PLM for Small Manufacturers. Why Cloud?
John Hayes posted on September 09, 2015 |

Smaller manufacturers face unique challenges to control their product development processes and data. The PLM offered in many software packages does not completely address these challenges.

Most PLM systems are grounded in product data management that is designed first and foremost to control CAD data. However, smaller manufacturers may have other needs that take higher priority, such as workflow, document management or managing their BOMs and supply chain. They also tend to require flexibility to accommodate more rapid product iterations.

Car Adapter from Automatic Labs

Consider the case of Automatic Labs of San Francisco. This start-up makes a device that plugs into the on-board diagnostic port of a car to provide information about driving behavior. According to Michael de Jesus, Automatic’s director of supply chain and logistics, their top priority for PLM was to manage the BOMs of their rapidly growing list of SKUs. And given their size, the solution couldn’t cost much. PLM in the cloud offered quick set-up and no hardware costs. They also were able to get started with just four licenses of Autodesk’s PLM 360, although they expect to add more.

According to many smaller manufacturers, they just don’t have the time and budget to launch an on-premise PLM system. One attendee at the recent Accelerate 2015 conference in Boston told of a PLM system in which the initial license and hardware cost $30,000.

Spreadsheets and Google Docs are Not the Answer

In the case of Automatic Labs, de Jesus knew from prior experience that a PLM solution was what the company needed. Other small manufacturers may not even consider a PLM solution. Instead, they often choose to manage BOMs and work flow with their own combination of Excel spreadsheets, Google Docs and email.

That path can lead to heartache when they need to manage some common scenarios, such as:

  • Customers demanding changes to the product, which creates complexity and often results in different versions of the product.
  • Suppliers failing to meet the company’s expectations for cost, quality or delivery, so the company has to change suppliers or change their product design.
  • Products with complex BOMs including electronic and mechanical components and firmware.

Three Common Requirements for Smaller Manufacturers

Greg Dohrman of IMAGINiT Technologies says these business challenges “lead to three common issues for smaller manufacturers”:

  1. Poor visibility into where various products are at in their stage of development. (Impact: This leads to slower business decisions when companies need to react to a challenge to keep a project on track.)
  2. Lack of control of their processes, in situations in which best practices are not followed by all team members. (Impact: Companies struggle with customer perception, quality issues and growth and retirement of key personnel.)
  3. Poor continuity of information flow requiring the same information to be entered multiple times from early development through the end of a product’s life. (Impact: Inefficiency, mistakes on data re-entry lead to quality issues, information loses context over time.)

Google Docs and Excel may be a good idea at the start but successful smaller manufacturers eventually find that these applications don’t scale.

That’s where the cloud creates a big opportunity for smaller manufacturers. According to Marc Halpern of Gartner, “I’ve never seen a bigger opportunity for disruption.” He pointed out that traditional design software, including CAD/CAE/PLM, can’t just simply be ported to a browser to work in the cloud. Instead, software has to be re-architected for the cloud to take advantage of many of the features that the cloud can provide, such as scalable processing power, easier social connections, simpler links to mobile platforms and more powerful search functionality.

New Sofas in Seven Days

Furniture maker QFC had its own reasons for implementing cloud-based PLM, which also turned out to be PLM360 from Autodesk. They found that for their sofas to be competitive, they had to slash delivery time from six weeks to seven days, while expanding their configurations to offer 45,000 design options to customers. James Truswell, new product development manager at QFC, commented that, “In our environment of fast moving projects, the product team found that milestones were missed or just plain missing. The data was lost, incomplete or erratic. We had no traceability as a project moved through the new product development processes.” Disparate systems and spreadsheets were managing new product development, resulting in “clunky and ineffective” change management.

Cloud-based PLM has provided formal and rigorous workflow-driven processes with real-time project visibility and milestone reporting. Now that QFC has managed their most important challenges they are moving on to more traditional data management tasks such as automated ERP and BOM.

The Case for Cloud-based PLM

Cloud-based PLM makes sense for many smaller manufacturers who would otherwise not move ahead with PLM at all. They are finding value in cloud-based solutions that can:

  • Manage their design workflows
  • Track projects through the product realization process
  • Keep track of revisions so that everyone on the team is working on the same version
  • Share documents securely with internal and external team members
  • Manage their BOMs

Many of the cloud-based solutions are also easy to implement and come with familiar user interfaces that reduce training time. Some even come with mobile versions for easy access from anywhere. It’s also easier for small companies to accept the cost of cloud-based software, which often has low start-up costs and then a monthly cost per user. By comparison, on-premise PLM systems for enterprises require an initial investment as well as maintenance costs that often include IT staff.

If you are finding that your system of spreadsheets, Google Docs and email for managing your product development processes may actually be getting in the way of your business, a cloud-based PLM system is worth a look.

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