With so much technology, it is sometimes amazing that we still seem to hold on to antiquated processes and procedures. Typically businesses build from the ground up and adapt a simple, spreadsheet-driven approach to managing business aspects that are cumbersome, error-prone, difficult to manage, and even more difficult to track.
PLM is no different in this manner, since it takes knowledge that it even exists before trying to implement some of the benefits. It has been brought home to me time and again of the difficulties in handling product development and engineering changes. Some of the biggest complaints I hear are:
- We lost a month of work on a particular change because the paper routing the ECO was misplaced.
- We are constantly plagued by incorrect versions in production due to an uncontrolled change process.
- We have a PLM system in place, but have no idea what it does or how to leverage the benefits. For this reason we stick to our current paper-based system because everyone knows how it works.
These were from real or potential customers that I find are in dire need of help. It’s not the upfront cost of implementing PLM that should scare management, but the unseen loss that chips away at profits due to unmanaged expenses and scrapped parts.
For this reason Rockwell Consults can provide help where most needed. We thrive in:
- Understanding where issues exist in engineering and in production, as well as the handoff between the two.
- Establishing PLM best practices by standardizing ECN/ECO processes to prevent department-, site-, or area-specific anomalies to cause variations in how changes are managed.
- Providing a robust, revision-controlled system to handle the engineering changes while communicating them to the appropriate parties.
- Connecting CAD to PLM and PLM to ERP for a smooth-flowing process that integrates data in what could be called seamless process.
PLM can and should provide management with a handle on the pulse of what is going on – not at the detail level, but at least to understand if there are obstacles or bottlenecks that are recurring. This will begin to improve metrics through performance management and improvement.
Many argue that a piece of paper is tangible and easy to handle – put it in front of someone and get a signature. This may be true in the idyllic sense that the person is sitting at their desk and waiting for the change to come – as many know this is rarely the case since most managers are either traveling or in meetings. In these cases, the requester simply leaves the form on their chair, assuming they have done their job. Only after a couple of days do they check on the signer to see first, if they saw the form, second, if they reviewed the changes, and third, whether they signed the form and forwarded it to the next approver.
More often that is admitted, the change form is shuffled in amongst several other changes or is put at the bottom of a pile. Even worse is when the paper is simply lost and is unrecovered – this is where the major loss occurs as the change has to be completely re-initiated and routed through the entire process again up to the point of loss.
Another problem is that no one other than the one who placed the form on someone’s chair and possibly the one whose chair it belongs knows where the ECO is sitting. This lack of communication or lack of exposure keeps everyone else in the dark and people wonder what happened to the change that should have been completed weeks or even *shudder* months ago.
This is not the apex of product innovation!
According to a study by the Aberdeen Group in January 2014, industry maturity was defined in three classes: Best-in-Class, Industry Average, and Laggard. For those who fell into the laggard category, there was a 71% Overall Equipment Effectiveness (OEE) while the industry average was 82%. Best-in-Class was at a 93% OEE average. The laggard company was an average -11% operating margin versus corporate plan, with the industry average being +7% and the best-in-class averaging at +15% operating margin versus corporate plan.
The Aberdeen group also noted that the success for successful New Product Introduction (NPI) was 58% for the laggard, 73% for the average, and 92% for the best-in-class companies.
However, what I saw as the true indicator of maturity in industry was the number of ECOs generated. The laggard had a 14% increase while the average had 13% increase. Not much difference. The best-in-class had a 14% decrease in ECOs!
How is this achieved? Can any company realize such potential? Hard to say, but there are always common threads that can be seen in any company which are obvious to see and not hard to eradicate, or the more insidious “hidden” issues that cannot simply be fixed with the flip of a switch. Since this article is geared towards the company still working with a paper-based process, I will concentrate on the laggard and how that can be changed
Let us walk through some scenarios:
Hank’s office is a mess. Papers strewn all over the place, there is a foul odor that emanates from his workarea and no one really wants to know why. Although a brilliant engineer, the stacks of paper have generated real fear of a fire hazard. Even Hank doesn’t know what lives in his office.
Product returns are on the rise, and management is at a loss for the reason why. They do not see any changes and the sales have been as strong as always, although as of late complaints are becoming more noticeable and long-time customers are starting to threaten seeking alternative suppliers.
Since the retirement of Sally, the bookkeeper in charge of managing ERP data, errors in production data have spiked dramatically. Her replacement, Moreen, although bright, has spent months in trying to decipher the cryptic notes that Sally left in order to enter product information into the antiquated but functional ERP system. Production is now in chaos as several product releases have been shelved until the problem is resolved.
In each of these cases electronic data could have prevented or at least mitigated the problem. Let’s walk through each one:
Hank had several ECOs squirreled away in the mountain of paperwork and although some were aware of the location, they knew it would take an additional week to two for him to sort them out and get back with an answer.
Had an electronic system existed that notified the requester that the task had not been completed, it could have been escalated to management until Hank “cleaned up his act.”
If management were aware that the number of reworked parts was in direct correlation to the number of changes made and the amount of time spent on tracking down correct revisions or parts, the problem might have been avoided, or at least understood so that changes could be made. Because that was not the case, profits suffered and the company posted lower than expected earnings.
PLM could have identified certain recurring changes that were continually being reworked. ECOs were being generated for the same information and sometimes in conflict with each other. Production had no idea there was an issue and continued to manufacture outdated parts.
If an electronic PDM solution were in place, with a connection to send items and BOMs to ERP, the retirement of Sally wouldn’t have been such a blow to the company. The replacement would have only had to monitor the situation and not try to scale the Everest of paper to understand what had happened in the past with oddball rules and workarounds that always seem to exist with “special cases.”
In each case, PLM could have provided some assistance, and the effect would have been noticeable – sometimes not immediately, but the ramifications would have been far-reaching.
Let Rockwell Consults help evaluate your system and see what areas of improvement can be made. The 80/20 rule applies here as well.