PLM investments pay, even in a down economy

CIMdata research of companies that have implemented PLM solutions indicates that typical ROIs range from 100 percent to 300 percent.

06/22/2009


Companies continue to invest in Product Lifecycle Management (PLM) as one of the best ways of surviving the current economic slump and strengthening their competitive position when global markets rebound.

Microsoft Clip Art: Speed

Given the harsh business climate, many organizations are emphasizing smaller, targeted PLM investments that provide the fastest bottom-line benefits for controlling costs and improving operational efficiencies.

Even as these short-term priorities dominate the current market, leading companies continue to focus on initiatives that support their long-term strategies for business success - initiatives such as harmonization of global processes, quality improvement, and others that help them manage the increased complexity of products and value chains and improve their competitiveness.Whatever their approach, companies need to develop a business justification for PLM that includes a thorough evaluation of total cost of ownership throughout the life of the system versus enterprise-wide benefits.

Too often companies focus on up-front acquisition expenditures and fairly narrow departmental savings. Such a limited return on investment (ROI) appraisal can discourage companies that don't realize the far-reaching business benefits of PLM, or disappoint them later with unanticipated expenses.In determining total cost of ownership, companies generally have little problem figuring acquisition expenditures for software licensing, training and hardware infrastructure.

But these up-front costs can be small compared to on-going expenses for items such as support, maintenance, upgrades, system expansion, system administration, and customized software.

Some of the highest hidden costs are associated with organizational process changes to support business transformation. Properly implementing PLM requires workflow and associated procedures and standards to be closely examined within the company as well as in the supply chain and partner organizations. Such assessments should be performed for the entire product lifecycle and can be far-reaching, with organizational and process change investments typically representing some of the most demanding drains on PLM budgets.

These costs amount to a significant level of commitment, and final figures can appear daunting. If PLM is properly implemented, however, huge business benefits can far outweigh these expenses.

Accessing data in seconds instead of hours or even days increases personal productivity significantly, for example. And the ability to streamline workflow and improve overall operational efficiency has the potential to save time and money on the group and department level. The greatest savings arise from organizational improvements, with systems enabling collaboration across the extended enterprise and leveraging information throughout the product lifecycle. CIMdata research of companies that have implemented PLM solutions indicates that typical ROIs range from 100 percent to 300 percent. Of course, some companies have not achieved these returns, while others have far exceeded them.

The benefits for overall business performance from properly implementing PLM solutions are enormous, allowing companies to increase market presence and profitability through improved customer relationship management, increased ability to respond faster to market changes, delivery of more innovative products, better management of resources and more.

The positive impact of such sweeping change can be staggering, which is why organizations worldwide continue to implement PLM during even the difficult economic times that we are currently facing.

Ed Miller, president of CIMdata
Ed Miller is president of CIMdata , an independent worldwide firm providing strategic consulting to maximize an enterprise's ability to design and deliver innovative products and services through the application of PLM strategies.

 

Read more from Ed Miller in MBT .





No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
Each year, a panel of Control Engineering editors and industry expert judges select the System Integrator of the Year Award winners.
Control Engineering Leaders Under 40 identifies and gives recognition to young engineers who...
Learn more about methods used to ensure that the integration between the safety system and the process control...
Adding industrial toughness and reliability to Ethernet eGuide
Technological advances like multiple-in-multiple-out (MIMO) transmitting and receiving
Virtualization advice: 4 ways splitting servers can help manufacturing; Efficient motion controls; Fill the brain drain; Learn from the HART Plant of the Year
Two sides to process safety: Combining human and technical factors in your program; Preparing HMI graphics for migrations; Mechatronics and safety; Engineers' Choice Awards
Detecting security breaches: Forensic invenstigations depend on knowing your networks inside and out; Wireless workers; Opening robotic control; Product exclusive: Robust encoders
The Ask Control Engineering blog covers all aspects of automation, including motors, drives, sensors, motion control, machine control, and embedded systems.
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
News and comments from Control Engineering process industries editor, Peter Welander.
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
This is a blog from the trenches – written by engineers who are implementing and upgrading control systems every day across every industry.
Anthony Baker is a fictitious aggregation of experts from Callisto Integration, providing manufacturing consulting and systems integration.
Integrator Guide

Integrator Guide

Search the online Automation Integrator Guide
 

Create New Listing

Visit the System Integrators page to view past winners of Control Engineering's System Integrator of the Year Award and learn how to enter the competition. You will also find more information on system integrators and Control System Integrators Association.

Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Control Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.