Reward Versus Risk

By Doug Bartholomew Print this article Print

Product life-cycle management is helping to get Boeing's 787 off the ground, but is a key factor in Airbus' A380 delays.

Reward Versus Risk

The missteps at Airbus, and Boeing's own reliance on Dassault's sophisticated software, underlie the stark reward-versus-risk scenario offered by PLM suites.

PLM packages, like CRM and ERP systems, consist of a set of integrated programs designed to automate certain processes within a business, be it customer service or finance. In the case of PLM, the software is focused on the development and production of products. The number of modules integrated into a PLM suite varies from vendor to vendor and the industry being addressed, but there are usually three core offerings: a CAD system like Catia; a digital manufacturing system, such as Dassault's Delmia, which allows companies to simulate how a product will be manufactured; and a product data management (PDM) system, such as Dassault's Enovia, which manages all the data associated with a product, such as CAD drawings and specifications.

Using the CAD software, manufacturers can create detailed 3D models of their products and run those designs through a battery of virtual tests, such as stress, vibration, noise, wind and even crash tests, long before a cent is spent on manufacturing. Using the digital manufacturing software, companies can explore how those parts or components can be produced by simulating the process. Products like Dassault's Delmia help manufacturers determine how many people, robots or other manufacturing resources will be required, whether existing machinery can be utilized or new purchases will need to be made, and whether processes can be automated or will need to be performed manually.

While the PDM piece of the suites is focused on managing the data associated with a product's development, it really forms the basis of a collaboration platform. Using software such as Enovia, companies like Boeing can hand off responsibility for designing parts or components to those partners who will ultimately be responsible for their manufacture. Designs can be polished, and the most efficient and cost-effective methods of production can be determined long before the first length of sheet metal is stamped.

The aerospace industry is far from alone in latching on to the potential benefits offered by PLM. Most Fortune 500 manufacturers, from Toyota (which uses Dassault's complete PLM suite—Catia, Delmia and Enovia) to General Motors (a UGS client), golf club manufacturer Ping (Parametric Technology) and consumer goods makers such as Playtex (Agile Software), are at various stages of implementing PLM suites.

Potential cost savings vary depending on the complexity of the product being manufactured, but some analysts, like AMR Research's Michael Burkett, estimate that the time and cost savings on more complicated products can be as much as 50%. That has translated into PLM becoming a hot software category, growing at an annual compound rate of about 8.3%, according to research firm CIMdata of Ann Arbor, Mich. In a report released in October, CIMdata forecast that investments in PLM would grow from about $19 billion in 2006 to $27 billion by 2010.

But underlying that promise are very real dangers. By relying so much on software, and by eschewing real world mock-ups or trials in favor of virtual models and tests, companies may not catch errors until late in the manufacturing process. And the potential pitfalls, such as compatibility problems between different CAD packages, are more common than most chief information officers might think, according to Kubotek COO Bean. Other challenges include everything from maintaining a current and accurate data warehouse for product information, to ensuring that multiple manufacturing partners have the latest software updates, dealing with user training issues and gaining executive support so that rules can be enforced across department and inter-company boundaries.

The risk is compounded by the fact that companies are basing their product rollouts, and by extension their very business, on the platforms. Mistakes can exact a heavy price.

In 2003, the British National Audit Office, which scrutinizes public spending on behalf of Britain's Parliament, pointed to difficulties in implementing CAD software used on the country's Astute nuclear submarine project as a chief source of the program's $1.7 billion in cost overruns. The chief contractor on the project, BAE Systems, said it underestimated the complexity of training users and the amount of information that the 3D design software would need to manage on the project. BAE was using Cadds5 software from Parametric Technology of Needham, Mass. The Astute program is now four years behind schedule, according to the audit office.

Parametric acknowledged that the Astute program did encounter problems related to the implementation of its software, in particular the Cadds5 3D design software. However, spokeswoman Nicole Rowe says that by working closely with the customer, the program has managed to get back on track. "Oftentimes, especially when you're dealing with something as complex as a nuclear submarine, there's a steep learning curve," she says. The first submarine is scheduled to launch on June 8, about seven weeks ahead of the revised schedule.

In addition to the problem encountered with wiring on the A380, Airbus also suffered another setback in February 2006, when a wing on the giant 550-seat aircraft snapped during a stress test. Software modules integrated with CAD systems are meant to simulate stress and catch possible failure points before components go into production. But Airbus said that during the last step of testing in February, where the wingtip is bent more than 24 feet away from its normal position, a rupture occurred between two engines. It did not provide further information on why the rupture could not be prevented through stress simulations; however, Airbus said the rupture would not result in major delays and could be corrected with "refinements" to the design.

Baseline made repeated attempts to speak with Airbus for this story, contacting officials in Europe and North America, but Airbus declined the requests.

Airbus' $6 billion problem offers technology leaders and chief executives a number of stark lessons in what can go wrong in implementing sophisticated PLM systems. But even more important, Boeing's response to the problems at Airbus, and its own use of PLM on the 787 Dreamliner program, offer guidance on what can and should be done to avoid the same turbulence.

Next page: Airbus' Nightmare: Born in a Storm

This article was originally published on 2007-02-05
Doug Bartholomew is a career journalist who has covered information technology for more than 15 years. A former senior editor at IndustryWeek and InformationWeek, his freelance features have appeared in New York magazine and the Los Angeles Times Magazine. He has a B.S. in Journalism from Northwestern University.
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