If the door handles of the cabs on the road graders manufactured by Volvo Motor Graders in Goderich, Ont., were the same as the door handles of a cab at another Volvo plant in Korea and even the Volvo plants in Sweden, China, France, Poland, Germany and Brazil, dealers could carry fewer varieties of door handles and everyone’s inventory would be reduced. Further, time and money would be saved if an engineer at one of these plants designed a better door handle and shared it so all the locations could readily incorporate it into their cab design and manufacturing process.
Those are two big “ifs” and though they’re not entirely possible now, they’re not just a pipe dream either. Volvo Motor Graders is part of the global Volvo Construction Equipment (VCE) and manufactures about 1,200 road graders each year for world-wide distribution. Ten other VCE locations produce compact equipment for construction, industrial and maintenance work and general purpose/production equipment for roadbuilding and maintenance, extraction and industrial applications. Since many of these locations were acquisitions, the 8,000-employee strong VCE has an assortment of ERP, computer-aided design (CAD) and engineering product data management (PDM) systems used for creating, storing and linking information on part designs.
Dave Ross, vice-president of engineering at Volvo Motor Graders, reports that VCE has in total about 800 engineers distributed over engineering centres in six countries, designing eight products that result in 60 models and well over 560,000 active part numbers. Of the 600 employees in Goderich, 30 engineers and designers used Solid Edge. Other VCE locations use Catia V4, Pro/ENGINEER and CADAM. Many PDM systems are self-made. Both SAP and Mapics Inc. are used.
“The advantage of belonging to the Volvo engineering community is having access to this diverse assortment of technologies,” Ross notes. “The issue we face is the difficulty to share the information due to distance and variances in the IT systems.”
Since joining Volvo Motor Graders in his present capacity 11 years ago, Ross had been wrestling with what he refers to as “workflow issues” and “playing keyboard.” For example, a designer’s change on a 30-part assembly entailed someone typing out changes and part numbers that were eight to 10 digits long in order to enter it into the company’s SAP ERP system. Once that data was entered, then the system notified the parts department and about six other departments where the data was handled manually, he says. He was frustrated by “the number of keystrokes to get a drawing into the vault and the number of key strokes to get an ECN (engineering change notice) into the system.”
Clearly, the efficiency of the data transfer and the integrity of the data were major concerns even at the local level. The diversified information systems throughout VCE globally dead-ended any hopes of significant enterprise-wide collaboration to reduce part numbers and cost.
Integrating product info
AMR Research stresses that lacking strong processes cutting across engineering, manufacturing, sourcing, sales and marketing leads to poor product profitability. The Boston, Mass.-based business process and IT consulting firm cautions that “suboptimal” new products are caused mainly by a lack of coordination and collaboration between functional silos, customers and trading partners. A recent document notes that while billions have been spent on product data management and CAD tools to support engineering, little has been done outside of engineering to address the total product profitability equation. That’s where product lifecycle management (PLM) comes in.
PLM is defined by IBM as an extended enterprise solution for manufacturing companies that facilitates the sharing of product data across all company functions, customers and suppliers. Applying the collaborative functionality of the Internet, PLM software supports and enables supply chain collaboration, product development and enterprise process integration, according to IBM.
The idea is to break down the technology silos that have limited interaction between product designers, builders, sellers and users. In theory, it puts products, the source of profits, at the centre of everything a company does by pulling relevant information from a firm’s ERP, SCM and CRM systems and associating it with product knowledge.
PLM is being touted by vendors as having the potential to increase engineering productivity, reduce design cost and leverage global engineering and manufacturing. Agile Software Corp. of San Jose, Calif., for example, promises three main results from its PLM software for the auto supply chain. One is reduced vehicle development costs by:
• eliminating legacy software application managers, reducing printing and shipping costs for communication to remote facilities, and reducing scrap and rework costs;
• enhancing engineering productivity by increasing design re-use;
• integrating supplier expertise earlier in the product development process to improve product quality, lower costs and accelerate time to market and time to volume;
• exchanging data with partners using STEP AP214 and reducing non-value-add activities such as manual data input and editing; and
• modelling and managing total vehicle system costs throughout a complex and globally distributed supply chain.
A second PLM benefit is improved leverage of global manufacturing capacity through:
• synchronizing all design and manufacturing partners through creation of a single Web-based product record that is accessible to all automotive supply chain partners regardless of location; and
• managing historical supplier cost and performance data and make sourcing decisions based upon proven ability to deliver value.
The third is improved product quality by defining and implementing advanced quality management programs such as Advanced Product Quality Planning (APQP) and Production Parts Approval Program (PPAP) to ensure consistency of product design and manufacturing processes across the supply chain.
Creating supply chain collaboration for process cost reduction and efficiency is a PLM driver, according to Joanne Friedman, CEO of consulting firm Connekted Minds in Richmond Hill, Ont. “Customers believe that collaborating in real-time with demand and supply chain partners will be critical to their success,” she adds. She cites the UCCNET, the subsidiary of the Uniform Code Council, Inc., as contributing to supply chain collaboration by driving cataloguing and transactional data requirements from product records through manufacturing processes. RFID also plays a part as it leverages and extends product information.
The investment in PLM varies with the size of company and just what is being implemented. Friedman estimates that a mid-size company can expect to pay up to $1 million for a PLM solution. At the top end, she points to a recent UGS PLM announcement of a US$19 million contract with the German aircraft engine manufacturer MTU Aero Engines.
Friedman agrees with the vendors that PLM brings operational efficiency. She cites five challenges that it addresses to that end:
• lack of timely communication between internal and external stakeholders;
• difficulty in tracking and managing ongoing product costs;
• difficulty in achieving economies of scale;
• customer demands for faster delivery of innovative products and increased revenue generation; and
• pressure to keep costs low despite change orders.
Without leveraging PLM, the cost of system duality and technology to enable collaboration will increase by orders of magnitude over the next five years, she adds. In fact, she claims a firm’s internal pressures are exacerbated ten-fold when externalized across the value chain. PLM technology — what Friedman calls “a new enterprise backbone” — is reaching the next milestone in the maturity curve, she says. She sees converging technologies as fostering the growth of PLM. “Shifting sourcing and supply chain functions upstream cascades business value across the enterprise. Integration [applied] to transactional systems facilitates data reuse and improved processes for collaboration and cost efficiency.”
Putting it in practice
Truly, analysts are projecting this to be a significant growth market. Friedman reports that in 2002, the PLM market was less than $15 billion. She estimates that by 2006, it will more than quadruple to $70 billion as PLM turns into PLIM: product lifecycle information management. She carves up that $70 billion five ways: PLM $25 billion, supply chain $21 billion, middleware $18 billion, design chain $3.2 billion, and services and outsourcing $3 billion. Before 2010, outsourced and hosted PLM will account for $10 billion, representing the biggest growth area, she predicts.
“By 2006, PLM will become the information backbone that enables rapid product innovation and global efficiency needed by all manufacturing industries,” she stresses.
Back in Goderich, Ross is somewhat skeptical that all this applies to companies other than those involved in the high-speed development cycle of cell phones and other consumer products. After all, Volvo Motor Graders’ products live 10 to 15 years, he says.
However, Ross leapt to his feet to be the first in line to implement a new system to improve workflow and collaboration when the VCE IT department decided in 2002 to transition all engineering departments to a standardized enterprise-wide offering to be implemented by 2006. The company chose to standardize on the Dassault Systems Catia V5 for design software and IBM SMARTEAM for the drawing vault and data storage.
With help from IBM and VCE IT, the 12-person local Goderich IT team worked on the implementation which ran the first nine months of 2003. It began with a three-month evaluation by IBM of the problems that the new PLM system needed to address. The many bottlenecks and data stoppages that Ross already knew only too well included:
• a limited visibility to real-time product maturity and work-in-progress data;
• after the product is released to manufacturing, its various configurations could not be accurately managed and tracked throughout the remainder of its lifecycle;
• business process architecture did not provide easy access across the entire enterprise;
• integration to other applications was difficult;
• productivity tools like information portals and enhanced collaboration tools to reach beyond point-to-point integration were not realized;
• engineering and production systems were not linked to support lifecycle management outside of the design community;
• business development, marketing, service and other enterprise-wide value chain participants of product data did not have access so cannot reuse 3D data;
• partners and suppliers shared electronic information but progress of changes or work-in-process development were managed only through paperwork and personal communication;and
• local management systems were specific to functional domains and data was not easily shared across the enterprise.
The evaluation was used to define the software packages required. The decision to proceed was made in April 2003 and the project was executed between May and October.
The software was adapted — not customized, stresses a pleased Ross — and tested before being rolled out.
“It was tough organizing these systems,” he admits. Initially, it was a struggle to adapt the interfaces for the hydraulic and electrical Catia modules, especially.
He recommends keeping the same lead experts throughout the implementation. He also found it was definitely beneficial to implement the CAD and PDM systems simultaneously. “Lead experts from specialized CAD areas and PDM must be on site at the same time to provide a consistent approach to solutions,” he stresses.
In February 2004, the Goderich site did an initial workflow module, creating a multi-department viewer capability which is “really slick,” says Ross.
“We see a 30 per cent improvement in ECN workflow and the drawing vaulting is better.”
The next step is collaboration with Sweden Volvo IT later this year and then eventually the rest of VCE as they follow the Goderich location’s lead.
“The payback is increasing efficiency, but the trick is making it real,” he concludes. “So what do you do with that efficiency?”
Whether you use your additional efficiency to make more product or reduce costs or both, having all the product information at hand can only improve such critical decisions.