Three Manufacturers Testify to the Business Value of PLM
According to a recent Pricewaterhouse Coopers report, titled “Getting the Benefits That PLM Has Promised for Years,” “PLM is still largely seen predominately as an ‘engineering sell’ rather than an integral, enterprise wide, cross-functional solution needed to manage increasingly complex global business operations.
Many OEMs—even those frustrated with the use of outdated spreadsheets and silo’d databases to manage their BOM—never consider how PLM can make cross-functional cooperation and communication more efficient.
Even worse, many engineering and operation department heads, who actually know PLM’s ability firsthand to lower costs, speed prototyping, reduce scrap, and streamline supply chain management, are dismissed by senior most executives who sometimes either fail to consider or don’t completely understand the business benefits of PLM.
This begs a question: why do engineers and operation managers struggle to sell executives on PLM?
Part of the reason why these insular department heads fail to communicate the financial benefits of PLM to executives is that they don’t have access to broad enough ranging ROI metrics or statistical-oriented case studies. Additionally, many fear embarking on ‘bunny trails’, or areas perceived to be fraught with risk, as they delve into broader tangential ‘science projects’.
Still, one must gird up thy loins to overcome the somewhat daunting task of measuring enterprise-wide improvement when lacking the letters of C, F and O in one’s title. In this three-part series, we’ll look at several companies and the measured ROI they achieved with PLM:
That’s Cold! Bring Down BOM Errors to Absolute Zero
For Nutanix, a virtualized platform for public and private cloud infrastructure company, change management and data sharing among partners had become problematic. With multiple revisions of the same BOM circulated among the company, confusion and error were wreaking havoc.
Issues with BOM version control are a common problem among most manufacturers. There’s a reason the phrase ‘one version of the truth’ is the Holy Grail among purveyors of high mix, high turn NPIs.
Nutanix's COO, David Sangster, used Arena’s multi-tenant SaaS, patented cloud-based PLM solution to corral change management processes.
Arena shortened the product concept to cash cycle on second-generation product by almost 50%. “This has had a positive, material impact on the business by reducing our burn rate and reliance on external cash,” he said.
In addition, Arena reduced engineering change order cycle (ECO) approvals from days to hours. “ECO reviews are now done by teams of stakeholders using the same data,” said Sangster. “We get terrific feedback from the give and take of the review process. Partners have also provided feedback that helped us avoid making unnecessary, confusing or costly changes.”
Discover how Graphite Hammered Product Errors Down by 90%
To formalize manufacturing processes and operations to accelerate time to market, reduce product errors and bogus parts, Graphite Systems, a venture-backed computer startup, turned to a PLM solution. In addition to decreasing design cycles from six months down to a few weeks, Arena removed 90% of product errors, saved an estimated $500,000 recurring annually by removing costly on-premises IT management, and reduced time to market 25%.
Arena PLM ensured Graphite’s design processes were now rock solid. And when your ROI numbers sparkle like a 4-carat diamond—an executive would have to wear shades not to see them.
“Before Arena, we didn’t have a concrete way of doing an ECO, so the cycle times were ‘infinity’ because we didn’t know how to do it,” says Graphite Director of Engineering Kevin Rowett. “Arena PLM BOMControl edits allow us to trace by batch, factoring codes, so we know where the parts came from for a particular build; that also extends into the sub-assembly and reduces ECO cycle times down to just hours.”
Stop the Wheel Spinning: Reduce ECO Cycles by 50%
IPG Photonics, a designer of semiconductor and cloud software company, turned to Arena to eliminate the time-consuming complications of managing unwieldy change order packages by formalizing ECO processes. In addition, Arena reduced ECO cycles by 50%, allowed refactoring of large BOM trees in a few hours, and dramatically lowered procurement costs.
Director of Platform, Bill Orner, noted that Arena’s ability to accelerate time to market has cut months out of the time to prototype from a 14-month development platform project. Arena also saved the company $100,000 per design project. When it comes to calculating product errors, Orner claimed it was harder to quantify—in a positive way.
“I can’t give you any estimates in the reduction of errors because we don’t have any now with Arena,” said Orner. “One error for us in assembly is catastrophic if the product doesn’t run. You know, so we’re down to close to zero errors for product deployment.”
Abracadabra. Now you see product errors…now you don’t.
Click here to learn more about how Arena PLM delivered compelling ROI to companies in industries ranging from medical devices to high tech.