1. 1 Lecture 3 Ch.6 Product Lifecycle Management & pp. 191-194

2. 2 Agenda 1. New Economy and Business Responses 2. Product Information 3. Product Lifecycle Management (PLM) 4. Collaborative PLM 5. Data Integration 6. System Integration and Collaboration 7. Questions to Ponder (to p3) (to p8) (to p14) (to p28) (to p33) (to p6)

3. 3 1. New Economy and Enterprise Reponses The digital economy has opened up new avenues for competition that challenges market leadership. Businesses therefore, must resort to strategy to better understand and organize product data as they influence product value along the product’s lifecycle. (to p4)

4. 4 What is product’s life cycle? –It involves with 4 stages of development It is thus critical for SC firms to possess accurate product data so that the each stages of issues could be addressed in a timely basis. These product data could be situated in a form of product information in a SC firm (to p6) (to p2) (to p5)

5. 5 Introduction Growth Maturity Decline Product Life Cycle (to p4)

6. 6 2. Product Information Product information is traditionally maintained in different software systems. ERP CRM CAD/CAM/CAE (Computer-aided Engineering) DfM/A (Design for Manufacturability/Assembly) PDM (Product Data Management) Major problem of these product information remains as …. (to p7)

7. 7 Product Information lack The lack of integration, coordination, and collaboration of these software systems limit the free flow of information to enterprise stakeholders. lack The lack of timely and accurate product information data makes it difficult for the enterprise to achieve its rapid response strategy in the dynamic market environment. Key Answer -- Product life cycle management (to p2) (to p8)

8. 8 3. Product Lifecycle Management Product lifecycle management (PLM) offers a solution strategy to the lack of integration, coordination, and collaboration of the mission critical software systems (ERP, CRM, SCM, e- business). coordinatesIt coordinates all product information in a structured form to offer a consistent view of the product through its lifecycle stages to all enterprise stakeholders. How PLM works? (to p9)

9. 9 PLM The key is organize WEB-enabled To organize a central product database that is WEB-enabled and accessible to both internal and external users in the product value chain. to sharereuse to be able to share and reuse product knowledge (with supply chain members or stakeholders) to create value to customers. How PLM helps in SCM? Also include clients, vendors, inter/intra-org. (to p10)

10. 10 The supply chain will be ineffective if vendors are unaware of information that influences product demand and product performance. need to know They need to know for example, warranty and legal actions that may be associated to product failures. need to know the changes They need to know the changes in demand since that will have potential effects on orders and inventory management and they need to know changes in customer preferences since that may also influence product designs. are able With knowledge, enterprise stakeholders are able to adapt their processes and practices to be capable of responding to market changes. (to p11)

11. 11 Exercises Optional Internet ex 1 Optional Internet ex 2. Main function of PLM Collaborative PLM (to p13) (to p14) (to p2) (to p12)

12. 12 Ex 1: PLM Software Vendors Optional Internet Assignment: Visit and explore the Internet site for one of the vendors of PLM software – QAD. Briefly describe the features of QAD’s PLM software. (to p11)

13. 13 Ex 2: mySAP PLM Optional Internet Assignment: Visit and explore the mySAP PLM Web site and see if you can identify its key features. (to p11)

14. 14 4. Collaborative PLM real timeProduct lifecycle management (PLM) enables enterprise stakeholders to collaborate in real time to share and leverage the enterprise’s intellectual capital. WEB-enabled… via WEB-enabled system ….of which it achieves functions like …. (to p15)

15. 15 The objectives of a collaborative PLM can be identified as follows (pp 91-93) : Rapid Market Response – eg intro a new product (such as Mc-Chicken) Customer Satisfaction – eg to match the wants and needs of clients Product Innovation – eg mobile phone by B&O with Samsung Cost Reduction (Strategic Issues; End-to-end Product Life Cycle) Order Fulfillment and Tracking – eg DHL customer system Reduces Maverick Buying – eg promote standardization Product Liability – eg all follows the same standards and benchmarking (to p17) (to p27) (to p16)

16. 16 The major creditability of collaborative PLM is that it focuses on: –Data integration (to p28) (to p2)

17. 17 Introduction Growth Maturity Decline Strategic Issues in Product Life Cycle Design Quality Production Planning Production Costs Supply chain Planning Demand Mgt. Standard Product Quality and Reliability Stable Process Exit Strategy Productivity Improvement (to p15) (to p18)

18. 18 Forecasting – example (pp.191-194) Sam: What is to come in terms of Christmas sale? 1 st, Sam needs to know some definitions: Y=seasonal demand forecast μ=average σ=standard deviation P= the probability that actual demand will exceed a given supply (that is, Y) MP=marginal profit ML=marginal loss Zy= the standard normal Z value for a given supply Y (The Obermeyer Method) (to p19)

19. 19 2 nd, Sam needs to follow the following solution steps to find Y (X’mas demand): Solution: (to p20)

20. 20 Solution Step 1 Find the forecasting information and then find μ and σ Step 2 Get the MP and ML Step 3 Find P using the following relationship: P*MP=(1-P)*ML Step 4 Construct the normal curve Step 5 Find Zy with the specific P value Step 6 Solve for Y with Zy=(y-μ)/σ Break-even concept (to p23) (to p24) (to 25) (to p26) (to p21) (to p17) (to p22)

21. 21 Committee Members123456AverageS.D. Los Angeles6900610059006500680074006600503 Chicago3300250029002600290026002800271 Dallas2500280032002850260032502867279 New York5100480053004500400051004800440 Step 1 Find the forecasting information and find μ and σ Mean = ∑ xi / N σ = √ ( ∑ ( xi – Mean) / N) (to p20)

22. 22 Step 2 Get the MP and ML Price/per notebook computer = $400 (given) Cost/per notebook computer = $120 (given) MP = $400 - $120 = $280 (profit made by selling each additional notebook computer or Cost of Understocking) ML = $120 (loss by not selling each additional notebook computer or Cost of Overstocking) (to p20)

23. 23 Step 3 Find P using the following relationship: P*MP=(1-P)*ML P*$280=(1-P)*$120 Thus, P=0.3 (to p20)

24. 24 66002800 2867 Step 4 Construct the normal curve Los AngelesChicago Dallas 4800 New York (to p20)

25. 25  =4800 New York  =440 Step 5 Find Zy with the specific P value P 1-P Optimal cycle service level (CSL) ZYZY Y If P is 0.3, then the corresponding Z value (or denoted as Zy) is 0.52. (to p20)

26. 26 Step 6 Solve for Y with Zy=(y-μ)/σ Solving for Y we obtain the following solution table: Customer ZoneY (Forecasting Value) Los Angeles0.5266005036,861 Chicago0.5228002712,941 Dallas0.5228672793,012 New York0.5248004405,029 (to p20)

27. 27 End-to-end Product Life Cycle (to p15)

28. 28 5. Data Integration on the product and notPLM’s focus is on the product and not the other activities of the enterprise. to organizeThe aim is to organize product data by integrating information from the mission- critical software systems (ERP, CRM, SCM, e-business), and making information available to value chain partners for effective decision-making. This is shown in the next figure. (to p29)

29. 29 Data Integration - PLM Important notes (to p30)

30. 30 Data Integration - PLM is housedIt is obvious from the previous figure that there are many phases in product development and each phase may need information that is housed in a different mission-critical system. work for the same goalYet, it is clear that all these mission-critical systems work for the same goal or purpose, which is to improve product performance and thereby, enhance the competitive posture of the enterprise. Note of attentions to concerned parties … (to p31)

31. 31 Data Integration - PLM must understandEnterprise stakeholders must understand that their unified effort would help the enterprise to achieve competitiveness and should not see themselves as competing against each other. data integration and collaborationThus, data integration and collaboration are the major functions of PLM. PLM integrates all the mission-critical systems to provide a “single point of reference” to product value chain providers. How it works …. (to p32) (to p2)

32. 32 6. System Integration and Collaboration It is shown in the following figure that PLM could be used as a system integrator for all the mission-critical systems that are scattered in the organization. (to p2)

33. 33 7. Questions to Ponder Why must product lifecycle management be exercised to ensure product success in the 21st century? (to p2)