1. A PLM system provides business benefits by helping companies address challenges from increasing competition, globalization, mergers, shorter delivery times, tighter quality requirements, and more. 2. Specifically, a PLM system helps solve problems of finding and retaining product information, dealing with increasing product variations and complexity, and reducing wasted time from inefficient processes. 3. The benefits of a PLM system include reduced costs through less inventory, improved productivity by easier information retrieval and reuse, and lower quality costs from better traceability and change management.

1. Business benefits of a PLM system
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2. Factors leading to PLM
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Growing competition
and tighter budgets
Internationalization
of business
Company
mergers
Shortening
delivery times
Less time available for
developing new products
Tightening quality
requirements
Regulations and common
industry standards
Tightening
legislation
“processes need to
change”
“increasing product
data”

3. Changing mode of operations
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Increased
manufacturing
automation
Expanded Product
portfolios
Increased
customer
involvement
More sub-
contracted work
Changed
organization

4. Impacts of the changes in the business environment
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Major Problems:
Finding the right
product-related
information
Retaining the
entirety of this
information
The Main Reasons:
Increasing variations of the
products
Increasing amount of
product information
Increasing complexity of
companies’ supply networks.

5. Vicious circle of deteriorating product data
• Many companies have
fallen into a vicious
circle/cycle:
– large number of items,
– numerous laborious
assignments caused by
the maintenance of item
information,
– product data are
problems that feed each
other.
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6. ~ the most important single benefit from a functional PLM system.
Benefits of the PLM system in PLM
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Today’s networked
companies use
heterogeneous
information systems
Sets great demands
upon the integration
of systems and the
transfer of information
PLM systems can improve
the internal and external
communication

7. An important consideration in adopting PLM system
• It allows for a radical reduction in many kinds of unnecessary
information processing and transfer work.
– Reuse existing information that:
» have been tested rigorously,
» have been used to make quality products.
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-- > rational and faultless design changes,
-- > increasedvalue of existing applications.

8. The working time of an engineer
8
A Coopers & Lybrand study from the year 1994
PLM can eliminate
these wastages.

9. Immediate advantages with the help of a PLM system
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Saving time
• Quick definition of the
product structure.
• Decreased amount of
overlapping work.
• Availability of latest part
lists.
• Fewer corrections to
information.
• Fast, easy retrieval of parts
and drawings.
• Availability of planning
information.
• Easier, faster documentation.
• Improved external and
internal grade of service.
Improvement in quality
• Automatic acceptance and
release of document
changes.
• Fast, accurate distribution of
change information.
• Certificates, records and test
results can be connected to a
product.
• Availability of standards.
• Improved information
security.
• Increased flexibility of
operation.
Reduction of tied-up capital
• The number of different
items is reduced and items
are more standardized.
• Reduced component stocks.
• The management of the total
production load

10. Measuring the business benefits in daily operations
• Converting the benefits of a PLM system directly into monetary
terms is difficult.
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2 different forms of savings:
Operational savings New/increased revenue
intensification of the
operative operation.
decrease in expenses
and working capital.
strategic matters

11. The flow of measuring benefits
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Identifying
typical
problems
Identifying
causes of
problems
Determining
indicators to
measure
operations
Determining
development
potential
brought by
PLM

12. 1. Material costs: reducing inventory tied capital
1(a) Typical problems
o The item management of the company is
not in order,
o The company’s own component design
and manufacturing is inefficient,
o Procurement buys the same type of
components from different suppliers for
different products,
o Product development and sourcing each
maintain large amounts of overlapping
information,
o The company makes overly fast and
uncontrolled changes in the design of the
product.
1(b) Causes of problems
 Difficulties in retrieving and
controlling product data often
lead to unwanted short cuts in
operations model,
 The product data concerning
component items is not up to
date and is unreliable,
 There are difficulties in the
internal and external
communication of the company
regarding product data and the
changes that have taken place in
it. 12

13. 1. Material costs: reducing inventory tied capital
1(c) Indicators to measure operations
o The number of component items
in the item base of the company
divided by the products (the
generic products) proportioned
to the number of components in
individual products,
o Length of the cycle from purchase
invoice to account sales,
o Value of the component
inventory
 Ability to easily retrieve and maintain
all necessary item information,
 Reducing component stock and
expanding the convertibility of
components,
 Better management of component
information and better management
of component suppliers and related
information,
 Reducing the items in the component
warehouse and dropping their value.
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1 (d) Development potential brought by
PLM

14. 2. Improving productivity of labour
2(a) Typical problems
• The product knowledge of the
product development organization
depends very essentially on the
individuals in the organization,
• Far too much work is needed to
retrieve existing product data and
to maintain and transfer,
• The reuse of existing information or
experience from older products
and functioning design solutions is
difficult.
2(b) Causes of problems
• Scattered product data over
several separate information
management systems (with no
links).
• Separately maintained essential
pieces of product data in
separate product management
systems.
• ‘Push principle’ distribution of
information. 14

15. 2. Improving the productivity of labour
2(c) Indicators to measure
operations
• The direct costs of labour related
to the transfer of information and
change management of products.
• The time used in finding and
retrieving information.
 Converting individual knowledge
into intellectual capital available
to the whole organization,
 Controlling and managing product
data and product knowledge in
electronic form,
 Reusing of existing information,
 Reducing the resources used in
retrieving, maintaining, and
transferring product related
information. 15
2(d) Development potential brought by
PLM

16. 3. Costs of quality
3(a) Typical problems
• Faulty or incomplete product
design,
• Faulty product units during
production or even after
delivery,
• Problematic manufacturing ,
• Returned products for repair
under guarantee.
• Consuming work to handle
problematic situations.
3(b) Causes of problems
• Complexity of products and
their processes,
• Lack of traceability in change
management.
• Slowness of change processes.
• Shortcomings in the
traceability of the order-
delivery process and of
individual product content. 16

17. 3. Costs of quality
3(c) Indicators to measure
operations
• Ability to produce:
– quality products ,
– improved manufacturing
processes.
• Ability to reduce:
– manufacturing defects,
– guarantee claims.
 Greater ability to improve
quality with the help of
efficient, streamlined product
processes.
 Fast, efficient change
management,
 Traceability of change
management and design
history. 17
3(d) Development potential brought by
PLM

18. «Data mining»
PLM and data warehousing as a tool
to support decision-making
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~daily tasks,
~user profiles,
~user activities,
~ files,
~documents.
PLM database
Decision making
statistical analyses
« Data warehouse»

19. Use of quantitative information for developing processes
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20. Data warehousing
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The IT systems that
support the different
co’ functions.
Data warehousing.
Data mining:
(to speed up production of
demanding reports and
analyses w/o disturbing the
production environment
of these operative systems)
Informed product lifecycle decisions
(based on real information)
e.g., cost analysis: parts list info. from ERP and product info. from PLM.

21. Data mining: An example
• The analysis of a manufactured product or product family.
– Reason for the product changes or ECOs,
– The dispersion and amount for each reason,
– The reason codes;
Reduction of costs
■ Documentation error
■ Design error
■ Product improvement – customer feedback
■ Product improvement – claim
■ Product improvement – development of production
■ New version
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22. Data mining: An example
• The analysis of a manufactured product or product family.
– Reason for the product changes or ECOs,
– The dispersion and amount for each reason,
– The reason codes;
Reduction of costs, ■ Documentation error, Design error,
■ Product improvement , customer feedback, Product improvement – claim
■ Product improvement – development of production, New version.
• Comparing the procured/made ratio and their cost the cost structure and
profitability of the assemblies to buy or to manufacture.
• Number of different items delivered by the different component suppliers.
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