The Drivers

Product Life Cycle Management

Week 3
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Topic Outline
Drivers of PLM
External
Internal

PLM
Product Life Cycle Management is a total
production system that tracks a product
from inception to disposal.
It includes, marketing, sales, design,
planning, production, quality requirements,
packaging, shipping, and disposing of the
product when its useful life is over.
3

PLM is a combination of
Selected PLM software tools
And proven industry specific practices

Measurable benefits
in term of cost, cycletime,
productivity
4

The Scope of PLM

Product
Lifecycle

Plus the engineering business

systems to make the process
work with the rest of the
company

PLM defines and monitors the real world

Dream

Reality
Define, Monitor and Control the Real World

Product & Process & Resources

Knowledge

PLM

VIRTUAL

The Drivers of PLM

External Drivers
o Scale companies have gotten larger
Company

1973

2003

General Motors

$35B

$186B

5.3x

Ford

$23B

$164B

7.1x

General Electric

$12B

$134B

11.1x

$126M

$255B

2,031x

Wal-Mart

Walmart
Beroperasi

sejak th.1962 di Rogers, Arkansas USA dengan penjualan di atas $1 juta,

th. 1967 memiliki 24 toko dengan penjualan $12.6 juta.
Pada tahun 1980 memiliki 276 toko dengan penjualan pertahunnya $ 1.4 milyar. Dan
pada tahun 1984 meningkat menjadi 640 toko dengan tingkat penjualan pertahun $ 4.5
milyar dengan memperoleh keuntungan diatas $ 200 juta.
Bahkan pada 2003-2004, berturut-turut Wal-Mart menempati posisi teratas dari 7
seluruh perusahaan di AS yang rata-rata memiliki pasar luas di seluruh dunia.

The Drivers of PLM

o Complexity variation in products have
increased
Product
Automobiles
Running shoes

Breakfast cereals
Contact lens

1970s

1990s

140

260

285

160

340

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Complexity

The Drivers of PLM

External Drivers
o Cycle time manufacturing timeframe has
decreased due to competition for first to market
Cycle time: Waktu yang dibutuhkan seorang operator untuk
menyelesaikan 1 siklus pekerjaannya termasuk untuk
melakukan kerja manual dan berjalan. Terkadang diartikan
sebagai waktu yang dibutuhkan untuk menghasilkan 1 unit
produk, dalam hal ini ditentukan dari proses yang paling
lama (bottleneck), apakah itu pekerjaan manusia atau
mesin.
o Automobiles: 7 years ~ 18 months
o Fashion: 90-day ~ 60-day (ZARA: 4-5 weeks ~ 2 weeks)
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The Drivers of PLM

External Drivers
Decreasing cycle times have a dual impact
Increasing the amount of information
The elimination of slack to coordinate cross functional
team

o Information technology digital information is

mobile and price of technology has decreased

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The Drivers of PLM

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The Drivers of PLM

External Drivers
o Globalization worldwide manufacturing arena and
markets
o The way we handle product information
o New, sophisticated competitors
Impacts of globalization:
Network of international linkages
Highly competitive
Interdependent global economy
Partnerships
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The Drivers of
PLM
External Drivers

A lemon is a vehicle (often new) that is found

to have several manufacturing defects which
may affect the safety, value or use of the
vehicle. Any vehicle with numerous, severe
issues can be termed so and, by extension,
so can any product with flaws too great or
severe to serve its purpose.

o Regulation increasing scope of governmental regulations

worldwide
o Safety
o Environment
o Society

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The Waste Electrical

and Electronic
Equipment Directive
(WEEE Directive) is the
European Community
directive 2012/19/EU on
waste electrical and
electronic equipment
(WEEE) which, together
with the RoHS Directive
2002/95/EC, became
European Law in
February 2003.
The purpose of this
legislation is to ensure
that old electrical and
electronic equipment is
recycled or reused
rather than disposed in
landfill sites (dumps).

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The Drivers of PLM

Internal Drivers within the organization that are
under the control or at least the influence of
management
Productivity quest for increased productivity

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The Drivers of PLM

Internal Drivers
Innovation
Product creativity, the availability of the
right information, resources
New product, modified product
Process to find better technologies and
methods in order to reduce the time, energy,
and material required to produce the product
JIT, Kanban, ERP
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Creativity Economy
The new forms of innovation driving Creativity
Economy forward are based on an intimate
understanding of consumer culture - the ability to
determine what people want even before they
can articulate it.

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The Importance of Being

First-to-Market
Being first in any market category is going to give you
the edge being the leader comes from being first.
It's much easier to get into the mind of consumers first
that try to convince people you have a better product.

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 Collaboration within and

between organizations
Working together over space
and over time
The farther we separate people in
space and time, the less instinctual
and easily practiced collaboration
becomes, the more we lose the
richness of communication and
spontaneous cooperation
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The Drivers of PLM

Quality
The characteristics of the product meeting
specifications warranty
The ability of a product to meet a certain
standard of usage
Return on investment ratio of input to output

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Understanding Business
Business being busy, doing commercially
viable and profitable work
Business process develop products
Manufacture products
Sell products
Deliver products
Satisfy customers/markets
All business process are going to be supported by
IT
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PLM Business Focus

Drives, facilitates, and captures innovation
Facilitate innovation through process enablement and
reduction in non-value-added activities

Manages complete product lifecycle

Captures and maintains corporate intellectual assets
Establishes product collaborative teams across the
enterprise and throughout supply chains
Establishes a common integrated product definition and
change management environment single version of
the truth
Integrates with value applications and enterprise
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systems

PLM Business Focus

Accelerates New Product Introduction (NPI) process
Brings together information, processes, and people
Plan, manage, and execute programs and resources more
efficiently and effectively

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Impact of IT
Leading cause of transformation in
business
Geographical barriers less relevant
Cultural barriers lowered through
information
Boosting productivity
Data sharing
Video- teleconferencing
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IT Value Map
Price

Revenue
Income

Quantity

Functions
Quality

Value
Assets

Eng.
Cost

Mfg

People

Sales

Material

Support
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Impact of Globalization
Global business environment
Network of international linkages
Highly competitive
Interdependent global economy

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Impact of Globalization
Partnership - Alliances
Outsourcing - a practice used by different companies to
reduce costs by transferring portions of work to outside
suppliers rather than completing it internally. Outsourcing is
an effective cost-saving strategy when used properly. It is
sometimes more affordable to purchase a good from
companies with than it is to produce the good internally.

Offshoring - is the relocation of a business process from

one country to anothertypically an operational process,
such as manufacturing, or supporting processes, such as
accounting.
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The terms "outsourcing" and "offshoring" are often used almost

synonymously in much of the popular literature today. However, there is a
technical difference.
When a company outsources, it buys from a third party a part or service it
used to produce itself. This does not necessarily mean that the product is
outsourced abroad, although it can be. For instance, General Motors, a US
company, can outsource production of a certain car part to a Chinese
company. The Chinese company, in turn, can outsource production of
various components of that part to various other Chinese companies.
When a company offshores, it shifts the location of a service or production
of a part to a location abroad. This can include companies who outsource to
foreign companies - for example, GM offshores production of a certain part
to a Chinese company, and the Chinese company outsources (but does not
offshore) various components of the production to other Chinese
companies. However, offshoring also includes companies who transfer
production or services to a location abroad without outsourcing the job. So,
for instance, if GM opens a factory in China, and shifts production of a car
part to the factory in China, it is offshoring but not outsourcing - it is still an
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American company running the factory rather than a Chinese one.

Summary
Drivers of PLM
External: increasing scale of organizations,
increasing complexity of products, decreasing
cycle times, the role of globalization, regulatory
change
Internal: productivity, innovation, collaboration,
and quality

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