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PG_-_Bob_Sherman_-_Mega_User_Conf_2008.pdf

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Product Lifecycle Management (PLM) & MEGA Bob Sherman

Procter & Gamble Enterprise Architect

Agenda

Meet P&G PLM Defined P&G’s PLM Journey MEGA’s Role in PLM

P&G

171 years old

~300 brands

$85 Billion in sales

~140,000 employees in ~160 Facilities distributed across ~70 countries

28 years of 5% annual growth of sales per employee

>5000 innovation initiatives last year

System Complexity

can be

INVERSELY RELATED

to Product

/Packaging Materials

Cost

Our Manufacturing Challenge

CPG Competitive Landscape

“6 month delay in product launch reduces five year profits by as much as 33%…” (Product Life Cycle Development, Certes Group)

Studies showing the potential of: 75% reduction in time to market 20% reduction in R&D spending 40% reduction of capital lifecycle asset costs

DEFINE: Product Lifecycle Mgmt (PLM)

Business Need Benchmarking Benefits Architectural Positioning

A New Architectural Cornerstone

company core

competencies

SCM suppliers

customers

CRM

resources

ERP

products PLM

Industrialization of Innovation

Self Sufficient Product Organizations

Matrix OrganizationMatrix Organization

Initiative/Project 1

Initiative/Project 2

Initiative/Project 3

Initiative/Project 4

Initiative/Project 5

Initiative/Project 6

Initiative/Project 7

Initiative/Project 8

ProjectsProjects

Fu nc

tio ns

Fu nc

tio ns

Product “A”

Product “B” Product “C”

Po rtf

ol io

M gm

Cu st

om er

M gm

Ma rk

et in

g Sa

les R&

D Ma

nu fa

ct ur

in g

Pu rc

ha sin

g Re

gu lat

or y

Pa te

nt /L

eg al

Loss of “Product” Focus

PPM

Purchasing Manufacturing Budget Mgmt

Sales

LI M

S LI

M S

E R

C on

su m

R es

ea rc

N on

-L IM

S N

on -L

IM S

C us

to m

S ol

ut io

ns R&D

Analytics Regulatory

Legal/Patent

C R

C ol

la bo

ra tio

n T

oo ls

Product Context?

Suppliers

Internet

Organizational Memory

Organizational MemoryOrganization 2Organization 1

Organization 5Organization 4Organization 3

Dependence on Org Memory

Sys E

Team Space

Sys F

Sys D

Team Space

Sys C

Sys G

Team Space

Share Drive

Sys B

App A

Goals Results Information IslandsInformation Islands

PROJECT

Knowledge Issue Is Mostly Upstream

Finished Product

Ideas Product Development

Information Available After Startup

product data

tests

decisionsexperiments

insight s

research

Iterative Work Critical Lost Product Knowledge

Product Launched Product

Launched

Org Memory = ∑ Failures

Product Goal

PDMA Product Development Handbook: 80% of a product’s final cost committed at the Design Concept phase, after only 5% of expenditure on the project’s eventual cost.

Better Product Better

Product

New TechnologyNew Technology

Information Available After Startup

Lost Product Knowledge

Organizational Memory

Inter-Project Knowledge Re-Use One Project’s Trash in Another’s Treasure

Weak Adhesive

Won’t Dry

Post-It Note

Restoring Lost “Product” Focus

PPM

Purchasing Manufacturing Budget Mgmt

Sales

LI M

S LI

M S

E R

C on

su m

R es

ea rc

N on

-L IM

S N

on -L

IM S

C us

to m

S ol

ut io

ns R&D

Analytics Regulatory

Legal/Patent

C R

C ol

la bo

ra tio

n T

oo ls

Records Mgmt

Product Context?

Suppliers

Internet

PLMPLM

Product Mgmt

PLM HistoryModeling ProcessPayout Model

PLM Payout Model

Source: AMR Research review of 120 PLM initiatives

Now Next Year + 5 Years 1 for 1

10 for 1

100 for 1

Savings from IT Infrastructure & Application rationalization • Most companies as-is PLM environment spans often dozens of separate systems

Operating Metrics Improvements • Direct Material Savings, Reduced design errors and rework

Strategic Value • Margin enhancement, First- to-Market Advantages

Payback

Time

Benefit Category

PLM ArchitecturePLM HistoryFlywheel

EDS Study on Value of PLM

Examined 120 public manufacturing companies

Companies that have an enterprise wide PLM installation are significantly more profitable than companies that do not

~50% higher net profitAutomotive

~25% higher net profitAerospace & Defense

~1.75 times higher net profit

Average of Industries

In some cases 3 times higher

High Tech

Almost 2X higher net profit

Industrial Machinery

~10% higher net profitMedical

~40% higher net profitNon durable CPG

Net Profit With PLM vs. without PLM

Source: EDS Study

Benchmarking PLM Benefits

$125M in annual Net Income improvement after adopting PLMDell 50% reduction in time to marketGillette

Reduced design and manufacturing from 36 to 24 months for $200M in savings

2500 engineers re-assigned to new projects one year early

Ford Motor Company

50% reduction in cycle time and manufacturing time 58% reduction in design time

Lockheed Martin JSF

Order fulfilment from 58 days to 22 days Value estimated at $135M savings over 5 years

Ethicon Endo- Surgery

Largest PLM engagement ever 400 Legacy systems to 4 OTS Packages

Boeing

ResultsCompany

P&G: PLM Case Study:

History Analysis Strategy & Results Architecture MEGA’s Role in PLM

P&G PLM History

Benchmarked with Aerospace and Automotive Leaders

Established P&G PLM Program in 2000

Enterprise agreement with a PLM supplier

After 5 years of heavy focus on workflow automation

Improved capabilities of individual, vertical business functions

Did not meet objective of cross-functional integration of product knowledge across the enterprise

PLM ArchitecturePLM Payout Model

Good-to-Great: “Flywheel” Concept

Source: Jim Collins – “Good to Great”

PLM & Enterprise Architecture

The Flywheel & Doom Loop

The flywheel builds momentum through constant application force over time.

In most cases, the disciplined workforce was not aware of any grand program to transform the company.

Good-to-Great companies don’t have to manage change, align or motivate. These problems took care of themselves because of their disciplined culture.

Doom-Loop companies try to skip buildup and jump directly to breakthrough. With disappointing results they jump back & forth… never building momentum.

Source: Jim Collins – “Good to Great”PLM Payout Model

PLM Strategy Intervention Switch from process to data modeling… create and use a reference Product Data Model (PDM) to identify opportunities to stream-line NPDI processes. Rationale…

People and processes exist to create, exploit, maintain and protect assets (data & physical)… therefore…

data should be the focus (i.e. set the scope) of improvement efforts.

Additional rationale for selecting a “data first” strategy…

Modeling Data requires less effort than modeling process

Cross-functional alignment to a data model is easier to obtain than for process model

Data model is more stable than process model

Use an Enterprise Architecture tool to develop and maintain the PDM

Architecture

Information Systems Portfolio

Work Processes WP1

WP5

WP3

WP2

WP4 WP6

WP3WP7

Application

Business Change

Requirements

Business Change

Requirements

Product Data Model

Requirements

Organizational Model

Projects

PLM: Strategy & Data Driven

Automation Objectives

opportunities

Business Strategy Business Strategy

Opportunity Analysis

SME Team

GBU GBU

GBU

GBUGBU

SME Team

GBU GBU

GBU

GBUGBU

SME Team

GBU GBU

GBU

GBUGBU

SME Team

GBU GBU

GBU

GBUGBU

Scope and Project Org Model

Etc.

Diapers / Pampers

Gillette / Blades & Razors

Coffee / Folgers

Fabric / Tide

Oral Care / Crest

Hair Care / Pantene

Diverse Collection of Business Verticals

GBU GBU

GBU

GBUGBU

SME Team

Core Team

Modeler

Etc.

Purchases

Consumer Research

Formulation

Package Development

Process Development

H&SE

22 Business Functions

Product Concept Through Hand-off To Manufacturing

Modeler

Key Challenge: Unstructured Data

Modeling Process

One Model Per Function

Deconstructed Standard Documents

Document Variations

Standard Document

Inter-Functional Data Models

GBU GBU

GBU

GBU GBU

SME Team

GBU GBU GBU GBU GBU

Core Team

Modeling

Applications Reverse Engineer

GBU GBU

GBU

GBU GBU

SME Team

PLM Architecture

Product Data Model Metrics

Duration: 120 days ~150 SME’s interviewed

~200 training/modeling sessions

~3000 data classes defined

~3500 associations

~9031 attributes

~100 generalizations 52% 4% 3%41%

100

Application Shared Files Workstation Physical

Structured Unstructured

Strategy & Data Driven Analysis

Opportunity Analysis

Common Data Model

Assets Controls

• Are we getting appropriate re-use? • Should it be easier find via navigation or

search? • Should it be pushed to me?

Control CommunicationTrackingDecision Knowledge

Assets Regulatory Reference

• What would happen if I eliminated this content? • Does the purpose of this document overlap with others? • Are we duplicating info we should be referencing ? • Are we leveraging appropriate automation to generate this?

Business Change RequirementsStrategies

Work Process Management

Knowledge From Research

Product Data Model Strategy & Data Driven Analysis

Projects Spawned from Analysis

Package Development Concurrent development of artwork and package structure

Reapplying past models and simulations

Integrated Product & Process Development Engineering feedback to Formulation & Package Design

Re-use of engineering knowledge across businesses

Material and Equipment Savings Better visibility of material requirements enables more choices

More granular spend pool management

Better visibility into past and predicted spend patterns

Architecture Derived from Analysis

PLM

ERP (SCM) and PPM

C F

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F E

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Li ne

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ce ss

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ra tio

CRM

Master Data Mgmt

Simulation (SLM) Manufacturing Process Lifecycle Mgmt (EWP/GTM)

MEGA’s Role (past & future)

Governance Collaboration Insights Communication

Governance

PDM Team PDM Team

Objects of Unknown Governance

Governance Folders: - Business Functions - Competency Teams

Collaboration: Avoiding Duplication

Browse Business Functions for Data Assets

Search for Entities

Insights: Auto-Diagram Entities

Class

Data

Class Class

Class

Class Class

Insights: Relational View of Docs

Failure Analysis

Document

Failure Analysis

Document

Process Operations Document

Process Requirements

Document

Process Requirements

Document

Observations of Modeling Process

Insights: Data Patterns

Example Abstraction of Testing Pattern Repeated Across the Enterprise

Observations: Modeling Process

Generating and aligning on an enterprise-wide Org model was more difficult than expected.

Not difficult for various business functions to grasp the modeling language and/or importance of data modeling.

Shortage of Subject Matter Expert’s time results in models that are far more complex than reality

The purpose of diagrams shifted from driving model accuracy and completeness within vertical functions to creating insights on enterprise-wide interdependencies.

Relational View of Docs

Future: PLM / MEGA Strategy

Project Scope

Project #2 Project #1 Project #3

Data Modeling

Business Process

Requirements

Architecture

Code

Leverage projects to grow and maintain the enterprise model. (vs. limiting modeling to only architects)

Future: Tactical MEGA Work

Create a “Organizational Navigator” to facilitate navigation of what we hope will one day be a really large model (and to support governance)

Likely areas of enhancements requests Model change and version management capabilities

Exposure of more MEGA events/triggers upon which to hook custom behaviors

Advisor

enhanced viewing (e.g. navigation, zoom, print, etc. capabilities)

to capture model review feedback

Questions