PLM gets buyers under the hood
Automotive firms implement systems to ensure buyers get information they need for strategic sourcing.
By Paul E. Teague -- Purchasing, 3/1/2007 2:00:00 AM
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Read more in this software series Avoid a mess, clean your data Basics of the software buy 5 'musts' for justifying IT budgets |
"Now, purchasing and the supply base will be able to come into the design process." That's one of the benefits that Jim Sistek, director of global business practices at Visteon, the $11-billion tier one automotive supplier, expects to get with implementation of product lifecycle management (PLM) products and services. In essence, buyers will get under the design hood.
The PLM suite of products, called Teamcenter, from Plano, Texas-based UGS, is a major tool the company is going to use as it ramps up its operational efficiency to improve product development. The first department within Visteon to get the Teamcenter software will be engineering. "Engineering designs the parts and provides key information others need to do their jobs," Sistek says.
But even before engineering begins fully using Teamcenter, the purchasing organization will get trained in the system and begin using it too. In fact, purchasing has been involved in the planning for PLM adoption. "Purchasing has a steering committee driving the configuration of Teamcenter for its own needs, setting up the software and deciding on the routing and other rules," Sistek says.
Among elements of the PLM implementation at Michigan-based Visteon that will strengthen the purchasing function:
1. Standardized parts and part naming, which will result in fewer duplicate parts and less confusion.
2. Buyers, engineers and suppliers will collaborate on quotes so no one is left out of the loop.
3. The software will organize multiple quotes and take into account transportation, tooling and other costs to get a total cost of ownership.
4. Purchasing will have real-time access to engineering drawings so buyers can keep up to date on engineering changes.
5. Supplier-tracking data from multiple sources will be integrated into the PLM system so buyers will have one place to go to see how suppliers are performing.
Information allows buyers to do their jobs better
 By giving buyers access to all engineering information, PLM will bring them closer to the design process. |
The value of PLM is that it brings the information engineering has to purchasing and enables purchasing to do its job, says Steve Murphy, who is on the Teamcenter team at UGS. Additionally, he says, Teamcenter helps purchasing manage the supply base. "Suppliers register their capabilities and the supplier-management module in Teamcenter helps users to develop a scorecard and monitor the suppliers' performance," he says. It's natural that purchasing would be involved early in the configuration and deployment of a PLM system. "Purchasing needs to know a lot about a product to source (the components and subsystems) successfully," says Michael Grieves, of the Purdue University PLM Center of Excellence. "The old silo approach doesn't work anymore." Recently, Grieves authored a case study of the possible implementation of Metaphase PLM software by Lear Corp., a manufacturer of automotive interiors. Metaphase was a product developed by SDRC, which was purchased by EDS Corp. EDS subsequently sold its PLM division to UGS.
 “The old silo approach doesn’t work anymore.” --Michael Grieves |
Begun as a Six Sigma project, the PLM implementation at Lear aimed to eliminate inefficiencies in engineering and part design. Among Lear's goals:
1. Relate the company's bills of material (BOM) to the parts and drawings in the BOM. Previously, though the BOM contained part numbers, engineers had to find the original CAD drawings to review the parts and hope the drawings they found contained the latest revisions.
2. Track and communicate engineering change orders so everyone, including purchasing, would know the current status of projects.
3. Improve collaboration within the company and give all parties, including purchasing, one commonly available version of each drawing that everyone could view and update.
The implementation plan stumbled, though, when it left purchasing out of the loop at a critical phase of product development: completion of the BOM. Before PLM, engineering and purchasing each had their own BOMs for projects and informally reconciled their differences. Initially, the PLM implementation ignored that reconciliation process, which meant that engineering entered information into the purchasing system on its own, often not including the information purchasing actually needed. The implementation team hoped to bring purchasing back into the picture and provide a system for giving purchasing all the information it needed.
"PLM is growing because it works," says Grieves. How much is it growing? Research firm CIMdata says that the PLM market grew nearly 9% to $18.1 billion in 2005, the latest year for which the firm has records. Says Ken Amann, the firm's director of research, "Companies are trying to make sure that they don't buy the same parts from different suppliers." PLM helps in that effort, he says. And, he adds, purchasing is getting more involved in PLM system and process design, at least in terms of that functionality within PLM software that relates to sourcing. "In companies they buy a lot of components, purchasing is more involved," he says. Freudenberg is one company that falls into that category. The German automotive-components manufacturer has 20 different development groups and 20 different change-management systems at its nearly 45 facilities in the U. S., Canada, Mexico, and Brazil. The company uses PLM software from Aras Corp. "We have tens of active unrelated projects per site, and Aras helps us keep track of them," says Tom Gill, director of computer-aided engineering for the company. Purchasing uses the PLM system, he says, to find suppliers and materials and to look for similarities in projects so the company can save money through parts consolidation. Aras is moving its software to an open-source platform. Companies can download the software from the Aras website. However companies get their PLM software, purchasing professionals should participate. "PLM is definitely going to grow," says CIMdata's Amann, "and as it does, purchasing's involvement in it will grow too."
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