PLM systems are at the heart of any successful digital transformation

Written by: Linda Di Gangi
12/8/2023

Read Time: 3 min

Today’s PLM system must serve as the product backbone of the digital manufacturing enterprise. They can help increase productivity, decrease costs, and enhance product quality. More critical is its foundational role in a successful digital transformation.

Why is the supply chain so important?

In this PTC Talk, guest speakers Stacy Dyer, Director, Product Development Lead, Deloitte, and Nitin Chandnani, Senior Manager, Enterprise Architect, Deloitte, discussed the key elements of a successful digital transformation journey. When managing a successful digital transformation, Deloitte has had to rethink the entire supply chain strategy around design-make-operate and ensuring the loop is closed. The digital thread and core have been at the heart of that. This understanding has enabled Deloitte to articulate how to tie the PLM system into logistics, ERP, MES, procurement planning, and asset maintenance.

The digital thread is at the core of the supply chain. There are several interesting facts that are coming out now that highlight the importance of this in research from the EU and Harvard University. The EU study discusses sustainability and reveals that 80 percent of a product’s emissions can be designed out during the design phase. If you think about this in the design phase, you can eliminate many challenges throughout the value or supply chain.

A separate report from Harvard University about supply chain resilience highlighted that during the recent global chip shortage, many OEMs could not get their cars out of the door because they did not try to engineer their way out of that system. What they tried to do was buy their way out of that problem. They did not go back to their engineering department and ask them to redesign the product. The only company that did that was Tesla, and that is why they could maintain their delivery schedule and saw sales climb.

What role does the digital thread play in a successful digital transformation?

Considering where product development sits in the supply chain and ecosystem and how to overcome some challenges is essential to how Deloitte approaches digital transformation.

Deloitte uses the digital thread and the core supply chain and asks How do you start with the end in mind? How do you design for reuse or remanufacture? How to optimize for sustainability and cost at the same time. Deloitte also applies Agile Product Development at this point.

According to Dyer, the talk of Agile Product Development is slightly misleading as most companies adopt a hybrid product development approach, especially when products are becoming more complex with software, hardware, and connected integration. The complexity is sharpened by the volatile business landscape with challenges regarding resilience, cost, regulatory changes, and the heightened focus on sustainability. To cope with the demands of reporting on carbon taxes, the plastic tax, carbon levies, and scope 1, 2, and 3 emissions, it is crucial that the product information is set correctly at the start of your process.

Finally, many companies are moving towards connected products that allow real-time feedback, enabling companies to change the price point quickly. This is a tactic adopted by Tesla in its subscription-based modeling. Customers pay a monthly fee for their car, but the real-time information allows them to change the price point quickly on their car; this will enable them to pivot when they face economic challenges because they have a regular income. The same goes for companies such as Spotify and Netflix.

Why is it essential to define requirements early in the design process?

The digital thread allows companies to make crucial decisions during the design process. When the design requirements are defined early in the process, it is possible to conduct virtual testing, although that can be difficult in some of the more regulated environments. In those situations, it is more about ensuring that when you move to physical tests, it is assured that the test is passed the first time you ask.

What Deloitte is seeing with many companies embarking on their transformation journey is that there are some real levers they can pull here in terms of improvement. Product development is the first step of any supply chain, designing the product to drive the following activities: sourcing materials, manufacturing, and distribution. By having a modular approach that allows reuse in the initial design phase, achieving a 40 percent boost in efficiency across the product lifecycle is possible. Adopting a virtual testing strategy and getting it right the first time can deliver another 35 percent improvement by reducing rework and churn. Involving the supply chain earlier in the process and designing for sustainability improves material availability. It reduces supplier lead times, which can add an extra 20 percent improvement. The final five percent comes from looking at standard processes, change management, and traditional product development such as bill of materials. Traditionally, this would be the starting point for any improvement strategy, but most companies already have a good handle on this, so there is much less to be gained here.

Why is a PLM system important for a successful digital transformation?

The availability of data is a fundamental requirement to enable a successful digital transformation. The Deloitte team always starts the process by asking where the product information is and how well that product information is managed. This will inevitably lead to the PLM system. Having that solid foundation of ensuring that the information in the PLM system is accurate allows the business to make informed decisions. With their expertise, Deloitte has enabled them to bring that information together so that they can understand and manage throughout the product lifecycle in a way that they can then decide from a business perspective what they want to do with that information. A sound PLM system is crucial for a company to understand what the product is doing throughout its lifecycle.

To learn more about how PLM is the foundation of a successful digital transformation, watch the full Talk here. 

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Tags: Product Lifecycle Management (PLM) Digital Transformation

About the Author

Linda Di Gangi

Linda Di Gangi is a Program Marketing Manager in PTC’s Field Marketing organization. She is responsible for the marketing strategy for European Emerging Markets and India. She first started with PTC's Corporate marketing in 2006 and managed global events including PTC flagship event, LiveWorx. Prior, she worked for an agency and oversaw PR for B2B companies in new technologies. In a spare time, Linda enjoys working out and hiking with family and friends. You can find her on Twitter and LinkedIn.