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

Combine IoT and PLM to tie the Digital Thread

Ulf Koester
Solution Director Oracle Digital Transformation Solutions

Innovation comes in many flavors. New technologies such as Internet of Things (IoT) and Big Data enable new smart products, which again enable new services. Overall these new products and services can be leveraged to enable new business models. An innovative company can disrupt a whole industry, not only with a disruptively new product, but also if the service or business model are disruptive. In fact, when looking at product innovation alone, many innovations have been iterative innovations: small improvements to existing products. But to add a new service or business model alongside a small, iterative product innovation, and that is a different story altogether.

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

Ask yourself:

  • Who are our customers?
  • What is being sold?
  • How is it produced?
  • How is revenue earned?

Pic: Engineering Focused to Customer Focused

This shift demands a new view for Product Lifecycle Management. Going forward, traditional data and application silos will no longer work! PLM needs to become an innovation platform, a smart connected applications platform that creates a digital thread. The digital thread is a connected data flow and integrated view of the product's data throughout its lifecycle across traditionally siloed functional perspectives. PLM, Customer Relationship Management / Customer Experience, Supply Chain Management, Service, Maintenance, Manufacturing must be connected in real time with Internet of Things, Collaboration, Social and Data. The Cloud is the only efficient way to achieve this.

Product Development 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 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 capability 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 connecting 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, 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 fence off attacks from hackers.

Product Development in the age of IoT


Check out the Aberdeen Report: Product Development in the Era of IoT


 

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 generate from it, and it gives businesses a unique differentiator.

In other words: It is advisable to develop innovations that enable business to develop more advanced services and be 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, modern 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 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 the recent years. IoT designers can come close to reality with some advanced planning and 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 Order directly from IOT the platform, automatically close an Engineering Change Order after rolling out a Software update throught the IoT platform to the connected devices, or show a list of connected devices, together with potential product errors in PLM Application

In addition, combine with Big Data to 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 an extra Big Data tool to manage IoT: We provide IoT Applications that manage the vast amount of data and makes it easy to consume, and makes it actionable. If respective connectivity is enabled, IOT readings are supervised by Oracle IoT Applications. IoT Apps are managing exceptions that is detected in the data, and can automatically kick off several activities at once, for example a non-conformance in Quality Management, a 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.

Benefits of using IoT in conjunction with Product Lifecycle Management and Supply Chain Management 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 workflow to avoid lack of compliance, and generally enables making better decisions based on facts.

Practical advise: Tear down the walls between the organization silos. For example, make sure that your PLM team, the IoT and the Big Data team are working together. Synchronize these initiatives, they are just different sides of the same coin. Joint activities should involve members of both the Big Data or IoT project team and the PLM initiative team. It's also useful to include the PLM initiative leader in the steering group for the Big Data or IoT project - and vice versa. In order 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.


Product Development in the age of IoT
Check out the Aberdeen Report: Product Development in the Era of IoT

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