Executive Summary

 

            Mercury Marine, leader in Marine industry is working relentlessly on launching new and innovative products to keep itself ahead in the race. To sustain its position as a market leader in outboards and stern-drives for boats, Mercury Marine is compelled to reduce time to market, product cost and constantly strive to improve the quality.

           

            To achieve cost reduction, process standardization, quality products at a quicker time it is essential that Mercury Marine adapts to the new technology that helps the organization move closer to the goal. All the above issues can never be solved all at once, but gradual change applied to the process will help reach the destination quicker. Mapping proper technology to the business process is an important aspect of this project.

PLM technology integrates the enterprise into a single fold system, thus eliminating the need for redundant databases and reducing rework. Immediate effects can be seen in the world of engineering as the PLM is driven by PDM – the engineering database. PLM, a superset of PDM, has a higher scope and reach in the industry than the former and provides various levels of access to the database, based on the groups and roles of the person logging into the system. Integrating the supplier base is another major advantage. With web based technology, suppliers scattered across the globe can be integrated easily like an extended division of the same organization. This paper tries to imply the effect of the PLM technology and the changes that it can impact on the business.      

 

 

Background of Industry

 

            Mercury Marine enjoys world marine industry leadership. The product brands have established engineering innovation and design creativity among products like Mercury and Mariner outboards, Mercruiser inboards, Racing products, Jet drives, Precision parts and propellers. Established as early as 1940, Mercury Marine has around 6000 employees, spread out in America, Asia pacific, Europe and Australia. Mercury Marine is a $2 billion turnover company with almost all of its product development process in Fond du Lac, Wisconsin and Stillwater, Oklahama. Mercury is a pioneer in Lost Foam castings technology with customers like Harley Davidson, GM and Ford. As a market leader in identified technologies and marine products, Mercury Marine strives to maintain the quality and integrate customer feedback in its product development process.

 

            Mercury Marine is part of Brunswick Corporation, which is a market leader in Life fitness, Bowling and Billiards products and Boats apart from Marine engines. Brunswick is a $4 billion turnover company. Continuous efforts are applied to standardize the process and standards across the Brunswick companies. Competing against major Japanese Marine engine manufacturers, Mercury Marine is clearly the leader in the American marine market. This elevates the responsibility of the company in delivering the quality and innovative products to the market in time.

           

 

 

Product Development Process – Scope for improvement

           

            Not alone for Mercury Marine, for any Engineering or Manufacturing industry Product development cycle needs to be constantly developed and improved. Currently within Mercury Marine more than 600 different databases are being owned by various departments. A good number of these databases are obsolete and have only legacy information. Some engineering and manufacturing data exists in more than one repository. This gives room for confusion and lack of clarity on identifying and tracking the latest information. Many critical information lies in personal hard drives and emails, thus in accessible to the rest of the project team in the absence of the key personnel. Communications among the Purchasing, engineering, manufacturing and marketing are not very effective and lack a well defined protocol. There have been various instances in which lots of time and efforts have been wasted owing to miscommunication and non communication. The issues list grows and impacts the product development process to a great deal. The product development process gets more complicated when procurement of parts involve suppliers, building engine builds for testing and validation of design, manufacturing process validation and so on.

 

            These issues stress the need for an Enterprise wide integrated system that is accessible by various departments based on defined role and criteria. This system needs to be built on a process driven solution that speeds up the product development process by eliminating needless time and efforts involved, secure and managed data access and tasks woven into a process. Consolidating the issues, the key problems are

 

·        Unclear or absence of defined process

·        Wasted time and efforts on Product Development

·        Communication issues     

 

           

Product Lifecycle Management

 

            Product Lifecycle Management (PLM) is the next generation of Product Data management (PDM). Product Lifecycle Management solutions are usually not ‘one size fits all’1, 2. The global market for PLM is expected to grow at a rate of 8% through 2007, to more than $9.2 billion.8The solution has to be configured to suit the processes and practices of any company Product Lifecycle Management comprises of the following core areas 1

 

            Product Data Management (PDM)

            Collaborative Product Development (CPD)

            Direct Materials Sourcing (DMS)

            Customer Needs Management (CNM)

            Product Portfolio Management (PPM)

 

In a typical environment there is more than a couple of software to manage these areas. In some companies, there may not be even any system to manage these areas.

           

            Product Data Management evolves from PDM which originally was intended to maintain CAD data. Ever since 1980s’ the focus of the PDM has been constantly changing to what is now known as PLM. Beginning with File management of engineering CAD data, PDM’s involvement was extended gradually to Change control, Engineering change management, Product structure management, configuration management and now into web based lifecycle management.2

 

            While the PDM systems were accessible only by engineering personnel, (Engineers and Designers) integrated PLM systems have different faces to be accessed by purchasing, manufacturing, shop floor, management, engineering, marketing and others. This access is secured, controlled and configurable based on the roles and groups of the personnel. While Engineering can access the heavy duty CAD data, the rest of the organization can access the light weight visualization files or drawings almost instantaneously, as and when created.

 

            Collaborative Product Development is another major area that Mercury Marine can see benefits with the PLM. With data tracking, reuse of CAD data and concurrent engineering functionalities improved, `PLM creates conducive environment for collaborative designing as compared with the PDM systems. Digital mock up, digital assembly, stress analysis and digital manufacturing are keys to this. Russian aircraft maker Sukhoi is currently using IBM’s PLM solutions, Enovia for achieving its goal of creating an aircraft with 15% lesser cost.3

 

            For example, in a typical collaborative scenario, an Engineer can specify a component design and assign a task to the designer requesting for the 3 dimensional models of the same through the project management tool of the PLM. Using the necessary engineering information available in the PLM system, the designer can create a mock up model and set a workflow where the Engineer and purchasing can approve the design and send it to the Supplier for quote. The supplier will be integrated to this system through a web based tool, from whichever corner of the world and convey his feedback on delivery, manufacturability or cost details. This is an ideal tool for product development groups which are scattered geographically.

 

            Looking at a broader picture, PLM can speed up product development process in a typical industry to a good extent. According to an AMR research, Kevin O’Marah finds that PLM technologies can potentially speed up major tasks involved in product development as high as 90%.4

 

            Engineering changes – 90% faster

            Material Sourcing – upto 5 % material savings

            Request for quote response – 60% faster

            Configure/Engineer to order errors – 90% lower

            Documentation – 80% cost reduction

 

Air International Group Ltd (AIUS) claims to achieve 10% savings using Arena PLM solutions on a specific $300 million project that it bagged from GM to supply air conditioning unit for the latter’s Sports utility vehicles. (Diane Trommer) 5 Time to market has also improved a lot with PLM deployment on this project, along with various nice things like electronic BOM management, supply chain management and integration with ERP systems.

 

Direct Materials Sourcing (DMS) involves supplier management and supply chain integration with the PDM and ERP system. Many companies like GM, Ford, Harley Davidson have suppliers access their network, enabling easier tracking of material supply, collaboration, quality and shorter deadlines.  

 

            Customer Needs Management (CNM) portion maintains the customer requirements, feedback and market input to be fed directly into the product development process which was not tied as it should be earlier. By communicating the market input to the Engineering, styling or designing departments in product’s early stages, the development cycle time is reduced drastically to achieve a quality product.

 

            Product Portfolio Management (PPM) involves project management, resource management and product planning. These areas are tightly linked to the product development process and one can see the resource overload of a personnel, before overloading them with more tasks to be performed. Allocation of tasks, configuring workflows on sequence of work that has to be performed to form a process, drive the product development based on the organization’s long term plans and arriving at high level up to date  picture of the project  are some of the highlights of the Product Portfolio Management of PLM.

 

            Product Lifecycle Management involves configured solution in all these areas, but in various proportions. The deployment and implementation has to be carefully planned to fit to the needs of the organization.  Answering these two levels would reinforce the business case behind the PLM.1

 

·        How does the system help the functional users in daily work?

·        How does it contribute towards corporate goals for better and faster product innovation?

 

 

PLM applied concepts and industry impact

 

            PLM basically eliminates need for different database systems and establishes enterprise wide process and standards, that eliminate confusion and increases communication effectively. PDM acts as the backbone of the PLM technology which is accessible by other divisions of the organizations for daily operations. Engineering, Purchasing and manufacturing which are the primary divisions involved during the product development process will have an integrated process flow linked with the PLM technology. Authoring tools like CAD, MS Office document tools, etc will be integrated with the PLM. All manufacturing tool data, work instructions, document approval procedures, Engineering drawings, 3D Assembly CAD data for shop floor, Engine test data, specifications, supplier information, 3D CAD data, etc will reside with proper access permissions in the PLM database.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Fig 1: Mercury Marine PLM process flow

 

            This helps regulated access and a streamlines process that will shorten the product development time and efforts. Need for repetitive communication will be eliminated, as there will be only one central data repository to be accessed. Effective communication through the process will be interlinked as a part of work flow and routings required for document approval or review purposes.

 

            For example, currently as part of Mercury Marine’s product development process engineering changes are not properly communicated to the manufacturing. There have been instances that manufacturing have been working on old release of engineering data, unaware of changes to the part design by the engineering. This is essentially because of manufacturing and engineering using different repositories of data and following different procedures to accomplish tasks. Absence of communication increases the problem. Whereas using PLM integrates the engineering and manufacturing process, thus the latest and up to date information can be shared.

 

Strength and Limitations

 

Consolidating the strengths from the above, following are the major highlights.

 

Control over product structure:

                        Better control of Product Structure, change management and lifecycle management.

 

Integrated Solutions:

                        Integrated solutions offer great benefits to the company by eliminating various databases or software systems to maintain. Lesser impact when key personnel leave the company.

 

Cost Savings:

                        Repeatable and predictable product to market savings, Engineering cost savings, Quality savings, and product related savings.10

 

Process driven solutions:                              

                        PLM technology, mapped to business process of a company applies focus on the process and hence helps standardize and structure work flow. Knowledge and information built in the process as opposed to people’s head.

 

Supplier integration:

                        Supplier integration is a key towards successful PLM implementation. Involving suppliers in different geographical locations helps quicker procurement and product innovation.

 

There are various limitations to this PLM technology based on specific product, process to be applied, deployment methodology and configuration. Some of the general limitations are as below:

 

Learning curve:

                        The whole solution is complex and vast and so requires training and experience for setup and configuration. Users require sufficient training and mentoring before staring to use the system.

 

Complex:

The solution cannot be implemented or deployed overnight and is a Gradual process change. Since the changes involved are huge careful planning and execution is critical.



Legacy data:

                        All the Legacy data cannot be migrated to the new system quickly. It takes time and efforts to maintain both the new and old systems in parallel. 

           

Lack of complete vision:

                        Lack of vision in PLM can be really troubling and expensive. It can lead to throw away solutions that answer short term issues and fail miserably for long term. Before testing or considering a PLM solution, a vision with Business justification is essential. Also it is important not to lay too much of importance on the technology, but on the process.7

 

Adoption strategy

           

            PLM is not a choice anymore and is evolving into a basic necessity10. Mercury Marine will benefit tremendously by getting into PLM and thus getting an edge over its competitors worldwide. PLM implementation has to be planned and executed very carefully. Management backing is very much necessary for PLM deployment. PLM is not Engineering or IT initiative and has to be a corporate funded or shared project. This will ensure equal participation and involvement of all stakeholders.

 

            A suggested sequence of PLM implementation in a company would be similar to this:-

ü      Analysis of current business process

ü      Identification of improvement and PLM justification

ü      Getting agreement from Top Level Management

ü      Review and Selection of PLM vendor

ü      Formation of cross-functional team on PLM project

ü      Department level discussions and brainstorming sessions on to-be process

ü      Solution configuration

ü      Solution validation

ü      Testing

ü      Pilot project in test environment

ü      Adjustments and tweaks to solution, based on test project feedback           

ü      Documentation of benefits in test project environment

ü      Training

ü      Migration of legacy data

ü      Deployment of PLM environment in stages

 

            As a first step, a management level team has to look into the current process in the company, chart the existing procedures and identify avenues for improvement. By calculating the savings attributed to these improvements, the team should start looking into various vendors with which a partnership can be established. The management has to convince the top level and executive management on the business imperatives of the PLM project. At the same time, the working group involving technical people and middle level managers need to be involved in the decision from the start, so that the decisions are not necessarily far from the organizational reality.6

 

            Once the decision has been made in favor of the PLM implementation, it is very important to research and analyze the available PLM vendors in the market and shortlist the one that is well suited for the company’s practices. This selection could be based on various issues depending on the industry. Engineering and Manufacturing industries would find PTC’s Windchill, UGS’s Teamcenter, IBM’s Enovia interesting whereas other companies like retailers and process industries may find Oracle and SAP as better options.

 

            After buy-in from top management and other departments, it is essential to consider carefully the available PLM vendors and chose the one that best suits the company requirements. One this is done, with the help of the PLM vendor, an initial draft of the solution has to be configured. This solution is discussed with the concerned departments and necessary changes made to the plan as and when required. This proposed solution is deployed in a test environment and feedback recorded on the test environment. Rigorous testing and training should follow. Once the legacy data is migrated, PLM could be deployed in a phased manner. Given the complexity of the project, PLM should be implemented in a gradual manner and not all at once. Some of the above mentioned sequence was developed out of discussion with the management9

 

 

References:

 

1. CAD Versus ERP versus PDM: How best to Anchor a PLM strategy

9/30/03, Micahel Burkett et al; AMR Research Report

 

2. PDM to PLM: Evolving to the Future (COE Newsnet, Feb 2004)

Ken Amann, Director of Research, CIMdata Inc.

www.coe.org/newsnet/feb04/industry.cfm

 

3. Design Collaboration takes Flight; Information Week (May 17, 2004)

Bus Management journal, UWO online library

 

4. Small is beautiful; PLM software is growing..; Information Week 253 (Nov 2004)

Bus Industry journal, UWO online library

 

5. PLM software helps OEM play in the big leagues; Diane Trommer; EBN (May 26, 2003) Bus Industry journal, UWO online library

 

6. Can PLM find a champion? VPs of Engineering aren’t the only stakeholders

MSI 20, no 10 (October 2002)

Bus Management journal, UWO online library

 

7. Supply chain’s role in leveraging PLM. Supply Chain Management Review 8, No 2. (March 2004); Bus Management, UWO online library.

 

8. Making a pitch for PLM; Industry Week 253, no. 8. (August 2004)

Bus Management, UWO online library

 

9. Fred Bellio, Director, Process Transformation and PLM, Mercury Marine

 

10. Measuring PLM’s Business Value; October 2003, CIMdata report

www.cimdata.com