Will GE and PTC’s joint venture create a ”PLM and manufacturing advantage”?
Verdi Ogewell posted on April 09, 2014 |
If there is a weak spot in PTC’s product portfolio, it’s on the shop floor.

Jim Heppelmann, PTC's CEO
If there is a weak spot in PTC's product portfolio, it's on the shop floor. Manufacturing Execution Systems (MES) have traditionally been the domain of Siemens and Dassault Systèmes along with ERP vendors like SAP, Oracle and Infor.

PTC's CEO, Jim Heppelmann, aims to change that.  Until now it's mostly been a question of when.

After projects like the launch of Creo and the acquisitions of Integrity (ALM), Servigistics (SLM) and M2M/ThingWorx (IoT), this new partnership with GE represents the next step: "Providing a state of the art PLM-MES integration."

This week's big story in PLM is that PTC and industry giant GE (Intelligent Platforms) are forming a joint venture in the manufacturing area. More precisely it's a combination of PTC's PLM solution Windchill and GE's Proficy, which is a specialized software application for discrete manufacturing. The idea behind the solution, called "Proficy + PTC Windchill", is to bridge the gap between product design and manufacturing in PTC-centric development environments.

This closed-loop process capability is designed to ensure real time visibility between the key business systems that support engineering and manufacturing.  Jim Walsh, General Manager, says that the improved visibiltiy between engineering and manufacturing should help manufacturers improve plant performance and quality, shorten production times and reduce – and optimize – work in progress inventories.

Jim Walsh, General Manager
Over time this partnership could evolve into more than just collaboration around shop floor information; it may be the first step towards an even deeper cooperation between GE and PTC. Such a collaboration could provide something similar to what Siemens PLM is working towards with the Industry 4.0 concept - an industrial turnkey solution for IT-support throughout the entire product development process, including manufacturing.

I'll give you my take on this below, but first some more background on PTC's strategy.

From the disruptive CAD Pro/Engineer to a market-driven PLM company

While PTC might not be number one in the business, it certainly has taken many steps to become a worthy contender. From the turn of the millennium it has gone from a company that lived on the commercial success of the disruptive technology embodied in Pro/Engineer (parametric modeling), to becoming the PLM industry's most market-driven developer.

What started a little cautiously during Heppelmann's predecessor, Dick Harrison's tenure, has taken on an almost exponential development curve. A few examples:

  • The dramatic move to re-architect the classic CAD solution Pro/Engineer into the modern Creo environment, with integrated capabilities for parametrics, direct editing and advanced variant management.
  • The acquisition of ALM (Application Lifecycle Management) solution Integrity and the work to integrate it into their PLM suite Windchill with the goal of creating an integrated systems engineering solution.
  • The investment in SLM (Service Lifecycle Management), including the acquisition of Servigistics, to provide what Heppleman calls "Product as a Service".
  • Most recently the venture to create an app platform for the Internet of Things (IoT) and M2M software (Machine-to-Machine) with the acquisition of ThingWorx.


Servigistics' IT-command Center
PTC's full product suite now covers product development, service and IoT aspects, and also manufacturing.

However, digital tools for production control have previously been somewhat lacking in the case of Windchill. While there has been significant development work on software like MPMLink and others, focus has been on manufacturing-related BoM solutions (Bill of Materials) rather than deep PLM-MES integration.


Proficy for process and asset performance insights
The new deal: Proficy + PTC Windchill Solution
Heppelmann claims that this new partnership is already offering a more powerful manufacturing solution; "PTC's customers can today already buy the new Proficy + PTC Windchill Solution."

He says that the solution has been pushed out quickly to respond to the pressure for changes in manufacturing, "Transformation is driven by production digitization and trends like lean streamlining of operations, and increased regulatory demands on product quality". He also mentions that manufacturers increasingly recognize the value of Master Data Management to safeguard the reliability of the data exchanged between PLM, ERP and MES systems.

GE's Jim Walsh reasoned along the same lines, "Product structures that were defined by engineering can now accurately become the basis for manufacturing routings and manufacturing's Bill of Materials – which are then used to manage shop floor activity", he said. He added that shop floor information such as the as-built Bill of Materials and non-conformance can then automatically be shared back with the PLM system to complete the closed loop.


My take on future GE – PTC options
Over the years there have been many speculations around a potential acquisition of PTC, but so far none have happened. While it's too early to say what the final outcome of this partnership might be, an even deeper cooperation between GE and PTC is an interesting scenario.

Here's my take on this: Large clean PLM contracts are not easy to get these days. To be able to compete you have to develop broader and deeper capabilities than the classic ones. For some time PTC and GE have watched Siemens PLM's initiative, Industry 4.0, which is based on just that; to marry IT for product development and production into a seamless chain of product realization. By joining forces, the two together can potentially produce a concept that will match Siemens PLM's (and indeed other stakeholders, like ERP giant SAP) "European" initiative Industry 4.0.

SMLC Clean Energy Efforts
There are other considerations beyond competition between companies. National industrial policy initiatives are one, and Industry 4.0 is an example of this. It has the backing of German Chancellor, Angela Merkel and top European executives. The goal is to make Germany more attractive to big industrial producers that previously outsourced manufacturing and product development to countries like China and India.

In North America there is a similar initiative; the Smart Manufacturing Leadership Coalition.  This idea of ​​getting outsourced manufacturing back to America byusing  super-rational production technologies has the backing of President Obama and a number of American corporate leaders.


How competitive is the new solution?
So, how competitive is the new joint venture manufacturing solution? From our perspective, PTC brings a technological edge to the partnership including the "Product-as-a-Service" concept and the Internet of Things (M2M included). These technologies can capitalize on trends that certain analysts, like Gartner's Marc Halpern and IDC's Frank Gens, say are about to reshape the world's commercial and consumer markets.

This is something that Jim Walsh appears to be betting on.

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