Product Lifecycle Management (PLM) solutions have become as important to the manufacturing sector today as ERP was a decade ago. Srikanth R P elaborates on the potential of this technology and the role played by the few Indian companies in this space

When we admire the sleek designs of dream cars like Ferraris, we hardly stop to think about the process involved in developing these beauties. Creativity in design is not the only factor that helps companies stay ahead of their rivals. In today’s competitive scenario, where a customer’s preferences are given top priority, the ability to make changes in design without affecting production schedules is crucial. For example, consider a car manufacturer like Toyota, with manufacturing plants across different countries. If the organisation wants to convey small changes in design, it is not an easy task. Dealing with different projects, people and different geographies—while tracking the development of the product in real-time—is simply too complex. This has compelled companies to look beyond traditional technologies and invest in technologies like Product Lifecycle Management (PLM).

Nitin Deshpande says PLM is being embraced by the Indian engineering industry, just like ERP was a decade ago

What is PLM?
In simple terms, PLM can be defined as a solution which monitors the progress of a product, right from its creation, to its market acceptance. Typically, an enterprise solution like PLM encompasses a wide range of functions and users, starting from product designers and engineers, going on to manufacturing and logistics, to sales, customer acceptance and maintenance. Hence, even if teams are located in different regions or time zones—they can work as one cohesive unit. As PLM integrates and provides the vital link between internal departments of companies, and also to third parties like customers, suppliers and partners—real-time information of the progress of product development is made available to all entities. In essence, this means that if a company incorporates some changes in its design, every entity involved with the product—right from development to marketing to the end-customer—will be informed about it. Thus, effectively giving companies the ability to expand the use of their design resources.

The need for PLM solutions
To understand the importance of PLM solutions for a product manufacturer, one has to look at the entire product development process. Typically, at every stage of development, the cost to implement changes increases ten-fold—this is because the process involves multiple entities. A report published by the Aberdeen Group, ‘Making the case for Product Lifecycle Management,’ shows that over 70 percent of a product’s final production costs result from decisions made during the design and engineering process. If changes are not conveyed and implemented at the appropriate time, it results in a delay in the time-to-market for the product. And here is where a PLM solution helps. With their ability to provide all types of users with easy access to data through role-based portals, these solutions help speed up the process of product development. Further, cost savings are also possible as there is a significant reduction in time consuming tasks such as sending data back and forth till it gets approved.

Today, companies equipped with PLM solutions can effect changes in a product at any stage of the production cycle. It is no surprise therefore that PLM solutions are now being looked upon in the same way as ERP solutions were a decade ago and are currently used in almost every industry, right from cars and aeroplanes, to designer jewellery and consumer electronics.

Market research firm IDC predicts explosive global growth in this segment, from an estimated $1.05 billion in 2001 to $5.67 billion in 2005, with a compound annual growth rate (CAGR) of 45 percent.

Evolution of the PLM industry
The evolution of the PLM industry has its roots in the CAD/CAM industry. As CAD/CAM systems started growing in complexity, systems to manage huge amounts of data and the workflow became inevitable. Every time an engineer worked with a CAD system, he/she created a mass of product-related data which needed to be tracked and accessed by a variety of people within the organisation. This gave rise to the first generation of Product Data Management (PDM) systems, which served as data vaults that provided only textual information, instead of graphical representation of products. While these PDM systems had significant benefits, there was still a vacuum in the system. This was because there was no way that the same data could be shared across a disparate group of engineers. This was a critical factor as engineers needed to understand the effect their designs would have on the rest of the group, when separate assemblies or parts were brought together to make a whole. The growing need to cut costs while quickening the time-to-market, combined with the declining cost of computing, encouraged companies to explore the benefits of PLM solutions. The biggest benefit being PLM’s ability to enable design and engineering work to be done concurrently rather than serially, thus allowing dispersed engineering teams to work on the same product. Secondly, as PLM solutions can build upon the functionality of CAD, a company can control a product’s parameters throughout the lifecycle of a product—from design to retirement—as well as collaborate with their external strategic partners. Globally, CAD/CAM vendors started looking at the PLM space as the next big opportunity, and accordingly the late nineties saw a spate of acquisitions in this space. Dassault Systems, for example, acquired Deneb Robotics as well as SolidWorks, Spatial Corporation, SAFEWORK, EAI Delta and Smart Solutions. Similarly, UGS acquired SDRC, and in turn consolidated with industry giant EDS to form a new unit, EDS PLM. The major players in the PLM space are Dassault Systems, EDS PLM, PTC and Autodesk—all of whom have their roots in the CAD/CAM industry.

Vivek Marwaha says both big and small companies are recognising the need for PLM solutions, as it helps reduce the time-to-market and lowers costs

Indian players
Like most other lucrative areas, one would have expected Indian software companies to flood this space too. But considering the complexity of the solution, there are just a handful of vendors in India that have focused on this space. One of the most visible players is the Mumbai-based Geometric Software Solutions, which is said to have little competition. The company’s clientele includes Dassault Systems and EDS PLM, two of the largest players in the global PLM space today.

The origin of the Geometric-Dassault relationship goes back to the former’s long-standing relationships with Spatial Corporation and SolidWorks. One of the key reasons Geometric is counted among the very best in the global PLM solutions space today is because of the nature of work done by it. For instance, in January 2001, Spatial bought out Geometric’s translation technology for over a million dollars. Geometric has also developed add-in products like CAMWorks, FeatureWorks and SolidWorks utilities, based on its proprietary feature recognition technology for SolidWorks. Besides this, the important fact to note is that both the product source codes of Spatial and SolidWorks are housed at Geometric.

Says Nitin Deshpande, chief operating officer of Geometric Software, “Seeing the quality of work which we did for Spatial and SolidWorks, Dassault decided to enter into a joint venture with Geometric. The JV company, named 3D PLM Software, is a significant development since it is the first time that Dassault has selected a product development partner.” The new company, which commenced operations in February this year, will work on projects relating to Dassault’s solutions like Catia and Enovia. The significance of the deal lies in the fact that Dassault Systems is a mega force in the 3D design space. Currently, one out of two cars and seven out of 10 aeroplanes are being designed using Dassault’s Catia solution. Hence, the opportunity for business from Dassault is huge.

Also noteworthy is the ‘feature recognition technology’ developed by Geometric. The feature recognition technology reduces design and manufacturing cycles by enabling mechanical and manufacturing products to automatically recognise features from any legacy 3D model. What’s significant here is that a company like Dassault is marketing the latest version of their product Catia saying that it has Geometric’s feature recognition technology.

Recently, the company has also entered into an alliance with IBM Global Services India, wherein Geometric would execute the PLM component of the offshore assignments bagged by IBM GSI.

Another Indian player in the PLM space is Rolta, which offers PLM solutions for industry specific segments like process and the manufacturing industry. For the process and power industry, Rolta, in partnership with Intergraph, offers a solution called ‘SmartPlant Foundation.’ The solution manages the availability and accuracy of information for projects and plants and supports the complete plant lifecycle, from design, to building, to operation. For the manufacturing industry, Rolta has a partnership with PTC and is one of PTC’s select worldwide enterprise consulting partners for providing onsite and offshore services on PTC’s Windchill platform. The Windchill suite of software is a set of solutions that uses Internet-based technologies to enable manufacturers to collaborate with customers, suppliers and partners, irrespective of where they are located.

Indian market
Though the adoption of PLM solutions in the Indian market is at a nascent stage, almost all the vendors in this space are convinced about the huge growth potential. This bullishness is proved by the fact that global players like EDS-PLM, Dassault Systems, Autodesk and PTC have a significant presence in the Indian market today.

Says Geometric’s Desh-pande, “The Indian engineering industry is already facing challenges from established global players, be it in the auto industry, machine tools, or in heavy engineering. In addition, global players are increasingly operating in the Indian market, be it as subsidiaries, joint ventures or for sourcing supplies from India. As a result, just like it happened with ERP in the last decade, PLM is being embraced by the Indian engineering industry. Some large players like Telco, Mahindra and Mahindra and Maruti have been active users of CAD/CAM/CAE products for a long time. Increasingly, they along with other players and their suppliers, are embracing the full spectrum of PLM products, including PDM and collaborative engineering solutions. Given the pace of globalisation in this industry, India will be an integral part of the PLM solution users’ world, which is expected to be worth a few billion dollars worldwide.”

As most Indian enterprises are already heavy users of CAD/CAM technologies, vendors believe that the next big growth wave would come in the PLM space. Manufacturing companies are realising that while the earlier wave of enterprise applications like ERP, SCM and CRM did much to streamline and improve business practices, they did little to improve a manufacturer’s core functions within the product development process. Hence, despite the economic slowdown, organisations are looking at investing in PLM-based solutions.

Says Vivek Marwaha, marketing manager for EDS PLM Solutions India, “India is now a mature market for CAD/CAM software. The critical role that PLM solutions play in the process of development of a product is being recognised world over and this trend is increasingly been seen in India too. Collaboration is becoming increasingly important in bringing diverse teams of people together to share common information and increase the velocity with which decisions are made across the organisation. Organisations, both big and small, are recognising the need for PLM solutions, as they help in reducing the product’s time-to-market and in lowering costs. In addition, a lot of design work is being outsourced to India from western countries. This in turn is encouraging engineering service providers to increase their investments and expand their operations.”

S S K Banerjee estimates the market for PLM software solutions in India to be in the range of Rs 100 crore

Initially usage of PLM solutions was primarily seen in heavy industries like aerospace and automotives. But today, it has spread over to sectors like consumer durables and jewellery design. For example, L’Oreal uses Catia to design its shampoo bottles, which enables not only the packaging designers, but also non-technical staff such as marketing personnel, purchasing agents and the management, to quickly and inexpensively review a large number of packaging prototypes.

While PLM solutions have mature markets in the US, West Europe and Japan, in India adoption is just about gaining momentum. As India has thousands of companies using CAD/CAM software, industry experts believe that it is only a matter of time before these companies move on to the PLM adoption phase.

With the Indian manufacturing industry acknowledging the benefits of economies of scale, the need to better manage one’s products has become imperative. Today, product definition resides not just within an individual company, but also across an extended enterprise, including suppliers, partners and customers. With the opening up of the Indian industry, the need for efficiencies is keenly felt. It is in this context that the market for PLM solutions is bound to increase exponentially.

Adds S S K Banerjee, executive director for mechanical design automation and PLM at Rolta, “On an estimate, the process and manufacturing industry spent about Rs 3,000 crore on IT, of which Rs 250-Rs 300 crore was spent on CAD/CAM/CAE. Further, the market for PLM software solutions in India (only in licenses, excluding services) is estimated to be in the range of Rs 100 crore. This market has been growing consistently at 20-25 percent over the last few years, though growth was slower last year due to the depressed market conditions. However, the market is expected to rebound this year. This is seen as an outcome of the move by many CAD/CAM companies to add PLM to their CAD/CAM strengths. Another major thrust will be in the government sector. Given the desire of some of the more IT-savvy ministers for e-governance, this sector is ripe for developing into a major PLM customer.”

One more pointer towards the rapid adoption of PLM solutions is to look at the number of Indian clients which have global vendors. For instance, EDS has a client-base of more than thousand customers in sectors like aerospace, consumer products and the electronics segment. Some of EDS’s customers include prominent names like Mahindra & Mahindra, the Hero group, Telco, Escorts, Ashok Leyland, Bajaj Auto, L&T, Godrej, HAL and the Indian Railways. Automotives is one of the the biggest sectors for the adoption of PLM solutions and every vendor is focusing its energies on tapping this segment to the fullest.

Challenges
One of the significant challenges facing the PLM industry is the lack of knowledge on the benefits of such a solution. To address this issue, most vendors in India are trying to grow the market by educating customers. EDS PLM for instance is focusing on ‘visual collaboration’ as a major area of growth. Visual collaboration refers to visualisation tools that give design engineers the ability to share, view and analyse product information in a single visual environment using digital data from any CAD, PDM or ERP system.

Another challenge faced by vendors is the price sensitivity factor of the Indian market. To counter this, vendors have started offering special prices backed by extensive services to gain market share. The other issue, availability of high-end hardware, which was earlier hindering adoption of PLM solutions is now becoming a non-issue with cost of hardware coming down rapidly. Going forward, analysts believe that in the coming months, the adoption of PLM solutions in India will begin the same way the adoption of ERP-based solutions began a decade ago.