Getting Executive Buy-In
Another shift overtaking midmarket PLM involves decision makers. While the products are still quite engineering-centric, "more people are touching PLM applications who are not engineers," analyst Amann says. "We're starting to see more decision makers involved from the CIO and CXO level."
CIO Jan LaHayne of Littelfuse Inc. ended up front and center in the PLM decision-making process at her company, the world's No. 1 fuse maker, according to Hoover's. Headquartered outside Chicago, the $535-million firm has more than 10,000 customers in 32 locations around the world. In the warp-speed electronics business, products can move through an entire lifecycle in less than 18 months.
"You really need good PLM software, because you're moving on new product development all the time," LaHayne says, noting how product design has become globalized and multidisciplinary. "All this data used to be on paper in file folders, which were relatively easy to deal with in one location, with one engineering department. But now you may have customers in Asia who want the designs done in Germany or elsewhere in Asia. Everyone now has to see the concept, look at the drawings and understand all the pieces."
In 2004, Littelfuse started kicking the PLM tires, but it took until 2006 to pilot UGS Corp.'s TeamCenter, an enterprise-level product installed at companies as large as Lockheed Martin Aeronautics Co. "We dragged our feet a bit, probably because we didn't have the right sponsorship to help us understand the next place we needed to go," LaHayne says. "The engineering group saw it mainly as a way to organize their CAD drawings and spec sheets. Like an electronic filing cabinet."
That myopic view changed once a leading engineer -- Jay Harris, now a global director of product management -- took up the cause of selling PLM to the business by emphasizing its marketing, quality-control and sales opportunities instead. The two joined forces to sell the board on a project that will likely cost about $350,000 once it wraps up later this year.
"The first tangible benefit that comes to mind is the connectivity," Harris says. "Part of our growth at Littelfuse is tied to acquisitions, and every time you acquire a company you know you'll get some new data management system. Everyone has different CAD systems, for example. So how do you maintain traceability and control of that data? TeamCenter is platform-agnostic, so it doesn't care where the data comes from. As we're looking to the future and continuing to expand globally, we've now got this system to plug in whatever data we need."
The ability to access this data from multiple engineering systems also brings a wealth of historical knowledge to bear on new product development, the CIO adds. "Someone may say, 'Hey, I can do that in nickel versus palladium,' and you have all that history to find out what happened in past testing with heat or torque. You can save yourself a lot of time and money."
LaHayne's most serious concern about the UGS software was that it required an Oracle database platform, which she didn't want to support at her predominantly SQL Server shop. "I know plenty of CIOs who run on Oracle happily, but we avoid it because of the overhead cost of those outsourced Oracle DBAs [database administrators]," she explains. The fact that UGS was adding a SQL Server version to which Littelfuse could migrate eased this issue, however.
There is also a shift taking place among the types of industries most likely to benefit from PLM capabilities. Joining the early adopters among large automakers, manufacturers and members of the aerospace industry are now scores of companies in fabrication and assembly, consumer product goods, retail, high tech and electronics.
This was first published in May 2007