PLM For Improved. Joe Barkai IDC Manufacturing Insights
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1 PLM For Improved Product Lifecycle Decisions Joe Barkai IDC Manufacturing Insights
2 About IDC Manufacturing Insights The premier independent global market intelligence and advisory firm for information technology Delivering IT intelligence, industry analysis, market data, and strategic t guidance since 1964 More than 1,000 analysts in over 100 countries provide global, regional, and local expertise on technology and industry opportunities and trends Insights business units focus on technologyenabled business innovation within an industry IDC Manufacturing Insights Page 2
3 Manufacturing Industries View Asset Oriented Value Chain Engineering Oriented Value Chain Technology Oriented Value Chain Brand Oriented Value Chain Value Chains Process Domains Chemicals, Pharmaceuticals, Automotive, Aerospace, Machinery, High-tech, Semiconductor, Fashion, Food & Beverage, Operations Investigate a segment across domains Supply Chain Product Lifecycle Investigate a domain across segments Sustainability IDC Manufacturing Insights Page 3
4 Why is it Difficult to Make High Quality Products? Customer Demand, Differentiation Time to Market Pressures / Shortening Lifecycles Shrinking Budgets Technology Complexity Operational Complexity Compliance Outsourcing Knowledge Deficit Aging Workforce IP Management IDC Manufacturing Insights Page 4
5 Challenges Increased Technology density and complexity Embedded control software System of systems Configurations and options Complex collaboration Outsourcing Partnerships Time & budget pressures Information overload Information systems & process fragmentation Diminishing Visibility Experience Time for formal & informal learning Knowledge sharing Complexity Capacity IDC Manufacturing Insights Page 5
6 PLM as a Strategic Capability $$$ Technology & Product Innovation Accelerate Market Penetration Customer Innovation Market Innovation Protect Brand & Market Share Market Extension Accelerate Time to Value/Volume Renewal Manage End of Life Growth Maturation Decline EOL Accelerate Product Innovation Operation Innovation IDC Manufacturing Insights Page 6
7 Opportunities (and Challenges) Abound Minimize Time & Costs Minimize Waste Improve Segmentation Minimize Costs & Inventory Research Design Make Sell Sustain End of Life Maximize Reuse Maximize for Performance, Quality & Compliance Maximize Efficiency & Productivity; Quality Maximize Channel Efficiency Maximize Service Level & Value-add Services Maximize Compliance Reapply Amend Enhance Continuous Improvement IDC Manufacturing Insights Page 7
8 Improving Productivity and Efficiency Stakeholders Input Concept Planning Development Validation Production Stakeholders Input Concept Planning Development Validation Production Lifecycle Evaluation & Balancing Concept Planning Development Validation Knowledge reuse Resource utilization Waste reduction Production IDC Manufacturing Insights Page 8
9 Time-Value of Information Information and Context Clarity Value and Impact Time Time IDC Manufacturing Insights Page 9
10 Making Better Decisions Decision Context Key Output Portfolio Analysis Allocation of Resources Strategict Tactical In nformatio on Scenario Analysis Value Analysis Po olicy Resiliency to Risk Optimized Outcomes Operational Situational Analysis Execution Consistency Consistency of optimized decisions at all levels, resulting in efficient, i sustained innovation IDC Manufacturing Insights Page 10
11 Decision Platform Transformation Singular decisions Driven from upstream Limited input from non-engineers Over emphasis on innovation Open systems Collaboration Visualization Leaning innovation IDC Manufacturing Insights Page 11
12 Out of the Recession It s All About Innovation Become more customer demand driven Exploiting new markets Innovation in new or existing products and services Increasing customer satisfaction Increasing revenues Reducing overall product related costs improving quality Top Business Initiatives Improving productivity 0% 25% 50% N=416 Become more customer demand driven Innovation in products and services Increasing revenues / new markets Rank 1 Rank 2 Increased quality and customer sat. Rank 3 Reducing overall cost / productivity 0% 20% 40% 60% 80% N=264 Source: IDC Manufacturing Insights, 2009 IDC Manufacturing Insights Page 12
13 But Is It R&D? Mkt Cap $350,000 $300,000 $250,000 $200, $150,000 $100,000 $50,000 $0 0% 5% 10% 15% 20% 25% R&D (% Revenue) Internal R&D spend, excluding acquisitions Mkt Cap Nov 29, 2010 Size = Revenue FY 10 Ford Motors IBM P&G Microsoft Boeing Apple J&J Dell Intel Cisco Caterpillar HP Oracle Google 3M Deere & Co. EMC Medtronic SAP Texas Instruments Qualcomm Applied Materials Boston Scientific Juniper Networks Sources: IDC Manufacturing Insights, 2011 Yahoo! Finance, Company Data IDC Manufacturing Insights Page 13
14 Scary Statistics About 20% of projects are over time, and 35% of product companies had experienced at least one runaway project Most products fail to meet expectations: Only one out of every four product development programs yields a product that reaches the market Two thirds of those still do not meet expectations 46% of the resources allocated to product development and commercialization are wasted IDC Manufacturing Insights Page 14
15 Purposeful Innovation $$$ Accelerate Market Penetration Protect Brand & Market Share Market Extension Accelerate Time to Value/Volume Renewal Manage End of Life Growth Maturation Decline EOL Accelerate Product Innovation IDC Manufacturing Insights Page 15
16 Collaboration Platform Develop a rich platform of product and process knowledge to support continuous innovation across multiple disciplines and lifecycle phases Integration and harmonization of tools and data Enabling business process innovation Collaboration (internal and external) Problems: Access Trust Understanding Being heard Being understood IDC Manufacturing Insights Page 16
17 Visualization A natural and effective way to communicate across barriers and level the playing field for all participants Simplifies complex information Synthesizes multiple sources to a common (visual) representation Increases capacity [multiple knowledge workers] and fidelity [multiple perspectives] of decision making IDC Manufacturing Insights Page 17
18 Changing Views Putting the L back in PLM Manufacturers are taking a long-term view Much more than features or cost Heterogeneous, ever changing environment Strategic relationship is key IDC Manufacturing Insights Page 18
19 PLM Investment Trends Manufacturing Management CIO Engineering Management CFO IT Management Financial Management Quality Management 7% 12% 27% 54% Increase Stay the same Decrease Don't know N=416 Sources: IDC Manufacturing Insights, 2010 IDC Manufacturing Insights Page 19
20 Aligning IT with the Business High Busine ess Align ment Business Led 2.9% Ad-hoc 2.5% Consensus 2.3% IT Led 1.8% Low Low IT Efficiency High Source: IDC Manufacturing Insights 2010 IDC Manufacturing Insights Page 20
21 Essential Guidance Adopt a holistic view of product lifecycle Innovation Optimization Value Expand PLM thinking to all product lifecycle activities Level the playing field for all decision makers and participants Rationalize investment and implementation models for interdisciplinary decision making Key productivity investments to consider Collaboration platform deployment Visualization tools Analytic tools Share models and best practices across programs and products, and with suppliers and partners IDC Manufacturing Insights Page 21
22 What About Social product development? Cloud? Mobile devices? IDC Manufacturing Insights Page 22
23 Learn More Worldwide Manufacturing 2011 Top 10 Predictions Worldwide Product Lifecycle Management 2011 Top 10 Predictions i Worldwide PLM 2009 Top 10 Predictions Global PLM Study: Observations and Lessons Learned PLM Market Analysis and Go to Market Strategy Product Life-Cycle Economics - Needs, Opportunities and Tactics jbarkai@idc.com IDC Manufacturing Insights Page 23
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