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The Business Case for PLM

The Business Case for PLM. Why PLM?. Companies who best optimize their business processes and leverage their value chain to capitalize on business opportunities will win. Driving Factor… Revenue Growth Engines.

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The Business Case for PLM

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  1. The Business Case for PLM

  2. DASSAULT SYSTEMES - 20 October 2014 Page 2

  3. Why PLM? Companies whobest optimize their business processes and leverage their value chain to capitalize on business opportunitieswill win. DASSAULT SYSTEMES - 20 October 2014 Page 3

  4. Driving Factor…Revenue Growth Engines What Are the Prime Sources of Revenue that Will Fuel Your Company’s Growth Over the Next Five Years? New products & new markets are the best routes to overall revenue growth ENOVIA MatrixOne Confidential DASSAULT SYSTEMES - 20 October 2014 Page 4

  5. What are companies facing today… Constrained R&D Budgets Exponential Increase in Complexity Design Moves Offshore Pervasive Outsourcing Tougher Regulatory Challenges DASSAULT SYSTEMES - 20 October 2014 Page 5

  6. ERP Manage resources and production, financials Federated Product Data CRM Care for customers PLM Manage product definition and innovation PLM is the foundation of all enterprise applications SCM DASSAULT SYSTEMES - 20 October 2014 Page 6

  7. Enterprise PDM Architecture ERPMESSC CRM Design Tools DASSAULT SYSTEMES - 20 October 2014 Page 7

  8. PLM Impacts Everything ProvideComplete AccurateProduct Information ImproveService ReduceCosts Use MoreStandard Components ImproveProductQuality ImproveCustomerSatisfaction MaximizeCash Flow ProvideComplete AccurateProject Information ReduceDefects IncreaseSuccessof NewProducts ImproveChangeManagement ReduceRework MaximizeRevenues ReduceTime toMarket Reduce ProcessCycle Times DASSAULT SYSTEMES - 20 October 2014 Page 8

  9. PLM Impacts Everything BOM accuracyÇ30% WarrantyÈ5% Inventory costsÈ50% PD costÈ10-20% Support personnelÈ50% Duplicate partsÈ10% Redundant dataÈ10% Search for infoÈ50% QualityÇ10 to25% ImproveCustomerSatisfaction MaximizeCash Flow ProvideComplete AccurateProject Information ScrapÈ10% IncreaseSuccessof NewProducts ECOsÈ10% ECO cycle timeÈ20% ECO labor costsÈ50% ReduceRework PD cycle timeÈ20% SourcingÈ90% Mfg. changeoverÈ80% RevenuesÇ10 to20% TTMÈ10 to20% DASSAULT SYSTEMES - 20 October 2014 Page 9

  10. 40% reduction 60% reduction Cost per specification via global standard templates Cost per RFQ via automation & collaboration GE Consumer& Industrial Time managing suppliers via supplier consolidation Cost per supplier certification via template, automation and supplier consolidation 40% reduction 25% reduction Automotive Tooling/production equipment costs via reuse Cost of prototypes including iterations 30% reduction 70% improvement 25% reduction BOM accuracy Initiating andprocessing changes Managing projects& programs 35% improvement 40% improvement 70% reduction Recreating lost data Product launch costs 40% reduction 35% reduction 20% faster Cost of quality Time to market Cost of compliance; Regulatory certification and audit Warranty costs via production readiness 33% reduction 10% reduction Case studies Global Product Development DAMA (Design Anywhere, Manufacture Anywhere) All Outsourced Manufacturing Supplier Collaboration Improving Product Launchwith Supplier Quality Management Process Synchronized Design Integrating Electrical and Mechanical Design into the Value Chain Visibility, Control& Measurement Cross-P&L,Cross-FunctionalCollaborative Solution Turning Market Requirements into Product Design Optimizing Program Management Process, from Customer Inquiry through Release of Order Ensuring Regulatory Compliance Across a Global Electronics Enterprise Regulatory Compliance DASSAULT SYSTEMES - 20 October 2014 Page 10

  11. Why PLM? The Business Case for PLM – An example DASSAULT SYSTEMES - 20 October 2014 Page 11

  12. TargetProcesses Design Data Management Engineering Change Management Process Excellence Workflow, Communication and Collaboration Tools Levers ofChange Unique Process, Role & Team Definitions Design and Execution Integration Component Supplier Management ProcessCost Product Cost Time to Market Product Quality BenefitAreas Demonstrating the Value of PLM DASSAULT SYSTEMES - 20 October 2014 Page 12

  13. (1) IP Vaulting & Data Integration Distribution of documents is automated via the web Current and previous versions of documents (any format) Searchable by sub system, supplier, author, date, etc Data Directories Access can be set by role, project, group, etc Vault uses established security protocols “Global, secure, instantaneous access to data” (2) Workflow Management • Web based automation of key tasks • Revision control & document approval rules enforced • Best practices standardized across value chain Design Data Management Opportunity Lever of Change Results A Single Source of Truth Providing the right information to the right people at the right time Excessive time spent searching for product data Up to 25% of time spent on data search in some functions Often fail to get the right data on first pass Up to 20,500 hours of productivity gains with a value of up to $13M per year Based on a 50% reduction in search & data transfer time for 700 staff members Also based on reductions in part admin costs due to better design re-use Excessive time spent transferring product data to partners Up to 15% of time spent on data transfer in some roles Lack of standardized DDM processes results in rework & confusion Average new product encounters at least 25 days of TTM delays due to DDM issues Up to a 60% reduction in DDM related TTM delays with a value of up to $3.05M per year DASSAULT SYSTEMES - 20 October 2014 Page 13

  14. AnnualFinancial Impact $8.75Mto$16.00M Results and Financial Impact • Process Cost • Improved data access • Reduced rework • Over 20,500 hours in potential savings • Product Cost • Increased design reuse • Fewer design errors • Earlier DFx • Time to Market • Fewer derivative delays • 60% reduction in DDM related delays • Product Quality • Early detection of design errors • Fewer design errors • Improved AML/AVL control DASSAULT SYSTEMES - 20 October 2014 Page 14

  15. (1) Change Process Definition • Highly automated ECO documentation, analysis &approval • BOM comparison • ECO review & approval • EC/Design package compilation/notification/ distribution • Up-front assessment of proposed change screen’s out ECRs without a clear business case • Automated tools allow for faster, more accurate assessment of ECO effectivity “More changes, processed earlierin the product life cycle” (2) Change Process/Data Integration • Automated notification of pending change increases awareness of pending change across functions & products • Early involvement of EM & supplier partners • Closed loop processes ensure product team visibility to change implementation status “Integrated, efficient change processes become a competitive strength” Engineering Change Management Opportunity Lever of Change Results Up to 70% reduction in ECO processing time with an annual value of up to $4M 40-70% reduction in processing time per ECO for engineers, EC & ESO staff Up to 17% reduction in quantity of ECOs due to improved screening Multiple change processes & manual tools make ECO mgmt a slow, cumbersome process Avg. end-to-end ECO cycle time is 70 days. An average ECO requires nearly 193.5 labor hrs to complete internally, 43.5 labor hrs. externally. Informal screening of proposed change Up to a 50% reduction in end-to-end ECO cycle time with an annual value of up to $1.3 M Lack of visibility to pending change impacts downstream functions ES change processing costs > $2.0M. Change related scrap & E/O costs > $1.8M Delays in ECO implementation delays realization of product cost savings Up to a 15% reduction in change related scrap, E/O & Enterprise Service costs with an annual value of up to $1.25M DASSAULT SYSTEMES - 20 October 2014 Page 15

  16. AnnualFinancial Impact $3.00Mto$6.50M Results and Financial Impact • Process Cost • Consistent ECx process • Streamlined communications • Up to 50% reduction in cycle time • Lower ECO processing costs • Product Cost • Lower scrap-related costs • Lower E/O Costs • Lower enterprise service costs • Time to Market • Streamlined release process • Real time communication to partners • Effect changes earlier in cycle • Product Quality • Rapid resolution of issues DASSAULT SYSTEMES - 20 October 2014 Page 16

  17. Component and Supplier Management Opportunity Lever of Change Results (1) Component Data Integration Existing tools (multiple Dbs and localized Dbs) and process limit capability to ensure use of preferred parts and suppliers • Searchable component database tools: • Cut component search time by 50% or more • Allow leverage of EM & Supplier expertise • Encourage use of preferred parts & suppliers • BOM risk rating & other decision support tools ensure linkage between OEM design process & out-source design strategy Up to a 7% increase in the use of preferred parts & suppliers with an annual value of up to $12.25M Excessive time spent on component search and AML/AVL set-up (over 17,500 hrs per year) and duplication of efforts Up to a 10% reduction E/O & last time buy costs with an annual value of up to $5.5M “Optimal component selection ensures lower product cost through the product life cycle” (2) Component (AML/AVL) Mgmt Process Definition Off Balance Sheet Inventory Liability (OBSIL) costs effect future business results, often unnecessarily, resulting in inventory buy-downs and payments to CMs for inventory Up to a 50% reduction in component search time with a value of $1.0M per year • Streamline & automate select supplier facing processes such as AML/AVL data management & inbound PCN’s/EOL’s • Clearly defined policies & processes support (Company name here) evolving business model • Outsourced manufacturing • ODM, JDM models Up to 20% reduction in part administration & qualification costs with a value of $2.2M per year Frequent unplanned product redesigns due to lack of component EOL data or PCN data “Closed loop processes with suppliers ensure effective management of AML/AVLs, qualifications & PCNs” DASSAULT SYSTEMES - 20 October 2014 Page 17

  18. AnnualFinancial Impact $12.0Mto$20.5M Results and Financial Impact • Process Cost • 50% less search time • 7% increase in preferred parts • Fewer new suppliers • 50% reduction in qualification costs • Product Cost • Leverage CM/EMS providers AML • Lower component costs • Lower material costs • Fewer EOL buys • Time to Market • Reduced qualification cycles • Product Quality • Increased use of preferred parts • Fewer errors due to AML/AVL issues • Fewer redesigns DASSAULT SYSTEMES - 20 October 2014 Page 18

  19. Real, Measurable Results DASSAULT SYSTEMES - 20 October 2014 Page 19

  20. Thank You MatrixOne is a Dassault Systèmes Company DASSAULT SYSTEMES - 20 October 2014 Page 20

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