Enabling Lean Enterprise
Transformation Through IT
The PDM Example
Erisa K Hines
with Tom Shields and Jayakanth ‘JK’ Srinivasan
March 23, 2005 – LAI Plenary
Overview
•
•
•
•
•
•
Context
Research Design
Results
Implications for Lean
Lessons Learned
Conclusions
http://lean.mit.edu
erisak@mit.edu
2
Lean Enterprise
“A lean enterprise is an entity that efficiently and effectively creates
value for its multiple stakeholders by employing lean principles and
practices” – EA Working Group Definition
• Lean Principles
– Waste minimization
– Responsiveness to change
– Right thing at right place at right time and in the right
quantity
– Effective relationships within the value stream
– Continuous improvement
– Quality from the beginning
http://lean.mit.edu
erisak@mit.edu
3
Product Lifecycle
Management
“A strategic business approach that applies a consistent set of business solutions in the
support of the collaborative creation, management, dissemination, and use of product
definition information across the extended enterprise from concept to end of life – integrating
people, process, business systems and information (emphasis added)”
– CIMdata definition of Product Lifecycle Management
Increasing Enterprise Value
High
Lean Enterprise
Enterprise Capability
Business Solutions
Enterprise Return
}
}
Effectiveness
Enterprise Agility
Business Applications
Process Focus
Revolutionary levels
Evolutionary levels
Standardized Toolkits
Functional Focus
Custom Implementations
Data/Technology
Localized Exploitation
Cost Focus
Low
1985
http://lean.mit.eduCAD Data
Management
1990
Integration
Quality Focus
1995
Product Data
Management
2000
Efficiency
Automate
2005
Product Lifecycle erisak@mit.edu
Management
4
“Industry” Perspective
“The aerospace companies want
to shed IT silos that can’t talk to
each other, and the vendors want
to accommodate them with suites
of tools that can smoothly
exchange data…”
– David Hughes, AWST, 2003
“PLM is an emerging technology
with a lot of growth in front of it.
But it is mature enough that the
GMs of the world are using it and
that’s a confidence-building factor”
– Bob Nierman, EDS
Aerospace Market Share of PDM/PLM
early 1990s
21%
Aerospace Market Share of PDM/PLM
2005
13%
PDM/PLM technologies for aerospace
alone is an estimated $10.4 Billion
market for 2005
– Daratech Report
http://lean.mit.edu
erisak@mit.edu
5
The Real Value of PDM
(beyond the design cycle)
Design
Manufacturing
Distribution
Product
Support
Retirement
• Why don’t we know the realistic payback? The metrics
aren’t there!!
• The Intangibles
– Downstream support capability and benefits
– Contracts won due to capability
– Actual savings due to reduced rework
http://lean.mit.edu
erisak@mit.edu
6
Key Research Questions
• What are the high level requirements of a
PDM?
• How is the management of data evolving?
• What makes a successful implementation?
• How are the technology and organization
evolving? Who is driving?
http://lean.mit.edu
erisak@mit.edu
7
Research Methodology
• 9 Sites (6 Companies)
– 24 programs
• Structured Interviews
–
–
–
–
Introduction to site
Site interview
Program interviews
Process interview
• Case Studies
– 2 sites
http://lean.mit.edu
erisak@mit.edu
8
Site Profile Data (1)
N u m b er
o f Sites
Number of Employees at each Site
4
3
2
1
0
0 - 1999
2000-4999
5000-7999
8000-10,999
11,000+
Employees
http://lean.mit.edu
erisak@mit.edu
9
Site Profile Data (2)
Money Spent per Site per Year on PDM
4
3
2
1
0
0-.99
1-1.99
2-2.99
3-3.99
Money spent ($M)
http://lean.mit.edu
erisak@mit.edu
10
PDM Implementation
Spending
Where Money is Being Spent for PDM
Im plem entations
Process
Development
35%
Required SW &
HW
32%
Consulting
19%
Training and
Other
5%
Data Quality,
M igration…
9%
• The majority of money spent is on developing processes
and the licensing costs
erisak@mit.edu 11
http://lean.mit.edu
Your Reasons for PDM
•
•
•
•
•
•
•
Need to replace legacy tool(s)
Reduction in cost, time to market
Centralization of data
Elimination of data redundancy
Concurrent engineering
Reduction in tool variability
Efficiency gains in design, iterations
http://lean.mit.edu
erisak@mit.edu
12
Primary Driver for PDM
• Site interviewees given a choice between:
– Internal Need/Desire
– Supplier Demand
-- Customer Demand
-- Competitive Need
• Survey says:
– Internal: 7 responses
• one had Customer as close second
– Competitive: 2 responses
• one had Internal as close second
http://lean.mit.edu
erisak@mit.edu
13
Results from Site/Program Visits
http://lean.mit.edu
erisak@mit.edu
14
Results (1):
What PDM is Being Used For
100%
90%
80%
nonPDM
70%
60%
PDM+
50%
40%
PDM
30%
20%
10%
ol
la
bo
ra
ti o
n
C
Vi
su
al
M
gm
t
C
S
ha
ng
e
tru
ct
ur
e
gm
t
M
Pr
od
R
oc
D
W
or
kf
lo
w
el
ea
se
0%
Va
ul
ti n
g
Percentage (Programs)
Current Functional Use of PDM (2004)
Functionality
• There is a clear distinction between the traditional
applications of PDM and those that are not
http://lean.mit.edu
erisak@mit.edu
15
•
MBOM is the breaking
point due to other
business systems
http://lean.mit.edu
C
AD
2D
M AD
et 3D
a
D
a
E
Sc E B ta
an ng OM
St D No
r u r a te
c w s
To t A ing
ol na s
in ly
g sis
M
od
el
C s
Pr M AE
N oc u B O
on re M
-c m
o n en
t
T e f Da
st ta
PM Da t
Fi D a
e a
M l d D ta
ai a
O nt D ta
th a
Sc er D ta
he at
du a
le
s
C
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
AD
C 2D
M AD
et 3D
a
D
at
E
Sc En B a
an g OM
St D No
ru ra te
c wi s
Percentage
To t A (Programs)
n
ol na g s
in ly
g si
M s
od
el
s
C
Pr M AE
N oc u B O
on re M
-c m
on e
n
T e f Da t
st ta
D
PM a t
a
Fi D
e a
M l d D ta
ai a
O nt D ta
th a
Sc er D ta
he at
du a
le
s
C
Percentage (Programs)
Results (2):
Product Data Trend
Where Data Elements Are Managed (Past)
•
CM
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
There is an industry
trend in using PDM to
manage more traditional
engineering design data
non-CM
than in the past
PDM+
Where Data Elements Are Managed (Future)
PDM
erisak@mit.edu
non-CM
CM
PDM+
PDM
Data Elements
Data Elements
16
Results (3):
PDM Maturity Survey
Integration of Product Data Across the
Lifecycle
Extent of Supplier/Partner Integration
A
5
4
3
2
1
0
A
5
4
3
2
1
0
I
H
I
B
C
G
D
F
H
D
F
5
4
3
2
1
0
H
A
5
4
3
2
1
0
G
D
F
http://lean.mit.edu
I
B
C
E
E
Integration/Compatibility with Existing
Systems/Applications
A
I
C
G
E
Managem ent of Workflow
Electronically Throughout the
Lifecycle
B
H
B
C
G
D
F
E
erisak@mit.edu
17
Results (4):
Industry’s PDM Maturity
Results from Survey of PDM Maturity (Current)
A
5
4
I
B
PD LC Integration
3
Sup/Part Integration
2
Electronic Workflow
1
H
C
System Integration
0
G
D
A through I represent the sites
F
E
Possible answers ranged from 1 to 5
• Higher maturity lies in the primes, with similar capability
erisak@mit.edu
http://lean.mit.edu
in homogeneous suppliers
18
Results (5): Industry’s
Desired PDM Maturity
Results from Survey of PDM Maturity (Current)
A
5
4
I
B
3
2
PD LC Integration
1
H
C
Sup/Part Integration
Results
from Survey of PDM Maturity (Desired)
0
Electronic Workflow
A
System Integration
G
D
F
•
E
The desire to increase
PDM capability
demonstrates that
companies are still
striving to transform
http://lean.mit.edu
I
H
5
4
3
2
1
0
F
B
C
PD LC Integration
Sup/Part Integration
Electronic Workflow
Syst em Integrat ion
D
E
erisak@mit.edu
19
Lean and PDM
http://lean.mit.edu
erisak@mit.edu
20
Lean Practices
• 8 out of 9 sites employ Lean and some form
of Six Sigma practices
• Was a Lessons Learned Standard Process
used for the PDM implementation?
– 2 out of 9 had a formal process
– 5 out of 9 had an informal process
– 8 of 9 have utilized LL information
• Stakeholder Identification
– 3 out of 6 formally identified stakeholders and
value
http://lean.mit.edu
erisak@mit.edu
21
Lean Implications of PDM
• IT provides the infrastructure to support
“Enterprise Change.”
– PDM is a (important) piece of that.
• Creates opportunity to address process
development/improvement
• When deployed as a Lean Initiative/Project
–
–
–
–
Competition with other initiatives
User sensitivity to success of past Lean events
May garner more management support
Provides visibility outside of “IT”
http://lean.mit.edu
erisak@mit.edu
22
Take-Aways
http://lean.mit.edu
erisak@mit.edu
23
Lessons Learned
• Change Management: Users
– People/culture are your biggest barrier
– Do not allow users to continue with the old system
• Change Management: Leaders
– RAA: Responsibility, Authority, Accountability
– Clear Objectives/Staying Power
• Run it Like a Program
• Get the vendors involved early – understanding
of process-tool interaction
• Understand vendor capability e.g. BOM
management
http://lean.mit.edu
erisak@mit.edu
24
Fun Quotes
“I guess it’s working just fine.”
~PDM Budget Oversight~
“There is no point in doing a value stream map and finding
out where improvements can be made, if you do not
have the authority and the funding to actually make
changes”
~Director of Lean PDM~
“Everyone is into reducing waste and continuous
improvement so it becomes the change agent – the
common language we all speak to justify going to our
(common) singular system.”
~VP of Engineering on Lean~
http://lean.mit.edu
erisak@mit.edu
25
Conclusions
• PDM remains focused on the design stage
• Suppliers moving up the food chain: Need for
product data management capability
• Change management and data migration are the
biggest challenges/pitfalls
• Lean principles and practices should be used when
implementing PDM capability
• PDM enables Lean Enterprise Transformation
– opportunity to address enterprise value stream
http://lean.mit.edu
erisak@mit.edu
26
Thank you
Questions? Feedback?
For further discussion, please contact Erisa (erisak@mit.edu)
or JK Srinivasan (jksrini@mit.edu)
http://lean.mit.edu
erisak@mit.edu
27