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Implementing Product Life Cycle Management in Indian Product

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Product lifecycle management (PLM) is the process of managing the entire lifecycle of a product from market demand, product design, manufacturing, services and disposal. By integrating people, data, process, business systems to provide product information which can foster a company's product innovation ability and their extended enterprise.

In short all-encompassing vision for managing all data relating to the design, production, support and ultimate disposal of manufactured goods.

The aerospace, medical devices, military, nuclear and automobile industries need to maintain safety and control extremely important. This safety and control measure brought about the concept of PLM in to the market. The configuration management further evolved into electronic data management systems. This further evolved into data management systems.

By using the PLM features, many manufacturers of industrial machinery, capital goods, consumer electronics and packaged goods have benefited largely in the past ten years, since the advent of the PLM.


Product lifecycle management (PLM) is the procedure of managing the complete lifecycle of a product. It symbolizes the encompassing vision for supervising all the data relating to the design, manufacturing, support and the dumping of the produced goods.

The concept of PLM was first introduced in the areas where safety and control were extremely important like aerospace, nuclear industries, military and medical device.

These industries invented the discipline of configuration management (CM), which later got evolved in to the electronic data management system (EDMS), and this was further developed to the product data management (PDM).

The usage of PLM solution has benefited the manufacturers of the industrial machinery, packaged goods, consumer electronics and complicated engineered products, and also there is a rapid increase in the adoption of PLM software by the industries. Product lifecycle management (PLM) is the procedure of managing the complete lifecycle of a product from its beginning, through design and manufacture, to service and disposal.

PLM integrates people, data, processes and business systems and provides a product information backbone for companies and their extended enterprise. Product lifecycle management is one of the four cornerstones of a corporation's information technology system structure. Every company needs to communicate and share information with their customer relation management (CRM) and also shared with the supply chain management and their resources with enterprises management (ERP-Enterprise Resource Planning) and their planning (SDLC-System Development Life-cycle). The manufacturing and engineering companies should compulsorily develop, describe, manage, and communicate information about their products.


1.3 Some requirements of PLM:

* Data File Control & Management (The right data…)

* Product Data Access Control (To the right person…)

* Workflow & Process Management (At the right time…)

* Geometry Management

* CAD File Control & Management

* Digital Mockup

* Integration Point For Single Source of Product Data

* Information System Interfaces

* Authoring Application Integration

* Product Data Distribution

* Product Data Viewing

* Change Control

* Configuration Identification

* Configuration Status Accounting, Verification and Audit

* Program / Project Management Coordination

* Requirements & Design Traceability

1.4 Benefits:

Benefits of product lifecycle management include:-

* Reduced time to market

* Improve product quality

* Reduced prototyping costs

* Saving through the re-use of original data

* A frame work for product optimization

* Reduce waste

* Saving through the complete integration of engineering workflows

1.5 History:

Inspiration for the burgeoning business process now known as PLM came when America Motor Corporation (AMC) was looking for a way to speed up its product development process to compete better against its larger competitors in 1985, according to Francois casting Vice President for Product Engineering and Development. After the introduction of its compact jeep Cherokee (XJ), the vehicle that launched the modern sport utility vehicle (SUV) market, AMC began to develop a new model, which later came out as Jeep Grand Cherokee. The first part in its quest for faster product development was Computer Aided Design (CAD) software system that makes engineers more productive.

The conflicts are very easily solved by using new communication system .By this system costly engineering also changes because of availability of drawings and documents in a central database. AMC was purchased by Chrysler because of the effectiveness of the product data management .This made the designing and building product to connect with enterprise. While an early adopter of PLM technology, Chrysler was able to become the auto industry's lowest-cost producer, recording development costs that were half of the industry average for the Burge owning business process now known as PLM came when America average by the mid-1990s. C:\Documents and Settings\kranthi\Desktop\rakesh_prj_img\RKSH_IMG4.bmp Fig 1. Layout of Product life cycle management

1.6 Timeline -Increasing Productivity with Technology:[2]


§ Introduction of Commercial Computer Aided Design (CAD) radically improved

§ Productivity in Product Design


§ Adoption of ERP Systems

§ ERP Systems included Engineering and Change Management Modules

§ Design & Build remained separated in silos


§ Adoption of Workflow & Web technologies accelerated PLM concepts

§ Workflow enabled collaboration between different company silos

§ PLM drastically improved NPI cycle cutting time & cost

§ PLM extended visibility and collaboration to CMs & Suppliers using the we


§ PLM extended Product Design to 3rd party Design Outsourcing

§ Collaboration extended across the global chain to Customers & Suppliers

§ Introduction of Industry & Government Standards Compliance

§ Adoption of Collaborative Quality Improvement across the supply chain

§ Adoption of Program/Project based PLM Portfolio Management

§ Adoption of PLM Analytics and Intelligence for Cost/Process Analysis & Improve.

1.7 Phases of Product lifecycle:[3]

There are many software solutions now developed which are use to organize and integrate the various phases of the product ‘s life cycle.

PLM is the single software with a suite of tools with several working methods, all these integrates to define single or different stage of product life cycle. PLM range is covered by some software providers but other only single application. Some of the applications can span various fields of PLM with different modules, with in the similar data model.

All fields in PLM are covered here. It should also not be forgotten that one of the main goals of PLM is to collect knowledge that can be reused for other projects and to coordinate simultaneous concurrent development of many products. PLM is mainly related with engineering tasks and also involves the activities of marketing like Product Portfolio Management (PPM), and mainly with regards to the new product introduction (NPI).

1.7.1. Phase 1: Conceive:

Imagine, specify, plan, and innovate

The initial phase in idea is the definition of its requirements based on customer, company, market and regulatory bodies' viewpoints. Major technical parameter can be defined by this product specification. Many functional aspect and requirement specification are carried out parallel with the initial concept design work carried out by defining the visual aesthetics of the product. For the Industrial Design Styling, work many different media are used from pencil and paper, clay models to 3D Computer Aided Design software

1.7.2. Phase 2: Design:

Describe, Define, Develop, Test, Analyze and validate

This is where the detailed design and development of the products form starts, progressing to prototype testing, through pilot release to full product launch. It may also include the redesign and ramp for improvement to present products as well as Planned obsolescence. CAD tool is used for design and development. This can be a simple or plain 2D Drawing / Drafting or 3D Parametric Feature Based Solid/Surface Modeling. Such software includes technology such as Hybrid Modeling, Reverse Engineering, KBE (Knowledge Based Engineering), NDT (Non Destructive Testing), Assembly construction

This step covers many engineering disciplines including: Mechanical, Electrical, Electronic, Software (embedded), and domain-specific, such as Architectural, Aerospace, Automotive, Along with the actual creation of geometry there is the analysis of the components and product assemblies. By standing alone the CAE (Computer-aided engineering) software can perform simulation validation and optimization task or it may carry out by integrating with CAD package. These are used to perform tasks such as: - Dimensional tolerance (Engineering) analysis task is performed by using CAQ (computer aided quality) such as Dimensional Tolerance (engineering) Analysis. Another task which is carried out at this phase is the sourcing of bought out components, possibly with the aid of Procurement systems.

1.7.3. Phase 3: Realize Manufacture, Make, Build, Procure, Produce, Sell and Deliver:

The method of manufacturing is defined when the design of the product's componnent is completed. It performs task such as design creation of CNC machining instructions for the products part as also it can perform tolls to manufacture those product which can be done using integrated or separate CAM. Process simulation for operations such as casting molding and die press forming will also be involve in the analysis tools. CPM comes in to play only when the manufacture method gets identified. The original CAD data with the use of Computer Aided Inspection equipment and software is used for checking the geometrical form and size of the components after they get manufactured.

Sales product configuration and marketing documentation work will be taking place parallel to the engineering task. This could include transferring engineering data (geometry and part list data) to a web based sales configuration and other Desktop Publishing systems

1.7.4. Phase 4: Service:

Use, Operate, Maintain, Support, sustain, phase-out, Retire, Recycle and Disposal

In final stage of the lifecycle the managing of in service information is involved. The repair and maintence, waste management/recycling information is provided to the customers and to service engineers. Maintenance repair and operation management software tools are involved.

1.7.5. All phases: Product lifecycle:

Communicate, Manage and Collaborate

In many cases or in real practical a project does not run sequentially or maintain isolation of other project development project. The co-ordination of and management of product definition data is the main part of PLM, it includes release status of the components, managing of engineering changes, management of documents, project resources planning, configuration product variations, timescale and risk assessment. The text and metadata such as the product bills of materials needs to be managed. At the engineering departments' stage this is the area of PDM - (Product Data Management) software, at the commercial level EDM (Enterprise Data Management) software; it is typical to see two or more data management systems within an organization. These systems are also linked to other systems such as SCM, CRM, and ERP. Associated with these systems are Project Management Systems for Project/Program Planning. Numerous collaborative product development tools cover this central role which runs throughout the whole life cycle and across organizations. This needs various technology tools in the area of Conferencing, Data Sharing and Data Translation.

Research study conducted on (Cell phone)

During past decade of time the, cell phone has become a part of our daily life .Like any product, making a cell phone and its parts requires natural resources and energy. Understanding the life cycle of a product can help you make environmental choices about the products you use, and how you dispose of them. Let us consider the example of a Nokia cell phone product life cycle management.

2.1 Concept Design:[4]

The design of the product influences each stage of its lifecycle and also influences the environment. Design will affect the materials which are used in manufacturing of a product. If cheaper materials are used they are less durable, the product will have a short useful life. Waste can be prevented by proper design of the product. The design of the product with modular components can be easily replaced and entire product need not be thrown away if only one part of the product gets broken. The items having long life, trendy design should be avoided because they are not thrown away when they go out of style.

2.2 Materials Extraction:[4]

All products are manufactured from the materials which are found in or on the earth. Raw materials, such as trees or ore, are directly mined or harvested from the earth and this process can create a lot of pollution and also involves usage of large amounts of energy and depletes the limited natural resources. The manufacturing of new products from recycled materials will reduce the amounts of the raw materials, being taken from the earth. The hand set consists of 40 percent metals, 40 percent plastics, and 20 percent ceramics and trace materials.

The circuit board which is also termed as a printed wiring board, present in the hand set is the main component and is the brain of the cell phone controlling all of its functions. The circuit boards are up of mined and raw materials like silicon, copper, lead, nickel, tantalum, beryllium and other metals. Circuit board manufacturing requires crude oil for plastics and limestone and sand for the fiberglass, these materials are also known as “persistent toxins” and can stay in the environment for long periods of time even after their disposal.

The cell phone consists of a liquid crystal display (LCD), a low power, flat- panel display on the front of the phone that shows information and images. The passage of electric current through it makes it opaque. The contrast between the opaque and transparent areas forms visible characters. Various liquid crystalline substances, either naturally occurring (such as mercury, a potentially dangerous substance) or human-made, are used to make LCDs, require the usage of plastic or glass. The rechargeable batteries used to power the phones can use several types of batteries: nickel-metal hydride (Ni-MH), lithium-ion (Li-Ion), nickel-cadmium (Ni-Cad), or lead acid. These batteries contain nickel, cobalt, zinc, cadmium, and copper.

2.3 Materials Processing:[4]

Once materials are extracted, they must be converted into a form that can be used to make products. For example, in cell phones: Crude oil is combined with natural gas and chemicals in a processing plant to make plastic; Copper is mined, ground, heated, and treated with chemicals and electricity to isolate the pure metal used to make circuit boards and batteries. The resulting copper pieces are transported to the manufacturer where they are formed into sheets and wires.

2.4 Manufacturing:[4]

The basic shape of the circuit board is made by using plastics and fiberglass, and is then coated with gold plating. The board has several electronic components which are connected with wires made of copper and are soldered to the board, are secured with coatings and protective glues.

LCDs are manufactured by sandwiching the liquid crystal in between layers of plastic or glass. Batteries have two separate parts known as electrodes, which are made from two different metals. Electrolyte is a liquid substance which touches each electrode.

2.5 Packaging &Transportation:[4]

The use of packaging can protect products from damage and provide product information. Finished products are transported in trucks, planes, and trains to different locations where they are sold. All of these modes of transportation burn fossil fuels, which can contribute to global climate change. The finished products and the parts of the cell phone require packaging and transportation in order to get from one place to another.

The transportation done by plane, rail or truck requires the usage of the fossils fuels for energy, which contribute to the global climate change. While the packaging of the product protects it from getting damaged, identifies contents and provides information, decorative or excessive packaging can be wasteful. Packaging makes use of the valuable natural resources which include paper (from trees), plastics (from crude oil from the earth), and aluminum (from ore) and other materials, all of which makes use of energy to produce and can result in waste.

2.6 Reuse/Recycling/Disposal:[4]

The way products are used can impact the environment. For example, products that are only used once create more waste than products that are used again and again. Using a product over and over again prevents the need to create the product from scratch, which saves resources and energy while also preventing pollution. Recycling or re-manufacturing products also reduces the amount of new materials that have to be extracted from the earth.

Always comparison - shop to be sure that you get the proper service and the phone that is right for you. By using the rechargeable batteries in cell phones reduces the amount of the waste and toxicity that disposable batteries will create. Be sure to follow the manufacturer's instructions for charging your batteries so you can extend their life as long as possible

2.7 Life:[4]

Recycling or donating the cell phones when they are no longer needed by you or want them extends their useful lives, and preventing them from going into the trash where they can cause problems relating to the environment.

2.8 Reuse:[4]

Many organizations including recyclers, Charities, and electronics manufacturers accept working cell phones and offer them to schools, community organizations, and individuals in need. Reuse provides people, who cannot afford them, free or reduced cost access to new phones and their accessories. And thereby it extends the useful lifetime of a phone.

2.9 Recycle:[4]

Springing up of electronics recyclers is every-where. Today, various stores, recycling centers and manufacturers accept cell phones for recycling. While few electronics recyclers only allow large shipments, the communities, schools, or groups can work together to collect used cell phones for shipment to electronics recyclers. Some of the rechargeable batteries can also be recycled, as many retail stores and some communities have started collecting them. The material recovered from the rechargeable batteries when they are recycled can be used for making new stainless steel products and batteries. You can use the phone book or Internet to find the local contacts that refurbish and recycle cell phones.

2.10 Disposal:[4]

By 2009, the rate at which cell phones are discarded is predicted to exceed 125 million phones each year, resulting in more than 65,000 tons of waste. The cell phones which are thrown into the trash end up in a landfill or are burned. As the cell phone contains plastics, chemical, metals and other hazardous substances, you should always recycle, donate or trade in your old cell phone.

2.11 Headset:[4]

Many people use a cell phone headset when they are driving or when they are walking around to keep their hands free. Most models of headsets can be reused when you buy a new phone.

2.12 Belt clip:[4]

Some people buy belt clips to carry cell phones while not in use. Reusing or donating your belt clip when you are finished using it prevents waste.

2.13 Face plate:[4]

Decorative face plates can be trendy and fun, but you don't need them to use a cell phone. The best way to prevent waste is to simply not buy products you don't need. If you do buy face plates, donate unwanted ones to a charity or swap them with your friends instead of throwing them away. Portable gaming cell phones have a lot of the same parts as hand-held video game and CD players, consoles and portable CD players, including speakers, circuit boards, and LCDs. Old or broken consoles and players can also be reused or recycled when no longer wanted. Advances in cell phone technology have given phones many uses today.


3.1 Case study: Siemens

Siemens Home and Office Communication Devices (SHC) is a leading company for home and office communication infrastructure. The company sells its products in more than 50 countries.

3.1.1 Business Challenge:

SHC has several engineering and manufacturing disciplines which are unique and located at one single site, in Germany. Mold tooling development, mechanical design development, manufacturing and assembling are all done in Bocholt, Germany.

For Siemens the market pressure is very high in electronics and electric and consumer goods, and there is stress from this competition to reduce development cycles and it's time to market new goods, as there is a wide range of products introduced into the market year after year with new designs and more complexity. Therefore Siemens recognized that it has to make improvements in its quality and thus needed to enhance the supply chain integration and collaboration to meet its marketing challenges.

Siemens soon recognized that to overcome the external and internal pressures it has to improve its development and product life cycle for the future success of Siemens SHC. Siemens had been working with a 3-D CAD system “ Euclid 3” for about 10 years on which it had made all possible improvements and it cannot upgrade it any further, so it has to get help from outside partner to help and implement a new product life cycle (PLM) system.

3.1.2 Solution:

Siemens in partnership with IBM services implemented CATIA V5 and SMART TEAM as a new PLM platform for improvement in product development. CATIA V5 has a set of predefined product and process templates, helps to quickly complete even sophisticated design tasks with a high level of accuracy.

With CATIA V5 and SMARTEAM, SHC has improved design innovation, taking advantage of the existing know-how and design to manufacturing process to the development and reduction of costs. In addition to that, this tool has helped make the mold tool development and NC manufacturing very competitive with low-cost suppliers from places like China.

3.2 Case study 2: Airbus UK
3.2.1 Business Challenge:

To meet tight deadlines for delivery and reduce design and manufacturing costs by constantly improving working processes throughout the aircraft lifecycle.

3.2.2 Solution:

IBM has provided with a team of flexible and scalable experts which included strategic business consultants, aircraft industry specialists and project managers to define and implement transformation programs in business, financial and organizational disciplines.

3.2.3 Business Benefits:

Improved collaboration with suppliers eliminated data re-entry, saving €18 million on collaboration with suppliers.

* Improved concurrent engineering reduced lead time on wing by 41 weeks (36% reduction).

* The world's first flight of largest passenger aircraft completed on time.

* Keeping Scheduled programming.

* Innovative practices introduced from concurrent engineering and collaborative working.

3.2.4 Why it matters?

IBM team created new business, financial and organizational processes to meet the deadlines while cost cutting the design and manufacturing for the new Airbus A380. These changes has transformed the airplane manufacturing methodology while enabling Airbus UK to cut cost and time out of design and manufacture, improve collaboration with suppliers and deliver key components on schedule to ensure the A380 aircraft's on-time first flight.

3.2.5 Key Components: IBM Global Business Services

In developing the new technologies and pushing the boundaries of knowledge in the aerospace industry Airbus is leading the world. Airbus is an extremely complex business, which employs advanced technologies and procedures, some of which have mainly been developed for this project. In such a large-scale, modern design and manufacturing process, a lot of attention is paid at keeping costs under control. Wing assembly is one of the most complex parts of the aircraft, an element for which Airbus UK has the design and manufacturing responsibility.

The company realized early in the A380 program that new processes would be needed to achieve the aggressive timeline for the airplane. “We needed to radically transform our approach to the A380, and saw value in bringing in an objective external consultancy to help define and implement new ways of working,” says Iain Gray, Managing Director of Airbus UK. Nowhere is this more evident than in its design and development of the A380, the world's largest passenger jet. Airbus is a highly complex business, employing advanced technologies and processes, some of which have specifically been developed for this project. In such a large-scale, innovative design and manufacturing operation, much attention is paid to keeping costs under control. Airbus UK commissioned IBM Global Business Services to bring together a team of experts to analyze designs, design processes and manufacturing operations. “IBM is exclusively placed to give advice and help us transform Airbus UK,” says Gray. “It has enormous breadth and depth of knowledge, with expertise in business, financial and organizational disciplines as well as the aircraft industry and computer technology.” The core IBM Global Business Services program team includes strategic business consultants, aircraft industry specialists and project managers. This team is expanded when ever required by drafting in specialists and consultants who bring a complete cross-section of business and technical skills relevant to the specific problem being addressed.

3.2.6 Designing out cost:

“Initiatives from IBM Global Business Services help us drive cost out of design and manufacture, improve collaborative working, and transform the way we work with our many subcontractors,” explains Gray. Improved collaboration with suppliers eliminated data re-entry, saving €18 million. The IBM team has helped the Airbus UK improve the concurrent engineering, reducing lead time of the wing by 41 weeks (36 percent reduction).

Sometimes, initiatives originated directly from the IBM team. Airbus built complete 3D models of A380 components to analyze clash conditions in airframe systems and structure before committing to cut metal—for example, to ensure that there were adequate clearances for slat and flap mechanisms on the wing and the landing gear. Such large-scale 3D modeling involves an enormous volume of number-crunching, which would normally trigger the purchase of large processors. Seeing this situation, IBM consultants introduced Airbus to the concept of GRID computing, which pools unutilized processing capacity in hundreds of distributed workstations for use with processor-intensive applications. A prototype was developed, and IBM then completed the implementation of GRID technology, there by saving Airbus a considerable investment.

In the area of business transformation, IBM Global Business Services is organizing an experienced team of human resource and organizational specialists to help Airbus UK transform from a development organization to one undertaking large-scale serial production.

The key aspect in the success of the A380 program is educating several hundred people across Airbus UK and its many of the subcontractors in the new tools, processes and collaborative working. With an infinite pool of resources, IBM responded very rapidly to Airbus' training needs, building and delivering of tailored courses that reflect the processes and technologies defined at the strategic level.

3.3 Case Study 3: Maruti Udyog Ltd

Maruti Udyog Ltd., a subsidiary of Suzuki Moto Corporation of Japan, has been the leading Indian passenger car maker for about two decades. The company has a diverse portfolio that includes: the Maruti 800;the Omni; a premium small car, Zen; the international brands, Alto and WagonR; an off-roader, Gypsy; the mid-size Esteem; a luxury car, Baleno; an MPV, Versa; a premium subcompact car, Swift; and a luxury SUV, Grand Vitara XL7. The company's 11 base platforms encompass300 variants for 100 export destinations. According to Maruti's vision statement, its goals include maintaining leadership in the Indian automobile industry, creating customer delight, increasing shareholder wealth and being “a pride of India.” Customers have shown their approval, ranking Maruti high in customer satisfaction for six years in a row according to the J.D. Power Asia Pacific 2005 India Customer Satisfaction Index (CSI) Study. The company has also ranked highest in the India Sales Satisfaction Study.

3.3.1The need for PLM:

Among the company's product development challenges, the need for shorter cycle times is always at the top. Management wants to be able to launch new models faster and reduce the time required for minor changes and development of product variants. Another challenge is co-development. Maruti's goal is to collaborate closely with its global teams and suppliers on the development of new platforms and product freshening. Other challenges include streamlining the process of vehicle localization and enhancing quality and reliability. These challenges pointed directly to a product lifecycle management (PLM) solution with capabilities for information management, process management, knowledge capture and support for global collaboration; a PLM solution directly addressing Maruti's business challenges. For example, PLM's information management capabilities address the issue of the many plat forms, local variants and export destinations. Process management permits concurrent development and faster change management and provides a platform for other process improvements - for faster vehicle development. Knowledge capture increases innovation and also reduces costs by increasing part re-use. PLM's collaboration capabilities permit global development by ensuring fast and accurate dissemination of product information.

3.3.2. Implementation profile:

Maruti selected the UGS PLM software solution because “UGS leverages the business value by offering complete PLM solution,” according to C.V. Raman, general manager, Engineering Division, Maruti Udyog Ltd. Maruti's PLM implementation includes Team centre, NX and Techno matrix software. Team centre provides a wide range of functionality for release management including bills of material management and change management. Team centre also handles the vehicle localization process, coordinates the part approval process and integrates design and engineering information with the company's ERP system. Team centre also provides the infrastructure for global collaboration. It does this by permitting real-time data sharing with suppliers in India and the global Suzuki team. NX supports vehicle design by providing advanced tools for styling, product design and digital mock-up. Its system-based modeling solution (WAVE) simplifies the creation of product variants. NX is also used for tool design and the development of machining programs. Techno matrix automates manufacturing process planning (final assembly and body-in-white) and allows for assembly feasibility studies, ergonomic analyses, welding cell simulations and so on.

3.3.3 PLM delivers results:

Since implementing the UGS PLM solution, engineering change notice (ECN) time at Maruti has decreased by 50 percent. The ECN errors have also been cut in half. The Cost reduction, cost which has been occurring to some extent is now more effective after the PLM implementation, with an improvement of 54 percent. With 3D parametric models now representing all elements of a vehicle, design reviews include digital mock-ups, which people find much easier to understand than drawings. On a latest program, digital design reviews revealed 36 issues that previously would not have been detected until the prototype stage, resulting in program delays. With the UGS PLM implementation, such delays are now avoided. The factory simulation functionality had equally beneficial results.

Factory simulation functionality has had equally beneficial results. Digital 3D plant layouts reduce errors and have cut personnel costs for accommodating new product introductions. In addition, Maruti has seen a 50 percent reduction in assembly/build issues.

From the business perspective, all this means vehicles get to market sooner. The company has experienced a reduction in design-to-launch time of 25 percent, and expects a further reduction of 15 percent as more of the collaboration with Suzuki and suppliers is done electronically in real time. From the customers' perspective, the move to the UGS PLM solution is seen in lower prices. Since the implementation of Team center, NX and Techno matrix, Maruti has reduced prices for five car models.

3.4 Business challenges:

§ Ensure customer delight

§ Increase shareholder value

§ Reduce development time and

§ offer cars at lower prices

3.5 Keys to success:

§ Information management,

§ process management and global

§ collaboration supported by

§ Team center® software

§ More efficient and innovative

§ design and manufacturing

§ with NX™ software

§ Ability to simulate

§ manufacturing processes using

§ Techno matrix® software

3.6 Results:

25 percent reduction in design to-launch time; additional 15 percent improvement yet to come

§ Lower prices for five models

§ 50 percent reductions in assembly/build issues and ECN time


4.1 PLM Market Analysis:

Annual study indicates continued growth for product lifecycle management initiatives throughout the next five years. The overall product lifecycle management (PLM) market grew 10.7% to reach $20.1 billion in 2006, and PLM investments are forecasted to increase at a compound annual growth rate (CAGR) of approximately 8.5% to exceed an estimated $30 billion by 2011, according to CIM data 2007 PLM Market Analysis Report. The report presents an analysis of the 2006 PLM market with special emphasis on the collaborative product definition management (cPDm) segment of that market. Also included in the study is an analysis of the multidiscipline MCAD segment of the market, which provides CIM data's perspective on PLM across a variety of industry and geographic sectors and identifies market trends, reviews investments in PLM-related software and services during 2006, and forecasts PLM investments for 2007 through 2011. Forecasts are based on data available through the first quarter of 2007. CIM data partitions the PLM market into two primary segments: cPDm and tools. The tools segment is focused on fundamental intellectual property (IP) creation, and cPDm is focused on IP management, including collaboration, visualization, vaulting, and sharing of product-related information.

According to the study, companies worldwide spent $13.2 billion in 2006 on PLM tools, including MCAD, computed-aided manufacturing (CAM), electronic design automation (EDA), engineering simulation and analysis, technical publishing, and other technologies. Development in this sector was driven primarily by investments in EDA and midrange MCAD. Areas like the high-end MCAD and simulation and analysis experienced relatively lower growth, the study states. The tools portion of the PLM market is forecasted to grow at a CAGR of 5.3% over the next five years to reach $17.1 billion by 2011.

The cPDm portion of the PLM market met the forecast for growth and reached $6.9 billion in 2006, representing an increase of approximately 13.6% over 2005. The cPDm sector is expected to continue its strong growth to $7.8 billion in 2007 and reach $13 billion by 2011 for a CAGR of 13.6%. cPDm focuses on collaboration, management, and sharing of product-related information. The section covers technologies and approaches such as PDM, collaboration and visualization, data exchange, portfolio management, compliance management, strategic sourcing, enterprise application integration, workflow, functional applications such as configuration management, and solutions for specific industries or businesses.

4.2 PLM Market Performance and Forecast:


Comprehensive PLM—covers the full product definition over the entire product lifecycle and across all industries. This comprises of mechanical, electronic, and software components, as well as both discrete and process industries.

Mainstream PLM—it covers a subset of the Comprehensive PLM market, but includes the subsectors that have traditionally been addressed by the major suppliers (i.e., drivers) of the PLM market.

4.2.1 Comprehensive PLM growth:

To increase at a compound annual growth rate of approximately 6.3% and expanding the market size to nearly $36 billion by 2013. Much of the growth in 2009 and early 2010 will be driven by services.

4.2.2 Mainstream PLM growth:

Although anticipated to be slower in 2009-2010, is expected to continue its climb over the next five years, increasing at a compound annual growth rate of just over 7% and expanding the market size to just under $24 billion by 2013 (as shown in 2).

4.3 PLM Market Categories:

PLM market into three major sub-sectors:

PLM Tools that create intellectual assets through authoring, analysis, modeling, simulation, and documentation of product and plant/facility information. Collaborative Product Definition management (cPDm) applications and solutions to capture, manage, disseminate, visualize, and collaborate on product-related intellectual (digital/virtual) information, including related processes. Digital Manufacturing systems for process planning, resource definition, factory floor layout, and product flow simulation and analysis-agronomy.


Historically, the Tools sector has received the largest amount of investment; $17.3 billion was spent in 2008 by companies worldwide on PLM Tools such as mechanical computer-aided design (MCAD), computer-aided manufacturing (CAM), electronic design automation (EDA), engineering simulation and analysis, architecture/engineering/construction (AEC), technical publishing, and others. The Tools portion of the PLM market is forecasted to grow at a CAGR of 5.1% over the next five years to reach $22.1 billion by 2013.

The fastest-growing segment of PLM is for expenditures on cPDm, which covers technologies and approaches such as PDM, collaboration and visualization, data exchange, portfolio management, compliance management, strategic sourcing, enterprise application integration, workflow, functional applications such as configuration management, and solutions for specific industries or businesses. CIM data research indicates that the cPDm portion of the PLM market fell short of forecasted growth for 2008 but still reached $8.2 billion, representing an increase of approximately 8.9% over 2007. Although slower growth is expected in 2009, the cPDm segment is expected to continue its strong growth to exceed $12 billion by 2013 for a CAGR of 8.6% (as shown in 3)
4.4 Supplier Rankings:

While there are many companies participating in the PLM market, a few have distinguished themselves as “PLM Mindshare Leaders.” These companies are typically considered to be at the forefront of the market in terms of either revenue generation or thought leadership. With broad-based capabilities that support a full product lifecycle-focused solution, the group of PLM Mindshare Leaders for 2008 includes Dassault Systems, Oracle, PTC, SAP, and Siemens PLM Software. Rankings and statistics in subsequent s reflect the ongoing consolidation within the PLM industry as it matures.

The shared core and partner revenues can greatly expand the visibility and impact of a supplier in the industry, generating a significant market footprint. Based on these combined revenues, the global PLM market presence (no double-counting of revenues and royalties) for the PLM Mindshare Leaders is shown in 4.

Dassault Systems was the PLM market presence leader in 2008. The income generated by IBM's Dassault-based PLM services business is a significant contributor to Dassault's market presence. Siemens PLM Software, PTC, and SAP also exhibited strong and growing partner programs in 2008, and these provide a positive impact on their overall market presence as well. Direct PLM-based revenues from these mindshare leaders are shown in 5.

Every year, PLM-related technologies and services are provided by several companies representing all sectors of the PLM industry. To illustrate this increasing and wide range of companies that participate in the overall PLM market, the suppliers of PLM-related solutions that derived the most revenues from the market are shown in 6. As can be seen from the companies shown, many of these companies do not compete with each other, but focus on a variety of different aspects of PLM. In many cases, these suppliers are partners in provided more complete solutions to the PLM market.

Reinforcing the growing strength of the PLM market, there are seven companies with revenues of more than $1 billion as seen in 6.

4.5 A Wide Range of cPDm Providers:

A widely-diverse group of suppliers provide cPDm solutions and services. However, the same PLM mindshare leaders are also the mindshare and market presence leaders for the key cPDm sector of the PLM market. CIM data's analysis of cPDm market presence for the PLM mindshare leaders is shown in 7 and illustrates the impact that partner revenue has on a supplier's cPDm PLM footprint.

Siemens PLM was again the cPDm market presence leader for 2008, with both significant direct revenues and strong partner revenues from HP Consulting and its other partners. Dassault Systems was second with IBM generating the significant portion of its partner revenues, followed by SAP, PTC, and Oracle respectively.

As can be seen in the 8, the leader in cPDm-only direct revenues for 2008 was SAP, which continues to generate substantial cPDm revenues by selling within its installed base. All of the vendors shown in 8 had growth in 2008 as adoption of cPDm solutions as part of PLM strategies continues to grow. A lot of these organizations generate a substantial portion of their revenues through services.

4.6 All Sectors Continued to Grow:

Looking deeper into the fast-growing cPDm sector of the overall PLM market, CIM data statistics indicate that cPDm growth continued in all industry and geographic sectors for 2008, with 37.5% of PLM business from the Americas, 39.5% from EMEA (Europe, Mid-East and Africa) and 23% from the Asia Pacific region. Asia-Pacific was dominated by Japan, while continued investment by solution providers in China and other AP countries helped increase growth across the region during 2008.

Companies in a wide range of industry segments invest in cPDm. Automotive and high-tech continue to be the largest cPDm adopters in 2008. Aerospace and defense (A&D) and Fabrication and Assembly (F&A), which consist of machine tools ,white goods, retail and apparel, and others, had solid revenues. The process industry sector has solid growth. This consist of consumer-focused process industries (consumer packaged goods, food and beverage, and pharmaceuticals), petrochemical, and utilities. The ‘Other' category (insurance, financial services, etc.) showed increasing adoption of PLM by those non-traditional industries. This across-the-board development demonstrates the universality of PLM in providing the business value across such a diverse spectrum of industries.

4.7 Future Outlook:[5]

The PLM market remains robust and will continue to have solid growth over the forecasted period (2009 through 2013) as companies continue to invest in solutions that can provide them with a sustainable business advantage and profitability. The cPDm segment of the PLM market will be the fastest-growing segment as companies invest to better leverage product and plant information across the lifecycle from concept, through manufacturing, to service and operation. Development of PLM's definition and scope will continue to fuel growth in both services and software as PLM becomes more essential and embedded within a business' overall enterprise.

(Enabling Profitable Growth for SMEs)
5.1 Executive Summary:

Aberdeen Group research shows that, like larger manufacturers, small to medium-size enterprises (SMEs) are focusing their product strategy on revenue growth in combination with cost reduction - to achieve profitable growth. However, as they pursue these goals, key targets such as product launch date, product development cost, product cost, and product quality are being missed. What is the cause for this gap between goals and performance? First, SMEs face the same increasingly complex product innovation environment as large manufacturers - including faster product commoditization, globalization, outsourcing, and demand for more complex products - and are more keenly affected by time-to-market pressures. Yet their product development processes are frequently out of control or at least inadequate to simultaneously address these challenges. This Aberdeen Group research examines these issues, how SMEs are responding by implementing PLM software, and the challenges these smaller companies face when implementing new solutions. The study further analyzes what top performers are doing to overcome their implementation challenges in order to recommend practical actions that SMEs can take to improve their product-related processes and compete successfully in the complex global environment.

5.2 Key Business Value Findings:

Aberdeen Group benchmark research shows that many SMEs are responding to the product innovation challenge by proactively focusing on product-related processes by planning for PLM solutions. Those that have done so are achieving significant performance improvements, including increased revenues (19%), reduced product cost (17%), and decreased product development cost (16%). Those SMEs that are engaged in PLM planning are looking to improve in the following critical areas:

• Control over product data and related project, product development, and program execution to handle the increased complexity of product data and the growing size and diversity of distributed product development teams

• Design and project collaboration - to include processes and expertise from multiple parties earlier in the design process to optimize designs for manufacturing and sourcing, reduce product cost, and support parallel work to decrease time-to-market However, SMEs face some unique challenges with PLM arising from their size, including the cost of implementation, the need to change business processes, and a lack of internal resources. Fortunately, software vendors are beginning to address these needs by offering solutions that facilitate PLM adoption. These include predefined workflows, data configuration templates, and industry-specific functionality, which reduce implementation barriers and provide a starting point for creating and automating processes that help to improve product development performance.

The PLM for Small to Medium-Size Manufacturers Benchmark Report All print and electronic rights are the property of

5.2.1 Implications & Analysis:

Leading SMEs are, in fact, adopting PLM solutions that lower implementation barriers with tools including templates, industry-specific solutions, and best practice processes and then adjusting them as necessary. However, many SMEs find these implementation aids unavailable when they need them, indicating a gap that SMEs must deal with during implementation. Furthermore, to reduce the effort required for technical deployment, many leading companies also choose hosted and software-as-a-service (SaaS) solutions rather than buying the software and implementing it in-house on their own technical infrastructure.

Finally, best-in-class SMEs make changes involving people, organizational structures, performance measurement, and business processes - in addition to adopting PLM systems. These companies are more likely to create organizations geared to integrate the product development process, coordinate product management across departments, and put in place key performance indicators to monitor the success of their product development processes.

5.2.2 Recommendations for Action:

Based on research findings, Aberdeen Group recommends that SMEs seeking to improve product innovation, product development, and engineering processes - in order to compete and win in the global environment - should take the following actions:

• Educate themselves on PLM including the implications of PLM outside of departmental and company boundaries, for example, with supply chain partners.

• Pick the right starting point by starting with a tangible business problem that they can solve and implementing a solution targeted to solve that problem as a foundation on which to build their full PLM solution.

• Look for PLM solutions that provide templates to common business processes and best practices and modify them if necessary, so they don't need to rethink every business process in an attempt to improve it.

• Seek solutions that fit their industry, through specialized solutions or industry templates.

The users will be more readily adopted to the software that provides a better fit.

• Include organizational, process, and performance measurement considerations in their PLM strategy.

• Consider hosted or software-as-a-service solutions to reduce the technical barriers to PLM adoption.

• Take benefits of the PLM opportunity to achieve substantial improvements. SMEs that do not adopt PLM will be at a competitive disadvantage.

5.3 Issue at Hand:
5.3.1 SMEs Face Product Innovation Complexity:

Manufacturers of all sizes are facing increased complexity in their product innovation environments, including faster product commoditization, outsourcing, globalization, cost pressure, and corporate pressure for growth. Aberdeen-Group's Product Innovation Agenda study indicates that small to medium-sized companies have many of the same challenges as their larger counterparts. Benchmarks of SMEs indicate that about one third outsource production and 22% outsource at least some of their product design, with about 75% having a global product design strategy in place. In addition, about half of respondents polled for this study report that they are facing demand for shorter product lifecycles, confirming previous research that indicates SMEs are even more keenly focused on time-to-market issues than larger enterprises ( 1).

5.3.2 SMEs Seek Profitable Growth, Miss Development Targets:

Despite the added complexity, these companies are not satisfied with simply addressing complexity and maintaining the status quo; they are simultaneously focusing on growth. According to Aberdeen Group's Product Innovation Agenda, companies of all sizes are focusing their product strategies on revenue growth in combination with cost control - to achieve profitable growth. SMEs exemplify this focus, but place even higher strategic importance on cost reduction than their larger counterparts. For many SMEs, achieving profitable growth in a more complex innovation environment is a significant challenge. Aberdeen Group research shows that companies of all sizes are not meeting product development targets. SMEs were benchmarked for this study on their ability to hit the following product development targets:

• Product revenue

• Product launch dates

• Product cost

• Product development cost

• Product quality

These benchmarks were compared with previous measurements of larger companies. The results indicate that the best-in-class SMEs (i.e., the top 25%) are performing at about the same level as the best-in-class larger companies. (See the Competitive Framework Key for definitions of best in class, industry norm or average, and laggard.) Average-performing SMEs, however, are doing more poorly than their larger counterparts and the worst performers - laggards - fall behind even further. As an example, benchmarks for SMEs indicate that top performers hit their product launch date targets between 81% and 100% of the time ( 2), and average performers between 21% and 80% of the time. This middle tier, roughly 50% of SME companies, are clearly demonstrating product development processes that are out of control, making profitable growth very challenging. And laggards, the bottom quartile of performers, are hitting their product launch targets only 20% of the time or less. They show similarly poor results in meeting targets for product revenue, product cost, product development cost, and product quality.

More complex innovation environments…simultaneous demand to increase revenue and decrease product cost, product innovation, product development, and engineering practices that frequently result in missed targets - this set of challenge is difficult for any company to address, let alone small to medium-sized manufacturers that lack the deep pockets and broad organizational resources of their larger competitors. There is visibly an opportunity for improvement.

5.4 Key Business Value Findings:
5.4.1 An Opportunity for Significant Improvement:

Despite the gloomy picture painted for SMEs, there is hope. Leaders are addressing the challenges mentioned in Chapter One proactively by focusing on improving product-related processes to facilitate product innovation, product development, and engineering processes. Although smaller companies appear to be less complex and seem to have less room for improvement because of their size, in fact, these companies are achieving significant performance improvements, resulting in tangible, corporate-level benefits on par with larger companies (Table 1).

Aberdeen Group's Product Innovation Agenda analyzes best-in-class performers to identify common characteristics of top-performing companies. The research concludes that better performing companies are organizing and automating their businesses for innovation, leading to corporate success. In particular, the report disclosed that best-in-class manufacturers are more likely to have product innovation, product development, and engineering led by a central executive; measure performance more regularly; and are four times more likely to utilize PLM-related technology ( 3).

Unfortunately, SMEs have not organized or automated on a par with their larger counterparts.

Aberdeen Group benchmarks show:

• Only 13% of SME currently have centralized product data.

• Over a half have limited procedure automation and collaboration.

Despite the fact that improvements are available, they have not taken full advantage of the opportunity.

5.4.2 SME Are Taking Action, Planning for PLM:

The benefits of PLM are available to SMEs, but these companies have been slower in making progress on the PLM adoption curve. SMEs tend to be more traditional, it often waits for the new solutions to be well proven before it adopts them.

While several of core capabilities of PLM application has proven track records, today's expanded PLM solutions that enable collaboration, control, and communication of product innovation data and processes mark a recent shift from defining PLM as a group of traditional design-related tools.

However, SMEs are now planning to act: 17% of small to medium-size manufacturers indicate that they will be pursuing PLM solutions in the next 12 months. The peak areas of investment are control-oriented solutions, which includes those that develop control over product data and related product development projects.

a) Improved product data management:

The increased complexity of product data, as well as the growing size and diversity of product development teams, creates a need for tight data controls. As a result, revision control, security management, search capabilities, and maintaining “one version of the truth” in regards to product information now comprise an essential foundation for a PLM infrastructure.

• Improved project, program development execution and product. Faster project times, cross-functional teams, and dispersed resources require better control and communication in order to prevent mistakes and rework. Management of tasks, timelines, deliverables, approvals, and status extend core product data management with business process automation and project management capabilities to coordinate activities in addition to data. In addition to seeking better controls for data and processes, SMEs are also looking to involve more parties in their design and development activities through collaboration. Shorter product lifecycles and rapid response to market demands are critical to SMEs' success and require parallel design, development, sourcing, and marketing activities. Collaboration infrastructure and tools allow companies to incorporate input from multiple parties early in the product development process to enhance designs and prevent rework.

• Collaborative design. The increased focus on optimizing product lifecycle impacts earlier in the design process - for example, design for manufacture and design for sourcing activities - are creating a demand for broader participation in design processes. In addition, many companies are including suppliers and other third parties in the design process to leverage external expertise. Sharing designs and gathering feedback, whether online reviews, embedded in documents, through remote access to files, or with visualization technologies, provide the opportunity to build designs right the first time - enhancing time to market, product appeal, and product quality.

• Project collaboration. Today's multi-disciplined project teams frequently cross department and even corporate boundaries. Project velocity requires that all resources work on the same information, with tight synchronization. Project collaboration tools provide shared access to deliverables, documents, project data, and tasks as well as promote and coordinate product development efforts.

b) SMEs Report Multiple Opportunities for PLM

Many PLM solutions provide broad and varied capabilities and, therefore, offer many opportunities to improve. In addition to the actions being pursued SMEs are targeting improvements in all aspects of their product innovation, product development, and engineering performance. The following improvement initiatives are also being pursued by survey respondents:

• Design for Lean

• Increased reuse of designs and parts

• Concurrent engineering

• Digital manufacturing/manufacturing process management/simulation

• Product simulation/virtual prototyping/virtual assembly

• Design for Six Sigma

• Design for mass customization/“to order” manufacturing

• Design for sourcing/total cost management

• Design for serviceability

• Enhanced portfolio management

• Design for environmental and regulatory compliance

c) SMEs Face Unique Challenges with PLM

In response to increasing complexity and strategic directives for profitable growth, many SMEs are planning to improve product innovation, product development, and engineering processes with PLM technologies. SMEs face challenges when considering or implementing PLM, however, that are unique to smaller-sized organizations. In particular, they frequently do not have the same resources available and are often daunted by the effort to make the business changes required when adopting PLM technologies. In other words, operational improvement does not come without change and requires investments beyond the cost of the software. In fact, less than one third of participants in this SME benchmark mentioned the cost of a software package as a challenge to adopting PLM solutions. Their concern, instead, was focused on successfully incorporating the solution into the business

* Cost of implementation: Implementations of enterprise software solutions require acceptance and adoption - i.e., regular use - by the business in order to provide value. To achieve successful adoption, companies must assess their business processes, identify the changes to be targeted and the solutions to be deployed, and train users to take advantage of them. An implementation may also involve integration with existing systems although many smaller companies choose to integrate PLM solutions relatively loosely in early implementation phases. However, the cost of implementation may become a barrier if solutions are too complex, require significant configuring, entail software modifications, or force companies to rethink business processes from scratch. While some companies are looking for fundamental transformation, other companies prefer smaller, incremental changes that provide short term business value by showing a timely ROI.

* Necessity to change business procedure: Change is hard. While no company should expect to achieve significant benefits without enacting change, many companies feel that they must conform to the business process built into the software. The greater the changes to business processes, the more effort required for training, documentation, and user acceptance. Often, SMEs must create a balance: changing processes that enable a business advantage, for example by implementing a best practice, but not changing other in-house practices that may be “good enough.”

* Necessity of internal resources: Smaller companies may be able to approve funding for software and implementation, but then face roadblocks in assembling the appropriate project team. Implementing new solutions that help to enable a business change will not be effective unless users adopt them. Making business-knowledgeable employees available to help craft the new processes and determine how to use the software is important to ensure that new business processes fit the business. Typically, companies need to invest their top internal talen

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