1 MEMA Information Services Council Spring Conference March, 31, 2003

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• Product Lifecycle Management and the ASP Model
• Michael Lieberman
• Datastay Corp.
• MEMA Information Services Council - Spring
  Conference
• March 31, 2003

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Agenda
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Trends affecting the Auto Supply Industry

• Economic Conditions
• Access to Information (brand awareness)
• Platform Proliferation
• Product Complexity
• Globalization (operations / customers / suppliers
  / competitors)
• Complex / Changing Distribution Channels
• Greater Value Chain Integration

Minimize Costs
Maximize Product Innovation Quality
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The Enterprise Application (EA) Landscape
ERP
SCM
CRM
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The Product Lifecycle
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The Product Lifecycle

• Data is used / re-used throughout the lifecycle
• Basic Definition
• Engineering Specifications (CAD/CAM/CAE)
• Product Structure (BOM)
• Suppliers and Sourcing
• Engineering Change Data
• Interchange and Application Information
• Quality Conformance Information
• Manufacturing Process and Support Information
• Installation, Servicing, Troubleshooting
  Information

Many different people access this data in their
decision processes
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Introduction to Product Lifecycle Management
ERP
SCM
CRM
COLLABORATION
COLLABORATION
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PLM in the Enterprise Application Landscape
G
CONCEPT DEV.
PROCESS PRODUCT DESIGN
PRODUCTION
DEPLOYMENT
SUPPORT / MAINTENANCE
NEED / OPPORTUNITY
RETIRE
SCM
ERP
PLM
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Definition of Product Lifecycle Management

• A strategic business approach that applies a
  consistent set of business solutions in support
  of the collaborative creation, management,
  dissemination and use of product information
  across the extended enterprise from concept to
  end of life integrating people, processes,
  business systems, and information.

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Key Benefits of PLM

• Information Centralization and Structuring
• Ensures data integrity, correctness, reliability
• Eliminates information silos, islands
• Increases information reuse and sharing
• Process Structuring and Automation
• Automates and structures workflow
• Automates and structures the sharing data
• Real-Time Access
• Universally Accessible
• Enables Collaboration

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The PLM Value Proposition

• Cost Reduction across the Product Lifecycle
• Improved Product Innovation and Quality
• Faster Time to Market (Initial Launch Changes)
• Improved Responsiveness to Market Trends
• Supply Chain Enhancement

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PLM and the Product Lifecycle
GREATER PROFITABILITY
GREATER MARKETSHARE
FASTER TIME-TO-MARKET
PLC
_
MARKET INTRODUCTION
COST REDUCTION
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Example Results from PLM Implementations

• 15-30 reduction in prototypes
• 40 reduction in lead times
• 25 productivity increase of design engineering
• 40 improvement in product change cycle times
• 75 reduction in dev. time for a household
  product
• 80 reduction in engineering review process cycle
• 99 reduction in time to cost products

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Innovation Affects the Entire Supply ChainBrief
Example
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PLM A High Level Summary
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PLM Deployment Approaches
Internal Model
ASP Model
COMPANY RESPONSIBILITIES
Data Management
Application
Infrastructure
COMPANY RESPONSIBILITIES
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Core Critical Business Functions
Core differentiate your company from its
competitors
Critical your business cannot operate without
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Critical Business Functions

• No direct contribution to competitiveness
• Significant indirect contribution to
  competitiveness
• Managing critical business functions frequently
  divert resources away from core competencies
• time and cost of implementation
• divert management attention

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Impact of ASPs on Business Functions

• Availability / Reliability
• Infrastructure
• Procedures, Process, Discipline
• Service Level Agreements
• Subject Matter Experts
• Staying Technically Up-To-Date
• Access to Infrequently Used Services
• Skill Availability

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Impact of ASPs on Costs

• Capital Investment Savings
• Up-front Investment
• Service Sharing
• Piloting and Assessment
• Predictability of Costs
• Pre-Defined Expectations (Budgeting)
• Mitigation of Risks
• Proactive Monitoring
• Cost Magnitude of Downtime

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ASP Survey Some Key Results

• 54 Companies surveyed by IDC
• gt 400 average five year ROI
• lt 6 month payback reported by 50 of companies
• lt 15 month average payback for all companies
• gt 1300 ROI over 5 years for firms outsourcing
  ERP scale applications

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Objections to ASP

• Tactical
• Outsourcing vs ASP
• Sunk Costs
• Job Security
• Retaining Control
• Operational Continuity
• Customization
• Other Considerations
• Data Security
• Shared Priorities
• Contingency Planning
• Disaster Recovery

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PLM via an ASP make sense

• Critical not Core Function
• Natively Web-Based
• An Emerging and Fluid Technology
• Requires Wide Array of Skills
• Single Point of Contact
• Implementation Options

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Case Study
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Case Study The Datastay Model FM

• Rapid Deployment
• Minimum Internal IT Requirements
• Phased Approach
• Clearly Defined and Predictable Costs
• Ongoing Support Relationship
• Trusted Skill Set and Business Understanding
• Proactive Monitoring and Suggestions
• Shared Goals

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Case Study Key Results

• gt 100 ROI in less than a year
• gt 80 faster completion of engineering changes
• More accurate knowledge workers, higher quality
• Higher acceptance rates and customer satisfaction

Achieved the benefits of PLM through the
advantages of ASP.
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• For more information contact me at
• 1-866-980-DATA
• This presentation is available at
• www.datastay.com