, however it's needed, by whoever needs it.
The 5th component on the PLM Grid is the company's PLM applications. There are
many applications in the PLM environment. They include Idea Management,
Computer Aided Design, requirements management, process planning, analytic
applications that work on Big Data, and waste management applications.
The sixth component is the company's Facilities and Equipment. These are used in all
phases of the product lifecycle. They're used to define the product, to produce it, to
service it, and to dispose of it. Examples of facilities include laboratories, service
centres, repair shops and recycling centres. Examples of equipment include 3D
printers, test rigs, NC milling machines, robots, and shredders.
30
The PLM Grid (3)
ØComponent #7, “Methods and Techniques”. Companies use all sorts of methods and
techniques to improve product-related performance across the lifecycle. Examples include:
Design for Assembly (DFA); Design for Environment (DFE); Lean Production; Statistical Process
Control (SPC); Value Analysis (VA) and Plan-Do-Check-Act (PDCA).
ØComponent #8, people. It takes many people, maybe one-third, or half, of the people in the
company, to develop and support a product across its lifecycle. Examples of peoples’ roles
across the lifecycle include: researcher; product developer; electronic engineer; software
developer; machinist; after-sales manager and recycling director.
ØComponent #9, “Management and Organisation”. Organisational structures are needed to

manage all the product-related resources and activities, and to meet the company’s objectives.
ØComponent #10, “Objectives and KPIs”. A company could have PLM objectives related to time
reduction, such as a reduction in time to market. Examples of Key Performance Indicators (KPIs)
for a company’s PLM activities include the value of the product portfolio (in $) and Time to Market
(in months). Possible targets could be to increase the value of the product portfolio by 25%, or to
reduce Time to Market by 30%.

The 7th component on the PLM Grid is the Methods and Techniques that the company
uses. Different companies use all sorts of methods and techniques to improve product-
related performance across the lifecycle. Here are some examples, Design for
Assembly, DFA, Design for Environment, DFE, Lean Production, Statistical Process
Control, SPC, and Plan Do Check Act, PDCA.
The eighth component is the people in the company. It takes many people, maybe one-
third, or half, of the people in the company, to develop and support a product across its
lifecycle. Examples of peoples' roles across the lifecycle include researcher, product
developer, electronic engineer, software developer, machinist, after-sales manager,
and recycling director.
The ninth component is management and organisation. Organisational structures are
needed to manage all the product-related resources and activities, and to meet the
company's objectives.
The tenth component on the PLM Grid is objectives and metrics, key performance
indicators, KPIs. A company could have PLM objectives related to time reduction,
such as a reduction in time to market. Examples of key performance indicators for a
company's PLM activities include the value of the product portfolio in
$ and Time to Market in months. Possible targets could be to increase the value of the
product portfolio by 25%, or to reduce Time to Market by 30%.
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B. PLM as a Paradigm
and a Paradigm Change
1. Paradigms
2. PLM Paradigm and Departmental Paradigm
3. Contrast of PLM and Departmental Paradigm
4. Examples of the Contrast
5. Summary

Moving on from the PLM Grid, let's now look at PLM as a paradigm and as a
paradigm change. I'll start by addresing paradigms in general, then discuss the PLM
paradigm and the departmental paradigm. Then I'll contrast the PLM paradigm and
the departmental paradigm.
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1. Paradigms
What is a Paradigm?
Ø An agreed and shared conceptual structure
Some Paradigms
Ø Example : Economy Class
Paradigm Shift

A paradigm is a generally agreed and shared conceptual structure that people use to
help them work with a complex subject. It's a simple picture that helps them to think
about, and describe, the complex subject.
Cattle class is an example of a paradigm? What picture does that conjure up for you?
If I say to you that I flew "cattle class", would you really think that airlines have
introduced a special class for cows, bulls, Texas Longhorns, and Charolais? No, in
your mind, you'd probably have a picture of sitting cramped on a full plane with little
leg-room, a broken seat-rest, no free beverage, nothing to eat, a seat plug socket that
doesn't work.
Over time, paradigms change. A paradigm shift occurs when the majority of people
find, through everyday experience and analysis, that the existing paradigm no longer
fits to the practical reality of the subject.
33
2. PLM and
Departmental Paradigms
The PLM Paradigm
Ø Emerged in 2001
The Departmental Paradigm

Ø Separate departments, specialised
Ø Went beyond specialities
Ø Unwanted effects
Paradigm Shift
Ø The PLM Paradigm

The PLM paradigm emerged in 2001.

The previous paradigm for the management of a company's products, the paradigm
before 2001, was the departmental paradigm.
With the departmental paradigm, the Marketing Department decided which products
were needed by customers, the Engineering Department developed them, the
Manufacturing Department produced them, and the After-Sales Department supported
them. Everybody understood and worked with this paradigm. It had existed for more
than fifty years.
This paradigm was generally agreed and shared for most of the 20th Century. The
reasoning behind it was that the specialists in a department were considered the best
equipped to carry out the activities of that function. However, over time, the
departmental paradigm led to an environment of departmental information silos,
departmental computer systems, incompatibilities at departmental borders,
contradictory versions of the same data, duplicate activities, and waste.
The departmental paradigm for the management of a company's products may have
been accepted for more than 50 years, but these anomalies eventually led people to
question it. A paradigm shift resulted. In 2001, a new paradigm for the management of
a company's products, the PLM Paradigm, emerged.
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3. Contrast of PLM and
Departmental Paradigms
PLM Paradigm Departmental Paradigm
Business-oriented Technically-oriented
Formally-defined Undefined
Lifecycle Departmental
Holistic Piecemeal
Digital Paper-based
Joined-up Separate
Product-focused Unfocused
Comparing the two paradigms, the PLM paradigm for the management of a company's
products is that a business-oriented, formally-defined, lifecycle, holistic, digital,
joined-up and product-focused approach must be taken to the management of a
company's products.
In the previous paradigm, the departmental paradigm, there was a technically-
oriented, undefined, departmental, piecemeal, paper-based, separate, and unfocused
approach to the management of a company's products.
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End of Lesson 1

That's the end of Lesson 1 of Week 2 of the Business Value of PLM course. I'll
continue later with Lesson 2, looking at the concepts, consequences and corollaries of
PLM.
36
Start of Lesson 2
Concepts, Consequences and

Corollaries of PLM

This is the start of Lesson 2 of Week 2 of the course. The subject of this lesson is the
concepts, consequences and corollaries of PLM.
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Lesson 2
Concepts, Consequences and Corollaries of PLM
A.Seven Concepts of PLM

B.Nine Consequences of PLM
C.Six Corollaries of PLM

In Lesson 2 of Week 2 of the course, I'll be looking at the seven concepts of PLM, the
nine consequences of PLM, and the six corollaries of PLM.
38
Seven Concepts of
PLM
Holistic Piecemeal
Digital Paper-based
Joined-up Separate
First up, the seven concepts of PLM.

You can see them here. The PLM paradigm for the management of a company's
products is that a business-oriented, formally-defined, lifecycle, holistic, digital,
joined-up and product-focused approach must be taken to the management of a
company's products. Whereas, in the previous paradigm, the departmental paradigm,
there was a technically-oriented, undefined, departmental, piecemeal, paper-based,
separate, and unfocused approach to the management of a company's products.
39
PLM Concepts (1)

The first of the concepts is that PLM is business-oriented. It has objectives such as
increasing product revenues.
The previous paradigm didn't have business-related objectives. It had technical
objectives, such as "design better".
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PLM Concepts (2)
Service Dept.
Guideline G:
Change Management
Production Det.
Policy B1:
Changes

The second important concept is that PLM is formally-defined. Under the PLM
paradigm, the way a company manages its products across the lifecycle is proactively
designed and defined.
Under the departmental paradigm, the way companies managed their products
across the lifecycle didn't result from a clear, deliberate, documented plan.
Instead, it resulted from the way that each department decided to organise its own
activities.
41
PLM Concepts (3)

The third concept is the lifecycle concept. It's clear from the name that PLM has a
lifecycle approach, not a departmental approach. PLM is looking to manage a
company's products all the way across their lifecycles.
Under the departmental paradigm, companies didn't have an approach to manage a
product continuously and coherently throughout the lifecycle. Marketing,
Engineering, Manufacturing, Service: and other departments, such as Quality and IS,
took product-related decisions separately.
42
PLM Concepts (4)
Holistic Piecemeal

The fourth concept is that PLM is holistic. PLM has a holistic approach to
management of a product. It's a business activity addressing not only products but also
organisational structure, methods, business processes, people, change management,
and information systems.
Under the departmental paradigm, there was a piecemeal approach, an atomistic
approach, a fragmented approach to managing these components. And not a holistic
approach.
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PLM Concepts (5)
Digital Paper-based

The fifth concept is that PLM is a digital paradigm. With the PLM paradigm, products
are managed throughout the lifecycle with digital computers, information and
communication. Under the departmental paradigm, products were managed using
analogue and mechanical calculation devices, and paper-based information and
communication.
44
PLM Concepts (6)
Joined-up Separate

The sixth concept is that PLM is a joined-up paradigm. With the PLM paradigm, the
company manages the product in a continuous, coherent, joined-up way across the
lifecycle. Under the departmental paradigm, companies didn't manage products in a
joined-up way throughout the product lifecycle. Many things were done separately, in
separate departments.
45
PLM Concepts (7)

The seventh and final concept of the seven concepts of PLM is that PLM puts the
focus on the product. PLM addresses the heart of the company, its defining resource,
the source of its wealth, its products.
Under the departmental paradigm, there wasn't this focus on the product. There was
a focus on the Departments.
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Nine Consequences of
PLM
Consequences on the components of the PLM Grid
1. Business processes
2. Product data
3. PDM system
4. PLM applications
5. Techniques
6. People
7. Performance Indicators
8. Products
9. Global Products

Having reviewed the seven concepts of PLM, let's move on to the nine consequences
of PLM. These are consequences on the components of the PLM Grid. Consequences
on business processes. Consequences on product data. Consequences on the PDM
system. Consequences on PLM applications. Consequences on techniques.
Consequences on people. Consequences on performance indicators. Consequences on
products. And consequences on Global Products.
47
PLM Consequences
(1)
Business Process Architecture Departmental activities
Marketing Dept.
Production Dept.
Procedure 11: Policy A2:

Tooling
Market Segments

Under the PLM Paradigm, the activities of managing a company's products are
organized, defined. The processes fit into the company's Business Process
Architecture.
Whereas, under the departmental paradigm, each department defined its activities
independently. And often, activities weren't formally documented.
48
PLM Consequences
(2)
Product data Departmental data

49
PLM Consequences
(3)
PDM system Dept. data mgmt. systems
PRODUCT DATA

With the PLM Paradigm, a cross-functional product data management system

manages product data across the product lifecycle.
Under the departmental paradigm, each department managed its data independently of
the other departments.
50
PLM Consequences
(4)
PLM Applications Departmental systems

With the PLM Paradigm, the applications used to support product-related activities
across the lifecycle fit into the overall company IS Architecture.
Under the departmental paradigm, each department chose its own applications with
the objective of improving its own performance.
51
PLM Consequences
(5)
Techniques Departmental techniques

With the PLM Paradigm, the various techniques, such as Design for Manufacture and
Life Cycle Design, used to support product-related activities across the lifecycle, have
to fit into the overall company Business Process Architectures and its IS Architecture.
Under the departmental paradigm, each department selected and implemented its own
techniques.
52
PLM Consequences
(6)
People (product-focused) People (dept. focus)
R&D Production
• R&D VP • Production VP
• R&D objectives • Production objectives
• R&D managers • Production managers
• R&D specialists • Production specialists
• R&D projects • Production projects
• R&D knowledge • Production knowledge
• R&D KPIs • Production KPIs
• R&D applications • Production applications
• R&D data • Production data
• R&D guidelines • Production guidelines
• R&D training • Production training
• R&D jargon • Production jargon
• R&D activities • Production activities
• R&D equipment • Production equipment
• R&D methods • Production methods

With the PLM Paradigm, people work in Product Family Teams. They're focused on
the success of the products of their family. The success of their products.
Under the departmental paradigm, people were hired, trained and worked on a
departmental basis. They were focused on departmental issues.
53
PLM Consequences
(7)
KPI's (product-focused) KPI's (departmental focus)
"% revenues from "Headcount in Engineering"

products less than 5
years old"

With the PLM Paradigm, Key Performance Indicators, KPIs, are product-oriented,
business-oriented. Percentage revenues from products less than 5 years old is an
example. Under the departmental paradigm, performance indicators were
departmental. A typical indicator was Headcount in Engineering.
54
PLM Consequences
(8)
Product Architecture New product, from scratch
New
Product Portfolio product
s
Product Families New
parts
Platforms,
Modules New
product
Products
s
With the PLM Paradigm, product architecture, the portfolio of products, product
families, and the relationship of a product to other products, are all-important.
Under the departmental paradigm, what was important was developing something
"new". Under the departmental paradigm, each new product was developed from
scratch. The product's relationship with other products, and the degree of reuse of
existing parts, weren't seen as important.
55
PLM Consequences
(9)
Global Product National Product

Global Products are manufactured products that can be purchased and used
worldwide. They're maintained and supported worldwide. Often they're developed and
engineered in many locations.
With the PLM Paradigm, Global Products are available. They offer billions of people
the opportunity to benefit from products to which they previously had no access.
Under the departmental paradigm, although some companies were international, or
multi-national, most were focused on their local market. Their products were available
at most to a few hundred million people, less than 5% of the world.
56
Six Corollaries of PLM
Corollaries following on from the PLM Paradigm:
1. Management
2. Product
3. Reporting
4. Product Portfolio
5. Voices
6. Customer Involvement

Having reviewed the seven concepts of PLM, and the nine consequences of PLM, let's
move on to the six corollaries of PLM.
The six corollaries of PLM address management, product, reporting, the poduct
portfolio, voices, and customer involvement.
57
PLM Corollaries (1)
Management Management

The first corollary addresses management's involvement with product-related issues.

With the departmental paradigm, product-related issues weren't considered to be a
subject for executives to address in any depth.
But, with PLM, executives understand and can formulate the need for effective
product lifecycle management.
58
PLM Corollaries (2)
Product Product

With the departmental paradigm, the focus was on developing a new product, on
developing a great new product. Nobody thought much about how the product was
developed. Or what happened after the product was developed.
With PLM, the company is focused on the product across its lifecycle.
59
PLM Corollaries (3)
Reporting Reporting
CEO CEO
VP F&A
CFO CIO CPO VP VP VP

Marketing Engineering Manufacturing

With the departmental paradigm, people thought departmentally about the company. A
Marketing VP, an Engineering VP and a Manufacturing VP.
With PLM, a Chief Product Officer, a CPO, has the responsibility for all the products
across the lifecycle.
60
PLM Corollaries (4)
Product Portfolio Product Portfolio
Product Project
Portfolio Product
Portfolio Portfolio
(Existing and
in (Existing (Products in
development Products) development
) )
Marketing Engineerin
g

With the departmental paradigm, people in Marketing and Sales would refer to the
product portfolio. This was the portfolio of existing products. People in Engineering
would refer to the project portfolio. This was the portfolio of projects to develop new
products.
With PLM, everyone in the company refers to the integrated product portfolio. This
contains both the existing products and those in the pipeline.
61
PLM Corollaries (5)
Voices Voices
Voice of
Voice of the
the
Customer
Product

With the departmental paradigm, the rule was "listen to the Voice of the Customer".
With PLM, the rule is "listen to the Voice of the Product as soon as possible". And, of
course, continue to listen to the Voice of the Customer.
62
PLM Corollaries (6)
Customer Involvement Customer Involvement

The sixth corollary follows on from the fifth, and addresses customer involvement.
With the departmental paradigm, the Marketing Department would carry out
Customer Surveys to find out what customers thought of existing and future products.
With PLM, the approach is different. People think Customer Involvement. Using
technologies such as GPS, mobile technology,RFID and the Internet of Things,
information is exchanged directly with a customer who's using the product.
63
End of Lesson 2

We've now reviewed the seven concepts of PLM, the nine consequences of PLM, and
the six corollaries of PLM. So, that's the end of Lesson 2 of Week 2 of the course. I'll
continue later with Lesson 3, which addresses the value of PLM and the spread of
PLM.
64
Start of Lesson 3
The Value of PLM. Where PLM?

This is the start of Lesson 3 of Week 2 of the course. The subjects of this lesson are
the value of PLM and the spread of PLM.
65
Lesson 3
The Value of PLM. Where PLM?
A. The Value of PLM
B. Where PLM?

In the first part of this lesson I'll address the value of PLM. In the second part of the
lesson I'll look at the spread of PLM.
66
A. The Value of PLM
1. Achieve Strategic Benefits
2. Achieve Operational Benefits
3. Keep Control over Products
4. Pre-empt Issues
5. Seize Technological Opportunities
6. Seize Macro-Economic Opportunities
7. Avoid Risks

In the first part of this lesson, which is about the value of PLM, I'll look at seven ways
in which PLM is valuable. The first is to achieve strategic benefits. The next to
achieve operational benefits. Another valuable benefit is to keep control over
products. Another source of value is that PLM allows technological and macro-
economic opportunities to be seized. And it's valuable in avoiding risks.
67
1. Achieve Strategic
Benefits (1)
1. Enable revenue growth
2. Reduce time-to-market
3. Reduce costs

I'll start with the strategic benefits.

PLM enables a company to grow revenues by improving innovation, by reducing
time-to-market for new products, and by providing support and new services for
existing products. Another source of value, PLM enables a company to bring a
product to market quickly. And PLM enables a company to reduce product-related
costs.
68
Achieve Strategic
Benefits (2)
4. Support better
5. Maximise value
6. Get products under control

Another source of value is that PLM enables better support of customers' use of
products. And PLM enables the value of a product to be maximised over the product
lifecycle. Another source of value is that PLM gets products under control throughout
the lifecycle.
Slide 70
69
2. Achieve Operational
Benefits (1)
1. Collaboration
2. Intellectual Property
3. Processes
4. Visibility

PLM helps companies to develop and produce products at multiple sites. It enables
collaboration across the design and supply chains. PLM helps manage the company's
Intellectual Property. It helps to maximise reuse of valuable product information. PLM
helps bring together the management of products and processes, and it helps ensure
compliance with regulations. PLM gives transparency about what's happening
throughout the product lifecycle.
70
Achieve Operational Benefits throughout
the Lifecycle
Ideate Define Realise Support/Use Retire/Recycle
Best ideas selected Clear decisions Efficient machine use Add-on modules Better compliance
Breakthrough ideas Clear processes Green logistics Better customer info. Disassembly time cut
Clear organisation Clear requirements Green production Fewer failures Environment-correct
Clear process Customisation Less inventory Happy customers Fewer fines
Fast innovation Data under control Less rework In-service upgrades Lean processes
Imaginative people Fast time to market Less scrap Liability costs cut Less waste
IP under control IP under control Lower material costs Lower service costs New applications
More ideas Motivated people More part re-use More customers Recycling costs cut
No bureaucracy Projects on time Optimal shop layout More services Reduced pollution
No ideas lost Reduced costs Reduced energy use Refurbishment Re-usable materials
Support applications Standards adherence Strategic suppliers Service revenues up Re-usable parts
Supportive culture #1 product family Trained workers Warranty costs cut Safer recycling

PLM provides benefits throughout the product lifecycle, in the product ideation phase,
in the product definition phase, in the product realisation phase, in the product
use/support phase, in the retire/recycle phase.
71
Achieve Reduced Costs,
Increased Revenues
Reduced costs Increased revenues
reduced development costs increased number of customers
reduced documentation costs increased product prices
reduced energy costs increased range of products
reduced liability costs increased range of services
reduced material costs increased sales of mature products
reduced prototyping costs increased sales of new products
reduced rework costs increased service prices
reduced warranty costs increased service revenues

PLM leads directly to reduced costs and increased revenues. As you see here, there are
many ways it enables cost reductions and revenue increases.
72
3. Keep Control over
Products
Consequences of losing control can be serious:
1. For the company
Ø Customer loss, .. recall costs, .. damage to image
2. For customers
Ø Frustration, .. , injury, death

Another source of value is that PLM enables a company to keep control of its products
over the lifecycle.
73
4. Pre-empt Issues (1)
Problem Area Typical Issue(s)

Incorrectly defined products,
insufficiently tested products
Products
Business processes not defined;

unclear processes;
Business
conflicting processes
Processes
Product data out of control;

data silos;
Product Data
conflicting definitions of data;
incorrectly structured data
Companies don't want to have difficulties with their products. Such difficulties can
result in loss of revenues and high costs.
Companies see PLM as a way to avoid difficulties with their products such as
incorrectly defined products, and insufficiently tested products.
74
Pre-empt Issues (2)
Problem
Typical Issue(s)
Area
Islands of Automation; duplicate PLM applications;
missing applications; ineffective application
interfaces
PLM
Applications
Machines and software licences not used or under-

used
Equipment
Methods Unclear methods; conflict with business process definition

Companies see PLM as a way to avoid difficulties with applications such as Islands of
Automation making communication difficult, duplicate wasteful PLM applications,
missing applications, and ineffective application interfaces.
75
Pre-empt Issues (3)
Problem Area Typical Issue(s)

Lack of skills; lack of training
People
Differences between structures on different sites
Organisation

Companies also see PLM as a way to avoid difficulties with people including lack of
specific skills and a lack of training.
76
5. Seize Technological
Opportunities
1. Newish technologies
Electronics, computing, biotechnology, ..
2. Newer technologies:
Analytics, Big Data, Cloud, Smart, Internet of Things

Another source of value is that PLM helps a company seize the technology-related
product opportunities that are available in the early 21st Century. Opportunities for all
sorts of new products based on new, and relatively new, technologies.
77
6. Seize Macro-Economic
Opportunities
21st Century global market size:
21st Century
opportunities:
2000 6 billion SpaceX 2002
2010 7 billion Tesla 2003
2020 7.8 billion Facebook 2004
2030 8.5 billion YouTube 2005
2040 9.1 billion Airbnb 2008
Uber 2009
2050 9.7 billion
Xiaomi 2010
Another source of value is that PLM helps a company seize the macro-economic
related product opportunities that are available in the early 21st Century.
Opportunities for all sorts of new products due to globalisation, and ongoing
environmental and social changes.
78
7. Avoid Risks
product recalls
product-related deaths
damages
revenues lost when products late to market
reduced revenues and earnings
product managers being fired
top managers appearing in court

executives being sent to prison

Another source of value is that PLM helps a company to minimise risks. At the end of
the 20th Century, it was often risky for companies to pursue many new opportunities
for their products. There were many risks for the company and its people. They
included product recalls, product-related deaths, damages relating to product use,
damage to company image, and revenues lost to competitors.
79
B. Where PLM?
Several ways of answering, for example,

by:
1. Industry sector
2. Company size
3. Product
4. Company type
5. Geography
6. Starting position in the company

The first part of this lesson addressed the value of PLM. In the second part of the
lesson I'll look at the spread of PLM.
There are several ways of addressing the spread of PLM, for example, by looking at
industry sectors, company sizes, products, type of company, geography, and starting
position in the company.
80
Where PLM? (1)
By industry sector
Ø discrete manufacturing, process manufacturing
Ø industry sectors such as aerospace, apparel, automotive, beverage,
consumer goods, electronics, food, footwear, machine tool,
mechanical engineering, medical equipment, pharmaceutical,
shipbuilding, ..

PLM is used in industry sectors such as aerospace, apparel, automotive, beverage,

chemical, construction equipment, consumer goods, defence, electrical engineering,
electronics, food, footwear, and so on.
81
Where PLM? (2)
By company size
ØLarge, medium, and small companies
All companies have the same components to manage:
Ø products, business processes, product data, applications, people, ..

PLM is used in all sizes of companies. It's used in large multinational corporations. It's
used in medium-sized companies. It's used in small companies.
82
Where PLM? (3)
By product
Øagricultural machinery, aircraft, cars, computers, consumer electronics,

elevators, furniture, machines, medical equipment, office equipment, offshore
structures, pharmaceutical products, power plants, power transmission belts,
processed food, refrigerators, rockets, ships, shoes, smartphones, toys, trains,
turbines, washing machines, watches, windows, ..

The list of products for which PLM is used is long. It includes agricultural machinery,
aircraft, beverages, cars, computers, consumer electronics, electrical equipment,
escalators, food, furniture, machine tools, machines, medical equipment, and so on.
83
Where PLM? (4)
By company type
Ømass production
Ørepetitive batch production
Øjob production

PLM manages products across the lifecycle. It applies to any company with a product.
It applies in mass production, repetitive batch production, and job production.
84
Where PLM? (5)
By geography
Øcontinents:
ØAfrica, Asia, Australasia, Europe, North America,
South America
Øcountries:
Ømore than ninety countries

PLM is used throughout the world. It's used in Africa, Asia, Australasia, Europe, North
America and South America.
85
Where PLM? (6)
By starting position in the company

The starting point for PLM may:
Ø be identified during the PLM Initiative

Ø be a response to the particular needs of a company
Ø depend on the requirements of other corporate initiatives
Ø be the starting point of the previous initiative
Ø be a strategically important and dominant function

Finally, a sixth view on the spread of PLM - the starting point in a company for PLM.
The starting point for PLM varies from one company to another. It depends on the
particular circumstances of the company. That leads to several possibilities. One
possibility is that the best starting point for PLM is identified during the PLM
Initiative. Another possibility is that the selection of the starting point for PLM is a
response to the particular needs of a company, or on the requirements of other
corporate initiatives, or on particular problems that the company is facing.
86
End of Lesson 3

That's the end of Lesson 3 of Week 2 of the course.
87
End of Week 2

And it's also the end of Week 2 of the Business Value of PLM Course.
88

Session 02 - PLM Environment

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Session 02 - PLM Environment

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Week 2:

Welcome to the second week of the Business Value of PLM course.

At the conclusion of this activity, participants will be able to:

Øsummarise the scope and activities of PLM;

Restricted © Siemens 2020

Lesson 1 What is PLM?

Lesson 2 Concepts, Consequences and Corollaries of PLM

Lesson 3 The Value of PLM. Where PLM?

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There are three lessons this week.

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B. PLM as a Paradigm and a Paradigm Change

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Different ways of looking at a subject.

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It's important to distinguish between What is PLM? and How to do PLM?.

The PLM Initiative of a company is an initiative with two

Ø to improve the product-related performance of the

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How to do PLM? The answer is through the PLM Initiative.

Product Lifecycle Management

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A PLM Initiative needs targets for performance improvement. Different companies

Product Lifecycle Management

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ØAll managed by PLM

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Ø Mixes of products and services

ØAll managed by PLM

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Ø Connectors, delivery mechanism

Ø Single or multiple form

ØAll managed by PLM

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ØAll managed by PLM

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ØThe product is important!

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Management includes activities such as organization and co-ordination of resources,

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ØProduct Lifecycle Management, PLM, is the

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Product Lifecycle Management, PLM, is the business activity of managing, a

Lower-level activities (1)

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Lower-level activities (2)

All these activities, and many others, are in the scope of

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The scope of PLM is shown on the PLM Grid a 5 *

Another way of understanding PLM is by reference to the PLM Grid. This is a 5 * 10

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I'll now address some of these components in more detail.

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ØComponent #9, “Management and Organisation”. Organisational structures are needed to

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