PLM | Manufacturers’ Secret To High Performance

Portrait of Henrik Reif Andersen
Free webinar with
Henrik Reif Andersen
Co-founder & Chief Strategy Officer
Configit
How to Overcome the Barriers to Digital Transformation in Global B2B Manufacturing
January 26, 2021, 4.00 pm CET / 10.00 am EST
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Capgemini’s Digital Transformation Institute’s recent research study Digital Engineering: The new growth engine for discrete manufacturers provides fascinating insights into how manufacturers are modifying their IT strategies, platforms, and spending to invest more in smart, connected products:

  • Around 50% of manufacturers aim to spend more than €100M ($117M) in Product Lifecycle Management (PLM) platforms and digital solutions in the next three years.
  • Spending on digitally-based PLM platforms and solutions are accelerating as budgets for maintaining legacy systems have dropped from 76% of IT spending in 2014 to 55% in 2017.
  • The size of the connected products market globally will range between $519B to $685B by 2020.
  • Collaborative product development is the most popular use of PLM systems today, with 54% of manufacturers prioritizing this as their most relied on feature.
  • Manufacturers who are successfully developing, launching and selling smart connected products are spending 10% more on end-to-end PLM and digital solutions with an average annual investment of 3.8% of revenues.     
  • PLM’s digital inflection point is enabling more manufacturers to manage product configurations across their lifecycles optimized with Configuration Lifecycle Management (CLM) platforms and supporting applications.

PLM Is A Proven Growth Catalyst For Configurable Products

Capgemini found that high-performing manufacturers excel at developing, launching and selling smart, connected products at a rate that outdistances their peers. Today, 25% of high performing manufacturers’ product portfolios are smart, connected products, compared to 19.5% of their counterparts. High performers are also generating more revenue from smart, connected products, with 14.1% of product revenues from smart, connected products for high-performing manufacturers, compared to 8.6% for their counterparts.

How do they do this?

  • Creating advanced, real-time knowledge sharing and collaboration. These high performers are thinking about how they can break down the barriers keeping them from collaborating more interactively with their global supplier networks, services organizations, sales teams, and aftermarket services providers. The study reveals just how committed these high performing manufacturers are to this by providing examples of how they are sharing access to their PLM systems with suppliers for a clear view of the products being designed.
  • Prioritizing collaborative product development using PLM systems. Manufacturers who are excelling at defining, launching and selling smart, connected and, in many cases, configurable products are investing more than their counterparts in end-to-end PLM and digital solutions. Capgemini found high performing manufacturers are spending 10% more on end-to-end PLM and digital solutions with an average annual investment of 3.8% of revenues. Nearly 50% of manufacturers aim to spend more than €100M ($117M) in Product Lifecycle Management (PLM) platforms and digital solutions in the next three years according to the Capgemini study.

Most used PLM features and tools at scale:

Taking PLM to the next level

With just 17% of manufacturers making significant progress across all six dimensions of engineering transformation maturity, a Configuration Lifecycle Management (CLM) approach to product configuration is needed. These six dimensions: vision, leadership, and transformation plan, nurturing a digital culture, creating and launching smart, connected products, enabling digital continuity and the ability to capture, aggregate, analyze and gain insights from the voice of the product or usage data, are the foundations for excelling at manufacturing smart, connected products.

Performance of manufacturers grouped by transformation maturity.

Accelerate revenue with CLM

Successfully growing a manufacturing business that includes configurable products and services must have engineering, production, sales, marketing, and services all relying on the same configuration knowledge. This is where CLM is helping manufacturers grow their configurable products revenue today, by aligning PLM’s product knowledge management and collaboration, ERP’s transaction data, and CRM’s customer data and their preferences for product configurations.

The era of smart, connected products has arrived and with it the need for a more unified approach to managing product configurations. It’s a natural progression to move beyond the limitations of PLM and ERP systems and create an open, scalable platform that will enable future product configuration revenue growth for decades to come.

Conclusion

Smart, connected products are forcing an inflection point in global manufacturing today. The need for greater agility, speed, and scale across production floors, coupled with increased insights needed from analytics, Business Intelligence (BI) and advanced predictive models tracking machinery stability and reliability, all create an entirely new knowledgebase. To manage and make the most out of this knowledgebase, a new approach is needed that extends beyond the limitations of traditional PLM, ERP, CRM, and CAD systems.

Configuration Lifecycle Management (CLM) combines PLM, ERP, CRM, and CAD systems to enable product configurations to scale over their lifecycles, providing time- and cost-saving benefits to manufacturers pursuing new markets with smart, connected products. Not dependent on one system for configuration knowledge, CLM provides an unbiased and complete view of each product’s configuration lifecycle, while also freeing up manufacturer’s IT departments from having to do double maintenance on master data in each system.

As a result, CLM becomes the single source of truth, flexing to provide seamless product lifecycles, reducing product errors and time-to-market for new products, and improving time-to-customer and perfect-order performance.

PLM 101: The Mini-Series

Read about the fastest growing area of PLM, the automotive industry, in the next blog post.