TECHNOLOGY: Change management key to PLM project success
23 July 2014 | Features & Interviews | Source: Leonie Barrie
It's one thing to invest in a product lifecycle management (PLM) system - but another altogether to get the most value out of the solution. Indeed, according to industry experts speaking in London last week, PLM projects should be driven from a business perspective if they are to deliver real gains in terms of revenue, margin improvement and inventory efficiency - with users on board from the beginning.
With potential benefits that include the ability to streamline processes and cut time to consumer, increase agility, data flow and accuracy, and give greater control over costs and collaboration, it's no wonder that PLM is seen as a solution to tackle many of the challenges currently facing the apparel industry.
But Sue Butler, the director who heads up the PLM implementation projects at consultancy Kurt Salmon, warns it isn't a quick fix.
"It's only really as good as the information that goes into the system, and the process that's behind it," she told delegates at the PI Apparel (Product Innovation Apparel) event in London last week.
"It doesn't automatically deliver those benefits for you. It doesn't keep everyone on time, it can't force people to do their job, or keep everyone on process, or provide decision discipline. These all need to be trained in and developed and coached in to the organisation."
Likewise, she adds: "It doesn't replace the need to collaborate with business partners, but helps you share the information much better."
The first piece of advice on how to unlock the benefits of PLM is not to treat it as a technology or IT implementation but to instead look at it from a business process driven perspective.
Indeed, projects that move beyond using PLM as a product information database to a tool that supports a well-defined and stable process, are the ones that see the most value.
"Before you position your PLM implementation you need someone to map out your requirements to understand what problems you're trying to manage and what business problems you're trying to solve," explains Andre Golab, former PLM programme manager at Burberry.
He recommends identifying a few deliverables such as critical path, business process maps, design principles, a product architecture diagram, integration catalogue, road map, business case including return on investment, and a project initiation document.
"This gives you reference and understanding of where you need to position your PLM solution in the future; and by shopping around to get validation, you will [also] engage the organisation - a crucial role."
Getting users on board
This last point - the ability to get users on board from the beginning of the project, to be active and visible in meetings, and help dispel any resistance to the implementation - is also key.
"It's critical to get people involved early on and then keep them involved on a regular basis so that their voices continue to be heard," explains Karl Schroeder, director, finance and operations, at US men's clothing retailer Bonobos.
While Austin Mallis, VP operations, at New York based Fashion Avenue Sweater Knits, adds: "We all spend a lot of time and energy picking the right software solution, but if it's not adopted it doesn't go anywhere."
Indeed, it's easy to underestimate the level of time commitment required, but without ongoing input from key users throughout the implementation cycle, there are lots of avenues for failure.
"There's a struggle sometimes to set aside the time in peoples' calendars - but if it doesn't hurt a little bit to sacrifice their time, you probably have the wrong people."
Butler also believes that "change management is the key to delivering your investment from PLM.
"We're talking about business users in many different functions, some of whom aren't used to working in a very defined, structured way, and we're talking about users who might often be working in different spreadsheets, company-developed tools, and many different locations.
"The speed at which users start to take on board the new ways of working and adopting the new processes and tools to follow those new processes can have a big impact on how quickly you get the benefit from your PLM investment."
Embedding change starts at the initial planning stage, when "you need to get people to understand why you're doing the project and what your vision for the implementation is."
For example, a global business operating in multiple regions, with many different divisions and many different departments within those divisions, may be looking for one common process that everyone abides by in order to deliver better product, better margins, and to enable the business to grow and remain competitive.
Key users - carefully selected to include opinion formers, or people with good end-to-end experience of different departments - should be involved in initial workshops so they buy-in to the solution and its benefits.
Another critical point is in training, with Butler suggesting this should be done as operators begin to use the system rather than several weeks beforehand, "so it's relevant and fresh."
She adds: "Train the end-to-end context so people really understand why their part of the process is important and that if they don't do their job someone in the supply chain isn't going to be able to help get the product to store on time.
"You're only going to realise the full benefit if the team are really well-trained an understand what they're doing and why, and the implications of them not doing it."
For instance, there isn't always an understanding of the knock-on effect of late decisions such as changes to products, zips, buttons or fabric - all of which add complexity and often lead to margin challenges.
Bonobos's Schroeder agrees. "If you can provide users with one single source of data, it's a lot easier to motivate those people to keep the data up-to-date as they do get a sense that people downstream are looking at what they do...and it all rolls downstream."
While Craig Crawford, former VP IT business relationship at Burberry, makes the point: "People have a hard time understanding how what they do affects someone else. If you work in the supply chain you know that, because the supply chain always has to pick up the calendar that's lost.
"The closer to market you are, the less time you end up having. No system helps a designer make up her mind any faster, no system makes a merchandiser decide any faster; but if it's truly collaborative you can all make decisions together."
There's also a 'reversibility threshold' to bear in mind, as Butler explains. "Once you've got through the training stage and start to pilot it's very difficult to go back and do it again if you've got it wrong, which is why it's important you start working change through the business from early on."
Strategic business benefits
Indeed, it seems all PLM customers could benefit from looking again at their roadmap and focusing on capturing some strategic business benefits from their implementation.
"You need to identify the PLM capabilities that can add value for you as a business, and translate them into a benefits case and business expectations map," concludes Butler. "If you've got a project plan, you should have a benefits plan that's aligned with that project plan so you can see how the benefits are being realised.
"And if you get into some challenges when delivering that project and have some tough decisions to make about priorities, if you know that delaying [a certain] activity has a knock-on effect on your benefit, being able to highlight that supports the process of keeping the project on track.
"Commit to tracking the core business metrics; and importantly, put change management at the centre of the design and development of the implementation. It's about the organisational process not just a system implementation."
And if all goes well?
PLM can help increase speed and agility within an organisation, give more control over materials management - and realistically halp a company increase the number of seasons per year without adding risk.
It also provides an opportunity to improve integration within a business, eliminate silos, improve product margins, give greater insight into component costing for more control and visibility at an earlier stage, and can support quality and increase efficiency.
It also strengthens the margin-eroding weak link between design, development, merchandising, and sourcing teams who might all be working to different calendars that they need to hit in order to get products into the stores on time.
For merchandisers, there can be more control of product assortments early on and visibility into what's happening with the ranges. Designers and technical teams will know what their targets are for the season, and have a way to call in product specifications, chase changes, and capture design detail templates.
And sourcing managers can have more visibility around sourcing capabilities, more control over prototypes and samples, and can make good comparisons back to costs around global raw materials and different suppliers.
Research by Kurt Salmon has identified five key drivers for the success of a PLM implementation:
1: Acknowledge that PLM is about changing processes and organisation; it's not just a technical implementation.
2: Allocate investment to areas that will drive ROI. Quite often a lot of effort will be put into areas that might not necessarily deliver the benefits.
3: Pilot value-driving functionality early in the implementation process.
4: Invest in functionality that supports the evolving business processes.
5: Commit to performance tracking metrics. For example, to improve revenue, margin, and inventory levels, metrics might include speed to market, product quality and returns, productivity, and the number of styles being produced.