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Speeding From Innovation To Execution

Product-focused chip firms recognise the need to continually bring compelling, reliable new products to market in order to maintain competitive advantage. Companies across a wide range of industries are adopting product lifecycle strategies and solutions to speed development and introduction of new products, while reducing risks and costs associated with operation of a global value chain of customers, employees, partners and suppliers, writes Jaap Smit of MatrixOne...
With the advent of globalisation, many semiconductor companies have sought to optimise the profitability of their products through domestic and global outsourcing of product-related functions, such as design, development and manufacturing. However, for many companies their existing technology infrastructure cannot support outsourced product design, global product development, multiple supplier relationships and enterprise-wide collaboration. The overwhelming number of systems and integrations needed to share product data and facilitate workflows between various internal and external groups can quickly make global reorganisation less beneficial than anticipated.

Moreover, as chip products become more complex and experience a shorter market life, the future viability of any chip manufacturer depends on its ability to speed products to market faster and innovate more rapidly - while driving costs down at every stage. In order to do this, an enterprise must tightly integrate and streamline its value chain of customers, design partners, suppliers and manufacturing resources. This requires a single, consistent version of product-related data to be shared across numerous groups, programmes and functions.

Most semiconductor companies, however, rely upon linear forms of communication (e-mail, fax and phone) between multiple groups when incorporating new customer requirements into finished products. This inevitably leads to problems in version control, as product-manufacturing groups have little visibility into upstream changes to the product design. Frequently the communications loop can break down. The final version of an approved product coming out of the design team can look very different from the actual product that is manufactured and shipped to customers.

Many leading chip manufacturers have sought to address these fundamental challenges and find new ways to eliminate costs and improve efficiency through the implementation of product lifecycle management (PLM) solutions. These solutions speed the development and introduction of new products, while at the same time reducing the risks and costs associated with the operation of a global value chain of customers, employees, partners and suppliers.

Using a PLM solution, groups from product management, design and manufacturing - internal and external to a semiconductor company - are able to view, in real-time, a single source of product-related information, including new requirements, approval status, comments, product mark-ups and the most recent design changes. This enables chip manufacturers to dramatically streamline their product development value chain, and at the same time, reduce excess costs resulting from product scrap and "swap-outs" at customer sites.

What is PLM exactly?

PLM aims at a holistic view of a company's products as they are developed, manufactured and brought to market. It incorporates all elements of product data, from original CAD designs to manufacturing bills of materials (BOMs), tying this data to the critical processes and tasks that numerous internal and external teams undertake to develop and bring products to market.

PLM's emergence represents an evolution from product data management (PDM). While PDM formed the collaboration backbone for product design and early product development groups, PLM has built upon that by including a much broader set of functionality, workflows, integrations and business processes to extend the collaborative backbone to a company's entire value chain of customers, employees, suppliers and partners.

Essentially, PLM is to a company's product value chain what enterprise resource planning (ERP) is to its inventory and manufacturing processes. However, a well thought-out PLM strategy enables a company to adopt new improvements to its product development processes over time in order to avoid the lengthy, costly and complicated implementations that have been associated with ERP. PLM represents the single version of the truth that enables a company's value chain to most effectively collaborate to bring better products to market faster and more cost effectively.

PLM addresses the complete lifecycle of products and fills in the product-related gaps not previously addressed by other major enterprise applications. PLM processes clearly interact with those supported by other enterprise systems, but the creative activity inherent in PLM distinguishes it from the ERP and supply chain management (SCM) that support routine processes only. For example, sourcing in the PLM environment involves suppliers in the early stages of product design to speed the development of prototypes and associated early design processes. By contrast, the sourcing function within SCM takes place only after a product is designed and involves little, if any, strategic input from suppliers regarding a product's content.

As PLM continues to prove itself in the semiconductor marketplace, its recognition is growing in boardrooms as a strategic, must-have strategy and technology solution. Semiconductor companies considering PLM solutions, however, need to be aware that the PLM market, like other enterprise application markets before it, has its share of solution providers that are true subject matter experts as well as vendors trying to force-fit tangential solutions that require excessive consulting and systems integration efforts. To ensure the highest levels of productivity and benefit from PLM, chip firms should demand a number of key capabilities from a packaged PLM solution. These include:

* A PLM backbone designed for large scale, secure cross-enterprise deployments

* A broad set of integrated applications for the complete product lifecycle

* Dynamic business schema with built-in process modelling capabilities

* A common, low-footprint integration for all design and desktop tools

* XML-based interoperability to other enterprise applications

Because each capability is critical, it is worth spending some time to understand each and its impact on product development, market success and ultimate profitability.


Serving as the common infrastructure through which all PLM and non-PLM applications will communicate, the PLM backbone must provide open standards support for leading operating systems, application servers and databases. At the same time, it must be able to distribute across an enterprise and its value chain all product-related files and associated data (in the form of metadata), and make it all work as if it is one single, logical instance. This will provide tremendous time and cost savings, as people in various groups can always work with the latest single version of the truth, no matter where they are or which application they are using.

A PLM backbone should also support both the J2EE (Java 2 Enterprise Edition) and .NET (Microsoft's XML web services platform) standards. Such support will allow users to leverage their current infrastructure or choose to upgrade with any future technology choice, enabling long-term competitive advantage through optimised capabilities.

Integrated Applications

A valuable PLM environment requires applications that cover the full PLM value chain - from design collaboration to product development and sourcing.

Of equal importance is that all PLM applications are deeply integrated. Effective PLM applications must be constructed so that they perform well on their own or as part of a broader solution. By using a PLM environment with fully integrated applications that extend from the product management domain to the manufacturing domain, a semiconductor company is able to significantly speed the process of capturing market requirements and incorporating them into manufactured products.

A US-based marketing team and Asia-based manufacturing groups of a semiconductor manufacturer can view very different PLM applications. However, if these are fully integrated, the marketing team can create a conceptual product and proposed BOM in product management application that translates into a real-life product with a manufacturing BOM for the Asian manufacturing plant's engineering application. With an additional product sourcing application integrated into these first two applications, strategic suppliers can view the manufacturing BOM and approve it or recommend changes based on product lead times, quality or other critical criteria.

The benefits of having a single source of product information are clear - valuable time can be saved throughout the value chain with the elimination of multiple manual steps. Costly mistakes are avoided as all groups began working off a single version of the truth concerning product data. Thus, having a broad set of PLM applications becomes truly valuable once there is seamless integration of those tools.

Also, if applications have been architected for seamless integration, PLM solutions can be deployed in multiple phases, allowing semiconductor companies to earn 100% return on investment (ROI) from small, focused implementations that demonstrate success, which can then be built upon to improve broader functional areas.

Dynamic business planning

Focused PLM solutions will have built-in processes and workflows based on industry best practice. However, every chip manufacturer has its own special, long-standing data types or unique processes that provide it with a competitive advantage. Therefore, PLM environments must provide dynamic business schemas that enable companies to define data types, relationships between data types and model specific product lifecycle processes to fit their unique capabilities and needs.

Having the flexibility to configure new PLM processes as time goes by helps semiconductor companies respond to changing market conditions. Take, for example, a chip manufacturer faced with a sudden new market requirement to incorporate software and additional components into the company's core chip products. This would require an entirely new set of processes around sharing hardware and software designs with third parties that would design the exterior package. Without the ability to quickly configure its PLM processes, the company would face either an expensive integration of new applications or run the risk of slowing down its value chain. Upgradeable "configurability" allows chip manufacturers to retain a real competitive advantage.

Integration with leading tools

Product companies often leverage a variety of disparate design and authoring tools when various groups become involved in product development. This can grind product development efforts to a halt, because one group of people has no idea how to access or manipulate the data coming from another group using different tools. The problem becomes magnified as companies outsource their designs and push to extend their value chain of partners and suppliers. Again, leading PLM environments can produce dramatic time and cost savings in this area.

Web-based PLM environments that provide access to any thick client obviate the need for painful integration of desktop tools. With all these tools using the same integration framework, communications take place via HTTP or HTTPS at a distributed server level. This means that users only need to download a small web applet to whichever desktop tools they are using to communicate seamlessly with other groups and tools. Moreover, IT administrators can deploy integration capabilities globally via the web, with no need to physically install hardware and software in different geographies.

As a result, "follow-the-sun" design and manufacturing become a reality. IT resource requirements are also minimised, because users can leverage a common infrastructure across multiple geographic locations, making administration and support simple. Ultimately, this saves chip companies time and money and focuses their people on innovation and product quality.

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