PLM, Design Quality and Cost of a Product

February 9, 2010

I want to continue the topic I started yesterday about Value Engineering and discuss how PLM can be potentially used to manage cost of a product. In my view, cost is a very sensitive and complicated topic in the organization. When PLM is normally mentioned as a tool that allows us to manage and optimize product cost, in practice I see the cost topic as pretty complicated. Before discussing what practices I can apply in PLM to manage product cost, I want briefly review product cost components.

Product Cost Elements
There are quite many cost elements. I made some diagram to figure out them below. The main total product cost combined from Direct cost and Indirect cost. The major part of direct cost is material cost. Additional components of direct cost are purchased parts, labor and tooling. Indirect cost combined from Overhead, Selling Expenses, profit and discount. Direct and Indirect costs together can be presented as a product list price.

There is additional cost classification terminologies that apply to elements I just mentioned. Manufacturing cost is  combined of variable and fixed cost. Total cost combined from manufacturing cost and selling expenses. Finally, there is the selling price combined from total cost and profit.

Product Cost, Design Cost and PLM
If we will analyze all cost elements and compare it to the design cost, we can learn that design cost is insignificant in comparison to the manufacturing cost. And this is a very important observation, in my view. On one side, design cost, itself is very small. However, on the early design stages, we have a very significant impact on manufacturing and total product cost. It means that by improving design cost, we can get significant improvements and decrease product cost. It also means, that if the company is using PLM system that allows to estimate a final cost of the product on the early design stages, it can be huge benefits and can influence overall product design and manufacturing.

What is my conclusion today? I think, cost analyzes is something that should be considered as an important part of PLM system implementation. PLM has a potential to become a system to handle all cost related data and provide total cost estimation based on current design options. From what I know, such implementation happens rarely today. My hunch is that PLM implementations and technologies today are struggling to integrate systems that responsible for the cost related information – design, ERP, requirements, supply. I’d be interested to hear what are your practices in the cost management during design phase and later? Does it seem as an important issue for you?

Just my thoughts.
Best, Oleg


Does PLM Behave like Deep Web?

March 20, 2009

I’m sure you have heard about Deep Web. For those who are not aware of this term,  Deep Web, (also known as Invisible Web)  is part of the Web which is not accessible by search engines. Even if Google has reported passing 1 trillion indexed pages, this is still only a small fraction of information available on the internet.

 I see that this story is very similar to what is happening in the backyard of PLM. PLM is trying to manage information about products from the initial idea of the product through to its disposal. Although there are lots of design models, engineering bill of materials, manufacturing plans, sales plans, and support reports, it looks like PLM is still catching only a small fraction of Product Lifecycle Data available in the organization.

 So, what is the main problem? I think that, content is the biggest PLM problem. This content – designs, different kinds of bill of materials as well as supplier’s bids and support claims etc. –  are hidden from most of the organization and is therefore unmanaged by PLM systems. How can we improve it? In my view, the ultimate goal should be to make PLM-related content available in an open format. Don’t get me wrong – I’m not talking about “another 3D format every CAD system can read/write”. I’m talking about an open format that allows us to expose PLM-related information in a way that it will be accessible in the manufacturing organization and beyond.

 This time I don’t have a recipe for how to cook up the next steps. I think that PLM and related industries have taken many steps in standardizing CAD/CAM/CAE data by inventing  multiple formats. However,  most of them, as well as initiatives around their creation, have been rather unsuccessful. IGES and STEP have been used widely. I think PDF is mostly used as a stable format for long term storage, but this is far from providing the ability to manage content.

 I will be glad to hear about your experience in this field as well as about developments I may not have discovered  (As I’ve mentioned, Google cannot yet dive into all the data available in the Deep Web Water :)).

CAD/PLM Robot Swarms

February 27, 2009

I was inspired to see Josh’s post on Solidsmack – Your Future 3D CAD Interface May be Soft, Cozy Memory Foam. I think this is a great idea for an alternative user experience for CAD and design, which will make it more adaptive and user-friendly.

I find the research related to the usage of nano robotic devices very interesting. These devices are so small that they can be controlled by a sort of mixed virtual/physical environment that allows you to use CAD models and change them with your hands. This prototype of robot swarms, according to the article, was created  by researchers at Carnegie Mellon University



 I hope you enjoyed this video. I understand that it looks like a dream, but sometimes today’s dreams become tomorrow’s reality…

SolidWorks World 2009 is Ready for PLM!

February 5, 2009

SolidWorks World 2009 in coming to Orlando next week and I’m preparing to blog about this. And, yes… I’d like to start a discussion about how the SolidWorks community is ready for PLM. Compared to many SolidWorks visualization tools, many customers find PLM and anything to do with data management just plain booooring… But if you take another minute and think about it a bit more, you might think differently… We are in an economical downturn. This is a perfect time to show some additional areas of focus rather than concentrating only on the newest and latest set of SolidWorks features. That’ s not to say that features aren’t interesting – I am sure they are all great and will be perfectly delivered by my colleagues from DS SolidWorks Corp.  What I am saying is that this is an opportunity to leave features alone for a bit, and speak more about PLM.

 PLM can help you practically to get better control over the cost of the products you design and manufacture. I’m sure that you know that 80% of the product cost is defined during the design phase. You can establish the right environment in which you control design, engineering and manufacturing information at the same time in the PLM system. This is possible by supporting Item Masters and multiple Bill of Materials. As soon as you will be able to produce an engineering and manufacturing BOM, and visually compare and synchronize changes, you will be able to optimize your product cost during the design time, since you will already be taking manufacturing and supply chain information into consideration.

 Imagine that you can access the engineering and manufacturing Bill of Materials directly from your SolidWorks environment, collaborate together with manufacturing planning engineers on the same Bill of Material structure, and optimize your changes together. PLM tools will allow you to work in cycles together with your engineering and manufacturing colleagues. At the end of the design phase, you will have a “ready for production” Bill of Materials. You will be able to get rid of all the excel spreadsheets you are using today to produce multiple Bill of Materials. These will be replaced with tools integrated into SolidWorks. You can see some examples of SmarTeam PLM interfaces with SolidWorks bellow.

Multiple Bill Of Material Editor

multiple bom editor

Compare Design to Manufacturing Bill of Material in SolidWorks.

Design to Engineering BOM compare in SolidWorks Environment

 I hope this has sparked your. I will keep blogging on these topics during the next week, live from SolidWorks World, and look forward to seeing you all next week in Orlando. Let’s keep our fingers crossed for good weather (compared to what I’ve been experiencing lately in Boston, Mass :)).



Use Predictive Modeling to Decrease Product Cost during Product Design and Development?

January 28, 2009

We are all concerned about how to decrease product cost. This is a top priority of users in today’s economic situation. But it was also a priority before 2008/9. Our primary goal is to provide systems that allows control over the cost of products. Since 80% of product cost is already defined at the stage of design and early product development, predicting cost, in my opinion, should be on the short list of PLM product developers and implementers.

 “Predictive modeling is the process by which a model is created or chosen to try to best predict the probability of an outcome” (Wikipedia).  Sounds complex, right? But predictive modeling technologies based on statistical data analyses are widely used today. Many systems analyze historical data and predict future behavior. A similar example of predictive modeling usage in PLM systems is evident in Customer Relation Management (CRM) Systems are analyzing customer level models to predict customer behavior in the future. For example, health care systems analyze existing customers to predict high-risk members; telecom operators use predictive analyses for cross-sell opportunities (by analyzing product combination patterns purchased by other customers), as well as customer churn. 

Now, how do you implement this? In my view, this is all about connectivity between your systems. Today’s design and engineering are very localized and have a limited view on what is going on outside, how customers uses their products, what happens with service departments, etc. If systems are to establish a connection between particular design decision and customer defect reports, extra expenses by suppliers etc., this information can be potentially reused to predict future cost and product defects. Even if it sounds ahead of its time, I’m pretty sure our future is there. More practical examples of predictive engineering are in the areas of FEA and other engineering analyzes. Accumulating statistical data in this area can provide good prediction results for product design connected to customer experience.

 I’d be glad to discuss with you potential scenarios of predictive modeling usage and… may be you already have some of them implemented… who knows?



Get every new post delivered to your Inbox.

Join 290 other followers