Where Does it Hurt?
Despite an abundance of obstacles facing the manufacturing industry, a smart product lifecycle management (PLM) solution may be the single most important tool for overcoming the pain points bruising the bottom line of many OEMs.
How could PLM be the panacea for all that is ailing OEMs? Does this sound too good to be true? Don’t just take our word for it. In this two-part series, Arena interviewed a cross-section of OEMs to discover the greatest manufacturing challenge impeding their success and how they resolved the problem.
Full disclosure: these companies selected Arena PLMas their product lifecycle management system of choice. We, ahem, think they chose wisely. But regardless of their system of use, we found that time and time again these customers faced similar problems. Does your product company face similar challenges?
More Parts, More Problems
LightSail Energy is a Berkeley based cleantech company developing high-efficiency energy storage systems using compressed air. The company aims to produce the world’s cleanest and most economical energy storage systems.
The manufacturing challenge for LightSail Engineer Tom Quinn was managing the coordination of the large number of parts necessary to build a complex energy system. “We have about 1,000 items,” said Quinn. “Some of the parts are custom however the majority of them are off the shelf, so our challenge right now is to track all that stuff.”
Unfortunately, to manage his bill of materials (BOM), Quinn relied on archaic tools, such as Excel spreadsheets, that prevented his dispersed manufacturing and engineering teams from sharing accurate information. This in turn led to frustrating versioning control problems, product errors, and costly launch delays.
Silicon Valley-based Nutanix creates a virtualized platform for public and private cloud infrastructure. The four-year-old company appears poised to scale with $170M from Tier 1 VCs, several Fortune 500 clients, and a 30% quarter-over-quarter growth rate.
Nutanix’s Chief Operating Officer, David Sangster, admitted that the number and frequency of change inherent in the product development activity as well as data sharing among partners had become problematic. Unfortunately, his team was stuck relying on Excel spreadsheets and email to address these manufacturing challenges. “It’s embarrassing to admit, but we had a number of instances where the suppliers built the wrong version of the product,” said Sangster. "It was 'rev A' all right, but the wrong rev A.”
Sangster confesses that issues with rework, which included extra procurement, build, and test cycles, could increase delays by as much as 400%. Rework also had a significant impediment to the company’s total time to market objective, which he had previously found “totally unacceptable.”
“Change management was a nightmare,” said Sangster. “With several people making changes and suggestions to uncontrolled documents there were multiple revisions of the same BOM flying around the other. No one had any trust in the data, so many local copies abounded based on the ‘mine is right’ premise.”
Hey, Who’s On First?
When Technical Engineer Ron Garron joined Affirmed Networks, he was surprised to discover the company did not have a bill of material (BOM) solution in place. The company’s VP of Finance was forced into the ad hoc role of managing the company’s BOM and price lists with outdated spreadsheets. Unfortunately, this led to versioning issues, churn and serious shipping delays.
“As you can imagine, spreadsheets caused us a lot of angst because there was stuff all over the place,” said Garron. “Our product record wasn’t always up to date, so we were getting incorrect quotes for things that we no longer supported with codes that didn’t even exist.”
Complicating matters further, the company’s paper-based engineering change orders (ECO) procedures prevented the visibility necessary for his manufacturing and engineering teams to share accurate product information cross-functionally. This caused versioning issues that ground processes to a screeching halt.
“Because we were moving a million miles an hour, we would have multiple versions of the latest price list rev,” said Garron. “So it was really tough to know if you had the latest, greatest version of a particular price list. In the heat of battle, it didn’t always get updated when it should have.”
While each of these three companies had unique manufacturing challenges, the solution to overcome the hurdles was the same—a cloud-based PLM solution.
- LightSail Energy eliminated version control issues, miscommunication, and reduced engineering admin delays by 50%.
- Nutanix reduced engineering change order cycle (ECO) approvals from days to hours, shortened product concept to cash cycle by 50%, and achieved the goal of having “zero wrong BOMs.”
- Affirmed Networks removed the need for costly five-person IT management team, lowered ECO cycle times by 90%, and boosted sales enablement processes.
More companies are discovering that Arena PLM applications simplify bill of materials (BOM) and engineering change management (e.g., ECRs, ECOs) while offering the right balance of flexibility and control throughout the product lifecycle—from prototype to production. Click here to hear the stories of more customers who turned to Arena to overcome their challenges.