Product Lifecycle Management: Driving the Next Generation of Lean Thinking (BUSINESS BOOKS) - Hardcover

GRIEVES

Hardcover

ISBN 10: 0071452303 ISBN 13: 9780071452304

Publisher: McGraw Hill, 2005

Synopsis

Product Lifecycle Management (PLM) is the newest wave in productivity. This revolutionary approach is an outcome of lean thinking; however, PLM eliminates waste and efficiency across all aspects of a product's life--from design to deployment--not just in its manufacture. By using people, product information, processes, and technology to reduce wasted time, energy, and material across an organization and into the supply chain, PLM drives the next generation of lean thinking.

Now PLM pioneer Michael Grieves offers everyone from Six Sigma and lean practitioners to supply chain managers, product developers, and consultants a proven framework for adopting this information-driven approach. Product Lifecycle Management shows you how to greatly enhance your firm's productivity by integrating the efforts of your entire organization.

Most companies are seeing the returns of their efforts in lean methods diminishing, as the most fruitful applications have already been addressed. Here, Grieves reveals how PLM gives you an opportunity to make improvements both within and across functional areas in order to increase agility, optimize efficiency, and reduce costs across the board. He gives you the most comprehensive view of PLM available, fully outlining its characteristics, method, and tools and helping you assess your organizational readiness.

There's also proven examples from the field, where PLM is being widely adopted by leading companies, including General Motors, General Electric, and Dell, that are widely adopting the approach. You'll see how PLM has saved these companies billions in unnecessary costs and shaved as much as 60% off cycle times. With this book you'll learn how to:

• Develop and implement your PLM strategy to support your corporate objectives
• Engage all your employees in using information to eliminate waste
• Enable improved information flow
• Better organize and utilize your intellectual capital
• Foster an environment that drives PLM

Lean manufacturing can only take your organization so far. To bring your productivity to the next level and save remarkable amounts of time, money, and resources, Product Lifecycle Management is your one-stop, hands-on guide to implementing this powerful methodology.

About this title

About the Author

Dr. Michael Grieves founded the Product Lifecycle Management Development Consortium, University of Michigan's College of Engineering and served as its Co-Director. He developed the first on-line Product Lifecycle Management Overview course for College's Center for Professional Development and organizes and chairs the annual University of Michigan AUTOe IT Conference. Grieves also is affiliated with the University of Arizona's internationally ranked MIS Department. Grieves works with PLM users and suppliers to companies such as General Electric, IBM, and Toyota on PLM strategies and implementations. With 35 years industry experience, Grieves is a principal in the international management and IT consulting firm Core Strategies Inc., and serves on the boards of a number of technology companies.

From the Back Cover

The first guide to this revolutionary productivity-enhancing system

This groundbreaking book introduces the next evolution of lean thinking: Product Lifecycle Management (PLM). PLM expert Michael Grieves shows how to roll out this integrated, information-driven approach across an entire company--to increase organizational agility, optimize efficiency and drastically reduce time-to-market.

Praise for Product Lifecycle Management

"The depth with which Michael Grieves explores PLM and the manner in which he describes its origin is exceptional. As we see new markets emerging for PLM, the universe of possibilities is limitless. This book should be considered a staple in business." --Tony Affuso, Chairman, CEO and President, UGS

"Michael Grieves has captured the "big idea" of PLM. Michael expertly explains how information and digital modeling can reduce cost, improve quality, and ignite innovation. 'Do you really understand the nature of information and your products?' Michael's book is a terrific source to expand your knowledge and begin the PLM journey!" --Lorie Buckingham, Senior Vice President and CIO, Visteon Corporation

"If you want to know precisely the proper way to use the product information in your company, this is the book to explain the whys and wherefores and the specific steps to complete that process. Mike Grieves' book Product Lifecycle Management just raised the bar to a new level!" --John Crary, CIO, Lear Corporation

"Product Lifecycle Management is an innovative book that will be highly useful tool when integrating all the business processes of a product's life cycle." --Mohan Tanniru, MIS Dept Head, University of Arizona

Excerpt. © Reprinted by permission. All rights reserved.

PRODUCT LIFECYCLE MANAGEMENT

DRIVING THE NEXT GENERATION OF LEAN THINKING

By MICHAEL GRIEVES

The McGraw-Hill Companies, Inc.

Copyright © 2006 The McGraw-Hill Companies, Inc.
All rights reserved.

ISBN: 978-0-07-145230-4

Contents

Acknowledgments
Chapter 1: Introduction—The Path to PLM
Chapter 2: Constructing PLM
Chapter 3: Characteristics of PLM
Chapter 4: The Environment Driving PLM
Chapter 5: PLM Elements
Chapter 6: Collaborative Product Development—Starting the Digital 
Lifecycle
Chapter 7: Digital Manufacturing—PLM in the Factory
Chapter 8: Outside the Factory Door
Chapter 9: Developing a PLM Strategy
Chapter 10: Conducting a PLM Readiness Assessment
Chapter 11: The Real World and the Universe of Possibilities for PLM
Index

Excerpt

CHAPTER 1

Introduction—The Path to PLM

Productivity is driven in waves. We create new ways of doing things or newthings to do that drive a new wave of productivity. Some waves of productivityare driven by a seminal invention such as the steam engine, the automobile, orthe computer. Other waves are driven by our approach to the way we do things,such as the assembly line, the multidivisional or M-form corporation, or leanmanufacturing.

As the newest wave in productivity, Product Lifecycle Management—popularlyreferred to as PLM—emerged in the last few years fully formed, or so itseemed. PLM was first piloted in the automotive and aerospace industries: twosectors with complex, manufactured products. The electronics industry, which hasproduct management issues that focus more on software configuration than thecomplex product configurations of the automotive and aerospace industries, wasalso an early adopter of PLM or PLM-like technologies. With the success of PLMin these three industries, interest in PLM has spread to businesses as diverseas consumer packaged goods (CPG), industrial goods, medical devices, and evenpharmaceuticals.

PLM is an outcome of lean thinking—a continuation of the philosophy thatproduced lean manufacturing. However, unlike lean manufacturing, PLM eliminateswaste and inefficiency across all aspects of a product's life, not solely in itsmanufacture. PLM is focused on using the power of information and computers todeliberately pare inefficiencies from the design, manufacture, support, andultimate disposal of a product. Wherever possible, PLM enables the movement ofinexpensive information bits in place of expensive physical atoms, a conceptpopularized by Nicholas Negroponte.

In doing this, PLM takes "lean" to the next level. Lean manufacturing is acontinual process that works at taking out the inefficiencies in themanufacturing process. However, as lean manufacturing efforts find and eliminatewaste, products are being produced less efficiently at other phases ofdevelopment. PLM uses product information, computers, software, and simulationsto produce the first product as efficiently and as productively as the lastproduct throughout the design, development, and delivery process.

Lean manufacturing requires considerable resources because changes that improveproduction cause equipment to be reconfigured, machines rearranged, and materialrelocated as the lean manufacturing engineers test their hypothesis that thisnew method will decrease waste. Once the system is set in place, PLM uses littlein the way of resources, since this same process is done digitally.

Testing lean approaches is time intensive, so only the most promising ideas forstreamlining the manufacturing process can be tried. The wall clock ticks awayas the new configurations are set up, production commences, and the results areevaluated. PLM does not operate under the same time constraint. PLM can simulatewall clock time, and it can do multiple versions of it simultaneously, so allhypotheses can be tested, not just the most promising.

Finally, lean manufacturing can only take an organization so far. The mostefficiently produced product resulting from the best lean manufacturingprocesses can be flawed as a result of design failure or failure in actual use.It is nothing more than efficiently produced scrap that is a waste of time,energy, and material. Productivity increases in the production of scrap are adisappointing, but logical, result of a limited approach to lean manufacturing.

Lean Thinking–Globally!

Seeing what lean thinking can do on the manufacturing floor has left companieseager to extend these benefits of lean into other parts of the organization.But, to do so, lean will have to be accompanied by an integrated approach toproduct information and the tools and techniques needed to enable thatintegrated approach. The level of productivity that PLM can drive promises to beenormous, as evidenced by the attention it has received in a short period oftime.

PLM has attracted worldwide attention on a global basis; it is not solely anAmerican or European initiative. It is being adopted by organizationseverywhere. We expect organizations based in the more industrial Asian countriessuch as Japan and Korea to be early adopters of PLM. However, organizations insuch diverse countries as India, Malaysia, and China are also not only adopters,but innovators of PLM.

PLM is able to raise the bar on productivity because it allows for the completeintegration of everything related to a product or service—both internaland external—into the organization producing it. As you'll learn as youread this book, PLM uses information technology and organizational practices andprocesses to improve efficiencies both within and across functional areas.Dividing work along functional areas, such as engineering, manufacturing, sales,and service, is an organization's method of dividing tasks in order to simplifycomplexity.

In the past, a great deal of effort and focus has been placed on increasingefficiencies within these functional areas. Although improvements can always bemade within the various functional areas, these initiatives suffer from the lawof diminishing returns. The high-return projects have been identified andremediated. This is especially true of those companies that have embraced SixSigma project teams, where their mantra is continual improvement.

In fact, PLM initiatives are becoming an option for Six Sigma teams looking forareas of improvement. Because PLM generally originates in a specificdepartmental area, it may be natural simply to view PLM as a functional areainitiative. PLM projects can naturally start in engineering, because that iswhere product information originates, and there are a substantial number ofopportunities to make improvements through better organization of productinformation. However, as we shall see throughout this book, the biggeropportunity is to use PLM to enable better information flow across the entireorganization.

Functional areas can easily become isolated silos, with little communication orcoordination among them. Attempts to optimize performance within these silos canactually lead to substantial underperformance across the whole organization andits related supply chain.

PLM holds the promise of improving productivity through a cross-functionalapproach, using product information. By linking different functional areasthrough shared product information, PLM can help organizations break down thesilo perspective and unlock productivity gains as functional areas benefit froma shared base of information. As supply chains become more integrated, PLM hasthe potential for impact across these supply chains—not just within theorganization. This will enable productivity and performance gains that cannot beobtained if the focus is solely on individual areas.

The other allure of PLM is that it does not improve efficiency and productivityfrom simply a cost-reduction perspective, but also from a revenue perspective.Increasing costs are not an inherently bad thing. If revenues are increasing, itis almost impossible not to increase costs. The key to increasing profits isjust not to let costs increase at a faster rate than revenues.

PLM has within its framework the opportunity to increase innovation,functionality, and quality—three drivers of increased revenues—bybetter organizing and utilizing the intellectual capital of an organization. Theability to develop and build creative, more useful, and better products from thesame amount of effort will also drive productivity and is a great deal moresustaining than cost cutting. As the old adage goes, "You can't simply save yourway to prosperity." Real prosperity requires revenue growth.

At first blush, PLM appears to be a relatively straightforward concept. As thename implies, it is the management of the information about a product throughoutits entire life cycle from initial design to final disposal. However, as will beexplained in the next chapter, the devil is in the details of this seeminglyobvious explanation. In addition, there is still a good deal of discussion anddisagreement regarding the form, scale, scope, and implementation of PLM.

Even in its initial phases, PLM is a "big idea" information technologyundertaking. Similar to Enterprise Resource Planning (ERP) initiatives, PLM'sgreatest promise is not in the foundation projects that affect one functionalarea, but in its larger strategic use that is cross-functional, enterprise-wide,or even supply chain inclusive.

However, the days of the chief executive officer (CEO) and chief informationofficer (CIO) going to their board of directors and saying, "Give us $500million and two years, and we'll give you an enterprise system" have come andgone—if they ever really existed. So too are the days when any projectinvolving the Internet received automatic approval without the annoyance ofhaving a financial justification or even a business proposition that wasquasi-logical.

As John Crary, CIO of Lear Corporation, a $13 billion automotive supplier says,"The only way CIOs will bring projects to their board for approval is if theyhave a well defined Return on Investment (ROI)." PLM holds that promise, and itdoes it on a "pay as you go" basis, as we shall see. This is the only way thatsuch a broad technological concept could even hope to be funded in this day andage.

In this introduction, we will explore why PLM and other information systems havethe potential for such a powerful impact on the productivity of an organization.This will be the basis for the claim that PLM will drive the next wave of leanthinking in organizations that adopt and embrace PLM. The success of PLM relieson some underlying fundamental premises. We will explore four of them in thisintroduction. We use these premises every day to guide our decisions regardinginformation technology adoption. However, we often do not realize it. Nor do werealize the increasing impact of these premises. The premises we will discussare: information as a substitute for time, energy, and material; the trajectoryof computer technology development; the virtualization of physical objects; andthe distinction between processes and practices.

Information as a Substitute for Wasted Time, Energy, and Material

We often lose sight of why Information Systems (IS) have such a powerful impacton organizations. Systems that enable approaches such as PLM are developed andfind a place in organizations for a fundamental reason: with these systems, wecan substitute the use of information for the inefficient use of time, energy,and material. Since we live in a physical world, we cannot substituteinformation for all uses of time, energy, and material, only for those usedinefficiently. With physical products, we eventually have to do something withatoms: move them, shape them, reconfigure them, assemble them, etc. To producephysical products, we have to use material, expend energy, and use people to doso.

Let's take an example from everyday life to illustrate this principle ofsubstituting information for wasting time, energy, and material. Those of us whoplay golf will be all too familiar with this example. We hit our first golf shotoff the tee. We then drive our golf carts up to where the golf ball rests.Because we need to know the distance to the green in order to select the rightclub and hit our next shot accurately, we need to find out where we are. Whilethere are yardage markers on the course marking the distance to the green, weusually have to find them. This entails some time and some energy to drive ourgolf cart around to find these markers.

We then compute the distance between these yardage markers and our ball,sometimes by stepping off the distance between the yardage marker and ourball—again taking more time and more energy. We also sometimes drive ourgolf carts farther up the course to survey the green to see if there is water orother nasty hazards that might come into play on our next golf shot. Again, thisentails more time and energy. Only after we use this time and energy, do weselect our club and hit our next shot.

Contrast this with golf carts that are equipped with a small computer and GPSsystem that show us an image of the hole, where we are on that hole, and yardageto the green and to hazards that we ought to avoid. We now drive up to our teeshot, look up at the computer screen, and know precisely how much yardage wehave to the green and what hazards we ought to avoid surround the green. We canimmediately get out of the cart, select the right club, and hit our shot.

While the waste of time and energy on the golf course is unlikely to become anational issue, it does illustrate nicely the substitution of information forthe waste of time and energy in a common, familiar task. While we may have theluxury of this waste in a leisure task situation, the situation is verydifferent when our objective is to minimize the use of resources, as we need todo in for-profit organizations.

Time, energy, material, and information are not directly comparable because,with respect to quantities, they all have different units of measure. However,with respect to the value we typically place on them, we can compare thembecause we can translate each of them into a cost, and then compare the costs.

Figure 1.1 represents the relative costs of a typical task that we perform. Itcould be designing a product that has specific functions, drilling a hole in apart that will match up with another part to be bolted on, routing materialthrough three stations on a production floor, or, on a personal level,assembling a bicycle to put under the Christmas tree. On the left bar, there arethree components of that task. The lower part of the bar represents the costfunction of the time, energy, and material we would expend if we did the task inthe most efficient manner possible. We waste no material. The time to performthe task is the least possible time of all possible ways to perform the task. Weminimize the amount of energy used. With today's focus on "lean" manufacturingand other functions, this is the optimal "lean" task.

The second or middle part of the bar is execution inefficiencies. These areinefficiencies that develop because, even though we know what the optimalprocedure is to perform the task, we just do not do it properly. We design thepart, but forget to include one of the functions. So we have to redesign thepart to include the forgotten function. We drill the hole in the wrong placewhen producing the product, and we have to scrap the material. We also waste thetime and energy we have used to drill the misplaced hole. We move the wrongmaterial to the wrong station on the factory floor, and we have to relocate itto the right station, wasting time and energy. We select the wrong bolt to putthe wheel on the bicycle, and we have to dissemble the bike and reassemble itwith the right bolt.

The top part of the bar represents the information inefficiencies. This is theinefficient or wasted use of time, energy, and material because we just do nothave the information required to do the task efficiently. We do not know how toget all the functions incorporated into a single design without trial and error.We do not know exactly where the hole to be drilled is or what tolerances weneed so that the hole lines up with the other part later on in the productioncycle. We do not know what the machine loading is on the factory floor so thatwe can route the material to the machines with capacity. And something we haveall experienced, we just cannot tell from the bicycle plans—supposedlywritten so a child could understand them—what size and type of bolt amongall the bolts in the package is the one required to hold the front wheel on thebicycle.

On the right bar, we have the relative impact on costs of information replacinginefficient or wasted time, energy, and material. The bottom part of the rightbar is still the same optimal use of time, energy, and material for our task.The middle part of the right bar, execution inefficiencies, is still the same.While an area of concern, remedying execution inefficiencies is whereengineering usually plays its part. Engineering excels at taking taskinefficiencies where the optimal use of time, energy, and materials are known,and devising processes and machines to reduce those inefficiencies as much as ispossible in an imperfect physical world. Six Sigma project teams are aimed atthese execution inefficiencies.

The top part of the right bar is where information can replace the inefficientor wasted use of time, energy, and material on the top part of the left bar. Ourvault of drawings shows us how the functionality we need was accomplished inprevious designs. Computer Aided Design (CAD) and engineering specificationsmake it possible to know exactly where to drill the hole so it will fitperfectly every time with another part, with no wasted material or the time andenergy necessary to process that material.

Information systems that monitor each work station let us know which machinesare available at what specific times so that the material moves continuallythrough the three machines in the least amount of time with the least amount ofeffort. An instructional video showing someone assembling the bicycle with aclose-up on the parts used at each step minimizes the wasted effort dismantlingand reassembling the bicycle by trial and error. (Although, from experience, theauthor would recommend the most efficient use of time, energy, and materialwould be to have the store that assembles hundreds of these bicycles do theassembly.)

Figure 1.1 shows a substantial reduction in overall cost resulting from thesubstitution of information for the inefficient use of time, energy, andmaterial. However, Figure 1.1 is only meant to be an illustration and does notreflect the actual cost function for any particular task. Admittedly, it is alsoan ideal representation.

As shown in the right bar, information might not replace all the inefficient useof time, energy, and material. In a typical situation, information mightsubstitute for a substantial amount of wasted time, energy, and material, butnot all of it. For complex tasks, the most efficient use of time, energy, andmaterial might not be know-able because the permutations and combinations are sovast.

(Continues...)

Excerpted from PRODUCT LIFECYCLE MANAGEMENT by MICHAEL GRIEVES. Copyright © 2006 by The McGraw-Hill Companies, Inc.. Excerpted by permission of The McGraw-Hill Companies, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Edition details

• Publisher: McGraw Hill
• Publication date: 2005
• Language: English
• ISBN 10: 0071452303
• ISBN 13: 9780071452304
• Binding: Hardcover
• Number of pages: 335