If the world was focused on mass production of standard products with no customization, then PLM would be all you need to manage your product lifecycle. However, mass customization has been a reality for some time and is growing.
The Distinctions between PLM & CLM and why they are Essential in Modern Manufacturing
Q&A with Daniel Joseph Barry, VP of Product Marketing | Configit
Tell us about yourself and your role at Configit.
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I am responsible for product marketing at Configit, reporting to the chief marketing officer. I am embedded in the product management team and provide a lot of support to the sales team. In this sense, my role is to bridge these different organizations providing input to product management on market trends and sales needs, product insight to the marketing team and sales enablement content to the sales team.
I have over 30 years of experience in a variety of roles ranging from software and hardware design to business management, product management, sales, marketing and strategy, which provides me with an appreciation for the challenges and different cultures in engineering, sales and marketing as well as a broad strategic overview.
Can you explain the main differences between PLM and CLM, and why both are essential for modern manufacturers?
If the world was focused on mass production of standard products with no customization, then PLM would be all you need to manage your product lifecycle. However, mass customization has been a reality for some time and is growing.
In 2005, 25% of manufacturers in North America offered Engineer-To-Order (ETO) customization. By 2020, over half of manufacturers offered some form of customization and today this percentage is between 60% and 70%.
Customization is here to stay and is growing. To support customization, you need to manage what you are offering to your customer and what you have delivered to them. You are no longer selling products; you are selling product configurations!
That’s what Configuration Lifecycle Management (CLM) is all about. While PLM manages products throughout their lifecycle, CLM manages product configurations throughout their lifecycle.
Essentially, CLM is an extension of PLM to provide more granularity to product lifecycle management.
How does CLM enhance the value of PLM for organizations offering highly configurable products?
Manufacturing organizations have been organized for decades around the principle of specialization, just like the mass manufacturing factory floor. Departmental siloes have developed where engineering work is done in isolation to operations and manufacturing planning while sales and service are also isolated siloes.
The vision of the PLM approach is that it extends from engineering to manufacturing and service. However, the reality is that most manufacturers use PLM systems together with CAD and ALM systems to manage research and development with ERP and MRP systems used in operations and CRM and CPQ systems used in sales.
Ensuring engineering intent through the manufacturing and sales processes is a major issue as it requires close integration between all these systems, which does not exist today.
CLM is a cross-functional approach by design. Since CLM is focused on product configuration data, it is only interested in the configurable options and rules defined in each system and department. By extracting and consolidating this information from the various systems in a common product model, CLM establishes a “shared-source-of-truth" for product configuration information that can be accessed by all. In this way, CLM connects all the systems together for this purpose to ensure data alignment, zero errors and great product configuration experiences.
What are the most common challenges manufacturers face when relying solely on PLM for product management?
Firstly, configurable products need to be configured at the point of sales either by sales reps, retailers or by the customer themselves. This means that the sales process needs to be part of the end-to-end process. PLM approaches focus on engineering, manufacturing and service, but do not consider the sales process. Combining PLM and CLM extends the PLM approach to also include sales and ensure engineering integrity in the sales process.
When a CLM approach is not taken, data misalignment is almost inevitable between PLM, ERP, MRP and sales systems as each are working in isolation. This leads to errors, gaps and the potential of delivering the wrong product to the customer or even a production shutdown as the product can’t be manufactured and delivered.
At an estimated $2 million per hour per shutdown, few manufacturers can take this risk.
How does a shared product model in CLM help ensure alignment across engineering, sales, and operations teams?
By establishing a shared product model, you are creating a common language that everyone can understand and where collaboration can occur. This makes it easier to see gaps and errors.
Configit uses its product, Configit Ace®, to implement a CLM approach using Virtual Tabulation® (VT) technology. VT technology enables all valid product configurations to be calculated up-front and stored in a compact file. So, instead of performing these calculations in run-time as other product configurators do, compilation with VT turns the product configuration validation process into a simple lookup. This leads to a lightning fast, error-free product configuration process as only valid configurations are offered.
The VT compilation process actually identifies misalignments when information from different sources is brought together in a common shared product model. Guidance is provided on how to resolve multiple conflicts, such as values that are blocked because of conflicting rules or gaps in the product model.
In addition, the pre-calculated solution space of all valid configurations can be analyzed with tools available in the Configit Ace® product to understand how changes affect what is offered as well as deeper analysis of any errors identified.
Can you provide examples of how CLM reduces errors and accelerates time to market in complex manufacturing environments?
Most manufacturers processes are manual, and document driven. They rely on experienced experts to interpret information from one system and how it should be compared with information in another system. With decades of experience, these experts understand what is possible and not possible throughout the end-to-end process ensuring a smooth process.
Unfortunately, this cohort of experienced experts is now retiring, and manufacturers are finding it hard to find replacements. In other words, a new approach is needed.
With a CLM approach, the experience of these experts can be captured as rules in the shared product configuration model enabling automation of the process and integration between systems. Configit customers have experienced up to 92% faster time-to-market using this approach.
At the same time, the establishment of the shared product configuration model using VT compilation ensures alignment and zero errors as only valid configurations are offered to the customer. This eliminates errors in the sales product configuration process and has also improved order handling by up to 40% for Configit customers.
How does integrating CLM with PLM empower sales teams without compromising engineering integrity?
With a CLM approach, most sales teams rely on isolated CPQ systems where product models need to be created from scratch based on information exported from engineering and operational systems. However, this is often a one-time effort and relies on internal manual, document driven processes to ensure that changes made in one system propagate to downstream sales systems.
This means that sales systems quickly become misaligned with the information in other systems resulting in sales offering products and configurable options that cannot be delivered.
With a CLM approach, the starting point is the engineering intent, which is then enriched with information from operational and sales systems to provide a complete, aligned product configuration model. When changes are made in source systems, the shared product model is also updated ensuring that downstream sales systems are always operating with an up-to-date, reliable source of information.
This ensures that sales are always offering valid and deliverable product configuration options to customers.
Looking ahead, how do you see the role of CLM evolving as customization demands continue to grow?
Manufacturers today realize that value is delivered cross-functionally and are embracing cross-functional approaches like CLM, as well as concepts like Digital Threads.
PLM system vendors see a path to realizing the full vision of PLM by extending their offerings with CLM so that PLM can extend beyond engineering to manufacturing, service AND sales. At the same time, sales teams are realizing that sales systems need to be tightly integrated with the rest of the manufacturing IT ecosystem and that a CLM approach establishes a reliable back-end configuration engine to drive error-free, omni-channel sales.
It is therefore likely that we will see more collaboration between CLM vendors like Configit and PLM, ERP and sales system vendors in ensuring reliable, high-performance, error-free product configuration processes and lifecycle management.
The content & opinions in this article are the author’s and do not necessarily represent the views of ManufacturingTomorrow
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