PLM paralyzes innovation: Why leaders need to rethink PLM now

James White

VP of Strategy, Duro

March 28, 2023


PLM streamlines engineering processes so that when changes are made, people know what to do next. So how is it that startups with only an innovative idea and no PLM can come out of nowhere to disrupt the industry leaders and take away their market advantage?

PLM software itself does not inhibit innovation. However, the way it’s implemented and utilized within a company runs the risk of doing so. If PLM is used solely to optimize existing products and processes, rather than exploring new possibilities, it could lead to a lack of innovation.

Why does PLM paralyze innovation?

PLM isn’t just software, it’s a business strategy. It’s enabled by various software and systems, including those commonly categorized as “PLM.” It was designed to ensure governance of the design, testing, manufacture, and quality of manufactured products. These processes and sets of rules are essential so that products conform to corporate and regulatory standards.

Preset workflows and processes encourage repeatability not freethinking

Market leaders often customize their PLM platforms to ensure maximum efficiency in product development. Product lifecycle workstreams become streamlined to perfection. They encapsulate proprietary processes, templates, libraries, plus even functional roles. 

However, those workstreams are like guardrails; predictable, reliable, efficient, and rigid. This is where the problem of innovation arises because innovation requires free thinking and acting. People need to be able to think and act differently than they did before in order to solve new problems. 

The customized PLM system backbone that ensures engineering efficiency and repeatability is the same thing that prevents agility to try out new things.

Leading manufacturers follow repeatable engineering processes. That way they don’t drift outside of governance standards, proven over decades, and do something risky. 

PLM was traditionally designed for products with long lifecycles

Historically products had longer lifecycles and most of the content was designed and manufactured in-house. This was a stable, predictable, well controlled environment. And it fueled investment in customized PLM solutions because processes could be baked into a system to improve efficiency, velocity. The ROI was high because the baseline of the product and sourced content didn’t change much. As a result, the PLM backbone didn’t need to change much either.

In contrast, today’s manufactured products have much shorter lifecycles and draw sourced content from a vast global ecosystem. There are new security issues along with a new for greater flexibility. Manufacturers are now dependent on supply chain constituents for significant modules of their whole product. Additionally, a product’s invention is frequently a collaborative effort between many independent companies who may also work with competitors. This highly fluid environment is not conducive to rigid customized workflows because things are constantly changing.

Bold ideas are easy. Converting them into innovative products is hard

Let’s take a look at an example of an engineer working at a large enterprise. The engineer has an idea for a new product and wants to create a quick design to share with his manager.

Initially, an engineer uses PLM to find content to reuse

He might choose an existing design using PLM’s advanced search capability to start developing. The PLM platform recognizes that changes are being made to an existing design and issues an “ECO Pending Approval Number” notification. 

The engineer then realizes that’s not what he wants to do and will make a copy of the design instead. Again PLM recognizes the intention to “copy” an existing design, issuing a new part number in the system which in turn flags ERP to check component inventory levels. 

This part number is now officially registered and can only be removed by a formal obsolescence process. It can’t be deleted or retired any other way. As a result, the new design will be an increment of the previous trial number, which creates ongoing confusion in the numbering registry. 

Advanced PLM systems may also prompt the engineer to consider an alternate component that is more readily in-stock. But he doesn’t want to make anything yet and doesn’t know how much of the original design he’ll actually use, if any. 

Then, the engineer decides to create a brand new design in CAD

By now the engineer is frustrated so starts a new CAD model. He’ll use externally sourced content from free online catalogs to speed up design brainstorming. Eventually, he’ll have a new digital prototype. However, the design likely won’t conform to PLM policy standards for the data model or BOM structure. It may include non-approved components and can’t be manufactured in-house because of existing tooling or process restrictions. Additionally, no one in the company has any experience with the new technology that’s been incorporated in the design. 

The idea is eventually rejected as it is viewed as risky

The official PLM system has no awareness of this new product development. The engineer, although acting with best intentions, has gone rogue! Management likes his idea but is unwilling to risk the time or money to make a prototype, let alone scale to production. Management tells the engineer that he should’ve created the design in the corporate PLM system to comply with engineering governance standards. Catch 22.

Disruptive startups aren’t held back by proprietary processes and systems

In contrast, disruptive startups are built around innovation. They aren’t weighed down by proprietary processes because they don’t yet have any. They have the ability to continuously try new things and change things if something doesn’t work. But their fail-fast and keep-moving-forward model surely must lead to chaos? So how do disruptive startups, big or small, ensure that failures become learning experiences and eventually, result in quality innovative products being built?

Any size company can build innovative products

As discussed in our blog on the challenges faced by market leaders, processes that were defined for yesterday’s product development may not support how engineers must develop new products today. 

What’s needed is a Product Lifecycle Management strategy that embraces today’s supply-chain-centric product development. Modern PLM software should combine both agility and governance.

It’s not just disruptive startups that have the ability to push the boundaries of hardware design and innovation. Although it’s more difficult for larger organizations that have established product lines and platforms to adapt, they can set up new teams for success. They need suitable tools and systems to support agile development. 

How to rethink PLM strategy to encourage innovation

Innovators should design their organizations to empower people while allowing technology to both simplify and speed up processes. They should review and adapt the core areas of their business.

People are empowered to take risks

  • Functional workgroups: Organizations are structured around connected workgroups that are semi-autonomous, rather than monolithic hierarchical organizations. Functional connections between people allow all product stakeholders to collaborate freely. This creates a flexible organization that has specialized, discipline-specific workgroups within. All product stakeholders have access to the product information they need using a centralized PLM platform.
  • A culture of failing fast: Choose the right people. They are willing to take risks and think outside of the box. A culture of failing fast and learning from the failure is encouraged. Your employees don’t seek permission first; they seek forgiveness later, if needed.

Processes enable agility

  • Agile methodologies: Your design team incorporates Git-style workflows, user stories and scrums. These strategies and processes, originally used for software development, can now be applied in hardware development. Teams can freely socialize new ideas and rapidly converge on the best design (rather than the first one that works). They use a fail-fast approach where PLM captures all attempts including the who, why, what, and how of the iterations performed.
  • Common product baselines: Products and product portfolios have common baselines to serve as the basis for future designs. Configuration Management standard 2 (CM-2) defines how to create a product baseline. This gives a predictable basis to adopt innovative features across multiple products within the portfolio. A family of products may be derived from the common base which significantly improves efficiency when making changes, enhancements, or customized products for example.

Technology simplifies your way of working

  • Minimal customization: Out-of-the-box software incorporates predefined industry best practices, forms, workflows, integrations, and templates. Rather than customizing it to fit your current ways of doing things, the software simplifies your way of working. In some cases, this means adapting to how the software works rather than changing the software to how your company wants it to work. User-level configuration provides enough personalization without the technical debt of customization.
  • Best-in-class applications: Cloud-native PLM systems with best-in-class complementary tools for cloud-native MES, ERP, CRM, etc., create a much more flexible and powerful suite of solutions than a single monolithic solution can offer. They are the best solution for the job rather than the monolithic PLM vendor’s choice.

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