New products are entering and exiting the market with blinding speed. On top of the complexities associated with existing items, we’re seeing the emergence of entirely new categories of technology.
Take the Internet of Things. The concept of machines communicating directly with one another is spurring innovation on countless fronts. Manufacturers are scrambling to create “smart” appliances, vending machines, smoke alarms, home security systems, and any number of other consumer products.
Then there’s the area of wearable technologies, which will quickly expand well beyond the Fitbits, Apple Watches and Google Glasses that are dominating the sector in its early days. Such devices will impact supply chains all the way back to chip makers and raw-material providers.
Other examples abound. 3D holographic projection will transform the world of entertainment, smartphones and other electronic devices. The growing popularity of electric cars is sparking a revolution in battery technology. And the list goes on.
The discipline of PLM was already struggling with shrinking product lifecycles and consumers’ apparently insatiable demand for novelty. Manufacturers have responded by outsourcing both production and design, reaching for a degree of flexibility and responsiveness that they can’t support within their own organizations.
Software vendors have had to adjust their offerings as well. As with so many other types of applications, the trend has been toward delivery of systems via the cloud. Over the last decade, the technology has undergone a “tipping point” that has propelled cloud-based I.T. well beyond the initial efforts of pioneers such as Salesforce.com, says Steve Chalgren, vice president of product management and strategy with PLM software provider Arena Solutions.
The arrival of the cloud made PLM specialists especially nervous. They depend on confidentiality and the protection of intellectual property. Yet suddenly they were being urged by software vendors to move proprietary systems outside the firewall and into some supposedly secure server farm. They were understandably reluctant to make the leap.
Chalgren describes the stages of denial and acceptance of the cloud that have characterized many in-house I.T. departments, especially those concerned with PLM. “They started out as fearful,” he says. “They wouldn’t touch it. Then it was nice to have. Then it was mandatory.”
So is security no longer an issue for PLM? We hear almost daily about the theft and violation of intellectual property in global supply chains. Chalgren argues, however, that the cloud can actually be more protective of IP than on-premises systems.
That’s especially true, he claims, for small and medium-sized businesses, which often can’t afford “the full, adult version” of security measures. “Even big companies that have carved out their I.T. departments don’t have that capability anymore.”
The cloud, of course, isn’t 100-percent secure. No system is, regardless of where it’s hosted and who’s supplying it. But Chalgren points to the obvious truth that in-house systems aren’t completely protected from incursion either. Companies undergo cyber attacks all the time. Some of the most serious vulnerabilities exist in such mundane areas as e-mail, or the use of outside vendors. (Ask Target Corp. about that.) Vigilance is required for all systems, whether inside or outside the firewall. “You’ve got to have a continuous process of reviewing and hardening,” says Chalgren.
So where is cloud-based PLM today? Back in 2010, Gartner was charting the technology along one of its “hype cycles” as being stuck at the “Peak of Inflated Expectations.” At the time, Gartner said that “only a few visionary manufacturers have been willing to take on the costs and risks of the emerging opportunities to gain competitive advantage.”
But Gartner was far from dismissive in its evaluation of PLM back then. It took note of increased investment in the technology by the aerospace, automotive and life sciences sectors. And it argued that PLM was so complex that it would be take a full five to 10 years before manufacturers saw tangible results from its use. So it’s hardly surprising that we’re only now beginning to see mainstream adoption of PLM in the cloud.
Chalgren likens the transition to that experienced by enterprise resource planning (ERP) systems. Companies tend to delay the adoption of new and complex I.T. tools until they’re forced to do so by fundamental changes in the underlying technology, he says. A legacy system might lack the capacity to run a modern manufacturing line. Change might also be dictated by the arrival of a new operating system, or updated hardware.
In the case of cloud-based PLM, acceptance is often driven by new compliance regimes, requiring companies to trace the provenance of products all the way up the supply chain. One recent example is the new rule by the Securities & Exchange Commission on reporting the presence of conflict minerals in high-tech and electronics products.
“At some point,” says Chalgren, “the old system can’t bend or grow to solve the problem.”
PLM in the cloud promotes “mass collaboration” both for product design and production, he says. Companies acquire the opportunity to create “ecosystems” that bring together engineers and planners from multiple sources around the world. Nevertheless, a major shift in corporate I.T. strategy can be slow in coming – even as manufacturers confront a world that’s changing with blinding speed.