PLM-Automation Market Evolution
The PLM Footprint Steps onto the Factory Floor
A CIMdata White Paper
Introduction
The recent announcement of the intended acquisition of UGS by Siemens AG has generated an explosion of discussion about the impact that this move could have on both companies involved and on the PLM industry in general. This paper is not intended to assess the acquisition itself because much has already been written about the anticipated impact on the involved companies. Rather, this paper will review the potential impact of this acquisition on the overall PLM market; its ramifications on the market’s evolution, competitive landscape, and overall value to industrial companies.
After this acquisition, UGS will become a unit within Siemens’ Automation and Drives (A&D) Group; one of the largest suppliers of Factory Automation solutions to industrial organizations. Due to UGS’ role as one of the leading suppliers of PLM solutions, this impending acquisition has generated a tremendous amount of interest and speculation as people attempt to understand the short- and long-term implications of this move.
The stated intent of this acquisition is to integrate Siemens’ Automation and Production technologies with UGS’ suite of PLM technologies to deliver integrated and more broad-based solutions to the market. The initial integrations will heavily leverage UGS’ Digital Manufacturing and Teamcenter technologies, an integral part of the overall UGS PLM portfolio of offerings.
CIMdata is quite positive on the potential impact that this acquisition can have on the PLM market and industry. In CIMdata’s opinion, this acquisition is a key event for the PLM market because it will accelerate the integration of PLM with the physical world of manufacturing production and process plants, an evolution that has been in process for many years. A seamless flow of information across the extended enterprise to enable collaboration throughout the entire product lifecycle demands that production automation be tightly integrated into the virtual world of PLM.
The integration of PLM and Automation is a logical step in the long-term maturing of the market and another major step toward fulfilling the promise of the Computer Integrated Manufacturing (CIM) strategies that were first proposed some 25 to 30 years ago. This reinforces the continued expansion of PLM as an enterprise-wide “full product lifecycle” initiative that will encourage more collaboration throughout the entire product development lifecycle.
PLM Market Environment
2.1 PLM Market Evolution
Enterprises worldwide continue to seek ways to compete more effectively and achieve success in their own markets. A key component of most companies’ strategy is to more effectively utilize information technologies to rapidly facilitate process changes that enable them to successfully address their challenges and gain a competitive advantage. PLM is one of the most significant initiatives to be introduced into industrial companies and continues to gain momentum as the key initiative that focuses on product-related improvements.
PLM is not just a computer application. PLM is the business strategy that a company uses to effectively support the full virtual/digital lifecycle of their products and accelerate business performance using a combination of process, organization, methodology, and technology. PLM incorporates processes that enable collaboration throughout the full lifecycle and across partner networks, utilizes technologies that support product and process development, and helps enable processes that foster innovation at all stages of the product lifecycle. PLM forms the product information backbone for a company and its extended enterprise.
PLM initiatives have been validated as excellent business performance enhancers and have become major programs in leading companies around the world. PLM focuses on support for the entire virtual product lifecycle, in the same manner that Enterprise Resource Planning (ERP) focuses on support for the product production lifecycle. These major initiatives are complimentary and, as shown in Figure 1, they have many different points of interaction throughout the lifecycle of a product.
Figure 1—PLM Supports the Virtual Product Lifecycle
As PLM is expanded through a close integration with factory automation and thus gets closer to the factory floor, this begins to provide a major layer of integration between the traditional arena of PLM and the production planning arena of ERP. In Figure 1, this PLM-Automation layer is a part of the overlap between PLM and ERP and provides the opportunity to share and leverage key product-related information from both environments. Although not the only area of overlap between these two major enterprise initiatives, it is a substantial one and offers excellent opportunities to better integrate the entire manufacturing enterprise.
While the overall vision of PLM is quite broad and encompassing, the actual realization of it in industry has been more modest. This realization reflects PLM’s gradual evolution as commercial PLM-related technologies have continued to improve and as industry has acquired sufficient expertise to make effective use of these technologies to enable the desired changes in business operations.
The evolution of PLM can easily be seen in the changing scope of the “PLM footprint” that industrial companies pursue and the commercial PLM solutions that the suppliers are providing. The footprint of the overall PLM vision is depicted in the Figure 2, and illustrates PLM supporting the product lifecycle from initial product planning through its end of life.
Figure 2—PLM supports the Full Product Lifecycle
This footprint has expanded from one that predominantly focuses on engineering design to one that encompasses a range of activities from early-stage product strategy development and planning, to product engineering and manufacturing engineering, and through product maintenance and support. The broader the PLM footprint, the higher the business performance acceleration and more complete integration to factory automation becomes a logical expansion of that footprint. The evolution is not nearly complete, but it is clear that the scope of the “realistic” PLM footprint has expanded substantially over the past several years and PLM has become a true enterprise program for market-leading firms.
A common theme of PLM’s expansion has been the integration of the various components of the footprint into a single “logical” solution, even if it supported by a variety of different technologies and solutions from multiple sources. As newer areas of lifecycle support have been developed and become available, they have gradually been incorporated more effectively into more complete PLM solutions. The evolutionary expansion of the PLM footprint to include Factory Automation solutions with Programmable Logic Controllers (PLC), transfer lines, and feedback mechanisms should follow the same pattern, with initial integration at the most critical points of interaction, followed later by more extensive incorporation into full enterprise solutions.
2.2 PLM & Factory Automation
In concept, the combination of design and management solutions with production automation solutions can be used to create a more all-inclusive environment for both design and manufacturing engineers; enabling manufacturing information and features to be incorporated earlier and seamlessly into the overall product development process and allowing changes and/or knowledge of production related issues to flow more readily from the production processes back into the product design process. This is totally consistent with the concept of a comprehensive PLM strategy, but isn’t achieved with a single step.
When considering the integration of automation solutions with PLM solutions, it is important to consider the best points of interaction between the two environments. Within the umbrella of PLM, Digital Manufacturing is the obvious first point of integration with factory automation.
Digital Manufacturing has been one of the major areas of PLM expansion over recent years, essentially bringing manufacturing engineering into the scope of PLM’s support. The substantial commercial offerings of UGS’ Tecnomatix and Dassault Systèmes’ DELMIA have been very visible as pioneers in developing and expanding Digital Manufacturing solutions and educating industry about them. Extending the scope of PLM through seamless integration with Factory Automation results in an overall PLM strategy that has the opportunity to provide a higher level of manufacturing production benefit than has previously been the case.
One visible trend in the evolution of the major commercial Digital Manufacturing solution suites has been their consistent march toward integration with the factory floor. This movement makes good sense as the solutions seek to provide more complete and accurate definition for product production (e.g., both good quality and a single version of the truth); more effective process plans; more complete instructions for machines; etc. The current Digital Manufacturing-related “automation” initiatives that support development of PLC programming that can be used directly with machines are clear examples of this trend, and mirror the much earlier development of Numerical Control (NC) programming to automatically drive machine tool operations. However, the current Factory Automation initiatives have a much greater ability to provide impact across the entire factory or plant. In addition, the trend to integrate Digital Manufacturing systems with Manufacturing Execution Systems (MES) systems is intended to facilitate the feedback loop necessary to better understand the impact of product and process designs on production and provide quicker inputs to effect improvements. UGS Tecnomatix’s purchase of US Data and Dassault Systèmes DELMIA’s joint initiative with Schneider Electric and their Dextus subsidiary are good examples of this trend. If effectively executed, the Siemens acquisition of UGS may now elevate this integration to the next level in terms of industry visibility and attention for both industrial companies and suppliers of solutions, resulting in increased value to end customers.
The link between PLM solutions and factory automation systems is shown in the overall PLM focus on solutions that encompass definitions of product, process, plant, and resources. Whether you consider Dassault Systèmes’ Product-Process-Resource (PPR) model, UGS’ Product-Process-Plant-Resource (PPPR) model, or models of other major suppliers of PLM solutions the meaning is clear. Integration to the factory and all resources within it (i.e., production lines, machines, tools, and people) is fundamental to a comprehensive PLM solution.
Development of more substantial integrations between Automation and PLM merely continues a natural evolution that has been occurring in industry for several years. Essentially, this is the continuous drive toward fulfilling the CIM strategies that were launched 25 to 30 years ago. The pending acquisition of UGS by Siemens A&D is a market event that has the potential to accelerate this evolution due to the increased visibility and focus that this expanded integration will be receiving. One of the biggest market impacts may be the increased growth of the Digital Manufacturing market as it gains substantially more exposure through the UGS Tecnomatix link to Siemens’ Automation solutions.
While the closer integration of PLM and Automation is another logical step in the long-term evolution of the PLM market, it certainly isn’t the end of the expansion of PLM as a “full product lifecycle” initiative. As illustrated in both Figure 1 and Figure 2, PLM supports the full virtual product lifecycle, not just one phase of it. Further extensions of PLM are expected in other major phases of the product lifecycle as well. For example, PLM-based solutions to address product maintenance and support have begun to be released, but much more extensive support is anticipated, and further integration with maintenance systems is expected. Additionally, on the front end of the product lifecycle, the expansion of PLM solutions to incorporate more in-depth solutions for development of product strategy, customer requirements, and product portfolio management are in the early stages of development.
Impact on the PLM Market
3.1 Impact on Major PLM Components
In enterprise implementations, comprehensive PLM solutions are composed of multiple components. Some of the major components that will most likely be impacted by the market changes resulting from the Siemens-UGS move include Design Tools (especially Mechanical CAD/CAM), Digital Manufacturing, and collaborative Product Definition management (cPDm—the PLM solution components that address the management, control, sharing, and leveraging of product related information). Impacts in each of these areas are potentially significant.
Given all of the previous discussion in this paper, it is obvious that there will be a significant impact on Digital Manufacturing solutions to integrate them much more fully with factory automation solutions. The integration of these components is a clear process that is already well underway. The enhanced visibility that Digital Manufacturing should receive and the boost in its perceived value to industrial executives could be one of the biggest impacts of the PLM-Automation integration movement.
Design tools solutions, especially CAD/CAM will be affected as well. In some cases, design technologies that have been focused on product design may be expanded to better accommodate design of the plant and facilities. For many years, design tools have been used to address tooling and machine designs. However, specialized design tools have been used primarily on plant and facility designs instead of traditional product design tools. A potential impact of the Siemens-UGS combination may be to speed the evolution of design systems to be more accommodating of full product and resource design and plant design that is accomplished in the context of the products that are to be manufactured in the facility. In fact, product design technologies may be targeted to design complete facilities as products. One impact of this would be to bring more use of traditional product design tools to tooling design and facilities design. This will result in greatly improved integration and data sharing across all parts of the product development process.
Another potential impact on design tools should be a greater understanding of the manufacturing processes associated with early design decisions (e.g. features, materials, etc.). More feedback could be provided to the designers and engineers regarding the ramifications of their choices on the manufacturing processes and ultimate product cost. This could provide major improvements in both cost and quality. In essence, this impact on design tools furthers the “design for manufacturability” initiatives from several years ago.
cPDm solutions will undergo further expansion in the way they manage product definition information and its collaborative development and use across the extended enterprise. These solutions will need to be much more complete in accommodating manufacturing and automation needs—driving development of better integrations to automation technologies.
Similar to the pressure on design tools, cPDm solutions will also be pushed to better encompass tooling, machine, and plant design issues as well as product design issues, so that the full product and manufacturing design processes are all integrated into an “enterprise” environment. They will also have to expand to support definition of complete production systems in addition to their current support of machine tool-level definitions, per our previous comments about the PPR/PPPR level of support that has been envisioned.
As with Mechanical Computer-Aided Design (MCAD), few industrial companies utilize automation technologies from a single supplier; they use technologies from multiple suppliers. Hence, the cPDm solutions must be capable of incorporating automation systems from multiple suppliers into a coherent overall enterprise solution. In the process, cPDm solutions will become more robust, more enterprise-capable, and much more visible as critical enterprise backbones that are well-known to enterprise executives.
As the scope of PLM and its supporting cPDm solutions expands to provide more extensive support of manufacturing automation and MES solutions, the necessity and requirements for clear and in-depth integrations with the backbone of manufacturing production planning systems—the world of ERP—become more critical. As was described earlier and shown in Figure 1, there is a substantial layer of potential integration between the virtual product lifecycle managed by PLM and the physical product lifecycle managed by ERP. Factory Automation solutions provide a significant point of interaction between traditional PLM and ERP solutions, and this integration will mostly be accomplished through utilization of the underlying information backbone provided by cPDm solutions.
In order to build a truly integrated PLM-Automation solution environment, standard integration protocols and data standards have to be defined and used. By developing and leveraging open integration standards that include how data is formatted and transferred (e.g., XML), solution suppliers as well as industrial companies can greatly reduce implementation and maintenance costs. For this to occur, a partnership among solution suppliers, major industrial companies, and industrial groups will have to take place. The good news is that there are already a number of standards in place. Unfortunately, there are many, perhaps too many, standards already in place that can be chosen.
3.2 Impact on PLM-Automation Investment Decisions
For companies that design and manufacture products, the combination of current PLM capabilities with Factory Automation can help bridge the gap that remains between the production processes and the various design and manufacturing engineering processes. This gap causes a number of issues that can only be solved when production and design systems can communicate easily and share common definitions of product and production equipment designs and processes.
One area that will be impacted is Digital Manufacturing solutions which are used to develop and simulate production processes. The same types of data can be used to set up process automation monitoring solutions in an integrated environment, saving data regeneration. PLM integration also provides a secure data storage and access facility for all data.
The potential to greatly reduce the negative impacts, including costs of engineering changes that occur due to problems found in production is substantial. In an integrated environment, the production systems can capture issues and communicate them directly into the PLM environment used by the various engineering organizations. Direct tracking and communication of these issues has the potential to reduce the long lag times that can adversely impact production schedules and lead to lower product quality.
There is also a potential for savings when the production automation systems can base their planning and scheduling calculations and simulations on a common set of product and tooling design information. For instance, when ongoing machining operations can be checked against the desired part geometry, tooling failures such as wear can be detected and analyzed more quickly, leading to fewer scrapped parts.
In essence, these integrated PLM-Automation solutions offer the “closed loop” environments that were one of the fundamental concepts of the early CIM initiatives. It has just taken the industry several years to achieve that vision.
However, the commercial availability of integrated PLM-Automation solutions does not necessarily mean that investments in these expanded solutions will be easily forthcoming. Although the potential value may be outstanding and the vision may match the strategic objectives of most major industrial companies, companies will still need to find ways to justify and fund investments in these expanded and enhanced solutions. This may be one of the most challenging aspects of PLM’s continued evolution.
As suppliers of comprehensive PLM solutions that include Digital Manufacturing have discovered, the ideal “buyers” of comprehensive PLM solutions that encompass both engineering design and Digital Manufacturing are really the CEOs, CIOs, and CTOs of companies—those individuals within an organization that have a clear focus on the overall performance of the business. However, most investment decisions are championed by heads of major functional units within the business—VPs of Engineering, Manufacturing, etc.
In many organizations, Design Engineering and Digital Manufacturing investment decisions are funded by different organizations. Investments in Factory Automation solutions are typically funded by different groups as well. Thus, suppliers selling comprehensive PLM solutions that encompass all of these solutions are faced with a difficult exercise of determining “who” the most appropriate focus for sales efforts is.
Industrial companies that want to take advantage of the value offered by broad PLM solutions, and now even more valuable PLM-Automation solutions, must raise the level of the investment discussions to include the full executive team and consider these investments as enterprise-wide initiatives. This typically results in greater returns but is more difficult and takes longer to achieve.
3.3 Impact on Competitive PLM Landscape
The PLM market movement that has been the focus of this paper will impact the competitive landscape for suppliers of broad-based comprehensive PLM solutions as well as suppliers of more limited-scope offerings. Some of the major components of comprehensive PLM solutions include Design Tools (especially MCAD), Digital Manufacturing, and cPDm. Competitive market impacts in each of these three areas are potentially substantial and the furthering of all three in concert offers the greatest opportunity to increase the impact of PLM on the enterprise.
Market education and awareness of manufacturing solutions should progress much more quickly than it has over the past few years. This PLM-Automation evolution has the potential to significantly increase the visibility and credibility of Digital Manufacturing within PLM solutions—it will certainly help validate the move toward Automation that the major Digital Manufacturing suppliers have been pursuing. The increased market exposure should help to accelerate development of the Digital Manufacturing market, benefiting all suppliers of these technologies, whether for large-scale solutions or more focused solutions.
Major industry acquisitions tend to force competing suppliers to respond in order to compete effectively. For example, as Dassault Systèmes’ DELMIA program became more substantial, UGS took the step of acquiring Tecnomatix rather than just partnering with them. In turn, PTC acquired PolyPlan to help them address Digital manufacturing as well. This UGS-Siemens move should again raise competitive pressure regarding manufacturing and Automation support and we would expect competitive reactions by the other major suppliers.
The impact on suppliers of design tools, whether they are targeted at product design, tool design, or facility design, will be increased awareness of the overlaps and the potential opportunities to be gained from cross-utilization of design technologies and data within an overall enterprise environment. With the broader opportunities provided through integrated PLM-Automation solutions, design tool suppliers will be forced to assess whether they remain focused on either product design or facility design, or attempt to broaden their offering.
For suppliers of cPDm solutions, the challenges will be substantial. The opportunity to develop and provide more comprehensive solutions that address further expanding enterprise needs and accommodate more manufacturing-focused needs is terrific, and offers real growth opportunities. However, it also creates a situation where cPDm solutions provided by suppliers who were previously focused on manufacturing may gain additional credibility. In this case, the major ERP suppliers like SAP and Oracle, may find an opportunity to better establish themselves as credible suppliers of cPDm solutions—the backbone of PLM strategies. Although ERP suppliers have not directly participated in the Automation market, PLM suppliers haven’t either to any great extent. Thus, the opportunity exists for each of these two “camps” to seriously try to fill this new opportunity, possibly resulting in new PLM market dynamics.
Although not a focus of discussion in this paper, it is clear that there will be an impact on suppliers of Automation solutions as well as suppliers of PLM solutions. The availability of comprehensive solutions that include more integrated Automation-PLM capabilities should raise the competitive pressure on traditional suppliers of Automation solutions, and should result in more attention to integrated Automation-PLM solutions throughout industry.
Summary and Concluding Comments
Businesses around the world are investing in PLM at increasing levels as its value has been validated in enabling companies to become more effective, more innovative, and more successful. The move to tie Automation more closely to PLM will further increase the impact of PLM on the production portion of the lifecycle and provide substantial additional benefits as companies are able to develop and manufacture products in a much more integrated and knowledge-driven environment—an environment in which designing both the products and the facilities that produce them become a single integrated process in order to best leverage the organization’s knowledge and expertise.
As a result of the PLM-Automation evolution, PLM becomes an even more critical enterprise investment for industrial companies. This natural evolution of PLM is transforming it from a primarily design-centric solution to one that is encompassing all elements of the virtual product lifecycle. The PLM-Automation integration will ensure manufacturing’s key role in PLM strategies, and significantly enhance the overall business value of these solutions as design, manufacturing, and information management are totally integrated. But PLM’s evolution isn’t complete. It will continue to be expanded and its value enhanced with better links into other major aspects of the product lifecycle.
The potential for industrial companies is substantial, and they should pay close attention to the opportunities that the PLM-Automation evolution provides. Of course, this expansion of the scope of an overall PLM-Automation vision and strategy will require re-thinking and solid effort to be effective. However, the potential is too significant to ignore, and forward-thinking companies will be leading this movement as PLM’s footprint takes a big step onto the factory floor.
About CIMdata
CIMdata, an independent worldwide firm, provides strategic consulting to maximize an enterprise’s ability to design and deliver innovative products and services through the application of Product Lifecycle Management (PLM) solutions. CIMdata offers world-class knowledge, expertise, and best-practice methods on PLM solutions. These solutions incorporate both business processes and a wide-ranging set of PLM enabling technologies.
CIMdata works with both industrial organizations and suppliers of technologies and services seeking competitive advantage in the global economy by providing world-class knowledge, expertise, and best-practice methods on PLM solutions.
In addition to consulting, CIMdata conducts research, provides PLM-focused subscription services, and produces several commercial publications. The company also provides industry education through international conferences in the US, Europe, and Japan that focus on PLM. CIMdata serves clients worldwide from locations in North America, Europe, and Asia Pacific.
To learn more about CIMdata’s services, visit our Web site at www.CIMdata.com or contact CIMdata at: 3909 Research Park Drive, Ann Arbor, MI 48108, USA. Tel: +1 (734) 668-9922. Fax: +1 (734) 668-1957. In Europe: Siriusdreef 17-27, 2132 WT Hoofddorp, The Netherlands. Tel: +31 (0)23 568-9385. Fax: +31 (0)23 568-9111.
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