Decision Engineering Ser ies Editor Professor Rajkumar Roy Department of Enterprise Integration School of Industrial and Manufacturing Science Cranfield University Cranfield Bedford MK43 0AL UK Other titles published in this series Cost Engineering in Practice John McIlwraith IPA – Concepts and Applications in Engineering Jerzy Pokojski Strategic Decision Making Navneet Bhushan and Kanwal Rai Product Lifecycle Management John Stark From Product Description to Cost: A Practical Approach Volume 1: The Parametric Approach Pierre Foussier From Product Description to Cost: A Practical Approach Volume 2: Building a Specific Model Pierre Foussier Decision-Making in Engineering Design Yotaro Hatamura Composite Systems Decisions Mark Sh. Levin Intelligent Decision-making Support Systems Jatinder N.D. Gupta, Guisseppi A. Forgionne and Manuel Mora T. Knowledge Acquisition in Practice N.R. Milton John Stark Global Product Strategy, Product Lifecycle Management and the Billion Customer Question 123 John Stark, PhD Geneva Switzerland British Library Cataloguing in Publication Data Stark, John, 1948- Global product : strategy, product lifecycle management and the billion customer question. - (Decision engineering) 1. Product management 2. Product life cycle 3. Globalization I. Title 658.5 ISBN-13: 9781846289149 Library of Congress Control Number: 2007930552 Decision Engineering Series ISSN 1619-5736 ISBN 978-1-84628-914-9 e-ISBN 978-1-84628-915-6 Printed on acid-free paper © Springer-Verlag London Limited 2007 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reprodu- ced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms of licences issued by the Copyright Licensing Agency. Enquiries concerning reproduction outside those terms should be sent to the publishers. The use of registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant laws and regulations and therefore free for general use. The publisher makes no representation, express or implied, with regard to the accuracy of the infor- mation contained in this book and cannot accept any legal responsibility or liability for any errors or omissions that may be made. 9 8 7 6 5 4 3 2 1 Springer Science+Business Media springer.com Preface This book has two main subjects. The first is Global Products. The second subject is the method for identifying, developing, producing and supporting Global Products. Global Products are manufactured products that can be purchased and used worldwide, and are maintained and supported worldwide. The range of Global Products is wide. It includes industrial goods such as trains, aircraft and machine tools, as well as consumer goods such as cars, food, apparel and consumer electronics. Chapter 1 introduces Global Products, giving examples of both consumer products and capital goods, and explaining their increasing importance. It shows the opportunities that Global Products offer, the questions that they raise, and the challenges that they set. Chapter 2 describes the factors that have led to the emergence of Global Products. It highlights more than 20 issues, some of which create opportunities for Global Products, some of which create problems, and some of which do both. An understanding of these issues helps one understand how to respond to challenges rooted in the past, how to benefit in the future from the opportunity of Global Products, and how to identify and avoid related risks. Chapter 3 shows, using documented cases, how a serious problem with a product will be investigated. The effects will be described, the causes understood, and necessary measures identified and implemented to prevent the problem recurring. By taking a similar approach, companies can identify potential problems with Global Products and take measures both to avoid them before they occur and to improve performance. Chapter 4 includes examples from individual companies in various industry sectors. It shows the type of issues they face in the product environment, the steps taken to address them and the results. vi Preface The situation in every company is different. There are many reasons for these differences, such as different products, different markets, different managers, different employees and different organisational structures. Due to these differences, there is not a single common solution that will be applicable in all companies. However, Chapter 5 proposes Best Practices for Global Products that can be applied in many companies. Chapter 6 brings together many of the subjects addressed in the previous chapters, and positions them in an overall framework. The framework helps to show how the various components of the product environment are related, and how they are positioned in the different phases of the product lifecycle. Chapter 7 introduces the Product Lifecycle Management (PLM) activity that allows a company to manage its products across their lifecycles, maximising the value of current and future products for customers and shareholders. PLM is the enabling business activity for Global Products. Chapter 8 briefly describes the many applications, processes and techniques that are used to manage a product at different times of its life. These are components of PLM. Chapter 9 shows how to build a Vision and Big Picture of the future product environment in the company that will allow it successfully to identify and deploy Global Products. Building an environment for successful management of Global Products is, for companies of all sizes, a long-term task. Chapter 10 describes the current situation in typical companies. Chapter 11 looks at some potential future influences on Global Products and PLM. Contents 1 Global Product: Opportunities and Challenges.............................................1 1.1 Global Products and You...........................................................................1 1.2 What is a Global Product?.........................................................................1 1.3 Why are Global Products Important?.........................................................2 1.4 The Challenge of Global Products – Customer View................................4 1.5 The Challenge of Global Products – Company View................................4 1.6 Practical Considerations and Potential Risks.............................................6 1.7 Mixed Fortunes........................................................................................10 1.8 Global Products: Good News, Bad News and Best News.......................10 1.9 Global Product and Product Deployment Capability...............................11 1.10 Global Product: A Missed Opportunity...................................................12 2 Global Products: Change and Complexity...................................................13 2.1 Change.....................................................................................................13 2.2 Complexity..............................................................................................14 2.3 Globalisation............................................................................................15 2.4 Geopolitical Developments......................................................................16 2.5 Social and Health Problems.....................................................................17 2.6 Changing Business Models......................................................................17 2.7 Improved Travel, Transport and Telecommunications............................18 2.8 Revolutionary New Technologies............................................................19 2.9 New IS Applications................................................................................19 2.10 New Company Structures........................................................................21 2.11 New Customer Requirements..................................................................24 2.12 Products...................................................................................................25 2.13 Shareholder Value....................................................................................26 2.14 Market Mentality.....................................................................................26 2.15 Regulation and Deregulation...................................................................27 2.16 Environmental and Sustainable Development.........................................29 2.17 Changing Roles........................................................................................30 2.18 Inertia.......................................................................................................30 2.19 Free Trade................................................................................................31 viii Contents 2.20 Communities............................................................................................31 2.21 Low-cost and Lean...................................................................................31 2.22 The Result and the Requirement..............................................................32 2.23 The Risks of Not Meeting the Requirements...........................................33 3 Problems: Causes and Action .......................................................................35 3.1 Addressing Potential Problems................................................................35 3.2 Causes for Problems................................................................................35 3.3 Multiple Causes and Effects....................................................................37 3.4 Root Cause and Network of Causes.........................................................38 3.5 Causes and Measures...............................................................................38 3.6 Effects, Causes and the Details of the Busy Organisation.......................40 3.7 An Increasingly Complex Environment..................................................41 3.8 Everyday Product Problems.....................................................................43 3.9 Action......................................................................................................45 4 Global Products: At the Coalface..................................................................47 4.1 Introduction..............................................................................................47 4.2 ABB.........................................................................................................47 4.2.1 Introduction..................................................................................47 4.2.2 Sustainability................................................................................48 4.2.3 The Discussion.............................................................................49 4.3 PPM.........................................................................................................51 4.3.1 Actual Situation............................................................................52 4.3.2 Improvement Objective................................................................52 4.3.3 Action...........................................................................................52 4.3.4 Results..........................................................................................53 4.3.5 Lessons Learned...........................................................................54 4.4 Assessing and Managing Portfolio Risk..................................................55 4.4.1 The Discussion.............................................................................55 4.5 BSH Bosch und Siemens Hausgeräte GmbH...........................................59 4.5.1 Introduction..................................................................................59 4.5.2 Company Aims.............................................................................60 4.5.3 Action...........................................................................................60 4.5.4 A Common Product Development Process..................................60 4.5.5 The PLM Implementation............................................................61 4.5.6 Barriers and Success.....................................................................62 4.5.7 Results..........................................................................................63 4.5.8 Lessons Learned...........................................................................63 4.5.9 Next Steps.....................................................................................64 4.6 Dow Corning Corporation.......................................................................64 4.6.1 Background..................................................................................65 4.6.2 The Situation................................................................................65 4.6.3 Action...........................................................................................66 4.6.4 Results..........................................................................................67 4.6.5 Lessons Learned...........................................................................67 Contents ix 4.7 Habasit.....................................................................................................68 4.7.1 Introduction..................................................................................68 4.7.2 The Situation................................................................................69 4.7.3 Action...........................................................................................70 4.7.4 Results..........................................................................................72 4.8 Magna Steyr ............................................................................................73 4.8.1 Background..................................................................................74 4.8.2 Original Aim.................................................................................74 4.8.3 Action...........................................................................................74 4.8.4 Barriers and Success.....................................................................75 4.8.5 Results..........................................................................................75 4.8.6 Lessons Learned...........................................................................76 4.8.7 Next Steps.....................................................................................76 4.9 Siemens....................................................................................................76 4.9.1 Introduction..................................................................................76 4.9.2 Processes......................................................................................77 4.9.3 Introducing a Process Mentality...................................................78 4.9.4 Digital Factory..............................................................................79 4.9.5 Product Data Management...........................................................80 4.9.6 Digital Product..............................................................................81 4.9.7 Innovation.....................................................................................81 4.10 GAC.........................................................................................................82 4.10.1 Introduction..................................................................................82 4.10.2 Background..................................................................................82 4.10.3 Original Aim.................................................................................83 4.10.4 Findings........................................................................................83 4.10.5 Action...........................................................................................87 4.10.6 Results..........................................................................................88 5 Lessons Learned and Best Practices.............................................................89 5.1 Similarity of Situation..............................................................................89 5.2 Managing for Action................................................................................89 5.3 Ground Rules...........................................................................................89 5.3.1 Think Global.................................................................................90 5.3.2 Understand the Global Market......................................................90 5.3.3 Select the Markets........................................................................90 5.3.4 Select the Competitive Battleground............................................90 5.3.5 Global Product Strategy................................................................90 5.3.6 Upfront Planning..........................................................................91 5.3.7 Prescriptive Approach..................................................................91 5.3.8 Clear and Common Terminology.................................................91 5.3.9 Architectures and Models.............................................................92 5.3.10 Digital Product and Digital Manufacturing..................................92 5.4 Product Strategy.......................................................................................92 5.4.1 Managed Complexity and Change OEM......................................92 5.4.2 Global Complex Assembly Provider............................................93 5.4.3 Low-cost Commodity Supplier.....................................................93 x Contents 5.5 Product Portfolio and Product Architecture.............................................93 5.6 Beyond the Product..................................................................................94 5.7 Getting the Deployment Capability Foundations Right...........................96 5.8 Extending the Deployment Capability.....................................................97 6 To a Structured Framework..........................................................................99 6.1 From Dog’s Dinner to Structured Framework.........................................99 6.2 The Product............................................................................................100 6.3 Processes................................................................................................101 6.4 Data and Documents..............................................................................102 6.5 Applications...........................................................................................105 6.6 Methods.................................................................................................106 6.7 Facilities and Equipment.......................................................................107 6.8 People....................................................................................................107 6.9 Organisational Structure........................................................................108 6.10 Metrics...................................................................................................108 6.11 A Framework for Action........................................................................108 6.12 Pains and Gains Throughout the Lifecycle............................................109 6.13 A Grid....................................................................................................112 6.14 Benefits of the Grid................................................................................113 7 PLM Enabling Global Products..................................................................115 7.1 Product Lifecycle Management (PLM).................................................115 7.2 The Emergence of PLM.........................................................................116 7.3 Key Characteristics of PLM...................................................................116 7.4 Focus of PLM........................................................................................117 7.5 Applicablility of PLM............................................................................118 7.6 Functions of PLM..................................................................................119 7.7 Importance of PLM................................................................................119 7.8 Benefits of PLM....................................................................................120 7.9 Metrics and Targets of PLM..................................................................123 7.10 Comparison of the Old and New Paradigms..........................................124 7.11 Key Points for the CEO.........................................................................125 7.12 PLM Applications..................................................................................126 7.13 Generic PLM Applications....................................................................127 7.13.1 Data Management / Document Management.............................127 7.13.2 Part Management / Product Management...................................127 7.13.3 Process Management / Workflow Management.........................127 7.13.4 Program Management / Project Management............................127 7.13.5 Collaboration Management........................................................128 7.13.6 Visualisation...............................................................................128 7.13.7 Integration..................................................................................128 7.13.8 Infrastructure Management.........................................................128 7.13.9 Idea Management.......................................................................128 7.13.10 Product Feedback Management................................................128 7.14 Task-focused PLM Applications...........................................................129 7.14.1 Product Portfolio Management...................................................129