Project management

How the entire company benefits from PLM

The advantages of a PLM system beyond product development

The transformation pressure on manufacturing companies is increasing. They need to optimize their core business while simultaneously driving their digital transformation, enabling them to quickly react to changing market conditions and new customer requirements. Particularly for companies with complex product portfolios, it is essential to accurately calculate costs from the initial customer inquiry to order completion, coordinate manufacturing and development across locations, and involve numerous suppliers while always keeping an eye on target achievement.

An integrated PLM system helps companies master these challenges and set the course for long-term competitive success. With suitable function modules and interfaces, it supports them to align processes across departments for maximum efficiency, grasp complex interdependencies faster, and significantly reduce the time to market of their products.

Discover the specific added value that a PLM system provides to your company beyond the development department:

Product cost management

With integrated product cost management, product costs are calculated quickly and reliably during development. Pricing is optimized while costs are kept within budget.

Reliable sales planning is crucial for product development. In order to offer competitive products, companies need to know as early as possible what these will cost and are allowed to cost. If prices exceed the market average, they must offer convincing arguments to potential customers as to why. To achieve decent contribution margins, however, prices cannot be too low either. When conditions change – for example, due to fluctuating material costs or altered manufacturing processes resulting from new customer demands – this often leads to problems. This is because key metrics are usually calculated in separate IT systems in the controlling or accounting departments – outside product development, where 80% of the product costs are determined. Information synchronization and exchange are not digitally harmonized, making them time-consuming and error-prone. Under these conditions, meeting project budgets can be compared to navigating by sight in thick fog.

With the help of integrated product cost management, companies can accurately calculate product development costs in early development stages. When selecting a PLM system, a product costing module with easily adaptable calculation schemes should therefore be a factor to consider. This allows you to calculate various product lines at the same time and adhere to project budgets by capturing costs during development.

To enable the costing of product variants, colleagues outside product development should have direct access to the engineering bill of materials as well. A PLM system with its role-based access management concept allows just that. With this approach, companies set the course early on to achieve the desired profit margin. By analyzing different sales volumes, they determine the optimal price and increase product profitability.

The following areas in the company benefit from integrated cost management:

Controlling: A product costing module integrated into the PLM system allows the controlling department to directly access calculation schemes as well as product cost calculations from development and set relevant directives. This helps you ensure product profitability and contribution margins, increase cost-effectiveness, and steer your company with precision.

Sales: The quick and reliable calculation of variants, for example, for requested material alternatives, accelerates the quotation phase. Your sales team can provide quotes on short notice – and thus quickly increase revenue.

Procurement, materials management, and logistics: Keep larger quantities of frequently requested and used parts in stock to reduce procurement costs. Additionally, materials management can proactively stock alternative materials in appropriate quantities with regard to increasing sustainability aspects.

Product development: Control and break down costs to determine project profitability based on actual needs rather than fictitious specifications from the ERP system. This allows you to plan project costs realistically and adhere to budgets. Simultaneous cost tracking within the project enables you to document expected work efforts directly in the work breakdown structure and compare them with the cost breakdown. By utilizing project cost reports, your team always stays on top of things.

Requirements and variant management

Effective requirements and variant management sets the foundation to implement customer requirements faster, configure variants in no time, and bring innovations to market sooner.

Customer requirements are constantly increasing in both their quantity and the level of detail of their specifications. As the number of product variants grows, so does product complexity. Without requirements management along the entire product lifecycle, rapid and efficient development is hardly possible – let alone the use of suitable methods to support interdisciplinary collaboration, such as MBSE.

The increasing variant diversity also raises the risk of compromising the cost-effectiveness of procurement, manufacturing, and quality assurance. This is because, in conventional approaches, small batch sizes do not allow for economies of scale and the corresponding cost reductions.

PLM Software with integrated requirements management enables faster and more accurate product development in accordance with customer requirements. Requirements can be documented throughout the entire lifecycle and captured and edited more easily. The relationships between requirements are visualized in the digital product model and the degree of fulfillment can be permanently tracked. Additionally, PLM-supported requirements management provides the foundation for Model-based Systems Engineering (MBSE) for interdisciplinary teamwork.

Integrated variant management enables companies to strategically align their product portfolios and minimize the effort for variant configuration. With feature- and rule-based variability models, they can build platforms and product systems, limit variant diversity, reduce proliferation, and manage their portfolio in an efficient and cost-effective way. Additionally, the digital data and process organization of the PLM system facilitates largely automatic documentation, which significantly simplifies the fulfillment of compliance requirements.

Departments beyond development that benefit from PLM with integrated requirements and variant management:

Sales, product management, and product development: Sales can respond more quickly to customer inquiries and capture new or modified requirements directly in the PLM system. Product management and product development can easily process these requirements and simultaneously track their implementation, reducing lead times and increasing innovation productivity.

Variant management enables the targeted development of product portfolios tailored to market demand. Across departments, the company thus combines customer orientation with efficient value creation – for example, by leveraging intelligent process patterns and delivery strategies like CTO+ (Configure-to-Order in conjunction with Engineer-to-Order).

The platform approach and product systems set the foundation for a cost-effective and efficient portfolio. Furthermore, a PLM system ensures alignment with the company’s strategy and compliance with sustainability goals. It enables them to develop their products with cost-effectiveness in mind – even from batch size 1 – and implement innovations for new market opportunities or business fields faster. This is enabled by intuitive configuration options and reusing existing variability models stored in the PLM system.

Effectively limiting variant diversity: The interaction between maximum BOM (also known as 150% BOM) and sets of rules prevents the creation of uneconomical variants. Through a PLM system with integrated variant management, the portfolio can be managed in a clear and structured way.

Support for product, quality, and compliance management: Thanks to automatically recorded comprehensive documentation, design decisions can be accurately traced back even years later. This makes it easier to meet compliance requirements with clients and authorities.

Procurement, materials management, and logistics: Frequently used components are stocked in various material alternatives and in larger quantities, reducing procurement costs. This enables companies to increase cost-effectiveness, shorten delivery times, and increase customer satisfaction.

Conclusion: A PLM system benefits the entire company!

PLM systems ensure end-to-end data availability along the digital thread. They enhance collaboration within product development and across departments, all the way to supplier chains. A PLM system as a central database (in the sense of a “Single Source of Truth”) with modern IT-supported collaboration tools significantly shortens time to market, reduces efforts in the quotation process, and simplifies compliance with customer and regulatory requirements.

Companies looking to manage the complexity of their product portfolio with a PLM system do not necessarily have to put up with high administrative efforts. Cloud-based Software-as-a-Service (SaaS) solutions provide preconfigured and standardized function modules out of the box. A user-friendly no-code environment allows the specialized departments to set up the software themselves without requiring any specialized IT knowledge. Furthermore, companies relieve their IT department from efforts that traditionally come with installing and maintaining dedicated hardware infrastructure. Updates and backups are performed automatically, eliminating the need for manual interactions. Extensive cloud security technologies provide reliable protection against cyberattacks and prevent unauthorized access to sensitive data.

Benefits of SaaS PLM at a glance:

Building and managing complex product portfolios
Systematic product cost management during development
Comprehensive requirements management throughout the product lifecycle
Rule-based variant management
Implementation of methods to support effective interdisciplinary collaboration in complex projects
Fast response times
Reduced workload for internal IT department (in times when IT specialists are scarce)
High availability and IT security

Take advantage of cloud-based PLM software now: CIM Database Cloud is the solution for end-to-end digital product development. With “Innovate”, you bring innovations to market faster and manage your product portfolio with ease.

Lasting communication instead of talk and forget

Today I had a task to complete that I had long postponed due to other pressing matters. The team urged me to finally finish my part so that we could complete the implementation of a function in the software. The logic to be clarified was rather demanding and I struggled to get back into it. My to-do card on the task board was vague and my recollection of the initial meeting had already faded. So I started researching and found an email that refreshed my memory.

Overabundant communication channels lead to information loss

Oh, good old email. What a surprise, since I have much more modern communication tools at hand. Our team is spread all over Germany and we have been accustomed to working remotely, even before the corona pandemic. This works just fine for us, with the help of agile rituals such as the daily standup meeting and communication via video conferencing and chat. Successful communication is essential for the success of the project, as is well known.

It is also convenient that notes and documents can directly be shared within the online meeting. The catch is, however, that the chat often ends up containing decisions and technical information. Hence, the information I was looking for could just as well have been found there. Apart from email and chat, a surprising number of companies also have a third potential location for finding information: network drives, where project documents are stored in a more or less structured manner.

Communication in context means finding instead of searching

Have fun searching! Luckily, we at CONTACT have it much easier. We use our own software for project management, which provides us with excellent tools to do things better. In addition to the project management functionality, these include document management and a communication functionality called Activity Stream.

Posts in the Acitivity Stream – and this is the key point – can always be assigned to an object. For example, to a project, a task, or an open item. Or, in the case of our customers, to product data such as a CAD model, a bill of materials, or simulation data. This links project and product data to the relevant communication activities. For one thing, this allows us to search and find information in one single tool. In addition, because the object serves as an anchor point for the associated communication, all context-relevant information is automatically displayed when the object is called up.

Enrich objects with information en passant

Back to my case: To clean up the mess, I attached a document with my solution to the completed task. Along with it, I added the email that helped me do it. I also created and linked a new task for implementation by my colleagues, then wrote a summarizing Activity Stream post and shared it with them.

Now, I have brought together what belongs together. Even if a team member unfamiliar with the project history takes over the implementation, all information is immediately at hand. He or she can ask a question via the Activity Stream, without having to explain the context in an email or chat first. If I had used the Activity Stream to communicate within the task’s context from the beginning, all relevant information would have been assembled there. And I would have saved myself the trouble of researching and combining it.

Changing habits pays off

So, what do we learn from this? Firstly: A project management system with document management and context-related communication à la Activity Stream improves collaboration enormously. Secondly: It takes some discipline not to fall back to other tools at the first opportunity – as I did. But it saves a lot of work later on.

Time and time again, I see customers hesitating to switch from email to this type of contextual communication. My simple advice: Have the courage! Provide your employees with an appropriate tool and advocate for it. It may be unfamiliar at first, and it takes some time to gain widespread acceptance. But it is worth it. For the entire organization as well as the individual employee!

Time scheduling – The hammer of project management?

If you have only a hammer as a tool, you see a nail in every problem. Mark Twain is credited with the bon mot ” If you have only a hammer as a tool, you see a nail in every problem”. Even if it is not clear beyond doubt who is actually the author of this statement, it remains probably the most succinct formulation for “Maslow’s hammer“

So what does this have to do with project management?

When it comes to project management software, I often observe that users try to achieve a wide variety of goals with just one tool, namely scheduling. You can’t blame them, because many project management tools tempt users to do just that.

In the process, schedules are created from hundreds or thousands of daily tasks. It is not uncommon for me to also encounter tasks in question form, such as “Specification released?”, “Customer presentation done?” and so on, provided with duration, deadline and task links.

Over-detailed planning takes its revenge in the project

The dilemma: Such plans are only pseudo precise, with many detailed deadlines calculated from activity links. Although everyone involved actually knows that in larger projects no activity is completed to the day. Nevertheless, everyone pretends that the plan is exactly right.

Also, the practice of managing resource utilization by linking all the tasks of a particular person one after the other only works well until you have to change the planning. Then the whole scheduling structure is no longer right. But the scheduling tool continues to calculate the dates mercilessly according to the network plan. The more detailed the plan is, the more time-consuming it is to make changes in the course of the project. You move one task and many others move with it – but unfortunately not in the way you would have expected. You no longer understand your own, overly complicated network plan and require a great deal of rescheduling effort for new fake precision. Some people leave the plan unchanged and start improvising instead

Use the entire toolbox

Here it is obvious to think of agile approaches as an alternative. But you don’t necessarily have to change your project management completely. Many experienced project managers say: “Agile is nothing new. With me, it’s just not a task board, but a good old open points list.” And that’s exactly the key. Plan only as precisely as necessary and as really useful. The motto here is: Better good rough planning than poor detailed planning. Even if the rough plan probably doesn’t come in as thought, it’s much easier to correct and makes the impact on the project more readily apparent.

For detailed issues, a list of open items (LOP) with clearly defined responsibilities is the tool of choice. And for anything you want to schedule in question form, checklists that are reviewed regularly as the project progresses are helpful. If not met, put an action on your LOP. And perhaps you record and monitor risks and define countermeasures to take timely and effective countermeasures. This usually puts you in a much better position for a successful project.

So: Only use the hammer for nails. For everything else, feel free to pick up pliers, screwdriver or wrench!