On-demand PLM Boosts SMMs, U.S. Economy

Two mid-sized manufacturers found a way to efficiently and, most importantly, affordably share product lifecycle information with their global partners and suppliers. Here's how.

Jaskarn Johal, Engineering director for Petaluma, Calif.-based Threshold Corp., had a problem. His company, an 18-month-old start-up, employing roughly 10 employees, had been using spreadsheets to coordinate bills of materials (BOMs) and costing and pricing data between its U.S. employees and its suppliers and manufacturers in China. According to Johal, this was an inefficient and burdensome process that took focus away from the company's mission of producing top-of-the-line home server products that connect wireless peripherals in the digital home.

So Johal decided to seek out a way in which he and his team both within the company and abroad could share a single version of the product record. His goal was to find an affordable product lifecycle management (PLM) solution that he could easily switch on and use.

The only barrier, which proved to be a formidable one, was that traditional enterprise PLM solutions were simply not in Johal's budget.

Tight Budgets, Big Needs

Indeed, for many small- to mid-market (SMM) manufacturers and design shops the option of using a PLM solution has been out of reach because traditional enterprise applications are often too expensive, difficult to use or cumbersome to deploy. Countless manufacturers have been relegated to managing their global supply chain on unwieldy Excel spreadsheets, or worse. This practice has led to errors, product delays, lost revenue and, in extreme cases, shuttered businesses.

Exchanging vital product data with our partners in China through spreadsheets was a nightmare very time consuming and prone to error, explains Johal. We needed a better way to keep track of this data.

In early 2005, a new on-demand PLM software initiative emerged from Menlo Park, Calif.-based Arena Solutions. The initiative dubbed Arena PLM Workgroup Edition has already been adopted by more than 400 SMMs, including a foreign-based bicycle manufacturer, a cardiac device manufacturer and a developer of homeland security products for cargo containers.

Because of its on-demand nature, Arena PLM Workgroup Edition removes such traditional barriers to adoption as software installations and downloads, maintenance, deployment costs, or upfront cash outlays. Instead, the software facilitates the democratization of PLM to manufacturers of any size and speeds overall adoption of PLM by allowing companies hands-on experience due to its instantaneous deployment.

According to Johal, who selected Arena's solution to remedy his supply chain problem, product information is now easily accessed by all the necessary people in the process online and in real-time. And since we're a start-up, the fact that this solution is delivered on-demand and comes with no IT costs enables us to bring our new product to market efficiently without a large overhead, Johal said. For example, maintaining this data would require 10 times the amount of work using the old spreadsheet method.

Ready for More

Arena says that as companies are exposed to the benefits that on-demand PLM provides to their organizations, many are taking steps to upgrade from the free, entry-level version to full deployment of Arena PLM Professional Edition, a more comprehensive PLM offering for larger companies and development teams.

Take Austin, Texas-based CoVi Technologies, for example. The company, a leader in high-definition video surveillance solutions, says it was able to increase the sophistication of its products and doubled its rate of new product introduction after testing Arena's PLM Workgroup solution. Within a matter of weeks, CoVi Technologies made the decision to use the full Arena PLM Professional Edition after it had experimented with Workgroup.

Gary Langerhans, vice president of operations at CoVi Technologies, explains: The ability to test-drive Arena PLM before purchase was a major selling point. With previous technology purchases we didn't really know what we had bought until after the sale and were oftentimes disappointed. With Arena Workgroup we were able to validate that the features we needed BOM management, item management, version control and supplier collaboration were available as advertised.

Langerhans adds that CoVi Technologies' engineers and document control professionals were able to experience for themselves how to use the application, and the instantaneous deployment of Workgroup assured the company that they could be quickly up and running with Arena Professional.

Growing Manufacturers, Growing the Economy

Arena says that the technology that both Johal and Langerhans selected is designed to serve a segment of the manufacturing market that's a primary growth engine for the U.S. economy. According to data from the National Association of Manufacturers (NAM), mid-sized manufacturers comprise about 95 percent of all U.S. manufacturing firms, employ about half of all manufacturing employees in the country, and account for more than $1 trillion in yearly revenue. Furthermore, the Federal Reserve said in a recent report that manufacturers of this size are an integral part of the economy. They account for about half of private-sector output, employ more than half of private-sector workers and provide about three-fourths of net new jobs each year.

Mid-sized manufacturing companies drive the economy through product innovation, and many are in need of PLM solutions to help fuel their exponential growth and competitiveness against established firms. The increase in complexity of our products and doubling of the rate of new product introduction required that we use a best-of-breed PLM solution, comments Langerhans.

Both CoVi Technologies and Threshold found that on-demand PLM caused an immediate increase in operational efficiency, and it also streamlined intra- and inter-company communication between designers, engineers, operations and the extended supply chain. Such efficiency enables manufacturers in the small- to mid-market to focus on what they do best: continue the great American traditions of innovation and entrepreneurship.

About the Author: Doug Wyllie is a freelance business technology writer based in San Francisco, Calif. He can be reached at dougwyllie@thunderhush.com.

To learn more about leveraging on-demand PLM to compete in the global market, register for a free Web seminar. Thursday, July 28, 2005, 2 p.m. EDT.

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