Product Value Management

Happy New Year. With the last moments of 2007 winding down I wanted to make a brief run-down of main developments that marked the passing year. In the next blog I will highlight our research agenda for the coming year.

For an analyst, it is always difficult to rate impact of significant industry events. Main reason is that analysts try to comprehend all consequences far beyond the immediate journalistic weight of an event. For example, Airbus problems with the A380 launch received significant press, while for an analyst the problems were a logical consequence of a major strategic misalignment between program complexity and company’s distributed infrastructure supporting product development.

My criteria for rating importance of an event is based on its potential to dramatically or significantly change how we do product development and consequently its impact on what we expect from PLM technology and how will we use it in the future. Using an actual and familiar analogy, an avalanche is not much of a news for me, I am more interested in understanding impact of climate conditions that may cause drastic change in the yearly number of avalanches.

With that in mind, my top five list events that marked PLM development last year are:

1. Launch of Teamcenter 2007.

Teamcenter 2007 is the world’s first commercial PLM system. Its significance is the final departure from PLM as a set of applications. One integrated information system can now connect all product information from early ideas and requirements to manufacturing release and support, spanning the entire scope of product life cycle. New process efficiencies can be obtained from more integrated streamlined process flows and above all, capture and reuse of product information can be institutionalized and measured.

Similar effect to the business performance was observed in early 90-es when ERP systems started connecting all transactions within an enterprise closing the feedback loop between financial performance and operational excellence. PLM is now entering same phase of maturity, paving the way for a closed loop between financial performance and strategic planning, and we will never look on PLM as software for engineering automation.

2. Toyota officially number one.

Many years in coming, it has finally arrived. With impeccable precision and predictability, the recognition of Toyota as the world’s number one automotive OEM marks the pinnacle of concurrent engineering era. Aside from many other dimensions, the importance of this event to the PLM is seen through three significant consequences:

a. Planned organic growth following a long term vision has proven its strategic superiority over “arithmetic” mergers and acquisitions;

b. It is organizationally possible to establish a standard process for product development as a measurable value stream;

c. In commercial/consumer product development, information technology is best utilized when planned and implemented within the context of process, people and overall strategic enterprise equilibrium.

Toyota will have its share of challenges in the near and distant future. Scalability and standardization of global development operations is yet unconquered business challenge. We will all learn much more form Toyota as it keeps thinking and creatively addressing new challenges.

3. SOA.

Perhaps most misused information technology advancement in last decade is the service oriented architecture (commonly known as SOA). SOA is a set of very simple and elegant principles for distributed process execution. Yet, it has been hijacked by overly zealous vendors who saw in it a shot in the arm for otherwise mundane value proposition of their boring infrastructure and enterprise application integration offerings. Same vendors that were well served with the “Y2K bug” (probably they liked that scare factor). Without clear vision of the adoption roadmap, they poured into shallow substance-less marketing hundreds of millions of dollars that ultimately more confused than educated likely beneficiaries of the SOA concept.

Yet, for PLM, SOA is a major advancement that marks a quantum leap in possibilities for faster and richer product information flow. SOA has been instrumental in executing Teamcenter 2007 and is instrumental in the plans of all other PLM vendors that will launch their own PLM system offerings this year. What remains to be seen is the use of SOA in the larger context of the process management, where we believe product development stands to benefit the most. It will require further maturing of the process management frameworks and semantic enterprise architectures. A great topic to follow in 2008.

4. Return of direct geometry.

Parametrization of geometry has been an undisputed leader in applied techniques for reuse and repurposing of product designs. It evolved over many years through maturing mass customization and engineer to order business models. Yet, the design devil is always in the details, small dimensional adjustments and tolerances. With the growing application of design optimization techniques such as DFSS and robust engineering, constrained “nominal geometry” becomes more of a burden than an enabler. Variability of production processes, performance and functional factors surrounding the system of parts is now a critical focus for optimization. Consequently, un-tethering the geometric shapes from their history and/or origin of their nominal dimensions becomes an important feature to quickly and more completely match optimal system design characteristics.

Contextual manipulation of geometry of mechanical systems within their virtual working environment, while preserving traceability and reasoning on their dimensions is a new modeling paradigm that has potential to change the flow of design processes. The question arises: is it more effective to constrain engineers to specific parts proportions thus preserving certain design and manufacturing rules, or to allow them to freely manipulate geometry of recommended starting design concepts while presenting them with consequences of their choices. There has to be a balance between these two ends of the spectrum and that point of balance will determine the exact process flow. Optimal balance will be different for different products and different manufacturing strategies. With new PLM offerings now supporting the entire spectrum of possibilities, it is quite realistic that early adopters who solve this puzzle will gain significant advantages.

5. SysML crawling out of the crib.

For many years we witnessed a quest for the holly grail of systems engineering - an integrated information model tying requirements, functions and components into a complete representation of the system design. Various data representation standards like STEP series came forward as results of multi-year efforts of many bright and dedicated engineers. However, implementation of these data exchange standards was always a challenging technology endeavor because their objective was a unified and normalized data model, what is a tall order for any single end user company to adopt and particularly for a diverse community of PLM vendors to converge on.

SysML grew from a much more humble objective - to provide a common representation language to express models required for functional design and simulation of electromechanical systems controlled by embedded software. Similar to how UML helped software designers express key properties and use cases of an object oriented application. Naturally, the system modeling language needed to tie together requirements, functions, interfaces and performance parameters. The idea of supporting exchange of system models between design and test engineers provided it with a much needed focus. Now, SysML looks like a logical choice for considering a language to capture and share system design information within a distributed collaborative design community. It yet remains to be seen what adoption by the PLM vendors will it receive, but we believe that its completeness and applicability to the growing problem of managing functional allocations warrants at least its immediate future.

These five events in my opinion have all long lasting consequences on how we do product development and how will we use PLM technology in the future. I probably missed some other important ones, please drop me a note if you have your own observation that I may have missed in this list.