A holistic Product Lifecycle Management framework facing the challenges of 21st century

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1 A holistic Lifecycle Management framework facing the challenges of 21st century Dr. Julius D. Golovatchev Oliver Budde Zurich, August 27-29, 2007

2 Company Profiles Best Practice experience combined with scientific excellence provide the basis for a strong partnership for PLM-related projects. Detecon Research Institute for Operations Management at RWTH Aachen University Company Profile Established: 1977 DETECON Reorganized: 2002 Detecon International GmbH Sales 2006: EUR 148 million 650 consultants Shareholder: T-Systems International GmbH More than 3500 projects in 120 countries Established: 1953, currently with 45 research assistants Chair: Prof. Dr. Schuh, Chair of Engineering Employees: 70 permanent employees and further 70 academic and student assistants References Service portfolio: Strategy & Marketing Operations & Performance Technology Industry competence: Telco Digital Media Enterprise and Services Public Sector Page 1 Research Departments: -Management Service Engineering Information Management Several interdepartmental practices

3 Company locations + references (excerpt) Integrated Management and Technology Consulting Global activities, know-how und do-how expertise esp. in ICT markets characterize our consultancy services in PLM-related projects.. Detecon (Switzerland) AG Löwenstrasse Zurich Switzerland San Mateo Reston London Aachen Madrid Zurich Bonn Beijing Internet Mexico City Cairo Abu Dhabi Bangkok DETECON offices Research institute office (FIR) Page 2 Johannesburg

4 Content 1. Motivation 2. Current status of PLM 3. Integrated PLM-approach 4. Case-study Page 3

5 1. Motivation Current Challenges Various challenges in nowadays economy provoke product and process complexity, which need to be addressed. Management of the Extended Globalization Triple play flat-rate Supplier Device&Network OEMs Serviceprovider End-device Software IP TV Phone book Challenges Page 4 Sarbanes Oxley Act Treat Act Legal Frameworks Regulation

6 2. Current status of PLM Evolvement of PLM A holistic approach for the product lifecycle management and the associated process is essential to counter the challenges. Evolvement of PLM Remarks - Integration Dynamic Networks Holistic approach Networked elements Collaboration-driven Integrated PLM PLM offers: Higher innovation rate Less coordination effort and therefore a higher efficiency in distributed and globalized environments Process Integration Islands of Automatisation Source: FIR Research Page 5 Less used system/approaches MRP/ CAD Isolated PLM- Solutions ERP PLM / SOA Document- Management Classification Change Management IT- Integration cost transparency along the lifecycle PLM pitfalls: many initiatives only focus on isolated PLM-aspects and so don t leverage the full potential Proper /IT- Alignment is a critical success factor for implementing an integrated PLM

7 1. Growing relevance of PLM Success factor PLM With an effective PLM-strategy companies can overcome the above challenges to successfully meet their growth and profitability objectives. Relevance of Lifecycle Management High product (portfolio) complexity Increasing competitive pressure High customer expectations Lifecycle Management = Success factor Fast changing markets Effective Time2Market Page 6 Short lifecycle innovations

8 3. Integrated PLM- Approach Holistic view Four pillars build the fundament for a successful implemenation of the integrated PLM- Approach. Four pillars of the PLM Integrated PLM- Approach and Strategy PLM-Process and Organization Meta-Model PLM IT- Architecture Lifecycle Value Management Page 7 Transformation - Management Innovation & PLM Culture

9 3. Integrated PLM- Approach PLM Process All relevant activities from three different perspectives (market, technical, finance) on the PLM have to be identified and documented in the process definition. PLM Process (Overview) Remarks 2 Market Perspective Technical Perspective Financial Perspective 3 Innovation-Delivery Innovation- Marketing Evaluation Planning Implementation Launch Exit Mgnt Mgnt Page 8 1 Idea Paper Market& Capabilities Analysis Technical Evaluation Financial Rating Plan Market Roll-out Planning Develop technical concept Detailing Case Detailed Design Implement Market Plan Technical Implementation Adjust Case Launch Go-Live technically Monitor Case Monitor& Manage KPIs Monitor& Ensure & Process Control Case Gate 1 Gate 2 Gate 3 Gate 4 Gate 5 Gate 6 Description Approval by the Board Launch Report Mgnt. Report Market Exit Technical Exit Finalize Case 1. PLM- Process consists of 7 phases, whereby each phase ends with a gate decision by the Board 2. Each phase is further detailed by considering the three perspectives of the PLM 3. Metrics-based Management safeguards the efficient and effective implementation

10 3. Integrated PLM- Approach Meta-model The product database and the corresponding processes should be implemented by considering the existing processes, company structures and cultures. Definition and requirements on product data structure IT- Architecture realization Sales and market view Portfolio branch Internal production view Modules Modules Module cat I Module cat II Components ion and service Marketing and advance performance mgmt Transfer payments Billing Controlling: Realization in PLM as well as stock management systems Realization in production systems and order management Processes One master product data management fits all needs of the main processes and its interfaces. Page 9

11 3. Integrated PLM- Approach PLM IT-Architecture For competing in an ever-changing environment, the IT-Architecture has to offer a wide variety of IT-functionality for supporting the PLM- process. At the same time the ITcomplexity must be manageable. DSS Multi-Project- Management System PLM- Process OSS SOA Page 10 CAS Architecture View Strategic Resource Management Value Management -Development Marketing Management Exit Management Operational Support System Applications (Supplier) Re-use of legacy systems and existing middleware solutions ensure a reduced OPEX and access to a wide variety of ITfunctionality Workflow- Management System Decision Support System Collaboration Tools Integration-layer (SOA) Applications SCM ERP CRM CAD -Data-Management System Modeling System Applications (Customer) PLM IT-Architecture can be partitioned in three groups DSS OSS Remarks Integration Middleware Single PLM-System does not hold the promise of enabling a seamless and flexible PLM-process

12 3. Integrated PLM- Approach Lifecycle Value Management Management of the product post-launch through the growth, maturity, and decline stages of the product life cycle to ensure the profitability of the product over its whole lifecycle. Three building blocks of Lifecycle Value Management Customer Needs Management Page 11 Value Oriented Portfolio Management Lifecycle Value Management PLM Reporting and Controlling Information View Ability to support products with the most suitable platforms across their lifecycle High degree of data consistency and transparency Standardized reporting for all KPIs throughout the entire PLM process master data management as prerequisite for process automation Simple data exchange with production and sales systems

13 4. Case Study Results The holistic approach must be designed and implemented hand in hand with the C-level. Approach Impact Meta Model Introduction of a modular product definition on a global scale from a customer perspective Portfolio complexity Master Data Management Process IT Design and implementation of three variants of Stage/Gate PLM processes, taking different product types into account Introduction of fuzzy gates for a lean decision making process Concept development and implementation of Core Information Objects DMS/Workflow Mgnt/Project-Mgnt. Sys. Implementation of the product concept within the ERP-system Time to Market Organizational implementation success rate Integration Consolidation LC-Value Mgnt Introduction of a value-based portfolio management process Page 12 Effective product controlling

14 Questions and Answers Contact We are happy to answer your upcoming questions. Please contact us. Contact Details Dr. Julius D. Golovatchev Managing Consultant Member of Detecon International GmbH Oberkassler Straße Bonn (Germany) Telefon Telefax Mobil Dipl.-Wirt.Inform.. Oliver Budde Pontdriesch 14/ Aachen Page 13 Informationmanagement Telefon: +49/241/ Fax: +49/241/

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