Component manufacturers drive product innovation through PLM

Product innovation has shifted from OEMs to SMB component manufacturers who are at the helm of affairs in driving innovation and collaborative commerce writes Akhtar Pasha

Component manufacturers and suppliers have graduated from CAD/CAM/CAE to PLM at a rapid pace and last year saw a turnaround for the manufacturing industry. A significant proportion of product innovations that were earlier done by the OEMs have shifted to the component manufacturers and suppliers. Today they have a strategic say in the new product development of OEMs. SMBs are no longer just low cost suppliers, but are participating early in the OEM design process. For example, Sansera Engineering that manufactures components and supplies them to most car and two-wheeler OEMs has improved it’s time to market for New Product Development (NPD) and assumed process and quality control over its manufacturing. NRB Bearings has also seen increased growth through PLM and there is better collaboration between the company’s design teams, tool room and manufacturing plants. Dietech has streamlined its designs, Product Development Management (PDM) and there is greater control in product checks and better collaboration between designers and the tool room for die-casting.

The extended enterprise is the reality that, in today's global market, a company is not made up of just its employees, board members and executives but also its business partners, customers and suppliers. Many SMB suppliers and component manufacturers are demanding PLM solutions that fit their need so that they can connect their own departments and OEMs to assist in the collaborative development of products and help them improve time to market.

A shift in responsibility for product innovation

Five years back, the OEM had the final say in the design and production of a product. Today, however, thanks to globalization and the competitive nature of the market, OEMs have been reduced to mere System Integrators (SI) or assemblers. Product innovation is now happening at the SMB level. The OEM gives the barebones specification of parts, the quality that it expects, and the timeline. Within the given parameters, the SMB supplier has to innovate and cut costs to maintain its profit margins.

Rafiq Somani, Country Manager, PTC-India, said, “Suppliers have become SIs of OEMs in the process of variant management in the automotive vertical. Earlier OEMs were introducing new products every five years. That’s passé now. Today they are introducing new products and new variants every 12-18 months. Clearly time and customer pressure to introduce new products have shifted from OEMs to their suppliers.”

Similarly, in the apparel & footwear industry, companies have to keep pace with the changing trends of the fashion industry as seasons change. Many companies are competing via fast fashion, increasing the already challenging seasonal product shifts with fashion lifecycles that last for a few weeks. Multipack Systems, a biscuit manufacturing machinery concern, that supplies machinery to Parle, Britannia etc has reduced NPD from six months to a few weeks using PTC’s Windchill PLM solution. Similarly NRB Bearings has reduced its product design cycle time from six weeks to five days. Virgo Engineers Group that manufactures and sells automated and manually operated quarter turn valves (flow control industry) has improved its project order execution processes through the implementation of Windchill PLM system and ERP.

Vivek Marwaha, Marketing Director, Siemens Product Lifecycle Management Software India Pvt. Ltd., said, “Today’s market is commoditizing products more quickly than ever, creating a stronger pull-through effect for unique and better performing products.” In the past, PLM exclusively focused on engineering design. However, over the past five to six years, the focus has expanded to include many other areas of the product lifecycle, such as product planning, quality engineering, manufacturing engineering, customer service, and maintenance, he added.

B. R. Preetham, Vice President-Operations, Sansera Engineering explained how NPD has a direct relationship with innovation. PLM systems from WRENCH have helped the company innovate and align its business and PLM innovation, ensuring that innovation is productive and that it is helping the company achieve growth. Preetham said, “PLM has helped speed up time to market and has helped in growth and revenues. Today we can view all the new and existing projects and PDM systems that are there in our systems and track them online and have greater control of document management, customer queries and quotations.”

NRB Bearings Ltd uses PTC Windchill for PDM and project link and it has shortened its time to market for NPD and manufacturing. The company’s Senior Manager-R&D, Prakash Janardan Banait, said, “We have seven plants in India, all at remote locations. We used to scan and e-mail our designs, BOM and production data (inter-plant data) to our plants and our processes were people-centric, which used to delay production and shipments. Additionally it created chaos between the design room, tooling room and manufacturing if there were any changes at the design level. This used to delay our production by three to four days. We used PTC Pro/ENGINEER, Windchill PDMLink for the control and management of product data and Windchill ProjectLink for enterprise project collaboration. It has helped us improve and develop NPD faster. Data management has been centralized and the search engine made user friendly. Earlier it was difficult to locate designs on papers. Change request management is automated and only the latest designs and specifications are uploaded to our intranet site. We can track and manage all the projects online. The ability to collaborate seamlessly across locations, while allowing us the benefit of reduced costs, is another great advantage of adopting PLM solutions. PLM has added to profitability as customers prefer to do business with partners that have automated systems and quality control in place. General Motors and Daimler Motors became our customers after seeing us using PLM effectively.”

Andy Kalambi, President, Dassault Systemes, India, noted, “Innovation is moving to the supply chain and OEMs depend a lot on product innovation by suppliers who have a stronger say in the product strategy and innovation cycle of automobile OEMs.” Consider Bosch which is the biggest automotive supplier and perhaps its revenues are bigger than some of the automotive OEMs. Additionally, the weak economy has forced it to work with fewer strategic suppliers that can scale up capacity especially in product innovation.

Varghese Daniel, CEO and Founder, WRENCH Solutions (P) Ltd., added, “Suppliers to OEMs want to automate four core business operations using PLM—monitoring project systems (as each component is a project in itself), quality control, collaboration (between the design team, tool room and manufacturing plants) and capturing knowledge. Supplier and component manufacturers have become value engineering in building components in cost-effective ways for OEMs. SMBs are squeezed on price and hence they need to improve efficiencies by monitoring project systems and control quality using PLM.”

Other business drivers for suppliers to use PLM included faster delivery of components to OEMs, re-usability of design (to modify designs quickly using earlier referenceable designs rather than reinventing the wheel every time) and manufacturing at the cheapest location closer to the OEM factory.

The trend that clearly impacted the PLM market has been the adoption of PLM strategies by non-traditional industries, such as food and beverage, CPG, retail, apparel & footwear, aerospace, ship building and services.

Need for tighter control over PDM and project systems

S. Natarajan, R&D Head, Dietech India Private Ltd., (DTI) explained what was behind the need to maintain strong control of project and PDM systems. DTI is a commercial tool-room in Chennai, making molds for aluminum permanent mold castings in Pressure Die Casting, Gravity Die Casting and Low Pressure Die Casting processes. PDM is a troublesome area in any tool-room and it is more aggressive in a commercial tool room like DTI. The Windchill-PDM link solution from PTC has provided a well organized data management system to DTI where data storage, backup and searching is simplified. The version control check-in and check-out offer security and assurance that the right data is being used for the required purpose. All these advantages along with a host of other benefits such as operation flow communication, quality improvements and standardization using library functionality drove the company to implement a PDM solution. He added that data release for new projects got streamlined treatment in the beginning of the mold development. Though the primary benefits are still to be exploited, the take-off is smooth and the process has been well received.

Daniel added that some companies are demanding higher quality standards to meet Advanced Product Quality Planning (APQP) and TS standards (for quality testing and benchmarks to improve the overall safety of products) and hence many customers have deployed PLM to meet this requirement, which is part of the PDM system.

Kalambi cited examples such as Elgi Equipments using a PLM solution from MatrixOne that is helping it store and track all data relating to every product during its entire lifecycle. Satya Auto, Lakshmi Machine Tools, and Fine Arc are some other examples.

Interestingly there is another trend that is driving the adoption of PLM systems and it is called crowdsourcing, which is a distributed problem-solving and production model. Some have predicted that crowdsourcing is the future of the marketing, advertising, and industrial design industries. The phenomenon, they argue, will accelerate creativity across a larger network. Others, meanwhile, have predicted that this practice of opening up a task to the public instead of keeping it in-house or using a contractor will result in the demise of those businesses because of the downward pressure on prices. Consider this, if LG crowdsources a new cell phone design on CrowdSpring for $20,000, as it did recently, what happens to the old model of paying a design firm millions of dollars for the same project?

Enquiry, proposal and quotation management

Preetham said, “Earlier we had manual systems for developing products from inception to finished product and there was no process control. For example, we deal with thousands of components and each component was a project for us. Tracking and monitoring each project was impossible. We were unable to identify the root cause of delayed components and the top management had to call up the project leaders to get the latest reports. We would not be able to respond to customer quotation of NPD on time and the responses were inaccurate. PLM systems such as WRENCH have helped us automate query and quotation management. We can do product costing and respond to customer quotations quickly and accurately. There is tighter control in documentation and collaboration between marketing, engineering design team, the tool room and manufacturing.”

Marwaha noted that demanding customers were increasingly pushing requirements for faster turnaround times on quotes, orders, design and support of unique products. Quicker response requiring integrated design and manufacturing were other factors that drove SMBs to invest in PLM systems. Additionally, there is the burden of managing an increasingly complex design and development environment—high business growth typically requires the coordination of design and development resources across and between boundaries, both geographic and organizational.

Collaboration between design, tool room and manufacturing

Many are using PDM components for design review and change management. OEMs post new product data to be developed on their Intranets. Suppliers are required to download the specifications and spend time understanding the requirement. For example, DTI has three core areas—capturing change; collaboration between designers, tool room and manufacturing; and knowledge management. Each component is referred to as a project and a supplier would have hundreds of these projects. Knowledge management systems are required to manage these drawings. Since most suppliers work with multiple automotive OEMs, a small change in the OEM product design can be done easily if they have similar designs stored in the knowledge database. This helps further reduce the design cycle time.

Being able to collaborate and to have shared access to a single source of data, and follow structured workflow processes is critical in helping stakeholders to work together on related tasks and be able to find and reuse past experience. Typically, organizational and cultural barriers can make it harder for teams to collaborate on common processes. Working in isolation usually creates downstream misunderstandings. SMBs usually lack the necessary tools to allow one to capture, share and reuse knowledge which is the lifeblood of product engineering. Collaborative product development as enabled by a PLM system will allow them to increase design commonality and facilitate reuse thanks to a powerful and flexible search capability, accurately calculate BOMs that ensure downstream quality, streamline the completion of everyday engineering tasks with simple design release and engineering change workflows (e.g., create BOMs, initiate new projects, create specifications, review designs with suppliers, check, approve and release product information to manufacturing, etc.) and improve resource utilization through integrated project scheduling.

Entry barrier down

Earlier SMBs stayed away from purchasing PLM systems because of the high cost of ownership (product costs vis-à-vis implementation cost ratios were 1:2 or 1:3) and the fact that the implementation time stood at 18 months. However, in the recent past, vendors have made conscious efforts to reduce acquisition costs, implementation costs and speed up deployment. Five years back, the cost of PLM systems and time to deploy were major hurdles for SMBs wanting to implement the technology. Somani said, “The licenses and implementation costs about five years back were in the ratio of 1:2 and time to deploy PLM ranged from 12 to 18 months. Competition, open markets and the SMB’s survival instincts have forced vendors to cut prices and introduce a vertical focus with industry best practices to reduce implementation time. We too have cut down the entry-price barrier and time to implement significantly. Today the ratio of license and implementation costs is on par.” Similarly the company has also changed its strategy from enterprise to SMB starting from 2007. “Today SMBs account for 45-50% of our revenues. Further, Dassault Systemes has added 11 vertical PLM solutions in the market because of the customer demand,” he added.

According to Marwaha, earlier the TCO in PLM was high because it worked well only with the Oracle database, which was a die-hard enterprise product. Today customers can use SQL Server for engineering, which has low TCO on PLM systems. Further, Siemens has introduced PLM systems that are available in 5, 10, 15 seats without compromising on the functionality such as PDM, workflow management and engineering change management, which has allowed it to penetrate the market better. Given its vast experience of implementing and deploying these solutions across various industries, the company has acquired a lot of knowledge on the processes and best practices as followed across various industry segments. Some of this knowledge has been embedded in the solutions as predefined industry configured best practices, process specific design applications, preconfigured workflows, wizards, templates etc, and some are leveraged during the implementation process, using standardized best implementation practices for rapid deployment. The company has introduced PLM solutions that require less customization for industries such as automotive and aerospace.

WRENCH too has reconfigured PLM systems to address all the functionality such as BOM, PDM, project management, collaboration and quality management that have reduced the implementation cost and time from eight months to two months and this has reduced the risk of failure. Its vertical-specific solutions are used in heavy engineering, by R&D organizations such as Vikram Sarabhai Space Centre (VSSC), DRDO etc. and the engineering and construction verticals for power, oil & gas, roads and shipping.

Component manufacturers will continue to evolve their business and will play a significant role in product innovation and delivering quality and safe products. We expect that the innovation factor will not just be the preserve of automotive suppliers. Rather, in coming months, we expect SMB manufacturers in verticals such as consumer goods, aerospace, ship building, apparel & footwear and infrastructure projects to also play a significant role in the adoption of PLM systems.

akhtar.pasha@expressindia.com