ROI: PLM’s Ability to Save and Make Money
Historically speaking, identifying the total financial benefit from a product lifecycle management (PLM) solution is not as obvious as it is within an ERP system. Nor is it as straight-forward.
As a consequence, many raise a white flag after attempting to glean all the goodness that can be extracted from PLM across the organization.
But that may all soon be in the past. To win in this modern manufacturing economy requires new champions with a broader appreciation of the enterprise. And with that, the business value of PLM is beginning to get the respect it deserves as more manufacturing executives are taking a deeper look.
Paybacks in internal operational efficiency improvements are among the most straight-forward to measure. The ability to monitor processes against milestones, including reduced engineering change order (ECO) and new product development (NPD) cycle times, accelerated time to market (TTM) and performance goals are critical yardsticks to stay on top of.
These process efficiency improvements are all hard edged, tangible, demonstrable proof points that can be analyzed as true “financial benefits.” Here is a sampling of some industry-specific internal ROIs shared by Arena customers:
How Did Affirmed Networks Reduce ECO Cycles by 90%?
Affirmed Networks' manufacturing engineering teams needed a solution that facilitated synchronization across the company’s supply chain. Version control issues had resulted in more BOM product fumbles than a Chicago Bears quarterback. By providing controlled access to right versions of the product record, Arena’s BOMControl helped Affirmed Networks reduce engineering cycles by 90%, eliminate the need for a costly five-person IT management team, and dramatically boosted sales enablement KPIs.
Pssst. Want to hear a good PLM story?
In addition to providing hard ROI metrics to point to the benefits of PLM, Affirmed Networks’ technical engineer Ron Garron offered this compelling sales anecdote: “Recently, we had a team at a sales conference, and I got a message that we needed a product pushed through right away and needed a quote,” said Garron.
“From the time I got the email, I created an ECO and pushed it through our ERP system to get the customer that quote almost instantaneously. Without BOMControl, we would have never been able to do that.”
That’s an example of a business anecdote–not just an engineering tool kit yarn.
Sinton Reduced Shipping Delays, Product Errors, and Costs
Sinton Instruments designs cost-effective state-of-the-art physic devices and measurement tools to determine the quality of silicon in solar cells and integrated circuits.
Revision control had quickly become one of Sinton’s major concerns. “I would send out a purchase order for a huge job and discover a high percentage of the drawings were below revision,” says Cherie McCandless, Sinton Instruments’ procurement director.
Arena's cloud-based solution resolved the product introduction delays and product errors plaguing Sinton Instruments by reducing shipping delays, decreasing product errors and—most importantly—measuring cost savings. Specifically, Arena accelerated product design time by 20%, and is forecasted to reduce version control issues accounting for 10% of product errors.
McCandless is convinced Arena has resulted in an immediate ROI to reduce shipping delays, solve product errors, and – most importantly—save the company some big-time Benjamins—that’s slang for money for those of you still using Excel to manage your BOMs.
McCandless is another example of a manufacturing professional who clearly saw the immediate financial benefits of PLM.
12 Years. Multiple Companies. Same PLM Solution. Why?
Network Video Technologies’ (NVT) engineer Ben Hsu turned to Arena PLM BOMControl to automate NVT’s manufacturing processes. He chose Arena because of the cloud benefit, which removed lengthy, expensive IT consulting necessary for on-premise implementations, including server sizing, procuring and installation. “The cloud meant ease of access, 24/7 availability and removed the need for an internal IT infrastructure and on-going support,” said Hsu.
For NVT, Arena eliminated change order miscommunication, reduced ECO delays and accelerated time to market by eliminating manual BOM processes.
Manual processes result in version control issues, errors, and delays—all translating into lost money. These companies are all proof of the tangible business benefits PLM offers OEMs of all sizes.
Click here to learn more about how Arena PLM delivered compelling ROI to companies in industries ranging from medical devices to high tech.