Sunday, June 5, 2011

The tipping point: corporate PLM vs. local autonomy

 With all the globalization and mergers & acquisitions going on, PLM architects are increasingly facing one critical question: where to enforce a single corporate PLM standard - and where to allow for local autonomy. When researching this topic, I came across a thesis from Nils Johansson On the Lifecycle Management of Standards.

 (Calculation of interface-connections for local and global standards (BSharah, 2003))

He makes the case for global standards based on financial justification: the more participants use the global standard, the more positive the business case becomes. But everyone who has ever been involved in this kind of decision knows that the political dimension can quickly overshadow the rational, financial dimension. Here is my quick analysis of the

Pro's and Con's of a corporate standard PLM 

Business scale effects, e.g. reuse of parts and processesHuge standardization effort in terms of cost and time
ICT scale effects, e.g. cost for operations, maintenance, software licensesHigh dependency on one system and potentially one vendor
Enables global cooperation, because all users are trained on the same processes and systemsChange management challenge: a political minefield and a lot of resistance to overcome
A common platform allows for immediate global deployment of best practicesTechnical challenge of global multi-site deployments (complexity, performance, stability, security...)
Single source of truth for product data for all downstream processesPotential loss of flexibility and ability to react on local requirements / serve local customers

Well, you could argue that today´s extended enterprise business models require loose coupling between PLM, anyway. But I think that the advantages of a corporate PLM solution - especially when operating distributed development centres - can outweigh the disadvantages. In this case, it is about finding the parts in PLM that still need local autonomy and those that should be harmonized globally. Here are some

Ideas how a PLM implementation could balance these factors
    • Hierarchical data model with inheritance, so that common standards are enforced on a higher level and local details can be varied on a lower level
    • Global standard workflows branch into local specific workflows
    • Abstract interfaces to components that are typically different in each site such as ERP integration and customer-driven reports
    • Find a “killer application” that creates demand for the corporate PLM. The Volkswagen Group reported on the 2011 ProSTEP-iViP Symposium in Munich that they provide access to their strategic MQB platform through the corporate Teamcenter PLM. This access is business-critical for the VW brands such as Audi and Skoda, i.e. acceptance of the PLM solution is greatly increased.
    • Process harmonization is a prerequisite before deploying harmonized IT solutions

So, what are your experiences on corporate PLM vs. local autonomy?

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