As we discussed last week, showrunners are to the success of a TV show, as operations managers are to product success. When it comes to new product introduction and development, operations managers run the show. They “get it done.”
While other people in the company may believe there’s no need for a product lifecycle management (PLM) system since the company is already using an enterprise resource planning (ERP) system, the modern operations manager knows better. He knows no engineer, nor supplier, would use an ERP system. The operations manager is aware of collaboration and communication challenges that have come about due to the company’s distributed structure more than anyone in the company because the buck stops with him. He understands that an ERP system is more about historical outcomes and PLM is more about versioning control while collaboratively driving to an intended outcome. Operations managers’ four responsibilities include to:
• Create and manage a flexible, secure supply chain which is external to the company spanning many time zones
• Efficiently communicate product data to dispersed partners
• Receive valuable manufacturability feedback from suppliers
• Be the in-house expert since OEMs who predominately outsource often suffer from limited manufacturing knowledge among their employees
Innovative operations managers know the ROI of PLM because they can measure internal operational efficiency improvements. For instance, the ability to monitor processes against milestones, including reducing engineering change order (ECO) and new product development (NPD) cycle times, accelerating time to market (TTM) and performance goals can all be calculated with precision.
These operational process efficiency improvements are all tangible, demonstrable proof points that can be analyzed as true “financial benefits.”
Modern operations managers are finding greater financial and business value in their PLM solution than in their ERP systems.
There is a growing consensus among manufacturing operations managers that the business impact of PLM may soon surpass that of ERP.
“In addition to PLM’s inherent value, PLM decisions have strong influence on the business model and benefits that can be realized by ERP, Supply Chain Management (SCM) and Customer Relationship Management (CRM) applications in downstream business processes; in that sense, PLM is the most fundamental business application in manufacturing,” according to a recent Gartner report.
A manufacturing tragedy is when the modern operations manager, who knows firsthand PLM’s ability to lower costs, speed prototyping, reduce scrap and streamline supply chain management, is dismissed by executives who refuse to consider the business benefits of PLM. Without a PLM solution in place, cross-functional cooperation and communication becomes more opaque, exacerbating a culture of distrust and blame over product errors between operations and engineering managers.
That is why Arena finds that operations managers–frustrated with the use of outdated spreadsheets and siloed databases to manage their bill of materials (BOM)–are the biggest influencer driving demand for PLM. They have the most to gain (improved quality, reduced costs, lowered risk, collapsed time to market) and most to lose (product errors and rising costs).