Description
Change management is an approach to transitioning individuals, teams, and organizations to a desired future state.
The Impact of Organisational Change Management on the Success of a Product Lifecycle Management Implementation an Investigation into the Electronics Manufacturing Industry
Masters dissertation at:
Fachhochschule Ludwigshafen am Rhein University of Lincoln Hans-Jürgen Brück
Submitted by:
Date:
March 2002
Supervisors:
Mr. Karl A. Scholz Mr. Malcolm Myers
Acknowledgements
I would like to thank a number of people that supported me and provided contribution during my MBA study programme and especially during the time when the dissertation was prepared and written. My sincerest thanks to:
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Mr. Karl A. Scholz from FH Ludwigshafen for interesting and helpful discussions on the topic and for acting as supervisor for this project. Mr. Malcolm Myers from the University of Lincoln for useful comments on the dissertation proposal and for acting as supervisor for this project. My manager Dr. Andreas Hintz, who supported me with useful hints, interesting discussions and assisted in reviewing the dissertation. All the people that participated in the survey and took valuable time out of their schedules to answer the comprehensive questionnaires. Many thanks also to those, who additionally participated in the interviews and openly discussed the issues involved. My employer Tyco Electronics (formerly AMP Incorporated). John Sandwell for reviewing the abstract Stephan Prosser, who assisted in reviewing the questionnaires.
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Finally, I want to thank my family, especially my wife Katrin and my children Chiara Luisa, Lana-Joy and Robbin Joanne for their patience and their support throughout the time of writing the dissertation. Without them, none of this would have been possible.
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Abstract
The dissertation in hand discusses the implementation of Product Lifecycle Management (PLM) in the Electronics Manufacturing Industry. In particular, the impact of Organisational Change Management on the implementation success of PLM has been researched. The methodology used to investigate the topic includes literature research, quantitative research (survey) as well as qualitative research (interviews). The environment of manufacturers is coined by time to market reduction, increased variety and complexity resulting from trends like globalisation, mass customisation and increased outsourcing. PLM aims to help manufacturers in this environment by providing an "infrastructure to support management of product related data throughout its complete lifecycle"1 (from initial concept to product obsolescence). Appropriate solutions ensure that up to date information are accessible for the right people, in the right format at the right time. Especially interesting for the product lifecycle is the conceptual phase of the product definition process where fundamental design choices are made and the product lifecycle costs are determined to a large extent. The concept of Concurrent Engineering suggests improving this phase by breaking down functional barriers and setting up crossfunctional teams. Globalisation and increased outsourcing require collaboration across geographic regions and company borders. Therefore PLM systems do not only provide functionality to control product related data but also to collaborate within a company as well as in the extended enterprise. The reason for failure of new business concepts like PLM is very often due to a poor implementation phase rather than to the concept itself. It is therefore important not only to take the technological but also the organisational perspective of PLM into account. Collaborating and sharing of data within a company and especially in the extended enterprise challenges existing processes and culture. An holistic implementation approach will therefore most likely result in process as well as cultural changes. For that reason, the success of PLM heavily depends on the willingness of the organisation to accept change and especially on the people that must form inter-organisational and cross-functional teams to collaboratively develop and manage products. People are not likely to change the way they have been successfully working. Resistance to change is therefore the natural reaction. Organisational Change Management deals with the emotional reaction to change and aims to provide an implementation friendly environment. Communication of the required changes and participation of people affected by change are common means of Organisational Change Management to address initial fears and to build trust.
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cf. Portella (2000)
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It was found in the research, that the most critical success factors as well as potential problems are people related issues that can be addressed by Organisational Change Management. In conclusion, the impact of Organisational Change Management on implementation success can be rated as relatively high. Including Organisational Change Management methods and tools during a PLM implementation can play an important role to facilitate changes, in processes as well as in the corporate culture. According to the research the early involvement of people affected by the changes and the barriers between departments and companies have to be addressed by Organisational Change Management. However the most important factor for success can be found in the role of senior management whose support and commitment not least decides if the additional budget for the Organisational Change Management initiative is released.
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Table of Contents
Acknowledgements Abstract Table of Contents List of Abbreviations 1 1.1 1.1.1 1.1.2 1.1.3 1.1.4 1.2 1.3 1.4 1.5 2 2.1 2.2 2.3 2.4 2.5 2.6 3 3.1 3.2 3.2.1 3.2.2 Introduction Background Product development From CA -Tools and PDM to Product Lifecycle Management (the technological perspective) Engineering and Virtual Co-location (the organisational perspective) Organisational Change Management Main research issues Literature comment Research methodology Dissertation structure Concurrent Engineering and physical co-location Collaborative engineering and virtual co-location The organisational model for collaborative engineering and virtual colocation Organisational Change Management and Information Technology (IT) Organisational and cultural change and the implementation of a PLM solution Change Management and the implementation of a PLM solution Methodology and data collection Secondary research (desk research) Primary research Quantitative research (Survey) Qualitative research (Interviews) 17 18 21 21 21 21 23 15 16 2 5 7 9 12 12 13 14 14 15 From Concurrent Engineering and Physical Co-location to Collaborative ii iii v viii 1 1 1
Literature review
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4 4.1
Results Results from quantitative research Survey participants Preparation for analysis Questionnaire results Results from qualitative research Discussion 5.1 5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 5.1.6 5.2 5.3 5.4 5.4.1 5.4.2 Interpretation of research findings What kind of companies do implement PLM? The role of organisational culture The role of organisational structure The role of the product development processes The role of Change Management on implementation success The relationship of the research results to published literature and research The appropriateness of data collection and methodology The effect on professional practice The implementation strategy Appropriate Change Management methods and tools Summary of principal features Major findings Suggestions for business practice Recommendations for future research Bibliography 7.1 7.2 Textbooks Articles 4.1.1 4.1.2 4.1.3 4.2
24 24 24 25 26 31 33 33 33 33 34 35 36 37 37 38 39 39 41 43 43 44 45 46 47 47 50
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The Return on Investment (ROI) and the impact of Change Management
6 6.1 6.2 6.3 6.4 7
Conclusions
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Appendices Appendix A: Appendix B: Appendix C: Questionnaires - Summary (All) Questionnaires - Summary (Software Vendors and System Integrators)
54 54 Questionnaires - Summary (Electronic Manufacturing Companies) 62 74
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List of Abbreviations
2D 3D anon. CAD CAE CAM cf. CoP CPC cPDM CRM DMU Dr. EDM Eds. e.g. EMC EMI ERP et al. etc. EU FH ff. i.e. IGES IS IT MBOM Mr. MRP MS No./n OEM p. pp. PDC PDM PIM R&D ROI SMC STEP Two Dimensional Three Dimensional anonymous Computer Aided Design Computer Aided Engineering Computer Aided Manufacturing confer (compare) Communities of Practise Collaborative product Commerce collaborative Product Definition Management Customer Relationship Management Digital Mock-Up Doctor Engineering Data Management Editors exempli gratia (for example) Electronic Manufacturing Companies Electronics Manufacturing Industry Enterprise Resource Planning et alii (and others) Et cetera (and so on) European Union Fachhochschule And the following id est (that is) Initial Graphics Exchange Specification Information Systems Information Technology Manufacturing Bill of Material Mister Manufacturing Resource Planning Microsoft Number (of respondents) Original Equipment Manufacturer page pages Product Definition and Commercialisation Product Data Management Product Information Management Research and Development Return On Investment Small and Medium Companies Standard for the Exchange of Product Model Data
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SVSI TQM
Software Vendors and System Integrators Total Quality Management
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Introduction
1
Introduction
The introduction provides background information about the topics involved in the investigation. Furthermore the research question is introduced and explained and set in the context of existing research and literature. A short introduction to the methodology used to research the topic is provided followed by a presentation of the dissertation structure. 1.1 Background The following pages are intended to give the reader an overview and background information on the various topics involved in the research, namely: Product development Product Lifecycle Management (PLM) Concurrent and Collaborative Engineering Organisational Change Management 1.1.1 Product development
"In today's industry, New Product Development is often the focal point of competition. Companies that are able effectively to develop, produce and introduce new products are the key competitors in markets where variety and time-to-market play an increasingly important role." (Victor Paashuis, 1997) The dominant importance of product development for the manufacturing industry as their core competence and process is outlined by the quote of Victor Paashuis. Several studies carried out throughout the last years have shown that the way in which product development is executed does have a significant impact on costs and time to market and therefore on the financial results. Nevins et. al (1989) for example found, that 80% of product lifecycle costs are locked in the early stage of product development, when fundamental design choices are made. New product development nowadays is heavily influenced by industry as well as social trends. The following section describes industry and social trends and their implications on product development (especially in the Electronics Manufacturing Industry):
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Increased Outsourcing: Product complexity is increasing and companies are concentrating on their core competence. Consequently an increasing number of components making up a product is given to outside vendors for designing and manufacturing. The increasing number of outside vendors has somehow to be managed and integrated. So called ‘extended enterprises’ have to be established. Alliances and Merger: The number of companies that are merging or establishing alliances has rapidly increased throughout the past years. Similar to increased outsourcing product development processes somehow have to be integrated or aligned to gain synergy effects.
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Introduction
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Mass customisation: The role of the customer has changed. Tailor made, individual products instead of mass-produced products are demanded. This means a shift from make-to-stock and assembly-to-order styles of manufacturing to mass customisation and personalisation. Therefore product development has to be much more agile and flexible to quickly respond to customer wishes and fast changing market needs. Globalisation: Supported through the falling of borders, the liberalisation of markets and the explosive development of communication technology many manufacturers have scaled to a global level. Globalisation means more opportunities but also more competition. Power of innovation and especially time to market reduction becomes critical. This means that product development cycles have to be reduced and innovation has to be fostered. After sales market/Recycling: Historically, a product was only as long important for a manufacturer as the product was under warranty. Today the after sales market, that was traditionally held by 3rd party vendors, is also seen as a major growth opportunity. This trend, combined with the new EU decree for scrapping and recycling, forces manufacturing companies to take the late product lifecycle stages like service and retirement much more into account, especially during the product definition phase. Virtualisation: Prototypes are expensive and time consuming. Through virtualisation, hardware prototypes are increasingly replaced by digital prototypes. The advantage is that manufacturing problems can be recognised in a very early stage of the product development process. Virtual enterprises are established to develop, produce, operate and support new products in order to save costs through synergy effects and increase profit through decreased time to market. Vertical integration is replaced by virtual integration. Information age/Internet: We are currently in a shift from the industrial age to the information age. Information is said to be the currency of the future. Most companies are not suffering from a lack of information. The problem is that a consistent view on the information is not provided and the information can not assimilated quickly enough. Therefore product related information has to be organised in a way that it is accessible in the right format and at the right place for the right people. From CA -Tools and PDM to Product Lifecycle Management (the technological perspective)
1.1.2
The reduction of product development cycle time and the improvement of design quality has been supported in the last two decades through the implementation of various computer aided technologies like 2D and 3D -CAD (Computer Aided Design), CAE (Computer Aided Engineering and Analysis), CAM (Computer Aided Manufacturing) etc... All these tools aimed to accelerate, automate and integrate various engineering and manufacturing processes. The introduction of CA –Tools, however, was often only task instead of process oriented. Departments tried to automate their tasks as good as possible and created an environment which best helps to meet their targets. In practice, only little integration took place. Each CA -Tool produced it’s own data format which led to so called ‘islands of automation’. This problem could only partially be resolved by various interfaces and data exchange formats like IGES and
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Introduction
STEP that were developed to facilitate communication between the different CA -tools. Therefore, the result was often an heterogeneous, fragmented, multi-system environment in many companies and especially in design chains for product definition. Romano (1999) in this context states, that "during the engineering supply chain, manufactures and suppliers need to work as design partners, however their design and manufacturing systems are frequently incompatible. This introduces very significant time and cost penalties as they attempt to share design information." Moreover, the large amount of data generated by the various CA -Tools was often not centrally organised and therefore inaccessible to others. New developments instead of using already designed parts were often the costly consequences. Realising this problem and the associated business opportunity several software companies started in the mid 1980s to develop Product Data Management (PDM) systems2 that initially provided vaulting and file management capabilities for engineering documents like 2D CAD drawings. In the late 1980s and early 1990s engineering change management to control and track the changes made to engineering data was added to the functionality together with configuration and classification management capabilities. As a result of 3D -CAD systems and teamwork approaches entering the market PDM systems started to support the management of complex relationships between parts, assemblies, drawings, metadata, people and groups of people. In the mid 1990s many PDM vendors switched the operating system from UNIX to Windows/NT and moreover various improvements in the user interfaces were made. Since the main functionality of PDM has been CAD -centric data and workflow management it was mainly used in the engineering organisation, sometimes in the manufacturing organisation. This was due to the existing technology which made the accessibility for other than design engineering departments difficult. The software was not usable without extensive training and the files could only be viewed in the native CAD system. In the late 1990s a new class of software, Product Lifecycle Management (PLM) systems evolved from PDM systems. Besides the term PLM there are other terms existing that were established by different Research Firms. CPC i.e. stands for Collaborative Product Commerce and was established by the Aberdeen Group whereas cPDM stands for collaborative Product Definition Management which is used by Research Firm CIMData. Other terms are ePLM (electronic Product Lifecycle Management), PDC (product definition and commercialisation) or PIM (Product Information Management). With the advances in user interfaces and database, viewing as well as the Internet technology the technological prerequisites were provided to share data more easily. Providing integrated visualisation and Digital Mock-Up (DMU) Tools, PLM systems make it possible to view, mark-up and redline native CAD data without the need for having access to the native CAD system. The Internet serves as highly effective platform to communicate product data information far beyond the engineering organisation.
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cf. anon (1995)
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Introduction
Nadamuni (1999) therefore states that "the vision for PLM is to do more than just CADcentric data and workflow management and become an enterprise application that ties together all the information sources in a corporation". A PLM system can be described as an enterprise-wide Information Technology (IT) "infrastructure to support management of product definition throughout its complete lifecycle"3 (from initial concept to product obsolescence). Including workflow management, PLM systems, as a single source of product information, ensure that up to date information are available and accessible for the right people in the right format at the right time. It is also viewed as an "effective tool in managing the product definition supply chain by serving as an informational bridge connecting OEM's, partners, subcontractors, vendors, consultants and customers" (Miller, 1998f). PLM systems provide a consistent view on product related information in the extended enterprise whereas the easily sharing of product data facilitates real-time collaboration across departmental barriers and among geographically dispersed individuals and groups. Consequently the Aberdeen Group (2000) defines CPC respectively PLM as "a class of software and services that uses Internet technologies to permit individuals - no matter what role they have in the commercialisation of a product, no matter what computer based tool they use, no matter where they are located geographically or within the supply net - to collaboratively develop, build and manage products throughout the entire lifecycle." To cope with the industry as well as social trends described above and to gain competitive advantage a new integrated approach for developing products with respect to the whole product lifecycle has to be taken. Integration has to take place internally (between different departments) as well as externally (i.e. with suppliers and customers). PLM means "the management of comprehensive, accurate and timely information over the entire product lifecycle"4 in order to realise collaborative product development. Therefore, PLM systems are viewed as enabler for an integrated product development approach by industry analysts from Research Firms like Aberdeen Group, AMR Research, CIMData, Gartner Group and Forrester Research. The future meaning of software for managing the product lifecycle in the manufacturing industry can be illustrated by figures that were recently released by Research Firm CIMData: " ... the world-wide [Product Lifecycle Management Solutions (software and services)] market grew 62% to reach $2.86 billion in 2000. CIMData forecasts overall investments to continue at a significant pace over the next five years. The firm predicts the market will exceed $4 billion in 2001 and increase at a compound annual growth rate of 43% through the year 2005, when they expect the market size to exceed $13 billion." (CIMData Press Release, February 28, 2001).
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cf. Portella (2000) cf. anon. (1999)
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Introduction
1.1.3
From Concurrent Engineering and physical co-location to Collaborative Engineering and virtual co-location (the organisational perspective)
According to Miller (1998e) the product lifecycle is comprised of three primary processes: product definition, product production and operations support. Especially interesting for the product lifecycle seems to be the product definition process and especially the early phase where fundamental design choices are made and the product lifecycle costs are determined to a great extent. The iterative nature of the product design process highlights the point that a great deal of the design activity is redefining and redesigning of ideas. Collaboration has the potential to dramatically reduce the total number of design changes in a product's development cycle and even more important it reduces the late and costly design changes. Changes take place in the early design phase where their impact on cost and time is small (anon. 1999) In the traditional design and manufacturing practice, however, the product life cycle is a series of independent sequential steps ranging from design and engineering to process planning, production and servicing. Frequently, information is passed among groups in a sequential process known as “throwing over the wall”. This scenario can be described as “serial engineering” (CMstat, 1996) Concurrent Engineering (sometimes referred to as Simultaneous Engineering, a later expression is Integrated Product Development) offers a solution to the inefficient sequential product development process by breaking down the barriers between engineering and other key departments like manufacturing (CMstat, 1996). It describes the involvement of different individuals with different perspectives on the product definition process and the parallelisation of the formerly sequential process of product development. In other terms, it describes the concurrent accomplishment of product and process engineering (Smith and Reinertsen, 1995). Concurrent Engineering has been defined by the Institute of Defence Analyses (Pennel and Winner, 1989) as a "systematic approach to the integrated, concurrent design of products and their related processes including manufacture and support." While Concurrent Engineering used to address mainly intra-organisational aspects of the product development process Collaborative Engineering (that has evolved with PLM systems) addresses more the inter-organisational aspect respectively the aspect of the (dynamically changing) extended enterprise (sometimes termed as boundary-less value chain). Integrating internal processes as well as suppliers and customers according to the vision of PLM requires intense collaboration across the entire product lifecycle, inside and outside the company and across geographic regions. Companies must therefore implement processes and structures for collaboratively sharing information with partners, vendors and customers. Teamwork is today the fundamental precondition for innovation. Most tasks nowadays are just too complex for one person to be able to produce practicable and realistic solutions (Doppler and Lauterburg, 2000). The most common mechanisms for pursuing Concurrent Engineering approaches involves therefore a multi-disciplined, cross-
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Introduction
functional and physically collocated team structure. Physical co-location in this context means that the team members sitting close to each other, ideally within ten meters according to a study of Allen (1977), researching the effect of distance to technical communication. He found that the probability of communication rapidly decreases within the first ten metres. Beyond these point the increase of distance does not seem to have a big impact on communication.
Figure 1.1: From Allen, Managing the Flow of Technology, Figure 8.3, p. 239, The MIT Press, 1977
The greatly enhanced communication and the team cohesiveness has been described by Smith and Reinertsen (1995) as advantage of physical co-location. Growing globalisation, fast changing marketplaces and the increasing trend to outsource, however, demands globally dispersed and inter-organisational teams which makes physical co-location increasingly infeasible. Dynamically changing and flexible teams can only be supported by virtual co-located teams. Virtual co-location does not eliminate the need for occasional face to face meetings, especially in the early phase of a product development project. However, team members will mainly meet, through the advances in Internet and communication technology being possible, either in an online virtual workplace or in video - or telephone conferences. When the environment is dynamically changing communication networks become critical. Smith and Reinertsen (1995) in the context of Concurrent Engineering already stated that frequent, open communication plays an important role since it fosters faster and earlier sharing of information. According to Rowe (2000) the key to collaboration is communication. Traditional organisational structures and approaches cannot provide the competitive basis that is required in this business environment because the product development process is broken down across the specialist functional departments which renders poor communication (Pawar, Sharifi, 2000). Hierarchical organisations are too slow moving
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Introduction
and inefficient for this environment, therefore flexible project organisations become increasingly important. Several theoreticians, including Drucker (1988) and Schein (1989) suggest that hierarchical authority will probably play a much smaller role in the future, while co-ordination and coaching skills will become more important. Doppler and Lauterburg (2000) describe this development as the shift from the hierarchical organisation, based on the division of labour to the easily re-configurable network organisation. They emphasise that "thinking in organisational categories needs to be replaced by thinking in terms of quickly changing process chains". 1.1.4 Organisational Change Management
The implementation of an enterprise wide IT system involves often structural as well as cultural changes in a company. Significant change, however, is a disruption in our expectations of the future which is viewed as a loss of control (Marshall & Conner, 1996). Resistance to change is therefore often the reaction. People are not likely to change the way they have been (successfully) working, especially when it is not clear what the goal of the whole operation is and who will benefit from the changes (Doppler and Lauterburg, 2000). Fear of the unknown and uncertainty is often the source of resistance. People need predictability, which has something to do with our basic need for security. Uncertainty however can reduce productivity to a great extent (Stark, 1999) Therefore, changing a culture, structures and processes is risky and can even produce negative results which is proved by many studies. Kotter (1995) for example found, that two third of major change initiatives are not successful. Change has therefore carefully be planned and the change process has to be managed and overviewed. Organisational Change Management has proved as a useful tool to facilitate successful cultural transformations by helping people dealing with 'unknown territory' or as Bridges and Mitchell (2000) put it, the 'neutral zone' to ensure that the outcome of the change initiative is positive. The roots of Change Management can be found in so-called soft science of psychology where Change Management is applied to help people deal with traumatic emotional issues like death in the family or knowledge of one’s own impending death (anon., 1996). The increased popularity of Change Management in an business environment can be dated in the mid 1990s when the under Business Process Reengineering (BPR) summarised restructuring efforts of companies often did not deliver the promised results Al-Ani and Gattermeyer,2000). Not addressing the resistance of people to change was identified as key problem of the poor implementation results of many PBR projects. Change Management, that deals with the emotional response to change is therefore sometimes termed as the soft side of BPR that "helps stakeholders deal with dramatic changes in how they earn their livelihoods" (anon., 1996). Change Management suggests that resistance is a natural reaction to change that always contains a coded message and happens on an emotional and not an intellectual level. Accordingly it is important not to 'overcome' resistance i.e. with logical arguments or even fight the resistance but treat resistance as an emotional process where feelings are involved. It is also viewed as important to pause and deal with resistance immediately,
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Introduction
when it appears which can mean a delay in the project plan (Doppler and Lauterburg, 2000; Block, 1981). Not dealing with it by ignoring the resistance means to risk severe obstacles and barriers which causes significant delays since the resistance will appear later in the process again. Therefore it is important that employees are encouraged to express their concerns, fears and perceptions so that they pass. This can happen either in an anonymous way, i.e. through employee surveys or in face to face meetings. Resistance can have very different forms. Typical forms of resistance, or better symptoms of resistance, beside the most obvious form of attacking, are: Silence, debating unimportant things, staying away, coming to late to meetings, flooding with detail, intrigues, rumours etc...(Block, 1981) Different models, methods and tools have been developed to deal with the change process. The tools and methods that are utilised are often dependent on the change that is required. Most researchers differentiate between two main strategies: incremental and transformational change (depending on the researcher also termed as 'radical change', 'discontinuous change', 'major change' or 'profound change). According to Stark (1999) "incremental change does not challenge existing assumptions and culture. It uses existing structures and processes and is therefore low risk but also slow. Transformational changes intends to change existing structures, the existing organisation and the existing culture". Moreover a difference is made if the change comes from inside the organisation (proactive) or if the change is forced from outside the organisation (reactive). Figure 1.2 shows that a typical change process moves through several phases that are accompanied by typical reactions of people involved and must be met by different Change Management methods and tools. After announcing a change initiative confusion is increasing. Fear of the unknown, not being able to cope with the new patterns and old rules overlaying new rules are reasons for confusion. Communication as an ongoing process during the change process as well as early participation of the people affected by change play an important role to address the initial fears and concerns and to build trust. Coaching people during the change process and facilitate learning of the skills that are needed to deal successfully with the new environment is essential. In the diffusion phase marketing of the change initiative is important for example through publishing of first successes. In order to institutionalise the changed behaviour consistently rewarding adequate behaviour and accordingly punishing inadequate behaviour is viewed as an essential element (Stark, 1999; Doppler and Lauterburg, 2000). To hold the gains of the change initiative and to avoid erosion effects the installation of a continuos improvement process has proved as successful (Reiss, 1997).
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Introduction
Implementation Success
Supporting Desired State
IDEAL
REAL Marketing
Current State
Confusion
Diffusion
Erosion
Implementation Time
Coaching
Implementation Failure
Figure 1.2: Success characteristics of implementation. From Reiss, Managing Change, Figure 14, p. 28, Schaeffer-Poeschel, 1997 (translated from German)
1.2 Main research issues Great things are expected from PLM ranging from faster time to market, closer collaboration, better quality products to more innovation. The Aberdeen Group (2000) terms PLM respectively CPC even as the 'next big thing' for manufacturing companies. Indeed, implementing Product Lifecycle Management promises manufacturing companies a competitive advantage and a major step towards increased productivity. Regarding collaboration i.e. “GM expects to double design productivity and increase product development workflow by 70% using a collaborative system [built around a PLM system]", according to a Press release from May, 20, 2001. In order to realise major improvements Harrison (1995)5 and Bergh (1996) remind us that a product information management system works best in a reengineered environment. Business Process Reengineering (BPR) has been defined by Hammer and Champy (1995) as "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements".
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Harrison made this statement at the 'EMDS Focus 95 User Forum' (Feb. 27 to March 2, Orlando)
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Introduction
The introduction of a PLM system by itself, however, does hardly initiate the changes that are required to improve the product development process. It is therefore important to recognise that PLM "is not a tool to improve the product development process but a tool to support an improved product development process" (Stark, 1999)6. Before it can work to its full potential there must be changes in organisational processes as well as in the organisational culture. A significant impact on the success of the introduction of a PLM system should therefore be the willingness of the organisation to accept change7 and to develop, as Wildermann (2001) put it an "outward-facing collaborative culture", which means a culture that is based on openness and trust. Changing a corporate culture means changing people's values, norms, inner attitude and behaviour. This means that the success heavily relies on the people, making up an organisation, that must form multidisciplined, cross-organisational and virtual teams to improve and accelerate the product development process. Lipnak and Stamp (1997) remind us in this context, that in the establishment of virtual teams "90% is people and only 10% is technology" and Ali (2001)8 describes the experience of Ford Motor in overcoming the barriers to using collaboration tools as 80% people and only 20% technology'. However, old habits die slowly and the sharing of data is often counter-cultural (Peterson, 2001) which is why Bourke (2000) and Krouse (2001) remind us to consider the organisational and cultural issues that are involved with a PLM implementation. Nevertheless, the organisational and cultural implications of the implementation of an enterprise-wide information system like PLM are often neglected or ignored in practice, although researchers suggest that these aspects might be even more important than the technical aspects (Bourke, 2000). The trouble is, however, that senior managers often imagine that transition is automaticthat it occurs simply because the change is happening. But it does not. Just because everyone does have access to the PLM system does not mean that virtual teams develop collaboratively new products and improve the product development process in the way the consultants promised it would (Bridges and Mitchell, 2000). Child (1987) suggests, that technical integration should be mirrored by organisational integration if its full potential benefit is to be realised. In essence, this would mean, that an holistic implementation approach of PLM would not only consider the technical issues but also the organisational and cultural issues. Changing the organisational form (i.e. to a project based organisation to support globally dispersed and interorganisational virtual teams) and accordingly the culture (i.e. to an "outward facing collaborative culture") to support collaboration, however, means for most manufacturing companies not only structural alterations but a radical change. Implementing organisational change offers "tremendous potential for improved performance for today’s product development organisations" according to Stark (1999). But Stark (1999) also adds that it is a major activity that is "difficult, time consuming and costly". Moreover it bears the risk of producing negative results.
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Stark (1999) made this statement in conjunction with the implementation of PDM cf. Miller (1998d) 8 Ali made this statement at the “International Quality and Productivity Center Conference , June 2001
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Introduction
Organisational Change Management, as a discipline to deal with the emotional reaction to change has proved to support major change initiatives and should also significantly improve the change process during a PLM implementation. The research is therefore focused on the question if the implementation of PLM, in practice, is understood as a change process that touches organisational and cultural issues. Furthermore the research aims to find out if, how and to what degree Change Management methods and tools can support the implementation process in order to evaluate 'The Impact of Organisational Change Management9 on the Success of a PLM Implementation'. In order to research these issues it is intended to answer the following questions: • How does, in theory and practice, the implementation of a PLM solution influence the organisational structure, processes and culture of a company? What are the organisational and cultural consequences or prerequisites? • If Change Management is utilised during an implementation, what Change Management tools and methods are utilised and can they be related to the success or failure of the implementation? • What Change Management strategy is appropriate? • How can Change Management programmes be integrated in an overall implementation project? The research is focused on the Electronics Manufacturing Industry (EMI) which is characterised by short product lifecycles and has enjoyed a time of unprecedented growth as providers of components and products10 to the formerly fast growing markets of communication, computers and consumer products. With the current economic downturn combined with deregulation, emerging markets, increasing globalisation and the rise of consumer power the competitive pressures are stronger than ever. These driving forces require the Electronic Manufacturing Companies (EMC), beside time-tomarket reduction, innovation and cost reduction to be more agile and responsive to changes. Since the EMI relies extensively on outsourcing, supply chain management capabilities are extremely important (Miller, 1999a). Effective interaction and collaboration among globally distributed design and engineering resources in the extended enterprise is therefore vital. In conclusion, EMC have especially the potential to benefit from the introduction of PLM.
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To avoid mixing up Change Management with engineering change management which describes the management of changes that a product faces during its lifecycle, the working title includes the term Organisational Change Management, which is, however, also to a certain extent misleading because change is always a personal and emotional matter and therefore organisations do not change, people do (Marshall and Conner, 1996). In the context of the dissertation in hand Change Management equals Organisational Change Management. 10 cf. http://www3.ibm.com/solutions/plm/pub1/05256965005b0639/6/3fc8f66c401eaaa88525684d00787896.jsp
11
Introduction
1.3 Literature comment The importance of the product development process, especially for manufacturing companies has been widely discussed (Smith and Reinertsen, 1995, Paashuis, 1997, Pawar and Sharifi, 2000) and is confirmed by various studies (i.e. Nevins et al. (1989). PLM respectively CPC systems, as relatively new IT infrastructure to support an improved product development process are currently intensively discussed, especially among Research Firms (like the Aberdeen Group, AMR Research, Forrester Research, Gartner Group and the Meta Group) as an opportunity for manufacturing companies for major improvement and competitive advantage. The role of organisational change and IT is controversially discussed among researchers, however, all agree that there is a certain relationship. Organisational Change Management is described by many researchers as an appropriate tool to support and facilitate organisational and cultural change (Kotter, 1995; Doppler and Lauterburg, 2000; Schein, 1997). In the context of PDM, the predecessor of PLM, various information can be found on organisational and culture issues i.e. an end user study of product data management users that was carried out by Dataquest in 1997 relates the implementation success of a PDM system to organisational structure and culture. Considering Change Management while implementing a PDM system has been suggested by Stark (1999) and Miller (1998c) states, that "without proper cultural change management and education, most PDM implementations fail or fall short of expectations." In the context of PLM solutions as an inter-organisational information system for product related information, however, only little can be found about organisational or cultural change. Some researchers like Bourke (2000) and Krouse (2001) remind us on the organisational and cultural implication of a PLM implementation. Information about how these implications can be taken into account during the implementation are very rarely found. 1.4 Research Methodology Literature research has been used to identify the key concepts of PLM solutions and the organisational and cultural implications that a PLM implementation might have on a electronics manufacturing company. Accordingly for identifying different Change Management approaches, methods and tools a literature research has been applied. The results from the literature research have been used to develop the following hypothesis: A company culture and organisational structure determines to a great extent the success of a PLM implementation. Organisational Change Management, if used properly, is a significant factor for implementation success. These hypothesis' have been tested by a survey, that was carried out in form of a postal questionnaire. The questionnaires have been sent to EMC as well as Software Vendors and Integrators and Research Firms in the field of PLM. PLM Software Vendors and Integrators as well as Research Firms have been included in the survey to gain a broader perspective on the implementation issues surrounding PLM.
12
Introduction
In order to triangulate the topic and to obtain different perspectives qualitative research in form of telephone interviews has been added. 1.5 Dissertation Structure The dissertation consists, besides the introduction, of six additional chapters. Chapter two contains a literature review that is dealing with various concepts in the research areas product development, Product Lifecycle Management and Organisational Change Management. The research methodology, outlined in chapter three, explains the different methods that were utilised to answer the research question. Furthermore an overview is given on how the gathered data has been analysed. In Chapter four the results obtained through quantitative and qualitative research are presented and described. Chapter five discusses and interprets the findings of the research, their relationship to the objectives set out and to the published literature. Moreover the role of theory is discussed as well as the effect on professional practice. Also the appropriateness of methodology and data collection is reviewed. In Chapter six a summary of the main findings and principle features of the dissertation is provided. Moreover, suggestions for professional practice and recommendations for future research are given. The bibliography can be found in chapter seven. The appendices contain the results of the survey.
13
Literature review
2
Literature review
The literature review is divided into various sections dealing with the main areas of research. 2.1 Concurrent Engineering and physical co-location
In the last decade the main focus of manufacturing companies has been the time to market reduction in order to stay competitive (Paashuis, 1997; Smith & Reinertsen 1995; Hammer and Champy 1995). Some companies and industries could significantly decrease product development cycle time for various products. (Smith and Reinertsen, 1995). One of the concepts underlying to reach this goal has been 'Concurrent Engineering', sometimes termed as 'Simultaneous Engineering', 'Rapid Product Development' or 'Integrated Product Development'. Concurrent Engineering has been described and defined in different ways and with various implications (Garrett, 1990; Duffy, 1989; Hurst, 1993; McKeag, 1994; Walker, 1997). A widely accepted definition, however, has been developed by the Institute for Defence Analyses (Pennel and Winner, 1989). According to them, "Concurrent Engineering is a systematic approach to the integrated, concurrent design of products and their related processes including manufacture and support. This approach is intended to cause the developers from the outset to consider all elements of the product life cycle from conception through to disposal, including quality, cost schedule and user requirements." Common to all of the definitions of Concurrent Engineering is the emphasis of the integration effort on technological as well as organisational level. Technological integration has been supported by Computer Aided Technologies like Computer Aided Design (CAD), Computer Aided Manufacturing (CAM) and especially Product Data Management (PDM) systems that handle the access rights to product data information. Concerning the organisational level Bessant et al. (1985) remarks that "Integrating a Design-Engineering-Manufacturing process is much more challenging from an organisational point of view, than introducing a single stand alone system." Tantoush & Clegg (2001) found that during a [CADCAM] implementation technical problems are more obvious and widely recognised than the organisational challenges involved. Child (1987) therefore suggests, that "technical integration should be mirrored by organizational integration if the [implementations'] full potential benefit is to be realised." Accordingly Smith and Reinertsen (1995) state, that "to achieve the full potential of [Concurrent Engineering] demands a fundamental change in organizational behaviour." In order to break down functional borders among the individuals participating in the product development process it is proposed by Pawar and Sharifi (2000) to set up crossfunctional product development teams "comprising individuals with specialist skills, experiences and different perspectives on the product development process." For communication reasons physical co-location, which is defined by Rafii (1995) as "physical proximity of various individuals, teams, functional areas ... involved in the development of particular products or processes" is proposed by many researchers to facilitate Concurrent Engineering (Smith and Reinertsen,1995; Bergring and Andersin,
14
Literature review
1994). Allen (1977) developed a relationship between technical communication and distance which shows that the probability of communicating at least once a week dramatically drops within the first ten metres. As a consequence Smith and Reinertsen (1995) conclude, that "team members must be located close together, definitely closer than ten meters, to communicate effectively." 2.2 Collaborative Engineering and virtual co-location
Through globalisation, increased outsourcing and the increased number of alliances there is a gradual shift from an intra-organisational to an inter-organisational level (Pawar and Sharifi, 2000). This also touches product development. According to Guha (2001), however, "collaboration across company borders in the extended enterprise is fundamentally different than collaboration among users within a company." Technical as well as organisational integration across organisational borders has to take place. The technical integration aspect is covered by PLM software solutions that are viewed as an opportunity for major improvement and therefore as definite competitive advantage for manufacturing companies (Miller, 1998; Bourke, 1999; Maynard, 2000). In this inter-organisational context respectively the context of the extended enterprise collaboration and cross-functional product development teams and the appropriate organisational form hereof might be defined differently as in the classical Concurrent Engineering environment. Rafii (1995) therefore argues, that physical co-location is increasingly infeasible and not an efficient use of resources as corporations become more global. Similar to Lipnack and Stamps (1997) he sees the emerge of virtual co-location as an alternative and more promising approach since new information technology can enable a project team of hundreds of geographically dispersed team members. In contrast Smith (2000) states, that even through new communication technology (e-mail, WEB etc..) and more globally dispersed manufacturing operations and therefore dispersed product development teams physical co-location should be preferred whenever possible because of the informal information that gets lost in a virtual team. Pawar and Sharifi (2000) compare in their research physical and virtual co-location. They propose a combination of physical and virtual co-located teams and found that virtual teams outperform physical co-located teams in changing environments whereas physical co-located teams face less motivational and technological problems. 2.3 The organisational model for Collaborative Engineering and virtual colocation
Many researchers including Drucker (1988)11 and Kanter (1992)12 have described the traditional model of an hierarchical structured organisation as not competitive in a fast changing marketplace.
11
Drucker describes in his publication: 'The Coming of the New Organization" the shift from a command and control organisation into an information based organsiation.
15
Literature review
In the context of Concurrent Engineering Pawar and Sharifi (2000) explain that "traditional organisational structures and approaches cannot provide the competitive basis that are required in the business environment because they break down the product development process across the specialist functional departments which renders poor communication." Accordingly Doppler and Lauterburg (2000) suggest, that the traditional model of organisational structure, with it's strict hierarchical guarantees for power at every level, involves a number of severe problems that reduce it's overall effectiveness. Among others the 'cult of individual responsibility' is mentioned as an effect of the strict division of labour that leads to competition instead collaboration, both at the individual level and at the level of groups and departments.' They further argue, that rapidly changing marketplaces and the increase of complexity demands a different organisational model and are proposing a network organisation, that enables quickly changing process chains instead of a hierarchical organisation, that is based on the division of labour. In their research about the emerge of virtual or network organisations Black and Edwards (2000) conclude accordingly, that "when this new set of organizing rules are overlaid with the conditions and processes facilitated by the use of advanced communication technology and computing technology, virtual or networked organizations are logical forms of organizations and that this form allows firms to cope with the rapidly changing environment." Rafii (1995) in the context of virtual co-location states, that "networks are inherently informal and anti-hierarchical, and thus their use tends to minimise the formal organisational structure. Knowledge and the willingness to share it, rather than position or job title in a chart, become the key indicators of relevant contribution to a project. These factors contribute to cross-functional integration by making functional walls more transparent and by facilitating the measurement and evaluation of individuals and units contributions to project success." 2.4 Organisational Change Management and Information Technology (IT)
The role of IT and organisational change has been widely discussed. Some researchers remark, that instead of being used to support (i.e. automate) existing procedures, IT now in large parts determines the design of work processes and has become a major component for organisational change (Currid, 1993; Applegate et al, 1996; Bradley et al., 1993). Furthermore many Information Systems (IS) researchers have pointed out that the broader social and organisational context in which IT is implemented has a profound influence on the way in which IT is used (Bussen&Myres 1997, DeSanctis 1993, Myers 1994). Different views are provided regarding the question if new-technology based Information Systems (IS) are enabling desirable organisational change (Scott Morton, 1991; Hammer and Champy 1993; Turner, 1998) or if IS are resulting from social
Kanter et al. sees the competitive model as "a more flexible organization, adaptable to change, with relatively few levels of formal hierarchy and loose boundaries among functions and units ..."
12
16
Literature review
dynamics of the organisational change process (Ciborra, 1991; Orlikowski and Walsham, 1996). 2.5 Organisational and cultural change and the implementation of a PLM solution
The organisational and cultural implications of implementing inter-organisational integration and collaboration via a PLM solution is emphasised by some researchers in this field. Krouse (2001) e.g. reminds us, "that there are a number of organizational and cultural obstacles to overcome to implement collaboration." According to him, people often resist new procedures. Similar to Miller (1998)13 and Peterson (2001)14 he sees the sharing of data or handing off ownership of data to others "as the project moves through various phases of the product development" as potential cause for conflicts." Moreover he reminds us that "Groups that previously operated autonomously may resent having to co-ordinate their activities with others and that work styles and customs may vary between companies located in different areas around the world." Bourke (2000) in the same context emphasises, that "collaborative product design [in a virtual design environment] especially implies the need for a high degree of openness and trust for best results'. He concludes, that 'on the road to success...., addressing cultural problems may be as important, or more important, than technical solutions.' The importance of taking cultural and organisational implications into account is also supported by an end user study of Product Data Management (PDM, the predecessor of PLM) users that was carried out by Dataquest in 1997. The following was found: • Those organisations with strong information networks and lines of communication are more apt to implement –and are more successful when doing so. • Despite users feelings about the strength of information networks within their company and how well their PDM deployments are progressing, they still see the companies structure and culture as the biggest roadblock to expansion. Being in line with theses findings Doppler and Lauterburg (2001) remind us, that implementing organisational change by switching to a network organisation is a fundamentally different way of approaching tasks together that requires "radical structural transformation." For successfully transforming the organisational structure they suggest that the corporate culture has to be changed to one that is based on openness and trust.
13
Miller writes that "one of the greatest challenges .... is resolving inevitable question about who controls data in the enterprise." 14 Peterson emphasizes, that "old habits die slowly, and while the benefits of collaboration are intuitively obvious, the sharing of data with third parties is often counter-cultural. "
17
Literature review
2.6
Change Management and the implementation of a PLM solution
The hidden, informal dimension of change is often explained with the 'Iceberg model', describing that only 10-15%, namely the formal systems like products, policies, procedures etc. is visible, whereas the rest, namely the informal system like perception, feelings, attitudes, norms, behaviour and values are below the 'water surface'. (i.e. Bourke, 2000; Jarmai, 1997). Many researchers including Senge et al. (1999) and Doppler and Lauterburg (2001) therefore state, that successful change requires a inner shift in peoples' values, attitudes and behaviours which means peoples' basic ways of thinking. Marshall and Conner (1996) state in this context that change initiatives must be translated to implications for each individual who will be affected. Significant change, however, is a disruption in our expectations of the future which is viewed as a loss of control (Marshall & Conner, 1996). Resistance is therefore the natural reaction to change and has been described by various researchers (i.e. Reiss, 1997; Kanter et al. 1992). Block (1981) states, that "resistance is an emotional process, not a rational or intellectual process". According to him the major cause for resistance is 'fear of the unknown'. Uncertainty in a working environment, however, reduces productivity and can paralyse a whole organisation. Organisational change has therefore to be carefully planned and the change process has to be managed and overviewed. (Doppler and Lautenburg, 2000). Implementing organisational and cultural change is described as difficult, timeconsuming and costly (Stark, 1999) and therefore the result of Kotters study (1995) that only one third of major change initiatives is successful is not very surprising. Many theorists and practitioners alike are proposing the utilisation of Change Management techniques to successfully deal with the change process. Change Management, that aims to provide an implementation and change friendly environment within an organisation (Reiss, 1997) has been and still is one of the most popular topics in business management. Many books and articles have been written about Change Management including well known business researchers like Kanter, Kotter, Schein, Schaffer and Senge. The roots of Change Management can be found in the science of psychology. Many of the techniques helping people to deal with traumatic emotional issues have been applied to "help stakeholders deal with dramatic changes in how they earn their livelihoods" (anon., 1996). The nature of change has been described by Conner (1993, 1996). Based on Kuebler-Ross (1969) who researched the stages that terminal patients and their families go through he developed a model (Figure 2.1) that describes the emotional response during a change process that is viewed as negative. According to Conner (1996) this model can also be applied to organisational change.
18
Literature review
Active
ANGER ACCEPTANCE
EMOTIONAL RESPONSE
BARGAINING
STABILITY
DENIAL
TESTING
IMMOBILIZATIO DEPRESSION Passive
TIME Figure:2.1: The Nature of Change. From Conner, D.R., Managing the Speed of Change, 1993/1996
Nadler, Shaw and Walton (1995) suggest that there are different types of change that require different management strategies, approaches and methods. In a business context therefore the scope of Change Management ranges from planned evolutions and reforms to business transformation. Top-Down approaches like business transformation (i.e. Business Process Reengineering or crisis management) are characterised by a high degree of intervention whereas bottom-up approaches like planned evolution or reforms (i.e. organisational development) are characterised by less intervention and by harmonising the goals of the corporation and the affected employees (Reiss, 1997). Traditionally the change process was described as moving from a stable state through the unstable state of changing to the desired state, being stable again. Lewin (1951) characterised these three stages as: 'unfreezing, changing and refreezing' the organisation. Consequently Nickols (2000) states, that "a very useful framework for thinking about the change process is problem solving'. He sees managing change 'as a matter of moving from one state to another, specifically from the problem state to the solved state." Many researchers, however, emphasise that due to the economic environment of constant and accelerated change the stable states of an organisations are becoming shorter (Reiss, 1997) or even diminish. Consequently researchers remark that there also has to be a constant change process within an organisation and that the change process has to be viewed as a learning process (Agyris, 1985; Senge 1999; Doppler and Lauterburg, 2000; Dobiey and Wagner, 2001). In order to facilitate a constantly changing organisation the focus is therefore laid on changing the organisation into a so called 'learning organisation' (Senge, 1991, 1995; Doppler and Lauterburg, 2001).
19
Literature review
Conventional reactive models aim to react in an optimal way to changes that are forced from the environment, like technological or legal changes. In contrast hereof proactive models like learning organisations moreover aim to anticipate change and to generate change from within the organisation. People are not being changed, they change (Reiss, 1997). Arie de Geus (1988) in this context states, that "the only competitive advantage the company of the future will have is it's managers' ability to learn faster than their competitor." Independent of the method that is used the capacity of an organisation to change is viewed as a critical success factor and important corporate asset in a world of accelerated and constant change (Pagliarella, 2000).
20
Methodology and data collection
3 Methodology and data collection
This chapter gives an overview on the techniques that were used to research the dissertation topic. Both, desk research (secondary) and field research (primary) has been carried out to achieve the aims of the dissertation. 3.1 Secondary research (desk research)
Desk research has focused on examining the literature and has covered the areas of product development, Product Lifecycle Management (PLM) and Organisational Change Management. Moreover the Internet has been searched, especially the web pages of System Integrators, Software Vendors and Research Firms for valuable information about the topics involved. Subscription to various journals and periodicals provided another source for desk research. Literature research has been used to identify the key concepts of PLM solutions and the organisational and cultural implications that a PLM implementation might have on a electronics manufacturing company. Accordingly for identifying different Change Management approaches, methods and tools literature research has been used. Moreover desk research has been utilised to develop a hypothesis for the survey. 3.2 Primary research
In the primary or field research quantitative as well as qualitative research methods have been used. A survey, comprised by mainly closed or partially open questions has covered the quantitative research. Interviews covered the qualitative research. The triangulation of the topic aims to provide different perspectives on the research topic. 3.2.1 Quantitative research (Survey)
Quantitative research has been carried out through a survey. As technique for data collection postal questionnaires have been chosen. The following hypothesis have been concluded from the literature research: Especially the culture of a company determines to a great extent the success of a PLM implementation. Organisational Change Management, if used properly, can be a significant factor for implementation success. The aim of the survey has been also to find out if, to what extent and how successful Change Management methods are utilised during a PLM implementation. Heterogeneous sampling has been used to select the participants for the survey. In case of the Electronic Manufacturing Companies (EMC) the participants needed to meet specific criteria to qualify. They should at least being in the process of evaluating or benchmarking PLM solution. In order to gain a broad perspective on the topics investigated also PLM System Integrators, Software Vendors and Research Firms have
21
Methodology and data collection
been, beside EMC, asked to participate in the survey. Table 4.1 in the next chapter shows the number of companies that have been asked to participate and the number of respondents categorised by profession. A great help for identifying potential participants have been various articles dealing with PLM and conference manuals of appropriate conferences (i.e. solutions.conference of CSC Ploenzke, eeuc-european engineering user conference). Contacts have been made either by e-mail or phone calls. Two different, comprehensive questionnaires have been designed. One has been sent to EMC aiming to analyse the current state of the company and the internal implementation process regarding organisational, cultural and Change Management elements. A slightly different one has been sent to System Integrators and Software Vendors (SVSI) aiming to benefit from their broader experiences in PLM implementation projects, especially regarding Change Management elements and the impact of those on the overall implementation success. The questionnaire for the survey was developed in an iterative process through literature review and conversations with various experts in the area of PLM and Change Management. Especially Starks' 'pdm e-zine' newsletter and various publications of Miller (1997, 1998, 1999) have been contributed to the questions in the area of PLM. Kotters (1995) ideas in his publication 'Leading Change-why transformation efforts fail', Senge et al. (1999) with his publication 'The Dance of Change' and Doppler and Lauterburg (2000) with their publication "Managing Corporate Change" contributed much to the final questions in the areas of organisational change. Mainly closed or partly open questions have been used in the survey in order to identify trends and patterns. For these kind of questions answers have been predefined that could be ticked off. However, there was also space left for inserting own ideas and comments. Open questions have been used in those areas that have been selected for further research via qualitative research. For better understanding and guidance the questions have been grouped into thematically sections provided with appropriate sub-headings. The following subheadings for example have been utilised in the manufacturers questionnaire: Product development process and relationship to customers/suppliers Project set-up of the PLM implementation Changes (because of the PLM implementation) Organisational Change Management Before sending the questionnaires to the participants they have been reviewed by the German supervisor. Moreover the questionnaires have been pilot tested. This has influenced the questionnaires in a way, that the answers have been classified and some questions have been formulated clearer or a complex question has been divided into two easier questions. To make sure that the intention of the survey was well understood telephone calls or e-mail correspondence took place with the participants before sending the questionnaire. Additionally a covering letter has been sent with the questionnaire and it was guaranteed to keep the information gathered by the survey confidential to increase the reply rate.
22
Methodology and data collection
Appropriate coding (two examples can be found in the next chapter) has been used to prepare the data for analysis. Because of the small sample size it has to be mentioned that the data will not be statistically significant. However, they highlight differences and similarities. Tables have been chosen as the best way to display the results in order to identify trends and patterns and compare the data received. The tables contain mostly classification and rank or percentage values (an example can be found in the next chapter) 3.2.2 Qualitative research (Interviews)
Qualitative research has been used to triangulate the topic in order to provide different perspectives on the topics involved in the research. Structured telephone interviews have been chosen to carry out qualitative research. In total, three interviews have been conducted each lasting approximately one hour. A pilot interview has been conducted as well. The interview partner (an individual person) have been identified and chosen after analysing and evaluating the results of the quantitative research. In order to get the most varieties of views the interview partner had different backgrounds. One interview partner came from an EMC, one from a System Integrator and the third from a Software Vendor. Interviews have been chosen as qualitative research method since it seems the most appropriate method to get an understanding about the relevance of so called 'soft issues' during a PLM implementation. The topics involved and resulting questions were chosen based on the results of the survey. Qualitative research mainly concentrated on the organisational and cultural implications, the implementation strategy and on the utilised Change Management concepts, methods and tools during a product lifecycle implementation.
23
Results
4
Results
In this chapter the obtained results through qualitative and quantitative research are presented. Quantitative research has been covered by questionnaires that were send to Electronic Manufacturing Companies (EMC) on the one hand and to Software Vendors, System Integrators and Research Firms on the other hand. The results of the qualitative research that were conducted by telephone interviews are also presented in this chapter. 4.1 Results from quantitative research (Survey)
The result of the survey is presented in the following section. The main trends and patterns are described and differences in the answers of EMC on the one hand and Software Vendors and System Integrators (SVSI) on the other hand are mentioned. Each question of the survey and its intention is presented as well as the result that was obtained from it. Before that the response rate is introduced and an explanation is given on how the data was prepared for analysis and interpretation. A detailed summary of the results can be found in the appendices. The tables in appendix A consolidate the answers of EMC and SVSI. Appendix B summarises the findings from the questionnaires sent to EMC. The tables in appendix C show the results of the survey from SVSI. 4.1.1 Survey participants
The overview in the following table shows how many companies have been asked to participate in the survey and how many companies finally participated:
Category Manufacturing Companies System Integrators/Consultants Software Vendors Research Firms Table 4.1: Survey participants No. of companies 'Being Asked' 16 12 6 4 No. of companies that participated 7 8 5 0 Response Rate (%) 44 67 83 0
The companies participating in the survey are not named explicitly because it was guaranteed to keep the information confidential. In case of EMC the participants have been the project leader of the PLM implementation. In case of SVSI they have mainly been the PLM practice leader respectively knowledgeable consultants in the field of PLM.
24
Results
4.1.2
Preparation for analysis
In order to reveal trends and patterns the answers have been summarised, ranked and ordered as described in the examples below: Example 1: Most questions are organised as shown in table 4.2. For each question different predefined answers15 are offered that could be weighted from 'very important' over 'important' and 'less important' to 'not import' (respectively 'frequently'/'occasionally' /'seldom'/'never' or 'true'/'partially true'/'not true'). A factor is assigned to each answer as shown in table 4.2. The numbers are then summed up and divided by the number of respondents for that answer (sometimes not all possibilities where marked by each respondent). Calculation example for 'Cultural Changes' (Rank2): 7 (number of respondents that ticked that box) x 3 (factor for very important) = 21 3 (number of respondents that ticked that box) x 2 (factor for important) =6 2 (number of respondents that ticked that box) x 1 (factor for less important) =2 0 (number of respondents that ticked that box) x 0 (factor for not important) =0 ---------------------------------------------------------------------------------------------------------Sum ? = 29 Number of respondents for that answer No = 12 Result ?/No = 2,4 Depending on the result the answers were reordered and assigned a rank. What changes are required to successfully implement a PLM system?
Rank Predefined Answers XXX 1 very important 3 6 important 2 7 less important 1 not important 0 ? X 32 No X 13 ?/No XX 2,5
2 3
Weight/Factor Reengineering/Redefinition of product development processes (i.e. interdisciplinary virtual team approaches, workflow changes) Cultural changes (i.e. open 7 communication and collaboration culture) Empowering of people / teams (i.e. 5 designers having direct customer contact)
3 3
2 5
29 26
12 13
2,4 2
Table 4.2: Extract of questionnaire
15
However, there was also space left to insert own answers.
25
Results
Example 2: For the second type of questions there is no range to choose from. Depending on the question, multiple boxes or just one could be ticked. For those kind of questions a percentage value is generated as result. How is the implementation of a PLM system and the changes required hereof communicated with the people affected (n=13)?
Rank 1 2 3 4 5 6 7 Predefined Answer Workshops Intranet Notice Board e-mail Internal newspaper Employee Survey Global Town Hall Meetings ? 12 10 10 7 7 5 4 % 92 77 77 54 54 38 31
Table 4.3: Extract of questionnaire
4.1.3
Questionnaire results
The implementation of a PLM solution can be used to automate existing processes and procedures or to change existing processes and procedures. This can be done for only a part of the enterprise or the whole enterprise. The first question16 about the most important goals to define for the implementation of a PLM system respectively the most important reasons for the decision to implement a PLM system therefore intents to find out the context and scope of the implementation. Overall, time to market reduction is viewed as the most important reason for implementing a PLM solution. Enabling extended enterprises through integration of customers, increase of productivity and improvement of quality are also viewed as important goals. While most of the answers of EMC and SVSI are similar, differences can be found regarding the improvement of the classic PDM functionality and the integration of internal islands of automation. While EMC view the improvement of the classic PDM functionality as very important SVSI rank this aspect very low. Integrating internal islands of automation is viewed by SVSI as important while EMC view this as subordinate aspect. Enabling mass customisation through the implementation of PLM systems seems for EMC as well as SVSI less important. The intention of the second question asking who generally is involved in the product definition process is to find out what departments and stakeholders are typically involved in the product design process. Manufacturing, suppliers, purchasing and marketing are mostly named to be involved besides the typical departments like product design and R&D. Customer, service and sales departments seem to be less involved. The role of senior management and manufacturing in the product definition process is viewed differently by EMC and SVSI. While SVSI state that manufacturing departments are frequently and senior management is seldom involved the answer of
16
Numbering according to results in Appendix A
26
Results
EMC indicate the opposite. Some respondents comment that this is very different depending on the division and the phase in the development cycle. Accordingly the next question is about who has access to and is using the PLM system in order to find out the scope and penetration of the PLM system. A difference is made between using and accessing because having access does not necessarily mean that it is also used. The result is quite similar to the second question. Contrary to the question before the answer of EMC indicate that manufacturing departments have, except product design departments, more than any other department access to and are using the PLM system. Having a vision is viewed as essential by many researchers for initiating and managing change17. The fourth question therefore aims to find out if a vision is connected with the implementation of a PLM system. The answers are very heterogeneous. Half of the answers, however, indicate that a vision is defined. Analysing the current state and developing a roadmap to reach the target state is typical for problem solving. Change Management can be viewed as some kind of problem solving18 and therefore those elements could also be an important element during a PLM implementation. Nearly two third of the respondents state that an 'as is' or current state analysis is being performed before implementing a PLM solution. Basically the same number of respondents state that a strategy is defined how to reach the 'to be' situation. Establishing a pilot group is viewed by researchers as important element to successful implement change and to minimise risk19. Question number seven therefore asks if a pilot group is established during a PLM implementation. Nearly two third of SISV confirm this statement whereas all of the manufacturers that responded to this question have worked with pilot teams. The reduction of productivity and motivation is typical for the confusion phase at the beginning of a change process. Therefore the intention of question number eight is to find out if the productivity is influenced during the implementation phase in order to draw conclusions to the appropriateness of different Change Management strategies. 59 % respond that the productivity is slowed down only a little bit, whereas 35% do not realise any negative influence on productivity. 6% realise a significant decrease of productivity. Question number nine and ten of the questionnaire try to find out the relationship between PLM and Enterprise Resource Planning (ERP) systems and the resulting ownership of data hereof which is viewed as potential source of conflict20. More than 75% of the respondents state that there is an interface to an ERP system. All variations on how this situation is handled appear in practice. From keeping the data in both
17 18
cf. Kotter (1995) cf. Nickols (2000) 19 cf. Senge (1999), Reiss (1997) 20 cf. Miller (1999a)
27
Results
systems (39%) to keeping the data in the ERP system (28%) respectively in the PLM system (11%) to transferring the data from the PLM into the ERP system (22%). Changes in processes as well as in the organisational structure and culture are regarded by some researchers21 as prerequisite for a successful PLM implementation. Therefore, the aim of question number eleven is to find out, if, in practice, appropriate changes take place. Overall, the redefinition of product development processes (i.e. workflow changes) is viewed as the most important change that is required for successfully implementing a PLM system. Changes in the organisational model and cultural changes have not taken place during the PLM implementation according to the respondents of EMC. SVSI, however, view cultural changes (i.e. an open communication and collaboration culture) as critical. Empowering of people and changes in the organisational model are viewed as less important. One respondent added to the predefined answers, that the management awareness of PLM related issues has to be increased. Question number twelve intents to find out how well the implementation of PLM and the changes resulting hereof are communicated since this is an important element of Organisational Change Management.22 The responses show that different ways are used to communicate the implementation and the changes that are required. Mostly used are Workshops and the Internet to communicate whereas employee surveys and Global Town Hall Meetings are seldom used. One respondent remarked that awareness sessions are utilised that are combined with feedback questionnaires. Another respondent mentioned that 'since PLM is an integration program, a marketing and communication strategy and roadmap is required. All channels/media for internal and external (suppliers, customers, partners) communication should be part of this strategy.' The aim of question number thirteen is to find out what changes are required in the organisational structure to best support the implementation of PLM. Researchers suggest as the future organisational model a flexible and process oriented network organisation to deal with a quickly changing environment23. A variety of different views is provided. The manufacturing companies that participated state that no changes in the organisational model have taken place during the implementation whereas most of the SISV emphasise the importance of a project or process organisation and the tearing down of functional borders. Question number fourteen asks for Change Management methods and tools that are utilised during a PLM implementation like aligning and mobilising leaders and vocal and visible support from senior management (walking the talk). The early involvement of people being affected by the changes is viewed as very important by EMC as well as SVSI. Establishing a communication concept as the logical consequence hereof is also viewed as important. Moreover the establishing of a shared and motivated vision and the creation of an atmosphere of openness and trust is ranked high. Changing the reward systems to support the change initiative however is ranked very low.
21 22
cf. Stark (1999), Bourke (2000) cf. Stark (1999), Doppler and Lauterburg (2000) 23 cf. Doppler and Lauterburg (2000)
28
Results
Coaching plays an important role during the change process especially during the confusion phase24. Question number fifteen therefore aims to find out what kind of training users receive during a PLM implementation. Of special interest has been the question if other than software functionality is trained like working in a team to successfully deal with the new environment. However, besides software training, other training like team specific training (communication, conflict management, team working) is quite seldom offered to users. According to the results intercultural training is very seldom considered to support the PLM implementation. Question number sixteen tries to find out the main barriers and problems during a PLM implementation. Especially interesting in this context has been the question if the problems can be located in the organisational culture and people related issues or if they are centred around technical aspects. The overall result was that not enough visible and vocal support from senior management was given the highest rank, followed by barriers between departments and laying the focus too much on technological aspects and not enough on people. Other answers that received a high rank were the resistance of middle management and users to change. A remarkable difference can be found in evaluating the technological limitation. SISV assign this problem a very low rank, whereas EMC assign this problem a very high rank. Intercultural problems (i.e. language barriers) seem to be no problem and are therefore ranked very low. Aiming to find out what factors positively influence the success of a PLM implementation question number seventeen asks for the main success factors. Overall it was felt that the early involvement of people being affected by change and the commitment and buy in of senior management are very important for a successful implementation. Aligning and mobilising leaders and the commitment of middle management are also viewed as important. Establishing a sense of urgency25 and changing the reward system to support changes 26,however, are ranked as less important. The next question (18) asks if the results of a PLM implementation are satisfactory respectively deliver the promised results. The question intents to relate the success of an implementation to the utilised Change Management methods and tools in the implementation phase. The overall result was that 53% classified the implementation as satisfactory whereas 40% responded that the implementation can be rated as partially or sometimes satisfactory. One respondent classified PLM implementations as not satisfactory. Explanations were given on the ratings described above. One respondent mentioned that a successful implementation actively supports users in living new processes and leads to long-term profitability. Another respondent remarked that the potential of benefits is so big, that it will even be hard to not be successful. A different participant remarked that companies make different experiences that are not always positive but that a number of visionary companies have achieved a tremendous step forward through the implementation of PLM. Another explanation suggests that project benefits are overestimated at the beginning of the project because otherwise the
24 25
cf. Reiss (1997) cf. Kotter (1995), sometimes referred to as creating a burning platform 26 suggested by Stark (1999) and Doppler and Lauterburg (2000)
29
Results
management would not have invested in the system. It is stated that the actual benefits are therefore much lower than estimated. Question number nineteen deals with the Return on Investment (ROI) measurement of the PLM implementation. The result shows that a ROI calculation is only done in a few instances. Especially manufacturing companies answered that no calculation is done afterwards. Respondents remarked that this is very difficult to do since there is no real measure to compare. Furthermore it is difficult to find out if the improvements result from the PLM implementation or if they are due to other changes within the company or the environment. Some questions have only be placed on the questionnaire for EMC respectively on the questionnaire sent to SVSI. The first ten questions on the questionnaire sent to EMC have been placed in order to find out what kind of companies are implementing PLM . For that reason it was asked for the product development process in general, the CA -tools used to support the product development process and the internal and external flow of communication. The results showed that most companies implementing a PLM system have also implemented other CA -Tools like 3D-CAD, CAM and EDM/PDM. The answers also showed that a variety of possibilities are used to communicate internally in the product development process. E-mail is at least equally often used as the traditional communication tools like face to face (individual as well as team) meetings. Video conferences and collaborative workspace systems, however, are still rarely used whereas one respondent comment that he sees this technology growing in the near future. Concerning external communication with suppliers and customers the results were basically the same. One comment stated that there is a growing desire to include suppliers as part of the extended enterprise and that much more use of Collaborative Engineering is planned for the future. In order to evaluate the need and the level of collaboration and interaction with customers and suppliers several questions were asked. The research found that paper drawings are still equally often exchanged as CAD files. An analysis of the question if engineers have direct contact and interaction with their customers found that this is only unconfined true for 43% of the companies. The question concerning the percentage value of the components making up the final product aims to evaluate the need for collaboration. It was found that more than half of the companies outsource 25-50% of their final product. Another question aiming to find out the interaction between functional groups has been if the concept of Concurrent Engineering has been implemented. 29% of the respondents confirm this question whereas 57% answered with partially and one with no. Several questions have exclusively been forwarded to SVSI aiming to benefit from their experience gained from different PLM implementations. Question nineteen asks for the positive impact of Change Management methods on the success of a PLM implementation. Half of the participants respond that they would rate the impact as high, 33% as medium and 17% as low. 42% of the participants state that the company culture does have a high impact on the implementation success whereas
30
Results
another 42% view the impact as medium and only 16% view the impact as low. Since the company culture seems to have a big impact on the implementation success nearly 70% of the respondents answer that their implementation approach is depending on the company culture. 4.2 Results from qualitative research (Interviews)
Qualitative research was used to triangulate the topic. Three telephone interviews have been conducted. The following section shows the results that were obtained from qualitative research. The results from the interviews are categorised in those topics that were chosen for further research after analysing the survey results. What kind of companies do implement PLM? The interviewees stated that this is different but that there is a clear tendency to companies that can be described as modern and innovative. Furthermore the companies that do implementing are rather big than small in size. How does the implementation of PLM impact organisational processes? The interviewees felt, that organisational processes are mainly impacted through improving existing processes rather than the radical redesign of processes according to BPR. They are mainly improved through workflow changes. A typical example is the changing of responsibilities and transferring of tasks and people from manufacturing process planning into product development. Moreover it was stated that PLM is enabling new approaches and these were used to improve existing processes. Collaboration in virtual teams is so far mainly used in selected test environments. The change of processes is more likely to happen when external consultants are involved. How does the implementation of PLM impact organisational structures? In accordance with the survey results the interviews show that organisational structure is very little impacted by the implementation of PLM. Bigger companies are showing a tendency to process organisation and virtual teams. One interviewee argued that if the need for change in the organisational structure would be stated a PLM project in most cases would have no chance to get started. How does the implementation of PLM impact organisational culture? Organisational culture is viewed as an important success factor that can influence the implementation strategy. The degree of openness of a company's culture can be seen on the fact how restrictive - or not restrictive data is handled. It was remarked that there are also different cultures within a company (between departments or between divisions) and that the implementation approach has to take care of this fact. One interviewee highlighted that PLM creates transparency which automatically should change the culture.
31
Results
In what way are Change Management concepts, tools and methods utilised? The impact of the so called soft factors is very well recognised. One interviewee stated that he estimates that 70% on implementation success is people related. Change Management in the implementation planning phase tends to be a topic when an external consultant is involved or when the company has already experience with large software projects. Change Management tools are otherwise used mainly reactively instead of proactively. One interviewee stated, that too less attention is put on these aspects. Defining a vision tends to be used only in large scale projects. Communication mainly takes place through various information sessions to introduce the PLM system and to create awareness. As especially important it was viewed by one interviewee to achieve management awareness and recognition. In general, talking to people in order to find out for whom the implementation is interesting and can create opportunities, is viewed as important to find appropriate key users. Key users are used as multipliers e.g. in train the trainer approaches. It is viewed as essential that the key users have the appropriate acceptance within the group. To gain acceptance for necessary changes it was viewed as important that the PLM system is easy to use and does not restrict the way people are working. Short term wins are used to create confidence and convince the people involved but especially senior management. The important role of senior management support and commitment was underlined. One interviewee emphasised the importance of 'Walking the Talk' which means for example that when collaborative behaviour is expected also senior management has to collaborate to serve as a role model. It was remarked that resistance can have very different reasons and dealing with it has to happen in a flexible way which can also mean that a PLM implementation has to be postponed. What are commonly used implementation strategies? A common strategy is to replace and consolidate various existing product information systems with the PLM system.. In a second step it is tried to incrementally improve the product definition process. Also pilot group approaches do appear.
32
Discussion
5
Discussion
The discussion interprets the results of the research and answers the research question. Furthermore the results are related to the published literature and the role of theory is discussed. Additionally the appropriateness of the research methodology and data collection techniques are reviewed. Finally the effect on professional practice is discussed by recommending implementation respectively Change Management strategies. 5.1 Interpretation of research findings This section discusses the role of organisational culture, structure and processes during a Product Lifecycle Management (PLM) implementation. Additionally the role of Change Management is discussed in order to answer the research question. 5.1.1 What kind of companies do implement PLM?
Product Lifecycle Management has evolved from various predecessors like Engineering Data Management (EDM) and Product Data Management (PDM) over the last twenty years. However, PLM solutions by itself are a quite young range of software. Therefore the number of companies that have already experience with PLM software solutions is relatively small. The companies that are implementing PLM solutions do have a long and broad experience with different computer aided development tools as well as with enterprise-wide software implementation like Enterprise Resource Planning (ERP) . In most cases they are one of the best in their business segment and can be described as multinational and internationally operating companies. Small and medium companies (SMC) do relatively seldom implement PLM solutions up to date. Electronic Manufacturing Companies (EMC) whose business is minted by time to market and cost reduction coupled with the demand of increased quality have mostly already experience with management concepts like Concurrent Engineering, Business Process Reengineering (BPR) and Total Quality Management (TQM). Change is therefore nothing totally new for them and there management systems and organisational structures tend to be 'modern' rather than 'traditional'. 5.1.2 The role of organisational culture
There is no doubt that an open minded organisational culture is beneficial for the introduction of any new programme. Accordingly it is also viewed as supportive for a PLM implementation. However, if a company's culture has to be changed is heavily depending on the matter of fact what predominant culture exists within a company. PLM promotes many aspects like the early sharing of data and the internal and external need for collaboration that might be, especially in an inter-organisational context, counter-cultural and affect the way people are working. This can cause conflicts and negatively influence the implementation success. The success of collaboration for
33
Discussion
example is depending on the sharing of data and ideas. Openness and trust are basic requirements for successful collaboration as well as the responsibility to timely and accurately submit data to the PLM system so that others can benefit from it. In many cases this behaviour firstly has to be learned and anchored in the company culture. The research results indicate that especially Software Vendors and System Integrators (SVSI) view cultural changes (to an open communication and collaboration culture) as an essential element of a successful PLM implementation27. This might be the result of the experiences that they have gained during various PLM implementations at different companies with different organisational cultures which enables them to relate the implementation success to a certain culture. The results of the questionnaires from the EMC seem to be in contrast of the result found by SVSI since all of the respondents for this questions (n=4) stated that there have been no cultural changes28. Two of them, however commented that an open minded culture is prerequisite for the implementation and a second commented that he expects significant cultural changes from local data and knowledge to more global collaboration as the PLM tool set evolves29. It can be concluded that the organisational culture seems to be a quite important success factor for the PLM implementation, however, the importance is differently evaluated by SVSI and EMC. This might be due to the fact that EMC tend to view the implementation of PLM in the first place as the replacement and consolidation of existing systems in order to improve the classic PDM functionality30 rather than a new business concept. 5.1.3 The role of organisational structure
The organisational structure has been changed and remodelled during the last decade in many companies. Different concepts in the 1990s like TQM, BPR, Lean Management and Concurrent Engineering challenged traditional organisational forms and often led to project management, team based approaches and process orientation. Although changing the organisational structure could make sense in a few instances the implementation of PLM will most likely not lead to radical structural changes which is proved by the fact that all EMC, responding to this question, stated, that the organisational structure has not been changed with the PLM implementation31. SVSI in this context emphasise the importance of project management, process orientation and cross-functional teams32. The implementation of network organisations as a means to better cope with the changing environment and the virtual integration of partners, suppliers and customers does not seem to play a role. This is not surprising when the strategic goals that are defined with the implementation of PLM33 are reviewed. Time to
27
The impact of company culture on implementation success is viewed by 42% as high and by 42% as medium. Moreover cultural changes are ranked as the most important change that is required after workflow changes (cf. Appendix C, question number 20). 28 cf. Appendix B, question number 24 29 cf. Appendix B, comments to question number 24 30 cf. Appendix B, question 1. The improvement of the classic functionality is viewed as one of the main goals by EMC. 31 cf. Appendix B, question number 23 32 cf. Appendix C, question number 13 33 cf. Appendix A, question number 1
34
Discussion
market reduction, better quality products and increase of productivity have already been well known strategies before PLM evolved and have also been addressed by programmes like TQM, BPR and the introduction of Lean Management. According to the fact that 'structure follows strategy' the basic organisational structure remains untouched in most cases of PLM implementations. However, it is important to realise that along the product lifecycle different phases need different set-ups, environments and structures. As already discussed in the introduction34, especially the early phase of product definition has a remarkable impact on the total product lifecycle costs. According to the concept of Concurrent respectively Collaborative Engineering the involvement of different individuals from different disciplines with different perspectives on the product definition process is important in this phase. Cross-functional teams have to be established and barriers between departments must diminish in order to run through the iteration loops as early as possible. The organisational form in this phase has to be coined by a project and process organisation.35 In this phase the PLM system can greatly support the product development by offering portals to virtually meet, review and change the product online. Although the great opportunities of online meetings exist the need for initial physical meetings should be emphasised. In the manufacturing planning phase the interaction between different departments becomes less important whereas in the production phase interaction and iterations tend to produce rather negative than positive results. In this phase functional departments will be more important than a project organisation. In summary it can be stated, that radical structural transformations like establishing a network organisation are viewed neither as prerequisite nor as an important success factor for implementing PLM. However, project management, process orientation and cross-functional teams are viewed as supportive for a PLM implementation (especially for the product development phase). 5.1.4 The role of the product development processes
There are two basic strategies how to handle processes during a PLM implementation. Either the PLM system will be customised to map existing processes or the existing processes will be customised to allow an implementation without customisations to the PLM systems. The product development process as core process of EMC and whose early phase determines to a large extent the product lifecycle costs36 is of special interest during a PLM implementation. The research result indicates that the product development process should be analysed and if necessary adjusted with the implementation of PLM in order to improve product development. Especially SVSI view the redefinition respectively reengineering of the product development process as the most important change.37 EMC only partially agree38 to this statement. However, the
34 35
cf. Introduction, page 1 cf. Appendix C, question number 13 36 cf. Introduction, page 1 37 cf. Appendix C, question number 11 38 cf. Appendix B, question number 22
35
Discussion
research results indicate that there is certainly room for improvement since Concurrent Engineering is only partially implemented39 in most companies. In most cases this does not mean that the product definition process has to be redefined from scratch according to BPR40. In many instances the workflow has to be changed to encourage collaboration and participation. Processes can be changed by changing responsibilities and transforming tasks in different areas without the need for changing the organisational structure. This can for example mean that tasks from production planning are transformed into the early design phase. It is important in this context to remark that processes can be changed without changing the organisational structure. Also possible is the improvement of processes through enabling of new techniques like collaborative workspace systems. It can be concluded, that especially the product definition process should be analysed and, if necessary, improved. Instead of top-down approaches like BPR most likely bottom-up approaches like workflow changes will be utilised. 5.1.5 The role of Change Management
The implementation of an enterprise-wide information system will always mean change to a certain extent, no matter if and to what degree it challenges existing culture, structure and processes. Therefore Change Management can play an important role to help managing the transition. The degree of change of course depends on the implementation strategy. Accordingly the Change Management tools and methods will vary depending on the implementation strategy. The success or failure of PLM will to a great extent be determined by implementation issues and especially by those that are dealing with the so called soft factors like human behaviour and attitude41. Resistance of users and middle management as well as putting too much focus on technological aspects and not enough on people related issues belong to the main problems of a PLM implementation42 whereas the early involvement of affected people belongs to the main success factors43. Senior Management seems to play an especially important role. Their engagement and support throughout the whole implementation process is viewed as an important prerequisite for the implementation success.44 Communication through different channels and in different ways45 plays an important role to gain acceptance and to involve and integrate employees whereas workshops as an effective but inefficient way of communication are mostly used46.
39 40
cf. Appendix B, question number 10 Hammer and Champy (1995) define BPR as 'the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements' 41 One interviewee estimated that at least 70% of implementation success are depending on people related issues 42 cf. Appendix A, question 16. 43 cf. Appendix A, question 17 44 cf. Appendix A, question 16 and 17 45 cf. Appendix A, question 12 46 cf. Appendix A, question 12
36
Discussion
The importance of utilising Change Management tools and methods is very well understood by PLM implementers. However, it seems that a Change Management concept is often not embedded as an strategic element in the overall implementation strategy, especially when no external consultant is involved. Selected Change Management tools are mostly intuitively and reactively used based on the experiences from former software implementations. Change Management tools that are used in major change initiatives like establishing a sense of urgency or the change of reward systems are relatively seldom found47. It can be summarised, that understanding a PLM implementation as a change process is viewed as highly beneficial. Proactively including a Change Management concept in the implementation strategy however is very seldom found. This is also due to the fact that senior management has to be convinced to approve additional money for a Change Management initiative. 5.1.6 The Return on Investment (ROI) and the impact of Change Management on implementation success
The implementation of PLM is a major investment for most Electronic Manufacturing Companies. Therefore the ROI is always a critical factor for senior management to investigate. Although several potential characteristics like time to market, cost reduction or quality improvement exist to evaluate a PLM implementation it is very hard to find reliable calculations48. This is often due to the fact that the implementation can easily last several years and it is often not clear if improvements are resulting from the PLM implementation or different reasons. Consequently it is even harder to calculate the impact of Change Management on the implementation success. The research results however indicate that implementation related issues and especially those that are dealing with human behaviour and attitude are very important. This is proved by the fact that all important success factors as well as implementation barriers can be addressed by Change Management. The probability is therefore very high that understanding the implementation of PLM as a change process has a positive impact on the implementation.49 The hypothesis, underlying the questionnaire, that Change Management has a significant impact on implementation success can therefore be confirmed. To further verify this statement different PLM implementations with different implementation approaches have to be benchmarked. 5.2 The relationship of the research results to published literature and research
The statement that an enterprise-wide information system like PLM impacts organisational culture, structure and processes is neither new nor unique to the implementation of a PLM system but can also be found at the implementation of other Information Systems (IS) like ERP or Groupware. Many theoreticians as well as
47 48
cf. Appendix A, question 14 cf. Appendix A, question 19 49 50 % of the SVSI rate the impact on the implementation success as high whereas 33% rate it as medium
37
Discussion
practitioners have emphasised in this context the importance of implementation issues during the introduction of a new business concept. Rohe (1998) states, that research indicates that 90% of failed implementations are not due to a wrong concept or strategy but due to neglecting the implementation phase. The research results of the dissertation in hand certainly support the view that people related issues are the most critical for implementation success. Moreover the research results agree with the published literature that utilising Change Management can be regarded as useful for helping through the implementation process. However the Change Management methods and tools that are used or are viewed as useful can differ from Change Management theory. Changing the reward system is e.g. viewed as less important although it is common practice to support and institutionalise changed behaviour50. This might be due to the fact that the implementation of PLM tends to be viewed more as incremental than as transformational change process. Furthermore the research supports the view of Krouse (1999) and Bourke (2000), that especially the aspect of inter-organisational collaboration challenges organisational culture of most companies. The statement that the implementation of PLM challenges organisational structure51, however, cannot be supported by the research. At least not the view that the implementation of PLM should ideally be supported by a network organisation52. Although the vertical and virtual integration (extended enterprise) is one of the main goals during a PLM implementation53, network organisations do not play a role. If a PLM system is to be implemented in a traditional and strictly hierarchical organised corporation without project management and process orientation than it can certainly agreed on this statement. Harrison (1995) and Bergh (1996) suggest that PDM/PLM works best in a reengineered environment. The research results show that reengineering mainly takes place in the product development process and on the level of workflow changes. The radical redesign of processes according to BPR54 however does not take place. In this context an interesting comparison can be drawn on the results of the research and a research that was carried out in 1995 (Bullinger, H. J. et al.) aiming to research critical success factors in reengineering projects. The research found, accordingly to the research of the dissertation in hand, the support of senior management as most important success factor. Other success factors were a participative company culture, an existing vision and the involvement of employees. 5.3 The appropriateness of data collection and methodology
There is no real alternative to literature research that has been used to become familiar with the topic under research in order to identify key concepts and theories. Also the chosen methodology of method triangulation by combining a quantitative research in form of a survey and a qualitative research in form of telephone interviews seems to be
50 51
cf. Stark (1999), Doppler and Lauterburg (2000) cf. Stark (1999) 52 cf. Introduction, p 7 53 cf. Appendix A, question 1 54 cf. Hammer and Champy (1993)
38
Discussion
the most suitable in hindsight in order to investigate the topic in the given time frame. Since the research started with the quantitative research and added a qualitative research another interesting instance of the methodology would have been to start with the interviews and then add the survey. This would have had the advantage that the questions in the questionnaire could more precisely address the main issues. A case study approach would have been difficult to carry out since it would have been problematic to make generalisations from only one sample. Longitudinal or action research did not seem possible due to the limited time frame. It should again be stated that the research has no statistical significance since the basis of the research is much to small. 5.4 The effect on professional practice
Different strategies can be applied to implement PLM whereas the strategies can vary in scope and scale. The easiest way to implement is surely to understand the introduction of a PLM system as a replacement or legacy system for an older or maybe various older systems. In this case the implementation will most likely only result in minor changes; for the affected people as well as for the business results. The implementation of an enterprise wide Information System (IS) like PLM, however, can also be understood as an opportunity to rethink and if necessary change existing processes, culture and structure. The way these changes are implemented can vary from transformational topdown approaches to incremental bottom up approaches. Especially the transformational approaches will most likely result in major changes but also bear the risk of producing negative results. The following paragraph discusses different implementation strategies and highlights specific opportunities and threats. 5.4.1 The implementation strategy
A common implementation strategy firstly replaces and consolidates existing systems in order to achieve relatively quick wins. From this basis it is tried to incrementally improve the status quo with the advanced PLM functionality and opportunities that become clear during the first implementation phase. This implementation approach, although suitable for many companies, bears two risks. The first risk is that the budget is empty after achieving the status quo which means that the phase of improving will be postponed or never be carried out. The second risk is that although the status quo is incrementally improved it can be that ineffective and inefficient processes have been improved. Therefore it is important to realise that the implementation strategy should always be dependent on the size, background and current situation of a company. The implementation approach for a locally operating, 'traditional' SMC company will most likely be different than for an international operating Fortune 500 company. Therefore the analysis of existing product related processes as well as the predominant corporate culture is critical. A diagnosis, based on the analysis should provide a clear basis for
39
Discussion
decision making55. Moreover, it should result in being able to answer the question if and what kind of change is necessary and what kind of resistance the initiative will most likely face56. A measurable goal, depending on the analysis of the 'as is' situation and the diagnosis, should be defined, connected with a strategy in form of an implementation plan on how to reach this goal. One of the implementation goals must be to "harmonise a new concept with an existing context" (Reiss, 1997). The overall concept must therefore be flexible designed in order to make customisations and adoptions to the existing context57. A simplified description of different change strategies diversifies in incremental and transformational change approaches58. Incremental change that uses existing structures is slow but also low risk59 and often uses bottom-up approaches (evolutionary process). On the other hand transformational or radical change challenges existing structures, is fast but also high risk.60 Transformational change concentrates on major improvements and is mostly top down driven. All facets between those two extremes including the combination of both are of course also possible whereas the research, especially the research result gained from EMC, shows a clear tendency to incremental change approaches. It can be argued, that incremental change to continually improve existing processes with the new possibilities of PLM systems might be suitable for a 'modern' company that has already implemented a process oriented organisation, project management and Concurrent Engineering. Consequently, transformational change would be suitable for a 'traditional' and strictly hierarchical organised SMC that is not process focussed yet and firstly needs a reengineered environment before PLM can be successfully implemented. However, it can also be argued the other way round, that the capacity for change61 in a 'modern' company is much higher than in a 'traditional' company and therefore transformational change can only be successful here. No matter what implementation approach is chosen it is important to realise that the implementation of change moves always along the two dimensions of opportunity and risk. More opportunity means more risk and vice versa. An implementation approach that is relatively balanced and promising regarding opportunities and risks uses spinoffs, newly established departments or daughter companies to implement and test the new approach. If successful the new approach is transferred to the rest of the organisation or the mother company. A different approach that combines relatively high opportunities with relatively low risks uses selected pilot areas for implementations. The success of this strategy is of course very much dependent on the project that is chosen and how well the chosen pilot area can act as a role model. 62 Regarding the implementation of PLM this can mean that the new approach is either tested in a newly established department or a daughter company. This has the advantage that new
55 56
cf. Doppler and Lauterburg (2000) cf. Reiss (1997) 57 cf. Reiss (1997) 58 cf. Stark (1999), Nadler, Shaw, Walton (1995) 59 cf. Stark (1999) 60 cf. Stark (1999) 61 cf. Pagliarelli (2000) 62 cf. Reiss (1997)
40
Discussion
approaches are not facing so much resistance as in well established areas. If successful, they are transferred to the mother company. In the pilot area approach PLM would be implemented i.e. in the most successful product line of a selected business unit and then transferred to the rest of the organisation. 5.4.2 Appropriate Change Management methods and tools
In this section Change Management tools are introduced that are arising from the research results respectively the interpretation of them and therefore seem to be appropriate for a PLM implementation. Diagnosis: Diagnosis is an important tool to evaluate the current state and condition of a company in order to have a clear basis for defining appropriate action. A diagnosis can be based on a employee survey or on interviews carried out for the whole company or for a representative cross-section63. Since organisational culture seems to play an important role, the diagnosis can aid in determine the predominant culture and defining the target culture. To ensure neutrality the diagnosis should be done by an external institute64. Senior management: Senior management seems to be one of the most critical success factors during a PLM implementation. Commitment and (vocally and visibly) support during the whole implementation phase seems to be critical. This can i.e. mean that senior management writes about the importance of the PLM implementation in the internal newspaper or by frequently visiting the implementation team. Although not directly arising from the questionnaire but from the interviews it is important that senior management is 'walking the talk'65 and serves as an example. In practice this can mean that senior management has to show a collaborative behaviour when collaboration is one of the goals of the PLM implementation. Therefore it is important to create awareness at senior management level about their important role during a PLM implementation Communication: Communication throughout the whole change process has mainly two goals. The first goal is to explain why the changes are necessary and what the aims are in order to address initial fears and resistance. The second is to involve the people that are affected by the changes as early as possible to gain acceptance. In the context of PLM this can mean that PLM is introduced in the internal newspaper or in the Intranet. Although these are very efficient one way communication vehicles a more effective two way communication vehicle would be workshops or employee surveys where feedback from employees can be gathered. Coaching: Coaching people during the change process and facilitate learning of the skills that are needed to deal successfully with the new environment is essential. The basic requirement for a PLM implementation is software functionality training. Moreover training about the basic ideas of PLM as well as in team working should be
63 64
cf. Doppler and Lauterburg (2000) cf. Doppler and Lauterburg (2000) 65 cf. Senge et al. (1999)
41
Discussion
beneficial. In the event of workflow changes where also responsibilities are changed it can make sense to train how to handle responsibility. Marketing: Marketing is especially important when a pilot group implementation approach is chosen. The innovative practices have to be diffused to the rest of the organisation. The so called 'not invented here syndrome' however makes the transformation often problematic. Therefore a marketing concept is necessary to introduce new concepts and publish successes. An informal but very efficient way of diffusing are Communities of Practice (CoP)66. CoP are "groups that form to share what they know, and to learn from one another regarding some aspect of their work " (The Distance Consulting Company, 2000). Key can also be used to transfer the new approaches. Institutionalising of new approaches: According to the results gained from the survey and interviews, new approaches are seldom institutionalised. This, however, is viewed as an important element of a change initiative by theoreticians in order to hold the gains of an improved state and to avoid erosion effects. Therefore, this should also be beneficial for a PLM implementation, especially for the aspect of collaboration. Collaboration can for example be encouraged by regular meetings between different departments where new ideas or current problems are freely exchanged. These meetings would serve to anchor collaborative behaviour in the company culture.
66
cf. Senge et al. (1999)
42
Conclusions
6
Conclusions
This chapter provides a summary on the principle features of the dissertation. The main findings are reviewed as well as the key concepts and theories that were identified in the literature. Additionally, suggestions for business and management practice is given followed by recommendations for future research. 6.1 Summary of principal features
It was shown in the introduction that the environment of manufacturing companies and in particular of Electronic Manufacturing Companies (EMC) is coined by time to market reduction, increased variety and complexity resulting from various trends like globalisation, mass customisation and increased outsourcing. Those companies that are able to effectively develop and introduce new products in this environment are said to have a competitive advantage. Product Lifecycle Management (PLM), that has evolved from Product Data Management (PDM) can support manufacturing companies in this environment by providing an "enterprise-wide infrastructure "to support management of product related data throughout its complete lifecycle"67 (from initial concept to product obsolescence). Including workflow management, PLM systems, as a single source of product information, ensure that up to date information are available and accessible for the right people in the right format at the right time. According to Miller (1998e) the product lifecycle is comprised of three primary processes: product definition, product production and operations support. Especially interesting for the product lifecycle is the product definition process and especially the early phase where fundamental design choices are made and 80% of the product lifecycle costs are determined according to various studies68. The introduction explains that the concept of 'Concurrent Engineering' aims to improve the product development process and especially the early design phase. Breaking down the barriers of functional departments and involving individuals with different perspectives on the product development process by setting up physical co-located and cross-functional teams facilitates this. Globalisation and increased outsourcing, however, require not only intraorganisational but also inter-organisational teamwork. It is therefore important to realise that PLM does not only provide functionality for controlling product related data but also to collaborate and support inter-organisational and virtual co-located product development teams. PLM is therefore viewed as an "effective tool in managing the product definition supply chain by serving as an informational bridge connecting OEM's, partners, subcontractors, vendors, consultants and customers (Miller, 1998f). According to the vision of PLM it requires intense collaboration especially in the early design phase, inside and outside the company and across geographic regions. Companies must therefore implement processes and structures for collaboratively sharing product related information. The sharing of data and transferring of data ownership is often counter-cultural. The implementation of PLM involves therefore not
67 68
cf. Portella (2000) cf. Nevins et al. (1989)
43
Conclusions
only structural but also cultural changes in a company. Consequently, the success of a PLM implementation should heavily rely on the willingness of the company to accept change and especially on the people that must form inter-organisational and crossfunctional teams to collaboratively develop products. However, people are not likely to change the way they have been successfully working. Resistance to change is therefore the natural reaction. According to researchers the source of resistance is mostly fear of the unknown and uncertainty. Uncertainty however can reduce productivity and even paralyse a whole organisation. Changing a culture, structures or processes is therefore risky and often not successful, which is proved by many studies (i.e. Kotter 1995). In order to address this aspect the literature review in chapter two has shown that researchers and practitioners alike are proposing the utilisation of Organisational Change Management that aims to provide an implementation friendly environment. Organisational Change Management, which deals with the emotional reaction to change, provides different concepts, tools and methods like early communication and early participation to gain acceptance for change. Chapter three has explained the methodology that was used to answer the research question about 'The Impact of Organisational Change Management on the Success of a PLM Implementation'. Based on literature research a questionnaire has been developed in order to find out: What kind of companies are implementing PLM The implications of a PLM implementation on culture, structure and processes. If the implementation of PLM is viewed as a change process and if and what Change Management concepts and tools are utilised The questionnaire has been sent to Electronics Manufacturing Companies (EMC), Software Vendors and System Integrators (SVSI) in the area of PLM. Additionally, telephone interviews have been conducted to triangulate the topic. 6.2 Major findings
The dissertation has pointed out that many researchers emphasise that the reason for failure of new concepts is very often due to a poor implementation rather than to the concept itself. The literature review in chapter two has explained that not addressing people related issues like resistance is named in most cases for implementation failure. Accordingly also some researchers and practitioners in the field of PLM emphasise the importance of these issues and remind us on the implications that the redefinition of processes and the need for collaboration might have. Organisational Change Management that has its roots in the science of psychology aims to gain acceptance for changes by the affected people. The Change Management concepts methods and tools vary. Basic elements however are : A vision to align the organisation Communicating why the changes are necessary Involving affected people actively in the change process (participation) Provide people with the skills to actively support the change process Marketing of new approaches Institutionalise new approaches to avoid erosion effects
44
Conclusions
The discussion has shown that the research results support the key concepts of the literature that the implementation of PLM has to be viewed as a change process that impacts organisational culture and processes. Organisational structures, however, do not seem to be impacted. It was also shown that the results gained from SVSI support these views even more than those gained from EMC. Although not measurable in numbers the research results have shown that the impact of utilising Change Management is viewed as relatively high. Although the impact is viewed that way; a Change Management concept is seldom a strategic element of the implementation plan. Consequently Change Management tools and methods are mainly utilised reactively instead of proactively. 6.3 Suggestions for business practice
It is important to realise that there are two main pitfalls when implementing a PLM system. The first pitfall can be described as defining the implementation scope as too narrow. This includes the danger that the PLM system is implemented only as a legacy system that replaces or consolidates various older systems without questioning processes, responsibilities and tasks. This implementation approach will most likely lead to only minor changes, in the organisation as well as in business results The second pitfall can be seen in the risk of defining a too broad implementation goal that not only implements a new product related enterprise-wide information system but also radically challenges existing structures and culture. In this case the implementation will be expensive, the organisation will not be capable to cope and the changes will most likely never lead to the anticipated results. The discussion in chapter five has shown that it is important to realise that implementation strategy should be dependent on the type of company. An analysis of the processes and the organisational issues is therefore essential to diagnose what kind of change is appropriate in order to reach the implementation goal. Depending on the result of the diagnosis an appropriate Change Management concept should be integrated in the overall implementation plan to provide an holistic implementation approach. The biggest challenge however might be to create awareness at senior management level and to convince senior management to release additional money for the Change Management initiative in order to improve the likelihood of a flawless and successful implementation. All change results in risk and opportunity. A promising implementation approach that combines a relatively high opportunity for changes with a relatively low risk uses selected pilot areas for implementation. The innovative processes have then to be transferred to the rest of the organisation. Marketing of the new approaches plays at this point an important role. The success of this approach is furthermore dependent on how well the pilot area can act as a role model.
45
Conclusions
It can be concluded, that PLM offers new opportunities for EMC, especially regarding the improvement of the product development process. To what degree and in what time the product development process can be improved depends on several factors like the implementation approach and the company culture. Change Management can play an important role during the implementation phase to facilitate changes in processes as well as in the corporate culture. 6.4 Recommendations for future research
The dissertation has shown that there are no measurement criteria existing that have common acceptance to evaluate the success of a PLM implementation. An interesting issue for future research should therefore be the development of a framework to evaluate a PLM implementation in order to benchmark different implementation strategies. Although the research has shown that organisational culture is viewed as an important factor for implementation success many aspects have not or only partially been addressed and might be interesting for future research. These include the following questions: What company culture is best supporting PLM? How can the company culture be changed to this culture? How do different company cultures affect the success of supply chain collaboration? The intercultural aspect of globally dispersed teams? Empowering of teams in the light of intercultural aspects? Finally, the aspect of knowledge management seems to be interesting for further research. Especially the interviews have highlighted the aspect that PLM is also viewed as a tool for managing knowledge in order to keep and globally provide product development know-how. Further research could investigate what factors are important for additionally using a PLM system for knowledge management.
46
Bibliography
7
7.1
Bibliography
Textbooks
Argyris, C. (1978) Organizational Learning. Reading, MA: Addison-Wesley. Argyris, C. (1990) Overcoming Organizational Defenses. Allyn and Bacon. Argyris, C. (1991) Teaching Smart People How to Learn, pp 1-19 in Harvard Business Review on Knowledge. Boston: Harvard Business School Press. Askenas, R.; Ulrich, D.; Todd, J.; Kerr, S. (1995) The Boundaryless Organisation: Breaking the change of organisational structure. San Francisco: Jossey-Bass Publishers. Block, P. (1981) Flawless Consulting, pp 113-146. San Francisco, CA: Pfeiffer & Company Bridges, W. (1991) Managing Transitions: Making the most of Change Reading, MA: Addison-Wesley Publisher Bullinger, H.-J.; Wiedemann, G.; Niemeier, J. (1995) Business Reengineering. Aktuelle Managementkonzepte in Deutschland. Stuttgart Collins, J. and Porras, J. (1994) Built to Last. New York: Harper Collins Conner, D. R. (1998) Managing at the speed of change. Chichester, England: John Wiley and Sons Ltd. Cummings, T. and Worley C. (1997) Organization Development and Change 6th edition. Cincinnati : South Western College Publishing. Dobiey, D. and Wargin, J.J. (2001) Management of Change. Bonn: Galileo Business Drucker, P.F. (1988) The coming of the new organisation, pp 1-19 in Harvard Business Review on Knowledge. Boston: Harvard Business School Press Duck, J.D. (1993) Managing Change: The art of balancing, pp 55-81 in Harvard Business Review on Change. Boston: Harvard Business School Press. Gattermeyer, W. , Al-Ani, A. (2000) Entwicklung und Umsetzung von Change Management Programmen, pp 13-37 in Change Management und Unternehmenserfolg. Hammer, M. and Champy, J. (1993) Reengineering the Corporation, A Manifesto for business Revolution. New York: Harper Collins. Hofstede, G. (1991) Cultures and Organizations. New York: McGraw-Hill.
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Kotter, J.P., Heskett, J. L. (1992) Corporate Culture and Performance NYC: The Free Press. Kotter, J.P. (1996) Leading Change: Why transformation efforts fail, pp 1-19 in Harvard Business Review on Change. Boston: Harvard Business School Press. Kotter, J.P. (1997) Leading Change. Boston: Harvard Business School Press. Larkin, S and Larkin, T.J. (1994) Communicating Change, 2nd edition, New York: McGraw Hill. Lipnak, J., Stamp, J. (1997) Virtual Teams: Reaching across Space, Time and Organization with Technology. New York: John Wiley & Sons. Martin, R. (1993) Changing the mind of the corporation, pp 113-138 in Harvard Business Review on Change. Boston: Harvard Business School Press; Mohrman, S. A.; Cohen, S. G.; Mohrmann, A. M. (1995) Designing Team-Based Organisations: New Forms of Knowledge Work. San Francisco: Jossey Bass Publishers. Moss Kanter, R., Stein, B.A., Jick, T.D. (1992) The Challenge of Organizational Change. New York: The Free Press. Moss Kanter, R. (2001) e-Volve! Boston: Harvard Business School Press. Nadler, D., Shaw, R., Walton, E. (1995) Discontinuous Change: Leading Organizational Transformations. San Francisco: Jossey Bass Publishers. Nevins et al. (1989) Concurrent Design of Products and Processes. New York: McGraw-Hill. Orlikowski, W.J. and Walsham, G. (Eds) (1996) Information Technology and Changes in Organisational Work. London: Chapman & Hall. Paashuis, V. (1997) The Organisation of Integrated Product Development Berlin, Heidelberg: Springer-Verlag. Pagliarella, A. (2000) Developing and Unleashing a Capacity to Change, pp 41-56 in Change Management und Unternehmenserfolg. Reiss, M., von Rosenstiel, L., Lanz, A. (1997) Change Management Stuttgart: Schaeffer-Poeschel. Rohe, C. (1997) Risiko und Erfolgsfaktor Nr.1: Implementierung in Spalink, H. (eds) Werkzeuge für das Change Management. Edition Blickbuch Wirtschaft, Frankfurt
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Bibliography
Schaffer, R.H., Thomson, H. M. (1992) Successful Change Programs begin with Results, pp 189-213 in Harvard Business Review on Change. Boston: Harvard Business School Press. Schein, E.H. (1989) Organizational Culture and Leadership San Francisco: Jossey Bass Publishers. Schoettener, J. (1999) Produktdatenmanagement in der Fertigungsindustrie Muenchen: Hanser Verlag. Siegwart, H. and Senti, R. (1995) Product Life Cycle Mangement. Die Gestaltung eines integrierten Produktlebenszyklus. Stuttgart: Schaeffer Verlag. Senge, P.M. (1990) The Fifth Discipline: The Art and Practice of the Learning Organisation. New York: Currency Doubleday. Senge et al. (1999) The Dance of Change. London: Nicholas Brealey Publishing Ltd. Spalink, R. (1998) Werkzeuge für das Change Management Frankfurt: Frankfurter Allgemeine Zeitung, Verlagsbereich Wirtschaftsbücher. Smith, P.G., Reinertsen D. G. (1995) Developing Products in half the Time New York: van Nostrand Reinhold. Strebel, P. (1996) Why do employees resist change?. pp 139-157. Harvard Business Review on Change. Boston: Harvard Business School Press. Turner, J. (1998) The role of information technology in organisational transformation, pp. 245-260, in Galliers, R.D. andd Baets, W.R.J. (Eds), Information Technology and Organizational Transformation: Innovation for the 21st Century Organization. Chichester: John Wiley nd Sons Ltd.. White, B. (2000) Dissertation Skills for Business and Mangement Students.London/New York: Cassell.
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7.2
Articles (from Journals and through Internet search)
Anon. (1995) Product Data Management - Understanding the Fundamental Technology and Business Concepts
http://www.cocreate.com/english/products/pdm/pdm.pdf
Anon. (1996) Business Process Re-engineering: Integrating Business Transformation Approaches. Gartner Group report, Document No. R-4000-103, 25. October 1996 Anon. (1999) Obstacles to Effective Product Development (White Paper). http://www.ptc.com/products/windchill. 15. April 1999. Anon. (2000) cPDM - the Key to Harnessing Innovation in an E-Business World. CIMdata report, http://www.cimdata.com/PDM_main.htm Aberdeen Group (1999) Collaborative Product Commerce: Delivering Product Innovations at Internet Speed. Market Viewpoint, Vol. 12 No.9, 1999 Al-Timimi, K. and Timmermann, H. (1999) Managing the Product Lifecycle-an overview. Engineering Data Newsletter, Vol 7 No.8, October 1999. http://www.datamation.co.uk/samples/edu00/e708sp1.html Avgerou, C. (2000) Trying to improve communication with information technology. Information Technology and People, Vol. 13 No.4, 2000, pp. 234-262 Bergh, L. (1996) Before the PDM project starts: What should you know? Engineering Department Management and Administration Report, Issue 96-1 Black, J., Edward, S. (2001) Emergence of virtual or network organisations Journal of Organizational Change Management, Vol. 13 No.6, 2000, pp. 359-388 Bourke, R. W. (2000) Avoiding the implementation Iceberg. Midrange ERP, May 2000 Bourke, R. W. (2000) CPC: A Leap Forward. Midrange ERP, September 2000 Bourke, R. W. (2001) Best Practices in Web-Enabled Collaborative Product Development. 2PDM e-zine, Vol. 4, Number 2 Bridges, W.; Mitchell, S. (2000) Leading Transition: A new model for Change Leader to Leader, No. 16, Spring 2000 http://pfdf.org/leaderbooks/L2L/spring2000/bridges.html Burdick, D. (2000) Collaborative Product Commerce: The Technology Vision Ciborra, C.U. (1991) From thinking to tinkering: the grassroots of strategic information systems. Proceedings of the 12th International Conference on Information Systems, New York, NY
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CIMdata (2000) cPDM - the Key to Harnessing innovation in an E-Business World http://www.pdmic.com/articles/artl701.html CIMdata (2001) collaborative Product Definition Management (cPDM): an Overview. CIMData Report, August, 2001, http://www.pdmic.com/ CMstat (1996) PDM Industry White Paper. Focus on Configuration Management. http://www.pdmic.com/articles/wppdmfcm.html. Conaway, J. (1995) Integrated product Development: The technology (White Paper) http://www.cimdata.com/PDM_Main.htm Crompton, C. (2000) Manage Knowledge to Facilitate Collaboration--Part 1. Incentive Systems to promote collaborative behaviour (Report # HR-48) de Geus, A. (1988) Planning as Learning. Harvard Business Review, March/April 1988, p. 74 Goldfarb, E. (2000) The CIO as Coach. The CIO Magazine, July 15, 2000 Guha, A. (2001) Value Net Collaboration. 2PDM e-zine, Vol. 3, Number 18 Hesselbein, F. (1998) Journey to Transformation. Leader to Leader, No. 16, Spring 2000 http://pfdf.org/leaderbooks/L2L/winter1998/fh.html Krouse, J. (2001a) The Real Value of Collaborative Tools. Engineering Process Journal, Issue 01-03 Krouse, J. (2001b) The Scary Part of Collaboration. Engineering Process Journal, Issue 01-10 Maynard, J., Goodreau, W. (2000) Beating the competition with Collaborative Product Commerce-Leveraging the Internet for new Product innovation. Aberdeen Group report, June 2000 http://www.aberdeen.com/ab_company_hottopics/cpc Marshall, J. and Conner, D.R. (1996) Another Reason why companies resist change. Strategy and Business (Booz, Allen and Hamilton), First Quarter 1996 http://www.strategy-business.com/briefs/96101/page1.html Miller, E. (1997) What's PDM. Computer-Aided Engineering Magazine, September 1997 http://www.cimdata.com/article9709.htm Miller, E. (1998a) PDM's Big Conflicts and Huge Potential. Computer-Aided Engineering Magazine, June 1998
http://www.cimdata.com/article9806.html
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Miller, E. (1998b) The Need for New Thinking. Computer-Aided Engineering Magazine, August 1998 http://www.cimdata.com/article9808.html Miller, E. (1998c) Resolving Organizational Conflicts Computer-Aided Engineering Magazine, September 1998 http://www.cimdata.com/article9809.html Miller, E. (1998d) PDM Moves to the Mainstream Computer-Aided Engineering Magazine, October 1998 http://www.cimdata.com/article_me_10_98.htm Miller, E. (1998e) Intertwined Information Technologies Computer-Aided Engineering Magazine, October 1998
http://www.cimdata.com/article9810.html
Miller, E. (1998f) Managing the Design Supply Chain Computer-Aided Engineering Magazine, November 1998 http://www.cimdata.com/article9811.html Miller, E. (1999a) Integrating PDM and ERP Midrange ERP, March 1999 http://www.cimdata.com/article_cae_03_99.htm Miller, E. (1999b) Industries that influence PDM Computer-Aided Engineering Magazine, April 1999 http://www.cimdata.com/article9904.htm Miller, E. (1999c) Reaching Beyond Design Engineering Computer-Aided Engineering Magazine, August 1999 http://www.cimdata.com/article_08_99.htm Moreno, V. (1999) On the social implications of organisational reengineering Information Technology and People, Vol. 12 No.4, 1999, pp. 359-388 Nadamuni, D. (1999) New Directions in the PDM Market Gartner Group-Dataquest report, May 31, 1999 Nickols, F. (2000) Change Management 101:A Primer http://home/att.net/~nickols/change.htm Olesen K. and Myers, M. D. (1999) Trying to improve communication with information technology. Information Technology and People, Vol. 12 No.4, 1999, pp. 317-332 Pawar, K., Sharifi, S. (2000) Virtual colloction of design teams: coordinating for speed International Journal of Agile Management Systems, Vol. 2 No.2, 2000, pp. 104-113
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Pennel, J.P. and Winner R. I. (1989) Concurrent engineering: practices and prospects, IEEE Global telecommunication Conference and Exhibition. Part 1, Institute for Defense Analyses, 27-30 November, pp. 647-655 Peterson, N. (2001) Beyond the Hype - Portals emerge as the enterprise Vehicle for Collaboration. Solve!, Vol. 2 No.2, 2001, pp. 3-5. Portella, J., (2000) Collaborative Management of the Product Definition Lifecycle for the 21st Century, PDT Europe Conference, 3 May 2000, Noordwijk. Rafii, F. (1995) How important is physical collocation to product development process? Business Horizons January/February, pp. 78-84 Rigby, C. et al. (2001) CADCAM integration and the practical politics of technological change. International Journal of Agile Management Systems, Vol. 2 No.3, 2000, pp. 178-186 Romano, J. (2001) Proficiency Closes $27 Million Investment Round,http://www.mcadcafe.com/NEWS/MCAD_News/20010611_proficiency.html Press Release, June 11, 2001 Rowell, A. A. (2001) Is Product Lifecycle Management (PLM) the key to unlocking the Digital Enterprise? MCADvision Magazine, Nov. 2001 Scott Tsao, S. (1993) An Overview of Product Information Management Pan Pacific Conference on Information Systems, May 30 - June 1, 1993 Stark, J. (1999) PDM and Change Management http://www.johnstark.com/mc3.html Tan, S. (1997) Product Data Management: An End-User Study Gartner Group-Dataquest report, May 26, 1997 Tantoush, T., Clegg, S. (2001) CADCAM integration and the practical politics of technological change. Journal of Organizational Change Management, Vol. 14 No.1, 2001, pp. 9-27 Wagemann, R. (1996) Investigating New Frontiers: Understanding When and How to Implement Empowerment http://www.urich.edu/~eylon/ Wildermann, B. (2001) The state of supply chain collaboration META Group report (www.metagroup.com)
53
Appendix A: Questionnaires - Summary (All)
Appendix A: Questionnaires - Summary (All)
n=20
1. What goals are important to define (should be defined) for the implementation of a Product Lifecycle Management (PLM) system? Respectively 'What were the most important reasons for the decision to implement a PLM solution?'
Rank XXX 1 2 very important 3 12 11 important less important 1 not important 0 ? No ?/No
Weight/Factor 2 X X XXX Reduce time to market 7 50 19 2,6 Enabling extended enterprises through 4 3 44 18 2,4 integration of customers and suppliers 3 Increase productivity 9 9 1 46 19 2,4 3 Improve quality 9 9 1 46 19 2,4 5 Integrate “internal islands of 8 6 2 2 38 18 2,1 automation” ** 6 Improve classic PDM functionality * 6 9 4 40 19 2,1 6 Support the overall business strategy 6 8 3 1 37 18 2,1 9 Redefine the product development 5 10 4 39 19 2,1 process 7 More innovation/new products 6 8 1 3 35 18 1,9 8 Improve customer orientation 5 8 4 2 35 19 1,8 11 Enabling “mass customisation” *** (i.e. 8 6 3 22 17 1,3 through part configurators accessible via the Internet) * product data vaulting/warehousing, part classification, search functionality, cross referencing, revision control, workflow, electronic engineering change management, document management ** integrate different CA –Tools; integrate several databases storing product related data into one (single point of access) *** also known as “built to order”, “manufacturing for the individual” or “customer driven manufacturing”, the opposite of mass production or built to stock
Comments: Question is difficult to answer because all improvement initiatives and solutions have more or less these same objectives. So this is not a discriminator for PLM. A lot of customers would be happy to have this classic PDM function in place.
2. Who is normally involved in the product definition process?
Rank XXX 1 2 3 4 5 6 7 8 9 10 Weight/Factor Product Design/Engineering Research&Development Manufacturing Supplier Purchasing/Procurement Marketing Senior Management (CEO, CTO, ...) Customer Service Sales frequently 3 18 14 5 6 4 7 7 1 2 3 occasionally 2 1 4 9 7 8 7 5 10 9 5 seldom 1 1 4 3 4 3 5 5 8 never 0 ? X 56 51 33 36 31 39 34 28 29 27 No X 19 19 14 17 15 19 17 16 17 17 ?/No XX 2,9 2,7 2,4 2,1 2,1 2,1 2 1,8 1,7 1,6
1 2 1 1
Comments:
-
Again difficult to answer: you are asking who IS today, not who should. Therefore I answered occasionally for most, even though they should be involved frequently (in my opinion). Depends on the phase in the development cycle.
54
Appendix A: Questionnaires - Summary (All)
3. Who has normally access to and is using a PLM system? (A= Access ; U =Using)
Research & Development Product Design/Engineering Purchasing/Procurement Marketing Manufacturing Sales Service Senior Management (CEO, CTO,...) Customer Supplier frequently A(1),U(8) A(1),U(11) A(2),U(5) A(2),U(1) U(6) U(2) A(1),U(3) A(1) A(1) U(2) occasionally A(1),U(2) U(1) A(4),U(3) A(4),U(2) A(2),U(3) A(4),U(2) A(1),U(6) A(2),U(2) A(2),U(2) A(3),U(5) seldom U(1) never
A(1),U(2) A(1),U(1) A(1),U(4) A(2),U(1) A(3),U(2) A(3),U(4) A(3)
1 1 3 2
Comments: Sales uses CRM (which has links to PLM), Suppliers usage is increasing 4. Is a (shared) vision with the implementation of a PLM system being established (i.e. “we want to be the No 1 in customer service/we want to manufacture the most innovative products”)?
Rank 1 2 3 4 Sometimes Normally not Yes No ? 10 2 2 2 % 62 13 13 13
Comments: But this is key and the vision should be provable 5. Is an ‘as is’ (current state) analysis of the product development process being performed before implementing?
Rank 1 2 3 4 Sometimes Yes Normally not No ? 8 8 1 0 % 47 47 6 0
Comments: We prefer a ‘should be’ approach 6. Is a strategy defined how to reach the ‘to be’ (target) situation defined in the vision?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 11 6 0 0 % 65 35 0 0
Comments: For large scale projects the answer is yes.
55
Appendix A: Questionnaires - Summary (All)
7. Is a pilot group testing the new scenario being established?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 11 4 1 0 % 69 25 6 0
Comments: More likely to be normally not, but still sometimes it happens. 8. Does the implementation slow down the productivity of companies?
Rank 1 2 3 4 A little bit No Significantly Dramatically ? 10 6 1 % 59 35 6
Comments: The PLM roadmap should actively deal with risks like decreasing productivity and should include strategies to avoid or minimise these risks. The aim clearly is not to negatively influence productivity. For that reason a strategy and a good preparation are necessary. 9. Is there an interface to the ERP (i.e. SAP) system?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 12 4 0 1 % 71 24 0 6
Comments: This is always customer and business specific. All the cases appear in our projects. 10. If there is an interface, how is ownership of data respectively transformation of ownership in the product development process been regulated?
Rank 1 2 3 5 Data is kept in both systems Master data is transferred from PLM in ERP system Master data is kept in ERP system Master data is kept in PLM system ? 7 4 5 2 % 39 22 28 11
Comments: You will find all kind of projects. It depends of the customer and of the industry! Project dependent.
56
Appendix A: Questionnaires - Summary (All)
11. What changes are required to successfully implement a PLM system?
Rank XXX 1 Weight/Factor Reengineering/Redefinition of product development processes (i.e. interdisciplinary virtual team approaches, workflow changes) Cultural changes (i.e. open communication and collaboration culture) Empowering of people / teams (i.e. designers having direct customer contact) Changes in the organisational model (i.e. removing of layers, networked organisation) Product line rationalisation (i.e. to enable mass customisation) Other: Establishing a new business model (e.g. “Full Service Provider” instead of “Product Manufacturer”) Other: Management awareness very important 3 6 important 2 7 less important 1 not important ? X 32 No ?/No X 13 XX 2,5
2 3 4 5
7 5 3
3 3 6 6
2 5 3 5 1
29 26 24 17
12 13 13 11
2,4 2 1,8 1,5
1 1
12. How is the implementation of a PLM system and the changes required hereof communicated with the people affected? (n=18)
Rank 1 2 3 4 5 6 7 8 9 10 Workshops Intranet Notice Board e-mail Internal newspaper Employee Survey Global Town Hall Meetings Other: Awareness Sessions (2 hour Meetings) that will be combined with feedback questionnaires Other: PLM Solution Lab No communication required ? 14 12 12 8 9 7 6 1 1 0 % 78 67 67 44 50 39 33 6 6 0
Comments: Since PLM is an integration program, a marketing and communication strategy and roadmap is required. All channels/media for internal and external (suppliers, customers, partners) communication should be part of this strategy.
57
Appendix A: Questionnaires - Summary (All)
13. What changes in the organisational structure are necessary to best support PLM? Please describe.
-
-
Destroy functional borders into the product definition process. Build groups with all roles to fulfil the product definition process. IT should be part of the product definition process – end user satisfaction is key! Ports the factory planning and simulation process earlier in the product definition process. Use the DM function to simulate the production process as early as possible. Changes towards process and product orientation should be initiated. This could mean more responsibility for project managers (in product development programs) or the decision to establish product managers for strategic product lines. Implementation of process organisation Implementation of project management Implementation of cross functional teams This depends very much on the type of organisation, the type of product and the management style the specific company has adopted or wants to adopt. Not one answer possible. For the implementation absolutely necessary is the end of the thinking in departments and of possessing of product data by departments or people. Product Managers should be stronger than department managers Bonuses of product managers should be linked to success of PLM People need to be motivated, solutions must be sold internally No changes are necessary but a good project/process oriented organisation is a good starting point for success Establish global process, involving several partners
14. What of the following organisational change management methods/tools are used during the implementation of a PLM system?
Rank XXX 1 1 3 4 5 6 7 8 9 10 11 12 12 14 15 16 17 18 Weight/Factor Early involvement of people being affected Establishing a concept to regularly communicate with people involved Establishing a (shared and motivating) vision Create an atmosphere of openness and trust Planning, realising and celebrating short term wins (to build confidence) Aligning and mobilising leaders Coaching of people involved Build a critical mass for change: buy-in and stayin Vocal and visible support of senior management (walking the talk) Dealing with resistance Facilitate learning/skill building (to acquire new behaviour) Feedback (i.e. through employee survey, customer inquiry, 360° Feedback) Establishing a sense of urgency (burning platform) Empowering people/teams to act on the vision defined Implementation of change agents/promoters Institutionalise new approaches Hiring, promoting, developing employees who can implement the vision Changing reward systems to support the change initiative frequently /yes 3 11 11 10 9 8 8 6 6 5 4 4 3 2 2 4 2 1 occasionally /partially 2 4 4 3 6 5 5 4 6 8 9 8 9 10 10 5 4 6 5 seldom 1 2 2 2 1 2 4 2 1 2 2 3 2 3 2 3 6 6 6 never /no 0 ? X 43 43 38 40 36 38 28 32 33 32 31 29 29 28 25 20 18 16 No ?/No X 17 17 16 17 16 17 13 15 16 16 16 16 16 16 16 15 16 16 XX 2,5 2,5 2,4 2,35 2,3 2,2 2,2 2,1 2,1 2,0 1,9 1,8 1,8 1,8 1,6 1,3 1,1 1,0
2 1 1 1 2 1 1 1 2 1 2 4 3 4 4
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Appendix A: Questionnaires - Summary (All)
15. What kind of training do users receive during a PLM system implementation?
Rank XXX 1 2 3 4 5 6 7 Weight/Factor Software training (Functionality) Skill building regarding the PLM vision (new process training) Communication Training Training in team development, team working Training in conflict management, group dynamics Train how to take responsibility and have the obligation to assist those being responsible Intercultural Training Always /All 3 15 3 2 1 Sometimes /Some 2 2 9 7 8 7 7 4 Normally not 1 2 6 4 6 5 9 Never /No 0 2 1 3 3 4 2 ? X 49 29 26 23 20 19 15 No ?/No X 17 16 16 16 16 16 15 XX 2,9 1,8 1,6 1,4 1,3 1,2 1,0
16. What are the main/important problems during the implementation phase?
Rank XXX 1 2 3 4 4 6 7 8 9 10 11 11 13 14 15 16 17 Weight/Factor Not enough support from senior management Barriers between departments Focus too much on technological aspects, too less on people Resistance of middle management to change Scope not well defined, project is oversized Resistance of users to change Time for implementation needed, longer than expected Not enough resources available Project does not have appropriate priority Technological limitations (performance/missing functionality) Organisation and procedures are not adapted to the new situation (technological and organisational integration on different levels) Availability of people from implementation team No transparent goals/objectives Goals are to aggressive, organisation is not capable to cope Budget needed, higher than expected Barriers to external stakeholders (customers/supplier...) Intercultural problems (i.e. language barriers) very important /True 3 10 8 7 8 7 8 6 6 6 5 5 4 6 4 5 2 1 Important /Partially true 2 5 6 8 4 7 6 7 9 7 7 6 8 4 8 6 6 4 less important 1 2 1 3 1 3 3 1 2 4 4 3 4 4 2 4 9 1 not important /Not true 0 1 ? X 32 36 38 35 35 39 35 37 34 33 31 31 30 32 29 22 20 No ?/No X 17 15 16 15 15 17 16 17 16 16 16 16 16 17 16 14 16 XX 2,5 2,4 2,4 2,3 2,3 2,3 2,2 2,2 2,1 2,1 1,9 1,9 1,9 1,9 1,8 1,6 1,3
1 1 1 1 2 1 3 2 2
Comments: Clear goals are the prerequisite for the support of senior management. Priority one is always the actual productivity.
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Appendix A: Questionnaires - Summary (All)
17. What are the main/important factors for a successful implementation.
Rank XXX 1 2 3 3 3 6 7 7 9 9 11 12 13 14 15 16 Weight/Factor Commitment/Buy in of senior management Early involvement of people being affected by the changes Align and mobilise leaders Commitment/Buy in of middle management Appropriate training and coaching for people involved Choose the right system integrator Create an open communication and collaboration culture (boundaryless organisation) Realisation and celebration of Short Term Wins Engage, communicate and explain the changes involved with stakeholders Appropriate project staffing Clarify in an early stage the ownership of data in the product development process Establish a shared and motivating vision Choose the right PLM vendor Empowering people to act on the vision defined Establishing a sense of urgency/burning platform Change of reward systems to support change initiative very important 3 12 13 7 10 8 7 7 7 7 5 7 5 4 2 1 1 important less not important important 2 1 0 5 3 1 5 6 8 7 7 6 8 12 7 9 10 9 11 5 1 1 1 1 1 3 2 3 2 1 1 4 7 1 1 3 1 ? X 46 46 32 43 41 36 36 36 39 39 38 35 33 25 29 20 No ?/No X 17 17 13 17 17 15 16 16 17 17 17 16 16 13 16 16 XX 2,7 2,7 2,5 2,5 2,4 2,4 2,3 2,3 2,3 2,3 2,2 2,2 2,1 1,9 1,8 1,3
Comments:
-
If there is the commitment from senior management middle management often has to behave appropriately.
18. Are the results achieved through the implementation of a PLM satisfactory?
Rank 1 2 3 4 Yes Partially Sometimes No ? 8 5 1 1 % 53 33 7 7
Please explain:
-
-
-
A successful implementation actively supports users in “living” new processes and leads to long-term profitability A lot of companies have a lot of different experiences with PDM systems, not always being positive. A number of visionaries have achieved tremendous steps forward by understanding PDM as a product development methodology. The potential of benefits is so big, that it will be hard to not be successful in achieving them. Since the introduction of PLM solution very ... is results are often not immediately measurable. This would only be the case when all interfaces and working methods were adopted to the new system. This state very rarely is reached because already during the implementation phase modifications have to be done that are changing parts of the whole concept and so not all goals can be achieved. But this seems to be a normal process, since the internal company organisation is always changing. No one can work without afterwards Project benefits are overestimated at the beginning of the project – otherwise the management would not invest in the system. The actual benefits are much less than estimated.
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Appendix A: Questionnaires - Summary (All)
19. Is the “Return On Investment” measured?
Rank 1 2 3 4 Sometimes Normally not Yes No ? 7 3 2 4 % 44 19 13 25
Comments:
-
-
Is in most cases very difficult, because of wrong or not existing measurement processes. ...though this is one of the most difficult metrics to measure Very hard to do, because in most cases there is no real comparison possible It’s usually not possible to define if a benefit is really due to PLM or if it is due to another change in the company or its environment. If the senior management asks for there is certainly a ROI done although experienced managers do know that these measurements are based on many uncertainties. In certain instances and applications it is possible to perform past-present investigations, but the are not representative. In a normal company this should be done
20. If yes, how is it measured and with what results? How:
-
-
Monitoring of important process specific numbers, eg. Throughput time, time to market, overall product costs, lifecycle costs Usually a high number of qualitative and quantitative aspects like time to cash, engineer productivity, time to release to manufacturing, number of design iterations, design failure, number of parts used and re-used, search time etc. are checked by various means (data residing on the system and inquiries on various participants and users during the implementation of a PLM system). Key is that the data acquisition and interpretation part is done with the help of a good project management and industry expertise. Based on the original ROI calculation: Reduced time to market Improved efficiency (more work with less people) Reduced amount of different types and parts Higher reusability of existing parts Reduced cost for changes Time and ... comparison for certain actions, statistical analysis of mistakes Before project start a Benefit Potential Analysis is made, with a cost calculation. These figures are used to get the ROI. Stated metrics at the beginning regarding the value propositions at the start of the project. Value metrics based upon business results and business financial goals. Only on some aspects, e.g. number of parts, re-use, less re-creation
Results:
-
company and project specific driving PLM projects with an ROI-focus usually gives the positive results Cost reduction up to 30 % Reduced lead time up to 40 % Of course always positive since the example to investigate is always chosen on ones own The Project Plan must insure to get a time of cost amortization of the project in 2 years. This is possible if the project focuses on quick wins and functionality with highest priority.
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
n=7 I
1
Rank XXX 1 2 2 4 5 6 7 8 9 10
General Questions concerning the product development process and the relationship to customers/suppliers
Who in your company is generally involved in product definition process?
Weight/Factor Product Design/Engineering Research & Development Marketing Senior Management (CEO, CTO, CIO...) Supplier Customer Sales Manufacturing Purchasing/Procurement Service frequently 3 6 4 4 3 2 1 2 1 1 occasionally 2 2 2 1 2 3 1 2 1 4 seldom 1 never 0 ? X 18 17 17 12 12 11 10 10 8 9 No X 6 6 6 6 6 6 6 6 5 6 ?/No XX 3 2,8 2,8 2 2 1,8 1,7 1,7 1,6 1,5
1 2 2 2 3 3 1
1
1
Comments: The R&D group does become directly involved with in the product definition process for specific new product introductions, but are more typically focused on developing technology that is applicable across product lines. Very different from division to division, no standard 2 What CA –Tools has your company implemented?
3D CAD 2D CAD (Computer Aided Design) CAM (Computer Aided Manufacturing) CAE (Computer Aided Engineering) EDM/PDM Digital Mockup (DMU) ? 7 5 5 5 5 4 % 100 71 71 71 71 57
Rank 1 2 2 2 2 6
Comments: 3D solid modelling is used for the majority of new product development, however 2D is still being used for maintenance of legacy drawings and associated 2D drawings to 3D models is a standard operating practice. The use of CAE is growing, however is still not the norm.
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
3
How do you communicate internally (when developing products in a team)? If possible try to rate with a percentage value.
Group/Team Meetings Telephone (conferences) e-mail Face2Face meetings Facsimile Video Conferences Collaborative Workspace Systems (i.e. One Space, Xbrioso, ProjectLink, MS Netmeeting...) 10/20/20/60 15/25/20/0 25/50/20/10 40/5/20/20 0/15/15/10 5/5/0/0 <5/5/0/0 % 28 26 26 21 10 3 2
Rank 1 2 2 4 5 6 7
Comments: The use of viewing technology is growing as is the use of web conferencing. The future is clearly one of collaborating as much as possible remotely and getting closer to our customer. Pulling our vendors/suppliers in is also becoming increasingly more important and Collaborative Engineering tools should grow in importance over the next year plus. 4 How do you communicate externally (when developing products in a team)? If possible try to rate with a percentage value.
e-mail Face2Face meetings Telephone (conferences) Group/Team Meetings Facsimile Video Conferences Collaborative Workspace Systems (i.e. One Space, Xbrioso, ProjectLink, MS Netmeeting...) 25/50/20/60 40/5/20/20 15/25/20/20 10/20/20/20 0/15/15/10 5/5/5/10 <5/5/0/10 % 39 21 20 18 10 6 5
Rank 1 2 3 4 5 6 7
Comments: Most communication with suppliers is today via phone however there is a growing desire to include suppliers as part of our extended manufacturing enterprise (more use of Collaborative Engineering tools). There is more face to face interaction with customers with resident engineers even being on-site at larger customers. Much more use of Collaborative Engineering being planned. Team meetings are in most cases phone or video conferences. During phone and video conferences Netmeeting tools are frequently in use. 5
1 2 2 4 4 6
How is information exchanged internally?
e-mail Paper Data Management System (secure) ftp solutions public directories tapes/diskettes 7 5 5 4 4 2
Rank
?
%
100 71 71 57 57 29
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
6
How is information exchanged externally?
Paper e-mail tapes/diskettes/CDs ftp solutions Virtual Private Network ? 7 7 6 5 3 % 100 100 86 71 43
Rank 1 1 3 4 5
Comments: Various significantly based upon customer and industry. The amount of paper being exchanged with customers especially automotive customers is definitely going down with more being electronic. Would like to see the same trend continue with key suppliers/vendors. FTP solutions are SSL encrypted Web Services, E-FTP via ISDN, Key suppliers are connected via Virtual Private Network (VPN) 7 What kind of data is exchanged with external stakeholders (i.e. suppliers and customers)?
Paper drawings 3D CAD files specifications 2D drawing files projects plans other: (CAE, FMEA, etc) 6 6 6 3 3 1
Rank
1 1 1 4 4 6
?
%
86 86 86 43 43 14
Comments: Other data being shared with customers includes CAE results, FMEA data, and qualification/test data. Depends on projects and divisions (from paper up to all) 8 Do your engineers/designers normally have direct contact/interaction with your customers? (Note: Question only relevant for suppliers)
Yes Sometimes Normally not No ? 3 3 1 0 % 43 43 14 0
Rank 1 1 3 4
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
9
How much of the components making up your final products is typically outsourced?
25-50% 0-25% 50-75% 75-100% ? 4 1 1 0 % 57 14 14 0
Rank 1 2 2 4
Comments: More molded product outsourced than stamped product. Depends on projects/divison (from 0 to 90%) 10 Do you have already implemented the concept of concurrent engineering? (Definition by the institute of Defence and Analyses, 1989:”.. a systematic approach to the integrated, concurrent design of products and their related processes including manufacturing and support”)
Rank 1 2 3 Partially Yes No ? 4 2 1 % 57 29 14
II
Questions concerning the project set-up of the PLM implementation
11 Where are you in the process of your PLM implementation?
Rank 1 2 3 3 5 Already implemented During Just beginning Not planned yet Before ? 3 2 1 1 0 % 43 29 14 14 0
Comments: We already have a core PLM solution in place for CAD vaulting, but are in the process of significantly extending to a more full function PLM solution with [System X] which will evolve over the next 3 plus years. We are thinking about an implementation
65
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
12 What were (would be) the most important reasons for the decision to implement a PLM solution?
Rank very less not ? No important important important important XXX Weight/Factor 3 2 1 0 X X 1 Improve quality 3 3 15 6 2 Improve classic PDM functionality * 2 4 14 6 2 Increase productivity 2 4 14 6 4 Reduce time to market 1 5 13 6 5 Redefine the product development process 2 2 2 10 6 6 Enabling extended enterprises through 2 1 2 8 5 integration of suppliers and/or customers 7 Support overall business strategy 2 3 7 5 8 Improve customer orientation 3 2 1 8 6 9 Integrate “internal islands of automation” ** 2 2 1 6 5 10 More innovation/new products 1 1 3 5 5 11 Enabling “mass customisation” *** (i.e. 1 3 1 4 through part configurators accessible via the Internet) 12 Our competitors started implementing 5 0 5 Other: (acquisition assimilation) 1 Other: (easy access to ALL technical data) 1 * product data vaulting/warehousing/part classification/search functionality/cross referencing/revision control, workflow, electronic engineering change management, document management) ** integrate different CA -Tools, integrate several databases storing product related data into one (single point of access) *** also known as “built to order”, “manufacturing for the individual” or “customer driven manufacturing”, the opposite of mass production or built to stock ?/No XX 2,5 2,3 2,3 2,2 1,7 1,6 1,4 1,3 1,2 1 0,3 0
Comments:
-
The biggest problem being addressed by our focused PLM plan is “one stop shopping” for ALL relevant technical information and support for the concept of “enter once and populate everywhere” (address data integrity issues). Other business strategies being addressed include a focus on design reuse and increased engineering productivity.
13 What functionality of PLM systems has already been implemented? (n=6)
Rank 1 1 1 4 4 6 6 8 Engineering Change Management Document Management Part2Document Cross References Classification of Parts Data viewing capabilities (i.e. viewing of CAD Data) Workflow Management Collaborative Workspace systems Part configurators ? 3 3 3 2 2 1 1 0 % 50 50 50 33 33 17 17 0
Comments:
-
Use of Collaborative Engineering tools is just starting and as a result is in its infancy. Our company has had electronic global Engineering Change Management tools in place for over 10 years, has had a global image repository for 7+ years, and has been using local CAD vaulting tools for more than 6 years. All of these current capabilities will continue to evolve with the next wave of PLM including more integration and functionality.
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
14 How did you plan/execute the implementation?
Rank 1 1 3 3 Internally Together with software vendor Together with system integrator Together with software vendor and system integrator ? 2 2 1 1 % 29 29 14 14
15 Who has normally access to and is using the PLM system?
Rank 1 2 3 3 5 6 6 6 9 10 Product Design/Engineering Manufacturing Purchasing/Procurement Service Research&Development Marketing Sales Senior Management (CEO, CTO, ...) Customer Supplier ? Access 0 3 1 1 2 1 1 1 1 1 % 0 43 14 14 29 14 14 14 14 14 ? Using 5 3 3 3 2 1 1 1 % 71 43 43 43 29 14 14 14
Comments: Customer access to our PLM capabilities is through our Electronic Catalog and not direct access. Direct secure access is being planned for the coming year for Suppliers. 16 Is there an interface to the ERP system?
Rank 1 2 Yes No ? 3 1 % 75 25
Comments: Interface to MRP is currently planned through a master Part Index as a hub and not directly. 17 If there is an interface, how is ownership of data respectively transformation of ownership in the product development process regulated?
Rank 1 2 2 4 Master Data is kept in ERP system Master Data is kept in PLM system Data is kept in both systems Master Data is transferred from PLM in ERP system ? 2 1 1 0 % 50 25 25 0
Comments:
-
Data is mastered multiple places with a movement to single masters based upon the data itself. Manufacturing data like MBOM are mastered in our MRP systems. Engineering data like document/part revision control and part-doc relationships is mastered in our PLM tool set. The goal is to support a global Part Index to roll-up all relevant information from different masters.
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
18 Did the implementation slow down the productivity of your company?
Rank 1 2 3 3 A little bit No Significantly Dramatically ? 3 1 0 0 % 75 25 0 0
Comments:
-
The implementation of our ERP system has certainly had an impact on company productivity. However the initial deployment of our new PLM tools has not had a significant impact on end user productivity.
19 Did you in any form measure the ROI? If so, how did you measure and with what results?
Rank 1 2 No Yes ? 4 0 % 100 0
How: Results: 20 Are you satisfied with the success of the implementation and with the results achieved?
Rank 1 2 3 Partially Yes No ? 2 1 0 % 67 33 0
Please give reasons:
-
Too early to tell and much more is planned.
21 Did you install/establish a pilot group testing the new scenario?
Rank 1 2 Yes No ? 3 0 % 100 0
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
III
Changes
22 Did your product development process change with the implementation?
Rank 1 2 3 Partially No Yes ? 2 2 0 % 50 50 0
Comments: If something has changed please describe what has changed (i.e. interdisciplinary virtual team approaches, involvement people from different disciplines): Our initial deployment of new PLM capabilities was focused on replacing some legacy CAD vaulting solutions and consequently no process change was required. As new capabilities are being added and as we begin to decommission our legacy [Engineering] Change Management application, there is expected to be significant process changes. Only in minor manner. Discussion ongoing 23 Has the organisational structure in your company been changed with the implementation?
Rank 1 2 2 No Partially Yes ? 4 0 0 % 100 0 0
If your organisational structure was changed, please describe what was changed (i.e. removal of layers; interdisciplinary, globally dispersed teams; global product family business units..): 24 Has the culture of your company changed with the implementation?
Rank 1 2 2 No Partially Yes ? 4 0 0 % 100 0 0
If the culture was changed to what has it been changed (i.e. promotion of collaboration and communication)? As the PLM tool set evolves there is expected to be a significant cultural change with less local data/knowledge and more global collaboration. You have to have an open minded culture in the company, otherwise you will not overcome many discussions.
69
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
IV
Organisational Change Management
25 Has a (shared) vision with the implementation of a PLM system been established? (i.e. “we want to be the No 1 in customer service/we want to manufacture the most innovative products”)
Rank 1 1 Yes No ? 2 2 % 50 50
26 Has an ‘as is’ (current state) analysis of the product development process been performed before implementing?
Rank 1 2 Yes No ? 4 0 % 100 0
27 Has a strategy been defined how to reach the ‘to be’ (target) situation defined in the vision?
Rank 1 2 Yes No ? 4 0 % 100 0
Comments: More work is needed to clearly articulate the Vision and communicate it. 28 How was the decision to implement a PLM system and the changes required communicated with the people affected?
Rank 1 1 1 1 1 6 7 Intranet Internal newspaper Notice Board Workshops Global Town Hall Meetings e-mail No communication took place ? 2 2 2 2 2 1 0 % 29 29 29 29 29 14 0
Comments: Steering Group formed as well as many one-on-one discussions with key engineering leaders. Information in several steps and different ways
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
29 What are the main problems and barriers during implementation?
Rank XXX 1 1 1 4 4 6 6 6 6 6 11 12 12 12 12 16 17 Weight/Factor Technological limitations (performance/missing functionality) Not enough (visible and vocal) support from senior management Time for implementation needed, longer than expected Focus too much on technological aspects Resistance of users to change Not enough resources available Barriers between departments Resistance of Middle Management to change Availability of people from implementation team Scope not well defined, project is oversized Goals are to aggressive, organisation is not capable to cope Organisation and procedures are not adapted to the new situation (technological and organisational integration on different levels) Intercultural problems (i.e. language barriers) No transparent goals/objectives Project does not have appropriate priority Barriers to external stakeholders (customers/supplier...) Budget needed, higher than expected True 2 2 2 2 1 1 1 1 1 1 Partially true 1 2 2 2 2 3 2 2 2 2 3 2 2 1 2 1 Not true 0 ? X 6 6 6 4 5 4 2 2 4 4 3 2 2 2 2 1 0 No X 4 4 4 3 4 4 2 2 4 4 4 3 3 3 3 2 3 ?/No XX 1,5 1,5 1,5 1,3 1,3 1 1 1 1 1 0,8 0,7 0,7 0,7 0,7 0,5 0
1 1 1 1 1 1 1 2 1 1 3
30 What of the following organisational change management methods were used during the implementation?
Rank XXX 1 1 3 4 5 5 5 8 8 8 11 11 11 11 15 15 17 17 Weight/ Factor Establishing a concept to regularly communicate with people involved Create an atmosphere of openness and trust Planning, realising and celebrating short term wins (to build confidence) Early involvement of people being affected Establishing a (shared and motivating) vision Aligning and mobilising leaders Coaching of people involved Establishing a sense of urgency (burning platform) Build a critical mass for change: buy-in and stay-in Dealing with resistance Vocal and visible support of senior management (walking the talk) Facilitate learning/skill building (to acquire new behaviour) Empowering people/teams to act on the vision defined Institutionalise new approaches Feedback (i.e. through employee survey, customer inquiry, 360° Feedback) Implementation of change agents/promoters Changing reward systems to support the change initiative Hiring, promoting, developing employees who can implement the vision yes 2 3 3 2 2 2 1 1 1 1 partially 1 1 1 1 2 1 3 2 2 1 3 2 2 2 2 1 1 no 0 ? X 7 7 5 6 4 5 4 4 3 3 2 2 2 2 1 1 0 0 No X 4 4 3 4 3 4 3 4 3 3 3 3 3 3 3 3 3 3 ?/No XXX 1,8 1,8 1,7 1,5 1,3 1,3 1,3 1 1 1 0,7 0,7 0,7 0,7 0,3 0,3 0 0
1 1 1 1 1 1 2 2 3 3
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
31 What kind of training did users receive during the implementation?
Rank XXX 1 2 3 4 4 4 4 Weight/Factor Software training (Functionality) Communication Training Intercultural Training Training in team development, team working Training in conflict management, group dynamics Skill building regarding the PLM vision (new process training) Train how to take responsibility and have the obligation to assist those being responsible All users 2 3 1 Some users 1 1 1 1 1 1 1 1 No user 0 1 1 2 2 2 2 ? X 7 3 1 1 1 1 1 No X 4 3 2 3 3 3 3 ?/No XXX 1,8 1 0,5 0,3 0,3 0,3 0,3
Comments: A Train-the-Trainer approach was taken for global deployment of the initial PLM application. Similar approaches are planned for the future. 32 What are the main/important factors for a successful implementation?
Rank XXX 1 1 3 3 5 6 6 6 9 9 9 12 12 12 15 very important Weight/Factor 3 Early involvement of people being affected by 3 the changes Commitment/Buy in of middle management 3 Commitment/Buy in of senior management 2 Appropriate project staffing 2 Choose the right system integrator 1 Clarify in an early stage the ownership of data 1 in the product development process Appropriate training and coaching for people 1 involved Establish a shared and motivating vision 1 Vocal and visible support of senior management (walking the talk) Realisation and Celebration of Short Term Wins 1 Create an open communication and collaboration culture (boundaryless organisation) Choose the right PLM vendor 1 Communicate and explain the changes involved 1 with the implementation Establishing a sense of urgency/burning platform 1 Change of reward systems to support change initiative important 2 1 1 2 2 1 3 3 2 2 1 3 2 3 1 1 1 1 1 1 2 less important 1 not important 0 ? X 11 11 10 10 5 9 9 7 4 6 6 7 7 7 1 No ?/No X 4 4 4 4 2 4 4 3 2 3 3 4 4 4 3 XX 2,8 2,8 2,5 2,5 2,5 2,3 2,3 2,3 2 2 2 1,8 1,8 1,8 0,3
NA
72
Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
Appendix C: Questionnaires - Summary (System Integrators and Software Vendors)
n=13 1. What goals are important to define (should be defined) for the implementation of a Product Lifecycle Management (PLM) system?
Rank XXX 1 2 very important 3 11 9 important less important 1 not important 0 ? No ?/No
Weight/Factor 2 X X XXX Reduce time to market 2 37 13 2,8 Enabling extended enterprises through 3 1 33 13 2,6 integration of customers and suppliers 3 Integrate “internal islands of 8 4 1 32 13 2,5 automation” ** 4 Increase productivity 7 5 1 32 13 2,5 5 Improve quality 6 6 1 31 13 2,4 6 Support the overall business strategy 6 6 1 30 13 2,3 7 More innovation/new products 5 7 1 30 13 2,3 8 Improve customer orientation 5 5 2 1 27 13 2,1 9 Redefine the product development 3 8 2 27 13 2,1 process 10 Improve classic PDM functionality * 4 5 4 26 13 2,0 11 Enabling “mass customisation” *** (i.e. 8 5 21 13 1,6 through part configurators accessible via the Internet) * product data vaulting/warehousing, part classification, search functionality, cross referencing, revision control, workflow, electronic engineering change management, document management ** integrate different CA –Tools; integrate several databases storing product related data into one (single point of access) *** also known as “built to order”, “manufacturing for the individual” or “customer driven manufacturing”, the opposite of mass production or built to stock
Comments:
-
Question is difficult to answer because all improvement initiatives and solutions have more or less these same objectives. So this is not a discriminator for PLM. A lot of customers would be happy to have this classic PDM function in place
2. Who is normally involved in the product definition process?
Rank XXX 1 2 3 4 5 6 7 8 9 10 Weight/Factor Product Design/Engineering Research&Development Manufacturing Supplier Purchasing/Procurement Marketing Senior Management (CEO, CTO, ...) Service Sales Customer frequently 3 12 10 4 4 3 3 4 2 1 occasionally 2 1 2 7 5 7 5 4 5 4 7 seldom 1 1 4 3 4 3 5 8 5 never 0 ? X 38 34 26 26 26 23 23 21 19 19 No X 13 13 11 13 13 13 13 13 13 13 ?/No XX 2,9 2,6 2,4 2 2 1,8 1,8 1,6 1,5 1,5
1 2 1 1
Comments:
-
Again difficult to answer: you are asking who IS today, not who should. Therefore I answered occasionally for most, even though they should be involved frequently (in my opinion). Depends on the phase in the development cycle
73
Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
3. Who has normally access to and is using a PLM system? (A= Access ; U =Using)
Research & Development Product Design/Engineering Purchasing/Procurement Marketing Manufacturing Sales Service Senior Management (CEO, CTO,...) Customer Supplier frequently A(1),U(8) A(1),U(11) A(2),U(5) A(2),U(1) U(6) U(2) A(1),U(3) A(1) A(1) U(2) occasionally A(1),U(2) U(1) A(4),U(3) A(4),U(2) A(2),U(3) A(4),U(2) A(1),U(6) A(2),U(2) A(2),U(2) A(3),U(5) seldom U(1) never
A(1),U(2) A(1),U(1) A(1),U(4) A(2),U(1) A(3),U(2) A(3),U(4) A(3)
1 1 3 2
Comments: Sales uses CRM (which has links to PLM), Suppliers usage is increasing 4. Is a (shared) vision with the implementation of a PLM system being established (i.e. “we want to be the No. 1 in customer service/we want to manufacture the most innovative products”)?
Rank 1 2 3 4 Sometimes Normally not Yes No ? 10 2 1 0 % 77 15 8 0
Comments: But this is key and the vision should be provable 5. Is an ‘as is’ (current state) analysis of the product development process being performed before implementing?
Rank 1 2 3 4 Sometimes Yes Normally not No ? 8 4 1 0 % 62 31 8 0
Comments: We prefer a ‘should be’ approach 6. Is a strategy defined how to reach the ‘to be’ (target) situation defined in the vision?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 7 6 0 0 % 54 46 0 0
Comments: For large scale projects the answer is yes
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
7. Is a pilot group testing the new scenario being established?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 8 4 1 0 % 62 31 8 0
Comments: More likely to be normally not, but still sometimes it happens. 8. Does the implementation slow down the productivity of companies?
Rank 1 2 3 4 A little bit No Significantly Dramatically ? 7 5 1 0 % 54 38 8 0
Comments: The PLM roadmap should actively deal with risks like decreasing productivity and should include strategies to avoid or minimise these risks. The aim clearly is not to negatively influence productivity. For that reason a strategy and a good preparation are necessary. 9. Is there an interface to the ERP system?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 9 4 0 0 % 69 31 0 0
Comments: This is always customer and business specific. All the cases appear in our projects. 10. If there is an interface, how is ownership of data respectively transformation of ownership in the product development process been regulated?
Rank 1 2 3 4 5 Data is kept in both systems Master data is transferred from PLM in ERP system Master data is kept in ERP system Other: All of the above solutions do appear Master data is kept in PLM system ? 6 4 3 3 1 % 46 31 23 23 8
Comments: You will find all kind of projects. It depends of the customer and of the industry! Project dependent
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
11. What changes are required to successfully implement a PLM system?
Rank XXX 1 Weight/Factor Reengineering/Redefinition of product development processes (i.e. interdisciplinary virtual team approaches, workflow changes) Cultural changes (i.e. open communication and collaboration culture) Empowering of people / teams (i.e. designers having direct customer contact) Changes in the organisational model (i.e. removing of layers, networked organisation) Product line rationalisation (i.e. to enable mass customisation) Other: Establishing a new business model (e.g. “Full Service Provider” instead of “Product Manufacturer”) Other: Management awareness very important 3 6 important 2 7 less important 1 not important ? X 32 No ?/No X 13 XX 2,5
2 3 4 5
7 5 3
3 3 6 6
2 5 3 5 1
29 26 24 17
12 13 13 11
2,4 2 1,8 1,5
1 1
12. How is the implementation of a PLM system and the changes required hereof communicated with the people affected?
Rank 1 2 3 4 5 6 7 8 9 10 Workshops Intranet Notice Board e-mail Internal newspaper Employee Survey Global Town Hall Meetings Other: Awareness Sessions (2 hour Meetings) that will be combined with feedback questionnaires Other: PLM Solution Lab No communication required ? 12 10 10 7 7 5 4 1 1 0 % 92 77 77 54 54 38 31 8 8 0
Comments: Since PLM is an integration program, a marketing and communication strategy and roadmap is required. All channels/media for internal and external (suppliers, customers, partners) communication should be part of this strategy.
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
13. What changes in the organisational structure are necessary to best support PLM? (Please describe)
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Destroy functional borders into the product definition process. Build groups with all roles to fulfil the product definition process. IT should be part of the product definition process – end user satisfaction is key! Ports the factory planning and simulation process earlier in the product definition process. Use the DM function to simulate the production process as early as possible. Changes towards process and product orientation should be initiated. This could mean more responsibility for project managers (in product development programs) or the decision to establish product managers for strategic product lines. Implementation of process organisation Implementation of project management Implementation of cross functional teams This depends very much on the type of organisation, the type of product and the management style the specific company has adopted or wants to adopt. Not one answer possible. For the implementation absolutely necessary is the end of the thinking in departments and of possessing of product data by departments or people. Product Managers should be stronger than department managers Bonuses of product managers should be linked to success of PLM People need to be motivated, solutions must be sold internally No changes are necessary but a good project/process oriented organisation is a good starting point for success Establish global process, involving several partners
14. What of the following organisational change management methods/tools are used during the implementation of a PLM system?
Rank XXX 1 2 2 3 4 4 6 7 8 9 10 11 12 13 14 15 16 17 Weight/Factor Early involvement of people being affected Establishing a (shared and motivating) vision Establishing a concept to regularly communicate with people involved Aligning and mobilising leaders Coaching of people involved Planning, realising and celebrating short term wins (to build confidence) Create an atmosphere of openness and trust Vocal and visible support of senior management (walking the talk) Build a critical mass for change: buy-in and stay-in Facilitate learning/skill building (to acquire new behaviour) Feedback (i.e. through employee survey, customer inquiry, 360° Feedback) Dealing with resistance Implementation of change agents/promoters Empowering people/teams to act on the vision defined Establishing a sense of urgency (burning platform) Institutionalise new approaches Hiring, promoting, developing employees who can implement the vision Changing reward systems to support the change initiative frequently 3 9 8 8 7 6 6 6 5 5 4 3 4 4 2 1 2 1 occasionally 2 2 3 3 2 4 4 5 6 5 6 8 6 4 8 8 4 6 5 seldom 1 2 2 2 4 2 2 1 2 1 3 2 2 3 2 3 4 6 6 1 2 1 1 2 1 1 never 0 ? X 33 32 32 29 28 28 29 29 26 27 27 26 23 24 22 18 18 16 No X 13 13 13 13 13 13 13 13 12 13 13 13 13 13 13 12 13 13 ?/No XX 2,5 2,5 2,5 2,2 2,2 2,2 2,2 2,2 2,2 2,1 2,1 2 1,8 1,8 1,7 1,5 1,4 1,2
1 1 1 1
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
15. What kind of training do users receive during a PLM system implementation?
Rank XXX 1 2 3 4 5 6 7 Weight/Factor Software training (Functionality) Skill building regarding the PLM vision (new process training) Training in team development, team working Communication Training Training in conflict management, group dynamics Train how to take responsibility and have the obligation to assist those being responsible Intercultural Training Always 3 12 3 1 1 Sometimes 2 1 8 7 6 6 6 3 Normally not 1 2 4 6 6 5 9 1 1 2 1 Never 0 ? X 38 27 21 21 18 17 15 No ?/No X 13 13 13 13 13 13 13 XX 2,9 2,1 1,6 1,6 1,4 1,3 1,2
16. Is your implementation approach depending on the culture of a company?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 9 3 1 % 69 23 8
Comments:
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If the 'normal' implementation approach is leading to resistance appropriate action will be taken.
17. What are the main/important problems during the implementation phase?
Rank XXX 1 2 3 4 5 6 7 8 9 10 10 12 13 14 15 16 17 Weight/Factor Barriers between departments Not enough support from senior management Resistance of middle management to change Focus too much on technological aspects, too less on people Scope not well defined, project is oversized Resistance of users to change Project does not have appropriate priority Not enough resources available Budget needed, higher than expected Organisation and procedures are not adapted to the new situation (technological and organisational integration on different levels) No transparent goals/objectives Time for implementation needed, longer than expected Goals are to aggressive, organisation is not capable to cope Availability of people from implementation team Technological limitations (performance/missing functionality) Barriers to external stakeholders (customers/supplier...) Intercultural problems (i.e. language barriers) very important 3 7 8 8 6 6 7 6 5 5 5 5 4 4 3 3 2 1 important 2 6 3 2 6 5 3 5 7 6 4 4 5 5 6 5 5 2 less important 1 2 3 1 1 3 2 1 2 4 4 3 4 3 4 4 9 1 1 not important 0 ? X 33 32 31 31 29 30 30 30 29 27 27 25 26 24 21 20 16 No ?/No X 13 13 13 13 12 13 13 13 13 13 13 12 13 12 12 12 13 XX 2,5 2,5 2,4 2,4 2,4 2,3 2,3 2,3 2,2 2,1 2,1 2,1 2 2 1,8 1,7 1,2
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
Comments: Clear goals are the prerequisite for the support of senior management. Priority one is always the actual productivity. 18. What are the main/important factors for a successful implementation.
Rank XXX 1 2 3 3 3 6 7 8 8 10 11 12 13 14 15 16 Weight/Factor Commitment/Buy in of senior management Early involvement of people being affected by the changes Align and mobilise leaders Commitment/Buy in of middle management Appropriate training and coaching for people involved Choose the right system integrator Create an open communication and collaboration culture (boundaryless organisation) Realisation and celebration of Short Term Wins Engage, communicate and explain the changes involved with stakeholders Clarify in an early stage the ownership of data in the product development process Establish a shared and motivating vision Appropriate project staffing Choose the right PLM vendor Empowering people to act on the vision defined Establishing a sense of urgency/burning platform Change of reward systems to support change initiative very important 3 10 10 7 7 7 6 7 6 6 6 4 3 3 2 important 2 3 2 5 5 5 6 4 5 5 4 7 10 8 9 10 1 5 less important 1 1 1 1 1 1 1 2 2 3 2 1 1 3 6 1 1 1 1 not important 0 ? X 36 35 32 32 32 31 30 30 30 29 28 29 26 25 23 14 No ?/No X 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 XX 2,8 2,7 2,5 2,5 2,5 2,4 2,3 2,3 2,3 2,2 2,2 2,2 2 1,9 1,8 1,1
Comments: If there is the commitment from senior management middle management often has to behave appropriately. 19. How would you rate the positive impact of Change Management Methods on the success of a PLM implementation?
Rank 1 2 3 4 High Medium Low No ? 6 4 2 0 % 50 33 17 0
Comments: Depends on how they are implemented
79
Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
20. To what degree is the implementation success depending on the company culture?
Rank 1 1 3 4 High Medium Low No ? 5 5 2 0 % 42 42 16 0
Comments: “Company culture’ is a reflection of behaviour and activities of individual people. Most important is CEO responsiveness to changing market requirements and power to change. A company culture that contradicts the introduction of a new system will not survive very long 21. Are the results achieved through the implementation of a PLM satisfactory?
Rank 1 2 3 4 Yes Partially Sometimes No ? 7 3 1 1 % 54 25 8 8
Please explain:
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-
-
A successful implementation actively supports users in “living” new processes and leads to long-term profitability A lot of companies have a lot of different experiences with PDM systems, not always being positive. A number of visionaries have achieved tremendous steps forward by understanding PDM as a product development methodology. The potential of benefits is so big, that it will be hard to not be successful in achieving them. Since the introduction of PLM solution very ... is results are often not immediately measurable. This would only be the case when all interfaces and working methods were adopted to the new system. This state very rarely is reached because already during the implementation phase modifications have to be done that are changing parts of the whole concept and so not all goals can be achieved. But this seems to be a normal process, since the internal company organisation is always changing. No one can work without afterwards Project benefits are overestimated at the beginning of the project – otherwise the management would not invest in the system. The actual benefits are much less than estimated.
22. Is the “Return On Investment” measured?
Rank 1 2 3 4 Sometimes Normally not Yes No ? 7 3 2 0 % 58 25 17 0
80
Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
Comments:
-
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Is in most cases very difficult, because of wrong or not existing measurement processes. ...though this is one of the most difficult metrics to measure Very hard to do, because in most cases there is no real comparison possible It’s usually not possible to define if a benefit is really due to PLM or if it is due to another change in the company or its environment. If the senior management asks for there is certainly a ROI done although experienced managers do know that these measurements are based on many uncertainties. In certain instances and applications it is possible to perform past-present investigations, but the are not representative. In a normal company this should be done
23. If yes, how is it measured and with what results? How:
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Monitoring of important process specific numbers, eg. Throughput time, time to market, overall product costs, lifecycle costs Usually a high number of qualitative and quantitative aspects like time to cash, engineer productivity, time to release to manufacturing, number of design iterations, design failure, number of parts used and re-used, search time etc. are checked by various means (data residing on the system and inquiries on various participants and users during the implementation of a PLM system). Key is that the data acquisition and interpretation part is done with the help of a good project management and industry expertise. Based on the original ROI calculation: Reduced time to market Improved efficiency (more work with less people) Reduced amount of different types and parts Higher reusability of existing parts Reduced cost for changes Time and ... comparison for certain actions, statistical analysis of mistakes Before project start a Benefit Potential Analysis is made, with a cost calculation. These figures are used to get the ROI. Stated metrics at the beginning regarding the value propositions at the start of the project. Value metrics based upon business results and business financial goals. Only on some aspects, e.g. number of parts, re-use, less re-creation
Results:
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company and project specific driving PLM projects with an ROI-focus usually gives the positive results Cost reduction up to 30 % Reduced lead time up to 40 % Of course always positive since the example to investigate is always chosen on ones own The Project Plan must insure to get a time of cost amortization of the project in 2 years. This is possible if the project focuses on quick wins and functionality with highest priority.
81
doc_685071153.pdf
Change management is an approach to transitioning individuals, teams, and organizations to a desired future state.
The Impact of Organisational Change Management on the Success of a Product Lifecycle Management Implementation an Investigation into the Electronics Manufacturing Industry
Masters dissertation at:
Fachhochschule Ludwigshafen am Rhein University of Lincoln Hans-Jürgen Brück
Submitted by:
Date:
March 2002
Supervisors:
Mr. Karl A. Scholz Mr. Malcolm Myers
Acknowledgements
I would like to thank a number of people that supported me and provided contribution during my MBA study programme and especially during the time when the dissertation was prepared and written. My sincerest thanks to:
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Mr. Karl A. Scholz from FH Ludwigshafen for interesting and helpful discussions on the topic and for acting as supervisor for this project. Mr. Malcolm Myers from the University of Lincoln for useful comments on the dissertation proposal and for acting as supervisor for this project. My manager Dr. Andreas Hintz, who supported me with useful hints, interesting discussions and assisted in reviewing the dissertation. All the people that participated in the survey and took valuable time out of their schedules to answer the comprehensive questionnaires. Many thanks also to those, who additionally participated in the interviews and openly discussed the issues involved. My employer Tyco Electronics (formerly AMP Incorporated). John Sandwell for reviewing the abstract Stephan Prosser, who assisted in reviewing the questionnaires.
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Finally, I want to thank my family, especially my wife Katrin and my children Chiara Luisa, Lana-Joy and Robbin Joanne for their patience and their support throughout the time of writing the dissertation. Without them, none of this would have been possible.
ii
Abstract
The dissertation in hand discusses the implementation of Product Lifecycle Management (PLM) in the Electronics Manufacturing Industry. In particular, the impact of Organisational Change Management on the implementation success of PLM has been researched. The methodology used to investigate the topic includes literature research, quantitative research (survey) as well as qualitative research (interviews). The environment of manufacturers is coined by time to market reduction, increased variety and complexity resulting from trends like globalisation, mass customisation and increased outsourcing. PLM aims to help manufacturers in this environment by providing an "infrastructure to support management of product related data throughout its complete lifecycle"1 (from initial concept to product obsolescence). Appropriate solutions ensure that up to date information are accessible for the right people, in the right format at the right time. Especially interesting for the product lifecycle is the conceptual phase of the product definition process where fundamental design choices are made and the product lifecycle costs are determined to a large extent. The concept of Concurrent Engineering suggests improving this phase by breaking down functional barriers and setting up crossfunctional teams. Globalisation and increased outsourcing require collaboration across geographic regions and company borders. Therefore PLM systems do not only provide functionality to control product related data but also to collaborate within a company as well as in the extended enterprise. The reason for failure of new business concepts like PLM is very often due to a poor implementation phase rather than to the concept itself. It is therefore important not only to take the technological but also the organisational perspective of PLM into account. Collaborating and sharing of data within a company and especially in the extended enterprise challenges existing processes and culture. An holistic implementation approach will therefore most likely result in process as well as cultural changes. For that reason, the success of PLM heavily depends on the willingness of the organisation to accept change and especially on the people that must form inter-organisational and cross-functional teams to collaboratively develop and manage products. People are not likely to change the way they have been successfully working. Resistance to change is therefore the natural reaction. Organisational Change Management deals with the emotional reaction to change and aims to provide an implementation friendly environment. Communication of the required changes and participation of people affected by change are common means of Organisational Change Management to address initial fears and to build trust.
1
cf. Portella (2000)
iii
It was found in the research, that the most critical success factors as well as potential problems are people related issues that can be addressed by Organisational Change Management. In conclusion, the impact of Organisational Change Management on implementation success can be rated as relatively high. Including Organisational Change Management methods and tools during a PLM implementation can play an important role to facilitate changes, in processes as well as in the corporate culture. According to the research the early involvement of people affected by the changes and the barriers between departments and companies have to be addressed by Organisational Change Management. However the most important factor for success can be found in the role of senior management whose support and commitment not least decides if the additional budget for the Organisational Change Management initiative is released.
iv
Table of Contents
Acknowledgements Abstract Table of Contents List of Abbreviations 1 1.1 1.1.1 1.1.2 1.1.3 1.1.4 1.2 1.3 1.4 1.5 2 2.1 2.2 2.3 2.4 2.5 2.6 3 3.1 3.2 3.2.1 3.2.2 Introduction Background Product development From CA -Tools and PDM to Product Lifecycle Management (the technological perspective) Engineering and Virtual Co-location (the organisational perspective) Organisational Change Management Main research issues Literature comment Research methodology Dissertation structure Concurrent Engineering and physical co-location Collaborative engineering and virtual co-location The organisational model for collaborative engineering and virtual colocation Organisational Change Management and Information Technology (IT) Organisational and cultural change and the implementation of a PLM solution Change Management and the implementation of a PLM solution Methodology and data collection Secondary research (desk research) Primary research Quantitative research (Survey) Qualitative research (Interviews) 17 18 21 21 21 21 23 15 16 2 5 7 9 12 12 13 14 14 15 From Concurrent Engineering and Physical Co-location to Collaborative ii iii v viii 1 1 1
Literature review
v
4 4.1
Results Results from quantitative research Survey participants Preparation for analysis Questionnaire results Results from qualitative research Discussion 5.1 5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 5.1.6 5.2 5.3 5.4 5.4.1 5.4.2 Interpretation of research findings What kind of companies do implement PLM? The role of organisational culture The role of organisational structure The role of the product development processes The role of Change Management on implementation success The relationship of the research results to published literature and research The appropriateness of data collection and methodology The effect on professional practice The implementation strategy Appropriate Change Management methods and tools Summary of principal features Major findings Suggestions for business practice Recommendations for future research Bibliography 7.1 7.2 Textbooks Articles 4.1.1 4.1.2 4.1.3 4.2
24 24 24 25 26 31 33 33 33 33 34 35 36 37 37 38 39 39 41 43 43 44 45 46 47 47 50
5
The Return on Investment (ROI) and the impact of Change Management
6 6.1 6.2 6.3 6.4 7
Conclusions
vi
Appendices Appendix A: Appendix B: Appendix C: Questionnaires - Summary (All) Questionnaires - Summary (Software Vendors and System Integrators)
54 54 Questionnaires - Summary (Electronic Manufacturing Companies) 62 74
vii
List of Abbreviations
2D 3D anon. CAD CAE CAM cf. CoP CPC cPDM CRM DMU Dr. EDM Eds. e.g. EMC EMI ERP et al. etc. EU FH ff. i.e. IGES IS IT MBOM Mr. MRP MS No./n OEM p. pp. PDC PDM PIM R&D ROI SMC STEP Two Dimensional Three Dimensional anonymous Computer Aided Design Computer Aided Engineering Computer Aided Manufacturing confer (compare) Communities of Practise Collaborative product Commerce collaborative Product Definition Management Customer Relationship Management Digital Mock-Up Doctor Engineering Data Management Editors exempli gratia (for example) Electronic Manufacturing Companies Electronics Manufacturing Industry Enterprise Resource Planning et alii (and others) Et cetera (and so on) European Union Fachhochschule And the following id est (that is) Initial Graphics Exchange Specification Information Systems Information Technology Manufacturing Bill of Material Mister Manufacturing Resource Planning Microsoft Number (of respondents) Original Equipment Manufacturer page pages Product Definition and Commercialisation Product Data Management Product Information Management Research and Development Return On Investment Small and Medium Companies Standard for the Exchange of Product Model Data
viii
SVSI TQM
Software Vendors and System Integrators Total Quality Management
ix
Introduction
1
Introduction
The introduction provides background information about the topics involved in the investigation. Furthermore the research question is introduced and explained and set in the context of existing research and literature. A short introduction to the methodology used to research the topic is provided followed by a presentation of the dissertation structure. 1.1 Background The following pages are intended to give the reader an overview and background information on the various topics involved in the research, namely: Product development Product Lifecycle Management (PLM) Concurrent and Collaborative Engineering Organisational Change Management 1.1.1 Product development
"In today's industry, New Product Development is often the focal point of competition. Companies that are able effectively to develop, produce and introduce new products are the key competitors in markets where variety and time-to-market play an increasingly important role." (Victor Paashuis, 1997) The dominant importance of product development for the manufacturing industry as their core competence and process is outlined by the quote of Victor Paashuis. Several studies carried out throughout the last years have shown that the way in which product development is executed does have a significant impact on costs and time to market and therefore on the financial results. Nevins et. al (1989) for example found, that 80% of product lifecycle costs are locked in the early stage of product development, when fundamental design choices are made. New product development nowadays is heavily influenced by industry as well as social trends. The following section describes industry and social trends and their implications on product development (especially in the Electronics Manufacturing Industry):
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Increased Outsourcing: Product complexity is increasing and companies are concentrating on their core competence. Consequently an increasing number of components making up a product is given to outside vendors for designing and manufacturing. The increasing number of outside vendors has somehow to be managed and integrated. So called ‘extended enterprises’ have to be established. Alliances and Merger: The number of companies that are merging or establishing alliances has rapidly increased throughout the past years. Similar to increased outsourcing product development processes somehow have to be integrated or aligned to gain synergy effects.
1
Introduction
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Mass customisation: The role of the customer has changed. Tailor made, individual products instead of mass-produced products are demanded. This means a shift from make-to-stock and assembly-to-order styles of manufacturing to mass customisation and personalisation. Therefore product development has to be much more agile and flexible to quickly respond to customer wishes and fast changing market needs. Globalisation: Supported through the falling of borders, the liberalisation of markets and the explosive development of communication technology many manufacturers have scaled to a global level. Globalisation means more opportunities but also more competition. Power of innovation and especially time to market reduction becomes critical. This means that product development cycles have to be reduced and innovation has to be fostered. After sales market/Recycling: Historically, a product was only as long important for a manufacturer as the product was under warranty. Today the after sales market, that was traditionally held by 3rd party vendors, is also seen as a major growth opportunity. This trend, combined with the new EU decree for scrapping and recycling, forces manufacturing companies to take the late product lifecycle stages like service and retirement much more into account, especially during the product definition phase. Virtualisation: Prototypes are expensive and time consuming. Through virtualisation, hardware prototypes are increasingly replaced by digital prototypes. The advantage is that manufacturing problems can be recognised in a very early stage of the product development process. Virtual enterprises are established to develop, produce, operate and support new products in order to save costs through synergy effects and increase profit through decreased time to market. Vertical integration is replaced by virtual integration. Information age/Internet: We are currently in a shift from the industrial age to the information age. Information is said to be the currency of the future. Most companies are not suffering from a lack of information. The problem is that a consistent view on the information is not provided and the information can not assimilated quickly enough. Therefore product related information has to be organised in a way that it is accessible in the right format and at the right place for the right people. From CA -Tools and PDM to Product Lifecycle Management (the technological perspective)
1.1.2
The reduction of product development cycle time and the improvement of design quality has been supported in the last two decades through the implementation of various computer aided technologies like 2D and 3D -CAD (Computer Aided Design), CAE (Computer Aided Engineering and Analysis), CAM (Computer Aided Manufacturing) etc... All these tools aimed to accelerate, automate and integrate various engineering and manufacturing processes. The introduction of CA –Tools, however, was often only task instead of process oriented. Departments tried to automate their tasks as good as possible and created an environment which best helps to meet their targets. In practice, only little integration took place. Each CA -Tool produced it’s own data format which led to so called ‘islands of automation’. This problem could only partially be resolved by various interfaces and data exchange formats like IGES and
2
Introduction
STEP that were developed to facilitate communication between the different CA -tools. Therefore, the result was often an heterogeneous, fragmented, multi-system environment in many companies and especially in design chains for product definition. Romano (1999) in this context states, that "during the engineering supply chain, manufactures and suppliers need to work as design partners, however their design and manufacturing systems are frequently incompatible. This introduces very significant time and cost penalties as they attempt to share design information." Moreover, the large amount of data generated by the various CA -Tools was often not centrally organised and therefore inaccessible to others. New developments instead of using already designed parts were often the costly consequences. Realising this problem and the associated business opportunity several software companies started in the mid 1980s to develop Product Data Management (PDM) systems2 that initially provided vaulting and file management capabilities for engineering documents like 2D CAD drawings. In the late 1980s and early 1990s engineering change management to control and track the changes made to engineering data was added to the functionality together with configuration and classification management capabilities. As a result of 3D -CAD systems and teamwork approaches entering the market PDM systems started to support the management of complex relationships between parts, assemblies, drawings, metadata, people and groups of people. In the mid 1990s many PDM vendors switched the operating system from UNIX to Windows/NT and moreover various improvements in the user interfaces were made. Since the main functionality of PDM has been CAD -centric data and workflow management it was mainly used in the engineering organisation, sometimes in the manufacturing organisation. This was due to the existing technology which made the accessibility for other than design engineering departments difficult. The software was not usable without extensive training and the files could only be viewed in the native CAD system. In the late 1990s a new class of software, Product Lifecycle Management (PLM) systems evolved from PDM systems. Besides the term PLM there are other terms existing that were established by different Research Firms. CPC i.e. stands for Collaborative Product Commerce and was established by the Aberdeen Group whereas cPDM stands for collaborative Product Definition Management which is used by Research Firm CIMData. Other terms are ePLM (electronic Product Lifecycle Management), PDC (product definition and commercialisation) or PIM (Product Information Management). With the advances in user interfaces and database, viewing as well as the Internet technology the technological prerequisites were provided to share data more easily. Providing integrated visualisation and Digital Mock-Up (DMU) Tools, PLM systems make it possible to view, mark-up and redline native CAD data without the need for having access to the native CAD system. The Internet serves as highly effective platform to communicate product data information far beyond the engineering organisation.
2
cf. anon (1995)
3
Introduction
Nadamuni (1999) therefore states that "the vision for PLM is to do more than just CADcentric data and workflow management and become an enterprise application that ties together all the information sources in a corporation". A PLM system can be described as an enterprise-wide Information Technology (IT) "infrastructure to support management of product definition throughout its complete lifecycle"3 (from initial concept to product obsolescence). Including workflow management, PLM systems, as a single source of product information, ensure that up to date information are available and accessible for the right people in the right format at the right time. It is also viewed as an "effective tool in managing the product definition supply chain by serving as an informational bridge connecting OEM's, partners, subcontractors, vendors, consultants and customers" (Miller, 1998f). PLM systems provide a consistent view on product related information in the extended enterprise whereas the easily sharing of product data facilitates real-time collaboration across departmental barriers and among geographically dispersed individuals and groups. Consequently the Aberdeen Group (2000) defines CPC respectively PLM as "a class of software and services that uses Internet technologies to permit individuals - no matter what role they have in the commercialisation of a product, no matter what computer based tool they use, no matter where they are located geographically or within the supply net - to collaboratively develop, build and manage products throughout the entire lifecycle." To cope with the industry as well as social trends described above and to gain competitive advantage a new integrated approach for developing products with respect to the whole product lifecycle has to be taken. Integration has to take place internally (between different departments) as well as externally (i.e. with suppliers and customers). PLM means "the management of comprehensive, accurate and timely information over the entire product lifecycle"4 in order to realise collaborative product development. Therefore, PLM systems are viewed as enabler for an integrated product development approach by industry analysts from Research Firms like Aberdeen Group, AMR Research, CIMData, Gartner Group and Forrester Research. The future meaning of software for managing the product lifecycle in the manufacturing industry can be illustrated by figures that were recently released by Research Firm CIMData: " ... the world-wide [Product Lifecycle Management Solutions (software and services)] market grew 62% to reach $2.86 billion in 2000. CIMData forecasts overall investments to continue at a significant pace over the next five years. The firm predicts the market will exceed $4 billion in 2001 and increase at a compound annual growth rate of 43% through the year 2005, when they expect the market size to exceed $13 billion." (CIMData Press Release, February 28, 2001).
3 4
cf. Portella (2000) cf. anon. (1999)
4
Introduction
1.1.3
From Concurrent Engineering and physical co-location to Collaborative Engineering and virtual co-location (the organisational perspective)
According to Miller (1998e) the product lifecycle is comprised of three primary processes: product definition, product production and operations support. Especially interesting for the product lifecycle seems to be the product definition process and especially the early phase where fundamental design choices are made and the product lifecycle costs are determined to a great extent. The iterative nature of the product design process highlights the point that a great deal of the design activity is redefining and redesigning of ideas. Collaboration has the potential to dramatically reduce the total number of design changes in a product's development cycle and even more important it reduces the late and costly design changes. Changes take place in the early design phase where their impact on cost and time is small (anon. 1999) In the traditional design and manufacturing practice, however, the product life cycle is a series of independent sequential steps ranging from design and engineering to process planning, production and servicing. Frequently, information is passed among groups in a sequential process known as “throwing over the wall”. This scenario can be described as “serial engineering” (CMstat, 1996) Concurrent Engineering (sometimes referred to as Simultaneous Engineering, a later expression is Integrated Product Development) offers a solution to the inefficient sequential product development process by breaking down the barriers between engineering and other key departments like manufacturing (CMstat, 1996). It describes the involvement of different individuals with different perspectives on the product definition process and the parallelisation of the formerly sequential process of product development. In other terms, it describes the concurrent accomplishment of product and process engineering (Smith and Reinertsen, 1995). Concurrent Engineering has been defined by the Institute of Defence Analyses (Pennel and Winner, 1989) as a "systematic approach to the integrated, concurrent design of products and their related processes including manufacture and support." While Concurrent Engineering used to address mainly intra-organisational aspects of the product development process Collaborative Engineering (that has evolved with PLM systems) addresses more the inter-organisational aspect respectively the aspect of the (dynamically changing) extended enterprise (sometimes termed as boundary-less value chain). Integrating internal processes as well as suppliers and customers according to the vision of PLM requires intense collaboration across the entire product lifecycle, inside and outside the company and across geographic regions. Companies must therefore implement processes and structures for collaboratively sharing information with partners, vendors and customers. Teamwork is today the fundamental precondition for innovation. Most tasks nowadays are just too complex for one person to be able to produce practicable and realistic solutions (Doppler and Lauterburg, 2000). The most common mechanisms for pursuing Concurrent Engineering approaches involves therefore a multi-disciplined, cross-
5
Introduction
functional and physically collocated team structure. Physical co-location in this context means that the team members sitting close to each other, ideally within ten meters according to a study of Allen (1977), researching the effect of distance to technical communication. He found that the probability of communication rapidly decreases within the first ten metres. Beyond these point the increase of distance does not seem to have a big impact on communication.
Figure 1.1: From Allen, Managing the Flow of Technology, Figure 8.3, p. 239, The MIT Press, 1977
The greatly enhanced communication and the team cohesiveness has been described by Smith and Reinertsen (1995) as advantage of physical co-location. Growing globalisation, fast changing marketplaces and the increasing trend to outsource, however, demands globally dispersed and inter-organisational teams which makes physical co-location increasingly infeasible. Dynamically changing and flexible teams can only be supported by virtual co-located teams. Virtual co-location does not eliminate the need for occasional face to face meetings, especially in the early phase of a product development project. However, team members will mainly meet, through the advances in Internet and communication technology being possible, either in an online virtual workplace or in video - or telephone conferences. When the environment is dynamically changing communication networks become critical. Smith and Reinertsen (1995) in the context of Concurrent Engineering already stated that frequent, open communication plays an important role since it fosters faster and earlier sharing of information. According to Rowe (2000) the key to collaboration is communication. Traditional organisational structures and approaches cannot provide the competitive basis that is required in this business environment because the product development process is broken down across the specialist functional departments which renders poor communication (Pawar, Sharifi, 2000). Hierarchical organisations are too slow moving
6
Introduction
and inefficient for this environment, therefore flexible project organisations become increasingly important. Several theoreticians, including Drucker (1988) and Schein (1989) suggest that hierarchical authority will probably play a much smaller role in the future, while co-ordination and coaching skills will become more important. Doppler and Lauterburg (2000) describe this development as the shift from the hierarchical organisation, based on the division of labour to the easily re-configurable network organisation. They emphasise that "thinking in organisational categories needs to be replaced by thinking in terms of quickly changing process chains". 1.1.4 Organisational Change Management
The implementation of an enterprise wide IT system involves often structural as well as cultural changes in a company. Significant change, however, is a disruption in our expectations of the future which is viewed as a loss of control (Marshall & Conner, 1996). Resistance to change is therefore often the reaction. People are not likely to change the way they have been (successfully) working, especially when it is not clear what the goal of the whole operation is and who will benefit from the changes (Doppler and Lauterburg, 2000). Fear of the unknown and uncertainty is often the source of resistance. People need predictability, which has something to do with our basic need for security. Uncertainty however can reduce productivity to a great extent (Stark, 1999) Therefore, changing a culture, structures and processes is risky and can even produce negative results which is proved by many studies. Kotter (1995) for example found, that two third of major change initiatives are not successful. Change has therefore carefully be planned and the change process has to be managed and overviewed. Organisational Change Management has proved as a useful tool to facilitate successful cultural transformations by helping people dealing with 'unknown territory' or as Bridges and Mitchell (2000) put it, the 'neutral zone' to ensure that the outcome of the change initiative is positive. The roots of Change Management can be found in so-called soft science of psychology where Change Management is applied to help people deal with traumatic emotional issues like death in the family or knowledge of one’s own impending death (anon., 1996). The increased popularity of Change Management in an business environment can be dated in the mid 1990s when the under Business Process Reengineering (BPR) summarised restructuring efforts of companies often did not deliver the promised results Al-Ani and Gattermeyer,2000). Not addressing the resistance of people to change was identified as key problem of the poor implementation results of many PBR projects. Change Management, that deals with the emotional response to change is therefore sometimes termed as the soft side of BPR that "helps stakeholders deal with dramatic changes in how they earn their livelihoods" (anon., 1996). Change Management suggests that resistance is a natural reaction to change that always contains a coded message and happens on an emotional and not an intellectual level. Accordingly it is important not to 'overcome' resistance i.e. with logical arguments or even fight the resistance but treat resistance as an emotional process where feelings are involved. It is also viewed as important to pause and deal with resistance immediately,
7
Introduction
when it appears which can mean a delay in the project plan (Doppler and Lauterburg, 2000; Block, 1981). Not dealing with it by ignoring the resistance means to risk severe obstacles and barriers which causes significant delays since the resistance will appear later in the process again. Therefore it is important that employees are encouraged to express their concerns, fears and perceptions so that they pass. This can happen either in an anonymous way, i.e. through employee surveys or in face to face meetings. Resistance can have very different forms. Typical forms of resistance, or better symptoms of resistance, beside the most obvious form of attacking, are: Silence, debating unimportant things, staying away, coming to late to meetings, flooding with detail, intrigues, rumours etc...(Block, 1981) Different models, methods and tools have been developed to deal with the change process. The tools and methods that are utilised are often dependent on the change that is required. Most researchers differentiate between two main strategies: incremental and transformational change (depending on the researcher also termed as 'radical change', 'discontinuous change', 'major change' or 'profound change). According to Stark (1999) "incremental change does not challenge existing assumptions and culture. It uses existing structures and processes and is therefore low risk but also slow. Transformational changes intends to change existing structures, the existing organisation and the existing culture". Moreover a difference is made if the change comes from inside the organisation (proactive) or if the change is forced from outside the organisation (reactive). Figure 1.2 shows that a typical change process moves through several phases that are accompanied by typical reactions of people involved and must be met by different Change Management methods and tools. After announcing a change initiative confusion is increasing. Fear of the unknown, not being able to cope with the new patterns and old rules overlaying new rules are reasons for confusion. Communication as an ongoing process during the change process as well as early participation of the people affected by change play an important role to address the initial fears and concerns and to build trust. Coaching people during the change process and facilitate learning of the skills that are needed to deal successfully with the new environment is essential. In the diffusion phase marketing of the change initiative is important for example through publishing of first successes. In order to institutionalise the changed behaviour consistently rewarding adequate behaviour and accordingly punishing inadequate behaviour is viewed as an essential element (Stark, 1999; Doppler and Lauterburg, 2000). To hold the gains of the change initiative and to avoid erosion effects the installation of a continuos improvement process has proved as successful (Reiss, 1997).
8
Introduction
Implementation Success
Supporting Desired State
IDEAL
REAL Marketing
Current State
Confusion
Diffusion
Erosion
Implementation Time
Coaching
Implementation Failure
Figure 1.2: Success characteristics of implementation. From Reiss, Managing Change, Figure 14, p. 28, Schaeffer-Poeschel, 1997 (translated from German)
1.2 Main research issues Great things are expected from PLM ranging from faster time to market, closer collaboration, better quality products to more innovation. The Aberdeen Group (2000) terms PLM respectively CPC even as the 'next big thing' for manufacturing companies. Indeed, implementing Product Lifecycle Management promises manufacturing companies a competitive advantage and a major step towards increased productivity. Regarding collaboration i.e. “GM expects to double design productivity and increase product development workflow by 70% using a collaborative system [built around a PLM system]", according to a Press release from May, 20, 2001. In order to realise major improvements Harrison (1995)5 and Bergh (1996) remind us that a product information management system works best in a reengineered environment. Business Process Reengineering (BPR) has been defined by Hammer and Champy (1995) as "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements".
5
Harrison made this statement at the 'EMDS Focus 95 User Forum' (Feb. 27 to March 2, Orlando)
9
Introduction
The introduction of a PLM system by itself, however, does hardly initiate the changes that are required to improve the product development process. It is therefore important to recognise that PLM "is not a tool to improve the product development process but a tool to support an improved product development process" (Stark, 1999)6. Before it can work to its full potential there must be changes in organisational processes as well as in the organisational culture. A significant impact on the success of the introduction of a PLM system should therefore be the willingness of the organisation to accept change7 and to develop, as Wildermann (2001) put it an "outward-facing collaborative culture", which means a culture that is based on openness and trust. Changing a corporate culture means changing people's values, norms, inner attitude and behaviour. This means that the success heavily relies on the people, making up an organisation, that must form multidisciplined, cross-organisational and virtual teams to improve and accelerate the product development process. Lipnak and Stamp (1997) remind us in this context, that in the establishment of virtual teams "90% is people and only 10% is technology" and Ali (2001)8 describes the experience of Ford Motor in overcoming the barriers to using collaboration tools as 80% people and only 20% technology'. However, old habits die slowly and the sharing of data is often counter-cultural (Peterson, 2001) which is why Bourke (2000) and Krouse (2001) remind us to consider the organisational and cultural issues that are involved with a PLM implementation. Nevertheless, the organisational and cultural implications of the implementation of an enterprise-wide information system like PLM are often neglected or ignored in practice, although researchers suggest that these aspects might be even more important than the technical aspects (Bourke, 2000). The trouble is, however, that senior managers often imagine that transition is automaticthat it occurs simply because the change is happening. But it does not. Just because everyone does have access to the PLM system does not mean that virtual teams develop collaboratively new products and improve the product development process in the way the consultants promised it would (Bridges and Mitchell, 2000). Child (1987) suggests, that technical integration should be mirrored by organisational integration if its full potential benefit is to be realised. In essence, this would mean, that an holistic implementation approach of PLM would not only consider the technical issues but also the organisational and cultural issues. Changing the organisational form (i.e. to a project based organisation to support globally dispersed and interorganisational virtual teams) and accordingly the culture (i.e. to an "outward facing collaborative culture") to support collaboration, however, means for most manufacturing companies not only structural alterations but a radical change. Implementing organisational change offers "tremendous potential for improved performance for today’s product development organisations" according to Stark (1999). But Stark (1999) also adds that it is a major activity that is "difficult, time consuming and costly". Moreover it bears the risk of producing negative results.
6 7
Stark (1999) made this statement in conjunction with the implementation of PDM cf. Miller (1998d) 8 Ali made this statement at the “International Quality and Productivity Center Conference , June 2001
10
Introduction
Organisational Change Management, as a discipline to deal with the emotional reaction to change has proved to support major change initiatives and should also significantly improve the change process during a PLM implementation. The research is therefore focused on the question if the implementation of PLM, in practice, is understood as a change process that touches organisational and cultural issues. Furthermore the research aims to find out if, how and to what degree Change Management methods and tools can support the implementation process in order to evaluate 'The Impact of Organisational Change Management9 on the Success of a PLM Implementation'. In order to research these issues it is intended to answer the following questions: • How does, in theory and practice, the implementation of a PLM solution influence the organisational structure, processes and culture of a company? What are the organisational and cultural consequences or prerequisites? • If Change Management is utilised during an implementation, what Change Management tools and methods are utilised and can they be related to the success or failure of the implementation? • What Change Management strategy is appropriate? • How can Change Management programmes be integrated in an overall implementation project? The research is focused on the Electronics Manufacturing Industry (EMI) which is characterised by short product lifecycles and has enjoyed a time of unprecedented growth as providers of components and products10 to the formerly fast growing markets of communication, computers and consumer products. With the current economic downturn combined with deregulation, emerging markets, increasing globalisation and the rise of consumer power the competitive pressures are stronger than ever. These driving forces require the Electronic Manufacturing Companies (EMC), beside time-tomarket reduction, innovation and cost reduction to be more agile and responsive to changes. Since the EMI relies extensively on outsourcing, supply chain management capabilities are extremely important (Miller, 1999a). Effective interaction and collaboration among globally distributed design and engineering resources in the extended enterprise is therefore vital. In conclusion, EMC have especially the potential to benefit from the introduction of PLM.
9
To avoid mixing up Change Management with engineering change management which describes the management of changes that a product faces during its lifecycle, the working title includes the term Organisational Change Management, which is, however, also to a certain extent misleading because change is always a personal and emotional matter and therefore organisations do not change, people do (Marshall and Conner, 1996). In the context of the dissertation in hand Change Management equals Organisational Change Management. 10 cf. http://www3.ibm.com/solutions/plm/pub1/05256965005b0639/6/3fc8f66c401eaaa88525684d00787896.jsp
11
Introduction
1.3 Literature comment The importance of the product development process, especially for manufacturing companies has been widely discussed (Smith and Reinertsen, 1995, Paashuis, 1997, Pawar and Sharifi, 2000) and is confirmed by various studies (i.e. Nevins et al. (1989). PLM respectively CPC systems, as relatively new IT infrastructure to support an improved product development process are currently intensively discussed, especially among Research Firms (like the Aberdeen Group, AMR Research, Forrester Research, Gartner Group and the Meta Group) as an opportunity for manufacturing companies for major improvement and competitive advantage. The role of organisational change and IT is controversially discussed among researchers, however, all agree that there is a certain relationship. Organisational Change Management is described by many researchers as an appropriate tool to support and facilitate organisational and cultural change (Kotter, 1995; Doppler and Lauterburg, 2000; Schein, 1997). In the context of PDM, the predecessor of PLM, various information can be found on organisational and culture issues i.e. an end user study of product data management users that was carried out by Dataquest in 1997 relates the implementation success of a PDM system to organisational structure and culture. Considering Change Management while implementing a PDM system has been suggested by Stark (1999) and Miller (1998c) states, that "without proper cultural change management and education, most PDM implementations fail or fall short of expectations." In the context of PLM solutions as an inter-organisational information system for product related information, however, only little can be found about organisational or cultural change. Some researchers like Bourke (2000) and Krouse (2001) remind us on the organisational and cultural implication of a PLM implementation. Information about how these implications can be taken into account during the implementation are very rarely found. 1.4 Research Methodology Literature research has been used to identify the key concepts of PLM solutions and the organisational and cultural implications that a PLM implementation might have on a electronics manufacturing company. Accordingly for identifying different Change Management approaches, methods and tools a literature research has been applied. The results from the literature research have been used to develop the following hypothesis: A company culture and organisational structure determines to a great extent the success of a PLM implementation. Organisational Change Management, if used properly, is a significant factor for implementation success. These hypothesis' have been tested by a survey, that was carried out in form of a postal questionnaire. The questionnaires have been sent to EMC as well as Software Vendors and Integrators and Research Firms in the field of PLM. PLM Software Vendors and Integrators as well as Research Firms have been included in the survey to gain a broader perspective on the implementation issues surrounding PLM.
12
Introduction
In order to triangulate the topic and to obtain different perspectives qualitative research in form of telephone interviews has been added. 1.5 Dissertation Structure The dissertation consists, besides the introduction, of six additional chapters. Chapter two contains a literature review that is dealing with various concepts in the research areas product development, Product Lifecycle Management and Organisational Change Management. The research methodology, outlined in chapter three, explains the different methods that were utilised to answer the research question. Furthermore an overview is given on how the gathered data has been analysed. In Chapter four the results obtained through quantitative and qualitative research are presented and described. Chapter five discusses and interprets the findings of the research, their relationship to the objectives set out and to the published literature. Moreover the role of theory is discussed as well as the effect on professional practice. Also the appropriateness of methodology and data collection is reviewed. In Chapter six a summary of the main findings and principle features of the dissertation is provided. Moreover, suggestions for professional practice and recommendations for future research are given. The bibliography can be found in chapter seven. The appendices contain the results of the survey.
13
Literature review
2
Literature review
The literature review is divided into various sections dealing with the main areas of research. 2.1 Concurrent Engineering and physical co-location
In the last decade the main focus of manufacturing companies has been the time to market reduction in order to stay competitive (Paashuis, 1997; Smith & Reinertsen 1995; Hammer and Champy 1995). Some companies and industries could significantly decrease product development cycle time for various products. (Smith and Reinertsen, 1995). One of the concepts underlying to reach this goal has been 'Concurrent Engineering', sometimes termed as 'Simultaneous Engineering', 'Rapid Product Development' or 'Integrated Product Development'. Concurrent Engineering has been described and defined in different ways and with various implications (Garrett, 1990; Duffy, 1989; Hurst, 1993; McKeag, 1994; Walker, 1997). A widely accepted definition, however, has been developed by the Institute for Defence Analyses (Pennel and Winner, 1989). According to them, "Concurrent Engineering is a systematic approach to the integrated, concurrent design of products and their related processes including manufacture and support. This approach is intended to cause the developers from the outset to consider all elements of the product life cycle from conception through to disposal, including quality, cost schedule and user requirements." Common to all of the definitions of Concurrent Engineering is the emphasis of the integration effort on technological as well as organisational level. Technological integration has been supported by Computer Aided Technologies like Computer Aided Design (CAD), Computer Aided Manufacturing (CAM) and especially Product Data Management (PDM) systems that handle the access rights to product data information. Concerning the organisational level Bessant et al. (1985) remarks that "Integrating a Design-Engineering-Manufacturing process is much more challenging from an organisational point of view, than introducing a single stand alone system." Tantoush & Clegg (2001) found that during a [CADCAM] implementation technical problems are more obvious and widely recognised than the organisational challenges involved. Child (1987) therefore suggests, that "technical integration should be mirrored by organizational integration if the [implementations'] full potential benefit is to be realised." Accordingly Smith and Reinertsen (1995) state, that "to achieve the full potential of [Concurrent Engineering] demands a fundamental change in organizational behaviour." In order to break down functional borders among the individuals participating in the product development process it is proposed by Pawar and Sharifi (2000) to set up crossfunctional product development teams "comprising individuals with specialist skills, experiences and different perspectives on the product development process." For communication reasons physical co-location, which is defined by Rafii (1995) as "physical proximity of various individuals, teams, functional areas ... involved in the development of particular products or processes" is proposed by many researchers to facilitate Concurrent Engineering (Smith and Reinertsen,1995; Bergring and Andersin,
14
Literature review
1994). Allen (1977) developed a relationship between technical communication and distance which shows that the probability of communicating at least once a week dramatically drops within the first ten metres. As a consequence Smith and Reinertsen (1995) conclude, that "team members must be located close together, definitely closer than ten meters, to communicate effectively." 2.2 Collaborative Engineering and virtual co-location
Through globalisation, increased outsourcing and the increased number of alliances there is a gradual shift from an intra-organisational to an inter-organisational level (Pawar and Sharifi, 2000). This also touches product development. According to Guha (2001), however, "collaboration across company borders in the extended enterprise is fundamentally different than collaboration among users within a company." Technical as well as organisational integration across organisational borders has to take place. The technical integration aspect is covered by PLM software solutions that are viewed as an opportunity for major improvement and therefore as definite competitive advantage for manufacturing companies (Miller, 1998; Bourke, 1999; Maynard, 2000). In this inter-organisational context respectively the context of the extended enterprise collaboration and cross-functional product development teams and the appropriate organisational form hereof might be defined differently as in the classical Concurrent Engineering environment. Rafii (1995) therefore argues, that physical co-location is increasingly infeasible and not an efficient use of resources as corporations become more global. Similar to Lipnack and Stamps (1997) he sees the emerge of virtual co-location as an alternative and more promising approach since new information technology can enable a project team of hundreds of geographically dispersed team members. In contrast Smith (2000) states, that even through new communication technology (e-mail, WEB etc..) and more globally dispersed manufacturing operations and therefore dispersed product development teams physical co-location should be preferred whenever possible because of the informal information that gets lost in a virtual team. Pawar and Sharifi (2000) compare in their research physical and virtual co-location. They propose a combination of physical and virtual co-located teams and found that virtual teams outperform physical co-located teams in changing environments whereas physical co-located teams face less motivational and technological problems. 2.3 The organisational model for Collaborative Engineering and virtual colocation
Many researchers including Drucker (1988)11 and Kanter (1992)12 have described the traditional model of an hierarchical structured organisation as not competitive in a fast changing marketplace.
11
Drucker describes in his publication: 'The Coming of the New Organization" the shift from a command and control organisation into an information based organsiation.
15
Literature review
In the context of Concurrent Engineering Pawar and Sharifi (2000) explain that "traditional organisational structures and approaches cannot provide the competitive basis that are required in the business environment because they break down the product development process across the specialist functional departments which renders poor communication." Accordingly Doppler and Lauterburg (2000) suggest, that the traditional model of organisational structure, with it's strict hierarchical guarantees for power at every level, involves a number of severe problems that reduce it's overall effectiveness. Among others the 'cult of individual responsibility' is mentioned as an effect of the strict division of labour that leads to competition instead collaboration, both at the individual level and at the level of groups and departments.' They further argue, that rapidly changing marketplaces and the increase of complexity demands a different organisational model and are proposing a network organisation, that enables quickly changing process chains instead of a hierarchical organisation, that is based on the division of labour. In their research about the emerge of virtual or network organisations Black and Edwards (2000) conclude accordingly, that "when this new set of organizing rules are overlaid with the conditions and processes facilitated by the use of advanced communication technology and computing technology, virtual or networked organizations are logical forms of organizations and that this form allows firms to cope with the rapidly changing environment." Rafii (1995) in the context of virtual co-location states, that "networks are inherently informal and anti-hierarchical, and thus their use tends to minimise the formal organisational structure. Knowledge and the willingness to share it, rather than position or job title in a chart, become the key indicators of relevant contribution to a project. These factors contribute to cross-functional integration by making functional walls more transparent and by facilitating the measurement and evaluation of individuals and units contributions to project success." 2.4 Organisational Change Management and Information Technology (IT)
The role of IT and organisational change has been widely discussed. Some researchers remark, that instead of being used to support (i.e. automate) existing procedures, IT now in large parts determines the design of work processes and has become a major component for organisational change (Currid, 1993; Applegate et al, 1996; Bradley et al., 1993). Furthermore many Information Systems (IS) researchers have pointed out that the broader social and organisational context in which IT is implemented has a profound influence on the way in which IT is used (Bussen&Myres 1997, DeSanctis 1993, Myers 1994). Different views are provided regarding the question if new-technology based Information Systems (IS) are enabling desirable organisational change (Scott Morton, 1991; Hammer and Champy 1993; Turner, 1998) or if IS are resulting from social
Kanter et al. sees the competitive model as "a more flexible organization, adaptable to change, with relatively few levels of formal hierarchy and loose boundaries among functions and units ..."
12
16
Literature review
dynamics of the organisational change process (Ciborra, 1991; Orlikowski and Walsham, 1996). 2.5 Organisational and cultural change and the implementation of a PLM solution
The organisational and cultural implications of implementing inter-organisational integration and collaboration via a PLM solution is emphasised by some researchers in this field. Krouse (2001) e.g. reminds us, "that there are a number of organizational and cultural obstacles to overcome to implement collaboration." According to him, people often resist new procedures. Similar to Miller (1998)13 and Peterson (2001)14 he sees the sharing of data or handing off ownership of data to others "as the project moves through various phases of the product development" as potential cause for conflicts." Moreover he reminds us that "Groups that previously operated autonomously may resent having to co-ordinate their activities with others and that work styles and customs may vary between companies located in different areas around the world." Bourke (2000) in the same context emphasises, that "collaborative product design [in a virtual design environment] especially implies the need for a high degree of openness and trust for best results'. He concludes, that 'on the road to success...., addressing cultural problems may be as important, or more important, than technical solutions.' The importance of taking cultural and organisational implications into account is also supported by an end user study of Product Data Management (PDM, the predecessor of PLM) users that was carried out by Dataquest in 1997. The following was found: • Those organisations with strong information networks and lines of communication are more apt to implement –and are more successful when doing so. • Despite users feelings about the strength of information networks within their company and how well their PDM deployments are progressing, they still see the companies structure and culture as the biggest roadblock to expansion. Being in line with theses findings Doppler and Lauterburg (2001) remind us, that implementing organisational change by switching to a network organisation is a fundamentally different way of approaching tasks together that requires "radical structural transformation." For successfully transforming the organisational structure they suggest that the corporate culture has to be changed to one that is based on openness and trust.
13
Miller writes that "one of the greatest challenges .... is resolving inevitable question about who controls data in the enterprise." 14 Peterson emphasizes, that "old habits die slowly, and while the benefits of collaboration are intuitively obvious, the sharing of data with third parties is often counter-cultural. "
17
Literature review
2.6
Change Management and the implementation of a PLM solution
The hidden, informal dimension of change is often explained with the 'Iceberg model', describing that only 10-15%, namely the formal systems like products, policies, procedures etc. is visible, whereas the rest, namely the informal system like perception, feelings, attitudes, norms, behaviour and values are below the 'water surface'. (i.e. Bourke, 2000; Jarmai, 1997). Many researchers including Senge et al. (1999) and Doppler and Lauterburg (2001) therefore state, that successful change requires a inner shift in peoples' values, attitudes and behaviours which means peoples' basic ways of thinking. Marshall and Conner (1996) state in this context that change initiatives must be translated to implications for each individual who will be affected. Significant change, however, is a disruption in our expectations of the future which is viewed as a loss of control (Marshall & Conner, 1996). Resistance is therefore the natural reaction to change and has been described by various researchers (i.e. Reiss, 1997; Kanter et al. 1992). Block (1981) states, that "resistance is an emotional process, not a rational or intellectual process". According to him the major cause for resistance is 'fear of the unknown'. Uncertainty in a working environment, however, reduces productivity and can paralyse a whole organisation. Organisational change has therefore to be carefully planned and the change process has to be managed and overviewed. (Doppler and Lautenburg, 2000). Implementing organisational and cultural change is described as difficult, timeconsuming and costly (Stark, 1999) and therefore the result of Kotters study (1995) that only one third of major change initiatives is successful is not very surprising. Many theorists and practitioners alike are proposing the utilisation of Change Management techniques to successfully deal with the change process. Change Management, that aims to provide an implementation and change friendly environment within an organisation (Reiss, 1997) has been and still is one of the most popular topics in business management. Many books and articles have been written about Change Management including well known business researchers like Kanter, Kotter, Schein, Schaffer and Senge. The roots of Change Management can be found in the science of psychology. Many of the techniques helping people to deal with traumatic emotional issues have been applied to "help stakeholders deal with dramatic changes in how they earn their livelihoods" (anon., 1996). The nature of change has been described by Conner (1993, 1996). Based on Kuebler-Ross (1969) who researched the stages that terminal patients and their families go through he developed a model (Figure 2.1) that describes the emotional response during a change process that is viewed as negative. According to Conner (1996) this model can also be applied to organisational change.
18
Literature review
Active
ANGER ACCEPTANCE
EMOTIONAL RESPONSE
BARGAINING
STABILITY
DENIAL
TESTING
IMMOBILIZATIO DEPRESSION Passive
TIME Figure:2.1: The Nature of Change. From Conner, D.R., Managing the Speed of Change, 1993/1996
Nadler, Shaw and Walton (1995) suggest that there are different types of change that require different management strategies, approaches and methods. In a business context therefore the scope of Change Management ranges from planned evolutions and reforms to business transformation. Top-Down approaches like business transformation (i.e. Business Process Reengineering or crisis management) are characterised by a high degree of intervention whereas bottom-up approaches like planned evolution or reforms (i.e. organisational development) are characterised by less intervention and by harmonising the goals of the corporation and the affected employees (Reiss, 1997). Traditionally the change process was described as moving from a stable state through the unstable state of changing to the desired state, being stable again. Lewin (1951) characterised these three stages as: 'unfreezing, changing and refreezing' the organisation. Consequently Nickols (2000) states, that "a very useful framework for thinking about the change process is problem solving'. He sees managing change 'as a matter of moving from one state to another, specifically from the problem state to the solved state." Many researchers, however, emphasise that due to the economic environment of constant and accelerated change the stable states of an organisations are becoming shorter (Reiss, 1997) or even diminish. Consequently researchers remark that there also has to be a constant change process within an organisation and that the change process has to be viewed as a learning process (Agyris, 1985; Senge 1999; Doppler and Lauterburg, 2000; Dobiey and Wagner, 2001). In order to facilitate a constantly changing organisation the focus is therefore laid on changing the organisation into a so called 'learning organisation' (Senge, 1991, 1995; Doppler and Lauterburg, 2001).
19
Literature review
Conventional reactive models aim to react in an optimal way to changes that are forced from the environment, like technological or legal changes. In contrast hereof proactive models like learning organisations moreover aim to anticipate change and to generate change from within the organisation. People are not being changed, they change (Reiss, 1997). Arie de Geus (1988) in this context states, that "the only competitive advantage the company of the future will have is it's managers' ability to learn faster than their competitor." Independent of the method that is used the capacity of an organisation to change is viewed as a critical success factor and important corporate asset in a world of accelerated and constant change (Pagliarella, 2000).
20
Methodology and data collection
3 Methodology and data collection
This chapter gives an overview on the techniques that were used to research the dissertation topic. Both, desk research (secondary) and field research (primary) has been carried out to achieve the aims of the dissertation. 3.1 Secondary research (desk research)
Desk research has focused on examining the literature and has covered the areas of product development, Product Lifecycle Management (PLM) and Organisational Change Management. Moreover the Internet has been searched, especially the web pages of System Integrators, Software Vendors and Research Firms for valuable information about the topics involved. Subscription to various journals and periodicals provided another source for desk research. Literature research has been used to identify the key concepts of PLM solutions and the organisational and cultural implications that a PLM implementation might have on a electronics manufacturing company. Accordingly for identifying different Change Management approaches, methods and tools literature research has been used. Moreover desk research has been utilised to develop a hypothesis for the survey. 3.2 Primary research
In the primary or field research quantitative as well as qualitative research methods have been used. A survey, comprised by mainly closed or partially open questions has covered the quantitative research. Interviews covered the qualitative research. The triangulation of the topic aims to provide different perspectives on the research topic. 3.2.1 Quantitative research (Survey)
Quantitative research has been carried out through a survey. As technique for data collection postal questionnaires have been chosen. The following hypothesis have been concluded from the literature research: Especially the culture of a company determines to a great extent the success of a PLM implementation. Organisational Change Management, if used properly, can be a significant factor for implementation success. The aim of the survey has been also to find out if, to what extent and how successful Change Management methods are utilised during a PLM implementation. Heterogeneous sampling has been used to select the participants for the survey. In case of the Electronic Manufacturing Companies (EMC) the participants needed to meet specific criteria to qualify. They should at least being in the process of evaluating or benchmarking PLM solution. In order to gain a broad perspective on the topics investigated also PLM System Integrators, Software Vendors and Research Firms have
21
Methodology and data collection
been, beside EMC, asked to participate in the survey. Table 4.1 in the next chapter shows the number of companies that have been asked to participate and the number of respondents categorised by profession. A great help for identifying potential participants have been various articles dealing with PLM and conference manuals of appropriate conferences (i.e. solutions.conference of CSC Ploenzke, eeuc-european engineering user conference). Contacts have been made either by e-mail or phone calls. Two different, comprehensive questionnaires have been designed. One has been sent to EMC aiming to analyse the current state of the company and the internal implementation process regarding organisational, cultural and Change Management elements. A slightly different one has been sent to System Integrators and Software Vendors (SVSI) aiming to benefit from their broader experiences in PLM implementation projects, especially regarding Change Management elements and the impact of those on the overall implementation success. The questionnaire for the survey was developed in an iterative process through literature review and conversations with various experts in the area of PLM and Change Management. Especially Starks' 'pdm e-zine' newsletter and various publications of Miller (1997, 1998, 1999) have been contributed to the questions in the area of PLM. Kotters (1995) ideas in his publication 'Leading Change-why transformation efforts fail', Senge et al. (1999) with his publication 'The Dance of Change' and Doppler and Lauterburg (2000) with their publication "Managing Corporate Change" contributed much to the final questions in the areas of organisational change. Mainly closed or partly open questions have been used in the survey in order to identify trends and patterns. For these kind of questions answers have been predefined that could be ticked off. However, there was also space left for inserting own ideas and comments. Open questions have been used in those areas that have been selected for further research via qualitative research. For better understanding and guidance the questions have been grouped into thematically sections provided with appropriate sub-headings. The following subheadings for example have been utilised in the manufacturers questionnaire: Product development process and relationship to customers/suppliers Project set-up of the PLM implementation Changes (because of the PLM implementation) Organisational Change Management Before sending the questionnaires to the participants they have been reviewed by the German supervisor. Moreover the questionnaires have been pilot tested. This has influenced the questionnaires in a way, that the answers have been classified and some questions have been formulated clearer or a complex question has been divided into two easier questions. To make sure that the intention of the survey was well understood telephone calls or e-mail correspondence took place with the participants before sending the questionnaire. Additionally a covering letter has been sent with the questionnaire and it was guaranteed to keep the information gathered by the survey confidential to increase the reply rate.
22
Methodology and data collection
Appropriate coding (two examples can be found in the next chapter) has been used to prepare the data for analysis. Because of the small sample size it has to be mentioned that the data will not be statistically significant. However, they highlight differences and similarities. Tables have been chosen as the best way to display the results in order to identify trends and patterns and compare the data received. The tables contain mostly classification and rank or percentage values (an example can be found in the next chapter) 3.2.2 Qualitative research (Interviews)
Qualitative research has been used to triangulate the topic in order to provide different perspectives on the topics involved in the research. Structured telephone interviews have been chosen to carry out qualitative research. In total, three interviews have been conducted each lasting approximately one hour. A pilot interview has been conducted as well. The interview partner (an individual person) have been identified and chosen after analysing and evaluating the results of the quantitative research. In order to get the most varieties of views the interview partner had different backgrounds. One interview partner came from an EMC, one from a System Integrator and the third from a Software Vendor. Interviews have been chosen as qualitative research method since it seems the most appropriate method to get an understanding about the relevance of so called 'soft issues' during a PLM implementation. The topics involved and resulting questions were chosen based on the results of the survey. Qualitative research mainly concentrated on the organisational and cultural implications, the implementation strategy and on the utilised Change Management concepts, methods and tools during a product lifecycle implementation.
23
Results
4
Results
In this chapter the obtained results through qualitative and quantitative research are presented. Quantitative research has been covered by questionnaires that were send to Electronic Manufacturing Companies (EMC) on the one hand and to Software Vendors, System Integrators and Research Firms on the other hand. The results of the qualitative research that were conducted by telephone interviews are also presented in this chapter. 4.1 Results from quantitative research (Survey)
The result of the survey is presented in the following section. The main trends and patterns are described and differences in the answers of EMC on the one hand and Software Vendors and System Integrators (SVSI) on the other hand are mentioned. Each question of the survey and its intention is presented as well as the result that was obtained from it. Before that the response rate is introduced and an explanation is given on how the data was prepared for analysis and interpretation. A detailed summary of the results can be found in the appendices. The tables in appendix A consolidate the answers of EMC and SVSI. Appendix B summarises the findings from the questionnaires sent to EMC. The tables in appendix C show the results of the survey from SVSI. 4.1.1 Survey participants
The overview in the following table shows how many companies have been asked to participate in the survey and how many companies finally participated:
Category Manufacturing Companies System Integrators/Consultants Software Vendors Research Firms Table 4.1: Survey participants No. of companies 'Being Asked' 16 12 6 4 No. of companies that participated 7 8 5 0 Response Rate (%) 44 67 83 0
The companies participating in the survey are not named explicitly because it was guaranteed to keep the information confidential. In case of EMC the participants have been the project leader of the PLM implementation. In case of SVSI they have mainly been the PLM practice leader respectively knowledgeable consultants in the field of PLM.
24
Results
4.1.2
Preparation for analysis
In order to reveal trends and patterns the answers have been summarised, ranked and ordered as described in the examples below: Example 1: Most questions are organised as shown in table 4.2. For each question different predefined answers15 are offered that could be weighted from 'very important' over 'important' and 'less important' to 'not import' (respectively 'frequently'/'occasionally' /'seldom'/'never' or 'true'/'partially true'/'not true'). A factor is assigned to each answer as shown in table 4.2. The numbers are then summed up and divided by the number of respondents for that answer (sometimes not all possibilities where marked by each respondent). Calculation example for 'Cultural Changes' (Rank2): 7 (number of respondents that ticked that box) x 3 (factor for very important) = 21 3 (number of respondents that ticked that box) x 2 (factor for important) =6 2 (number of respondents that ticked that box) x 1 (factor for less important) =2 0 (number of respondents that ticked that box) x 0 (factor for not important) =0 ---------------------------------------------------------------------------------------------------------Sum ? = 29 Number of respondents for that answer No = 12 Result ?/No = 2,4 Depending on the result the answers were reordered and assigned a rank. What changes are required to successfully implement a PLM system?
Rank Predefined Answers XXX 1 very important 3 6 important 2 7 less important 1 not important 0 ? X 32 No X 13 ?/No XX 2,5
2 3
Weight/Factor Reengineering/Redefinition of product development processes (i.e. interdisciplinary virtual team approaches, workflow changes) Cultural changes (i.e. open 7 communication and collaboration culture) Empowering of people / teams (i.e. 5 designers having direct customer contact)
3 3
2 5
29 26
12 13
2,4 2
Table 4.2: Extract of questionnaire
15
However, there was also space left to insert own answers.
25
Results
Example 2: For the second type of questions there is no range to choose from. Depending on the question, multiple boxes or just one could be ticked. For those kind of questions a percentage value is generated as result. How is the implementation of a PLM system and the changes required hereof communicated with the people affected (n=13)?
Rank 1 2 3 4 5 6 7 Predefined Answer Workshops Intranet Notice Board e-mail Internal newspaper Employee Survey Global Town Hall Meetings ? 12 10 10 7 7 5 4 % 92 77 77 54 54 38 31
Table 4.3: Extract of questionnaire
4.1.3
Questionnaire results
The implementation of a PLM solution can be used to automate existing processes and procedures or to change existing processes and procedures. This can be done for only a part of the enterprise or the whole enterprise. The first question16 about the most important goals to define for the implementation of a PLM system respectively the most important reasons for the decision to implement a PLM system therefore intents to find out the context and scope of the implementation. Overall, time to market reduction is viewed as the most important reason for implementing a PLM solution. Enabling extended enterprises through integration of customers, increase of productivity and improvement of quality are also viewed as important goals. While most of the answers of EMC and SVSI are similar, differences can be found regarding the improvement of the classic PDM functionality and the integration of internal islands of automation. While EMC view the improvement of the classic PDM functionality as very important SVSI rank this aspect very low. Integrating internal islands of automation is viewed by SVSI as important while EMC view this as subordinate aspect. Enabling mass customisation through the implementation of PLM systems seems for EMC as well as SVSI less important. The intention of the second question asking who generally is involved in the product definition process is to find out what departments and stakeholders are typically involved in the product design process. Manufacturing, suppliers, purchasing and marketing are mostly named to be involved besides the typical departments like product design and R&D. Customer, service and sales departments seem to be less involved. The role of senior management and manufacturing in the product definition process is viewed differently by EMC and SVSI. While SVSI state that manufacturing departments are frequently and senior management is seldom involved the answer of
16
Numbering according to results in Appendix A
26
Results
EMC indicate the opposite. Some respondents comment that this is very different depending on the division and the phase in the development cycle. Accordingly the next question is about who has access to and is using the PLM system in order to find out the scope and penetration of the PLM system. A difference is made between using and accessing because having access does not necessarily mean that it is also used. The result is quite similar to the second question. Contrary to the question before the answer of EMC indicate that manufacturing departments have, except product design departments, more than any other department access to and are using the PLM system. Having a vision is viewed as essential by many researchers for initiating and managing change17. The fourth question therefore aims to find out if a vision is connected with the implementation of a PLM system. The answers are very heterogeneous. Half of the answers, however, indicate that a vision is defined. Analysing the current state and developing a roadmap to reach the target state is typical for problem solving. Change Management can be viewed as some kind of problem solving18 and therefore those elements could also be an important element during a PLM implementation. Nearly two third of the respondents state that an 'as is' or current state analysis is being performed before implementing a PLM solution. Basically the same number of respondents state that a strategy is defined how to reach the 'to be' situation. Establishing a pilot group is viewed by researchers as important element to successful implement change and to minimise risk19. Question number seven therefore asks if a pilot group is established during a PLM implementation. Nearly two third of SISV confirm this statement whereas all of the manufacturers that responded to this question have worked with pilot teams. The reduction of productivity and motivation is typical for the confusion phase at the beginning of a change process. Therefore the intention of question number eight is to find out if the productivity is influenced during the implementation phase in order to draw conclusions to the appropriateness of different Change Management strategies. 59 % respond that the productivity is slowed down only a little bit, whereas 35% do not realise any negative influence on productivity. 6% realise a significant decrease of productivity. Question number nine and ten of the questionnaire try to find out the relationship between PLM and Enterprise Resource Planning (ERP) systems and the resulting ownership of data hereof which is viewed as potential source of conflict20. More than 75% of the respondents state that there is an interface to an ERP system. All variations on how this situation is handled appear in practice. From keeping the data in both
17 18
cf. Kotter (1995) cf. Nickols (2000) 19 cf. Senge (1999), Reiss (1997) 20 cf. Miller (1999a)
27
Results
systems (39%) to keeping the data in the ERP system (28%) respectively in the PLM system (11%) to transferring the data from the PLM into the ERP system (22%). Changes in processes as well as in the organisational structure and culture are regarded by some researchers21 as prerequisite for a successful PLM implementation. Therefore, the aim of question number eleven is to find out, if, in practice, appropriate changes take place. Overall, the redefinition of product development processes (i.e. workflow changes) is viewed as the most important change that is required for successfully implementing a PLM system. Changes in the organisational model and cultural changes have not taken place during the PLM implementation according to the respondents of EMC. SVSI, however, view cultural changes (i.e. an open communication and collaboration culture) as critical. Empowering of people and changes in the organisational model are viewed as less important. One respondent added to the predefined answers, that the management awareness of PLM related issues has to be increased. Question number twelve intents to find out how well the implementation of PLM and the changes resulting hereof are communicated since this is an important element of Organisational Change Management.22 The responses show that different ways are used to communicate the implementation and the changes that are required. Mostly used are Workshops and the Internet to communicate whereas employee surveys and Global Town Hall Meetings are seldom used. One respondent remarked that awareness sessions are utilised that are combined with feedback questionnaires. Another respondent mentioned that 'since PLM is an integration program, a marketing and communication strategy and roadmap is required. All channels/media for internal and external (suppliers, customers, partners) communication should be part of this strategy.' The aim of question number thirteen is to find out what changes are required in the organisational structure to best support the implementation of PLM. Researchers suggest as the future organisational model a flexible and process oriented network organisation to deal with a quickly changing environment23. A variety of different views is provided. The manufacturing companies that participated state that no changes in the organisational model have taken place during the implementation whereas most of the SISV emphasise the importance of a project or process organisation and the tearing down of functional borders. Question number fourteen asks for Change Management methods and tools that are utilised during a PLM implementation like aligning and mobilising leaders and vocal and visible support from senior management (walking the talk). The early involvement of people being affected by the changes is viewed as very important by EMC as well as SVSI. Establishing a communication concept as the logical consequence hereof is also viewed as important. Moreover the establishing of a shared and motivated vision and the creation of an atmosphere of openness and trust is ranked high. Changing the reward systems to support the change initiative however is ranked very low.
21 22
cf. Stark (1999), Bourke (2000) cf. Stark (1999), Doppler and Lauterburg (2000) 23 cf. Doppler and Lauterburg (2000)
28
Results
Coaching plays an important role during the change process especially during the confusion phase24. Question number fifteen therefore aims to find out what kind of training users receive during a PLM implementation. Of special interest has been the question if other than software functionality is trained like working in a team to successfully deal with the new environment. However, besides software training, other training like team specific training (communication, conflict management, team working) is quite seldom offered to users. According to the results intercultural training is very seldom considered to support the PLM implementation. Question number sixteen tries to find out the main barriers and problems during a PLM implementation. Especially interesting in this context has been the question if the problems can be located in the organisational culture and people related issues or if they are centred around technical aspects. The overall result was that not enough visible and vocal support from senior management was given the highest rank, followed by barriers between departments and laying the focus too much on technological aspects and not enough on people. Other answers that received a high rank were the resistance of middle management and users to change. A remarkable difference can be found in evaluating the technological limitation. SISV assign this problem a very low rank, whereas EMC assign this problem a very high rank. Intercultural problems (i.e. language barriers) seem to be no problem and are therefore ranked very low. Aiming to find out what factors positively influence the success of a PLM implementation question number seventeen asks for the main success factors. Overall it was felt that the early involvement of people being affected by change and the commitment and buy in of senior management are very important for a successful implementation. Aligning and mobilising leaders and the commitment of middle management are also viewed as important. Establishing a sense of urgency25 and changing the reward system to support changes 26,however, are ranked as less important. The next question (18) asks if the results of a PLM implementation are satisfactory respectively deliver the promised results. The question intents to relate the success of an implementation to the utilised Change Management methods and tools in the implementation phase. The overall result was that 53% classified the implementation as satisfactory whereas 40% responded that the implementation can be rated as partially or sometimes satisfactory. One respondent classified PLM implementations as not satisfactory. Explanations were given on the ratings described above. One respondent mentioned that a successful implementation actively supports users in living new processes and leads to long-term profitability. Another respondent remarked that the potential of benefits is so big, that it will even be hard to not be successful. A different participant remarked that companies make different experiences that are not always positive but that a number of visionary companies have achieved a tremendous step forward through the implementation of PLM. Another explanation suggests that project benefits are overestimated at the beginning of the project because otherwise the
24 25
cf. Reiss (1997) cf. Kotter (1995), sometimes referred to as creating a burning platform 26 suggested by Stark (1999) and Doppler and Lauterburg (2000)
29
Results
management would not have invested in the system. It is stated that the actual benefits are therefore much lower than estimated. Question number nineteen deals with the Return on Investment (ROI) measurement of the PLM implementation. The result shows that a ROI calculation is only done in a few instances. Especially manufacturing companies answered that no calculation is done afterwards. Respondents remarked that this is very difficult to do since there is no real measure to compare. Furthermore it is difficult to find out if the improvements result from the PLM implementation or if they are due to other changes within the company or the environment. Some questions have only be placed on the questionnaire for EMC respectively on the questionnaire sent to SVSI. The first ten questions on the questionnaire sent to EMC have been placed in order to find out what kind of companies are implementing PLM . For that reason it was asked for the product development process in general, the CA -tools used to support the product development process and the internal and external flow of communication. The results showed that most companies implementing a PLM system have also implemented other CA -Tools like 3D-CAD, CAM and EDM/PDM. The answers also showed that a variety of possibilities are used to communicate internally in the product development process. E-mail is at least equally often used as the traditional communication tools like face to face (individual as well as team) meetings. Video conferences and collaborative workspace systems, however, are still rarely used whereas one respondent comment that he sees this technology growing in the near future. Concerning external communication with suppliers and customers the results were basically the same. One comment stated that there is a growing desire to include suppliers as part of the extended enterprise and that much more use of Collaborative Engineering is planned for the future. In order to evaluate the need and the level of collaboration and interaction with customers and suppliers several questions were asked. The research found that paper drawings are still equally often exchanged as CAD files. An analysis of the question if engineers have direct contact and interaction with their customers found that this is only unconfined true for 43% of the companies. The question concerning the percentage value of the components making up the final product aims to evaluate the need for collaboration. It was found that more than half of the companies outsource 25-50% of their final product. Another question aiming to find out the interaction between functional groups has been if the concept of Concurrent Engineering has been implemented. 29% of the respondents confirm this question whereas 57% answered with partially and one with no. Several questions have exclusively been forwarded to SVSI aiming to benefit from their experience gained from different PLM implementations. Question nineteen asks for the positive impact of Change Management methods on the success of a PLM implementation. Half of the participants respond that they would rate the impact as high, 33% as medium and 17% as low. 42% of the participants state that the company culture does have a high impact on the implementation success whereas
30
Results
another 42% view the impact as medium and only 16% view the impact as low. Since the company culture seems to have a big impact on the implementation success nearly 70% of the respondents answer that their implementation approach is depending on the company culture. 4.2 Results from qualitative research (Interviews)
Qualitative research was used to triangulate the topic. Three telephone interviews have been conducted. The following section shows the results that were obtained from qualitative research. The results from the interviews are categorised in those topics that were chosen for further research after analysing the survey results. What kind of companies do implement PLM? The interviewees stated that this is different but that there is a clear tendency to companies that can be described as modern and innovative. Furthermore the companies that do implementing are rather big than small in size. How does the implementation of PLM impact organisational processes? The interviewees felt, that organisational processes are mainly impacted through improving existing processes rather than the radical redesign of processes according to BPR. They are mainly improved through workflow changes. A typical example is the changing of responsibilities and transferring of tasks and people from manufacturing process planning into product development. Moreover it was stated that PLM is enabling new approaches and these were used to improve existing processes. Collaboration in virtual teams is so far mainly used in selected test environments. The change of processes is more likely to happen when external consultants are involved. How does the implementation of PLM impact organisational structures? In accordance with the survey results the interviews show that organisational structure is very little impacted by the implementation of PLM. Bigger companies are showing a tendency to process organisation and virtual teams. One interviewee argued that if the need for change in the organisational structure would be stated a PLM project in most cases would have no chance to get started. How does the implementation of PLM impact organisational culture? Organisational culture is viewed as an important success factor that can influence the implementation strategy. The degree of openness of a company's culture can be seen on the fact how restrictive - or not restrictive data is handled. It was remarked that there are also different cultures within a company (between departments or between divisions) and that the implementation approach has to take care of this fact. One interviewee highlighted that PLM creates transparency which automatically should change the culture.
31
Results
In what way are Change Management concepts, tools and methods utilised? The impact of the so called soft factors is very well recognised. One interviewee stated that he estimates that 70% on implementation success is people related. Change Management in the implementation planning phase tends to be a topic when an external consultant is involved or when the company has already experience with large software projects. Change Management tools are otherwise used mainly reactively instead of proactively. One interviewee stated, that too less attention is put on these aspects. Defining a vision tends to be used only in large scale projects. Communication mainly takes place through various information sessions to introduce the PLM system and to create awareness. As especially important it was viewed by one interviewee to achieve management awareness and recognition. In general, talking to people in order to find out for whom the implementation is interesting and can create opportunities, is viewed as important to find appropriate key users. Key users are used as multipliers e.g. in train the trainer approaches. It is viewed as essential that the key users have the appropriate acceptance within the group. To gain acceptance for necessary changes it was viewed as important that the PLM system is easy to use and does not restrict the way people are working. Short term wins are used to create confidence and convince the people involved but especially senior management. The important role of senior management support and commitment was underlined. One interviewee emphasised the importance of 'Walking the Talk' which means for example that when collaborative behaviour is expected also senior management has to collaborate to serve as a role model. It was remarked that resistance can have very different reasons and dealing with it has to happen in a flexible way which can also mean that a PLM implementation has to be postponed. What are commonly used implementation strategies? A common strategy is to replace and consolidate various existing product information systems with the PLM system.. In a second step it is tried to incrementally improve the product definition process. Also pilot group approaches do appear.
32
Discussion
5
Discussion
The discussion interprets the results of the research and answers the research question. Furthermore the results are related to the published literature and the role of theory is discussed. Additionally the appropriateness of the research methodology and data collection techniques are reviewed. Finally the effect on professional practice is discussed by recommending implementation respectively Change Management strategies. 5.1 Interpretation of research findings This section discusses the role of organisational culture, structure and processes during a Product Lifecycle Management (PLM) implementation. Additionally the role of Change Management is discussed in order to answer the research question. 5.1.1 What kind of companies do implement PLM?
Product Lifecycle Management has evolved from various predecessors like Engineering Data Management (EDM) and Product Data Management (PDM) over the last twenty years. However, PLM solutions by itself are a quite young range of software. Therefore the number of companies that have already experience with PLM software solutions is relatively small. The companies that are implementing PLM solutions do have a long and broad experience with different computer aided development tools as well as with enterprise-wide software implementation like Enterprise Resource Planning (ERP) . In most cases they are one of the best in their business segment and can be described as multinational and internationally operating companies. Small and medium companies (SMC) do relatively seldom implement PLM solutions up to date. Electronic Manufacturing Companies (EMC) whose business is minted by time to market and cost reduction coupled with the demand of increased quality have mostly already experience with management concepts like Concurrent Engineering, Business Process Reengineering (BPR) and Total Quality Management (TQM). Change is therefore nothing totally new for them and there management systems and organisational structures tend to be 'modern' rather than 'traditional'. 5.1.2 The role of organisational culture
There is no doubt that an open minded organisational culture is beneficial for the introduction of any new programme. Accordingly it is also viewed as supportive for a PLM implementation. However, if a company's culture has to be changed is heavily depending on the matter of fact what predominant culture exists within a company. PLM promotes many aspects like the early sharing of data and the internal and external need for collaboration that might be, especially in an inter-organisational context, counter-cultural and affect the way people are working. This can cause conflicts and negatively influence the implementation success. The success of collaboration for
33
Discussion
example is depending on the sharing of data and ideas. Openness and trust are basic requirements for successful collaboration as well as the responsibility to timely and accurately submit data to the PLM system so that others can benefit from it. In many cases this behaviour firstly has to be learned and anchored in the company culture. The research results indicate that especially Software Vendors and System Integrators (SVSI) view cultural changes (to an open communication and collaboration culture) as an essential element of a successful PLM implementation27. This might be the result of the experiences that they have gained during various PLM implementations at different companies with different organisational cultures which enables them to relate the implementation success to a certain culture. The results of the questionnaires from the EMC seem to be in contrast of the result found by SVSI since all of the respondents for this questions (n=4) stated that there have been no cultural changes28. Two of them, however commented that an open minded culture is prerequisite for the implementation and a second commented that he expects significant cultural changes from local data and knowledge to more global collaboration as the PLM tool set evolves29. It can be concluded that the organisational culture seems to be a quite important success factor for the PLM implementation, however, the importance is differently evaluated by SVSI and EMC. This might be due to the fact that EMC tend to view the implementation of PLM in the first place as the replacement and consolidation of existing systems in order to improve the classic PDM functionality30 rather than a new business concept. 5.1.3 The role of organisational structure
The organisational structure has been changed and remodelled during the last decade in many companies. Different concepts in the 1990s like TQM, BPR, Lean Management and Concurrent Engineering challenged traditional organisational forms and often led to project management, team based approaches and process orientation. Although changing the organisational structure could make sense in a few instances the implementation of PLM will most likely not lead to radical structural changes which is proved by the fact that all EMC, responding to this question, stated, that the organisational structure has not been changed with the PLM implementation31. SVSI in this context emphasise the importance of project management, process orientation and cross-functional teams32. The implementation of network organisations as a means to better cope with the changing environment and the virtual integration of partners, suppliers and customers does not seem to play a role. This is not surprising when the strategic goals that are defined with the implementation of PLM33 are reviewed. Time to
27
The impact of company culture on implementation success is viewed by 42% as high and by 42% as medium. Moreover cultural changes are ranked as the most important change that is required after workflow changes (cf. Appendix C, question number 20). 28 cf. Appendix B, question number 24 29 cf. Appendix B, comments to question number 24 30 cf. Appendix B, question 1. The improvement of the classic functionality is viewed as one of the main goals by EMC. 31 cf. Appendix B, question number 23 32 cf. Appendix C, question number 13 33 cf. Appendix A, question number 1
34
Discussion
market reduction, better quality products and increase of productivity have already been well known strategies before PLM evolved and have also been addressed by programmes like TQM, BPR and the introduction of Lean Management. According to the fact that 'structure follows strategy' the basic organisational structure remains untouched in most cases of PLM implementations. However, it is important to realise that along the product lifecycle different phases need different set-ups, environments and structures. As already discussed in the introduction34, especially the early phase of product definition has a remarkable impact on the total product lifecycle costs. According to the concept of Concurrent respectively Collaborative Engineering the involvement of different individuals from different disciplines with different perspectives on the product definition process is important in this phase. Cross-functional teams have to be established and barriers between departments must diminish in order to run through the iteration loops as early as possible. The organisational form in this phase has to be coined by a project and process organisation.35 In this phase the PLM system can greatly support the product development by offering portals to virtually meet, review and change the product online. Although the great opportunities of online meetings exist the need for initial physical meetings should be emphasised. In the manufacturing planning phase the interaction between different departments becomes less important whereas in the production phase interaction and iterations tend to produce rather negative than positive results. In this phase functional departments will be more important than a project organisation. In summary it can be stated, that radical structural transformations like establishing a network organisation are viewed neither as prerequisite nor as an important success factor for implementing PLM. However, project management, process orientation and cross-functional teams are viewed as supportive for a PLM implementation (especially for the product development phase). 5.1.4 The role of the product development processes
There are two basic strategies how to handle processes during a PLM implementation. Either the PLM system will be customised to map existing processes or the existing processes will be customised to allow an implementation without customisations to the PLM systems. The product development process as core process of EMC and whose early phase determines to a large extent the product lifecycle costs36 is of special interest during a PLM implementation. The research result indicates that the product development process should be analysed and if necessary adjusted with the implementation of PLM in order to improve product development. Especially SVSI view the redefinition respectively reengineering of the product development process as the most important change.37 EMC only partially agree38 to this statement. However, the
34 35
cf. Introduction, page 1 cf. Appendix C, question number 13 36 cf. Introduction, page 1 37 cf. Appendix C, question number 11 38 cf. Appendix B, question number 22
35
Discussion
research results indicate that there is certainly room for improvement since Concurrent Engineering is only partially implemented39 in most companies. In most cases this does not mean that the product definition process has to be redefined from scratch according to BPR40. In many instances the workflow has to be changed to encourage collaboration and participation. Processes can be changed by changing responsibilities and transforming tasks in different areas without the need for changing the organisational structure. This can for example mean that tasks from production planning are transformed into the early design phase. It is important in this context to remark that processes can be changed without changing the organisational structure. Also possible is the improvement of processes through enabling of new techniques like collaborative workspace systems. It can be concluded, that especially the product definition process should be analysed and, if necessary, improved. Instead of top-down approaches like BPR most likely bottom-up approaches like workflow changes will be utilised. 5.1.5 The role of Change Management
The implementation of an enterprise-wide information system will always mean change to a certain extent, no matter if and to what degree it challenges existing culture, structure and processes. Therefore Change Management can play an important role to help managing the transition. The degree of change of course depends on the implementation strategy. Accordingly the Change Management tools and methods will vary depending on the implementation strategy. The success or failure of PLM will to a great extent be determined by implementation issues and especially by those that are dealing with the so called soft factors like human behaviour and attitude41. Resistance of users and middle management as well as putting too much focus on technological aspects and not enough on people related issues belong to the main problems of a PLM implementation42 whereas the early involvement of affected people belongs to the main success factors43. Senior Management seems to play an especially important role. Their engagement and support throughout the whole implementation process is viewed as an important prerequisite for the implementation success.44 Communication through different channels and in different ways45 plays an important role to gain acceptance and to involve and integrate employees whereas workshops as an effective but inefficient way of communication are mostly used46.
39 40
cf. Appendix B, question number 10 Hammer and Champy (1995) define BPR as 'the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements' 41 One interviewee estimated that at least 70% of implementation success are depending on people related issues 42 cf. Appendix A, question 16. 43 cf. Appendix A, question 17 44 cf. Appendix A, question 16 and 17 45 cf. Appendix A, question 12 46 cf. Appendix A, question 12
36
Discussion
The importance of utilising Change Management tools and methods is very well understood by PLM implementers. However, it seems that a Change Management concept is often not embedded as an strategic element in the overall implementation strategy, especially when no external consultant is involved. Selected Change Management tools are mostly intuitively and reactively used based on the experiences from former software implementations. Change Management tools that are used in major change initiatives like establishing a sense of urgency or the change of reward systems are relatively seldom found47. It can be summarised, that understanding a PLM implementation as a change process is viewed as highly beneficial. Proactively including a Change Management concept in the implementation strategy however is very seldom found. This is also due to the fact that senior management has to be convinced to approve additional money for a Change Management initiative. 5.1.6 The Return on Investment (ROI) and the impact of Change Management on implementation success
The implementation of PLM is a major investment for most Electronic Manufacturing Companies. Therefore the ROI is always a critical factor for senior management to investigate. Although several potential characteristics like time to market, cost reduction or quality improvement exist to evaluate a PLM implementation it is very hard to find reliable calculations48. This is often due to the fact that the implementation can easily last several years and it is often not clear if improvements are resulting from the PLM implementation or different reasons. Consequently it is even harder to calculate the impact of Change Management on the implementation success. The research results however indicate that implementation related issues and especially those that are dealing with human behaviour and attitude are very important. This is proved by the fact that all important success factors as well as implementation barriers can be addressed by Change Management. The probability is therefore very high that understanding the implementation of PLM as a change process has a positive impact on the implementation.49 The hypothesis, underlying the questionnaire, that Change Management has a significant impact on implementation success can therefore be confirmed. To further verify this statement different PLM implementations with different implementation approaches have to be benchmarked. 5.2 The relationship of the research results to published literature and research
The statement that an enterprise-wide information system like PLM impacts organisational culture, structure and processes is neither new nor unique to the implementation of a PLM system but can also be found at the implementation of other Information Systems (IS) like ERP or Groupware. Many theoreticians as well as
47 48
cf. Appendix A, question 14 cf. Appendix A, question 19 49 50 % of the SVSI rate the impact on the implementation success as high whereas 33% rate it as medium
37
Discussion
practitioners have emphasised in this context the importance of implementation issues during the introduction of a new business concept. Rohe (1998) states, that research indicates that 90% of failed implementations are not due to a wrong concept or strategy but due to neglecting the implementation phase. The research results of the dissertation in hand certainly support the view that people related issues are the most critical for implementation success. Moreover the research results agree with the published literature that utilising Change Management can be regarded as useful for helping through the implementation process. However the Change Management methods and tools that are used or are viewed as useful can differ from Change Management theory. Changing the reward system is e.g. viewed as less important although it is common practice to support and institutionalise changed behaviour50. This might be due to the fact that the implementation of PLM tends to be viewed more as incremental than as transformational change process. Furthermore the research supports the view of Krouse (1999) and Bourke (2000), that especially the aspect of inter-organisational collaboration challenges organisational culture of most companies. The statement that the implementation of PLM challenges organisational structure51, however, cannot be supported by the research. At least not the view that the implementation of PLM should ideally be supported by a network organisation52. Although the vertical and virtual integration (extended enterprise) is one of the main goals during a PLM implementation53, network organisations do not play a role. If a PLM system is to be implemented in a traditional and strictly hierarchical organised corporation without project management and process orientation than it can certainly agreed on this statement. Harrison (1995) and Bergh (1996) suggest that PDM/PLM works best in a reengineered environment. The research results show that reengineering mainly takes place in the product development process and on the level of workflow changes. The radical redesign of processes according to BPR54 however does not take place. In this context an interesting comparison can be drawn on the results of the research and a research that was carried out in 1995 (Bullinger, H. J. et al.) aiming to research critical success factors in reengineering projects. The research found, accordingly to the research of the dissertation in hand, the support of senior management as most important success factor. Other success factors were a participative company culture, an existing vision and the involvement of employees. 5.3 The appropriateness of data collection and methodology
There is no real alternative to literature research that has been used to become familiar with the topic under research in order to identify key concepts and theories. Also the chosen methodology of method triangulation by combining a quantitative research in form of a survey and a qualitative research in form of telephone interviews seems to be
50 51
cf. Stark (1999), Doppler and Lauterburg (2000) cf. Stark (1999) 52 cf. Introduction, p 7 53 cf. Appendix A, question 1 54 cf. Hammer and Champy (1993)
38
Discussion
the most suitable in hindsight in order to investigate the topic in the given time frame. Since the research started with the quantitative research and added a qualitative research another interesting instance of the methodology would have been to start with the interviews and then add the survey. This would have had the advantage that the questions in the questionnaire could more precisely address the main issues. A case study approach would have been difficult to carry out since it would have been problematic to make generalisations from only one sample. Longitudinal or action research did not seem possible due to the limited time frame. It should again be stated that the research has no statistical significance since the basis of the research is much to small. 5.4 The effect on professional practice
Different strategies can be applied to implement PLM whereas the strategies can vary in scope and scale. The easiest way to implement is surely to understand the introduction of a PLM system as a replacement or legacy system for an older or maybe various older systems. In this case the implementation will most likely only result in minor changes; for the affected people as well as for the business results. The implementation of an enterprise wide Information System (IS) like PLM, however, can also be understood as an opportunity to rethink and if necessary change existing processes, culture and structure. The way these changes are implemented can vary from transformational topdown approaches to incremental bottom up approaches. Especially the transformational approaches will most likely result in major changes but also bear the risk of producing negative results. The following paragraph discusses different implementation strategies and highlights specific opportunities and threats. 5.4.1 The implementation strategy
A common implementation strategy firstly replaces and consolidates existing systems in order to achieve relatively quick wins. From this basis it is tried to incrementally improve the status quo with the advanced PLM functionality and opportunities that become clear during the first implementation phase. This implementation approach, although suitable for many companies, bears two risks. The first risk is that the budget is empty after achieving the status quo which means that the phase of improving will be postponed or never be carried out. The second risk is that although the status quo is incrementally improved it can be that ineffective and inefficient processes have been improved. Therefore it is important to realise that the implementation strategy should always be dependent on the size, background and current situation of a company. The implementation approach for a locally operating, 'traditional' SMC company will most likely be different than for an international operating Fortune 500 company. Therefore the analysis of existing product related processes as well as the predominant corporate culture is critical. A diagnosis, based on the analysis should provide a clear basis for
39
Discussion
decision making55. Moreover, it should result in being able to answer the question if and what kind of change is necessary and what kind of resistance the initiative will most likely face56. A measurable goal, depending on the analysis of the 'as is' situation and the diagnosis, should be defined, connected with a strategy in form of an implementation plan on how to reach this goal. One of the implementation goals must be to "harmonise a new concept with an existing context" (Reiss, 1997). The overall concept must therefore be flexible designed in order to make customisations and adoptions to the existing context57. A simplified description of different change strategies diversifies in incremental and transformational change approaches58. Incremental change that uses existing structures is slow but also low risk59 and often uses bottom-up approaches (evolutionary process). On the other hand transformational or radical change challenges existing structures, is fast but also high risk.60 Transformational change concentrates on major improvements and is mostly top down driven. All facets between those two extremes including the combination of both are of course also possible whereas the research, especially the research result gained from EMC, shows a clear tendency to incremental change approaches. It can be argued, that incremental change to continually improve existing processes with the new possibilities of PLM systems might be suitable for a 'modern' company that has already implemented a process oriented organisation, project management and Concurrent Engineering. Consequently, transformational change would be suitable for a 'traditional' and strictly hierarchical organised SMC that is not process focussed yet and firstly needs a reengineered environment before PLM can be successfully implemented. However, it can also be argued the other way round, that the capacity for change61 in a 'modern' company is much higher than in a 'traditional' company and therefore transformational change can only be successful here. No matter what implementation approach is chosen it is important to realise that the implementation of change moves always along the two dimensions of opportunity and risk. More opportunity means more risk and vice versa. An implementation approach that is relatively balanced and promising regarding opportunities and risks uses spinoffs, newly established departments or daughter companies to implement and test the new approach. If successful the new approach is transferred to the rest of the organisation or the mother company. A different approach that combines relatively high opportunities with relatively low risks uses selected pilot areas for implementations. The success of this strategy is of course very much dependent on the project that is chosen and how well the chosen pilot area can act as a role model. 62 Regarding the implementation of PLM this can mean that the new approach is either tested in a newly established department or a daughter company. This has the advantage that new
55 56
cf. Doppler and Lauterburg (2000) cf. Reiss (1997) 57 cf. Reiss (1997) 58 cf. Stark (1999), Nadler, Shaw, Walton (1995) 59 cf. Stark (1999) 60 cf. Stark (1999) 61 cf. Pagliarelli (2000) 62 cf. Reiss (1997)
40
Discussion
approaches are not facing so much resistance as in well established areas. If successful, they are transferred to the mother company. In the pilot area approach PLM would be implemented i.e. in the most successful product line of a selected business unit and then transferred to the rest of the organisation. 5.4.2 Appropriate Change Management methods and tools
In this section Change Management tools are introduced that are arising from the research results respectively the interpretation of them and therefore seem to be appropriate for a PLM implementation. Diagnosis: Diagnosis is an important tool to evaluate the current state and condition of a company in order to have a clear basis for defining appropriate action. A diagnosis can be based on a employee survey or on interviews carried out for the whole company or for a representative cross-section63. Since organisational culture seems to play an important role, the diagnosis can aid in determine the predominant culture and defining the target culture. To ensure neutrality the diagnosis should be done by an external institute64. Senior management: Senior management seems to be one of the most critical success factors during a PLM implementation. Commitment and (vocally and visibly) support during the whole implementation phase seems to be critical. This can i.e. mean that senior management writes about the importance of the PLM implementation in the internal newspaper or by frequently visiting the implementation team. Although not directly arising from the questionnaire but from the interviews it is important that senior management is 'walking the talk'65 and serves as an example. In practice this can mean that senior management has to show a collaborative behaviour when collaboration is one of the goals of the PLM implementation. Therefore it is important to create awareness at senior management level about their important role during a PLM implementation Communication: Communication throughout the whole change process has mainly two goals. The first goal is to explain why the changes are necessary and what the aims are in order to address initial fears and resistance. The second is to involve the people that are affected by the changes as early as possible to gain acceptance. In the context of PLM this can mean that PLM is introduced in the internal newspaper or in the Intranet. Although these are very efficient one way communication vehicles a more effective two way communication vehicle would be workshops or employee surveys where feedback from employees can be gathered. Coaching: Coaching people during the change process and facilitate learning of the skills that are needed to deal successfully with the new environment is essential. The basic requirement for a PLM implementation is software functionality training. Moreover training about the basic ideas of PLM as well as in team working should be
63 64
cf. Doppler and Lauterburg (2000) cf. Doppler and Lauterburg (2000) 65 cf. Senge et al. (1999)
41
Discussion
beneficial. In the event of workflow changes where also responsibilities are changed it can make sense to train how to handle responsibility. Marketing: Marketing is especially important when a pilot group implementation approach is chosen. The innovative practices have to be diffused to the rest of the organisation. The so called 'not invented here syndrome' however makes the transformation often problematic. Therefore a marketing concept is necessary to introduce new concepts and publish successes. An informal but very efficient way of diffusing are Communities of Practice (CoP)66. CoP are "groups that form to share what they know, and to learn from one another regarding some aspect of their work " (The Distance Consulting Company, 2000). Key can also be used to transfer the new approaches. Institutionalising of new approaches: According to the results gained from the survey and interviews, new approaches are seldom institutionalised. This, however, is viewed as an important element of a change initiative by theoreticians in order to hold the gains of an improved state and to avoid erosion effects. Therefore, this should also be beneficial for a PLM implementation, especially for the aspect of collaboration. Collaboration can for example be encouraged by regular meetings between different departments where new ideas or current problems are freely exchanged. These meetings would serve to anchor collaborative behaviour in the company culture.
66
cf. Senge et al. (1999)
42
Conclusions
6
Conclusions
This chapter provides a summary on the principle features of the dissertation. The main findings are reviewed as well as the key concepts and theories that were identified in the literature. Additionally, suggestions for business and management practice is given followed by recommendations for future research. 6.1 Summary of principal features
It was shown in the introduction that the environment of manufacturing companies and in particular of Electronic Manufacturing Companies (EMC) is coined by time to market reduction, increased variety and complexity resulting from various trends like globalisation, mass customisation and increased outsourcing. Those companies that are able to effectively develop and introduce new products in this environment are said to have a competitive advantage. Product Lifecycle Management (PLM), that has evolved from Product Data Management (PDM) can support manufacturing companies in this environment by providing an "enterprise-wide infrastructure "to support management of product related data throughout its complete lifecycle"67 (from initial concept to product obsolescence). Including workflow management, PLM systems, as a single source of product information, ensure that up to date information are available and accessible for the right people in the right format at the right time. According to Miller (1998e) the product lifecycle is comprised of three primary processes: product definition, product production and operations support. Especially interesting for the product lifecycle is the product definition process and especially the early phase where fundamental design choices are made and 80% of the product lifecycle costs are determined according to various studies68. The introduction explains that the concept of 'Concurrent Engineering' aims to improve the product development process and especially the early design phase. Breaking down the barriers of functional departments and involving individuals with different perspectives on the product development process by setting up physical co-located and cross-functional teams facilitates this. Globalisation and increased outsourcing, however, require not only intraorganisational but also inter-organisational teamwork. It is therefore important to realise that PLM does not only provide functionality for controlling product related data but also to collaborate and support inter-organisational and virtual co-located product development teams. PLM is therefore viewed as an "effective tool in managing the product definition supply chain by serving as an informational bridge connecting OEM's, partners, subcontractors, vendors, consultants and customers (Miller, 1998f). According to the vision of PLM it requires intense collaboration especially in the early design phase, inside and outside the company and across geographic regions. Companies must therefore implement processes and structures for collaboratively sharing product related information. The sharing of data and transferring of data ownership is often counter-cultural. The implementation of PLM involves therefore not
67 68
cf. Portella (2000) cf. Nevins et al. (1989)
43
Conclusions
only structural but also cultural changes in a company. Consequently, the success of a PLM implementation should heavily rely on the willingness of the company to accept change and especially on the people that must form inter-organisational and crossfunctional teams to collaboratively develop products. However, people are not likely to change the way they have been successfully working. Resistance to change is therefore the natural reaction. According to researchers the source of resistance is mostly fear of the unknown and uncertainty. Uncertainty however can reduce productivity and even paralyse a whole organisation. Changing a culture, structures or processes is therefore risky and often not successful, which is proved by many studies (i.e. Kotter 1995). In order to address this aspect the literature review in chapter two has shown that researchers and practitioners alike are proposing the utilisation of Organisational Change Management that aims to provide an implementation friendly environment. Organisational Change Management, which deals with the emotional reaction to change, provides different concepts, tools and methods like early communication and early participation to gain acceptance for change. Chapter three has explained the methodology that was used to answer the research question about 'The Impact of Organisational Change Management on the Success of a PLM Implementation'. Based on literature research a questionnaire has been developed in order to find out: What kind of companies are implementing PLM The implications of a PLM implementation on culture, structure and processes. If the implementation of PLM is viewed as a change process and if and what Change Management concepts and tools are utilised The questionnaire has been sent to Electronics Manufacturing Companies (EMC), Software Vendors and System Integrators (SVSI) in the area of PLM. Additionally, telephone interviews have been conducted to triangulate the topic. 6.2 Major findings
The dissertation has pointed out that many researchers emphasise that the reason for failure of new concepts is very often due to a poor implementation rather than to the concept itself. The literature review in chapter two has explained that not addressing people related issues like resistance is named in most cases for implementation failure. Accordingly also some researchers and practitioners in the field of PLM emphasise the importance of these issues and remind us on the implications that the redefinition of processes and the need for collaboration might have. Organisational Change Management that has its roots in the science of psychology aims to gain acceptance for changes by the affected people. The Change Management concepts methods and tools vary. Basic elements however are : A vision to align the organisation Communicating why the changes are necessary Involving affected people actively in the change process (participation) Provide people with the skills to actively support the change process Marketing of new approaches Institutionalise new approaches to avoid erosion effects
44
Conclusions
The discussion has shown that the research results support the key concepts of the literature that the implementation of PLM has to be viewed as a change process that impacts organisational culture and processes. Organisational structures, however, do not seem to be impacted. It was also shown that the results gained from SVSI support these views even more than those gained from EMC. Although not measurable in numbers the research results have shown that the impact of utilising Change Management is viewed as relatively high. Although the impact is viewed that way; a Change Management concept is seldom a strategic element of the implementation plan. Consequently Change Management tools and methods are mainly utilised reactively instead of proactively. 6.3 Suggestions for business practice
It is important to realise that there are two main pitfalls when implementing a PLM system. The first pitfall can be described as defining the implementation scope as too narrow. This includes the danger that the PLM system is implemented only as a legacy system that replaces or consolidates various older systems without questioning processes, responsibilities and tasks. This implementation approach will most likely lead to only minor changes, in the organisation as well as in business results The second pitfall can be seen in the risk of defining a too broad implementation goal that not only implements a new product related enterprise-wide information system but also radically challenges existing structures and culture. In this case the implementation will be expensive, the organisation will not be capable to cope and the changes will most likely never lead to the anticipated results. The discussion in chapter five has shown that it is important to realise that implementation strategy should be dependent on the type of company. An analysis of the processes and the organisational issues is therefore essential to diagnose what kind of change is appropriate in order to reach the implementation goal. Depending on the result of the diagnosis an appropriate Change Management concept should be integrated in the overall implementation plan to provide an holistic implementation approach. The biggest challenge however might be to create awareness at senior management level and to convince senior management to release additional money for the Change Management initiative in order to improve the likelihood of a flawless and successful implementation. All change results in risk and opportunity. A promising implementation approach that combines a relatively high opportunity for changes with a relatively low risk uses selected pilot areas for implementation. The innovative processes have then to be transferred to the rest of the organisation. Marketing of the new approaches plays at this point an important role. The success of this approach is furthermore dependent on how well the pilot area can act as a role model.
45
Conclusions
It can be concluded, that PLM offers new opportunities for EMC, especially regarding the improvement of the product development process. To what degree and in what time the product development process can be improved depends on several factors like the implementation approach and the company culture. Change Management can play an important role during the implementation phase to facilitate changes in processes as well as in the corporate culture. 6.4 Recommendations for future research
The dissertation has shown that there are no measurement criteria existing that have common acceptance to evaluate the success of a PLM implementation. An interesting issue for future research should therefore be the development of a framework to evaluate a PLM implementation in order to benchmark different implementation strategies. Although the research has shown that organisational culture is viewed as an important factor for implementation success many aspects have not or only partially been addressed and might be interesting for future research. These include the following questions: What company culture is best supporting PLM? How can the company culture be changed to this culture? How do different company cultures affect the success of supply chain collaboration? The intercultural aspect of globally dispersed teams? Empowering of teams in the light of intercultural aspects? Finally, the aspect of knowledge management seems to be interesting for further research. Especially the interviews have highlighted the aspect that PLM is also viewed as a tool for managing knowledge in order to keep and globally provide product development know-how. Further research could investigate what factors are important for additionally using a PLM system for knowledge management.
46
Bibliography
7
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Textbooks
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Miller, E. (1998b) The Need for New Thinking. Computer-Aided Engineering Magazine, August 1998 http://www.cimdata.com/article9808.html Miller, E. (1998c) Resolving Organizational Conflicts Computer-Aided Engineering Magazine, September 1998 http://www.cimdata.com/article9809.html Miller, E. (1998d) PDM Moves to the Mainstream Computer-Aided Engineering Magazine, October 1998 http://www.cimdata.com/article_me_10_98.htm Miller, E. (1998e) Intertwined Information Technologies Computer-Aided Engineering Magazine, October 1998
http://www.cimdata.com/article9810.html
Miller, E. (1998f) Managing the Design Supply Chain Computer-Aided Engineering Magazine, November 1998 http://www.cimdata.com/article9811.html Miller, E. (1999a) Integrating PDM and ERP Midrange ERP, March 1999 http://www.cimdata.com/article_cae_03_99.htm Miller, E. (1999b) Industries that influence PDM Computer-Aided Engineering Magazine, April 1999 http://www.cimdata.com/article9904.htm Miller, E. (1999c) Reaching Beyond Design Engineering Computer-Aided Engineering Magazine, August 1999 http://www.cimdata.com/article_08_99.htm Moreno, V. (1999) On the social implications of organisational reengineering Information Technology and People, Vol. 12 No.4, 1999, pp. 359-388 Nadamuni, D. (1999) New Directions in the PDM Market Gartner Group-Dataquest report, May 31, 1999 Nickols, F. (2000) Change Management 101:A Primer http://home/att.net/~nickols/change.htm Olesen K. and Myers, M. D. (1999) Trying to improve communication with information technology. Information Technology and People, Vol. 12 No.4, 1999, pp. 317-332 Pawar, K., Sharifi, S. (2000) Virtual colloction of design teams: coordinating for speed International Journal of Agile Management Systems, Vol. 2 No.2, 2000, pp. 104-113
52
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Pennel, J.P. and Winner R. I. (1989) Concurrent engineering: practices and prospects, IEEE Global telecommunication Conference and Exhibition. Part 1, Institute for Defense Analyses, 27-30 November, pp. 647-655 Peterson, N. (2001) Beyond the Hype - Portals emerge as the enterprise Vehicle for Collaboration. Solve!, Vol. 2 No.2, 2001, pp. 3-5. Portella, J., (2000) Collaborative Management of the Product Definition Lifecycle for the 21st Century, PDT Europe Conference, 3 May 2000, Noordwijk. Rafii, F. (1995) How important is physical collocation to product development process? Business Horizons January/February, pp. 78-84 Rigby, C. et al. (2001) CADCAM integration and the practical politics of technological change. International Journal of Agile Management Systems, Vol. 2 No.3, 2000, pp. 178-186 Romano, J. (2001) Proficiency Closes $27 Million Investment Round,http://www.mcadcafe.com/NEWS/MCAD_News/20010611_proficiency.html Press Release, June 11, 2001 Rowell, A. A. (2001) Is Product Lifecycle Management (PLM) the key to unlocking the Digital Enterprise? MCADvision Magazine, Nov. 2001 Scott Tsao, S. (1993) An Overview of Product Information Management Pan Pacific Conference on Information Systems, May 30 - June 1, 1993 Stark, J. (1999) PDM and Change Management http://www.johnstark.com/mc3.html Tan, S. (1997) Product Data Management: An End-User Study Gartner Group-Dataquest report, May 26, 1997 Tantoush, T., Clegg, S. (2001) CADCAM integration and the practical politics of technological change. Journal of Organizational Change Management, Vol. 14 No.1, 2001, pp. 9-27 Wagemann, R. (1996) Investigating New Frontiers: Understanding When and How to Implement Empowerment http://www.urich.edu/~eylon/ Wildermann, B. (2001) The state of supply chain collaboration META Group report (www.metagroup.com)
53
Appendix A: Questionnaires - Summary (All)
Appendix A: Questionnaires - Summary (All)
n=20
1. What goals are important to define (should be defined) for the implementation of a Product Lifecycle Management (PLM) system? Respectively 'What were the most important reasons for the decision to implement a PLM solution?'
Rank XXX 1 2 very important 3 12 11 important less important 1 not important 0 ? No ?/No
Weight/Factor 2 X X XXX Reduce time to market 7 50 19 2,6 Enabling extended enterprises through 4 3 44 18 2,4 integration of customers and suppliers 3 Increase productivity 9 9 1 46 19 2,4 3 Improve quality 9 9 1 46 19 2,4 5 Integrate “internal islands of 8 6 2 2 38 18 2,1 automation” ** 6 Improve classic PDM functionality * 6 9 4 40 19 2,1 6 Support the overall business strategy 6 8 3 1 37 18 2,1 9 Redefine the product development 5 10 4 39 19 2,1 process 7 More innovation/new products 6 8 1 3 35 18 1,9 8 Improve customer orientation 5 8 4 2 35 19 1,8 11 Enabling “mass customisation” *** (i.e. 8 6 3 22 17 1,3 through part configurators accessible via the Internet) * product data vaulting/warehousing, part classification, search functionality, cross referencing, revision control, workflow, electronic engineering change management, document management ** integrate different CA –Tools; integrate several databases storing product related data into one (single point of access) *** also known as “built to order”, “manufacturing for the individual” or “customer driven manufacturing”, the opposite of mass production or built to stock
Comments: Question is difficult to answer because all improvement initiatives and solutions have more or less these same objectives. So this is not a discriminator for PLM. A lot of customers would be happy to have this classic PDM function in place.
2. Who is normally involved in the product definition process?
Rank XXX 1 2 3 4 5 6 7 8 9 10 Weight/Factor Product Design/Engineering Research&Development Manufacturing Supplier Purchasing/Procurement Marketing Senior Management (CEO, CTO, ...) Customer Service Sales frequently 3 18 14 5 6 4 7 7 1 2 3 occasionally 2 1 4 9 7 8 7 5 10 9 5 seldom 1 1 4 3 4 3 5 5 8 never 0 ? X 56 51 33 36 31 39 34 28 29 27 No X 19 19 14 17 15 19 17 16 17 17 ?/No XX 2,9 2,7 2,4 2,1 2,1 2,1 2 1,8 1,7 1,6
1 2 1 1
Comments:
-
Again difficult to answer: you are asking who IS today, not who should. Therefore I answered occasionally for most, even though they should be involved frequently (in my opinion). Depends on the phase in the development cycle.
54
Appendix A: Questionnaires - Summary (All)
3. Who has normally access to and is using a PLM system? (A= Access ; U =Using)
Research & Development Product Design/Engineering Purchasing/Procurement Marketing Manufacturing Sales Service Senior Management (CEO, CTO,...) Customer Supplier frequently A(1),U(8) A(1),U(11) A(2),U(5) A(2),U(1) U(6) U(2) A(1),U(3) A(1) A(1) U(2) occasionally A(1),U(2) U(1) A(4),U(3) A(4),U(2) A(2),U(3) A(4),U(2) A(1),U(6) A(2),U(2) A(2),U(2) A(3),U(5) seldom U(1) never
A(1),U(2) A(1),U(1) A(1),U(4) A(2),U(1) A(3),U(2) A(3),U(4) A(3)
1 1 3 2
Comments: Sales uses CRM (which has links to PLM), Suppliers usage is increasing 4. Is a (shared) vision with the implementation of a PLM system being established (i.e. “we want to be the No 1 in customer service/we want to manufacture the most innovative products”)?
Rank 1 2 3 4 Sometimes Normally not Yes No ? 10 2 2 2 % 62 13 13 13
Comments: But this is key and the vision should be provable 5. Is an ‘as is’ (current state) analysis of the product development process being performed before implementing?
Rank 1 2 3 4 Sometimes Yes Normally not No ? 8 8 1 0 % 47 47 6 0
Comments: We prefer a ‘should be’ approach 6. Is a strategy defined how to reach the ‘to be’ (target) situation defined in the vision?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 11 6 0 0 % 65 35 0 0
Comments: For large scale projects the answer is yes.
55
Appendix A: Questionnaires - Summary (All)
7. Is a pilot group testing the new scenario being established?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 11 4 1 0 % 69 25 6 0
Comments: More likely to be normally not, but still sometimes it happens. 8. Does the implementation slow down the productivity of companies?
Rank 1 2 3 4 A little bit No Significantly Dramatically ? 10 6 1 % 59 35 6
Comments: The PLM roadmap should actively deal with risks like decreasing productivity and should include strategies to avoid or minimise these risks. The aim clearly is not to negatively influence productivity. For that reason a strategy and a good preparation are necessary. 9. Is there an interface to the ERP (i.e. SAP) system?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 12 4 0 1 % 71 24 0 6
Comments: This is always customer and business specific. All the cases appear in our projects. 10. If there is an interface, how is ownership of data respectively transformation of ownership in the product development process been regulated?
Rank 1 2 3 5 Data is kept in both systems Master data is transferred from PLM in ERP system Master data is kept in ERP system Master data is kept in PLM system ? 7 4 5 2 % 39 22 28 11
Comments: You will find all kind of projects. It depends of the customer and of the industry! Project dependent.
56
Appendix A: Questionnaires - Summary (All)
11. What changes are required to successfully implement a PLM system?
Rank XXX 1 Weight/Factor Reengineering/Redefinition of product development processes (i.e. interdisciplinary virtual team approaches, workflow changes) Cultural changes (i.e. open communication and collaboration culture) Empowering of people / teams (i.e. designers having direct customer contact) Changes in the organisational model (i.e. removing of layers, networked organisation) Product line rationalisation (i.e. to enable mass customisation) Other: Establishing a new business model (e.g. “Full Service Provider” instead of “Product Manufacturer”) Other: Management awareness very important 3 6 important 2 7 less important 1 not important ? X 32 No ?/No X 13 XX 2,5
2 3 4 5
7 5 3
3 3 6 6
2 5 3 5 1
29 26 24 17
12 13 13 11
2,4 2 1,8 1,5
1 1
12. How is the implementation of a PLM system and the changes required hereof communicated with the people affected? (n=18)
Rank 1 2 3 4 5 6 7 8 9 10 Workshops Intranet Notice Board e-mail Internal newspaper Employee Survey Global Town Hall Meetings Other: Awareness Sessions (2 hour Meetings) that will be combined with feedback questionnaires Other: PLM Solution Lab No communication required ? 14 12 12 8 9 7 6 1 1 0 % 78 67 67 44 50 39 33 6 6 0
Comments: Since PLM is an integration program, a marketing and communication strategy and roadmap is required. All channels/media for internal and external (suppliers, customers, partners) communication should be part of this strategy.
57
Appendix A: Questionnaires - Summary (All)
13. What changes in the organisational structure are necessary to best support PLM? Please describe.
-
-
Destroy functional borders into the product definition process. Build groups with all roles to fulfil the product definition process. IT should be part of the product definition process – end user satisfaction is key! Ports the factory planning and simulation process earlier in the product definition process. Use the DM function to simulate the production process as early as possible. Changes towards process and product orientation should be initiated. This could mean more responsibility for project managers (in product development programs) or the decision to establish product managers for strategic product lines. Implementation of process organisation Implementation of project management Implementation of cross functional teams This depends very much on the type of organisation, the type of product and the management style the specific company has adopted or wants to adopt. Not one answer possible. For the implementation absolutely necessary is the end of the thinking in departments and of possessing of product data by departments or people. Product Managers should be stronger than department managers Bonuses of product managers should be linked to success of PLM People need to be motivated, solutions must be sold internally No changes are necessary but a good project/process oriented organisation is a good starting point for success Establish global process, involving several partners
14. What of the following organisational change management methods/tools are used during the implementation of a PLM system?
Rank XXX 1 1 3 4 5 6 7 8 9 10 11 12 12 14 15 16 17 18 Weight/Factor Early involvement of people being affected Establishing a concept to regularly communicate with people involved Establishing a (shared and motivating) vision Create an atmosphere of openness and trust Planning, realising and celebrating short term wins (to build confidence) Aligning and mobilising leaders Coaching of people involved Build a critical mass for change: buy-in and stayin Vocal and visible support of senior management (walking the talk) Dealing with resistance Facilitate learning/skill building (to acquire new behaviour) Feedback (i.e. through employee survey, customer inquiry, 360° Feedback) Establishing a sense of urgency (burning platform) Empowering people/teams to act on the vision defined Implementation of change agents/promoters Institutionalise new approaches Hiring, promoting, developing employees who can implement the vision Changing reward systems to support the change initiative frequently /yes 3 11 11 10 9 8 8 6 6 5 4 4 3 2 2 4 2 1 occasionally /partially 2 4 4 3 6 5 5 4 6 8 9 8 9 10 10 5 4 6 5 seldom 1 2 2 2 1 2 4 2 1 2 2 3 2 3 2 3 6 6 6 never /no 0 ? X 43 43 38 40 36 38 28 32 33 32 31 29 29 28 25 20 18 16 No ?/No X 17 17 16 17 16 17 13 15 16 16 16 16 16 16 16 15 16 16 XX 2,5 2,5 2,4 2,35 2,3 2,2 2,2 2,1 2,1 2,0 1,9 1,8 1,8 1,8 1,6 1,3 1,1 1,0
2 1 1 1 2 1 1 1 2 1 2 4 3 4 4
58
Appendix A: Questionnaires - Summary (All)
15. What kind of training do users receive during a PLM system implementation?
Rank XXX 1 2 3 4 5 6 7 Weight/Factor Software training (Functionality) Skill building regarding the PLM vision (new process training) Communication Training Training in team development, team working Training in conflict management, group dynamics Train how to take responsibility and have the obligation to assist those being responsible Intercultural Training Always /All 3 15 3 2 1 Sometimes /Some 2 2 9 7 8 7 7 4 Normally not 1 2 6 4 6 5 9 Never /No 0 2 1 3 3 4 2 ? X 49 29 26 23 20 19 15 No ?/No X 17 16 16 16 16 16 15 XX 2,9 1,8 1,6 1,4 1,3 1,2 1,0
16. What are the main/important problems during the implementation phase?
Rank XXX 1 2 3 4 4 6 7 8 9 10 11 11 13 14 15 16 17 Weight/Factor Not enough support from senior management Barriers between departments Focus too much on technological aspects, too less on people Resistance of middle management to change Scope not well defined, project is oversized Resistance of users to change Time for implementation needed, longer than expected Not enough resources available Project does not have appropriate priority Technological limitations (performance/missing functionality) Organisation and procedures are not adapted to the new situation (technological and organisational integration on different levels) Availability of people from implementation team No transparent goals/objectives Goals are to aggressive, organisation is not capable to cope Budget needed, higher than expected Barriers to external stakeholders (customers/supplier...) Intercultural problems (i.e. language barriers) very important /True 3 10 8 7 8 7 8 6 6 6 5 5 4 6 4 5 2 1 Important /Partially true 2 5 6 8 4 7 6 7 9 7 7 6 8 4 8 6 6 4 less important 1 2 1 3 1 3 3 1 2 4 4 3 4 4 2 4 9 1 not important /Not true 0 1 ? X 32 36 38 35 35 39 35 37 34 33 31 31 30 32 29 22 20 No ?/No X 17 15 16 15 15 17 16 17 16 16 16 16 16 17 16 14 16 XX 2,5 2,4 2,4 2,3 2,3 2,3 2,2 2,2 2,1 2,1 1,9 1,9 1,9 1,9 1,8 1,6 1,3
1 1 1 1 2 1 3 2 2
Comments: Clear goals are the prerequisite for the support of senior management. Priority one is always the actual productivity.
59
Appendix A: Questionnaires - Summary (All)
17. What are the main/important factors for a successful implementation.
Rank XXX 1 2 3 3 3 6 7 7 9 9 11 12 13 14 15 16 Weight/Factor Commitment/Buy in of senior management Early involvement of people being affected by the changes Align and mobilise leaders Commitment/Buy in of middle management Appropriate training and coaching for people involved Choose the right system integrator Create an open communication and collaboration culture (boundaryless organisation) Realisation and celebration of Short Term Wins Engage, communicate and explain the changes involved with stakeholders Appropriate project staffing Clarify in an early stage the ownership of data in the product development process Establish a shared and motivating vision Choose the right PLM vendor Empowering people to act on the vision defined Establishing a sense of urgency/burning platform Change of reward systems to support change initiative very important 3 12 13 7 10 8 7 7 7 7 5 7 5 4 2 1 1 important less not important important 2 1 0 5 3 1 5 6 8 7 7 6 8 12 7 9 10 9 11 5 1 1 1 1 1 3 2 3 2 1 1 4 7 1 1 3 1 ? X 46 46 32 43 41 36 36 36 39 39 38 35 33 25 29 20 No ?/No X 17 17 13 17 17 15 16 16 17 17 17 16 16 13 16 16 XX 2,7 2,7 2,5 2,5 2,4 2,4 2,3 2,3 2,3 2,3 2,2 2,2 2,1 1,9 1,8 1,3
Comments:
-
If there is the commitment from senior management middle management often has to behave appropriately.
18. Are the results achieved through the implementation of a PLM satisfactory?
Rank 1 2 3 4 Yes Partially Sometimes No ? 8 5 1 1 % 53 33 7 7
Please explain:
-
-
-
A successful implementation actively supports users in “living” new processes and leads to long-term profitability A lot of companies have a lot of different experiences with PDM systems, not always being positive. A number of visionaries have achieved tremendous steps forward by understanding PDM as a product development methodology. The potential of benefits is so big, that it will be hard to not be successful in achieving them. Since the introduction of PLM solution very ... is results are often not immediately measurable. This would only be the case when all interfaces and working methods were adopted to the new system. This state very rarely is reached because already during the implementation phase modifications have to be done that are changing parts of the whole concept and so not all goals can be achieved. But this seems to be a normal process, since the internal company organisation is always changing. No one can work without afterwards Project benefits are overestimated at the beginning of the project – otherwise the management would not invest in the system. The actual benefits are much less than estimated.
60
Appendix A: Questionnaires - Summary (All)
19. Is the “Return On Investment” measured?
Rank 1 2 3 4 Sometimes Normally not Yes No ? 7 3 2 4 % 44 19 13 25
Comments:
-
-
Is in most cases very difficult, because of wrong or not existing measurement processes. ...though this is one of the most difficult metrics to measure Very hard to do, because in most cases there is no real comparison possible It’s usually not possible to define if a benefit is really due to PLM or if it is due to another change in the company or its environment. If the senior management asks for there is certainly a ROI done although experienced managers do know that these measurements are based on many uncertainties. In certain instances and applications it is possible to perform past-present investigations, but the are not representative. In a normal company this should be done
20. If yes, how is it measured and with what results? How:
-
-
Monitoring of important process specific numbers, eg. Throughput time, time to market, overall product costs, lifecycle costs Usually a high number of qualitative and quantitative aspects like time to cash, engineer productivity, time to release to manufacturing, number of design iterations, design failure, number of parts used and re-used, search time etc. are checked by various means (data residing on the system and inquiries on various participants and users during the implementation of a PLM system). Key is that the data acquisition and interpretation part is done with the help of a good project management and industry expertise. Based on the original ROI calculation: Reduced time to market Improved efficiency (more work with less people) Reduced amount of different types and parts Higher reusability of existing parts Reduced cost for changes Time and ... comparison for certain actions, statistical analysis of mistakes Before project start a Benefit Potential Analysis is made, with a cost calculation. These figures are used to get the ROI. Stated metrics at the beginning regarding the value propositions at the start of the project. Value metrics based upon business results and business financial goals. Only on some aspects, e.g. number of parts, re-use, less re-creation
Results:
-
company and project specific driving PLM projects with an ROI-focus usually gives the positive results Cost reduction up to 30 % Reduced lead time up to 40 % Of course always positive since the example to investigate is always chosen on ones own The Project Plan must insure to get a time of cost amortization of the project in 2 years. This is possible if the project focuses on quick wins and functionality with highest priority.
61
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
n=7 I
1
Rank XXX 1 2 2 4 5 6 7 8 9 10
General Questions concerning the product development process and the relationship to customers/suppliers
Who in your company is generally involved in product definition process?
Weight/Factor Product Design/Engineering Research & Development Marketing Senior Management (CEO, CTO, CIO...) Supplier Customer Sales Manufacturing Purchasing/Procurement Service frequently 3 6 4 4 3 2 1 2 1 1 occasionally 2 2 2 1 2 3 1 2 1 4 seldom 1 never 0 ? X 18 17 17 12 12 11 10 10 8 9 No X 6 6 6 6 6 6 6 6 5 6 ?/No XX 3 2,8 2,8 2 2 1,8 1,7 1,7 1,6 1,5
1 2 2 2 3 3 1
1
1
Comments: The R&D group does become directly involved with in the product definition process for specific new product introductions, but are more typically focused on developing technology that is applicable across product lines. Very different from division to division, no standard 2 What CA –Tools has your company implemented?
3D CAD 2D CAD (Computer Aided Design) CAM (Computer Aided Manufacturing) CAE (Computer Aided Engineering) EDM/PDM Digital Mockup (DMU) ? 7 5 5 5 5 4 % 100 71 71 71 71 57
Rank 1 2 2 2 2 6
Comments: 3D solid modelling is used for the majority of new product development, however 2D is still being used for maintenance of legacy drawings and associated 2D drawings to 3D models is a standard operating practice. The use of CAE is growing, however is still not the norm.
62
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
3
How do you communicate internally (when developing products in a team)? If possible try to rate with a percentage value.
Group/Team Meetings Telephone (conferences) e-mail Face2Face meetings Facsimile Video Conferences Collaborative Workspace Systems (i.e. One Space, Xbrioso, ProjectLink, MS Netmeeting...) 10/20/20/60 15/25/20/0 25/50/20/10 40/5/20/20 0/15/15/10 5/5/0/0 <5/5/0/0 % 28 26 26 21 10 3 2
Rank 1 2 2 4 5 6 7
Comments: The use of viewing technology is growing as is the use of web conferencing. The future is clearly one of collaborating as much as possible remotely and getting closer to our customer. Pulling our vendors/suppliers in is also becoming increasingly more important and Collaborative Engineering tools should grow in importance over the next year plus. 4 How do you communicate externally (when developing products in a team)? If possible try to rate with a percentage value.
e-mail Face2Face meetings Telephone (conferences) Group/Team Meetings Facsimile Video Conferences Collaborative Workspace Systems (i.e. One Space, Xbrioso, ProjectLink, MS Netmeeting...) 25/50/20/60 40/5/20/20 15/25/20/20 10/20/20/20 0/15/15/10 5/5/5/10 <5/5/0/10 % 39 21 20 18 10 6 5
Rank 1 2 3 4 5 6 7
Comments: Most communication with suppliers is today via phone however there is a growing desire to include suppliers as part of our extended manufacturing enterprise (more use of Collaborative Engineering tools). There is more face to face interaction with customers with resident engineers even being on-site at larger customers. Much more use of Collaborative Engineering being planned. Team meetings are in most cases phone or video conferences. During phone and video conferences Netmeeting tools are frequently in use. 5
1 2 2 4 4 6
How is information exchanged internally?
e-mail Paper Data Management System (secure) ftp solutions public directories tapes/diskettes 7 5 5 4 4 2
Rank
?
%
100 71 71 57 57 29
63
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
6
How is information exchanged externally?
Paper e-mail tapes/diskettes/CDs ftp solutions Virtual Private Network ? 7 7 6 5 3 % 100 100 86 71 43
Rank 1 1 3 4 5
Comments: Various significantly based upon customer and industry. The amount of paper being exchanged with customers especially automotive customers is definitely going down with more being electronic. Would like to see the same trend continue with key suppliers/vendors. FTP solutions are SSL encrypted Web Services, E-FTP via ISDN, Key suppliers are connected via Virtual Private Network (VPN) 7 What kind of data is exchanged with external stakeholders (i.e. suppliers and customers)?
Paper drawings 3D CAD files specifications 2D drawing files projects plans other: (CAE, FMEA, etc) 6 6 6 3 3 1
Rank
1 1 1 4 4 6
?
%
86 86 86 43 43 14
Comments: Other data being shared with customers includes CAE results, FMEA data, and qualification/test data. Depends on projects and divisions (from paper up to all) 8 Do your engineers/designers normally have direct contact/interaction with your customers? (Note: Question only relevant for suppliers)
Yes Sometimes Normally not No ? 3 3 1 0 % 43 43 14 0
Rank 1 1 3 4
64
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
9
How much of the components making up your final products is typically outsourced?
25-50% 0-25% 50-75% 75-100% ? 4 1 1 0 % 57 14 14 0
Rank 1 2 2 4
Comments: More molded product outsourced than stamped product. Depends on projects/divison (from 0 to 90%) 10 Do you have already implemented the concept of concurrent engineering? (Definition by the institute of Defence and Analyses, 1989:”.. a systematic approach to the integrated, concurrent design of products and their related processes including manufacturing and support”)
Rank 1 2 3 Partially Yes No ? 4 2 1 % 57 29 14
II
Questions concerning the project set-up of the PLM implementation
11 Where are you in the process of your PLM implementation?
Rank 1 2 3 3 5 Already implemented During Just beginning Not planned yet Before ? 3 2 1 1 0 % 43 29 14 14 0
Comments: We already have a core PLM solution in place for CAD vaulting, but are in the process of significantly extending to a more full function PLM solution with [System X] which will evolve over the next 3 plus years. We are thinking about an implementation
65
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
12 What were (would be) the most important reasons for the decision to implement a PLM solution?
Rank very less not ? No important important important important XXX Weight/Factor 3 2 1 0 X X 1 Improve quality 3 3 15 6 2 Improve classic PDM functionality * 2 4 14 6 2 Increase productivity 2 4 14 6 4 Reduce time to market 1 5 13 6 5 Redefine the product development process 2 2 2 10 6 6 Enabling extended enterprises through 2 1 2 8 5 integration of suppliers and/or customers 7 Support overall business strategy 2 3 7 5 8 Improve customer orientation 3 2 1 8 6 9 Integrate “internal islands of automation” ** 2 2 1 6 5 10 More innovation/new products 1 1 3 5 5 11 Enabling “mass customisation” *** (i.e. 1 3 1 4 through part configurators accessible via the Internet) 12 Our competitors started implementing 5 0 5 Other: (acquisition assimilation) 1 Other: (easy access to ALL technical data) 1 * product data vaulting/warehousing/part classification/search functionality/cross referencing/revision control, workflow, electronic engineering change management, document management) ** integrate different CA -Tools, integrate several databases storing product related data into one (single point of access) *** also known as “built to order”, “manufacturing for the individual” or “customer driven manufacturing”, the opposite of mass production or built to stock ?/No XX 2,5 2,3 2,3 2,2 1,7 1,6 1,4 1,3 1,2 1 0,3 0
Comments:
-
The biggest problem being addressed by our focused PLM plan is “one stop shopping” for ALL relevant technical information and support for the concept of “enter once and populate everywhere” (address data integrity issues). Other business strategies being addressed include a focus on design reuse and increased engineering productivity.
13 What functionality of PLM systems has already been implemented? (n=6)
Rank 1 1 1 4 4 6 6 8 Engineering Change Management Document Management Part2Document Cross References Classification of Parts Data viewing capabilities (i.e. viewing of CAD Data) Workflow Management Collaborative Workspace systems Part configurators ? 3 3 3 2 2 1 1 0 % 50 50 50 33 33 17 17 0
Comments:
-
Use of Collaborative Engineering tools is just starting and as a result is in its infancy. Our company has had electronic global Engineering Change Management tools in place for over 10 years, has had a global image repository for 7+ years, and has been using local CAD vaulting tools for more than 6 years. All of these current capabilities will continue to evolve with the next wave of PLM including more integration and functionality.
66
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
14 How did you plan/execute the implementation?
Rank 1 1 3 3 Internally Together with software vendor Together with system integrator Together with software vendor and system integrator ? 2 2 1 1 % 29 29 14 14
15 Who has normally access to and is using the PLM system?
Rank 1 2 3 3 5 6 6 6 9 10 Product Design/Engineering Manufacturing Purchasing/Procurement Service Research&Development Marketing Sales Senior Management (CEO, CTO, ...) Customer Supplier ? Access 0 3 1 1 2 1 1 1 1 1 % 0 43 14 14 29 14 14 14 14 14 ? Using 5 3 3 3 2 1 1 1 % 71 43 43 43 29 14 14 14
Comments: Customer access to our PLM capabilities is through our Electronic Catalog and not direct access. Direct secure access is being planned for the coming year for Suppliers. 16 Is there an interface to the ERP system?
Rank 1 2 Yes No ? 3 1 % 75 25
Comments: Interface to MRP is currently planned through a master Part Index as a hub and not directly. 17 If there is an interface, how is ownership of data respectively transformation of ownership in the product development process regulated?
Rank 1 2 2 4 Master Data is kept in ERP system Master Data is kept in PLM system Data is kept in both systems Master Data is transferred from PLM in ERP system ? 2 1 1 0 % 50 25 25 0
Comments:
-
Data is mastered multiple places with a movement to single masters based upon the data itself. Manufacturing data like MBOM are mastered in our MRP systems. Engineering data like document/part revision control and part-doc relationships is mastered in our PLM tool set. The goal is to support a global Part Index to roll-up all relevant information from different masters.
67
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
18 Did the implementation slow down the productivity of your company?
Rank 1 2 3 3 A little bit No Significantly Dramatically ? 3 1 0 0 % 75 25 0 0
Comments:
-
The implementation of our ERP system has certainly had an impact on company productivity. However the initial deployment of our new PLM tools has not had a significant impact on end user productivity.
19 Did you in any form measure the ROI? If so, how did you measure and with what results?
Rank 1 2 No Yes ? 4 0 % 100 0
How: Results: 20 Are you satisfied with the success of the implementation and with the results achieved?
Rank 1 2 3 Partially Yes No ? 2 1 0 % 67 33 0
Please give reasons:
-
Too early to tell and much more is planned.
21 Did you install/establish a pilot group testing the new scenario?
Rank 1 2 Yes No ? 3 0 % 100 0
68
Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
III
Changes
22 Did your product development process change with the implementation?
Rank 1 2 3 Partially No Yes ? 2 2 0 % 50 50 0
Comments: If something has changed please describe what has changed (i.e. interdisciplinary virtual team approaches, involvement people from different disciplines): Our initial deployment of new PLM capabilities was focused on replacing some legacy CAD vaulting solutions and consequently no process change was required. As new capabilities are being added and as we begin to decommission our legacy [Engineering] Change Management application, there is expected to be significant process changes. Only in minor manner. Discussion ongoing 23 Has the organisational structure in your company been changed with the implementation?
Rank 1 2 2 No Partially Yes ? 4 0 0 % 100 0 0
If your organisational structure was changed, please describe what was changed (i.e. removal of layers; interdisciplinary, globally dispersed teams; global product family business units..): 24 Has the culture of your company changed with the implementation?
Rank 1 2 2 No Partially Yes ? 4 0 0 % 100 0 0
If the culture was changed to what has it been changed (i.e. promotion of collaboration and communication)? As the PLM tool set evolves there is expected to be a significant cultural change with less local data/knowledge and more global collaboration. You have to have an open minded culture in the company, otherwise you will not overcome many discussions.
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
IV
Organisational Change Management
25 Has a (shared) vision with the implementation of a PLM system been established? (i.e. “we want to be the No 1 in customer service/we want to manufacture the most innovative products”)
Rank 1 1 Yes No ? 2 2 % 50 50
26 Has an ‘as is’ (current state) analysis of the product development process been performed before implementing?
Rank 1 2 Yes No ? 4 0 % 100 0
27 Has a strategy been defined how to reach the ‘to be’ (target) situation defined in the vision?
Rank 1 2 Yes No ? 4 0 % 100 0
Comments: More work is needed to clearly articulate the Vision and communicate it. 28 How was the decision to implement a PLM system and the changes required communicated with the people affected?
Rank 1 1 1 1 1 6 7 Intranet Internal newspaper Notice Board Workshops Global Town Hall Meetings e-mail No communication took place ? 2 2 2 2 2 1 0 % 29 29 29 29 29 14 0
Comments: Steering Group formed as well as many one-on-one discussions with key engineering leaders. Information in several steps and different ways
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
29 What are the main problems and barriers during implementation?
Rank XXX 1 1 1 4 4 6 6 6 6 6 11 12 12 12 12 16 17 Weight/Factor Technological limitations (performance/missing functionality) Not enough (visible and vocal) support from senior management Time for implementation needed, longer than expected Focus too much on technological aspects Resistance of users to change Not enough resources available Barriers between departments Resistance of Middle Management to change Availability of people from implementation team Scope not well defined, project is oversized Goals are to aggressive, organisation is not capable to cope Organisation and procedures are not adapted to the new situation (technological and organisational integration on different levels) Intercultural problems (i.e. language barriers) No transparent goals/objectives Project does not have appropriate priority Barriers to external stakeholders (customers/supplier...) Budget needed, higher than expected True 2 2 2 2 1 1 1 1 1 1 Partially true 1 2 2 2 2 3 2 2 2 2 3 2 2 1 2 1 Not true 0 ? X 6 6 6 4 5 4 2 2 4 4 3 2 2 2 2 1 0 No X 4 4 4 3 4 4 2 2 4 4 4 3 3 3 3 2 3 ?/No XX 1,5 1,5 1,5 1,3 1,3 1 1 1 1 1 0,8 0,7 0,7 0,7 0,7 0,5 0
1 1 1 1 1 1 1 2 1 1 3
30 What of the following organisational change management methods were used during the implementation?
Rank XXX 1 1 3 4 5 5 5 8 8 8 11 11 11 11 15 15 17 17 Weight/ Factor Establishing a concept to regularly communicate with people involved Create an atmosphere of openness and trust Planning, realising and celebrating short term wins (to build confidence) Early involvement of people being affected Establishing a (shared and motivating) vision Aligning and mobilising leaders Coaching of people involved Establishing a sense of urgency (burning platform) Build a critical mass for change: buy-in and stay-in Dealing with resistance Vocal and visible support of senior management (walking the talk) Facilitate learning/skill building (to acquire new behaviour) Empowering people/teams to act on the vision defined Institutionalise new approaches Feedback (i.e. through employee survey, customer inquiry, 360° Feedback) Implementation of change agents/promoters Changing reward systems to support the change initiative Hiring, promoting, developing employees who can implement the vision yes 2 3 3 2 2 2 1 1 1 1 partially 1 1 1 1 2 1 3 2 2 1 3 2 2 2 2 1 1 no 0 ? X 7 7 5 6 4 5 4 4 3 3 2 2 2 2 1 1 0 0 No X 4 4 3 4 3 4 3 4 3 3 3 3 3 3 3 3 3 3 ?/No XXX 1,8 1,8 1,7 1,5 1,3 1,3 1,3 1 1 1 0,7 0,7 0,7 0,7 0,3 0,3 0 0
1 1 1 1 1 1 2 2 3 3
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Appendix B: Questionnaires - Summary (Electronic Manufacturing Companies)
31 What kind of training did users receive during the implementation?
Rank XXX 1 2 3 4 4 4 4 Weight/Factor Software training (Functionality) Communication Training Intercultural Training Training in team development, team working Training in conflict management, group dynamics Skill building regarding the PLM vision (new process training) Train how to take responsibility and have the obligation to assist those being responsible All users 2 3 1 Some users 1 1 1 1 1 1 1 1 No user 0 1 1 2 2 2 2 ? X 7 3 1 1 1 1 1 No X 4 3 2 3 3 3 3 ?/No XXX 1,8 1 0,5 0,3 0,3 0,3 0,3
Comments: A Train-the-Trainer approach was taken for global deployment of the initial PLM application. Similar approaches are planned for the future. 32 What are the main/important factors for a successful implementation?
Rank XXX 1 1 3 3 5 6 6 6 9 9 9 12 12 12 15 very important Weight/Factor 3 Early involvement of people being affected by 3 the changes Commitment/Buy in of middle management 3 Commitment/Buy in of senior management 2 Appropriate project staffing 2 Choose the right system integrator 1 Clarify in an early stage the ownership of data 1 in the product development process Appropriate training and coaching for people 1 involved Establish a shared and motivating vision 1 Vocal and visible support of senior management (walking the talk) Realisation and Celebration of Short Term Wins 1 Create an open communication and collaboration culture (boundaryless organisation) Choose the right PLM vendor 1 Communicate and explain the changes involved 1 with the implementation Establishing a sense of urgency/burning platform 1 Change of reward systems to support change initiative important 2 1 1 2 2 1 3 3 2 2 1 3 2 3 1 1 1 1 1 1 2 less important 1 not important 0 ? X 11 11 10 10 5 9 9 7 4 6 6 7 7 7 1 No ?/No X 4 4 4 4 2 4 4 3 2 3 3 4 4 4 3 XX 2,8 2,8 2,5 2,5 2,5 2,3 2,3 2,3 2 2 2 1,8 1,8 1,8 0,3
NA
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
Appendix C: Questionnaires - Summary (System Integrators and Software Vendors)
n=13 1. What goals are important to define (should be defined) for the implementation of a Product Lifecycle Management (PLM) system?
Rank XXX 1 2 very important 3 11 9 important less important 1 not important 0 ? No ?/No
Weight/Factor 2 X X XXX Reduce time to market 2 37 13 2,8 Enabling extended enterprises through 3 1 33 13 2,6 integration of customers and suppliers 3 Integrate “internal islands of 8 4 1 32 13 2,5 automation” ** 4 Increase productivity 7 5 1 32 13 2,5 5 Improve quality 6 6 1 31 13 2,4 6 Support the overall business strategy 6 6 1 30 13 2,3 7 More innovation/new products 5 7 1 30 13 2,3 8 Improve customer orientation 5 5 2 1 27 13 2,1 9 Redefine the product development 3 8 2 27 13 2,1 process 10 Improve classic PDM functionality * 4 5 4 26 13 2,0 11 Enabling “mass customisation” *** (i.e. 8 5 21 13 1,6 through part configurators accessible via the Internet) * product data vaulting/warehousing, part classification, search functionality, cross referencing, revision control, workflow, electronic engineering change management, document management ** integrate different CA –Tools; integrate several databases storing product related data into one (single point of access) *** also known as “built to order”, “manufacturing for the individual” or “customer driven manufacturing”, the opposite of mass production or built to stock
Comments:
-
Question is difficult to answer because all improvement initiatives and solutions have more or less these same objectives. So this is not a discriminator for PLM. A lot of customers would be happy to have this classic PDM function in place
2. Who is normally involved in the product definition process?
Rank XXX 1 2 3 4 5 6 7 8 9 10 Weight/Factor Product Design/Engineering Research&Development Manufacturing Supplier Purchasing/Procurement Marketing Senior Management (CEO, CTO, ...) Service Sales Customer frequently 3 12 10 4 4 3 3 4 2 1 occasionally 2 1 2 7 5 7 5 4 5 4 7 seldom 1 1 4 3 4 3 5 8 5 never 0 ? X 38 34 26 26 26 23 23 21 19 19 No X 13 13 11 13 13 13 13 13 13 13 ?/No XX 2,9 2,6 2,4 2 2 1,8 1,8 1,6 1,5 1,5
1 2 1 1
Comments:
-
Again difficult to answer: you are asking who IS today, not who should. Therefore I answered occasionally for most, even though they should be involved frequently (in my opinion). Depends on the phase in the development cycle
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
3. Who has normally access to and is using a PLM system? (A= Access ; U =Using)
Research & Development Product Design/Engineering Purchasing/Procurement Marketing Manufacturing Sales Service Senior Management (CEO, CTO,...) Customer Supplier frequently A(1),U(8) A(1),U(11) A(2),U(5) A(2),U(1) U(6) U(2) A(1),U(3) A(1) A(1) U(2) occasionally A(1),U(2) U(1) A(4),U(3) A(4),U(2) A(2),U(3) A(4),U(2) A(1),U(6) A(2),U(2) A(2),U(2) A(3),U(5) seldom U(1) never
A(1),U(2) A(1),U(1) A(1),U(4) A(2),U(1) A(3),U(2) A(3),U(4) A(3)
1 1 3 2
Comments: Sales uses CRM (which has links to PLM), Suppliers usage is increasing 4. Is a (shared) vision with the implementation of a PLM system being established (i.e. “we want to be the No. 1 in customer service/we want to manufacture the most innovative products”)?
Rank 1 2 3 4 Sometimes Normally not Yes No ? 10 2 1 0 % 77 15 8 0
Comments: But this is key and the vision should be provable 5. Is an ‘as is’ (current state) analysis of the product development process being performed before implementing?
Rank 1 2 3 4 Sometimes Yes Normally not No ? 8 4 1 0 % 62 31 8 0
Comments: We prefer a ‘should be’ approach 6. Is a strategy defined how to reach the ‘to be’ (target) situation defined in the vision?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 7 6 0 0 % 54 46 0 0
Comments: For large scale projects the answer is yes
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
7. Is a pilot group testing the new scenario being established?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 8 4 1 0 % 62 31 8 0
Comments: More likely to be normally not, but still sometimes it happens. 8. Does the implementation slow down the productivity of companies?
Rank 1 2 3 4 A little bit No Significantly Dramatically ? 7 5 1 0 % 54 38 8 0
Comments: The PLM roadmap should actively deal with risks like decreasing productivity and should include strategies to avoid or minimise these risks. The aim clearly is not to negatively influence productivity. For that reason a strategy and a good preparation are necessary. 9. Is there an interface to the ERP system?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 9 4 0 0 % 69 31 0 0
Comments: This is always customer and business specific. All the cases appear in our projects. 10. If there is an interface, how is ownership of data respectively transformation of ownership in the product development process been regulated?
Rank 1 2 3 4 5 Data is kept in both systems Master data is transferred from PLM in ERP system Master data is kept in ERP system Other: All of the above solutions do appear Master data is kept in PLM system ? 6 4 3 3 1 % 46 31 23 23 8
Comments: You will find all kind of projects. It depends of the customer and of the industry! Project dependent
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
11. What changes are required to successfully implement a PLM system?
Rank XXX 1 Weight/Factor Reengineering/Redefinition of product development processes (i.e. interdisciplinary virtual team approaches, workflow changes) Cultural changes (i.e. open communication and collaboration culture) Empowering of people / teams (i.e. designers having direct customer contact) Changes in the organisational model (i.e. removing of layers, networked organisation) Product line rationalisation (i.e. to enable mass customisation) Other: Establishing a new business model (e.g. “Full Service Provider” instead of “Product Manufacturer”) Other: Management awareness very important 3 6 important 2 7 less important 1 not important ? X 32 No ?/No X 13 XX 2,5
2 3 4 5
7 5 3
3 3 6 6
2 5 3 5 1
29 26 24 17
12 13 13 11
2,4 2 1,8 1,5
1 1
12. How is the implementation of a PLM system and the changes required hereof communicated with the people affected?
Rank 1 2 3 4 5 6 7 8 9 10 Workshops Intranet Notice Board e-mail Internal newspaper Employee Survey Global Town Hall Meetings Other: Awareness Sessions (2 hour Meetings) that will be combined with feedback questionnaires Other: PLM Solution Lab No communication required ? 12 10 10 7 7 5 4 1 1 0 % 92 77 77 54 54 38 31 8 8 0
Comments: Since PLM is an integration program, a marketing and communication strategy and roadmap is required. All channels/media for internal and external (suppliers, customers, partners) communication should be part of this strategy.
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
13. What changes in the organisational structure are necessary to best support PLM? (Please describe)
-
-
Destroy functional borders into the product definition process. Build groups with all roles to fulfil the product definition process. IT should be part of the product definition process – end user satisfaction is key! Ports the factory planning and simulation process earlier in the product definition process. Use the DM function to simulate the production process as early as possible. Changes towards process and product orientation should be initiated. This could mean more responsibility for project managers (in product development programs) or the decision to establish product managers for strategic product lines. Implementation of process organisation Implementation of project management Implementation of cross functional teams This depends very much on the type of organisation, the type of product and the management style the specific company has adopted or wants to adopt. Not one answer possible. For the implementation absolutely necessary is the end of the thinking in departments and of possessing of product data by departments or people. Product Managers should be stronger than department managers Bonuses of product managers should be linked to success of PLM People need to be motivated, solutions must be sold internally No changes are necessary but a good project/process oriented organisation is a good starting point for success Establish global process, involving several partners
14. What of the following organisational change management methods/tools are used during the implementation of a PLM system?
Rank XXX 1 2 2 3 4 4 6 7 8 9 10 11 12 13 14 15 16 17 Weight/Factor Early involvement of people being affected Establishing a (shared and motivating) vision Establishing a concept to regularly communicate with people involved Aligning and mobilising leaders Coaching of people involved Planning, realising and celebrating short term wins (to build confidence) Create an atmosphere of openness and trust Vocal and visible support of senior management (walking the talk) Build a critical mass for change: buy-in and stay-in Facilitate learning/skill building (to acquire new behaviour) Feedback (i.e. through employee survey, customer inquiry, 360° Feedback) Dealing with resistance Implementation of change agents/promoters Empowering people/teams to act on the vision defined Establishing a sense of urgency (burning platform) Institutionalise new approaches Hiring, promoting, developing employees who can implement the vision Changing reward systems to support the change initiative frequently 3 9 8 8 7 6 6 6 5 5 4 3 4 4 2 1 2 1 occasionally 2 2 3 3 2 4 4 5 6 5 6 8 6 4 8 8 4 6 5 seldom 1 2 2 2 4 2 2 1 2 1 3 2 2 3 2 3 4 6 6 1 2 1 1 2 1 1 never 0 ? X 33 32 32 29 28 28 29 29 26 27 27 26 23 24 22 18 18 16 No X 13 13 13 13 13 13 13 13 12 13 13 13 13 13 13 12 13 13 ?/No XX 2,5 2,5 2,5 2,2 2,2 2,2 2,2 2,2 2,2 2,1 2,1 2 1,8 1,8 1,7 1,5 1,4 1,2
1 1 1 1
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
15. What kind of training do users receive during a PLM system implementation?
Rank XXX 1 2 3 4 5 6 7 Weight/Factor Software training (Functionality) Skill building regarding the PLM vision (new process training) Training in team development, team working Communication Training Training in conflict management, group dynamics Train how to take responsibility and have the obligation to assist those being responsible Intercultural Training Always 3 12 3 1 1 Sometimes 2 1 8 7 6 6 6 3 Normally not 1 2 4 6 6 5 9 1 1 2 1 Never 0 ? X 38 27 21 21 18 17 15 No ?/No X 13 13 13 13 13 13 13 XX 2,9 2,1 1,6 1,6 1,4 1,3 1,2
16. Is your implementation approach depending on the culture of a company?
Rank 1 2 3 4 Yes Sometimes Normally not No ? 9 3 1 % 69 23 8
Comments:
-
If the 'normal' implementation approach is leading to resistance appropriate action will be taken.
17. What are the main/important problems during the implementation phase?
Rank XXX 1 2 3 4 5 6 7 8 9 10 10 12 13 14 15 16 17 Weight/Factor Barriers between departments Not enough support from senior management Resistance of middle management to change Focus too much on technological aspects, too less on people Scope not well defined, project is oversized Resistance of users to change Project does not have appropriate priority Not enough resources available Budget needed, higher than expected Organisation and procedures are not adapted to the new situation (technological and organisational integration on different levels) No transparent goals/objectives Time for implementation needed, longer than expected Goals are to aggressive, organisation is not capable to cope Availability of people from implementation team Technological limitations (performance/missing functionality) Barriers to external stakeholders (customers/supplier...) Intercultural problems (i.e. language barriers) very important 3 7 8 8 6 6 7 6 5 5 5 5 4 4 3 3 2 1 important 2 6 3 2 6 5 3 5 7 6 4 4 5 5 6 5 5 2 less important 1 2 3 1 1 3 2 1 2 4 4 3 4 3 4 4 9 1 1 not important 0 ? X 33 32 31 31 29 30 30 30 29 27 27 25 26 24 21 20 16 No ?/No X 13 13 13 13 12 13 13 13 13 13 13 12 13 12 12 12 13 XX 2,5 2,5 2,4 2,4 2,4 2,3 2,3 2,3 2,2 2,1 2,1 2,1 2 2 1,8 1,7 1,2
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
Comments: Clear goals are the prerequisite for the support of senior management. Priority one is always the actual productivity. 18. What are the main/important factors for a successful implementation.
Rank XXX 1 2 3 3 3 6 7 8 8 10 11 12 13 14 15 16 Weight/Factor Commitment/Buy in of senior management Early involvement of people being affected by the changes Align and mobilise leaders Commitment/Buy in of middle management Appropriate training and coaching for people involved Choose the right system integrator Create an open communication and collaboration culture (boundaryless organisation) Realisation and celebration of Short Term Wins Engage, communicate and explain the changes involved with stakeholders Clarify in an early stage the ownership of data in the product development process Establish a shared and motivating vision Appropriate project staffing Choose the right PLM vendor Empowering people to act on the vision defined Establishing a sense of urgency/burning platform Change of reward systems to support change initiative very important 3 10 10 7 7 7 6 7 6 6 6 4 3 3 2 important 2 3 2 5 5 5 6 4 5 5 4 7 10 8 9 10 1 5 less important 1 1 1 1 1 1 1 2 2 3 2 1 1 3 6 1 1 1 1 not important 0 ? X 36 35 32 32 32 31 30 30 30 29 28 29 26 25 23 14 No ?/No X 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 XX 2,8 2,7 2,5 2,5 2,5 2,4 2,3 2,3 2,3 2,2 2,2 2,2 2 1,9 1,8 1,1
Comments: If there is the commitment from senior management middle management often has to behave appropriately. 19. How would you rate the positive impact of Change Management Methods on the success of a PLM implementation?
Rank 1 2 3 4 High Medium Low No ? 6 4 2 0 % 50 33 17 0
Comments: Depends on how they are implemented
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
20. To what degree is the implementation success depending on the company culture?
Rank 1 1 3 4 High Medium Low No ? 5 5 2 0 % 42 42 16 0
Comments: “Company culture’ is a reflection of behaviour and activities of individual people. Most important is CEO responsiveness to changing market requirements and power to change. A company culture that contradicts the introduction of a new system will not survive very long 21. Are the results achieved through the implementation of a PLM satisfactory?
Rank 1 2 3 4 Yes Partially Sometimes No ? 7 3 1 1 % 54 25 8 8
Please explain:
-
-
-
A successful implementation actively supports users in “living” new processes and leads to long-term profitability A lot of companies have a lot of different experiences with PDM systems, not always being positive. A number of visionaries have achieved tremendous steps forward by understanding PDM as a product development methodology. The potential of benefits is so big, that it will be hard to not be successful in achieving them. Since the introduction of PLM solution very ... is results are often not immediately measurable. This would only be the case when all interfaces and working methods were adopted to the new system. This state very rarely is reached because already during the implementation phase modifications have to be done that are changing parts of the whole concept and so not all goals can be achieved. But this seems to be a normal process, since the internal company organisation is always changing. No one can work without afterwards Project benefits are overestimated at the beginning of the project – otherwise the management would not invest in the system. The actual benefits are much less than estimated.
22. Is the “Return On Investment” measured?
Rank 1 2 3 4 Sometimes Normally not Yes No ? 7 3 2 0 % 58 25 17 0
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Appendix C: Questionnaires - Summary (Software Vendors and System Integrators)
Comments:
-
-
Is in most cases very difficult, because of wrong or not existing measurement processes. ...though this is one of the most difficult metrics to measure Very hard to do, because in most cases there is no real comparison possible It’s usually not possible to define if a benefit is really due to PLM or if it is due to another change in the company or its environment. If the senior management asks for there is certainly a ROI done although experienced managers do know that these measurements are based on many uncertainties. In certain instances and applications it is possible to perform past-present investigations, but the are not representative. In a normal company this should be done
23. If yes, how is it measured and with what results? How:
-
-
Monitoring of important process specific numbers, eg. Throughput time, time to market, overall product costs, lifecycle costs Usually a high number of qualitative and quantitative aspects like time to cash, engineer productivity, time to release to manufacturing, number of design iterations, design failure, number of parts used and re-used, search time etc. are checked by various means (data residing on the system and inquiries on various participants and users during the implementation of a PLM system). Key is that the data acquisition and interpretation part is done with the help of a good project management and industry expertise. Based on the original ROI calculation: Reduced time to market Improved efficiency (more work with less people) Reduced amount of different types and parts Higher reusability of existing parts Reduced cost for changes Time and ... comparison for certain actions, statistical analysis of mistakes Before project start a Benefit Potential Analysis is made, with a cost calculation. These figures are used to get the ROI. Stated metrics at the beginning regarding the value propositions at the start of the project. Value metrics based upon business results and business financial goals. Only on some aspects, e.g. number of parts, re-use, less re-creation
Results:
-
company and project specific driving PLM projects with an ROI-focus usually gives the positive results Cost reduction up to 30 % Reduced lead time up to 40 % Of course always positive since the example to investigate is always chosen on ones own The Project Plan must insure to get a time of cost amortization of the project in 2 years. This is possible if the project focuses on quick wins and functionality with highest priority.
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