PLM is constantly expanding into new industries. From its roots in technologically advanced products like aerospace and automotive, it has reached new and, from a complexity standpoint, surprising areas.
One interesting example is chartered tourist travel. Few people would initially make a connection between complex IT systems and sandy beaches with palm trees swaying in the sun.
But the charter business is no longer what it once was. The one-size-fits-all charter trips are being replaced by tailored travel experiences. Customers want to “configure” their trips individually, by personally choosing their hotel, food, activities, degree of sustainability and many other options.
With this new trend, an industry that once operated through up to ten siloed systems has now entered a state of change. “PLM is the answer to these new IT needs,” says Peter Ulwahn, Regional Director of British charter giant TUI Group’s.
He calls himself "the new kid on the PLM block." The description is quite apt; Ulwahn might not be a spring chicken when it comes to business, but he is probably one of the first to connect the PLM concept with tourist charter and lazy days in the sun.
TUI Group’s Nordic subsidiary (Fritidsresor) has invested in this concept that now enables them to tailor their trips with the help of Dassault Systemes’ (DS) PLM software ENOVIA as a backbone.
They named their system the Travel Product Generator, or TPG. The system is integrated with all purchasing information, and all the products are updated and distributed to all systems with one master.
“It has given us a clear competitive edge,” says Ulwahn of TUI Group, which globally has 30 million passengers per year, employs 40,000 hotel establishments, and operates its own resorts and its own airline.
But while TUI is a sunshine story, there are others where the first attempt became a nightmare before things got on track. Fashion company Guess’ COO Mike Relich said that, ”the first implementation was a minor disaster.”
At a first glance, charter travels looks fairly straightforward; basically, two flights and a hotel. That’s how charters used to be, but over the past few years things have changed radically.
The point is that products today are exposed to the paradoxical effect called “mass individualization.” Consumers are no longer content with a few options; instead, they want to be able to customize their experiences to suit their individual preferences.
A closer look reveals an almost endless series of parameters: logistics, transport, hotel standards, beds, meals, personnel, entertainment excursions and many more. Given these options, every customer’s requirements will look different.
The challenge for the charter industry has become one of creating database tools that can combine specific customer requirements into a single, manageable product.
What this product looks like is a kind of travel industry BOM (Bill of Materials) in digital form, one that can be handled in a networked environment and communicated via social media or the cloud, and be available on any device, anytime and anywhere.
While ERP and business systems could be potential solutions, the problem remains that these types of systems are primarily designed for handling transactional data and lack the more advanced embedded intelligence necessary for product configuration.
The components needed to assemble a trip
Imagine that you could take all the components needed to assemble a trip, make them associative to each other and put them in a relational database: flight times, airline seats, arrival times, transportation, hotel options, quality standards, number of beds in the room, guided tours and more.
Up until a few years ago, IT tools that are able to accomplish these requests were more dream than reality. At the time, PLM was not seen as an option for anything other than the classic environments: automotive, aerospace, machinery manufacturing, telecommunications, consumer goods, high tech and electronics.
Then the industry changes began. The medical technology, healthcare, life sciences and biomechanics, and even the fashion, leisure and construction industries began to open their eyes to all they could gain by putting together products and services in PLM environments.
The PLM environments can then be linked to leverage the ERP systems' ability to handle the massive transaction-based information of the manufacturing, assembly, distribution, maintenance and finance industries.
Forward-thinking companies in these previously “PLM free” industries began to invest in this direction. IKEA in furniture (with PTC's Windchill), Guess and Under Armour in retail fashion (DS ENOVIA), and Marimekko in home furnishings (Siemens Teamcenter) are only a few examples of companies that have led the way.
The “Number One” Dassault-related consultant in Europe
A general observation is that Dassault Systemes, more than its competitors, pioneered the sales and implemention of cPDm (collaborative Product Data management)/PLM outside the traditional areas. In this effort, the partner channel is an important element.
Overall, Dassault partners stand for 57 percent of the company's gross revenues. The equivalent figure for Siemens PLM is 64 percent, and for PTC 47 percent.
In the case of Dassault, the relationship with IBM is an important partner revenue generator, At the same time, regionally focused providers such as Technia, the Swedish PLM consultant and DS VAR (Value Added Reseller) owned by Addnode Group, have developed significant businesses within their space, specifically in the field of using PLM in unconventional industries.
Moreover, the future looks bright. According to analyst CIMdata, “regionally focused providers will continue to grow and compete, effectively offering specialized services, local delivery and resources, and cost-competitive bids.”
As an example, Technia recently became Europe’s largest DS related PLM player when they bought German CATIA specialist, Transcat.
Technia’s CEO, Jonas Gejer, says the plan is to merge these two operations resulting in annual revenues just under $100 Million. Along with TechniaTranscat’s dominant position in Northern Europe and Germany/Austria, it will also have a growing US operation and a development center in India.
Dassault Systemes - a Technia reseller
In the light of these developments, it’s no surprise that Technia played a key role in TUI Nordic’s PLM journey. Technia is one of the world’s leading companies in establishing PLM in “new” business segments.
Historically, on the software side Technia is a Matrix/ENOVIA specialist. They held a resellership for this solution in the Nordics, and when Dassault bought the solution nine years ago (and later made it into their prime PLM/PDM backbone ENOVIA), they became a DS partner instead.
As of today, Technia's best-known proprietary software is Technia Value Components (TVC), which is a software intended to obtain faster implementation of Dassault’s ENOVIA, based on Technia’s experience of delivering advanced ENOVIA implementations in large organizations. Paradoxically, Dassault is also Technia’s reseller for TVC.
Technia’s CEO, Jonas Gejer, explains that Technia Value Components was created as a spinoff from a large implementation project at Nokia (today Microsoft Phones) around 2001. “These components have enabled Technia to very quickly adjust the processes and user interface to new industries. This, together with recruitment of staff with domain skills in retail and life sciences, has opened up new industries. The ability to sell and deliver a solution instead of software is also key.”
The PLM journey begins: “Reinvention of product development”
TUI Fritidsresor’s PLM journey began during 2010-2011, when Peter Ulwahn and his IT team encountered the concept of PLM for the first time.
They quickly realized what the PLM concept could theoretically do for the company, which up to that point had been working primarily with Oracle for finance, Lundalogik Lime Pro for CRM and CRS for sales. With that realization, the company started its journey into the PLM world.
The business was changing, but what brought on the need for a PLM system?
“The period between 2002 to 2007 can be characterized as the travel industry's cemetery, with a number of companies closing down or mergeing with other companies. It was tough, and has led to a total reorganization of our range and how we structure trips to meet customer requirements. One could put it that we've reinvented the product development process in our industry,” says Peter Ulwahn, adding that, “IT support plays a crucial role in this, and for the TUI Group among others, has brought a focus on PLM that sharpens product development and enables the agility required by the market.”
“I think the biggest difference is that our business was mostly that of a travel agent who sold the products of others. Our main objective now is to try to understand the customer better and work much deeper with the products. To enable this, we need something that keeps track of all the components. We often speak of a gradual path to success in the implementation project, that it may start in one corner and work toward the center,” Ulwahn explains.
TUI Nordic’s IT team called in three PLM suppliers to see if they could find a solution. They did and the contract with Technia to start using DS PLM solution ENOVIA was signed in 2012, and after that things kept on moving forward.
“The first thing we did was to put hotel contracts in the PLM system. We have our own company language regarding all room types in quite high detail. It is the first step. Then we we added flights, and upcoming steps are to continue with all components,” says Ulwahn.
A single source of product information
So what can a PLM solution do for the travel industry?
“We have created a database, a single source of information. This single source is our TPG solution,” says TUI Nordic’s Jenny Knejp.
Today, the Travel Product Generator manages virtually all of TUI Nordic's travel options, hotels and air transportation.
We are talking big volumes here. Across the whole TUI Group the system will globally manage some 30 million passengers per year and 40,000 employed hotel establishments. In addition, the group has its own resorts and even its own airline.
“What we have done is to create a database, a single source of information. This single source is our TPG solution,” says Knejp. “We have one solution instead of ten, which means that we have been able to shut down multiple systems.”
For example, TUI previously had one system for the hotel contracts, one for flight planning and so on. Now they can access everything in a single place. ”We are faster, make fewer errors and planning has become a lot easier,” Knejp asserts, explaining that, “The trips are planned manually the first time, but the next time the system can do a carryover, which can be used several times and also be modified. But even features like a new dashboard make life a lot easier. Instead of searching through ten systems to define or locate a production overview, a brief presentation of the same is just a keystroke away.”
She adds that the product quality has also increased because the TPG solution is more likely to understand the travelers' wishes and requirements, and product combinations can be handled much more efficiently.
Keeping track of the details
By keeping track of all the details, TPG makes it easy to tailor products to customer demands and to make new products, even when they are complicated.
“For instance, we may have a hotel with 18 restaurants in the neighborhood, all with favorable deals for our customers. Or say, we have a hotel in Tenerife (a European tourist island belonging to Spain) which does not sell as well as we hoped. Now we can reconfigure the offering and include tickets to the huge Tenerife Siam Water Park,” claims Peter Ulwahn, pointing out the importance of agility.
Travelling is something which can change rapidly for many reasons, such as the number of people involved or local political unrest. “PLM provides flexibility to quickly adapt,” he says. “Egypt is one example. What we hope to get from having this sort of connection and components is the ability to establish some form of "forecasting," which is something that we lack today. Currently, we just change destinations and see the effects afterwards, which is sometimes good and sometimes really bad.”
Another gain is that the two-times-per-year printed catalogues have been replaced by 19 releases on the web.
The power of social
The next step could be equipping staff with Technia’s TVC Mobile Access, which would enable them to enter new information from anywhere; for instance, when visiting a new hotel.
Next generation travel sites may allow customers direct access to the PLM system,where they will be able to make their choices on their own as well as provide immediate feedback.
Peter Ulwahn also says that they want to work more with customer contacts, from both a PLM perspective, and also much more from the social media perspective. “We will try to capitalize on our 500,000 Facebook customers in a much smarter way than we do today. I’m curious to take it all to the next level. In the current situation, we have this closeness to the guides, just to be able to update our products. But I am not at all averse to handing this information over to the customer, with a path directly into our system.”
There’s a lot of power in social media networks, he adds, continuing, “One example is that during the first three days that we released the news that Madeira would replace Egypt in our program some two years ago, we did so through Facebook. Something which incidentally worked extremely well.”
My take: The importance of competent partners
From a PLM perspective TUI Nordic is a “sunshine story”. There are are several reasons for this. They had an idea and a vision of what they wanted to obtain in terms of process integration and automation. They had top management support and the advantage of starting from a clean slate for PLM. And last, but not least, they made the right pick when they chose Technia as their PLM implementation partner.
“A PLM partnership is a marathon, but should be divided into a set of three to six month deliveries, to ensure alignment with business objectives and to ensure cost control and end-user acceptance,” Technia’s Gejer asserts.
TUI was probably the first in the world in the travel industry to invest in PLM.
What were the initial difficulties and challenges?
“When we looked at the need to keep track of all the data, we did not know the answer was PLM, because it is so tightly focused on manufacturing. But once we understood that the concept could help us, it was actually not that difficult. Technia quickly understood what we were looking for, although we did not speak the PLM language,” Peter Ulwahn explains.
This is the key to success. After all, PLM software is just software. Without an idea of what you want to accomplish, great implementation services, training and education, methodologies, best practices and competent consultants, things can easily go wrong long before they are on track and can deliver value.
Let me offer an example in Guess, the fashion, jewelery and accessory brand, which today is a huge global success.
Guess and PLM as “a minor disaster”
When I spoke with Guess’ former CIO (and current COO) Mike Relich in 2012, he told me about a rough road on the way to a working solution.
The company began its PLM journey in 2006 with the purchase of Dassault’s Matrix/ENOVIA, but to call the implementation and the reactions of users a success would be an exaggeration.
“Rather, it was a minor disaster,” said Relich, explaining that, “the menus were complex and the user interface certainly wasn’t suited to the creative orientation of our employees. To get them to take this on was a challenge on the edge of insurmountable.”
Relich’s Chairman of the Board on one occasion took him aside and asked, “Hey Mike, about these PLM things … what do you say about just skipping it?”
But Relich stood firm, stating that the system was partly implemented the wrong way, and that while it certainly had its faults, these things could be corrected.
And so in 2009, according to Relich, “We began to implement Dassault's ENOVIA, and slowly but surely the breakthrough approached. Not least was that Technia's entrance onto the stage meant a lot.”
He adds that they had also learned a lesson from the first attempt. This time, PLM was implemented from the user perspective. “It was their need that we must satisfy with sharp solutions, not the software developer’s or the IT department’s. Ease of use was the password. We wanted and got fewer clicks and a unified user interface that was easier to navigate.”
“One important result was that the previous eight mouse clicks needed to generate a BOM (Bill of Materials) of a model became just one.”
An instant success
The Guess story is not a rare one, but at TUI Nordic things seem to be the other way around: an almost instant PLM success.
Has PLM, Dassault's ENOVIA and Technia created a competitive advantage for TUI Nordic?
“I really think so. Customers will require much more customized products, and I know what systems our competitors are sitting on. They will not be able to deliver it the way it looks today,” asserts Peter Ulwahn.
I think he is right.