PLM Impact on Organizational Cultures (and the reverse)

Lionel Grealou Engineering, ERP, PLM Leave a Comment


Product Life-cycle Management (PLM) defines how people create and manage products, following a New Product Development & Introduction (NPDI) process, with the digital information that supports digital product development and digital manufacturing. PLM impacts how people and organizations (departments) operate and collaborate, what processes are used, what data is required, how data is created and maintained, how information and knowledge is shared across the enterprise, how people and departments are structured to operate in the environment, and what tools and IT solutions support the processes. PLM reflects and influences ‘how things are done‘ in the organization, which can be characterized by the following attributes:

  1. The dominant characteristics of the organization (what are the dynamics)
  2. The leadership style that permeates the organization (how things gets done)
  3. The organizational glue that holds every thing together (how interactions take place)
  4. The strategic emphases that constitute the organizational drivers
  5. The Critical Success Factors (CSFs) that determine how success is define for the organization – typically in the form of a Balance Scorecard (BSC)
  6. The style that characterizes how employees are treated and what the working environment is like (how talents are managed and developed, as well as employee engagement)

Organizations have cultures; but also organizations are cultures. Therefore, changing an organization leads to impacting / changing its culture, and vice versa. Any process improvement and business change will imply either cultural change or cultural adoption. And because PLM is rooted in Engineering, Product Development and Manufacturing, it directly concerns the backbone of manufacturing organizations.

Culture changes typically include a 7 step process:

  1. Clarify meaning: in and out of scope
  2. Identify storieslessons learned
  3. Determining strategic initiatives
  4. Identify quick-wins
  5. Define Key Performance Indicators (KPIs) – what to measure, how to measure, how to track progress, measures of success of the change, and milestones
  6. Communication (what and why) and symbols
  7. Change agent and leadership development to support and drive the implementation of the new ways of doings things

Various business drivers have changed the scope and influence of PLM processes and technologies. In the past 20 years, the manufacturing industry have moved significantly, from concurrent engineering to collaborative engineering, from physical co-location to global virtual collaboration, from PDM to PLM (enterprise-wide) scope, from in-sourcing to outsourcing, from traditional R&D to open innovation, from (relatively) simple to complex and integrated requirements, from semi to full integrated PLM-ERP processes, from slow to fast changing environment, from local to global competition, from product-centric to service-centric manufacturing, from basic automation to Industry 4.0 (ongoing change – with Internet of things, cloud, big data analysis, etc.)

Success is about asking (and answering) the right questions (Stark, 1999; Bruck, 2014):

How does, in theory and practice, the implementation of a PLM solution influence the organisational structure, processes and culture of a company? What are the organisational and cultural consequences or pre-requisites?

If Change Management is utilised during an implementation, what Change Management tools and methods are utilised and can they be related to the success or failure of the implementation?

What Change Management strategy is appropriate?

How can Change Management programmes be integrated in an overall implementation project?

Including Organisational Change Management (OCM) methods and tools during a PLM implementation can play an important role to facilitate the smooth deployment transformations, in processes as well as in the corporate culture so that manufacturing organizations can maximize benefits from their PLM investments.  

 What are your thoughts?


References:

  • Bruck H (2014) The Impact of Organisational Change Management on the Success of a Product Life-cycle Management Implementation: An Investigation into the Electronics Manufacturing Industry, GRIN Verlag, 91 pages.
  • Stark J (1999) PDM and Change Management http://www.johnstark.com/mc3.html

This post was originally published on LinkedIn on 25 April 2015.