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PLM Traction - Standard Concept

Introduction

For all your investment in PLM over the years, how effective is the outcome? If PLM improves by X%, then does your business improve proportionately - or is there no discernible effect?

Even when PLM has spread fully through the enterprise it may still have a limited effect. Perhaps PLM is not applied in a thorough and practical way, or there are bottlenecks, or discontinuities, or maybe there are some external factors that are working against PLM.

The ultimate metric to show the total effectiveness of PLM within an enterprise is PLM Traction - the ability of improvements in PLM to result in corresponding and commensurate improvements in the performance of the business.

Application

Measurement of PLM Traction requires a reasonably comprehensive set of PLM metrics and general business metrics to be in place, but this should be the goal of any business that is serious about management information.

The PLM metrics are being developed as part of the PLMIG Financial Framework and PLM Delivery initiatives. Development of business metrics should be via liaison with the business improvement functions of the organisation.

The ability to demonstrate and measure this inter-relationship between PLM and the business lies in the domain of advanced PLM management.

The long-term aim is to calculate PLM Traction, and the ongoing concept is a means of focusing attention on how successful (or otherwise) PLM actually is.

Definition

PLM Traction

PLM Traction is the ratio:-
Actual business performance change per percentage change in PLM performance	:	Potential business performance change per percentage change in PLM performance

In an automobile, the engine is connected to the road wheels via the transmission system. For manual transmission, in any given gear, if the engine speed increases
by 20% then the vehicle speed also increases by 20%. This can be regarded as
"full traction".

Some factors may cause the traction to be reduced. If the car has an automatic gearbox then, at low speeds, some of the 20% increase in engine speed will be absorbed by the torque converter. If the road is slippery, the wheels may slip and some of the extra vehicle speed will be lost.

The same principle can be applied to PLM. A well-implemented PLM environment should be tightly integrated to the operation of the business. Improvements in PLM should feed through and result in increased effectiveness and performance.

As with an automobile, there will be a gear ratio, because there are many other things that affect business outcomes than PLM.

Thus (for example) a 20% increase in PLM performance might result in a 4% increase in business performance. However, if the enterprise has full PLM Traction, then a 30% increase in PLM performance would then result in a proportionate 6% increase in business performance.

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