Chinese Manufacturers Use PLM to Drive Higher Value

It’s no secret that Chinese manufacturers are pushing hard to move beyond low-level commodity production and win with more innovative products and capabilities.

Rising costs are one reason. As Aaron Lo, Partner, KPMG China, has noted: “Labor costs have increased by 15-20 percent per annum on average over the past four years. This together with an appreciating Chinese currency has meant that China is no longer a low-cost manufacturing base.”

At the same time, Chinese manufacturers can now call upon a skilled labor force, a large domestic market, and new networks of suppliers to serve the country’s growing consumer market.

Together, these factors have accelerated the growth of more sophisticated manufacturing in China as manufacturers feel both the need and the opportunity to move up the value chain.

To reach their goal, Chinese manufacturers are investing heavily in new tools and approaches to improve product development and product lifecycle management (PLM).

Common initiatives include:

  • Driving product modularization for rapid product design
  • Improving product data management to ensure quick product customization
  • Optimizing and simplifying the product development process by upgrading and integrating older, disconnected systems

China Aerospace Science and Industry Corporation (CASIC) is the backbone of China’s national science and technology industry and the largest state-owned, high-tech enterprise under the direct administration of China’s central government.

CASIC produces extremely complex aerospace systems that include mechanical components, electronics, software, and optics. Product development typically involves the creation of project models or systems based on 20-30 supporting projects as well as sophisticated materials and infrastructure. In the past, reviewing a specific product configuration could easily take three to four months.

To improve and accelerate configuration management, status control, and process change, CASIC implemented a sophisticated PLM system over the last few years. By doing so, it gained real-time product status of any given product or project, as well the change process. Configuration reviews that took three to four months for one product model now take only three to four hours.

Another Chinese company that has realized major benefits with a new PLM program is Zhuzhou Electric Locomotive Co., Ltd., a major electric locomotive manufacturer and a subsidiary of CSR Corporation Limited.

Historically, CSR lacked internal controls, making it difficult to track research and development requests, results or changes. Departments used different processes, tools and methodologies. CSR had guidelines but the company lacked a regulations “platform.”

By implementing advanced PLM software, CSR was able to provide a uniform PLM interface for those in research and development, engineering, manufacturing, purchasing, services and sales. This, in turn, has enabled better collaboration, streamlined processes, and more effective tracking, managing, and auditing product-development activities across all departments.

While Chinese manufacturers’ transition to advanced PLM software is in the early stages, the trend is clear. Manufacturers in China seeking to effectively compete globally should take note and make plans to evolve their product lifecycle management capabilities. By transforming product development and product lifecycle management, these companies can deliver more innovative products and in turn gain greater market share.

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