Ontology for PLM Implementation to Facilitate Inorganic Growth for an Organization

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1 Ontology for PLM Implementation to Facilitate Inorganic Growth for an Organization By Subbanarasaiah K.V.Akshintala, Ganeshraj Machandran and Pitchiah Ramaswamy Introduction Corporate mergers occur when two companies combine to form a single entity. The motivations for mergers are such as expansion to get more capital; integrating local or global operations to save cost; to mature into a system supplier from a component or sub-system supplier for retaining/gaining competitive position, market share and service purview; globalization and the regulatory environment. Typically Seventy-five percent to 85% fall short of their financial and strategic goals due to the challenges such as Regulatory requirements Leadership issues for the new organization Cultural unification Captive Shared Captive Company-A Company-B Motivators IT System IT System Motivators Processes Processes Culture Culture Strategy Strategy Vision Challenges Vision Organizational unification opens up major challenges both in product lifecycle perspective and IT perspective. Once the statutory merger is accomplished, management and cultural issues are resolved; the next major challenge would be business process and subsequent IT solution unification. For the unified entity, selling products to the existing s without any disruption and attracting new s and markets should be the top priority. This will decide how the new entity meets its stated benefits of the merger such as increased market share, cost savings, maturing into a system supplier from a component/sub-system supplier etc. To accomplish this, unifying the Product Lifecycle (PLM) processes and supporting IT systems merit high attention.

2 Merger Scenarios in PLM context In the context of Product Lifecycle (PLM), merging companies can be categorized as follows: Merger of two companies producing Same or similar products. e.g. Automotive sub-systems Similar products for different domains such as automotive and aerospace. e.g. Fluid connectors Interfacing components/ sub-systems that are assembled as a system at site, prior to the merger. e.g. Electric chord and connectors Merger of two companies producing same or similar products is considered as the scenario for this paper. Even though two companies produce similar and competing products, they would have a different set of business processes, skills and representation of knowledge altogether. This will be based on the individual company s business, operational and IT strategy. Effective management of product lifecycle by aligning the business processes and corresponding IT enablers is a key success factor for any product centric organization. Implementing a Product Lifecycle (PLM) solution typically involves building capabilities such as part management, BOM management, document management, visualization etc. Consider merger of Company-A and Company-B which produce similar and competing products. The merger will present the following situations: Company-A and Company-B did not implement PLM In such a situation the main focus needs to be on process study at both the organizations. Maturing the process capability to the industry standard for that domain should precede system selection and implementation. This is similar to the green field PLM implementation scenario. Company-A implemented PLM and Company-B did not In this case the natural tendency will be to simply extend the existing implementation in Company-A to Company-B. This approach will definitely increase the cultural shock for Company-B. This may also result in losing the best practices and expertise of Company-B. Therefore the business processes and practices of these two organizations should be studied in the context of the unified strategy. A decision has to be made on the validity of the existing PLM technology for the unified organization. Incase it turns out that a different PLM solution will suit best the needs of the merged organization, then interface requirements with respect to data and process, should be carefully considered. Both Company-A and Company-B implemented same PLM technology In this case unification of PLM might pose little problem, as the processes at both the organization are likely to be similar. At the same time the implementation approach, version of the PLM technology and downstream systems such as ERP could be different. A thorough study for integrating process, different versions of technology and interfaces to the downstream applications should precede any attempt to IT integration.

3 Company-A and Company-B implemented different PLM technologies In this case the options are a) to retain both the PLMs and build an interface, b) replace one in favor of the other and c) replace both existing PLMs and implement a new technology all together at both the places. All the three options are technically feasible and present different levels of technical, cultural and financial challenges. Retaining the existing PLMs might make the users happy, but this approach surely will result in increased technical and financial challenges. Replacing one or both the PLMs will result in increased cost impact apart from user resistance. All options should be assessed in the light of organizational vision. Choice of PLM solution components and the order of their implementation depend on the business vision and strategy of an organization. Therefore it is highly likely that along with the level of PLM maturity, the PLM maturity continuum itself could be different for different organizations. Similarly, when two organizations merge, any one or a combination of the existing solutions need not be the best solution. Vaulting Visualization Configuration Engineering Change Supplier Collaboration Maturity Level Continuum -1 Vaulting Visualization Supplier Collaboration Engineering Change Configuration Maturity Level Continuum -2

4 Therefore the solution should be considered after a through understanding of the required PLM capabilities in the unified scenario and existing system capabilities. Challenges for the Product Lifecycle: Multiple similar designs leading to varieties of components serving same functional purpose Different product naming conventions representing a part differently Need to manage multiple product varieties to satisfy specific needs Slightly different manufacturing practices Sub-optimal supply chain needing fine tuning for the new scenario Pockets of best practices across lifecycle of the product Non conformance to industry standard processes and practices Need for new capabilities such as Supplier collaboration and involvement early into the development Visual collaboration capability in the extended enterprise Challenges for the IT system: Multiple, disparate PDM Systems Critical product information on multiple, aging, unsupported legacy systems Both the systems requiring upgrade to avoid obsolescence Same information represented differently in each system to meet the business process and COTS system requirements Un-Scalable customization or implementation Sub-optimal utilization of capabilities of PLM systems due to improper implementation PLM system capabilities are at different points on PLM maturity continuum Necessity to maintain multiple PLM systems to meet specific requirements Service and support organizations familiar with a set of processes, tools and methodology Solution Framework A structured thinking and due diligence is required while merging PLM implementations of two organizations. The suggested framework for successful PLM system unification is Envision Assess Analyze Verify Design

5 Envision Obtain Product portfolio strategy from the unified business leadership Time to market expectations (Reduce time to develop NPI) Productivity expectations New product Technology roadmap Assess Study either or both the PDM systems for Adequacy to support the products/varieties identified by the portfolio strategy System capability to support time to market expectations Does it support productivity requirement Can system scale up to New product technology requirement Increased user group Geographical spread Linguistic, regulatory requirement of different geographies Analyze Identify all possible alternative solutions, including the existing implementations Choose best-fit solution among the alternates Evaluate if the technologies used in the current implementation could support the new solution Identify the new technology that support the to-be solution Compare it with existing solutions to identify the reusable modules Develop High-level design Design Detail design of the new system Flexibility/ scalability of the new system Conformance to industry standards Incorporates best practices from both the organizations Pilot/Test the new system Build the system and migrate data Train the users Roll-out the systems Manage the cultural change from existing systems to new system Verify Measure performance of the new system with respect to CTQ identified in envision phase Conclusion The flexibility and scalability of the existing PLM solution architecture and conformance of the implementation to industry standards and best practices are the major parameters that aid to the success of unifying two companies in the perspective of Product Lifecycle.

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