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The potential of PLM software in custom and contract manufacturing

Understanding PLM’s role in the high-product-mix job shop

You and your team spent months implementing the shop’s enterprise resource planning (ERP) system. The costs were more than you care to discuss. Despite this, no one can argue that ERP has helped improve efficiency pretty much across the board; there’ve been far fewer material shortages, you now have greater visibility to practically everything, and the production floor has hit its on-time delivery target five months in a row. ERP is a no-brainer no matter what size the shop.

Still, something’s missing. There seems to be a disconnect between the front office and the engineering department, the shop floor, and the skilled people who operate the press brakes and laser cutters, the welders and waterjets at the heart of any sheet metal fabrication company. Sure, ERP has provided insights into production inefficiencies and hidden job costs, but it’s not helping you do one very important thing: eliminate these roadblocks.

Have you considered a product life cycle management (PLM) system? If you’re unfamiliar with the term, you can think of it as the yin to ERP’s yang. Where the latter is primarily focused on financial activity, order management, and material requirements planning (MRP), PLM is concerned with everything from product design and development to manufacturing and quality. It is a central repository for all forms of engineering and manufacturing data. It offers a comprehensive way to store, share, and manage bills of material (BOMs). Collaboration becomes much simpler with PLM and streamlined processes and work flows become easier to develop.

If you work at a custom fabricator, I know what you’re thinking: Aren’t PLM systems for companies that actually design products—namely, our customers? What business does a job shop like ours have investing in such specialized, high-end software? The only engineering data we have is our CAD files and NC programs, and we’ve since implemented a product data management (PDM) system for that. As for our BOMs, we manage them just fine in our ERP system, so tell me again: Why should we invest in PLM?

Data Versus Life Cycles

PDM does edge into PLM territory in that it offers a centralized location for manufacturing-related files. It also provides version control of those files with change tracking and tightly controlled check-in and check-out of CAD data, BOMs and routings, work instructions, and other documentation. Because everything a tool designer or programmer needs is now in one place, PDM improves the efficiency of these and other human assets, eliminating concerns over missing files or outdated revisions making it to the shop floor.

For a team of manufacturing engineers or a group of CNC programmers, PDM is an excellent way to get all of their information organized and secure. That said, typical PDM platforms do not incorporate sales and marketing information or quality metrics.

Speed Quoting With Historical Context

Consider the sales and quoting process. When quoting a job, how easy is it to find similar jobs that you quoted or produced in the past? If the answer is “damned difficult,” you’re not alone. PLM helps sales and estimators identify previously fabricated parts similar to ones in the job being quoted. It has search and indexing functions to help an estimator or salesperson find previously processed parts with similar geometries and features.

Once these “same as but slightly different” jobs are identified, you can take apart the watch. Estimators can see what worked during the manufacturing process and what didn’t and adjust their estimates accordingly. They can identify what tooling was used and whether it can be modified to fit the new job. If any quality problems occurred, they can see what was done to resolve them.

Good ideas can carry forward. For instance, say a previous job involved 10 small brackets, all bent on a press brake to 90 degrees over the same die width. It turns out that the shop was able to reduce manufacturing costs by bending all 10 brackets at the same time, simply by keeping the parts tabbed in place as they were lifted off the laser-cut sheet. Yes, keeping those brackets together might lower your material yield, depending on the active job mix, but that’s a small price to pay for the increased bending throughput.

Similarly, PLM can also drive design-for-manufacturability efforts. Say a request for quote (RFQ) calls for 10 brackets, but half of them have a bend line that’s in a slightly different position. If that bend line could be moved just a hair in one direction, it would match the bend line in the other brackets and, hence, could be bent with just one cycle of the press brake ram. A library of similar jobs, all indexed and searchable in PLM, can open up these and other manufacturing possibilities.

Linking and Searching

In many operations, a variety of manufacturing documents live apart, stored in separate files on a server. Nothing’s linked to anything, and a revision change can mean countless hours chasing down and updating files. Just one file slipping through the cracks can spell disaster. PLM can link these documents, including work instructions, quality procedures, tooling lists, and setup sheets.

Similarly, the purchasing department can use PLM’s search functionality to streamline the supply chain, looking for commonalities across all active jobs or projects. This creates opportunities for vendor consolidation and part-spend aggregation. They’ll also have greater visibility to the timing and content of upcoming engineering change requests, reducing the chance of filling the shelves with soon-to-be-obsolete inventory.

Designers and product managers might use PLM to analyze form, fit, and function characteristics of various components in an effort to substitute different but equivalent, lower-cost part numbers. The programming and scheduling departments can use it to optimize nests and reduce setup times. Quality control can use PLM for root cause analysis or to dig more deeply into failure modes.

Even the smallest shop designs and manufactures countless jigs and fixtures, molds, and dies. Doesn’t it make sense to document everything about these investments, including how, why, where, and when they were made, thus increasing your ability to utilize each to its fullest? What about the process plans, the NC programs, and assembly procedures used to make them?

Cracking the Nut

PLM can provide a single source of the truth for all things manufacturing. Integrating PLM with ERP mitigates data replication. Production costs are clearly visible to all and sundry. Engineering teams grow more efficient, reducing lead times and wasted effort alike. Quality and corrective actions become easier to manage.

Still, a full-blown PLM implementation is a big nut to crack, and the return on investment might take as long or longer than your ERP system. Worse, it can be more challenging to measure. With ERP, ROI is often reflected in a company’s income statements and balance sheets—depending on which modules have been implemented, you might see improvements in material spend, manufacturing productivity, and other areas from your ERP system.

PLM is a bit more … squishy. Hard figures like win-loss ratios, cost of quality, and product lead times—values that will likely improve with a properly implemented PLM system—are easy enough to measure, but how do you quantify the efficiency levels of your engineering staff? Similarly challenging to identify are productivity losses due to missing or inaccurate data, duplicate part numbers, siloed information, and all the other time-wasters that PLM eliminates.

This can make any ROI calculation more a leap of faith than an accounting exercise, although it’s still important to identify and measure key indicators wherever possible before you begin a PLM rollout.

Reaching Toward Harmony

PLM systems are typically modular in nature, allowing companies to use only the parts of software they currently need. They can eat the elephant one bite at a time. This is especially important to smaller shops, where engineering resources are often limited; PLM lets you start small, and then build on your successes.

One good place to start is the part numbers. If you already have an ERP system in place, chances are good that you’ll get some pushback on this one, but the most logical place to house part records, followed by the BOMs, is within the PLM software. That’s because each of these critical data elements is intimately related to manufacturing, and as noted earlier, manufacturing is PLM’s wheelhouse. Getting started involves establishing a data-entry procedure for the engineers to follow and handing over the reins.

But hold on—our ERP system requires BOMs and part numbers for costing and MRP purposes, you say. That’s fine; no one ever said you wouldn’t need some level of integration between ERP and PLM—in fact, it’s a prerequisite. The point here is that PLM can take the lead. That said, if data is needed from the ERP, CAD/CAM, the quality management system, manufacturing executions system, or customer relationship management software, then a one-way link to those systems must be provided.

It’s not as difficult as it might sound. All modern software provides “hooks” to support integration with other systems. Your software provider or reseller can use these application programming interfaces to share whatever data you and your team feel is necessary to achieve data nirvana.

What might be more challenging is retooling your company to fit into the PLM-based system. Just as it was with the ERP rollout, a PLM implementation is an excellent time to review and streamline your internal business processes around your new software—something that should be done on a routine basis anyway.

Managing Products and Capacity

Much of the confusion around PLM lies in “product life cycle,” a phrase that admittedly implies that the software applies only to companies that make and manage their own products, from prototype through production and the aftermarket. But products in custom fabrication have a life cycle too.

It’s been said that custom fabricators don’t sell products; they sell capacity—more specifically, the time it takes for the shop’s machines and employees to ship an order. In truth, OEMs aren’t buying capacity; they’re buying products, sometimes an infinite variety of products that will be assembled into customers’ own products, but products all the same. The less fabrication capacity (that is, less time and resources) a shop needs to produce those products—from raw stock to the shipping dock—the more successful the fabricator can be.

Sure, a custom fabricator might produce a batch of parts and never see those parts again; or if it does, that job might not appear on the shop floor until months or years later. But chances are, a custom fabricator has a sweet spot, jobs involving particular products that fit the shop’s engineering and fabrication capabilities and business model.

The sweet spot might include specific part geometries or machine capabilities, material, a specific routing, or demand patterns (seasonal work, lead time factors, inventory requirements, etc.). A fully integrated PLM can help identify and develop that sweet spot to grow the business.

The decision to move forward really comes down to one thing: Where ERP and PLM each offer a certain amount of visibility and control to any manufacturing environment, linking the two together extends these capabilities even further. It’s like a good marriage in that the sum is greater than the individual parts. And, just like a marriage, it’s going to take hard work at times, an open mind, and the unbridled participation from all involved, but the results will make it exceedingly worthwhile. So if you feel you need an ERP intervention, don’t lose sight of the important role that PLM can play in improving your overall operations.

Jon Gable is PLM line of business leader at Adaptive Corporation.