IBM Global Business Services
A Cup Half Full: PLM in
the automotive industry
September 2008
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© Copyright IBM Corporation 2007
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Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
2
PLM for the Automotive Industry | 31-Jul-17
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PLM in the Automotive industry
 Joint study with:
- Automotive Analysis Division, University of Michigan Transportation Research
Institute (2007)
- Cranfield University (2006)
- Ruhr University Bochum (2006/2004/2000)
- IBM
 We conducted a combination of in-depth interviews and surveys with directors
and managers with expertise in the fields of automotive engineering and
information technology.
 Findings are “indicative,” but the sample is not large
3
PLM for the Automotive Industry | 31-Jul-17
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-
-
4
OEM: 32%
Tier 1 supplier: 62%
Tier 2 supplier: 6%
PLM for the Automotive Industry | 31-Jul-17
Europe Participants
(Extract, total of 39)
 16 USA automotive OEMs
and suppliers
 39 European automotive
OEMs and suppliers
 Findings focus on 2006 &
2007 data (2004 data
available)
 The participating companies
are:
U.S. Participants
(Full List)
Who did we talk to?
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Dana Corporation
Eaton Corporation
Ford Motor Company
General Motors Corp
Valeo
Yazaki Corporation
BorgWarner, Inc.
Tenneco Inc.
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TRW Automotive
Lear Corporation
Michelin North America, Inc.
International Truck and Engine Corp
Siemens VDO Automotive Corp
Daimler Trucks North America
Harley-Davidson Motor Company
Aston Martin Lagonda
Behr GmbH & Co.
Bentley Motors Ltd
Bertrandt AG
BMW AG
Claas KGaA mbH
DaimlerChrysler AG
Delphi Automotive
Systems
 Deutschland GmbH
 Faurecia
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Jaguar Land Rover
Lotus Cars
Johnson Controls GmbH
Lear Corporation GmbH & Co. KG
Linde AG
Nissan Technical Center Europe
LTD
Mann+Hummel GMBH
Cooper-Standard-Automotive
GmbH
Brose Fahrzeugteile GmbH & Co.
Continental Teves AG & Co. oHG
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© Copyright IBM Corporation 2008
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We categorized the 52 participants into PLM Champions,
Advanced PLM Users and PLM Stragglers
There is a gap today between leaders and stragglers
Level of PLM Usage
Advanced PLM users have an
above-average level of integration,
but only use average PLM
methods and tools
• PLM champions are the
leading edge of the
Advanced users, show a
high, well-balanced level of
integration and use. They
are strategically ideally set
up. Top 10% are champions
PLM stragglers… largely have an
average level of PLM functions, but
only have limited integration
solutions
Level of PLM Integration
U.S. Europe
PLM Champions
Advanced PLM Users
Combined PLM Champions & Advanced Users
5
PLM for the Automotive Industry | 31-Jul-17
PLM Stragglers
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IBM defines Product Lifecycle Management (PLM) as a strategic
management approach for running the business, not just an
engineering tool
PLM is not a single tool, technology, or packaged product
PLM is a “strategic management
approach”
 consisting of integrated
methods and tools
 for the cooperative
development, maintenance and
use of all relevant engineering
information
 in the entire distributed product
lifecycle
6
PLM for the Automotive Industry | 31-Jul-17
PLM integrates systems and processes
engineering
processes
IT systems
integrated
product
strategy
by PLM
product data
engineering
organization
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A PLM environment typically includes a variety of integrated
systems, processes and tools
Market/
Sales Order
Process
Reqm;ts.
Specials
Org 1
Org 2
Org 3
Org 4
Org 5
Own
solution
Own
solution
Own
solution
SAP
SAP
CAD
PLM transformation initiatives are
challenged by these barriers and
may cause problems during
execution
CAE
Engineering
PLM processes often have a high
degree of variation between
organizations, locations or
projects.
PDM
To collaborate on enterprise
projects these disparate systems
cause major challenges for
product & process definition
E-BOM
MPM
M-BOM
Operations
ERP
Own
solution
Own
solution
Own
solution
SAP
SAP
Decision point—mandate system commonality (“rip & replace”)
or integrate existing systems through SOA (“best of breed”)!
7
PLM for the Automotive Industry | 31-Jul-17
© Copyright IBM Corporation 2008
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Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
8
PLM for the Automotive Industry | 31-Jul-17
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PLM Benefits are realized across many areas for both PLM
Stragglers and Advanced Users
• higher levels of process
Processes
Significant reported
benefits include:
PLM
stragglers
standardization of processes
18
16
availability of information
reduction of non-value activities
Advanced PLM
users
8
9
6
0
standardization
• reduced number of
changes
• improved product
quality
9
Data
data quality
4
3
re-use of data and knowledge
Organization
• better geographical
integration
12
16
16
collaboration and comunnication
12
3
4
geographic integration
16
lower IT maintenance
12
3
4
IT
• increased re-usage of
data and knowledge
data flow and exchange
integration of legacy systems
Product
• improved data flow and
exchange
0
0
optimized product quality
8
Reduced number of product changes
8
higher ability for innovative products
PLM for the Automotive Industry | 31-Jul-17
0
6
12
3
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PLM Champions and Advanced Users are much more proficient in
even doing ROI evaluations, and thus see better returns
share of companies which have
carried out a ROI calculation in %
return on investment in months
(averages of entries)
80
35
28
57
7
PLM advanced PLM PLM
champions
users
stragglers
10
PLM for the Automotive Industry | 31-Jul-17
PLM advanced PLM
champions
users
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One of PLM’s major goals is to improve innovation
“PLM enables collaborative product
development work environments that
bring together expertise from multiple
organizations. These are environments
where people can develop new,
innovative products and services, and
design and establish innovative
business, manufacturing, and support
processes”
- Peter Bilello, senior consultant,
CIMdata
“Today’s PLM solutions provide
essential support for innovation. PLM
has steadily evolved from engineeringcentric solutions focused on
engineering data management to
extended enterprise intellectual asset
management solutions that support
the collaborative creation,
management, dissemination, and use
of project definition information from
concept to decommission .”
- John MacKrell, senior consultant,
CIMdata
Source:
11
http://aecnews.com/articles/786.aspx http://www.ngmanufacturing.com/pastissue/article.asp?art=271207&issue=218
PLM for the Automotive Industry | 31-Jul-17
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Advanced PLM users focus on speed of innovation, while PLM
stragglers focus on decreasing the costs of innovation
The impact of PLM on product
innovations
advanced PLM users and
PLM Champions
33
Increasing the amount of reused
parts
faster rollout of innovations
17
29
11
33
19
decreasing innovation costs
effective use of platform
strategies
10
11
decreasing the number of
variants
5
11
developing mass customized
products
5
11
extending the product
economic life-time
12
PLM stragglers
PLM for the Automotive Industry | 31-Jul-17
0
6
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Advanced PLM users lead in using innovative product
development methods
2007 U.S. participants
2006 European participants
77%
100%
100%
parametric geometry modelling
71%
100%
100%
100%
behaviour modelling
100%
23%
80%
50%
interdisciplinary modelling
42%
80%
71%
62%
80%
64%
62%
100%
93%
digital product master
digital test bench4
100%
50%
83%
50%
67%
100%
100%
33%
67%
100%
U.S. participants 2007
83%
configured DMU3
83%
PLM stragglers
100%
European participants 2006
advanced PLM users
PLM champions
PLM stragglers
46%
advanced PLM users
80%
71%
design in context2
33%
50%
100%
PLM champions
13
PLM for the Automotive Industry | 31-Jul-17
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Advanced PLM users obtain about 10% more reuse (for Slightly
modified and Existing) than the stragglers
Advanced users also:
-
Pursue a high level of component reuse
Reusing readily available as well as slightly
modified parts
New parts
Slightly modified parts
Existing/standardized parts
Component reuse in new developments
(consolidated European and U.S. participants1 - averages each classification group)
PLMchampions
32%
30%
38%
14
Advanced PLM
users
PLM-
stragglers
All PLM users
32%
35%
33%
32%
PLM for the Automotive Industry | 31-Jul-17
28%
38%
44%
27%
30%
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What is going on?
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15
PLM is a strategic management
approach for running the business; it
is not just an engineering tool
We believe that the fundamental
difference between leaders and
stragglers in the automotive industry
is in the way they think about PLM
Leveraging product development
methods are in much greater use of
PLM Leaders
PLM benefits are being achieved by
all, but advanced users are getting
better benefits from their more
comprehensive approach to PLM
PLM for the Automotive Industry | 31-Jul-17
What are the implications?

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The best benefits come from thinking of
PLM in terms of a comprehensive,
strategic change process management
approach
The fact that Advanced PLM users report
lower IT costs means that automotive
companies should aim for more
comprehensive PLM benefits, and not
just aim at lowering costs.
PLM as a management strategy needs to
be at the core of how the business
fundamentally operates
An innovation focus will lead to a larger
business impact for an automotive
company than focusing on cost cutting
alone
© Copyright IBM Corporation 2008
IBM Global Business Services
Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
16
PLM for the Automotive Industry | 31-Jul-17
© Copyright IBM Corporation 2008
IBM Global Business Services
PLM functionally overlaps with other enterprise systems, and
needs to be integrated
SRM
PLM
SCM
CRM
ERP
Source: Alan Mendel 2007 presentation
17
PLM for the Automotive Industry | 31-Jul-17
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Advanced PLM users show a slightly higher level of
integrating non-technical departments into the engineering
environment. No user has achieved a full integration.
Integrating non-technical departments into the engineering environment
(averages in each classification group)
maintenance, repair &
overhaul (MRO)
U.S. Participants 2007
enterprise resource
planning (ERP)
PLM Stragglers
Advanced PLM Users and PLM Champions
customer relationship
management (CRM)
European Participants
2006
PLM Stragglers
supply chain
management (SCM)
Advanced PLM Users and PLM Champions
requirement traceability
management (RTM)
0  no integration
service & support
1  communication between the departments
0
18
1
2
3
degree of integration in
the engineering
environment
PLM for the Automotive Industry | 31-Jul-17
4
2  exchange of information over system interfaces
3  shared database
4  integrated processes and functions
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Advanced PLM users are integrating engineering applications more
than the stragglers in the physical environment
virtual product creation
100
real product creation
bill of material management
80
100 83
CAD
100
DMU
80
45 40
simulation / calculation
43 33
CAM
29
29 20
PLM stragglers
29
0
29
0
14
0
15
requirements management
0
project management
14
CAQ
0
14
advanced PLM users and champions
19
17
testing / prototyping
29 20
20
production planning
factory planning
resource planning
PLM for the Automotive Industry | 31-Jul-17
86
14
visualization
100 86
(U.S. participants - averages in each
classification group in %)
60
86
33
33
43
33
71
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Big changes are expected in the consolidation of their Engineering
IT landscapes
Number of product data management (PDM) systems in engineering
(U.S. participants - averages in each classification group)
10
9
8
7
PLM stragglers
4
advanced PLM users
2
1
2003
20
1
1
2007
PLM for the Automotive Industry | 31-Jul-17
PLM
champions
2011
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Currently, advanced users and champions tend to focus on
commercially available solutions with adaptations, with a
move toward more off the shelf solutions in the future.
Degree of standardization of the implemented PDM solutions
(averages in each classification group)
Advanced PLM Users and
Champions
B 94%
B 55%
PLM Stragglers
B 94%
A 33%
B 67%
B 43%
C 14%
D 43%
C 18%
C 14%
D 27%
D 6%
D 6%
Trend Europe
2010
U.S. 2007
B 72%
Trend U.S. 2011
European participants 2006
D 14%
Trend
U.S. 2007 Trend U.S. 2011
Europe 2010
U.S. participants 2007
B: commercial system with adaptations
A: commercial system without any adaptations
D: home grown system/interfaces
B: commercial system with adaptations
C: externally developed individual solution
D: home grown system/interfaces
21
PLM for the Automotive Industry | 31-Jul-17
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Advanced users are focusing on providing web based access in the
U.S.
Web based access to central PLM system components
(Share of all entries in %)
18
15%
82
70%
The trend to
completely web
based systems
will be more of a
focus for the US
participants than
the European
participants.
75%
17%
15%
Trend Europe
2010
22
U.S.
2007
8%
Trend U.S. 2011
PLM for the Automotive Industry | 31-Jul-17
U.S. participants 2007
complete web
based system
Core system with
partial web access
no web based
access to the
system
European participants 2006
complete web
based system
Core system with
partial web access
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Advanced PLM users are focusing more on integrated workflow
processes, while stragglers are focusing more on data integration
The top challenges relating to the relationship with customers and suppliers
(U.S. participants - average of classified results - multiple entries possible)
integrated configuration management (incl.
change and release management)
data exchange and interfaces
20%
43%
60%
29%
confidentiality (IP protection)
20%
14%
multi-CAD management
20%
14%
building a common PLM strategy
reduce parts, foster reuse and common parts
40%
0%
20%
0%
PLM stragglers
advanced PLM users
and champions
23
PLM for the Automotive Industry | 31-Jul-17
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Advanced PLM users apply more sophisticated techniques to communicate
requirements along the supply chain, however communication is still not
high
PLM stragglers
Communication of product interfaces to customers and suppliers
advanced PLM users
and champions
(average of classified results in % - multiple entries possible)
data shared electronically
100%
100%
design evolution tracked by system
0%
42%
25%
data integrated into and communicated via BOM
42%
Communication of assembly constraints to customers and suppliers
(average of classified results in % - multiple entries possible)
CAD-based communication
40%
verbal communication
40%
paper-based communication
no communication
24
PLM for the Automotive Industry | 31-Jul-17
57%
42%
20%
8%
28%
0%
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Participating companies are planning to use PLM functionalities
company wide and across the extended enterprise by 2011
Companies are optimistic about reaching full integration by 2011
Self assessed level of
PLM integration
2007
2011
100%
cross enterprise PLM
18%
100%
company wide PLM
54%
92%
100%
92%
100%
PDM
CAD data management
USA participants only
25
PLM for the Automotive Industry | 31-Jul-17
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What is going on?
 Automakers are challenged to
integrate their separate enterprise IT
systems on which they run their
business
 Integration along the supply chain
also remains a difficult challenge
 Automakers are optimistic about
achieving strongly integrated
capabilities within 5 years
 Companies are taking different
approaches to PDM customization
 Advanced users focus on PLM
workflow processes, not on data
integration
26
PLM for the Automotive Industry | 31-Jul-17
What are the implications?
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The major integration effort within an
enterprise will be integrating its key
enterprise systems, which often
means PLM and ERP
It is unclear which approach to PDM
customization will succeed or
dominate
Business focused scenarios can
highlight PLM integration success, as
opposed to a data integration
approach
© Copyright IBM Corporation 2008
IBM Global Business Services
Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
27
PLM for the Automotive Industry | 31-Jul-17
© Copyright IBM Corporation 2008
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PLM success can best be attained with a top-down strategy that
closely involves top management
Involving top management when implementing a PLM strategy
(averages in each classification group in %)
advanced PLM users
and champions
PLM stragglers
0
0
50
18
50
important decisions are coordinated
between TM and the PLM project team
44
33
TM supports PLM strategy,
PLM team makes decisions
33
17
23
28
50
top management determines the
PLM strategy (top-down)
TM is not involved/interested
in the PLM strategy
70
0
12
0
0
U.S. 2007
U.S. 2007
Europe 2006
Europe 2006
PLM for the Automotive Industry | 31-Jul-17
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A lack of user acceptance and communication are main causes for
failed PLM implementations.
Risks when introducing
PLM
advanced PLM users
and PLM champions
(averages in each classification group)
not risky
very risky
user acceptance
4,7
missing communication
4,6
too much focus on technical details
4,1
insufficient PLM project management
4,0
complex data migration
3,9
too large project steps
missing cost transparency
3,6
3,3
An expert statement: “People are used to ad-hoc [working], but PLM implies
additional business control that people are not used to. So we will have to
change the culture to adjust to PLM.“
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PLM for the Automotive Industry | 31-Jul-17
PLM stragglers
not risky
very risky
4,3
3,8
3,2
3,5
4,0
3,3
2,7
1.
2.
3.
4.
5.
not risky
somewhat risky
moderately risky
risky
very risky
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A successful PLM initiative has top management commitment, as well as a
clear process and business focus, rather than being IT-driven
Success factors for introducing PLM
(averages in each classification group)
advanced PLM
users and PLM
champions
not
very
importantimportant
not
very
important important
5
top management commitment
4,7
4,7
division / user involvement
4,7
initiative is process-, not IT-driven
4,3
accompanying change management
4,3
3,7
consideration of quick wins
4,3
3,8
clear democracy of scope
4,3
3,8
clearly defined responsibilities
4,1
assessing potential for improvements
costs (hardware, software, implementation)
30
PLM stragglers
4,3
4,2
3,9
3,6
4
3,7
detailed assessment before implementation
3,4
3,3
ROI analysis for prioritization of activities
3,4
3,3
PLM for the Automotive Industry | 31-Jul-17
1.
2.
3.
4.
5.
not important
somewhat important
moderately important
important
very important
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Compared to Advanced Users, PLM Stragglers significantly
exceed project costs and time. There is also a significant
loss of System Functionality.
Deviating from the project plan in the last PLM activity
(averages in each classification group in %)
PLM Stragglers
U.S. Participants 2007
PLM Champions and
Advanced PLM Users
PLM Stragglers
Advanced PLM Users and PLM Champions
+10
+12
project costs
+47
European Participants 2006
+4
PLM Stragglers
+300
+37
Advanced PLM Users and PLM Champions
project time
+71
system
functionality
system
integration
31
-30
+13
-12
PLM champions reduce the scope of the
project to the advantage of the project
plan (cost and time).

Clear scope and small project range
guarantee the adherence of the project
plan.

“Quick Wins” with clearly arranged project
scope and user groups
+7
+2
-30

-16
+3
+3
PLM for the Automotive Industry | 31-Jul-17
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What is going on?




32
Comprehensive change projects like
PLM need support and top
management coordination, as well as
compelling business cases
PLM projects also need strong end
user support from the engineers and
planners who will work with the
system when it goes live
Advanced PLM teams focus on quick
wins with clear scope to show
business value
Focus on change management
processes is an attribute of successful
implementations
PLM for the Automotive Industry | 31-Jul-17
What are the implications?



PLM should be tied to the overall
corporate strategy, however
leadership is reluctant to buy into
large projects
It might be easier to justify PLM
projects as small IT projects limited
to engineering, but then the full
benefits of PLM do not materialize
It is better to approach PLM as a
major change project for the entire
business culture, but that makes it
more difficult to get buy-in
© Copyright IBM Corporation 2008
IBM Global Business Services
Agenda
PLM Study Overview
Significant PLM benefits are being achieved today
PLM Integration is a BIG challenge
PLM implementation approaches are improving
Conclusion
33
PLM for the Automotive Industry | 31-Jul-17
© Copyright IBM Corporation 2008
IBM Global Business Services
Conclusion
Automotive industry’s PLM cup is “half full”
 Some are doing PLM well, and all are improving
 Most are getting benefits
 Integration and implementation is still a major
challenge
 Focus on the small quick wins with process focus,
such as engineering change
PLM stragglers need to imitate the leaders:
 who tend to think “innovation” and “process transformation” for the business as a
whole
 and not think just “tool” and “cost savings” for the engineering department
We are optimistic that PLM will continue to be a driving force for the innovation needed
to meet the rapidly changing demands on automakers today and into the future
34
PLM for the Automotive Industry | 31-Jul-17
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