CIMdata's PLMeurope2002 Conference: Creating, Managing, and Leveraging Intellectual Assets

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Wadad Abed							Jordi Portella
Tel: +1 (734) 668-9922						Tel: +33 (0) 1 48 01 61 82
ANN ARBOR, Michigan, December 4, 2002 - Consulting and research firm CIMdata Inc. recently held its annual European conference in Berlin, Germany. The event focused on the strategic role of product lifecycle management (PLM) in helping companies create, manage and leverage their intellectual assets. The conference brought together suppliers, users, consultants, and experts from companies around the world to discuss important issues, share experiences, provide information, and exchange ideas on a wide range of PLM solutions that include tools for product data management (PDM), collaboration, visualization, document management, and enterprise application integration (EAI).

"A company's most valuable asset is the wealth of information about its products: how they are configured, built, maintained, and evolved in the face of changing market demands," said Jordi Portella, conference chairman and director of CIMdata European consulting operations. "By integrating people, processes, and data, PLM forms the product information backbone in helping companies create, manage, and leverage these critical intellectual assets."

According to Portella, companies are implementing PLM in record numbers, and many organizations are expanding the scope of existing solutions across multiple geographically dispersed sites. Meanwhile, more mid-size organizations are starting to utilize PLM, with major concerns about the scope of solutions, the support they can expect from software providers, services required, and related costs. "In the face of today's tough economy, companies are turning to PLM as a way to operate more efficiently to differentiate themselves in the market and gain a competitive advantage through innovative products with high customer value," said Portella. "For many of these companies, such advantages will enable them to survive and thrive while less astute competitors fall behind." State of the Industry

In his annual state-of-the-industry address at the conference, CIMdata President Ed Miller noted that key drivers for growing activity in PLM include globalization, supply chain management, and customer relationships. Of all these factors, however, Miller contends that one of the most critical issues is product- related innovation.

Past initiatives aimed solely at product cost, quality, or time-to-market are no longer sufficient to gain market advantage," said Miller. "The focus today is on innovation of products and processes: products "that clearly differentiate themselves from others while also being affordable, reliable, and timely market, and processes that enable more effective business operations. Total management of the product lifecycle is critical in developing products to meet customer needs innovatively without driving up costs, sacrificing quality, or delaying product delivery."

According to Miller, product-related innovation is now an executive issue, and the implementation of PLM solutions to facilitate such innovation is being driven by a top-down impetus from savvy senior managers at a growing number of companies.

"Top executives are increasingly involved in spearheading PLM efforts. They realize that PLM can assume a critical role as a part of their business strategy," said Miller. "PLM empowers the business and enables a company to leverage its most important asset: their intellectual capital and knowledge of their products and services. In this environment of turbulent economy and radical market shifts, innovation and a clear focus on management of the entire product lifecycle have emerged as critical areas of investment for companies that want to move forward or be left behind in fiercely competitive markets."

Market Status and Trends
Director of Research Ken Amann reported a better than expected year 2001 for the PLM market, with solid growth of 25% to reach 3.6 billion dollars. Electronics, transportation and aerospace continued to make investments, while the process industries continued to grow. Europe continued to close the market share gap with North America, with Germany still the largest European PLM market segment, and a real opportunity is beginning to be seen in China. According to Amann, comprehensive technology suppliers still dominate the market with a 54% market share, but the rapid growth of service providers continues.

"As PLM is encompassing more business activities and touching more business systems, the scope of services continues to grow, including strategy and vision, process design and re-engineering, the various phases of deployment, cultural change management, metric definition and measurement, and expanded project management," said Amann. "Worldwide economic conditions continue to stress PLM suppliers, however, with revenues negatively impacted, particularly new software license sales. Further, as senior management is now viewing PLM as an enterprise investment, there is increased scrutiny on such investments coupled with a requirement for more rapid business-related return on investment. These forces lead to continuing consolidation in the PLM market, even as new companies enter the market to take advantage of emerging opportunities."

Harnessing Innovation
A keynote address "Harnessing Innovation Through an Integrated Design Chain Strategy" was delivered by Heinz-Simon Keil, Head of the Corporate Technology Department for Virtual Engineering at Siemens AG, a leader in electrical engineering and electronics for information and communication networks, industrial automation and control, power generation, transportation, medical equipment and other industries.

Keil explained that one of the major goals at Siemens is to establish processes, infrastructure, and technology for virtual engineering to facilitate teamwork and collaboration among the company's more than 56,000 employees engaged in research and development worldwide.

PLM is the collaborative framework to integrate these dispersed groups into a unified design chain. Benefits include shortening time-to-market up to 10% to 30% and reducing production planning time by "30% to 50% by providing a seamless flow of information and ideas from the definition of customer requirements to production ramp-up," said Keil.

The solution encompasses design, simulation, test, manufacturing, suppliers, service and maintenance, marketing and sales, and delivery logistics as well as customers. The scope of the process extends from the early phases of conceptual engineering through detailed design, production planning, manufacturing execution, and field support.

Keil emphasized that speed of innovation requires a seamless flow of information between different disciplines as well as changes in workflow and business process. The key is integration, allowing people across the value chain to work together as a team early in product development when innovate ideas take shape.

"From an operational standpoint, implementing PLM and changing work processes in this way results in shorter innovation cycles," said Keil. "From an overall corporate perspective, the business value is stronger market position, greater customer value, and improved profitability for companies willing to make the investment in their people, technology, and processes."

Managing Intellectual Capital
In another keynote address "Working with the Collective Intellect: the Whole is Greater than the Sum of its Parts," John Scholfield, European C3P Manager at Ford Motor Company, discussed the critical importance of technology and processes in leveraging a company's intellectual capital. In 1995, Ford initiated the C3P program to create an integrated global CAD, CAE, CAM, PLM strategy. According to Scholfield, the program has demonstrated considerable success in capturing the collective intellect - the accumulated knowledge and specialized information of in-house engineering and external multi-tier supplier-based enterprise.

"A major source of a company's value is in the knowledge and expertise of the people in its extended enterprise," said Scholfield. "The C3P initiative allows us to leverage that collective intellect for a competitive advantage in developing innovative products, shortening cycle times, reducing costs and improving quality."

The C3P initiative is based on a digital backbone of integrated tools and associative processes that allow different groups to readily share information to work collaboratively and concurrently. "With C3P, dispersed Ford facilities and suppliers have direct and immediate global access to product information and are automatically notified of relevant changes," said Scholfield. "Information flows freely and quickly, with associativity between the various software packages enabling data and changes to be exchanged digitally instead of manually."

According to Scholfield, this digital backbone capability can radically accelerate operations. Associative body design, for example, allowed design engineering to be completed ten days earlier in vehicle development, and the typical change cycle was reduced from 12 weeks to 3 weeks. Scholfield explained that C3P has made numerous breakthrough achievements in operational efficiency and quality improvement, and that business gains through strategic partnerships have been significant. In looking ahead to future efforts, Scholfield noted that processes will be targeted toward further compressing time to market in developing and launching new vehicles in 12 months thorough greater levels of automation and intelligent associativity as well as closer supplier integration.

Session Highlights
Following the keynote addresses, sessions were presented by representatives of user companies such as DaimlerChrysler, Hewlett-Packard, Thales, Fiat Auto, Fokker, and EADS. Topics included: Product Lifecycle Collaboration, Managing Product Data in a Global Enterprise, Collaborative Product Development, Cost Monitoring, On-Line After-Sales Support, Managing Legacy Data, and Automated Workflow.

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