Avoid Product Launch Failure
Full transcript below:
Linda Bell:
Welcome, and thanks for joining us. I’m Linda Bell, Editorial Director at Tech Briefs Media Group, and I’ll be your moderator for today’s webcast, “Avoid Product Launch Failure: Best Practices for Aligning Your Engineering and Quality Teams,” sponsored by Arena. Today’s webcast will last about 60 minutes, and there will be a question and answer period at the end of the presentation. You can submit a question anytime during the presentation by entering it in the box at the bottom of your screen. Our presenters will answer as many questions as possible at the end of the presentation, and those questions not answered during the live event will be answered following the webinar. In order to view the presentation properly, please disable any pop-up blockers you might have on your browser.
So now let’s meet our speakers. Ann McGuire is Product Marketing Manager for Arena and has more than 20 years of PLM and document management experience. She has held positions in pre-sales support, sales implementation and training, and established an implementation methodology that enabled fixed-scope, fixed-price implementations that challenged the enterprise software industry norm of open-ended, widely scoped, many-year implementations.
Jim Brown is the founder and President of independent research firm, Tech-Clarity. Jim is a recognized expert in software solutions for manufacturers with over 25 years of experience in application software, management consulting, and research. He has extensive knowledge on how manufacturers use products like cycle management and other enterprise applications to improve business performance.
So now I’d like to hand the program over to Ann McGuire. Ann?
Ann McGuire:
Thank you, Linda. Well, we know your time is limited, and thank you for joining us today. We wanted to make sure you got the punch line right up front. We have data on product launch failure as well as practices to increase product launch success. If you’re on a product team, especially one that brings innovative products to market, this webinar is for you.
The first question we have today is what is a product launch failure? We see a product fails when it doesn’t meet these or other goals. You see the functional, quality, time to market, and cost. You can have a complete failure or a partial failure where you hit some, but not all, of the targets.
Jim Brown:
Yeah, that’s a great point, Ann. This is Jim Brown with Tech-Clarity. We actually asked the question a little bit of a different way in terms of what’s failure. What makes a product successful in the market? And specifically, we asked what helps you differentiate your product?
What we found is some very product-centric things: being able to provide high quality and reliability, high performance, innovation, also about product cost. But there are also a number of other things that aren’t just differentiation factors that are important, and those are the ones that Ann mentioned, really being able to hit those targets, particularly time to market, really are important in terms of being able to drive a successful product and make money from it.
Ann McGuire:
Effective product launches are often elevated from the marketing perspective. While marketing must make sure that the product launch plans are effective and they’re executed correctly, we are going to focus on the many other organizations that must execute first.
Developing new products requires not only engineering, but other people that you see here: quality, manufacturing, procurement, the suppliers. They all have to be on the same page as products evolve from concept through full production, and these groups must be able to collaborate quickly throughout the development phases if you want to ensure products can be manufactured on time and under budget.
Jim Brown:
Yeah, it really takes a village to develop a product successfully. We talk about it as product development is a team sport. Obviously, engineering or R&D is very important, but really to market effectively, the product has to be well designed, but you also have to align the supply chain and meet supply chain demand. You’ve got quality needs. Sales and marketing need to be aligned and ready to actually support the launch. So, there’s just a tremendous amount that needs to happen in concert for products to be successful.
Linda Bell:
Can you explain a little bit more on why product launches fail?
Ann McGuire:
Good question. The major reason products fail is because of complexity—supply chain complexity and product complexity. Let’s take a look at a typical supply chain here. They’re often global. There are sources from around the world, manufacturing partners from around the world.
Here are some of the problems that happen. Today’s supply chains have many benefits, but they create many risks when you’re trying to launch your products. Your new product development team must consider all these issues ranging from problems like part shortages and long lead times, natural and political disasters, personnel changes, and other manufacturing challenges. The complexity of the product itself is a source of risk too.
Linda Bell:
So how are today’s products more complex?
Jim Brown:
Yeah, that’s a great question. I’ll jump in on that one. Ann mentioned that products are more complex as well as supply chains. We have something we call the five dimensions of product complexity, and if you start it around at the top, you see one of them is mechanics and materials. We’re seeing lots of new, different approaches to building products. They’re miniaturizing, but we’re also bringing in things like 3D printed materials and more composites. So, there’s a tremendous amount of complexity in developing those.
We’re also seeing, if you go around clockwise, that there’s more demand on supporting products and making them profitable across the product lifecycle. So, it’s not just about getting a product that’s great out of the box. It really needs to also be highly reliable and be able to work effectively for a long time, particularly for companies that are putting out fixed-cost or service-based pricing.
Continuing around, Ann mentioned globalization, global design, and global manufacturing, the fact that supply chains and organizations are split across multiple time zones. Fantastic opportunity to leverage different talent, different skills around the world, also to manufacture closer to the source and closer to the customer, but it adds just a tremendous amount of complexity as does global markets and the globalization of supply chains.
Then finishing off, we’re back on product with mechatronics and systems. We’re seeing smarter products being developed. So smarter products really drive a tremendous amount of additional complexity as we’re incorporating more software, and I’ll talk about that in a little more detail. But the same as Ann said, products are more complex and supply chains are more complex. The way we see it, products are more complex, but the entire product development ecosystem has gained in complexity and that’s driven some real challenges.
To drill down a little bit on complexity of these smart products, and connected products even, we surveyed people, manufacturers, and asked them how much the amount of software had increased in their products over the last five years and then looked forward for another five years. And this was a couple of years ago, so we’re continuing to see this trend. We saw that over half of companies said that the amount of software in their products, many traditionally mechanical products like agricultural equipment, has increased significantly. Over a third additional to that had said it had increased somewhat. Very, very few said that it had stayed the same or decreased at any level.
But it’s interesting to see that the amount of software has increased, but the other questions we asked, I think, are as telling as that. The importance of the software in products has increased, and one of the pieces of that is that the level of product innovation driven by software has increased. So, companies have these complex product development problems because they’re developing brand-new solutions that are systems oriented. They have to have mechanics, electronics, and software working in concert with those different teams bringing products to market at the same time. And it just brings in a tremendous amount of risk and really drives a lot of potential challenges.
Ann McGuire:
The need to continually innovate is a big challenge. Innovation is the lifeblood of success in our fast-moving global economy. Even well-established companies must continue to innovate if they want to avoid being passed up by smaller companies or startups.
This giant shark is gobbling up all the small fish. When that shark was small, those fish were a lot bigger. Think about Dell and Garmin, who dominated their markets, and then Canon, Sony, and Nikon, who earlier had innovated Kodak out of its business. Disruptive technologies can change markets quickly and take down successful Goliaths. We see this now and will continue to see it in the future.
Like Jim mentioned, the need to innovate crosses all industries. Michelin North America’s David Stafford said recently, “If you’re not innovating the product and service, you’re falling behind.” David was talking about the innovation changes they face in their industry, especially driverless cars and electric cars, which is so interesting to think about. How will driverless and electric cars be adopted? Is my son’s generation the last to learn to drive? Will charging stations replace gas stations?
And back to Jim’s data on software being so important, Tesla leverages software to advance their innovations. They collect what they call telematics data, which includes performance, usage, and condition data, and then they feed that back into the development cycle to improve their products and services. With only 0.1% of the auto industry, they are definitely a small fish, but I can hear the “Jaws” theme song playing from here.
There’s no question that companies that deliver innovative solutions are rewarded in the marketplace. The challenge for us is that there’s no single road map for innovation success.
Linda Bell:
At what stage of the product development cycle, then, do products fail most?
Jim Brown:
Yeah, I mean, with all the complexity, it’s not surprising that products are challenging. A lot of problems, though, actually start very early, even before the first design that started with poor requirements and understanding of customer needs. The best designs in the world can’t help unless they really meet a market need.
I once heard a definition of a product. Basically, it’s something that solves a customer’s problem for them that they’re willing to pay money to solve. So, getting it right up front is usually a tremendous challenge and very important, but a lot of the failures occur across the entire lifecycle, even for companies that do understand what their customers want, put solid requirements into place, maybe even come up with some conceptual designs. Oftentimes that gets put on a shelf.
All of that vision and understanding of the voice of the customer really needs to stay front and center and visible to everyone involved throughout the product development all the way through validation and launch. So, people are all going against the same thing: What are customers willing to trade money for in order to solve their problem? And everything should be centered around that, and the product and what’s developed is a means to an end.
So really what’s needed is from that beginning time, a persistent and dynamic part of the product record needs to be exactly that. What are we trying to accomplish for the customer? And it needs to be visible across everybody.
Ann McGuire:
Yeah, and keep in mind that identifying and resolving issues early in the development cycle is far less costly than trying to fix problems once you’ve reached full production. Just think about inventory costs, re-work costs, or field service repairs. More importantly, taking care of a problem before it is visible can help avoid the market perception that your product’s a failure.
Jim Brown:
Yeah, absolutely. When we asked about complexity, one of the things we tried to do is also understand what are the impacts of that complexity on product development and on products? And this is the area where complexity really kills products. If you look, over half of the companies that we surveyed said that complexity drives product quality issues. If you remember back a few slides ago, I said that the largest driver of differentiation that manufacturers report is quality. So over half of companies are saying this complexity hurts their quality.
Then the second—again over half of companies find issues and impacts in delaying time to market. And time to market is one of the key drivers of both differentiation, but, even more importantly, of profits and profit margins.
So again, if you don’t have a way to keep all of the requirements and everything in place, you don’t really have a chance to address complexity. One of the issues is that most companies don’t really have a central place where they can share information, store and bring information across from mechanics, electronics, and software all into one place because too many times, even within mechanical designers, we see people having their part of the product on a local copy on a hardware, or in email, or different versions floating around. It just leads to way too many opportunities for failure across the lifecycle as complexity really gets the best of them.
Linda Bell:
So, what can be done throughout the development phases to improve product launch success?
Ann McGuire:
Well, let’s start with the concept phase. The goal of the concept phase is to document the prioritized functional, cost, physical … all the goals that we talked about earlier … requirements of the new product. You also form the multidiscipline team that will develop it. To get started on the right track, take that product requirement document off the shelf, if that’s where it is, and place it in a secure accessible vault. Revision-control this document because it will inevitably change with time and new information.
If your product is going to be regulated by the FDA or a similar organization, begin your device master record and design history file now. If your product has a bill of material, is described by a bill of material, you’re going to want to organize these around that bill of material.
To help your new team work together, use a common platform for reviewing and sharing. In engineering alone, think about mechanical, electrical, and software teams each having their own specialized design tools, like EDA or MCAD and others, to create their part of the design. Product lifecycle management, or PLM solutions like Arena offers, provide this platform to import the designs together so you can have a complete product assembly that includes all the components as well as any drawings, specifications, just any of the supporting documentation that help people build the product.
Jim Brown:
Yeah, and I think, Ann, we can even go all the way back to planning. I mean, one of the things you mentioned, centralized information … I see way too many products fail really out of the gate in planning where something is not right about it, or people have too many products in the hopper, but those projects continue to consume time and resources even though most people may know that they’re eventually doomed. I’m always surprised at how many companies don’t have a central, consolidated view of even all of their new product development projects so they know what they’re working on and can make intelligent trade-offs. Companies really can’t afford to work on projects and products that aren’t ever going to make it to market. They really need to focus.
Ann McGuire:
Yeah. Jim, this is so true. We’re seeing many companies adopt Internet of Things technology, and I’m not sure what problems a smart kitchen solves with refrigerators taking inventory and ovens preheating to help with some online recipe. This technology, is this a solution for people who cook, or is it for people who don’t cook? I don’t know. I’d like to see appliance companies follow Tesla’s lead and collect usage data to improve their products and service. I would love to receive an appliance’s fuse or some controller card about a week before it blows.
Ann McGuire:
Then whatever the case, we need to listen to our customers and sometimes anticipate their needs in today’s economy.
Jim Brown:
Yeah, absolutely. I mean, we could probably talk about the Internet of Things all day and some of the benefits, both in consumer products but also in industrial equipment. But I think the key thing to think about with that right now is how much additional complexity that drives. If we think smart products are complex, I like to say that IoT-oriented products are complex on steroids and really have the potential to lead to even greater quality and time-to-market issues in new product development if companies don’t have their new product development processes under control.
Ann McGuire:
Right. Thank you. Let’s move on to the design development phase. In this phase, your major goal is to be ready for the next phase, which is, you can see it on the screen, limited production. To do this, you need documented, detailed design of the new product. You also need to identify partners. And this is really the time that you want to establish collaboration methods with those partners.
When you’re in this phase, bring your partners into review cycles so you can get their input and they can become familiar with your product. As you create and improve the product design, you need to create and improve all the required documentation needed to define, make, and test the product.
Jim Brown:
Yeah, absolutely. You mentioned collaboration and getting partners involved. One of the biggest issues that we see in product development is that collaboration, the ability for people to work together effectively and efficiently. Regardless of even the supply chain, even working across departments tends to be a big challenge for people so everybody knows what’s going on. There’s just so many people that need to be involved, and it’s such a dynamic process. Things change very quickly as you discover new things developing products.
Companies really need to be able to share information and collaborate almost effortlessly. Unfortunately, we don’t see that. You see the statistics on the screen. Over half of the companies that we talked to say it takes two or more days to get updated information, so this would be updated design information, to the entire product development team, and 71%, it expands to almost three-quarters, when you think about third parties, like design partners or suppliers that are involved in your product development process. So, you really don’t have an option to be successful when everybody’s working on outdated data. People really need to be able to share and collaborate on information that is up to the minute.
Ann McGuire:
Yeah, that’s right. Companies must do what they can to facilitate innovation. Our experience working with innovative companies is that having a centralized way to control, collaborate, and release information during new product development is critical to avoid problems caused in later stages, like in full production. Providing a proactive way to share ideas and collaborate with everybody in the supply chain shrinks the needed time to identify potential problems and then to find their solutions. What that ultimately does is it collapses the time to market. So, you want to have systems in place that provide visibility and processes. And by the way, these systems support rapid prototyping and iterative development, making them even more effective development methods.
Jim Brown:
Yeah, absolutely. We actually looked into the technologies that companies use to support product development, and we looked at a couple of different angles. In this, we looked at companies that used integrated solutions for product development. So, this would integrate all of the different design elements. Ann, you mentioned earlier, mechanical designs, electronic designs, and EDA. Companies have their own software development tools that they use for embedded software and controls. It really is important to get everything in one place, and revision controlled, and shared on that timely basis. What we found is that integrated systems work much better than disconnected point solutions in this environment.
We also looked at the use of structured lifecycle approaches. These are the product lifecycle management applications, lifecycle management kinds of solutions, as opposed to more ad hoc documents and shared folders. And again, what you see is that the issues of product quality, faster time to market, more innovative products, you see better performance for those companies that have these integrated, structured solutions. Again, one of the important pieces of that is the structure and the ability to have centralized information, but it also comes down to, remember, the ability to share and extend to other people. The Cloud is actually playing a big role in this now.
Ann McGuire:
Yeah, and don’t forget about employee training. Arena customers use Arena training management to ensure all teams are trained in their roles. With this kind of training record management, users are notified when they need to retrain because of a schedule or, say, something like a new procedure has been revised. When your BOM and AML are in place with PLM, you can even address cost in this phase, get multiple bids from potential contractors. Air International, a Tier 1 automotive supplier, has found that with Arena, they can create, submit, and receive bids more effectively. So, they can invite more potential suppliers, which then drives down the costs.
All right. Well, we are ready to talk about the limited production phase. Limited production is about executing like you’re planning to do in full production before making the major investment in the full production run. Your goals are to put production processes in place, to identify and resolve production issues and then, back to training, train the employees and partners as if they’re running full production. So, you’re testing all the processes and results, and you’re building salable products.
In this phase, you need to work out unforeseen kinks like personnel issues, process issues, documentation issues, sourcing issues. In order to streamline the resolution of these issues, Arena customers use Arena Quality. Quality manages quality processes which are integrated with the change management. So, say, for example, a board is not fitting into its case. The fix is to change the BOM, the drawing, and the assembly instructions. Once the owner revises the product record, it’s approved through the formal ECO process, and then the new revision is visible from the quality process itself all in one system. Same thing with sourcing issues. If a part isn’t meeting incoming inspection, or we talked about the long lead times, the engineer can update the AML or the BOM if necessary, and that revised AML shows up with the related quality process.
Jim Brown:
Yeah, and if you think about the amount of time companies leave for limited production, companies are really trying to compress this time as much as they can so that they get to full-ramp production sooner, even trying to go to more global product launches instead of easing themselves in by geography.
You mentioned, Ann, the kinks that come up. Right now, in this phase, is really where you don’t want any surprises, and you certainly don’t want them as you ramp up more fully. But they happen. One of the things that’s important is to make sure you can react to them quickly.
You see that on this slide we looked at factory change or changes in the plan, and the number one reason for changing the plan is to increase product quality. But you also see things like production efficiency, trying to get your throughput higher and those sorts of things. At the same time, you’re probably also releasing new products and new variants into the mix. But whenever you change things like this, they change processes. They also can change tooling and equipment. All of that needs to be updated, and one of the real challenges is as products change, most companies don’t do a good job of keeping their manufacturing processes in sync with their BOM and a bill of process approach.
So, what are the results of that? What we see is that as companies are making those changes, hopefully early, ideally they would do it while their production line is still simulated. But in limited production, as they make those changes, we see people missing the due dates for the change. We see additional product issues being introduced even though the primary reason that we’re making changes is to alleviate product issues. And we see lots and lots of companies that have cost overruns. And, again, it’s because of this separation of not having centralized and integrated, structured ways to associate the manufacturing processes with the bill of material. Too often they’re in a separate system. They’re not integrated. So, if manufacturing manages processes separately from the products, problems are going to come up, and it’s going to be hard to implement changes quickly and confidently to make sure that you’re getting yourself really well set up for blowing out to full production.
Ann McGuire:
Great. So speaking of full production, full production’s the most visible phase both internally and externally. Internally, there is now a lot of money on the line. Externally, the market is expecting to see a product soon. Full production is about building the product to the forecasted demand. You can also do all this and continue to improve costs and quality.
Jim Brown:
Absolutely. Once a product is released and it’s in production, this is really where you need effective engineering change control. As quality issues come up, and maybe you’ve got a CAPA process, so you’ve got corrective actions that need to be driven through, an engineering change in a controlled way, all of that needs to be able to be effectively shared with the right people, get their input up front, and make sure that it happens as seamlessly as possible. And again, the idea is to be able to implement them quickly and with confidence.
Actually, in a recent ebook, I looked at the integration and use of quality within the PLM systems, and one of the participants from Organ Recovery Systems, Chris Hill, you see his quote on the screen, really talked about the importance of integrating the product information, the bill of material, with the quality processes and the quality information. And again, the idea is to be able to drive these changes quickly to implement our corrective actions.
Jim Brown:
Another one of the participants from a medical device company talked about that the integrated quality and PLM approach really significantly reduced the amount of time that it took them to get their ECOs and to clear their CAPAs, which is an incredibly strong point in terms of driving quality and making sure that products are continually available to the market. In fact, our factory adaptability report really ends with that top performers, and top performers in that case are those that really were able to get changes in the plant, implemented more quickly and showed better control. Those top performers are better in control of their change management processes, and they do have that ability to implement changes faster and more confidently. And they do that through things like integrating quality and integrated PLM systems.
Ann McGuire:
Now we’re at our fifth and final phase, which is improve and expand. Improve and expand is about leveraging your product and your well-earned experience to create more products that expand your market and your profit. You can improve performance based on innovations. You can look for ways to improve the quality or stability of your product based on customer usage data or other information. Maybe you’ve learned about other market opportunities, like your existing customers have other problems that you can solve, or there are some non-targeted customers that have problems that you can solve with your current set of products. Then again, with higher volumes, you can continue to drive down costs, giving your company flexibility when you’re competing against others.
When you focus on these efforts, you extend what Stanford’s Mark Leslie calls the arc of a company life. When you have integrated PLM and quality system, you provide your product teams the visibility and the processes they need to do this valuable work.
Jim Brown:
Yeah, absolutely. One of the most discouraging things that I see happen in companies is when they find a quality problem, whether it’s through a formal CAPA process, or maybe they catch the challenge internally, or they’re just trying to improve production efficiently and they make a minor change to the product, they find it, they correct it in the product, and then all of a sudden that same problem re-emerges in a new revision of the product or a product extension. We see companies so often just trying to meet the letter of the law for things like CAPA with spreadsheets and documents and those sorts of things. They’re managing quality and change, but they’re doing it in a way that really puts them at significant risk to suffer from these recurrent product quality issues.
What they really need is the ability to have consolidated product information where when a change is made in manufacturing, it’s reflected back in the entire product record. It’s not something that’s marked up on a drawing or something that happens further down in a self-contained document that covers that manufacturing procedure. That’s why some industries have mandated design master records and design history files for audits and compliance. But even if you don’t have that, they’re best practices. Having all of that information in one place so you know what your product is and not just what it was when it was designed, but through all of the engineering changes, through all of the quality issues that can come up, it really helps to make sure that those quality issues don’t persist and re-emerge over time. It’s just another way that PLM really helps prevent product failure.
Ann McGuire:
Thanks. So back to the key message that we started with. For a successful product launch, you need to align your entire product team from the beginning of the development phase through to your improve-and-expand phase. You do this by adopting practices that are supported by a PLM, QMS unified solution.
Linda Bell:
Okay. Thank you, Ann. We do have some time now for some questions from our audience. Ann, the first question is for you. Why collaborate in your PLM system when email and texts seem to work?
Ann McGuire:
That’s a good question. Throughout the product development lifecycle, you need formal, controlled collaboration. However, there’s also a need for this low-friction, informal communication that isn’t tied to some kind of a change release process. And like you said, email and messaging are commonly used tools for this kind of informal communication. The problem with these informal methods of communication is that it is disconnected from the product record, so it requires someone to try to go back and see what comments or messages apply to which design or which revision. This is difficult, if not impossible, to do as you increase the number of teams and external partners that you have to work with.
So, Arena’s PLM solution enables both formal, which is ECR and ECO processes, collaboration, and also informal collaboration, which is chat with history that’s tied directly to the product record. In that way, the product context is never lost. I just like to think about how valuable that is throughout the process, but really in that improve-and-expand phase.
Linda Bell:
Okay. Let’s see. We have a question for Jim. You mentioned quality and collaboration as PLM benefits, but isn’t PLM primarily around managing product data?
Jim Brown:
Yeah, that’s something that I hear quite a bit. And truthfully, there are a lot of PLM implementations that don’t get beyond product data management, and there’s a lot of benefits in just doing product data management and having a consistent bill of material that’s shared across the company and with suppliers in the supply chain. So, managing product data is important. But really, PLM is also about processes. It’s about managing projects and workflows with tasks in them. So, it’s much more than that.
In fact, our research has shown that when you take a process-centric view of PLM, companies actually get more value out of it. The top performers, the ones that are really doing the best from a business perspective in things like bringing successful products to market, really do take a more process focus than just a data focus. And they extend it to more people, too. We see them extending to more departments and getting more processes involved other than product development, so, for example, reaching out into quality-based processes as we talked about in the recent ebook. So absolutely, it’s about data, but really to manage quality, in particular building in that process view, is tremendously valuable.
Linda Bell:
Okay. Ann, we have another question for you here. Do most companies follow the same product development lifecycle phases shown in your presentation?
Ann McGuire:
Well, it all depends on your company’s needs. A development process can be as simple as just a two-phase solution with in-work and then released, or they can go up to the five phases that you see here on the screen. Then it can also go to something more complex.
We’ve merged prototyping into the design and development phase because these days that rapid prototyping really enables iterative development even in the hardware world. Then another company might merge the two. … Improve and expand, they might merge that with concept. It’s all based on who is involved and how radically you want to improve or change your product to expand the market share.
But back to the key point, no matter what your development process looks like, how many phases you have, what you call them, providing controlled access to the product data and then integrating that with change management and quality management enables you to put your best practices in place for a better.
Linda Bell:
Okay. Now Jim, how do companies manage software development?
Jim Brown:
Going back to what I said before about products becoming smarter, and even when Ann mentioned about the Internet of Things, there’s so much software now involved in people’s products, and it really does become a very big issue to manage that development well, but also manage it in concert with everything else. What we don’t see happening is people making a PLM decision and saying, okay, we’re going to now have all of our software developers and our mechanical designers and our electronics designers all working in the same tools.
There are very good specialty tools for each of those design efforts. What we’re seeing is coordination in PLM. It’s a “the tail shouldn’t wag the dog” situation. We see a lot of times companies are going and using the tools that are good for their designers, in this case software developers. They’re managing those processes, potentially in a little different way than mechanical design, maybe even using some Agile methods as opposed to traditional waterfall approaches. But then integrating in at the right points in the design cycle to make sure that you’re developing a product that’s cohesive. You see a lot of integration at the requirement side, maybe a little less during development, and then some really strong integration at the validation and verification points.
Linda Bell:
Okay. We have another question for you, Jim. As far as concept phase and selecting correct components, do you recommend a software that tracks what components are used throughout the company and helps select preferred components?
Jim Brown:
Oh, absolutely, yeah. I mean, in the electronics industry … great question, by the way. Thanks for putting that one in. In terms of the right electronic components, there’s so much that goes into saying what the right component is. Obviously, there are specifications that are important, but you also have to deal with things like compliance. You have to deal with issues like obsolescence. So, something that tracks all of that information and keeps that central and keeps that in front of somebody that’s making the decisions of what components to put in early on in design is absolutely critical. The more that you’re reusing any parts, the better off you are. But when you get to electronics, particularly with the global supply chain issues that can come up and obsolescence issues and shortages, I think it’s even more important to keep those in sync and to make sure people are using preferred suppliers and not introducing too much new risk.
Ann McGuire:
Right. With the PLM’s AML-approved manufacturers list functionality, a lot of times you have your internal part number, and then it refers to a manufactured part name and number or company name and number. So, what you do want to do is, with PLM, you can reduce a lot of the duplicate part numbers, and there’s the benefits of, like you said, the risks. You know that if it’s already been labeled as compliant, it’s compliant. But the other thing is the cost. So instead of buying the same CPU in smaller lots, if you join them all together, then you can save a lot of money through your volume discounts. So, yes, that’s a great thing you can do, and you can do it with Arena PLM.
Linda Bell:
Okay. Jim, what about stand-alone project management tools for NPD?
Jim Brown:
What we see is that it’s important to manage projects well, and there are some stand-alone tools out there and some that are available on the Cloud that can do a good job of making sure people are on the same page with their tasks, making sure that you’ve got a cohesive schedule. Some of them even handle some rudimentary deliverables like Word documents and those sorts of things that maybe for some companies can help with pulling together product data. But really, what we see more value in is an integrated project and product system.
So what’s happening is it’s not just an extra task for a designer to go in and say, oh, what should I work on today, move over into a different system, bring up a design, when they finish remember to go back over into the project management system to make an update. The more seamless it can be between the two of those, the more likely it is to be up to date, and it also adds a lot less overhead to the product developers as they’re trying to get those products out to market quickly. So, I would probably rather see somebody with an independent point solution as opposed to nothing, but definitely would see higher value in an integrated solution like a PLM solution that has strong project management capability.
Ann McGuire:
Yeah, and the product managers really appreciate the ability to, with an integrated solution, link the deliverable to the task. So, say, for instance, an engineer does have to do a new layout. They don’t have to go and ask or email or message the informal communication to the engineer and say, hey, is it done yet? Is it done yet? Is it done yet? Nope. They can just look right on the system and say, all right, where are we on that task? Oh. And then they can pull up the drawing and see that it’s done. So, yeah, there’s a big benefit to that.
Linda Bell:
Okay. Our next question is for you, talking about supply chains. How can PLM help with problems you face by using a complex supply chain?
Ann McGuire:
Well, first, when you talk about a supply chain, think about what would happen if you do not have controlled, accurate, and accessible product information for the partners who need it. For example, you could email a bill of material to your plant in China. Let’s say this BOM is back-revved or incomplete, they’re going to purchase and stock the parts listed on the BOM, and you wouldn’t find out until either assembly, final tests, maybe the product will get out into the field with the wrong combination of components. No matter when you find out, it’s going to result in delayed production, more costs for you. So, yeah, accurate and accessible information is key.
Then the other thing is you can think about problems that you don’t necessarily anticipate, like the part shortages or long lead time. In Arena, you can store not only the bill of material, but we talked about the approved manufacturer’s list for purchased components. You can mitigate risks by qualifying alternate parts. Then even if you do release a BOM with one part with no alternate parts, and then you run into the long lead time problem or the local part shortages, you can resolve that problem a lot quicker in PLM.
Jim Brown:
Yeah, I see also a lot of companies are extending PLM to the supply chain and really not just managing internally, but stretching information out and sharing, whether it’s a design partner or whether it’s an ODM on the front end, whether it’s a back end. Really being able to extend and make sure that the information is consistent across is a tremendous benefit.
Linda Bell:
Great. Jim, we have another one for you. Which companies were the top performers in your research?
Jim Brown:
Oh, good question. Yeah, I mentioned top performers in a couple of my different slides. Depending on the research study, we defined top performers in different ways. Typically, when we’re looking at companies that are top performers in new product development, we look at those companies that are able to grow product revenue, product margins, and the percent of products or the percent of sales from new products. We really try and tie it to business performance, so companies that are able to go out, capture new business, capture high-margin business typically due to quick time to market. Then we use percent of sales from new products as a way to gauge innovation. How fresh is your product portfolio? Companies that are still selling the same products from years and years ago tend to lag behind also in the other factors, which are revenue and margins, except for rare circumstances. So typically, that’s what we do.
In some of the areas, like the factory change, it was more about how can you implement change in your factory more effectively? That was about on time, on budget, those kinds of metrics around factory change. So, it varies a little bit, but from a new product development perspective, we tend to try and go straight to the P&L.
Linda Bell:
Okay. We have time for one more question. Ann, we have a two-part question for you. For training record management, can you see who needs to be trained on something? And the second part is, how often do people need new training?
Ann McGuire:
Okay, thanks. Yeah, with Arena training, you can see who needs training, and you can see it from two points of view. First is, you can look at a person and you can say, what all training does Scott need? Or you can look at it from the point of view of content. So, if you revise a new assembly instruction, who all needs to be trained on this new assembly instruction?
As far as how frequently they need to be trained, that’s up to you. You can set up scheduled training, say, annually, but then you also are going to want to base it off when a process changes. If the process changes, the people involved should read the updates and then sign off that they did. Then when they sign off, it’stim so auditors can go back and see that your people are all up to date on their training.
Linda Bell:
Okay. That’s going to do it for our question and answer period for today. I would like to thank our speakers, Ann McGuire and Jim Brown, and all of our audience members for attending today. Please remember that the webcast will be available on demand for 12 months at www.techbriefs.com. Thanks again and have a great day.