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The Supply Chain Management Blog covers the latest
in SCM strategy, technology, and innovation.

  • August 5, 2020

Combine IoT and PLM to Tie the Digital Thread

Ulf Koester
Solution Director Oracle Digital Transformation Solutions

Innovation comes in many flavors. New technologies and capabilities such as the Internet of Things (IoT), Big Data, and Digital Twins are helping many companies improve the way they innovate—helping them get to market faster. Overall, these capabilities are being leveraged to enable business model transformation. An innovative company can disrupt an entire industry (take Netflix for example), not only with a new physical product but also with the embedded software or service.

Today, it’s more important than ever to be able to shift and pivot your business strategy to meet your sustainability and growth objectives. When looking at product innovation alone, many innovations have been iterative: small improvements to existing products. But to add a new service or business model alongside a small, iterative product innovation…well, that’s a different story altogether.

Nowadays, competition takes place between products, technologies, services, and business models. To be successful, companies strive for the perfect, customer-centric match of all of these elements to create a competitive advantage. Companies need to look at their current portfolio of offerings.

Ask yourself:

  • Is it meeting my objectives?
  • Who are our customers?
  • What is being sold?
  • How is it produced?
  • How is revenue earned?

This shift demands a new view of Product Lifecycle Management (PLM). Traditional data, application silos, and disconnected desperate systems will no longer work! PLM software needs to have evolved into a smarter connected application platform that creates a digital thread and supports digital twins. The digital thread is defined as a connected data flow and an integrated view of the product's data throughout its lifecycle across traditionally siloed functional perspectives. CIMdata, a leading PLM analyst firm, recently wrote about the capabilities of Oracle and Digital Thread. PLM Software, Customer Relationship Management Software, Customer Experience software, Supply Chain Management Software, Service Software, Maintenance Software, and Manufacturing Software must be connected in real-time with Internet of Things, Collaboration, Social, and Data. The Cloud is the only efficient way to achieve this. You can read more about Oracle's PLM Cloud strategy.

Product development and manufacturing organizations need to evolve to cross-functional engineering, tightly linked with IT, requiring a higher degree of collaboration and data integration. Many engineering departments have been developing and supporting configured products, but increasingly need to support connected products.

Configured products can be very complex, but have feature-limited connectivity. You do not know much about how products are used; hence you cannot base smart services on the limited info that is available. Typically, these configured products are developed inside out, which means they were developed focused on the capabilities of the development organization. With configured products, change control as well as agile methodology and stage-gate product development is key. But it also leads to a problem that sometimes the product does not meet the original customer need.

Connected products are bridging the gap between the “outside-in”, customer-focused view with the “inside-out” view. They enable the adoption of new business models such as Product-as-a-Service (PaaS), allowing continuous upgrades and remote software updates. The connected products, designed entirely or as subsystems, are transmitting a lot of data to analyze, so engineering departments have to support a set of totally new business requirements: You need to include data collection and monitoring mechanisms, support remote service to a fine granularity level, but you can also support very late design changes, including after delivery (through remote software updates). At the same time, you need to support high-security levels to fend off attacks from hackers.

Despite the challenges these new developments pose to the engineering departments, they are inevitable. Leading companies use innovation to improve their services offerings: In many markets, revenue from pure product sales will either plateau or decline. But the revenue from advanced services is an opportunity to grow! The more advanced the service is, the more revenue can be generated from it, and it gives businesses a unique differentiator.

In other words: It is advisable to develop innovations that enable businesses to develop more advanced services, are more customer-centric. 

Product Lifecycle Management (PLM) can no longer be a discipline hidden in the product engineer´s garage. Given today’s complex business environment and constant change, companies must look for a fresh approach to quickly improve product development functions and integrate them across the end-to-end supply chain.

A lot of innovation today is enabled by IT. New technologies can be leveraged to create smart products, to fund the basis for new services and business models. Intelligent and connected products with smart functionality can decide or communicate about their situation or environment. Use PLM to support the development of these products, either from scratch or with iterative innovation. With Oracle, you can combine PLM and IoT as well as other SCM modules such as Manufacturing and Quality to gain new data-driven insights and drive actions from IoT by connecting, analyzing and integrating device data into your PLM and SCM processes and applications, related to product behavior, detect defects, analyze trends, kick-off Engineering Change Orders, predict service requirements, etc.

With the growing deployments of Internet of Things (IoT) systems, the importance of the concept of a digital avatar of a physical thing has gathered significant interest in recent years. IoT designers can come close to reality with some advanced planning and operational simulation with tools such as Oracle's digital twin to instantly transform assets into digital twins, and intelligently monitor the assets' health, location, and utilization.

By combining IoT and PLM Applications, for example, you could feed product improvement ideas into the innovation funnel in Innovation Management, create Engineering Change Orders (ECO) directly from the IoT platform. You can automatically close an Engineering Change Order after rolling out a Software update through the IoT platform to the connected devices or show a list of connected devices, together with potential product errors in PLM Application.

Also, combining PLM with Big Data can help manage quality, support, and maintenance and optimize performance and autonomy. This would allow a more holistic view, for example on product behavior combined with customer feedback or other related information, which again feeds the innovation funnel.

With Oracle, there is no need for extra Big Data tools to manage IoT: We provide IoT Applications that manage the vast amount of data and make it easy to consume and make it actionable. If respective connectivity is enabled, IoT readings are supervised by Oracle IoT Applications. IoT Apps are managing exceptions that are detected in the data, and can automatically kick off several activities at once, for example, a non-conformance in Quality Management, an Engineering Change Order in Product Development, an idea to introduce a new product or service that is going through Innovation Management, or a service request in Customer Experience Service Application.

The benefits of using IoT in conjunction with PLM Software and SCM Software includes identification and development of new products & services, better serving existing customers and reducing customer churn, understanding field problems faster and reducing service costs, maintaining equipment better, leading to longer life and avoiding downtime or idle time, identifying optimum operating conditions, reducing waste and pollution, customizing products and services to individual customer needs, building compliance into a workflow to avoid lack of compliance, and generally enables making better decisions based on facts.

Practical advice: Tear down the walls between the organization silos. For example, make sure that your PLM team, the IoT and the Big Data team are all working together with Supply Chain Planning, Manufacturing, and Service teams. Synchronize these initiatives, they are just different sides of the same coin. Joint activities should involve members of the Big Data or IoT project team, the PLM initiative team, and those in operations. It's also useful to include the PLM initiative leader in the steering group for the Big Data or IoT project - and vice versa. To facilitate end-to-end processes, make sure you set the KPIs accordingly. Common metrics and systems can help overcome silo thinking. The right education will also help, but it is all nothing without the right leadership direction: End-to-end process owners can decrease overall cost and handoffs, and increase quality and speed of execution, but they need to be backed up by top management to be successful.

For more information on Oracle’s PLM software capabilities, visit oracle.com/plm.

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