What I Learned: PLM is an Industry Affair - or is It?

What I learned this week … came from
a conversation on the PLM Group on LinkedIN on
“Product Lifecycle Management - Not just for CAD/manufacturing
centric organizations anymore?” We
have been discussing the expansion of PLM into non-CAD-oriented
industries, and today I saw a great comment by Vinod Kumar about
the need for a holistic PLM system with varying industry focuses. I
am contributing back to that conversation on a number of Vinod’s
points, but one of his core conclusions - that there will be a
“holistic PLM solution with varying industry
specific focus” - is worth a bit deeper discussion.

With the risk that any analyst takes by surfacing old research
(namely looking like an idiot), I am reviving my 2003 article on

“PLM is an Industry Affair, or is it?” because I felt the
same way then as I do now. That one holistic solution is
probably not the feasible answer. It is a great goal, and
I will eat my words when someone produces it, but I have serious
doubts. Let’s talk about why.

PS - Thanks to all of my friends on the PLM
Group for starting a great discussion, this is exactly why I enjoy
social networking. I think we all stand to learn a lot when like
minds share thoughts and experiences.

Overview
Our conversation on the group so
far has discussed the expansion of PLM into multiple industries,
some even surprising to me:

• Consumer Packaged Goods (CPG)
• Food & Beverage
• Personal Care/Cosmetics
• Apparel/Footwear/Retail
• Oil & Gas (some interesting connections with BIM - Building
  Information Management - for facilities happening here as
  well)
• Specialty Chemicals
• Life Sciences (including medical devices)
• Infrastructure (like roads and railroads)
• Service Industries (healthcare, banking, telecom, etc.)
• Publishing houses (for books, although this was an “I would
  like to see” comment)

Each of these industries has their own way of doing things. Some
are because the industry has unique requirements
(assembling a plane is very different than formulating an adhesive)
and others are just industry tradition. For
example, I was always amazed that coiled products like steel and
paper are sold by weight as opposed to length “because that’s the
way everybody does it.” The big question is whether you can
support all of them (or maybe support just the important ones) with
a single solution with templates, switches, and add-on
modules that address industry needs. That was the approach
in ERP, and it resulted in unwieldy, overweight and brittle
solutions. Now, even though software technology makes managing
different industry configurations easier, many enterprise
applications that are sold as “one system” are actually
different versions by industry (or by a group of
industries). What I am saying is that it is not impossible, but at
some point the software vendor has to ask themselves whether they
are really saving time/effort by having one system or if it would
be easier to support multiple solutions. I have seen it go both
ways.

On the other hand, more industry-specific solutions are
available. I have always been a proponent of the specialty
vendors. They have the luxury of building a solution that only has
to work for a select set of circumstances within an industry, so
they can afford to go deep. But they face the challenge of
scalability, and have to find the right partners to be
able to support their solutions on a broad scale. I ran product
management for one such company, and I can tell you it was
a lot easier addressing customer enhancement requests when
everybody wanted the same basic things. I did not have to
pick and choose between which industry got what enhancement, or try
to build a single solution that would try to address too many
scenarios. On the other hand, I had a much smaller army of
developers working with me than the likes of an SAP or an
Oracle.

Relevant Past Discussion and Perspective
The conclusion of my first article on the industry affair concluded
that:

“When evaluating the applicability of a PLM solution, it is crucial
to define the problems to be addressed in advance. Depending on the
needs to be addressed by the PLM solution, industry may play a
critical role. As a general rule, the closer the PLM solution gets
to the design and production of the product itself, and the more
complicated the product, the more industry will play a
role.”

I think that is still as true today as it was then. I wouldn’t
write the paper exactly the same way today as I did then(things
have changed), but I think the core still holds true. So as much
fun as it would have been to poke fun at how wrong I was, I am
happy to have this paper back in the spotlight. For a little while,
at least. 

One of the biggest surprises to me in re-reading the old article is
that I used “technology transfer” - promoting products from
engineering to the plant - as an example of industry-specific
functionality. That is an area of PLM that hasn’t developed nearly
as far as I thought it would have by now. Why? Could it be that it
is so specific to individual industries?  And my second
example of industry specific capabilities, product
cost management, is also behind the level of
maturity that I believe they should be. On the other
hand, portfolio management has progressed nicely, and it is
generally applicable across manufacturing industries. Do
you think that this is a coincidence, or a telling sign that
general functionality gets more investment than industry-specific
capabilities?

Implications for Manufacturers?
Today, the
decision is clear. Five years later, there is still no one PLM
system that does everything any business needs, let alone one that
covers all industries. This leaves companies with a clear cut
decision:

• Go Generic - You can buy a cross-industry
  package, and it will probably serve you very well. You will
  probably enjoy a larger vendor with more stability and
  resources, but lack as much influence on their product and their
  business. You will get more cross-industry capabilities and
  infrastructure investment because it is shared across a larger
  number of customers. But you will not have the same custom fit of
  an industry focused solution, and you made to customize it for your
  needs. Before I get in trouble, most of the “generic” solutions are
  not generic anymore. They have been tailored to specific industries
  by the vendors, who are (for the most part) aiming for the “one
  holistic solution” approach by applying templates and add-ons to a
  core solution. These solutions, such a those from Dassault Systemes, Oracle (Agile),
  PTC, Siemens
  PLM Software and even SAP
  should be evaluated.

• Go Specialized - The other option is to buy an
  industry-specific solution. These solutions will use the same terms
  that your company is used to, provide deeper solutions for your
  specific needs, and address the nuances of your industry. The
  trade-off tends to be that you will be working with smaller
  vendors. But working with a recipe-centric solution like those from
  Enginuity PLM, Infor
  (Optiva), Selerant or
  Linx/AS probably will give you
  better control of your formulations, and will have the formulas
  more tightly integrated to the rest of their solutions. In the same
  way, apparel-centric solutions (with apologies too many to list and
  might be worth a follow up post, but here are my thoughts on the
  Apparel
  PLM vendors as of a year ago) will handle sizes and colors
  within a style much more naturally than a solution built from a
  parts-subassemblies-assemblies perspective.

So I said the decision is clear, but I didn’t give the answer.
As I said in the original article, you need to determine what’s
important to your business, both in regards to the software product
itself and all of the other factors that go into choosing a vendor.
Five years later, and the larger suite providers have all
made significant progress in industry-specific solutions, but they
still have a ways to go. Also five years later for the
specialty providers, and most of the specialty
players are still around (with the exception of a
few, and those that have been acquired by “the big guys”). In fact,
my guess is that there are more industry specialist PLM
vendors today than in 2003.

So that is what I learned this week, I hope you found it
interesting. Let me know what you think.