Though eye-catching, the proclamation of the "changing views on products" is an oversimplification. How engineers, customers and the market view products does not merely change—it transforms, explodes and fragments. This is also true of their marketplaces—as a look into the products as a service (PaaS) business model reveals.
By trading a large one-time revenue boost for an on-going stream of per-use payments, the PaaS business model upends the sales of capital equipment used everywhere in industry. Boilers, turbines, compressors, robotics, bottling & packing equipment, assembly-and-test systems and more are increasingly leased rather than purchased. For many years, for example, airlines have tended to view their aircrafts' jet engines as "power by the hour," transferring uptime responsibility back to the engines' original equipment manufacturer (OEM) with no-fly, no-pay contracts.
In the PaaS business model, the OEM's sale of equipment (or any big-ticket asset) is replaced by ongoing payments tied to usage—essentially productivity or what is produced. With enhanced connectivity, meters and sensors, the equipment's use, uptime, output and downtime are tracked and invoiced accordingly. CIMdata clients remind us that PaaS data must be timely, accessible and easily understandable. Here is what that might look like.
How PaaS Changes Product Designs
PaaS profoundly affects the OEM's views of its business opportunities, not just its products. Under PaaS, the OEM's revenue is based almost entirely on equipment availability and output, placing durability and long-term service life at the core of OEM business plans. In essence, under PaaS, the OEM now owns the performance of its products; if the product stops functioning for any reason, the OEM's revenues also stop. The consequences of PaaS for capital-equipment marketplaces, for example, are huge.
PaaS means that maximum equipment uptime, durability and service must be designed in—and fundamentally re-engineered—anywhere it is feasible in the lifecycle to address the challenges of long-term service. Among many things, PaaS dictates that equipment must be far more durable with robust connectivity, embedded electronics and sensors—along with software that can be updated remotely and parts that can be easily accessed for maintenance. A big PaaS consequence is that the OEM forgoes future income from field service and spare parts as the need for them is minimized with far more durable designs. A familiar example is automobile warranties that have grown to 100,000 miles from less than 25,000 and to five years from two. And who can remember changing spark plugs or installing a new muffler?
The market transformations, explosions and fragmentation that come with PaaS might appear to create more hurdles for product lifecycle professionals, but the opposite is true. By taking advantage of the hidden benefits these changing views uncover, more innovative and competitive products can be developed, manufactured, delivered and supported in the ever-changing business landscape. Although inevitably more complex, these products are released to users sooner, are supported more easily in the field and generate better profit margins.
How PLM Fits into PaaS Models
PaaS and capital goods aside, disruptions in the design, sale and service of everyday products are all around us. We must accept sweeping changes in our workloads and new processes to address these changes. For these reasons, and many others, product lifecycle management (PLM) environments are essential. Specifically, PLM offers:
- Digital twins that have access to the product's defining data, in their many formats, to make it all understandable.
- Digital threads that connect digital twins to all relevant data and information nonstop. This Includes modification control to keep the digital twin up to date with its physical counterpart.
- End-to-end lifecycle connectivity that networks and spreads data anywhere in the enterprise. This includes webs that radiate out to the Internet of Things (IoT) and the uncounted repositories of Big Data, where everything digital eventually comes to rest.
Also dramatically changing are the digital environments where products (along with systems and assets) are developed, refined, produced and supported. These changes restructure marketplaces and heighten customer expectations of future products.
My recent engineering.com article, "Why PLM-related Big Data Opportunities Greatly Exceed the Potential Headaches," addressed ways product developers use PLM to take advantage of today's massive inflows of data and information. This current article builds on that by showing how products, rather than data and information, change with different monetization strategies. Along with PaaS, these market transformations, explosions and fragmentations impact our product-lifestyle efforts and reshape our understanding of each product's marketplace. (In the context of this article, "product" can also refer to factories, data processing, distribution networks, supply chains, software and other systems and assets.)
The days are long gone when products were represented with a half-dozen 2D line drawings—front, back, side, top, isometric and an exploded view. Even with dimensions, these views were never adequate, leading to endless annotations—typed, hand-written and occasionally inscrutable. Stapled to the drawing, they were easily mislaid.
This changed in the CAD revolution of the 1970s and '80s. Pixels on computer screens replaced the draftsman's pen-and-ink. In quick succession came 3D, solid models, speedier rates of change in product views, the end of Mylar drawings and PLM.
Transformation, as governed by PaaS, is the biggest factor in how products are put to new uses by getting new capabilities, mechanizations, automations, embedded sensors and connectivity. Even bolt heads now have connectivity, which guards against over-torque and cross-threading. As a product attribute, the term “standalone” is disappearing.
Transformation of products' views is greatly accelerated by two revolutions sweeping through information technology (IT) worldwide. One is the digitalization of analog data in control systems, process monitors, bills of materials (BOMs), purchase orders, specifications, work instructions and more. The other is the digital transformation of documents, images and videos—anything in databases that is still formatted. In nearly all enterprises, digitalization and digital transformation remain works in progress.
The terms "explosion" and "fragmentation" needn't be scary. As changing views of the product, they reflect the huge increase in the volume of information needed in product development, the ever-growing number of people involved and the ever-closer examination of the data and information they use. In today's enterprises, every business unit that touches any part of any product continually downloads, uploads and regenerates information.
Amid the demands of PaaS and continually changing views of the product, PLM solutions connect product developers, as well as production and service personnel and their supporting systems, to almost any data repository and component, process, tooling and technique imaginable. Some examples include:
- 2D, 3D and solid models from CAD systems.
- CAM programs.
- BOMs with sources, specifications and variants.
- Specifics of assembly and inspection.
- Schematics for electronics, including hardware, software, sensors and firmware.
- Requirements for field service and maintenance/repair/operations (MRO).
- Greenness including lifecycle energy consumption and carbon footprints.
- IoT feedback on the performance of products in the field.
- Emerging user wants and needs coming out of Big Data with predictive analytics and topology data analytics (TDA).
- Sustainability and end-of-life data on reuse or safe disposal.
- Details about projected product innovations and obsolescent versions.
- Documentation on regulatory compliance and conformance to industry standards, usually still formatted.
In PLM environments, product lifecycle participants sort through an ever-widening range of information and insights, then combine these findings into basic requirements for breakthrough products.
These information sources are instrumental in taking product developers' imaginations far beyond customary notions of "product." If anything, "changes" in these contexts is an understatement.
Also exploding is the number of people needed to move new products from concept to customer. Decades of reliance on closely knit teams is ending; in every industry and marketplace, anyone can offer their notions. While this can complicate product development, the initial chaos yields smarter and speedier innovation.
Fragmentation follows explosion and is the third big driver of the changing views of the product. Information is demanded by product lifecycle participants in countless ways, then parsed into ever smaller bits as they investigate viable new designs to outperform rivals or meet PaaS demands. Inevitably, the contents of views fragment.
Moreover, no two people across the lifecycle see their responsibilities similarly, even on tightly integrated collaborative teams. Each user's diagrams, schematics, components, descriptions, and exploded views are unique and continually changing; so are all the underlying data and information.
These three realities of the changing views of products—transformation, explosion and fragmentation—point to the necessity of implementing Data Governance (DG) and Configuration Management (CM) practices, procedures and all associated roles and responsibilities. DG and CM in the enterprise's PLM environment were addressed in the recent CIMdata webinar, The Importance of Data Governance within Digital Transformation, by Janie Gurley and Dana Nickerson.
PLM's Role Grows as Views of Products Change
Amid these changing views of the product, PLM environments are bursting with new capabilities, including automated linkages and traceability, as reported in a recent CIMdata webinar, The Promise and Reality of the Digital Thread.
New PLM capabilities help users access and manage:
- The huge amounts of data needed for product development.
- Data comprehensibility.
- Overlooked memes and trends in social media.
- The extension of Big Data and the IoT to MRO.
- Use of PLM throughout the enterprise, thanks to highlighting user successes.
A significant PLM enhancement is the incorporation of value calculations that reflect changes throughout the product's lifecycle—product value management (PVM). PVM tracks changing values during design, production, distribution, sales, service, warranties and even disposal. As a redefinition of lifecycle processes, PVM strengthens connections between products, markets and users.
For fast-moving companies, these do-or-die connections keep innovative new products aligned with customers' wants, needs and marketplace upheavals, including those brought on by PaaS. Specifics were covered in a December 7, 2022, Propel Software webinar, "Product Value Management in the Age of Disruption," in which I participated.
From Ma Bell to Smartphones
CIMdata believes that even if your products and services are not being rendered obsolete, this is no time to let your guard down. The odds are that rival companies are targeting your products. They may even be using the IoT and Big Data to discover what your users want next.
You should be doing likewise; if your company's views of its products are not changing, this would be a good time to ask why not.
To grasp the magnitude of these changes, compare your smartphone and its apps with the old AT&T and Bell System phones. Ma Bell's phones were clunky black Bakelite things with rotary dials. They were analog, voice-only devices hard-wired to the innards of AT&T. Unable to access anything else, they were useless if disconnected.
Smartphones could not be more different; they have keypads and screens instead of dials and can be told verbally to place calls. Totally digital, smartphones snap photos, access images stored virtually anywhere, send and receive texts and e-mails, take notes and dictation, handle complex calculations, access the IoT and Big Data, forecast the weather, show us maps and routes, and connect to or even replace our computers.
We carry this sleek and compact capability around in our purses or pockets. Ma Bell's phones sat immobile on kitchen walls or little black tables in hallway corners. Will self-driving vehicles present as many radical changes?
Even the most unlikely things undergo change. Shoelaces were undone, so to speak, by Velcro. CarMax and Carvana are displacing used auto dealerships. Netflix displaced Blockbusters and now risks being displaced by others.
Conclusion: What Does 'Product' Mean?
We have arrived at the ultimate question prompted by PaaS and the resulting changing views of the product: what constitutes a “product?" Physical products still have fronts and backs, tops and bottoms, sides and edges, but these basic views are now represented in a myriad of ways.
What about the beginnings and ends of lifecycles? Not long ago, those were simply the service lives designed into the product. But today, service lives extend back to the product's initial concept and forward to its disposal and recycling. Extending service lives by decades also makes sustainability a vital design requirement—another consequence of PaaS.
Given these transformations, explosions and fragmentations, must we incorporate all the earlier versions into the new views of products? How many planned iterations should be attached and projected? How many variants? Should the changing views of products include BOMs? What about suppliers?
And what about lifecycle changes in the views of products emerging from PaaS durability, sensors, connectivity and metering?
Without a doubt, these issues are raised daily in your business unit or enterprise, which means it's time to re-evaluate your PLM environment and broaden your use of digital twins, digital threads and end-to-end connectivity.
For those who have yet to choose a PLM solution or still struggle with PLM's predecessors, now is the time to move product development and the rest of your extended enterprise into PLM environments. Let PLM help enhance your products and services before your rivals start changing your customers' views of your products.
If that happens, you may have very little room to maneuver. After all, change is the only constant.