J.M. Huber: A PLM Case Study
Based on the popular Stage-Gate process developed by Drs. Robert Cooper and Scott Edgett from the Product Development Institute, HEM had developed a similar internal system. But because so much effort was required to corral information, collate it, and disseminate it for quarterly reviews, the company found itself coming to a virtual standstill every three months.
To make matters worse, product development efforts were led by technical people pushing ideas out to the marketing department, with little buy-in from that side of the business. And with little input from customers in the development process and no real idea where new product concepts were coming from, the process was hamstrung from the start, said Wozniak, manager of new technology for HEM.
"What we ran into was the bureaucracy. It was cumbersome. We didn't do a very good job of training, so people didn't understand what their roles and functions were," he said. "It was being driven by the technology organization as opposed to the marketing organization. So, technology took ownership of it but marketing did not at the time."
The end result was a top-heavy system that delivered marginal results which eventually failed, twice.
Time for a Change
Realizing the need for something better, Wozniak set out to find a solution. After reviewing PLM products from more than five vendors, including Integrated Development Enterprise (IDE), Value Innovation, Agile, and SAP, Wozniak settled on Accolade from Sopheon.
Accolade provided HEM, which engineers raw materials into useful products for manufacturers, with the ability to centralize and Web-enable access to all the information critical to the product development and stage-gate processes. This eliminated the need for the cumbersome and time-consuming paper chase HEM had previously engaged in.
With Accolade, project managers now get a real-time, unified view of their projects (and others) under development, saving them time and the company money. Also, Accolade provides a searchable database so overlapping effort, like running two similar market-research studies, can be avoided, said Christina Walkosak, a new product development process leader.
"If you had a paper system you'd be shuffling through a lot of papers continuously answering data," she said. "With an electronic system, you're able to run a couple of macros and you've got that information right in hand."
Not only are the product development folks involved, but, because the system is Web-based, everyone in the company can have access to the information. This allows for better decision making, especially when it comes to making go/kill decisions. By comparing what's in the pipeline versus what the market is calling for, and combining financial metrics with technical and manufacturing data management, you get a more complete picture, said Tim Butler, HEM's manager of marketing communications.
"It touches everybody in the technology labs and the quality assurance labs to the manufacturing folks on the product floor to the marketing and marketing communication folks and the engineers," said Butler. "And, perhaps most importantly, the senior management and the sales management."
Market Driven Innovation
Because Accolade allows HEM to more easily compare projects to the desires of its customers, the company is more responsive to what the market really wants versus what its engineers and scientists think is cool, said Wozniak. This cuts down on the number of ideas that have no real chance of success because of limited market demand, manufacturing issues or potentially poor financial gains.
But Accolade alone only facilitates these benefits. HEM's internal commitment to let its customers dictate development efforts through a process known as MDI, or market driven innovation, is what really cleared the way for Accolade to work effectively. The MDI process firmly establishes marketing as the lead on all new development projects with the company's technologists serving in an advisory capacity instead of the other way around, said Wozniak.
This solved a long-standing problem. For most of the company's history, new ideas have been pushed out to the marketing department in search of customers. This meant that someone in marketing had to buy into the idea and then push it out to sales. By reversing this process via MDI and adding the tools to facilitate this new methodology, HEM is now responding to the market's needs versus pushing its products on a potentially unreceptive market.
PLM plays an important role here because it allows the company to make better-informed and quicker go/kill decisions that allow valuable resources to be allocated where they will do the most good, said Wozniak. Since implementing Accolade 18 months ago, HEM has increased "truly innovative" new products by 40%.
"There's nothing more frustrating as a technology person to get all done and to find out you made the wrong product," he said.
While no official measure of Accolade's ROI has been done, Wozniak believes the returns to be substantial if only in cutting down on the number of hours spent hunting for data and putting into useful formats. And while neither Sopheon nor HEM would discuss the cost of implementing it, Wozniak said Accolade was a lot less expensive than an ERP or CRM install, more along the lines of a department-level information management system.
And this makes sense, after all, since that is precisely what PLM is: a way to better manage data in order to make more informed and timely decisions. But, in this case, it effects the entire enterprise not just one department.