Smaller Companies are discovering that product management tools can help their small staffs get a global reach. The Product Lifecycle Management (PLM) software has become an important tool for managing people and resources at enterprises of any size. At Sonnax, the adoption of a PLM solution has led to some clear changes in information management. Instead of relying on a single point-person to do the project management for the whole company, each product line sales manager has become more deeply involved in the designs of specific lines. Indeed, many startups are incorporating PLM solutions before they even have products to manage. One factor that may be pushing small- and medium-size enterprises to adopt PLM solutions is the new globalized business model. Experts see PLM as way to help the far-flung pieces of the production chain mesh together. The system can be set up to enable suppliers of components anywhere in the world to look at the documentation they need, and to determine the most relevant information: what the history was, the nature of the changes, who approved it, and so forth.
WHEN BEN WALLACE took over as engineering manager at Sonnax, a small manufacturer in Bellows Falls, Vt., in February 2004, it was a bit like stepping in for Lucy Ricardo at the chocolate factory. The products-in this case, automatic transmission parts and torque converters for the aftermarket-kept rolling out, at a rate of a new product a day.
"At anyone time," Wallace said, "we have 200 to 300 products in play."
Keeping track of that torrent of projects was nearly a full-time job in and of itself. And with data scattered throughout several different record-keeping systems, it was impossible to pull together crucial information.
"The first thing I wanted to know when I took over the engineering group," Wallace said, "was what projects we were working on-just a list. That's pretty fundamental.
"It wasn't possible to generate that list. T hat was very eye-opening," Wallace said.
Unfortunately, that's not an uncommon problem for small and medium-size manufacturers. In order to compete in even the nichiest of markets, managers must keep track of dozens, even hundreds of products. But because of a reliance on legacy record-keeping solutions and temporary quick fixes that somehow live on and on, pulling together information on those products can be a monumental task. The same data can be stored in various systems in multiple formats, and keeping that data current is a struggle.
One solution that small companies are turning to increasingly is product lifecycle management. Once largely the province of global manufacturers and their suppliers, PLM software has become an important tool for managing people and resources at enterprises of any size. Indeed, many start-ups are incorporating PLM solutions before they even have products to manage.
Software companies have responded to this need by creating tiered options for their smaller customers. "It isn't that they leave things out," said Monica Schnitger, senior vice president at Daratech, a market research firm in Cambridge, Mass. "Most of the PLM software bundled for the middle market includes a set of specific capabilities that those customers have asked for, and allowing users to buy additional capabilities."
Moreover, these small users can afford to demand less customization than large manufacturers can. "They are willing to change some things they do to conform to the software so that it is cheaper to operate," Schnitger said.
GIANT FILING CABINETS
Traditionally, product life cycle management systems have been found in the largest manufacturers. The systems, which track products from the initial design phase through manufacturing and distribution to the end user, have been likened to giant filing cabinets. But the data held in such a database can encompass information well beyond what is typically associated with product design-things like how personnel and equipment are deployed, or the full accounting of costs.
Integrating this wealth of data in a form that can be managed, analyzed, and disseminated has generally required the computing power and a sophisticated software platform that made the adoption of PLM systems expensive. If you were running a giant manufacturer such as Boeing or General Motors,. adopting a PLM system would be a no-brainer.
Suppliers to large manufacturers have seen advantages to adopting PLM solutions as well; in many instances, the larger company requires it. But it's taken time for PLM to make inroads with other small and medium enterprises. For one thing, the amount of information technology support needed to implement such a system was beyond the reach of most smaller enterprises. Many small companies were content running the business software that came with their desktop computers.
"In midsize companies, margins are pretty thin," said Marc Lind, vice president of marketing at Aras Corp., a business software company in Lawrence, Mass. "A lot of times, they rely on unique practices to win new business and be profitable. You need to have solutions that they can get going quickly with and adapt to their specific competitive practices."
And often there wasn't an overriding need to adopt an integrated system. Established companies could adapt and expand filing systems that had served them for decades, even if they saw diminishing returns from them.
In many cases, the lack of integration leads to bottlenecks. "The people who know how to navigate the various systems become the only ones who can get anything accomplished," Wallace said. "It becomes difficult to grow."
Still, informal systems can work for small companies. "When a company's really small, the engineer talks to the buyer and the buyer calls the vendor," said Richard Rush, who's in charge of business development for Eksigent Technologies, a maker of inexpensive microfluidic pumps in Dublin, Calif. "That's the whole story."
Eksigent has been a fairly small company, specializing in high-performance liquid chromatography devices for sample testing. But expanding into the competitive and lucrative-drug-delivery market was a big step into a complicated field. The litigious nature of medicine means that quality control is of the highest importance. So, too, is record keeping: In case of a product failure, it's critical to be able to walk back through the design process to uncover any spot where a flaw may have been introduced.
Compliance with the U.S. Food and Drug Administration approval process is equally cumbersome. " It truly is a product life cycle management problem," Rush said. The FDA regulates not just manufacturing, but design control as well. Records are needed for the whole design process, including the initial requirements, how they're translated into product specifications, design reviews, records of changes, and on and on, all kept in a design history file.
"To keep that all organized requires either headcount or a good software system," Rush said.
It's possible to do all this without the benefit of software, of course. Rush said he knew of manual systems based on paper documents in manila folders, one for each necessary filing required by the FDA. Designers weren't done with a task until the right folder was filled with the proper documentation.
Such hard-copy based systems can work, Rush said, but they are fraught with problems. Real-time access to design changes is limited, for instance. And in case of a product failure, pinpointing the design change that may be at fault is a cumbersome exercise in document archeology.
Non-integrated systems also just don't scale up well, which is a problem when a small company starts facing global manufacturing issues. "When you've moved your engineering team offshore, and your supplier is in another offshore location and your marketing group is working out of a sales office," Rush said, "the complexity of it would make those manual systems collapse eventually."
At some point, the drag on growth from a paper-based system becomes so great that a change to a more sophisticated process becomes irresistible. "Eventually, you'd have to go back and re-engineer it so that it worked more effectively," Rush said. "At that point, you might try to bring in a system like a PLM. But imagine trying to load it with 10,000 documents. And 10,000 is not a big number for a small company. Each product might have 100 documents associated with it, and the design process might have hundreds of others."
To avoid that kind of headache down the line-and, as Rush pointed out, no one begins a business to stay small-it makes sense for start~ups to use a PLM system from the outset.
That's what his small unit, which is working to develop products for the medical market, did last summer. It chose to purchase a PLM system from Agile to track the design process before a single product was shipped. "One of our decisions was to select a well-validated system and install it early in the process, when we could get by with fewer people to administrate it," Rush said. "You've got to start from the ground up. Trying to implement a PLM solution in the middle or the back end of a development cycle adds a degree of complication that may not be worth it.
Instead of drawers full of file folders, the system keeps a database with the most up-to-date version of each design-related document and a full history of changes. What's more, the PLM system is accessible to every member of the design team and their managers.
"Medical device companies like Eksigent have many of the same needs as any other manufacturer that can be met by a PLM-manufacturing processes, development, and so on," said Joe Hage, senior vice president and general manager of Agile's division for small and midsize enterprise solutions. "But when you add the quality aspect and regulatory management, it's hard to survive without a PLM system."
For Ben Wallace and his colleagues at Sonnax, the problem wasn't dealing with a rigid regulatory regime. Instead, the issue was figuring out how to best use limited engineering resources.
"We had problems aggregating data," said Jeff Loewer, vice president for planning and information technology at Sonnax. "From an executive viewpoint, I have to look at what I am spending on a certain product category. It was difficult to aggregate that information."
Some of that was a function of the company's extensive product line. With hundreds of ongoing projects, getting accurate, up-to-date. information is going to be an issue.
But the situation was worsened by an archaic workflow system built on e-mail and spreadsheets . "We were working with multiple systems that weren't talking to each other," Wallace said. "It wasn't easy to find information when it was needed because the data was scattered. And there was always a question of whether you were looking at the most recent data."
Without a good sense of how resources and man-hours were being allocated, it was difficult to find efficiencies. With about 175 workers handling a global customer base the easiest way to deal with growth was to simply add more engineers. But that was becoming a costly option.
"We needed to be able to aggressively look at how we were spending the resources better than we could with a non-integrated system," Loewer said.
Initially, Wallace thought that a homegrown database system could do the job, but the longer Loewer looked at the problem, the more he was convinced a more fundamental change was needed. "It was an opportunity to look at our processes and make a leap forward," he said.
In the end, Sonnax chose to adopt a PLM solution offered by Aras, the Massachusetts business software company. Aras specializes in PLM software designed to take advantage of systems that small companies already have in hand-Microsoft Windows desktops and Internet browsers. By piggybacking on these technologies, Aras promises to get a PLM system up and running in as little as 60 days, as opposed to many months or years for custom- built software.
"It's about right-sizing," said Aras founder Peter Schroer. "You have to find the right size software and IT infrastructure to fit the problem. We very clearly know who our customers are and what their problems are.
"What we're finding in the mid-market is a much more pragmatic approach."
Other business software companies are beginning to target small and midsize companies. For instance, Piano, Texas-based UGS, one of the major companies serving high-end manufacturers, has recently launched its Velocity Series product line aimed at the needs of mid-market customers. The product has a preconfigured suite of software modules.
At Sonnax, the adoption of a PLM solution has led to some clear changes in information management. Instead of relying on a single point-person to do the project management for the whole company, each product line sales manager has become more deeply involved in the designs of specific lines. It's also led to a' clearer understanding of the engineering process. "We're starting to quantify how we are using resources," Loewer said. "As time goes on, that can be tied into budgeting much more specifically than we had in the past."
One factor that may be pushing small and medium-size enterprises to adopt PLM solutions is the new globalized business model. Richard Rush's unit at Eksigent is still developing its first product, but to make the numbers work, he expects to send a good deal of the manufacturing offshore. "We are looking at a product intended to be manufactured in the millions," Rush said. "So where can you make things cheaply in large volumes? They aren't usually here."
Rush sees PLM as a way to help the far-flung pieces of the production chain mesh together. "The system can be set up to enable suppliers of components anywhere in the world to look at the documentation they need, and to determine the most relevant information: what the history was, the nature of the changes, who approved it, and so forth. That's pretty remarkable," he said.
"It might avoid a midnight phone call."