PLM and Process Improvement: Building Bridges to Ensure Enterprise Value

When working to improve product lifecycle management, companies often struggle to gain full value from their initiatives because they fail to focus on cross-enterprise change. For example, companies seeking to accelerate product development often focus on improving tools and processes for collaboration. But they put most of their energy into changes within individual departments instead of also looking across them.

Here’s a typical scenario: Change management is a key aspect of product development, and it’s generally “owned” by the engineering department, which is focused on minimizing the time it takes to engineer a product change order from start to finish. But other groups are involved, and they have different concerns. Procurement looks at the cost and time it takes to procure needed parts. Manufacturing focuses on how long it takes to implement the change in the production process.

When engineering focuses just on its own internal metrics, of course they want to keep others out of the way. They’ll look at accelerating completion of change orders in isolation and then hand off the results to the other departments, which typically require additional changes in procurement and manufacturing. Engineering gets faster, but the whole process can get bogged down.

Moreover, opportunities for the company to realize savings and efficiencies disappear. If the purchasing group was involved earlier, it could have accelerated procurement of the new parts. Similarly, if manufacturing could have begun planning sooner for changes in the production process, it could have been ready for production of the revised product as soon as the final change was passed along.

In sum, including “downstream” organizations such as procurement, manufacturing, and even service in the key engineering processes enables the company to shift from sequential to parallel process execution, with great benefits downstream. While cross-functional involvement in engineering change orders might slow down that piece of the process, overall time to production could be shortened dramatically.

To ensure the highest value from investments in PLM or other enterprise application-based initiatives, companies need to tackle these types of cross-organizational issues. This means designing business processes to embed cross-functional collaboration – which, in turn, means building cross-functional alignment on overall goals from the very start.

In the case of product development, the first step is to bring together key stakeholders from across the organization and determine if department initiatives align with enterprise goals. A great way to do this is to review how well departmental scorecards roll up to the enterprise level. Often they do not and executive leadership needs to step in and fill the gaps.

It’s not surprising that functional heads focus mainly on their own departmental goals and improvements. Absent a concerted effort at the executive level to build bridges across the organization, however, initiatives like PLM too often fall short of their potential for overall business change.

Photo: Robert Nunnally, Flickr (CC BY 2.0)

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2 thoughts on “PLM and Process Improvement: Building Bridges to Ensure Enterprise Value”

  1. Mark Kristobak says:

    Your advise is spot-on according to my experiences. Often we find Engineering or MFG Orgs are trying to speed up their indivual change processes when I find the real value is incorporate all approvals into one process. It’s about making good, informed decisions, and making them once in full context of all the influences on the value/expense of the proposed change.

  2. Madan Rangabasyam says:

    Russ… Nice thought provoking article.

    Anybody that has tried it should recognize, getting design and manufacturing working together almost seems like a paradigm shift. For a every such paradigm shift, there needs convincing metrics to prove its worthiness.

    We are familiar with the cost of processing a PR being cheaper than processing a CR and cost of CR being cheaper than CN. Expanding this beyond CN and looking at cost of NCRs and Deviations and Waivers will help.

    A metrics that exposes these numbers, and demonstrate heaviness on downstream, should easily get the buy in and commitment to change. Just my 2 cents.

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