Product Lifecycle Management solution for challenges in the automotive industry


The global economy has been turbulent in recent years, but the automotive industry in particular has faced the most challenging environment. Market dynamics are changing rapidly, forcing vehicle manufacturers to change their business strategies and implement them successfully to remain competitive. Auto parts manufacturers are further pressured to meet more diverse product requirements with little room for error in a relatively much shorter period of time. Since radical technological trends are inevitable, exploiting this opportunity will enable companies with innovative products to gain market share.

The following key trends have shaped the automotive industry:

Self-crisis: The latest crisis has led to over-inventories and massive debt build-up for a number of major automakers in the US and Europe. At the same time, strong growth and healthy economic prospects in BRIC countries have helped their local businesses make progress in both local and international markets. The financial landscape is forcing the major auto companies in the US, Europe and Japan to rapidly change their strategy and innovate faster to compete with Asian auto and auto parts manufacturers.

Globalization: The opening of international trade borders has helped companies expand into new growth markets such as Asia; However, it adds to the complexity of meeting different types of local customer requirements, adding to the complexity of auto development.

Alternatively, globalization also increases the threat of fierce competition from Asian OEMs purchasing the anemic divisions from Western OEMs, thereby shifting to acquiring intellectual capital that can be easily exploited in combination with their cheap labor.

Quality, reliability and product differentiation to adapt the local market at lower prices become essential to a successful product portfolio. While protecting intellectual property rights, both internal cooperation and that in the global supply chain have become paramount.

Regulations and sustainability: The increasing focus on pollution and fuel consumption regulations is forcing companies to look beyond gas engines, as there is a limit to reducing emissions and increasing fuel consumption with conventional engines. With the maturity of battery technology, electric cars are rapidly changing the landscape and may make the hybrid cars even less relevant in the coming years. Security issues can lead to costly legal battles and recalls for the car manufacturers. Businesses must exceed government control standards for their own good.

Technology: The vehicle landscape changes quickly. Newer technologies in automatic batteries, more electronic components and control systems, software / hardware integration, etc. are redefining the market. Increased technological innovation and shrinking product development cycles are taxing the automotive industry.

Cost: One of the biggest challenges is to reduce costs while maintaining high quality with faster product innovation in the global market, a wider range of product types for local markets and multiple rule compliance in different markets.

How does Product Lifecycle Management (PLM) help?

To address the challenges of the automotive industry that result from trend setting, companies need an in-depth understanding of trends affecting their specific business areas, as well as a disciplined system and non-system based strategy for formulating and implementing strategies.

The system-based strategy requires a complete solution to be flexible, robust and integrated, using Customer Need Management, Customer Relationship Management, Quality Management, Supply Chain Management and Product Lifecycle Management. A holistic approach to system management is the right roadmap for car companies, but since the company revolves around the products or services a company offers, PLM can be the most rewarding area to focus on in system implementation.

Integrated or standalone, PLM solutions should be a priority because it can provide:

  • Integrated design with product record
  • Collaboratively distributed design and feedback loop
  • Cooperation between manufacturer, supplier and customer
  • Build the right product for the first time with distributed production
  • Track and minimize costs
  • Protection of intellectual property
  • Enforcement of regulations, environmental and business conformity
  • Track product portfolio, product and project lifecycles
  • Quality closed loop feedback
  • Corrective and preventive measures
  • Accelerate innovation
  • Increased profitability

Selection PLM supplier

A number of PLM systems are currently available on the market and careful analysis is required with regard to cost and benefit analysis when selecting the PLM suppliers. While it can be difficult to quantify the benefits of PLM savings from PLM implementation, it can be calculated using an array with the following criterion:

* Cost

+ Software and hardware

+ Designing business processes / re-engineering

+ Implementation and support

+ Integration and synchronization with ERP and other system of product records

+ Training and change management

* Benefits

+ Business issues solved e.g. Collaboration on new product introductions, change management and CAD management, proprietary information security and access to new markets through product compliance

+ Quality gains, e.g. reduced quality recalls, requests for quality actions, etc.

+ Process efficiency gains e.g. efficient parts searches and reuse, time savings on new product introductions, change management time savings and data entry improvements.

* Return on investment

An in-depth cost and benefit analysis matrix can help companies estimate the ROI and overall impact of PLM on overall productivity.

CAD vs. Non-CAD PLM criteria

Often CAD design becomes the center of attention when selecting PLM systems in engineering-centric sectors such as the automotive industry. Electrical Computer Assisted Design (ECAD) and Mechanical Computer Assisted Design (MCAD) are absolutely critical to engineering functions, but the PLM solution must span several functional areas along the extended supply chain.

PLM software with strong technical collaboration and CAD integration capabilities to automate item / BOM creation in the ERP / PLM system should be seriously considered when selecting the correct PLM vendor. The very best PLM software with a complete business solution and integrated service-oriented architecture capability can simply surpass only the CAD-based PLM systems in overall collaboration and efficiency gains.

On the one hand, CAD-based PLM vendors Dassault Systemes, PTC and Siemens offer integration from CAD to their own PLM without integration with the other CAD tools. On the other hand, a software tool such as Oracle Agile with non-CAD PLM tends to be more flexible in integration with all major CAD tools and also provides Application Integration Architecture (AIA) to distribute the product / BOM data to the ERP systems. This may be particularly important for organizations pursuing growth through acquisition strategy, as hard-to-replace CAD systems in acquired / merged entities can be easily integrated with the parent PLM and ERP systems of the parent, making costs significant lowered.

In summary, the completeness of the ready-to-use functions, user-friendliness, integration options, high degree of configurability and extensibility in the product suite are particularly important in the selection of suppliers, as the use of multiple PLM systems can be costly and can lead to an inconsistent user application. Architecture, data model and process standardization must be an integral part of the long-term strategy in the business decision of the PLM system.

PLM solutions

Businesses may be at different stages of the maturity spectrum to formulate, adopt and implement PLM strategies; However, a long-term perspective needs to be looked at as to how the company will change, creating the need to deploy future solutions that will pave the way to stay ahead of the competition.

Car companies should consider applying flow-based PLM solutions that focus on streamlining business processes. Business flows can encompass both the cross-functional business area and the product modules. Some of the major solutions for business flows can be outlined as:

* Customer need for product formulation

Product design is usually created by the marketing or product development team that comes up with a new product concept or one or more requirements expressed by the customers. Customers’ needs can be documented in forums, extension requests, CRM and quality systems or other documents. Such requirements can be turned into products using collaborative efforts and cross-functional interactions.

* Requirements for introduction of new parts (NPI)

Once a product idea has been internally approved, the part is created in the system. Product list of material configuration, supplier part numbers, manufacturer part number, attachment and other associated detailed attributes are added to the part number as part of the NPI process. Workflow-driven processes greatly simplify progress and shorten the time frame and increase data accuracy.

* Design to release

Any good change control process to manage the product lifecycle stages must be workflow driven to increase efficiency, streamline the process, and track changes. Different workflow-based change types can be used to manage the product, structure, MPN change / bulk change processes and make changes automatically upon approval.

* Engineering Design Collaboration

A number of internal teams and engineers from third-party suppliers could work on designing the product in multiple locations, and this technical collaboration could be key to properly designing the product the first time. Apart from CAD design collaboration, another aspect of technical collaboration is automating the creation of the product BOM structure in the central product record system where non-technical users can use the information for production, procurement and marketing.

* Product record management

Centralization of product records is important because distributed inconsistent and partial information can significantly increase data maintenance costs, operating costs and quality costs. A single source of truth for product, product features, bill of materials, supplier and supplier parts, manufacturer and manufacturer parts, and location information is critical to the implementation strategy of PLM systems. Product records can be synchronized with another record system using Web Services (Service Oriented Architecture) from the record master system.

* Document management

Intellectual property security is all the more important in global product collaboration. Document management includes check-in, check-out, checksum, document change control and bulk change with integrated control and approval workflow.

* Product portfolio towards profitability

During the product lifecycle, companies launch various projects and programs to manage, monitor and track the risk associated with costs, product rollout and compliance, etc. Integration with Microsoft Projects can be an important feature of any product portfolio management solution.

* Quality assessment in accordance

Proactively monitoring and managing product quality throughout the lifecycle is the key to success for any business. Quality control for conformity covers the management process during production, customer complaints, detection of methodical defects, improvement and corrective and preventive actions.

* Product governance and compliance

Company products must meet different standards, regulations or guidelines for transaction tracking in each country. Product governance and compliance solutions can be used to create, maintain and track to stay compliant.

* Product cost management

Tracking and managing product costs against target cost levels is key to maintaining profitability. The product cost management solution is used to calculate the cost of parts and resources across the supply chain throughout the product lifecycle.


The auto industry is showing signs of life after the economic recovery; However, a number of companies are still struggling with their product strategy. The challenges in the auto industry are real and their reaction can make or break the companies. Product innovation, quality, compliance, and product life cycle reduction while keeping costs down are fundamental factors for survival and thriving. Implementing PLM can provide companies with the necessary leverage to catch up and stay ahead of the competition. Choosing the right advice partner can steer you in the right direction.

Source by Mahender Bist