Business Benefits from PLM Transformation

Lionel Grealou Digital 3 minutes

Following on from my previous post on PLM Transformation

Full PLM‘ transformation is about aligning PLM vision and strategy with business requirements from Product Creation, Manufacturing, Marketing and Sales, Finance and HR functions, in a holistic and integrated manner. This is to drive benefits across all functional areas and include resource efficiencies, Research & Development cost savings, supplier cost savings, material cost savings, reduced assembly hours per vehicle, serviceability efficiency, etc.

Business drivers addressed by PLM comes from a combination of business objectives (non­exhaustive list) aiming at: (1) increasing product and service portfolio, (2) reducing time to market, (3) improving product, service and process quality, (4) reducing cost and improving efficiency across the enterprise, (5) accessing new talents, (6) enabling decision making, (7) reducing risk, and (8) enabling change.

Typical measurable business benefits from PLM transformation initiatives include a wide range of business improvements, such as:

  • Using a single Bill of Material (BOM) approach that represents a ‘single source of the truth’ so that master data is created once and consistently used many times (eliminating waste – e.g. multi­BOM synchronisation and various related inefficiencies); this should enable engineers to focus on designing new products, rather than spend valuable time maintaining BOMs.
  • Using product visualisation capability to review key ‘building data’ attributes, such as cost, weight, material, special relationships, both static and dynamic, etc. and reconnect the management to making decision with the product in sight (rather than looking at spreadsheets in isolation); this assumes accessing the right information at the right time through shared knowledge resources supported by a well­-integrated and holistic Building Information Model (BIM) – e.g. to enable manufacturing tooling change cost impact analysis while making design change proposals.
  • Accessing visualisation data and relevant PLM dashboards from mobile devices to connect the teams back to the product – e.g. visualising material, weight, cost or other ERP attributes onto the product Digital Mock­Up (DMU) on portable devices with light and accessible data.
  • Integrating the extended enterprise into using common processes, including offshore / low cost delivery centres, suppliers and partners (e.g. Joint Ventures), and supporting Product Creation growth globally (operational scalability).
  • Enabling effective management of product data includes the entire value chain – the entirety of all the processes, both inside and outside the company, touching product data from at any and every stage of the product life­cycle.
  • Enabling seamless PLM­-ERP integration – e.g. to allow new parts in PLM to be published to ERP, configuration engine supporting for PLM and ERP critical processes, or cost management driven from ERP to be reflected into PLM.
  • Supporting increasing product business requirements, including electronic software system and system engineering requirements which are growing fast.
  • Prioritising business improvements based on expected recoverable benefits across the entire product life­cycle – while removing hidden factories (non­ value­-added activities hidden or embedded in any process operation) in organisations, reducing the number and complexity of interfaces, and simplifying the supporting IT landscape and architecture.
  • Managing PLM deployment in waves – of various sizes and duration depending on the business case which need to encompass for business and cultural readiness, business growth priorities and pain points.

These benefits directly translate in resource efficiency, ER&D cost savings, material cost savings, supplier cost savings, IT cost avoidance, cost of ownership reduction, etc.

What are your thoughts? 

This post was originally published on LinkedIn on 21 January 2015.

About the Author

Lionel Grealou


Lionel Grealou, a.k.a. Lio, helps original equipment manufacturers transform, develop, and implement their digital transformation strategies—driving organizational change, data continuity and process improvement, managing the lifecycle of things across enterprise platforms, from PDM to PLM, ERP, MES, PIM, CRM, or BIM. Beyond consulting roles, Lio held leadership positions across industries, with both established OEMs and start-ups, covering the extended innovation lifecycle scope, from research and development, to engineering, discrete and process manufacturing, procurement, finance, supply chain, operations, program management, quality, compliance, marketing, etc.

You may also like: