How PLM can Remove Business Waste?

I’ve been attending Technia PLM Innovation Forum early this week in Stockholm. My conclusion from this forum is that all organizations are looking how to optimize their performance. The organizational objective is to keep their margin model. The margin model is something that very fundamental to every organization. To change margin model is one of the most complicated changes. In order to keep margins, organizations need to find ways to optimize business characteristics that can help them to keep this margin model in changing outside conditions. One of the possible ways to do is to review your wastes? Waste removal has a direct implication on margin model and overall profitability of an organization. Can PLM help you to improve your situation and help to remove your Business Waste? I identified three potential business wastes that can be handled by a successful PLM implementation:

Process Inefficiency
The bad process organization can kill any organization. How to optimize? A lot of business wizards and software geeks are trying to resolve this problem. A whole discipline – Business Process Management and Optimization was developed to handle it. However, the successful process implementation is a very complicated task. PLM implementations can bring pain relief in this space. Look on the following few pics. Processes is really complicated story:

However, the focus on how to make process implementation more dynamic is very important. Future will not be well-defined. In the future we will need to face ad-hoc process optimization. This is going to be a big deal for PLM vendors. 2-3-year implementation plans are not an option anymore.

Increased Cost
To manage cost is very complicated task. However, to understand a cost is extremely important. What tools can help you to do it? ERP and other financial tools are controlling 20-30% of cost. Rest is defined during product designs. Can PLM help? Definitely! To have cost-related decisions embedded into a product development process, can be a next frontier for PLM implementations.

Low Productivity
The last, but very extremely important. There are two aspects – organizational productivity and personal productivity. PLM is mostly focusing on organizational productivity these days. Team collaboration, data management and access. However, PLM Is under-serving personal productivity segment. This is where I can see the next focus. To improve personal productivity, we need re-consider lots of things – data availability, devices and mobility, flexible process changes, etc. This is a big think, in my view.

What is my conclusion? Coming decade is going to change a lot in the business of many companies. The question how to improve productivity and remove waste becomes more and more important. Will PLM companies be able to propose solutions to solve these problems? A very good question. I have no answers today.Do you?

Best, Oleg

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2 Responses to How PLM can Remove Business Waste?

  1. Chandrajit says:

    Thanks for your thoughts. I also think in same line that no definitive answer to this question.I think PLM solutions need to think out of box & try to get out of the conventional theory.This issue needs to be looked from different perspective – Like what all innovative ideas available with us to quickly & effectively implement the complicated business process.I am quite sure in next decade Implementation turnaround time will get decreased. Also I am confident that with future technologies give us good chance to tackle this situation/issue.One could be we can think of social way of managing the process but that’s in very ideal situation when Global PLM deployment considered:). One more point is standardizing the process to some extent will help? but that needs lot of discipline which again looks like a gray area.

    Regarding the cost factor in Product Development process, I agree this could be next step in PLM arena.The question is how are the organizational Product Development processes are organized now? Are they considering the cost factor. I think still this information is available in bits & pieces – so no central repository to give the overall picture, hence its difficult to take decisions based on this.

    Just my thoughts!
    - Chandrajit

  2. Chandrajit, the implementation time is one of the most critical factors. Companies won’t be able to afford 1+ years of implementation processes. It will not be a normal case in 2010s. The cost perception is more complicated. I believe people will think more about smaller “services/apps” rather than big suites. The networked organization of business processes will become more popular. Could you, please, take a look on the following post from yesterday – http://beyondplm.com/2010/09/20/plm-mobile-networks-big-time/. Best, Oleg

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