The Hindu Business Line : From mind to market...

If Tata Motors can launch the Nano for Rs 1 lakh, resisting inflation and other cost pressures, some of the credit can surely be attributed to the company’s streamlined processes and information technology platform that has enabled this.

As with the Tatas, Product Lifecycle Management (PLM) solutions have helped other automobile companies, in recent times, to launch products in the market at intervals and prices considered unthinkable a few years ago.

PLM adoption has been percolating down to tier-I and tier-II component suppliers, helping them cater better to the needs of their original equipment manufacturer (OEM) clients and seek new business, say industry watchers. eWorld explores the gamut of application areas for PLM solutions.

The origins

Every physical product has a lifecycle that extends from conceptualisation to death, involving processes such as concept, design, review, approval, manufacturing, shipment, maintenance/repair and product retirement. A PLM solution encompasses all this.

PLM was thought of about 40 years ago to capture product design and Computer Aided Design (CAD) was its precursor. CAD generated a lot of data that was put to use through the computer.

The late 90s saw the need for collaborating this data across geographies. Today, supply chain, enterprise resource planning (ERP) and customer relationship functions have also been woven into the PLM framework.

And this provides greater visibility into all stages of product development and results in optimisation and reduced costs, say PLM technology users.

More revenue, less cost

Shiva Ramani, Co-Founder and Chief Executive Officer, Cybernet-SlashSupport, a firm that provides IT services to PLM vendors, says revenues can increase between 15 and 25 per cent upon PLM adoption. This is because new products can be introduced faster and companies can seek new geographies to sell them. Additionally, one can expect a 5 per cent decrease in costs due to reduced product recalls, failures and liabilities. PLM adoption can also spur innovation and equip companies to undergo change management while maintaining product quality and safety standards.

Strong auto drive

According to CIMdata research, the strong growth of automotive industries in India, accompanied by extensive offshoring of design and development activities by MNCs such as GE, GM, Ford, and Caterpillar, is fuelling the local market for PLM solutions.

This is aided by the fact that IT majors such as Infosys, L&T Infotech, HCL Technologies, Patni, Satyam, TCS and Wipro have strong PLM product implementation capabilities. IBM recently announced a global network of nine PLM centres, including two in Bangalore and New Delhi.

Geometric recently started focusing on the Indian market because it felt local manufacturers were finally ready to take on competition by focusing on product innovation.

“Mid-sized companies want to grow and PLM will help them align people, processes and technology,” says Ajit Joshi, Vice-President, PLM Solutions, Geometric Ltd.

Helping in brand identity

“It has become important to maintain brand identity in the design process and integrate embedded software, physical and digital design data. Earlier, markets defined products. Now, the internal product development (of a company) helps define the market,” says Rohit Biddappa, Senior Manager-Marketing, Parametric Technology (India) Pvt Ltd.

Product development has moved from the engineering level to board level and PLM solutions help companies make strategic decisions.

Parametric’s client Tata Motors made such a decision by creating a niche category for the Nano — between the high-end two-wheeler and low-end four wheeler markets. It also used PLM to develop platforms that could serve to launch multiple vehicles, thus reducing time to market.

Where PLM made a difference

Another client, a 45-year-old South India-based auto components manufacturer, feels it could not have bagged the order from an MNC vehicle manufacturer client without a PLM implementation.

The company had discrete data stored in different formats — hard and soft copy — and wanted a common platform to browse through it. A customised PLM implementation (costing about Rs 1 crore in 1999-2000) created a workflow, repository of data and reduced data search time by about 20 per cent, says a spokesperson.

Geometric’s automotive OEM client saved about 30 per cent in cost and efforts through a PLM solution that brought together multiple departments and global suppliers onto one platform. “We may have saved only about 10 per cent costs by off shoring,” says a spokesperson when asked if the same result could have been achieved without a PLM solution.

Another client, a tier-I automotive company expecting a 40 per cent improvement in time-to-market, said it could have achieved some of the PLM benefits by significantly increasing manpower. However, incremental benefits such as data management, development of several product lines and catering to new workload would not have been possible without product lifecycle management.

A high-tech electronics and electrical products company sought Patni’s help to decide whether to replace or modernise its existing systems to rationalise its product development portfolio. “We recommended replacing the system with a PLM application that resulted in significant savings, as replacement costs were only 35 per cent of modernisation costs,” says Rajeev Phadke, Senior Solutions Architect, Manufacturing Business Unit, Patni.

SAP-TVS interaction

“When businesses talk about cost reduction, they mostly attempt to squeeze their supply chain partners to reduce prices and/or improve operational efficiencies. They overlook the fact that almost 80 per cent of costs are already built into the design and what they are trying to tweak is the remaining 20 per cent. PLM ensures that cost efficiency is taken care of right from the design stage, thereby enabling a quantum benefit,” says Nagaraj Bhargava, Vice-President, Marketing, Indian Sub Continent, SAP.

SAP’s client TVS Motor Co had similar objectives with regard to its new product development processes — faster time to market, improved control on quality and cost and increased ability to handle multiple concurrent projects.

T.G. Dhandapani, Chief Information Officer of the company, says PLM adoption resulted in 40 per cent increase in productivity related to product and process design, 40 per cent increase in supplier response time as a result of design collaboration and 20 per cent improvement in development time.

New industries fuel global demand

Though interest in PLM adoption is high, the market size for these solutions in India is disappointing — about $100-$250 million; each deployment ranging from a few thousand to half-a-million dollars. However, the global market, growing at about 8.5 per cent and expected to exceed $30 billion by 2011, is bound to fuel domestic adoption.

Global demand is being fuelled by new industries taking to PLM, such as pharmaceuticals, packaging, architecture and construction, FMCG, life sciences, mining and transportation. Geometric sees fashion and apparel as an emerging area and cites the example of fashion chain GAP adopting PLM. “There is a huge problem of configuration management in this sector. You have sizes, colours, cuts and fabrics to coordinate, resulting in mind-boggling permutations and combinations of items to be manufactured,” Joshi says. Oil and Gas (upstream), with its huge data generation capabilities, is another industry that needs PLM, he says.

From staplers to submarines

Parametric’s 2,000-strong clientele ranges from staplers to submarine manufacturers. “We see opportunity in aerospace, aviation, shipbuilding and defence,” says Biddappa. By adopting PLM India can become the shipbuilding hub of the world, he says. Commercial shipping liners (naval expedition and cruise liners) can be made faster and Dalian and Basuo ports in China have demonstrated this through PLM adoption. Parametric plans to engage with small Indian shipyards initially.

PLM is also seeing new use in documentation (making product manuals). “Car companies overseas are thinking of providing customised manuals for each car owner. They also plan to make it available as embedded software in the car itself and are looking to PLM for this,” says Biddappa.

US-based arms manufacturer Lockheed Martin physically ships manuals to frontline forces. However, it can take up to six months before a uniformed person can understand and operate the product. “Instead, with PLM, they can upload the entire manual to a secure Web site using a CAD/CAM approach so that users can see sections as per their requirements,” he says.

archana@thehindu.co.in

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