PLM - Product Life-Cycle Management

A relatively new software-based technology—product life cycle management (PLM)—has been adopted by numerous manufacturers because it allows the collaborative design of products from anywhere in the world. Developers can tap into a central workspace and get access to part designs, bills of material, product specifications, production schedules, and other data. PLM includes elements of earlier computer-based technologies, such as computer-aided design, engineering, and manufacturing (CAD/CAE/CAM), as well as product data management (PDM), but PLM is much more of a supply chain solution because it allows the sharing of product information not only throughout a company's many offices but throughout the offices of supply chain partners and suppliers as well.

The Joint Strike Fighter (JSF) program, for instance, is a prime example of supply chain collaboration. This multibillion-dollar initiative to build a next-generation aircraft for both the American and British militaries includes Lockheed Martin as the lead contractor and fellow aerospace and defense manufacturers Northrop Grumman (U.S.), BAE Systems (U.K.), and Fokker (Netherlands) as major subcontractors. Product experts from these companies can tap into Lockheed's virtual workspace platform to work on their own piece of this massive international project. As many as 1,500 engineers can access the virtual workspace as heavy users, and another 3,000 can tap into it on a more limited basis.

Product life cycle management (PLM) technology enables manufacturers to manage and share complex design and production information across an extended enterprise, with the goal of streamlining the product development process.

Like aerospace companies, automotive and high-tech manufacturers have also been early adopters of PLM software because of the complex nature of their production process. However, given the increasing importance of developing new products and getting them to market as quickly as possible, consumer packaged goods and pharmaceutical companies have also turned to PLM as a supply chain best practice because, when properly deployed and managed, it can help reduce costs while increasing efficiency. Here are some examples:

Playtex Products, a manufacturer of personal care consumer products, outsources 70 percent of its manufacturing to seven facilities throughout North America. Tracking document routing and product record data was increasingly difficult because this information was maintained on any number of electronic systems, or in some cases, on paper. By standardizing on a common PLM platform, Playtex enjoyed a 98 percent improvement in its document routing time. Time-to-market improved significantly as well, contributing in part to added revenues in the neighborhood of $20 million annually.

Regulatory requirements from the FDA as well as legal bodies in Europe have become more demanding for pharmaceutical manufacturers such as Roche Diagnostics. Roche was having difficulty stepping up its quality management processes because its quality data were scattered among a dozen nonintegrated systems, with much of that information being shared via fax machines rather than over a computer network. By implementing a PLM solution throughout the company, Roche has been able to automate its documentation process, which helps the company manage its growing product lines as well as satisfy the government audits.

At Eaton's Hydraulics Division, a maker of hydraulic products for farm and construction machinery, it frequently took up to 10 days to distribute CAD files throughout the company. The process began with the transfer of completed drawings to microfilm, which were then sent to the main library and duplicated so they could be sent to other sites' libraries. Not only did it take too long, but the error rate was as high as 6 percent at some of the libraries. A PLM solution capable of storing and retrieving more than 70,000 imaged documents has not only made the microfilming system obsolete, but it has also shaved the wait time from 10 days down to a mere three hours.

Six-Sigma - Motorola's Learns to Measure Quality

Supply chain manufacturing concepts often seem to emerge fully formed out of nowhere, and while there have been numerous short-lived trends du jour, in reality the legitimate best practices have gestated for many years, sometimes for decades. There's nothing new about lean manufacturing or the Toyota Production System, for example, even though they're currently popular buzzwords. The TPS, after all, emerged in Japan shortly after World War II ended, and in fact was based on concepts popularized even earlier in the twentieth century by Henry Ford. So even though lean is at the top of many people's minds these days, the only thing truly new about lean is the acceptance it's finally gained in the United States.

Another manufacturing concept that is frequently associated with lean is Six Sigma, a structured, quality-centric approach to manufacturing. It began at Motorola in the 1980s as a way of improving the quality and reliability of its products, which would enable the company to deliver a consistently high level of customer service. Based on quality initiatives developed by the Japanese, Motorola's Six Sigma program—like the TPS—involved every employee in the company.

Six Sigma is a measure of quality that strives for near perfection, which is defined as no more than 3.4 defects per million opportunities.

Motorola learned from the Japanese that "simpler designs result in higher levels of quality and reliability," explains consultant Alan Larson, a divisional quality director at Motorola when Six Sigma was launched. The company also learned that it needed to improve manufacturing techniques "to ensure that products were built right the first time."

The term Six Sigma refers to the idea of near perfection, defined as six standard deviations between the mean and the nearest specification limit. In practice, this means a product or process can have no more than 3.4 defects per million opportunities. Six Sigma, like the SCOR Model, focuses on five areas: define, measure, analyze, improve, and control. Six Sigma programs typically use statistical process control (SPC) tools to monitor, control, and improve a product or process through statistical analysis.

To achieve the desired result of enabling continuous improvement, rather than merely putting a temporary bandage on a problem, Larson recommends that every department, group, and unit within a company complete the following six steps:

* Identify the product you create or the service you provide.
* Identify your customers, and determine the customers' needs.
* Identify your suppliers and what you need from them.
* Define your process for doing the work.
* Establish metrics for measuring the goodness of your process and feedback mechanisms to determine customer satisfaction.
* Ensure continuous improvement by establishing a team that measures, analyzes, and completes focused action items.

Proponents of the Six Sigma approach typically cite its lack of ambiguity as a major plus. The Six Sigma methodology applies a mathematical precision to what might otherwise be highly imprecise supply chain processes. A corollary benefit comes when a company insists on getting commitment from every employee, and requiring everybody to focus on the better good for the entire supply chain.

"Getting our business units to accept change has been accelerated because we're talking a common language and common methodology through Six Sigma," observes Lori Schock, site supply manager with Dow Corning, a manufacturer of silicone-based products. "It removes the doubting Thomas attitude because it is a common process based on facts."