10 questions with... Ray Hein of Centric Software
28 September 2009 | Features & Interviews | Source: just-style
PLM Hub Q1: Product Lifecycle Management (PLM) remains a much-talked about strategic advantage. What do you see as the key benefits for the apparel industry - both in the short- and long-term?
Ray: PLM is delivering similar benefits to the apparel industry that other fast-moving industry segments realised in the past. While the roots of PLM lie in very different, slower-moving industries like aerospace and automotives, a major shift took place about 10 years ago when faster-moving industry segments like electronics, network equipment, medical devices and others moved to an outsourced manufacturing and supply chain model, and looked for the collaborative benefits a web-based PLM solution offers.
Today’s apparel industry faces the same challenges that those industries faced – outsourced product processes, widely scattered team members, outdated methodologies (like spreadsheets) that don’t scale or support the new business model, rapidly changing products and short product lifecycles, complex supply chain models and compliance requirements…. These characteristics demand the benefits of a web-based, easy-to-use PLM solution, including the improved collaboration, improved accuracy that results in higher quality, faster product cycles, enhanced efficiencies, and reduced errors which lower product costs. Enterprise PLM is a unique business application – compared to transactional systems like ERP, and WMS – in that all functions and roles in an organisation play a part in successful product launches. To ensure success having process visibility, controls, and accountability to each other in a web based system is the only way of doing business today.
PLM Hub Q2: How can PLM improve an organisation's competitive advantage?
Ray: The right PLM system supports a leaner, more efficient product development and sourcing process. When all the elements of an organisation – design and innovation teams, sourcing and compliance oversight teams, senior managers and financial teams – have alignment on style and financial goals, and can act rapidly and efficiently to achieve those goals, competitive advantage is maximised.
For example, suppose the design and sourcing teams in your organization have 3 styles on the drawing board, and know they can work with their best suppliers to get high-quality samples developed rapidly, approved and into production. And suppose those teams also have insight into the financial performance of all 3 styles, and realise that 2 of the 3 styles will achieve their margin performance targets, but one will not. In that case, the teams can make the decision to redeploy precious budget and resources, throw all of their efforts behind the 2 “winning” styles, get those onto shelves early in the season, and avoid costly discounting. This is the kind of strategic and competitive advantage that the right PLM solution can deliver to an organisation.
PLM Hub Q3: How can PLM help unify product development teams to deliver trend-right, high quality products to market on time?
Ray: At its simplest, by acting as a repository of product information, a PLM solution provides everyone involved in the product’s lifecycle – design teams, project managers, marketing teams, sourcing teams – with access to a single version of truth about the product. This reduces errors and speeds processes, and virtually any PLM system will provide this repository functionality. The team that benefits most from this basic functionality is the product development team.
A bigger question is this: Is this enough to expect from a PLM system? Many PLM systems are limited by the modest- to low-level functionality they deliver beyond this – product data management (PDM) – repository capability, and such modest, workgroup, functionality impedes other areas in the organisation from fully adopting the system and benefiting from it.
For example, not all PLM systems enable line planning functionalities, so that organisations can achieve top-down/bottom-up alignment of goals, tasks, and resource allocation. Virtually no other system that we know of delivers profitability planning capability as an integrated part of a PLM system, assuring that teams can make critical go/no-go decisions about products’ ability to achieve their margin targets before they launch. Few PLM systems enable sourcing and compliance management to be completely integrated with the core product data management functionality. Very few PLM systems provide for calendar management, so that tasks and critical milestones can be easily monitored by management and team members alike. Few PLM systems include an easy-to-use enterprise search capability so that teams can get the data they need wherever it resides in the organisation, and fewer still deliver a robust integration capability so that data that resides in other systems can easily be updated and integrated with PLM system data. When a PLM system adds all of these other capabilities to basic product data repository functionality, then the benefit of that system moves beyond the realm of the product development team to achieve true enterprise-level impact for an organisation.
PLM Hub Q4: How can PLM support a company's Corporate Social Responsibility (CSR) strategy?
Ray: Undoubtedly, the greatest single impediment between strategy and execution is visibility. A well-planned, well-intentioned Corporate Social Responsibility strategy will fail more often than not if managers don’t have easily-achieved visibility into the status of their programs. A PLM system can deliver that visibility, controls, but only with consistent usage of the system.
One reason our system is so focused on ease-of-use is that the participation of so many constituents with such highly varied abilities and skill sets is absolutely critical to customer success and visibility. For example, one customer is working with hundreds of suppliers in Asia and has to achieve high levels of supplier performance in traditional score carding areas (on time delivery performance, etc.), while at the same time achieving full supplier compliance in Corporate Social Responsibility areas. From that manager’s point of view, the system works well because it provides him with easily defined and updated dashboards that he can manage and customise himself. His dashboards let him identify at a glance those problem suppliers that require intervention, while also helping him quickly identify those who are achieving their performance and compliance targets and do not need his attention. By housing all suppliers and manufacturers in one system with their capabilities, what products they build, where they are built, allows the users to be proactive with any corrective actions to ensure compliance.
Meanwhile, in Asia, his suppliers can access the system to provide information – about performance metrics like shipment data, but also about the results of their latest compliance audits. Their skill levels were an unknown at the time the system was purchased. What was known was that the customer would not be able to afford extended periods of expensive training to bring suppliers up-to-speed on the system. Interestingly, the visibility that bridges the gap between this customer’s Corporate Social Responsibility program strategy and its execution, ends up being highly dependent on the system’s ease-of-use factor so that users at all levels can readily access the system for their specific purpose.
PLM Hub Q5: What are the stand-out features and benefits of your PLM system compared with others on the market?
Ray: Our Centric 8 PLM and sourcing system is different in a number of ways. Our domain expertise with regard to the business processes required by the apparel industry is embedded within the system’s architecture so that at its core, the system was designed to support the critical, inseparable processes of the apparel industry.
While we provide comprehensive functionality – calendar management, supplier management and scorecarding, line planning, profitability management, product data management, enterprise information search and connectivity, we have kept the product approachable, easy to use, intuitive, and adaptable to users’ requirements.
Another key difference between us and competitors is that our system implements and begins returning value to customers rapidly. This is because we have been successful in striking a good balance between delivering a flexible product that can be tailored to meet the specific requirements of the organisation, while also delivering a product that is business-ready out of the box. Essential process functionalities are already within the product, so we don’t waste customers’ precious time or resources hard-coding a process from the ground up.
PLM Hub Q6: How compatible is your PLM system with others in the marketplace?
Ray: Our system offers excellent compatibility with other enterprise systems found in the customer’s environment. In part, this is due to our Connector Hub capability which allows us to use our Connectors to integrate information from other systems – ERP, PLM, etc – in the customer’s environment with our system. The benefits of this capability are important: customers don’t face a rip-and-replace decision if they wish to leverage the benefits of Centric 8.
Another layer of compatibility is provided by our Enterprise Search capability, which allows customers to find and retrieve the information they need to make important decisions, regardless of what system that information is stored in.
PLM Hub Q7: What are the basic rules for a PLM project in the apparel industry compared to others?
Ray: One of our apparel customers is a leader in his industry and has spoken publicly about the essential rules for a successful PLM project. He says that first, you must be very clear in your goals and those goals must align with what a PLM system can deliver. A PLM system can not get you a bigger budget, but it can help you boost staff productivity so that you do more with the same amount of resources.
Once you align your goals, then you must follow these steps. Be part of the implementation team and process, and lead the way. Explain how PLM works, how it will help your team with their jobs, help them be more efficient and more productive, and help free them from some of the tedium they now face so they can be more creative. You must help them understand how the system and your operations will fit together.
As a leader, you must listen – -everyone on the team has something valuable to contribute. You must not just lead; you must be a part of the process: take the time, take the classes, sit through the training, be part of the team, and take the journey. And finally, you must convince, convince, convince everyone that this IS the right way to go.
PLM Hub Q8: What would you say to companies who are thinking about deferring a PLM investment because of the current economic crisis?
Ray: It’s very easy to understand a “let’s wait and ride this out” mentality in light of the current climate and some are pursuing this course. However, we think this is short sighted, and in fact is a path to failure.
The alternate path is demonstrated by those companies who realise they've got to invest and improve their efficiencies, control their costs, gain visibility, achieve compliance management now, more than ever. We recognise that it is not easy to invest in this environment, but it is not easy to lose market share or perish either, and there are plenty of smart apparel companies out there that have figured that out.
One very recent development for us is a new service offering, our Business Value Assessment, which analyses a customer’s environment and quantifies the opportunities to achieve enterprise-level impact, provides the data so that a customer or prospect can understand precisely what impact they will achieve through technology investment, and quantifies the risk of avoiding or deferring investment.
PLM Hub Q9: What are the best PLM practices learned from the apparel segment?
Ray: Clearly articulated goals for a PLM and sourcing system implementation, and laser-like focus on those goals, is profoundly linked to the overall success of the implementation and the benefits that accrue to the organisation. The apparel industry is replete with stories of PLM system implementations gone awry, because goals were unclear or systems were too complex.
Measuring pre-implementation process performance can help a company understand exactly where they stand, how much is at stake, and what can be achieved. A Business Value Assessment leverages a pre-defined, 5-step process to deliver this information to without burdening the customer with added workload. The result is a concise measure of where the customer stands today, and the quantifiable benefits they can expect to achieve. This information allows for fact-based decision making.
In the end, whether customers achieve greater productivity, high quality, more successful SKUs/collection, improved efficiency, lower overall costs, reduced need for discounting, or all of these benefits, the most important requirement for a successful PLM implementation is clearly articulated implementation goals.
PLM Hub Q10: Where next for PLM?
Ray: At Centric, we’re convinced that the next “great frontier” for PLM is the ability to integrate the financial team more tightly into the product lifecycle process, and provide for them the same functionality, visibility and tools that others involved in the product process can access.
The first phase of PLM’s evolution in the apparel industry involved the basic functionalities that support the product innovation, style or product-line introduction, and product lifecycle teams in the organisation. In the second phase, sourcing, supplier scorecarding and management, and compliance management functionalities began to be integrated into PLM systems. In the third phase, other capabilities that supported the needs of a wider group of participants were added: line planning so that executive management and development groups could be assured of top-down/bottom-up alignment of priorities, goals, and resource allocation; calendar management so that everyone involved in the process – regardless of their role – had visibility into the critical tasks, dates and milestones that are part of delivering a product to market; and more.
This evolution of PLM functionality has had the effect of allowing the system to reach out and enable the work of an ever-broader group of teams and functions across the organisation. Instead of delivering impact to a workgroup or team, this level of PLM functionality delivers impact across the enterprise.
Now, with the recent addition of the Product Profitability Planning module of our Centric 8 PLM and sourcing system, we are delivering to the apparel customer the latest chapter in this evolution. With insight into complete, detailed, up-to-date product cost information, product teams can determine whether or not a product will achieve its gross margin and profit objectives before they launch the product.
Ray Hein bio:
Ray Hein is widely recognised as an industry thought leader in collaborative PLM solutions. Ray's deep domain expertise and broad industry relationships help increase market awareness and customer adoption of Centric's PLM offerings, and propel Centric's corporate strategy, marketing, and strategic partnerships. Before joining Centric, Ray was vice president of product strategy and vice president of product management at Agile Software (acquired by Oracle).
Our sincere thanks to Ray for taking the time to answer our questions. If you'd like to know more about Centric's PLM applications please view their entry in the PLM vendor directory.