The Volkswagen-owned truck manufacturer Scania is facing one of its toughest challenges yet in the PLM arena: “The Starling Project.”
During 2021, Scania will roll out its new PLM platform based on Dassault Systèmes' 3DEXPERIENCE. The move will affect 16,000 coworkers and external stakeholders in the supply chain. It’s a challenging bet just by virtue of its size, but even more so in light of the company’s efforts to find a well-balanced combination with some “big bang-like” elements, but mainly based on incremental phases.
Scania’s Anders Malmberg, responsible for the Starling project, is experienced in these areas. Prior to this rollout, Malmberg has been involved in the launch of Scania’s present PLM platform which is based on Dassault’s ENOVIA V5 solution and its connection to the truck developer’s configuration and rules data base, OAS, as well as an extensive SAP rollout project. After 14 years in the company, he knows the organization as like the back of his hand, and also what it is capable of.
Still, Malmberg and his coworkers are aware of the hazards involved. At Technia’s recent PLM Innovation Forum, Malmberg illustrated the magnitude of the challenge with a touch of irony and self-awareness. “I always call these projects ‘five-fifty-fifty projects.’ It’s a matter of at least five years, €50 million and still a fifty percent risk that you fail.”
How does combining the elements of “big bang” and step-by-step implementations come together?
“The first release is a big bang from a number of users perspective. However, from a functional aspect it is not, because there is a limited amount of functionality such as “Review and Approve,” technical documentation such as technical product data, technical regulation and certificates, as well as a data exchange. So, this isn’t a big bang implementation even though there are many users to the first release,” clarified Malmberg.
“Following the first release, there will be extremely phased rollouts in small steps and that also include what we call CoEx solutions–short for ‘co-existence’ between V5 and 3DEXPERIENCE/V6 when we, for example, design in both systems in parallel,” he continued.
For the first release, Scania has carefully weighed the advantages and disadvantages of rolling out so many users in one move, Malmberg added. “But we are convinced that what we do is quite right as there is a limited amount of functionality, and to build a coexistence solution for the first release would have been both complex and unnecessary.”
Not a Walk in the Park
A PLM project involving 16,000 people in a complex business such as truck development and manufacturing is not a walk in the park. It’s about so much more than just a change of digital tools, involving new technologies such as vehicle autonomy and electrification, new methodologies, organizational patterns, processes, and a situation where new platforms such as the cloud come into deeper play.
Scania decided in late 2017, after a series of evaluations and proof-of-concepts, to update their PLM system along the path suggested by Dassault Systems and their 3DEXPERIENCE platform. The competition to win this order was fierce, and contained the usual suspects, including Siemens PLM, PTC and others. But why would Scania, which is known to have one of the world’s most smoothly operating and profitable PLM setups, want to swap parts of their system—in this case, the V5 related environments?
Sustainability, Electrification and Autonomy Demands Change Everything
The background here is complex. Today more than ever before, a transportation vehicle is turning into a software-driven online-connected computer with wheels—four or more wheels, depending of what cargo it carries. Furthermore, the transportation industry is an area expected to undergo dramatic changes in the coming decade. Key elements of this are electrification and autonomy, as well as a whole new way of orchestrating transport. These trends affect the evolution of trucks, in terms of how they are developed and manufactured, and how their operation, support and entire lifecycle look. Industry 4.0 will play a significant role in this new product realization landscape.
In parallel, transport is a cornerstone of the world economy, and the world's truck-based transportation system is a fundamental social backbone. In the near future, according to experienced assessors, we will see transport transformed by autonomous, electric trucks connected to cloud-based, synchronized operating centers and truck convoys led by only one manned vehicle.
This means that a new kind of ecosystem around truck transportation, one which is completely interconnected, will become a reality.
Of course, these changes won’t all come at once. It is a step-by-step process that will take place over a longer period of time, meaning that both organizations and digital tools must be prepared and capable of effectively managing and improving both existing traditional solutions—such as diesel engines where CO2 emissions are radically reduced—and hybrids, while the capabilities to develop electric and autonomous vehicles simultaneously can be performed at world-class level.
Tailor-Made Trucks are a Business Success Factor
Anders Malmberg points to these changes, stating that Scania must hold on to its world class position in terms of producing tailor made trucks that exactly fit the requirements of each individual customer, which is one of the secrets behind the company’s global success and unique profitability levels. Also contributing to this success is Scania’s well-known modular manufacturing system and Toyota-inspired lean production philosophy.
According to Scania’s definition, “modularization” covers the idea of reusing articles down to the lowest level and to combine them with as few article numbers as possible, in order to create as many variants and choices as possible for customers.
“That’s right. A few article numbers but many variants, which one would generally regard to be at the limit of what is possible. However, Scania has been quite successful in this, and created a win-win situation where we can offer our customers tailor-made solutions to boost their profitability, while at the same time we can increase our own profitability by being able to do this with fewer article numbers,” said Malmberg. “Furthermore,” he added, “our focus is to develop more sustainable transportation systems where less CO2 emissions are a focus.”
“All in all, this places huge demands on software capabilities,” he continued, pointing to, “the likewise huge scope in this project covering all types of areas, such as product development, manufacturing, sales and services.”
Much Different from Ericsson’s Failed Big Bang
Having a scope of this magnitude inevitably contains some risks. In this context, I have previously written about global telecom company Ericsson’s problems with implementing and rolling out Dassault’s 3DEXPERIENCE platform in a “big bang” manner.
Ericsson initially decided to bet on such a rollout model for their 25,000 coworkers in R&D following a tight schedule targeted to have the whole new PLM platform up and running in 15 months. This turned out to be too optimistic, and they had to reschedule the plan and rethink the architecture.
Scania’s model is much different, as it is what I would describe as a combined big bang and step-by-step phased approach, which substantially lowers the risks—and in some aspects contains very interesting trade-offs, instead.
Generally, “big bang” risks are usually the greatest for business. But if you do a phased rollout, the risk goes over to IT with coexistence (CoEx) challenges that have to be met and solutions that have to be developed and built.
“The reason we are doing a big bang for the first release is that it would be too complicated to build a good CoEx solution, and that we want to get rid of the solution we have today as soon as possible. The approach is furthermore under build by the fact that there are fairly simple solutions we will replace, such as ‘review and approve,’ technical documentation, and data exchange.”
He added that on the CAD side, Scania will be running CATIA V6. “But after the first release we will have a phased roll-out plan, which means that we will work with V5 and V6 at the same time. The important message is that the work so far on Dassault’s development of our requirements is going very well, but at the same time this is what drives the timetable for the rollout to, for example, our designers.”
There is no doubt this is an extensive job where much of what has been customized in V5 is related to Dimensional Criteria (DimCrit) and represents functionality that is important for working with in modularization.
“Much of that functionality is now developed for us by Dassault, and will also be included as out-of-the-box functions on the platform, such as variant driven positioning, breakdowns, work layout, and Center of the World,” Malmberg explained.
Unique Margins on Each Truck
In fact, it’s hard to find any truck manufacturer in the world that has the same margins per vehicle sold as Scania. The German-owned, but Swedish-produced, truck manufacturer’s niche is heavy vehicles, with a gross weight of 15 tons or more. With approximately 88,000 trucks produced annually, however, it is not number one in terms of quantity: Daimler Mercedes is the world's largest manufacturer of heavy trucks, followed by Volvo Group and Volkswagen Group, which in addition to Scania also consists of German-produced MAN.
OAS, CATIA and ENOVIA V5
Variant and configuration management are mainly what make Scania’s production volume specifically hard to carry through. In 2018, Scania on average produced every truck in different configurations. The variations in how a truck can be configured are virtually unlimited and producing 50,000-plus vehicle variants understandably places enormous demands on the digital support systems.
From this perspective, it comes as no surprise that the PLM system plays a leading role in product development and manufacturing. As of today, Scania uses Dassault Systèmes’ CATIA V5 and a proprietary product database and configurator OAS, with Dassault’s Enovia V5 as advanced CAD vault. In principle, all design work is done in CATIA, the engines included.
The eBOM, (engineering Bill of Materials) is produced in OAS, although some subassemblies are produced in Enovia.
The BOM structures are then transferred to a production preparation system called MONA. The latter can be compared with the production of mBOMs (manufacturing BOM) and BOPs (Bill of Process). MONA is set to be phased out and replaced by OAS, in order to have a common PDM for Design, Production and Service. Scania upgrading their system to 3DEXPERIENCE/V6 will create a common connection between PDM and vPDM (virtual PDM) for all Scania domains.
Manufacturing Execution Systems (MES) play an important role at Scania in light of OAS and MONA's capabilities. When MES is used, it is via EBBA—a modified version of Dassault’s Apriso, which handles information from OAS and MONA. This illustrates a unique part of Scania's business model, which is the company's holistic approach combining product development, production and sales systems.
Why V5 has Become a Dead-End Street at Scania
This is how it looks today, and regarding the V5 environment Malmberg said that, “We’ve come to a dead-end street. A lot has been customized and we’ve reached a deep level of technology, but it has as a consequence of this become harder and harder to handle. When our users now want to have new functionalities, we have challenges to develop that for them because the platform is so highly customized.”
He also said that simulation-based product development demands are another good reason for the change.
“Yes, we have discussed this a lot. Specifically, in light of every truck being unique. As it is now, we can’t create the simulations from the beginning. If you do the meshing, or if you want to do some kind of kinematics and want to test a variant of that, you don’t want to start from the beginning. It would be much more effective to be able to reuse simulations done earlier with some parts replaced. Here we see many benefits with the 3DEXPERIENCE platform.”
Still in the Concept Phase
So, how far has Scania advanced with the Starling Project?
Right now, Scania is in what Malmberg describes as “the concept phase.”
“Generally, they are still in the concept phase. Four main areas have been targeted: sales, product development/R&D, production and services. These areas each contain shared sub-disciplines covering common things such as visualization, reviewing, variant driven positioning, break downs, work layout, etc., which is about the daily work for our users. And then, of course, we need to have an IT platform up and running, a data model, and so on.”
He points to his vast experience of running PLM projects over more than 20 years, and adds that, “a success factor is how you are able to divide the PLM elephant information into small pieces.”
“We evaluate how it is to work together with Dassault. Of course, this is another key factor for the success of this project. This means that we are looking at securing that our business processes are working in a good way. We are increasing the knowledge around the new system among the project members. Additionally, we need to secure that Dassault develops these functionalities for us.”
So far, Scania invested more than a year in the concept phase. According to Malmberg, his earlier experiences show that it takes around a year to find and develop smooth and effective processes in cooperation with suppliers in the PLM area. “This is well-invested time,” Malmberg says, “because it also will improve the way the work is done in the future.”
Going into the implementation phase, Malmberg, stresses the value of keeping the PLM organization tight. “I would say that I want to have maximum of 30 people in the project group when you’re starting up. There are several reasons for this, but some of the important issues are to keep control of the costs and establish efficient ways of working. If we have that, then we can add more people. Many companies ship loads of people into the PLM project, they don’t have a good cooperation with the supplier, and then you are inevitably going to end up having problems. Investing time in the processes and the way of working is definitely worthwhile.”
Google Design Sprint
How do they do things right now? “We start a project with a preparation and requirement phase, followed by a solution definition phase, and in each of these disciplines we start up with onboarding a team,” said Malmberg.
“There’s a lot of businesspeople involved, as well as analysts, product development and solutions people. It’s all about adding people with different backgrounds. What we’re doing here first is that we’re going through Google’s ‘Design Sprint.’”
For those who haven’t heard of it, Google’s Design Sprint framework is based on the understanding of design thinking. It is a five-day process for answering critical business questions through design, prototyping and testing ideas with final users and customers; basically, it’s a way to solve design problems quickly. The primary goal is to identify the challenges the team should be solving—and also to invite the right talents.
“This session is run by a person from Dassault together with all of us,” Malmberg explained. “Scania here really focuses on the business needs and values.”
After that, they establish a global view for all disciplines, where they go through the use-cases and the different flows in each case and detail them. Then the discipline expert from Dassault comes in.
“We onboard this person and let him or her have all the use-cases we have, to look them through and discuss, for example, alternative routes and map Dassault’s best practices related to the use-case. Then we do a fit and gap analysis. So far, we have identified 140 gaps, including everything from critical functionalities to Dassault missing a best practice.”
Fit and Gap Analysis
Fit/Gap Analysis is a general term for evaluations of each functional area in a business project or business process to achieve a specific goal. It includes identifying key data or components that fit within the business system and gaps that need solutions.
When a gap is identified, as well as the fits, an action plan is decided for the latter.
“The best thing here is if we can change our way of working or change our process to fit how the system works,” asserted Malmberg. He continued with a touch of irony, “This, of course, is a challenge for Scania since we are a proud company thinking that we are the best and unique everywhere.” But he added that change is inevitable if they don’t want to end up working in exactly the same way as they do with the V5 platform. It’s certainly a relevant point, even though the case could be that an internal Scania process or idea might be better than what Dassault can present.
In this situation, the question is, “Can we change the process, or can we solve the problem with a new configuration?” Malmberg continued. “If we can’t; is it that Dassault is interested to create an out-of-the-box-solution (OOTB) for us? It is naturally good if Dassault thinks that our requirements in a case like this is are of value for other customers. But if it is a ‘no,’ then we need to produce our own customization to solve the problem, and in the end we write a concept report.”
What are the Success Factors?
Finally, Malmberg discussed the important success factors in this kind of project.
“I always call these projects ‘five-fifty-fifty-projects.’ They take five years, cost at least €50 million, and still there’s a 50 percent chance that you deliver,” he said, which is a great way to formulate it when looking at the history of many automotive bets on new or heavily upgraded systems.
In general, I would like to claim that a minimum common denominator is the cooperation with the supplier, combined with the internal organization, to which Scania’s PLM project leader agrees.
“The way our collaboration with Dassault works is a critical success factor. We have invested a lot of time in this to create principals, to develop mind sets, define and workaround the culture differences between our companies to really try to understand each other.”
Malmberg also claims that money and costs are an important factor. “We’ve got to respect this from both sides.”
Furthermore, functionality aspects are key. “Right, we always talk a lot about this, and my experience is that most of these discussions are around change management. Are our users ready for this solution? Are they trained enough? Are they sufficiently involved in the project? Change management is often a specific reason why these projects fail.”
He went on to say that functionality challenges can in most cases be solved; but what is tougher to deal with are issues related to the interaction between the old and new systems. This view is well in line with experiences from other cases—such as the Jaguar Land Rover story—that we have written about on engineering.com.
“Yes, the migration of older data, and older data with different data models and integration issues are what you really need to focus on in projects like this,” asserted Malmberg. He emphasizes that, “Change management, migrations, CoEx and integrations are the critical areas within PLM projects. Despite that, we talk a lot about functionality.”
He also stresses that you need to be ready with the way you want to work.
“No doubt, the way processes are organized in the company is very important before you start to add a lot of people.”
Malmberg Knows How to Rock the Boat
A flock of starlings is a sociality made particularly evident by their roosting behavior, and some roosts can number in the thousands of birds. When there are thousands of birds all wheeling and turning together at a similar speed and under neighbor control, it makes it much harder for predators to single out one particular bird. The point of this is to obtain safety and security in numbers, to be flexible and have coordinated moves—which are also desirable characteristics for a well-operating PLM system, and a great symbol of what Scania is aiming at.
Success is key to the company's future position as one of the market leaders in the heavy transport vehicles segment.
It will be extremely interesting to follow the Scania project through the coming phases.
Will they succeed? We won’t know until 2021; however, Scania has prepared the system swap in an exemplary way, both organizationally and methodologically, and in terms of a well-paced timeline. Scania is also, based on the earlier V4 and V5 implementations, very aware of the cultural aspects of the collaboration between Scania and Dassault Systèmes—as much as Dassault is aware of the necessity of contributing in a manner that makes this project an automotive industry posterchild. Dassault can’t afford another Jaguar Land Rover story, where the 3DEXPERIENCE platform is still, after more than ten years, only established in one model program.
Another difference when compared to the Ericsson case is that Dassault’s experiences from 3DEXPERIENCE in automotive are much larger than in the telecom industry, where they principally didn’t have a ready-to-implement solution, but rather a tool set that had to be adapted, and where Ericsson had a much more important role as a co-software developer than Dassault.
Furthermore, compared to Ericsson’s angle of attack, Scania has stretched out the timeline in a way that appears to be much more realistic given the technological complexity and the 16,000 people that are affected by the system swap.
The “limited” big bang approach isn’t necessarily a weak spot, and should be able to be worked around, given the awareness of the challenges this brings to the table. It can even be regarded as way to avoid entanglement brought on by the need to build a good CoEx solution, as was pointed out by Malmberg above.
With more than 20 years of experience from PLM implementations, of which 14 come from Scania, Anders Malmberg has the qualifications needed in this context. He knows the organization, its competence and how to rock the boat in a way that inspires people to move in the right direction.
The demands for speed in the implementation—to obtain attractive new digital capabilities versus the risks of delays, lack of functionality or even failure—is always a tough consideration, but it looks very promising at Scania so far. This angle of attack that contains a mix between big bang and step-by-step phases is a matter of a delicate and knowledge-based balancing act where even small deviations can matter.