The Roots of Product Lifecycle Management
Product Lifecycle Management (PLM) originated in the automotive industry and as a breed of IT application, it is still mainly associated with discrete manufacturing. Having started with the scope of product data management for the development phase of a product lifecycle, the reach of the technology has evolved to cover the full product lifecycle — and close the loop by supporting the exploitation of field experience to drive front end innovation (for example, Oracle seeks to reinforce this by referring to ‘Product Value Chain Management’).
The PLM technologies designed for discrete manufacturing industries deliver enormous benefit in product development scenarios involving high numbers of parts with their relationships defined by a well-structured bill of material (BOM) and especially where there are a variety different individuals/organizations contributing to the development, manufacture, sale and support of the product. As a result, the PLM market has grown to approaching $3 billion in software revenues and much larger if you count the services and support ecosystem. Having said that, the adoption of PLM in chemicals has been rather more tentative — with good reason.
PLM in The Chemicals Industry – The Early Years
PLM’s initial foray into the process industries came from several directions. Firstly, there were the understandable efforts to bend, twist and augment the functionality of the systems that had proved highly capable for discrete manufacturing. At a high enough level, this would be fine, the chemicals industry formulation simply replacing the automotive BOM (although while a car has over 30,000 components parts, it’s unlikely that a chemical formulation will have 30,000 ingredients). And after all, PLM is brilliant information management technology with workflow and information flow capabilities built in. However, the requirements of the chemicals industry have proved quite a barrier to moving discrete manufacturing technologies across.
The second direction from which PLM initially offered a solution for chemicals was extension of the business (ERP) system vendors’ product information management capabilities. However, the same limitations applied and this approach seemed to embody a tacit acceptance of the limitations of PLM in chemicals.
The third approach came from vendors that were offering applications for specific aspects of the chemicals product lifecycle and sought to build these out to provide broader workflow and information management capabilities.
However, chemicals companies did not want to wait until there was a total all-embracing solution for chemicals (indeed, they would still be waiting!). As a result, it’s perhaps most appropriate to talk about the product lifecycle information management picture in chemicals today in terms of PLM ‘environments’ rather than ‘systems.’
What Can PLM do For Chemicals Companies Today?
For the discrete manufacturers, the classic PLM benefits include:
- Integration of all ‘data creation’ systems leading to a reduction in the complexity of managing product development processes through effective information sharing and collaboration.
- Controlled sharing of information throughout the value chain — integration of information across the product development, manufacturing, supply, support and retirement processes.
- Better decisions on optimization of the innovation project portfolio — including information drawn from field performance of products (maintenance systems, supply chain systems) and information held in the ERP system (supplier, cost data.
- Ease of collating and organizing information associated with industry regulations.
The result is more innovative, higher quality products brought to market more quickly and supported more effectively.
So, given the hurdles that we have identified above, can PLM deliver these huge benefits for the chemicals industry?
While there are several aspects that are important to competitive position and for which individual companies can develop their own strategies, there is one, compliance with industry regulations, that is not an option — it’s a ‘table stake.’ The data needed to meet regulatory requirements varies from region to region or even from one part of a country to another and both the descriptions of the requirements and the information to be supplied comes in a variety of formats (including paper). So the document management capabilities of the PLM solution must be highly flexible in that respect. In addition, compliance must be monitored throughout the product lifecycle, all the way for initial development to retirement, given that regulations change all the time. A good example of the regulatory demands on the industry is the REACH (Registration, Evaluation, Authorization and Registration of Chemicals) safety standard that requires manufacturers and importers in Europe to register chemicals of which more than one tonne are used annually by supplying information such as chemical formulations, uses, volumes used and safety test results.
The industry still makes wide use of document management-type systems for gathering and maintaining this type of information but it’s not surprising that it’s an area that PLM’s information management capabilities can address very well, with its traditional strengths in centralizing document storage, version control and information dissemination. Consequently, many chemicals companies have led their PLM strategies with regulatory compliance as the core requirement. Of course the danger is that a rich PLM system can end up as a glorified document management system focused solely on this aspect of product information requirements.
What else can PLM do towards delivering the type of benefit enjoyed by the discrete manufacturing industries?
Today’s systems have come a long way. The data handling capabilities have developed to accommodate the variety and dynamism of the information requirements in the chemicals industry. The drivers for this variety and high pace of change are numerous. Many customers in the chemicals industry are other manufacturers that have their own application and require specific product data. Raw materials prices are volatile and for many it is an ongoing mission to seek alternatives that can be factored into a formula. Packaging and labelling requirements vary enormously by territory and development of the packaging is often a complex technical development issue. By taking a pragmatic view of the balance between what should be included within the scope of the PLM system itself and where PLM should provide integration glue with specialized applications (for example, research, lab management, experiment design will typically be separate applications).
There are a number of vendors that have achieved strong chemicals PLM capabilities. So the PLM vendors that have traditionally led the way in discrete manufacturing have acquired relevant technologies to enhance the capabilities of their PLM systems for process industry applications (Dassault with Enginuity, Accelrys; Oracle with Agile, Prodika; Infor with Optiva; Siemens with Simatic), or by continuing to build out from their original chemical industry focused applications (Selerant, Sopheon).
The above discussion is admittedly simplistic in considering the breadth of opportunities for chemicals companies to derive benefit from today’s PLM technologies. Due to the limitations of the early solutions, the industry has a legacy of customized systems, stand-alone applications and integrations that, like the early ERP systems, are rather like concrete – you can have it any shape the first time, but it’s hard to change. However, the combination of growing process industry PLM capabilities and the cost and accessibility advantages offered by the new cloud-based IT infrastructures are likely to make a change to a more off-the-shelf approach much more attractive.