Small Businesses: Building the Case for PLM Adoption

January 5, 2009

PLM is a catalyst for trimming the fat off design and development processes.

By Alex Zeltcer, General Manager, ENOVIA SmarTeam

In the current economic crisis, companies across the world -- regardless of their size -cannot afford to spend money unwisely. Every major purchase they make represents a substantial investment, one that can provide both immediate and long-term returns. While large enterprises often have a huge global infrastructure to rely on despite cyclical, region-specific downturns and the financial backing to keep them afloat when times are rough, small businesses do not. Small businesses are most vulnerable because they are less insulated from the effects of recession than their larger competitors and depend on consumer spending to survive.

In the world of manufacturing, the "consumers" are large enterprises: OEMs (original equipment manufacturers) who turn to small businesses for individual parts and specialties, rungs on the supply chain ladder. With so many niche manufacturers in existence today, the competition to remain in the good graces of major OEMs is critical. If a small business can't keep up with the demands and speed of its OEMs, it will soon find itself cast aside or replaced. To make things worse, small manufacturers face the same challenges as OEMs and then some; they have to deal with international competition, the demand for shorter product lifecycles, the need to develop more complex projects and products and juggle them simultaneously, the constraints of being part of a supply chain and, to top it off, they don't have the resources or money to absorb additional risk.

This is one of the reasons why smaller manufacturers have traditionally been reluctant to embrace product lifecycle management (PLM) -- the process of managing a product through its entire lifecycle, from discovery to delivery. To many small businesses, PLM seems like a tremendous undertaking. However, it is a boon for manufacturing operations and very achievable. However, PLM has been the cornerstone of OEM operations for more than a decade now, and small manufacturers now more than ever need the ability to create new products and deliver them within three to six months. They need to maintain solid communications with global offices and partners to increase efficiency and guarantee that high-quality products are delivered on time and within budget constraints. They also have to address international regulatory compliance in product development when doing business with foreign suppliers and/or OEMs in order to reduce risk of financial and corporate penalties (ITAR is a prime example). In other words, they must deploy PLM.

Nevertheless, PLM should not be viewed as a task designed to complicate day-to-day business; it is, in reality, the complete opposite -- it simplifies operations. With PLM in place, small businesses can get the same or greater return-on-investment in less time and with fewer mistakes. PLM is a catalyst for trimming the fat off design and development processes, particularly in terms of collaborative engineering component standardization, change management, intellectual property cross-applicability and mechatronics. It reconciles the needs for competitive advantage and innovation simultaneously.

The benefits of PLM are significant:

  • Increased product innovation (by using new product introduction methods within a single engineering platform, from concept to delivery)
  • Better global product development (by streamlining global innovation networks)
  • Increased profitability (using existing products and developing new modular products that can be cross-applied to other applications)
  • Shorter time-to-market and greater ROI (by lowering manufacturing and re-design costs while developing better-performing products)
  • Stronger handle on quality, costs and delivery times (by integrating change management processes and instigating real-time decision making across the business)
  • Improved customer (OEM) fulfillment (by meeting demands and incorporating customer needs and specifications throughout the design and manufacturing processes)

In order to start deploying PLM, small businesses need to start, appropriately enough, small. The first step is managing the design environment by creating the foundation for PLM with product data and CAD data. After that, the company should broaden their implementation to address the entire lifecycle of the product, from concept to manufacturing by taking an item-focused approach incorporating a bill of materials (BOM) based on the said PLM foundation. Once these elements are in place, the company should integrate PLM with other enterprise-wide processes by collaborating with other branches, partners and clients.

One important thing to keep in mind is that a small business won't get anywhere with a PLM initiative without explicit buy-in from its end-users. They will be using the product, and therefore, what they want directly impacts every element of the manufacturing process. The bigger the small business's PLM deployment, the more tangible the benefits are for the speed and quality of the product. In all estimations, this should translate into broader acceptance and adoption by the company's engineers as well.

PLM is not an overnight undertaking. It involves a great deal of resources as well as solid planning and dedication. This is why small manufacturers should adopt a phased approach to deployment, tackling each area of implementation one-by-one. It's like eating a pizza; it's more effective to eat it slice by slice rather than trying to consume the entire pie at once. After all, PLM should make manufacturing processes simpler, not create problems where previously there were none.